3 Positive Trends In Zynga’s Declining User Base

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Zynga (NASDAQ:ZNGA) reported its Q1 2016 earnings Wednesday and beat market expectations on both bookings and profitability. However, its user base continued to fall, raising some concerns regarding the sustainability of its revenue streams. The overall average monthly active user (MAU) base declined by 32% year-over-year (y-o-y), with 27% and 46% declines on mobile and web, respectively.

Notwithstanding the decline in active users, there are three positive trends for Zynga in terms of user engagement and monetization in its first quarter results:

  • Daily user engagement (DAUs/MAUs) increased
  • Growth in average daily bookings per average DAU (Average Bookings/Average DAUs)
  • Improvement in payer conversion rate (MUPs/MUUs)

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Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Zynga
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