Zynga posts Q2 FY13 declines in revenue, active users

By Stephany Nunneley
25 July 2013 21:43 GMT

Zynga has announced its Q2 financial results for the quarter ended June 30, 2013 and reports revenue of $231 million, down 31% year-over-year.

Zynga Q2 FY 13 at a glance

Daily active users (DAUs)decreased from 72 million in Q2 FY12 to 39 million – a 45% year-over-year decline

DAUs were down 24% from 52 million in Q1 FY13 on a consecutive quarter basis. Web DAUs and Mobile DAUs were 23 million and 16 million, respectively.

MAUs decreased from 306 million in Q2 FY12 to 187 million – a 39% year-over-year decline.

MAUs were down 26% from 253 million in Q1 FY13 on a consecutive quarter basis. Web MAUs and Mobile MAUs were 129 million and 57 million, respectively.

Monthly unique users (MUUs) decreased from 192 million in Q2 FY12 to 123 million – a 36% year-over-year decline.

MUUs were down 18% from 150 million in Q1 FY13 on a consecutive quarter basis.

Monthly Unique Payers (MUPs) decreased from 4.1 million in Q2 FY12 to 1.9 million – a 53% year-over-year decline. On a consecutive quarter basis, MUPs were down 22%.

The social gaming firm reported a net loss of $16 million, but noted its implementation of significant cost reductions resulting in a $25 million Q2 2013 restructuring charge with an expected annualized pre-tax cash savings ranging from $70 million – $80 million.

In the second quarter of 2013, Zynga began implementation of a restructuring plan that included a reduction in work force of approximately 520 employees and the closure of certain offices as part of an overall plan to reduce the Company’s long term cost structure.

“The next few years will be a time of phenomenal growth in our space and Zynga has incredible assets to take advantage of the market opportunity,” said Don Mattrick, the firm’s new CEO and former Xbox boss at Microsoft.

“To do that, we need to get back to basics and take a longer term view on our products and business, develop more efficient processes and tighten up execution all across the company. We have a lot of hard work in front of us and as we reset, we expect to see more volatility in our business than we would like over the next two to four quarters.

“I’m privileged to lead Zynga and I look forward to spending more time with our players, employees and shareholders.”

Zynga released six new titles during the second quarter of 2013, including Hidden Shadows on web-based platforms, and War of the Fallen, Draw Something 2, Battlestone, Solstice Arena and Running With Friends on mobile platforms.

As of June 30, 2013, Zynga had 3 of the top 10 games on Facebook, based on DAUs and franchises such as, Words With Friends, Zynga Poker and FarmVille 2.

“We have a lot of hard work in front of us and as we reset, we expect to see more volatility in our business than we would like over the next two to four quarters.” – Mattrick

For the second quarter of 2013, Zynga.com had 4.2 million MAUs. This was the first full quarter subsequent to its re-launch to include standalone player logins for users.

FarmVille and FarmVille 2 combined bookings grew 29% year-over-year, and its County Fair drove a 15% increase in engagement of players level 20 and up.

In July 2013, Don Mattrick was hired as Zynga’s CEO, replacing Mark Pincus, who continues to serve as chairman of the board and chief product officer.

During Q2 2013, Zynga completed its acquisition of Spooky Cool Labs LLC, a provider of social casino games, however, the firm believes its biggest opportunity is to focus on free to play social games.

While the firm said it will continue to evaluate its real money gaming products in the UK, it’s making “the focused choice not to pursue a license” for real money gaming in the US.

The firm will also continue to evaluate all of its priorities against the growing market opportunity in free, social gaming, including social casino offerings.

For the third quarter of the fiscal year, the firm expects projected revenue of between $175 million and $200 million, with a net projected loss of $14 million to $43 million.

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