Zynga shares volatile after massive year-end loss

Social game maker's revenues rise 91 percent in 2011 to $1.14 billion, but investors waffle over $404 million loss.

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Today, Zynga issued its first earnings report since its underwhelming initial public offering in December, and the results appear to have sent investors into a tizzy of confusion.

Zynga's earnings beat expectations, but it still appears to be in investors' doghouse.
Zynga's earnings beat expectations, but it still appears to be in investors' doghouse.

Revenues for the 12-month period ended December 31, 2011, came in at $1.14 billion, up 91 percent over the same period in 2010. The company reported a net loss of $404 million. However, that figure is heavily distorted due to Zynga's IPO, which saw the company's bottom line take a $510 million hit due to stock-based compensation expenses.

After ending trading today up nearly 7 percent to $14.35, Zynga has shed 2.5 percent of its value in after-hours trading. Currently, the company's stock is hovering around $14 a share.

During Zynga's October-December quarter, the company saw double-digit growth in daily and monthly active users. Daily users rose 13 percent to 54 million during the period, while monthly users were up 23 percent to 240 million.

The company also saw a significant increase in bookings, which is a complicated financial measurement that reconciles purchasing virtual currency with real currency. Zynga said its average daily bookings during the fourth quarter rose 11 percent to $0.061. People spending money on the company's slate of free-to-play games also rose to 2.9 million during the period.

Games produced by Zynga are the most popular on social networking platform Facebook. According to AppData, Zynga's CityVille, Texas HoldEm Poker, Hidden Chronicles, CastleVille, and FarmVille are currently the most-played games on Facebook.

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