Zynga Q2 Earnings Preview: What Investors Should Watch For

Since launching Farmville on Facebook in 2009, Zynga ZNGA has been a top-performing mobile game company. The company has evolved through acquisitions and gaming categories over the years. The recent acquisition of Peak, maker of Toon Blast and Toy Blast, should help user and monetization figures when the company reports second-quarter earnings on Aug. 5.

What To Know: In May, Zynga revised its second-quarter guidance. The company sees revenue hitting $400 and bookings to hit $460 million. Zynga stated at the time of its Peak acquisition close that it would once again update full-year guidance on the second-quarter results.

The figures to watch in the second quarter and guidance will be DAU and MAU. In the first quarter, DAU hit 21 million and MAU came in at 68 million. Both of these figures were down year over year, but increased after three consecutive declining quarters. Peak has 12 million average mobile DAU, which when added in will increase Zynga’s figure by over 50%.

What Else Is Key: Another key figure to watch is the average bookings per DAU. This figure was $0.216 in the first quarter, vs $0.170 in the prior year. Last year’s second quarter saw a rate of $0.188. Analysts will be expecting this figure to rise, but also hoping guidance from the Peak acquisition shows strength here.

Toon Blast and Toy Blast consistently rank in the top 20 grossing games and should really help Zynga’s monetization figures.

Price Action: Shares of Zynga are up 59% in 2020. Analysts continue to revise estimates and stay bullish thanks to the acquisition. Benchmark recently reiterated a Buy rating on the stock, expecting a strong second quarter.

Zynga shares traded as high as $10.55 this year, but haven’t traded over $11 since 2012.

Photo credit: Vladislav Bezrukov, Flickr