Zynga IPO road show presentation
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Transcript of Zynga IPO road show presentation
Mark Pincus Founder and CEO
Offering Summary
Offering Size
Over-Allotment
Filing Range
Expected Pricing
Tlcker /listing
Use of Proceeds
Underwriters
lOOM shares (all primary)
15% (all secondary)
$8.So-$10.00
Week of December 12, 2011
ZNGA / NASDAQ Global Select
General corporate purposes, capital expenditures, and tax withholding obligations related to the vesting of employee equity-based compensation (ZSUs)
Morgan Stanley Goldman Sachs SofA Merrill lynch Barclays Capital J.P. Morgan Allen & Company
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Investment Opportunity
1. Play is a core Internet and mobile activity
Jf zynga = play 2. Zynga is the leader in play
3. Only scalable platform
4. Repeatable and profitable model
5. Unmatched investment
Our Vision
J4lzynga =play
--· ---
Our Mission
rARMVillE . Jf:Ut.; .;! zyngapoker· ~
INOAOS~ ~ [jil•Uitt'(l}9J! !'I Maf1a Wars
CityVille: The Most Popular Social Game in the Western World
The Zynga Platform: Scalable, Repeatable with Network Effects
Network Effects
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Words With Friends: The Most Popular Word Game
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Zynga Platform Delivers Results
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Created 9 of the 10 biggest social games of all time
227M MAUs, 54M DAUs
28 minutes of play daily
3 Tectonic Shifts in the Global Internet Landscape
Social 18
Apps 188 downloads
User Pay $98 virtual goods
}fzynga· PLAY
$SOOM Invested in the Future of Play
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The Future of Play
• Platform
• Games
• Team
Our DNA Combines Social, Web and Game Talent
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John Schappert Chief Operating Officer
Play Huge Global Market Opportunity
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A Better Model for Play 1--
Traditional
Development Cycle Years
Revenue Model Single Purchase
Engagement Days I Months
Data and Analytlcs Limited
Distribution Traditional Retail
I ~tzynga Months
Free-to-Play I Ongoing
Years
Continuous Feedback
Networ1< Virality
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Undisputed Leader in Play
9 of the Top 10 Social Games
Rank Developer Social Game
1 if zynga FarmVille
2 if zynga CityVille
4 ifzynga Cafe world
5 ifzynga Words With Friends
6 ifzynga FrontlerVille
7 l!lzynga Empires & Allies
8 l!lzynga Texas Hold' em Poker
9 ifzynga FtshVille
10 ifzynga Treasure Isle
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Zynga DAUs > 14 Competitors
'*zynga NeJU 14 Competitors
s.pt~ber 2011 D•ilv Active Users
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Best Brands in Social Games
2010
60M
Ill Game on Face book since January 2009 4 out of 5 Top Games on Face book
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34M 32M 29M
Wo.-o Maf1aWars 11M 8M 6M
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lOx DAU Growth in Mobile
Mobile Dally AcUft U.ers : Wob to Mobile
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VOA~·~I 991K
Oct2010 Oct2011
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Zynga Games are Social
Powerful Virtual Goods Business Model
Play longer
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Virtual Goods
TTM Revenue
%of Total Revenue
YoYGrowth
Gift
$969M
95%
122%
Collect and Decorate
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· Accelerate Game Progress
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Drive Bookings
Advertising- Early and Promising
Branded Vi rtua I Goods
Advertising
TTM Revenue $SSM
" of Total Revenue S%
YoY Growth 162%
Social Engagement Ads
Sponsorships Mobile
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Games as a live Service
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Llounch 111M loot
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Co-op Fa rming Acltfll010
Mobile -2010
Promottons
ExponSIOtl M..O 2011
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Quests ~r20t0
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fund
Chanty MitCh lOU
~:/1 Expansion
Stptfmber 2011
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Only Zynga ...
Industry Leading Engines and Infrastructure 1--
Unmatched Player Experience
leading Engines •
Scalable Infrastructure
.
• Multi-platform: Flash 11, HTML 5, mobile
• Quickly serve game data
• High performance
- ·- -- • - • -·- ·- . ·-. ·- • ·-·- . ·-• ·-• Effectively handle
peak traffic
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• Securely store player data
• Always available
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Data and Analytics Drive Our Games
A/B Test for FarmVille Marketplace Layout
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9% Increase in Bookings
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Power of the Zynga Network
DAUs
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Cross Promotion from Zynga Network of ZZ7M MAUs and 54M DAUs
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7M
411) l Cross Promotion
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Multiple Opportunities for Growth
Grow Existing Franchises
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Launch New Games
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Expand Internationally
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Increase Mobile Offerings . .
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More Platforms
face book
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Largest Launch Lineup in Company History
2007 • 2008 200Q I • 1H20t1 R.:enl •nd Coming Soon
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Dave Wehner Chief Financial Officer
Financial Highlights 1--
a Attractive business model
a Robust bookings growth
• Highly profitable
• Investing for long-term growth
• Strong balance sheet
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Free-to-Play Business Model
Key Metrics
227M Q3 2011 Average MAUs
54M Q3 2011 Average DAUs
7. 7 M TTM Unique Payers
$1.18 TTM Bookings
$339M TTM Adjusted EBITOA ,... IWII.III_....,._.,.••t-... """ .... -..-u
Robust Bookings Growth 1--
Bookincs ($M) . -. ... --. .. ,.,,_~
S328
2009 2010
Full Yeu
9 Month Bookincs 2010 to 2011 V/Y Growth
llookl,.sGrOW1h 43%
Normo4ltod GrOWih 86%
2009 2010 2011
9 Months Ended 9/3()
Longevity of Bookings from Enduring Game Franchises
AR ViUIE Normalized Bookings Indexed to Peak Quarter
t OOl'
80% Book mas
60" -40"
20" OAUs
0% • Ql Q2 QS Q6 Q7 Q10
New Games Drive Additional Growth
Bookings ($M)
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• """'-·>1)111-ot-.... -5839 5849
SS9S
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5184
• 2009 2010 2009 2010 2011
Full Year 9 Months Ended 9/30
Investing in the Platform for Play
Adj. EBITOA Mar&in
More Games
R&D (ex·SBC) (SM)
$113
2010 2011
TlME-9/)0
49% 31%
. • More Powerful Infrastructure
% of OCF
Capital Elcpenditures ($M)
$199
$62
2010 2011
T1M Ended 9/)0
17% 70%
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Profitable Financial Model
Annual 9 Months 2010 2011
Cost of Revenue 21% 26%
R&D 17% 28%
S&M 13% 13%
G&A 8% 12%
D&A 5% 8%
Adjusted EBITDA 47% 28%
Capex 7% 22%
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