Zynga's profit drops 95 percent in year-over-year Q2

Zynga's profit fell from $27.2 million in Q2 2010 to $1.3 million in Q2 2011, a 95 percent decrease, an IPO filing with the SEC revealed Wednesday. Zynga's profit measures how much money the company is truly retaining, while revenue measures how much it is making, before expenses. To that end, Zynga's revenue grew over 100 percent year-on-year, to $279.1 million; however, this growth is slowing, rising 15 percent from its March quarter, while March rose 24 percent from the previous quarter.

Zynga's "bookings" measure revenue directly from ad sales and microtransactions before any adjustments, such as the 30 percent Facebook claims, and these were down for the first time in company history, dropping 4 percent to hit the super-low, rock-bottom, Ramen-every-night number of $274.7 million.

So far it looks like someone took some extra vacations on their new yachts this quarter. Or not. Zynga attributes its profit loss to two things: It didn't release any new games until Empires and Allies in March 2011, and it focused more on internal growth, hiring and acquisitions this quarter.

All of this stagnating growth and dipping profit-margins means only one thing -- Zynga's valuation was increased in this same analysis, rising from $13.98 billion to $14.05 billion. Because that's how money works.