WHAT TO WATCH FOR: Unlike many other new Internet companies, Zynga was profitable before it went public. Investors will likely focus on the company's plans and its ability to broaden its revenue stream. Zynga is the top maker of games for Facebook, the world's largest online social network. It gets nearly all of its revenue — and its players — through Facebook, which takes a 30 percent cut of what people spend on virtual items in Zynga games.
In turn, Zynga produced 12 percent of Facebook's $3.7 billion revenue last year, Facebook said this month. That disclosure lifted Zynga's stock sharply and provided more evidence of just how closely linked the two companies are.
Facebook has been a huge reason behind Zynga's growth (and Zynga helps Facebook keep users on site). But the relationship was the first thing Zynga listed in its IPO filing under "risks associated with our business." If the relationship sours, Zynga said its business will suffer.
But Zynga has been expanding and now owns the popular game "Words With Friends," which is played mainly on mobile phones.
WHY IT MATTERS: Zygna's games are wildly popular, played by more than 240 million people on Facebook each month, according to AppData, which tracks Facebook apps. As the first earnings report since Zynga went public in December, this one will be especially closely watched by investors.
WHAT'S EXPECTED: Analysts, on average, expect it to earn 3 cents per share on revenue of $301.1 million for its fiscal fourth quarter, which ended Dec. 31, according to FactSet.
LAST YEAR'S QUARTER: Still a private company, Zynga earned $43 million on revenue of $195.8 million in the last three months of 2010, according to documents it submitted to the Securities and Exchange Commission.
