In this post, we analyze 2 closely followed companies and note various information that can be gleaned from The Loadown’s data on each of them. This shows ways analysts can effectively use this information in helping support a position around a particular company and the predictive nature of the information.
Candy Crush Saga
With the recent King.com IPO, many analysts have had their eyes on the company’s apps, trying to monitor their performance. The Loadown tracks all King.com apps daily (across all countries), and below is only data on the iPhone app in the US.
In the above chart, we are looking at the daily download estimates for the period (from January 1, 2014 – present) respectively.
Though the app’s user continue to rise, daily downloads have decreased fairly dramatically to level off recently (since the beginning of 2014) at approximately 2.5 times less than end of 2013 ranges.
These findings tie in with the recent quarterly earnings announcement from King.com (May 7, 2014), where the following was reported and concluded:
- Candy Crush Saga accounting for 67% of total first quarter 2014 gross bookings, down from 78% in the fourth quarter of 2013 (Source: King.com earnings release)
- Investors were […] worried about the company’s growth. Revenue in Q4 was down from its Q3 revenue. This quarter, as we noted, revenue is up sequentially, but it’s still not as high as it was in Q3. (Source: Business Insider)
- Up premarket after posting a Q1 EPS beat and moderate Q/Q bookings growth, King Digital (KING -8.7%) has sharply reversed course. Concerns about softening Candy Crush Saga bookings and a Q/Q drop in monthly unique payers appear to be the triggers. (Source: Seeking Alpha)
Though it should be emphasized that daily downloads are only one piece of an overall company strategy and analysis, The Loadown’s download estimates show clear evidence early into the last quarter the pattern for reduced user growth on the iOS platform. (This may in part be attributed to a reduction in the company’s large paid acquisition strategy that it used around the IPO timeframe).
This daily downloads data can have important predictive value and could be an early alert to start monitoring other strategies and indicators of the company, as new users are not being added as the same level as before.
What can that imply further for user growth, usage patterns, and company performance in general going forward into the quarter and beyond?
Twitter, another recent IPO and closely followed company, also has interesting app download behavior. The Loadown follows the Twitter app (and all other 3rd party Twitter apps). Below is data on the iPhone app in the US.
In the above chart, we again look at the daily download estimates for the period (from January 1, 2014 – present) respectively.
The daily download shows a very steady pattern of user acquisition. Outside of a small spike in downloads around the time of the last earnings report (which may have been attributed to publicity around the event), the trend line for the period is pretty much flat. Therefore, the pattern shows that the user base acquisition (through the Twitter app) is not increasing beyond previous levels.
Analysts and the press has been very consistent and laser focused on Twitter’s ability to expand its user base, which was supposed to be the basis for its growth:
- Twitter Inc. (NYSE:TWTR) likely failed to accelerate user growth in the first quarter despite major investments aimed at making the social network more attractive to new users in the U.S. and abroad, according to analysts looking ahead to Tuesday’s first-quarter earnings report. (Source: International Business Times)
- Shares in Twitter dropped 9 per cent in after market trading when the messaging platform failed to reverse a trend of slow user growth, shaking investor confidence that it could ever grow to the size of Facebook. (Source: Financial Times)
- Twitter (TWTR) may have captivated millions of insiders in the twin realms of technology and media, but its most persistent challenge can be easily characterized in less than 140 characters: “Grow the user base faster and enlist more engaged, mainstream users i.e. #BeMorelikeFacebook.” (Source: Bloomberg Businessweek)
The Loadown’s download data for Twitter shows a predictive trend that ultimately became an important issue during the current earnings quarter for the company. By monitoring app download estimates daily through The Loadown data, it becomes clear that no significant uptick was seen, when one was expected for the company. Analysts could relatively early on in the quarter begin to focus on this emerging pattern to support the prediction that Twitter user expansion could fall below expectations.
It is also interesting to note that additional analysis could be done by studying the 3rd party Twitter apps’ download patterns for this period, further providing predictive clarity around company performance.