Tomahawk, WI 10/25/2013 (BasicsMedia) – Zynga Inc (NASDAQ:ZNGA)’s prospects for 2013 suddenly look brighter following its recent release of its latest financial results. It is quite long since ZNGA had something good to report during its regular release of quarterly financial results, but this time it has done just that. As it is usually the case, one expects that there will be a number of concerns raised on whether this good performance is a one-off or not. The results might yet indicate if ZNGA has turned the corner and will be posting better than expected financial results, much in the same way that it has done.

ZNGA’s Impressive Financials Good for the Stock

The release of ZNGA’s latest impressive quarterly financial results has helped the stock shoot up by close to 13%. First, the company announced that its daily active users have reduced from 60 million reported in the same period a year ago, to 30 million it reported during the latest quarter. The company has a lot of work to do in order to attract more daily active users to sample its products. ZNGA did not have something good to report in terms of non-GAAP revenue that fell from $256 million a year ago to $152.1 million this year, but surpassed analysts’ expectations.

Wall Street analysts expected ZNGA to collect $142.7 million as quarterly revenue, although the company performed quite well in this regard by gathering $152.1 million. ZNGA’s losses have also multiplied many times over, from $361,000 reported during the same quarter in 2012, to a high of $16.2 million in 2013. ZNGA adjusted its loss during this quarter to between 4 cents and 5 cents per share. Its total bookings for this period were between $130 million and $140 million. ZNGA’s biggest nightmare has been the rapid proliferation of the market by mobile devices.

ZNGA Loses Share of Gaming Market

ZNGA’s struggles started when the company lost a significant share of the online gaming market it enjoyed by offering its products on social networking sites such as Facebook. It relied on PCs and laptops, but never saw that the diminished sales of PCs worldwide would emerge as its biggest source of headache. Poor PC sales, compared to the improved sales of tablets and Smartphone devices worldwide, has had a worrying effect on ZNGA’s games. This single factor is what has contributed negatively to ZNGA’s financials since it went public in 2011.

The 40% drop in the value of ZNGA’s games, or money it makes through these sales, has also contributed negatively to its financial results for this quarter. However, the reason the company gave for the better than expected results is that it succeeded in reducing the expenses by close to 50%. ZNGA’s expenses during this three-month period amounted to $205.4 million, and I believe it must maintain this trend in order to post such performances. ZNGA has to address the issue of dwindling active users, who number 30 million from 39 million in the previous quarter.

ZNGA’s decision to appoint a new Chief Operating Officer, Clive Downie, although he has to wait until November 4, 2013 to take up office, could also help it to improve its financial performances in the future quarters. In the meantime, there is every reason to celebrate these impressive quarterly financial results.

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