The above graph represents the Zynga costs and expenses by quarter, starting from fiscal Q1 2010 to the recently completed quarter. The company’s total operating expenses reached an all-time high of $495.42 million in Q1 2020, with 21.7% YoY growth. A whopping 39.9% of that spent on R&D, followed by 24.9% on sales and marketing, and 5.7% on general and administrative activities.
|Source||Zynga Quarterly Reports, SEC Filings|
|Note||Zynga fiscal year starts from January 1st|
Zynga’s total cost of revenue increased 20.2% YoY in Q1 2020, to an all-time high of $146.2 million. The increase was primarily attributable to the $21.3 million YoY increase in payment processing fees, $1.9 million YoY increase in royalty expenses and $1.4 million YoY increase in hosting costs.
Zynga research and developments expenses also surged an impressive 22.2% YoY and 89.5% QoQ in Q1 2020, to a whopping $197.8 million. This was supposed to be the company’s second highest-ever spending on R&D after Q4 2011. Surprisingly, during the fourth quarter of 2011, the company spent a whopping $444.7 million in R&D activities, representing an astonishing 763.5% YoY increase.
Zynga sales and marketing expenses amounted to $123.17 million in Q1 2020, with approximately 20.7% YoY increase. However, on a quarterly basis, the company recorded nearly 3.56% decline from Q4 2019 when the sales and marketing expenses hit an all-time high.
Zynga general and administrative expenses increased an appreciable 31.2% YoY in Q1 2019, amounting to $28.2 million. One must note that the gaming company spent a massive $136.7 million in general and administrative activities – the highest-ever till date.
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