Tough times for Zynga as Q1 2014 sales drop 36% to $168 million

Heavy losses expected to continue into Q2

Tough times for Zynga as Q1 2014 sales drop 36% to $168 million

Zynga (NASDAQ: ZNGA) has announced its Q1 2014 figures for the three months ending 31 March 2014.

Revenues were $168 million, down 36 percent year-on-year.

FarmVille 2, Zynga Poker and FarmVille accounted for 30 percent, 24 percent and 10 percent of sales, respectively.

More generally, excluding NaturalMotion, the number of daily active players on Zynga's mobile games were up 10 percent quarter-on-quarter

Yet, thanks to the decline of Facebook revenue and restructuring costs, the company made a net loss of $61 million, compared to income of $4.1 million 12 months ago.

Don on the up

Looking at Zynga's performance on a quarterly cycle, revenue was down 5 percent compared to Q4 2013, though bookings of $161 million were up 10 percent quarter-on-quarter.

In Q4 2013, Zynga made a net loss of $25 million and it expects the bad times to continue with a projected net loss for Q2 2014 of between $65-$75 million.

Yet CEO Don Mattrick said the company had delivered a "strong base for 2014".

"For the first time in two years, our teams delivered sequential growth across our key performance metrics including bookings, adjusted EBITDA, mobile bookings mix and audience," he said.

"We believe these indicators demonstrate our strategy is working and the focus, rigor and discipline of our teams is showing up in our results."

Good games

In particular, Mattrick pointed to the launch of FarmVille 2: Country Escape on iOS and Android, which has been downloaded over 4 million times in a week.

Zynga also revealed that Zynga Poker achieved sequential quarterly growth in bookings for the first time in seven quarters. Its mobile audience was up 19 percent.

Another core title Words With Friends saw a rise of daily active players of 9 percent compared to Q4 2013 and bookings (a measure of revenue) were up 43 percent year-on-year.

Zynga ended the quarter with current assets worth $910 million, down from $1.2 billion three months ago.

[source: Zynga]

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