Looking at the Numbers: Zynga's $1 Billion IPO Filing With the SEC

The makers of CityVille, FarmVille and other social games is hoping to raise between $1 billion and $2 billion from shareholders


After months of speculation, Zynga has finally filed its S-1 with the SEC. The filing notes that the social games giant, the creators of FarmVille, CityVille and a number of other interactive games, is seeking to raise at least $1 billion from potential shareholders in an IPO that could value the company at somewhere between $10 billion and $20 billion. In the wake of IPO filings from Pandora, LinkedIn and a number of other tech companies, Zynga's S-1 is especially impressive. And the numbers will tell you why:

VALUATION: $1,000,000,000: The amount that Zynga is seeking to raise. TechCrunch has suggested that this could just be a placeholders, with the real number coming in closer to $2,000,000,000, which would value the company at closer to $20,000,000,000.

GAMEPLAY: According to the S-1 filing, there are 60,000,000 daily active users of Zynga and 232,000,000 monthly active users from 166 different countries. Every minute, Zynga's players create 38,000 virtual items. Every day, they spend 2,000,000,000 minutes on FarmVille, CityVille and the company's other games.

GROWTH: Empires and Allies, the newest game launched by Zynga, attracted more players than FarmVille in record time: 25 days. The game is now adding at least 1,000,000 players every day and about 8,000,000 every week, according to AppData.

REVENUE: Zynga's reported revenue for 2009 was $121,000,000 and $597,000,000 for 2010. In the first quarter of 2011, the company reported revenues of $235,000,000. For comparison, the first quarter of 2010 brought in about $100,000,000.

CASH: Zynga has close to $1,000,000,000 in cash on hand. At the end of 2010, the company had $738,000,000 in cash.

SALARIES: Mark Pincus, the founder and CEO of Zynga, had a base salary of $300,000 in 2010. That same year, he received bonuses totaling $134,500. Owen Van Natta, a MySpace alum who was lured to Zynga by Pincus, had a base salary of $200,000 in 2010. He also took home a $25,000 a month consulting fee for the five months from April to August.

FACEBOOK: Zynga uses Facebook Credits for payment in its games and Facebook takes a 30 percent cut of the revenue.

MARKETING: Have you seen Zynga advertising, on Facebook or elsewhere? The company has been spending a lot of money recently to market itself to new and existing customers. In 2009, Zynga spent $42,300,000 on marketing, a number that shot up in 2010, when Zynga spent $114,000,000. In the first quarter of 2011, Zynga spent $40,200,000 on marketing. For a reference point, the company spent $17,400,000 on marketing in the first quarter of 2010.

INFRASTRUCTURE: It's easy to dismiss virtual games, but there's a huge expense in the real world to support those digital farms. In the first quarter of this year, Zynga spent $119,000,000 on computing equipment and servers. That's a huge leap from the $84,000,000 that the company spent on infrastructure in all of 2010.

RESEARCH & DEVELOPMENT: In order to keep growing, Zynga needs to design and build new games; it can't rely on FarmVille to keep people interested forever. In the first quarter of this year, Zynga spent $71,800,000 on research and development, up from just $27,900,000 in the first quarter of 2010.

Image: Zynga.