Zynga (ZNGA) reported first-quarter results last week. It continued to add active users by launching games such as Hidden Chronicles, Slingo and Scramble with Friends last quarter and made some high-profile acquisitions like OMGPOP, the maker of Draw Something.

Its monthly active user base expanded to 292 million, up 24% year over year, after seeing a decline in the second half of 2011.

Revenue rose 32% year over year to  $321 million. However, it posted a net loss of $85 million, primarily because of a massive jump in its R&D expenses, which means it has reached the point where it has to spend increasing amounts of money to develop games to retain its existing users and attract new ones.

Zynga competes primarily with Electronic Arts (EA); Playdom, which was recently acquired by Disney (DIS); and other independent social gaming studios.

Mobile to drive growth

Zynga launched four new mobile games in the last quarter and also acquired Draw Something, which was one of the most popular games of 2012. The majority of its bookings and revenue growth came from mobile. We expect it to continue to focus on the mobile gaming space and derive most of its growth from mobile games.

Zynga Platform and online gambling could take Zynga to the next level

Until now, Zynga has been dependent primarily on virtual goods transactions and advertising for almost all of its revenue. Zynga launched its own cloud infrastructure -- Zynga Platform -- in March 2012. It will offer a complete gaming infrastructure to other game developers and enable them to leverage its massive reach and cloud platform to run its games and market them to its existing audience, charging a percentage cut of its revenues in return. This could generate sizable revenues for Zynga, going forward.

Another interesting space Zynga is looking at is online gambling. It is apparently in talks with Wynn and may launch online real-money gambling games in 2012. Since the average player spending in online games is much higher than in social games, this could significantly boost Zynga's revenue in coming years, if Zynga plays its cards right.

We currently have a $14 Trefis price estimate for Zynga, which stands nearly 45% above its market price. New games account for almost 50% of Zynga's total value.