UNITED STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 20549
FORM 8-K
CURRENT REPORT PURSUANT TO
SECTION
13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date of
Report:
February
3, 2016
(Date
of earliest event reported)
Glu Mobile Inc.
(Exact
Name of Registrant as Specified in Its Charter)
Delaware
(State or Other Jurisdiction of Incorporation)
001-33368
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91-2143667
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(Commission File Number)
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(IRS Employer Identification No.)
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500 Howard Street, Suite 300
San Francisco, California
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94105
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(Address of Principal Executive Offices)
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(Zip Code)
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(415) 800-6100
(Registrant’s Telephone Number, Including Area
Code)
Not Applicable
(Former name or former address, if changed
since last report.)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any
of the following provisions (see General Instruction A.2. below):
⃞
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
⃞
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
⃞
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
⃞
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition.
On February 3, 2016, Glu Mobile Inc. (“Glu”) issued
a press release announcing its financial results for the fourth quarter
and full year ended December 31, 2015. A copy of the press release is
attached as Exhibit 99.01 to this report. In addition, on February 3,
2016, Glu made available on its corporate website at
www.glu.com/investors supplemental slides that were referenced during
Glu’s earnings call to discuss its financial results for the fourth
quarter and full year ended December 31, 2015. A copy of such
supplemental slides is attached as Exhibit 99.02 to this report.
The information in this Item 2.02, including Exhibits 99.01 and 99.02 to
this report, shall not be deemed to be “filed” for purposes of Section
18 of the Securities Exchange Act of 1934, as amended, or otherwise
subject to the liabilities of that section or Sections 11 and 12(a)(2)
of the Securities Act of 1933, as amended. The information contained in
this Item 2.02 and in the accompanying Exhibits 99.01 and 99.02 shall
not be incorporated by reference into any registration statement or
other document filed by Glu with the Securities and Exchange Commission,
whether made before or after the date of this report, regardless of any
general incorporation language in such filing (or any reference to this
Current Report on Form 8-K generally), except as shall be expressly set
forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
99.01 Press release issued by Glu regarding its financial results
for the fourth quarter and full year ended December 31, 2015, dated
February 3, 2016
99.02 Supplemental slides made available by Glu on its corporate
website on February 3, 2016
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
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Glu Mobile Inc.
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Date:
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February 3, 2016
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By:
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/s/ Scott J. Leichtner
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Name: Scott J. Leichtner
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Title: Vice President and General Counsel
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Exhibit 99.01
Glu
Reports Fourth Quarter and Full Year 2015 Financial Results
-
Q4
non-GAAP revenue of $57.9 million and Q4 GAAP revenue of $61.0 million
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Q4
Adjusted EBITDA of $2.8 million
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Announced
exclusive partnerships with Taylor Swift and Gordon Ramsay
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Approximately
1.3 billion total social followers* of celebrities with whom the
company has exclusive partnerships; titles featuring these celebrities
expected live by end of 2017
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Investment
in and option to acquire Plain Vanilla Corp., developer of hit trivia
game QuizUp
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Approved
a stock repurchase program to potentially repurchase up to $50 million
of Glu’s common stock
SAN FRANCISCO--(BUSINESS WIRE)--February 3, 2016--Glu Mobile Inc.
(NASDAQ:GLUU), a leading global developer and publisher of free-to-play
games for smartphone and tablet devices, today announced financial
results for its fourth quarter and full year ended December 31, 2015.
“Our ability to exceed revenue and EBITDA expectations in Q4 was driven
by the ongoing traction of our catalog titles, including the continued
solid performance of Kim Kardashian: Hollywood, Cooking Dash 2016,
Racing Rivals and Deer Hunter 2016,” stated Niccolo de Masi, Chairman
and Chief Executive Officer of Glu. “During the quarter we hired new
studio leadership, with Tim Wilson joining as our Global CTO and Nick
Earl as our President of Global Studios. Nick and Tim have hit the
ground running and have already begun evolving our global studios. We
anticipate that our global studio improvements will significantly
enhance Glu’s product delivery on a go forward basis.”
de Masi continued, “I am pleased that Glu has extended our lead in
building the premier celebrity gaming platform via a multi-year,
exclusive gaming partnership with Taylor Swift. Swift is the most
followed woman in the world with over 220 million social followers and a
powerful addition to our celebrity gaming partnerships which now total
approximately 1.3 billion social followers*. The strength of our
catalog, new launch roadmap, and strong balance sheet, positions Glu for
growth in 2016 and beyond.”
Fourth Quarter 2015 Financial Highlights:
-
Revenue: Total GAAP revenue was $61.0 million in the fourth
quarter of 2015 compared to $72.9 million in the fourth quarter of
2014. Total non-GAAP revenue was $57.9 million in the fourth quarter
of 2015, compared to $76.2 million in the fourth quarter of 2014.
Non-GAAP revenue excludes changes in deferred revenue and litigation
settlement proceeds.
-
Gross Margin: GAAP gross margin was 58% in the fourth quarter
of 2015 compared to 56% in the fourth quarter of 2014. Non-GAAP gross
margin was 63% in the fourth quarter of 2015 compared to 61% in the
fourth quarter of 2014. Non-GAAP gross margin excludes changes in
deferred revenue and litigation settlement proceeds, change in
deferred cost of revenue, amortization of intangible assets and
non-cash warrant expense.
-
GAAP Operating Income/(Loss): GAAP operating loss was $(3.1)
million in the fourth quarter of 2015 compared to income of $5.1
million in the fourth quarter of 2014.
-
Non-GAAP Operating Income: Non-GAAP operating income was $2.1
million in the fourth quarter of 2015 compared to $13.5 million during
the fourth quarter of 2014. Non-GAAP operating income excludes changes
in deferred revenue and deferred cost of revenue, amortization of
intangible assets, non-cash warrant expense, stock-based compensation
expense, restructuring charges, change in fair value of the Blammo
earnout, transitional costs and litigation costs and settlement
proceeds.
-
Adjusted EBITDA: Adjusted EBITDA was $2.8 million for the
fourth quarter of 2015, compared to $14.1 million during the fourth
quarter of 2014. Adjusted EBITDA is defined as non-GAAP operating
income excluding depreciation.
-
GAAP Net Income/(Loss) and EPS: GAAP net loss was $(3.0)
million for the fourth quarter of 2015 compared to net income of $1.4
million for the fourth quarter of 2014. GAAP EPS loss was $(0.02) for
the fourth quarter of 2015, based on 127.8 million weighted-average
basic shares outstanding, compared to a GAAP diluted EPS of $0.01 for
the fourth quarter of 2014, based on 107.0 million diluted
weighted-average shares outstanding.
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Non-GAAP Net Income and EPS: Non-GAAP net income was $2.3
million for the fourth quarter of 2015 compared to $12.2 million for
the fourth quarter of 2014. Non-GAAP diluted EPS was $0.02 for the
fourth quarter of 2015 based on 129.4 million weighted-average diluted
shares outstanding, compared to non-GAAP diluted EPS of $0.11 for the
fourth quarter of 2014 based on 107.0 million weighted-average diluted
shares outstanding.
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Cash and Cash Flows: As of December 31, 2015, Glu had cash and
cash equivalents of $180.5 million compared to $182.3 million at the
end of the prior quarter. The company continues to have no debt. Cash
flows generated from operations were $139,000 for the fourth quarter
of 2015 compared to $19.3 million for the fourth quarter of 2014.
A reconciliation of GAAP to non-GAAP results has been provided in the
financial statement tables included in this press release. An
explanation of these measures is also included below under the heading
“Use of Non-GAAP Financial Measures.”
Recent Developments and Strategic Initiatives:
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Today, we announced a multi-year, exclusive mobile gaming partnership
with Taylor Swift, an award-winning singer, musician and song writer.
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In January 2016, we announced the exclusive partnership with
award-winning chef Gordon Ramsay on the development of a new mobile
game that is currently slated for global release during the summer of
2016.
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In January 2016, we announced an investment in QuizUp developer
Plain Vanilla Corp. We also have a call option to acquire Plain
Vanilla Corp. for 15 months from the closing of the initial investment
at a pre-agreed price.
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In January 2016, we acquired a minority equity stake and entered into
a publishing agreement with Dairy Free Games.
In addition, our Board of Directors has formally approved a stock
repurchase program under which we may repurchase up to $50 million of
our outstanding common stock. We currently intend to enter into a Rule
10b5-1 trading plan in order to facilitate this program, under which we
may repurchase shares without suspension for trading blackout periods.
The repurchase program may be suspended, discontinued or modified in
compliance with applicable securities laws.
“Our solid fourth quarter results were highlighted by our ability to
exceed our revenue expectations,” stated Eric R. Ludwig, Chief Operating
Officer and Chief Financial Officer. “Glu remains committed to enhancing
the long-term value of the company through the ongoing investment in
internal and external opportunities supported by our strong balance
sheet.”
Fiscal 2015 Financial Highlights:
-
Revenues: Total GAAP revenues were $249.9 million for the year
ended December 31, 2015 compared to $223.1 million for the year ended
December 31, 2014. Total non-GAAP revenues were $242.2 million for the
year ended December 31, 2015 compared to $241.8 million for the year
ended December 31, 2014.
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Gross Margin: GAAP gross margin was 57% for the year ended
December 31, 2015 compared to 62% for the year ended December 31,
2014. Non-GAAP gross margin was 62% for the year ended December 31,
2015 compared to 63% for the year ended December 31, 2014.
-
GAAP Operating Income/(Loss): GAAP operating loss was $(6.3)
million for the year ended December 31, 2015 compared to operating
income of $2.1 million for the year ended December 31, 2014.
-
Non-GAAP Operating Income: Non-GAAP operating income was $13.9
million for the year ended December 31, 2015 compared to $32.6 million
for the year ended December 31, 2014.
-
Adjusted EBITDA: Adjusted EBITDA was $16.8 million for the year
ended December 31, 2015 compared to $35.1 million for the year ended
December 31, 2014.
-
GAAP Net Income/(Loss) and EPS: GAAP net loss was $(7.2)
million for the year ended December 31, 2015 compared to net income of
$8.1 million for the year ended December 31, 2014. GAAP EPS loss was
$(0.06) for the year ended December 31, 2015, based on 118.8 million
weighted-average basic shares outstanding, compared to $0.08 for the
year ended December 31, 2014, based on 96.9 million weighted-average
diluted shares outstanding.
-
Non-GAAP Net Income and EPS: Non-GAAP net income was $13.8
million for the year ended December 31, 2015 compared to $33.3 million
for the year ended December 31, 2014. Non-GAAP EPS was $0.11 for the
year ended December 31, 2015 based on 122.8 million weighted-average
diluted shares outstanding, compared $0.34 for the year ended December
31, 2014 based on 96.9 million weighted-average diluted shares
outstanding.
-
Cash Flows Generated/(Used) from Operations: Cash flows used in
operations were $(14.0) million for the year ended December 31, 2015
compared to cash flows generated from operations of $30.6 million for
the year ended December 31, 2014.
A reconciliation of GAAP to non-GAAP results has been provided in the
financial statement tables included in this press release. An
explanation of these measures is also included below under the heading
“Non-GAAP Financial Measures.”
Business Outlook as of February 3, 2016:
The following forward-looking statements reflect expectations as of
February 3, 2016. Results may be materially different and are affected
by many factors, such as: consumer demand for mobile entertainment and
specifically Glu’s products; consumer demand for smartphones, tablets
and next-generation platforms; our ability to improve the monetization
of our titles and continue to successfully launch and update new games;
development delays on Glu's products; continued uncertainty in the
global economic environment; competition in the industry; storefront
featuring; changes in foreign exchange rates; Glu's effective tax rate
and other factors detailed in this release and in Glu's SEC filings.
First Quarter Expectations – Quarter Ending March 31, 2016:
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Non-GAAP revenue is expected to be between $46.0 million and $48.0
million.
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Non-GAAP gross margin is expected to be approximately 59.9%.
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Non-GAAP operating expenses are expected to be between $35.2 million
and $35.4 million.
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Adjusted EBITDA, defined as non-GAAP operating income/(loss) excluding
depreciation of approximately $0.6 million, is expected to range from
a loss of $(6.0) million to $(7.0) million.
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Income tax is expected to be an expense of approximately $0.2 million.
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Non-GAAP net income/(loss) is expected to be between $(6.8) million
and $(7.8) million, or between $(0.05) and $(0.06) per
weighted-average basic share outstanding, which excludes approximately
$4.1 million of anticipated stock-based compensation expense and $2.4
million for amortization of intangibles.
-
Weighted-average common shares outstanding are expected to be
approximately 129.5 million basic and 129.9 million diluted.
2016 Expectations – Full Year Ending December 31, 2016:
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Non-GAAP revenue is expected to be between $250.0 million and $275.0
million.
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Non-GAAP gross margin is expected to be approximately 56.2%.
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Adjusted EBITDA is expected to range from a loss of $(7.0) million to
$(15.0) million.
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Non-GAAP net income/(loss) is expected to be between a loss of $(10.3)
million and $(18.3) million, or between $(0.08) and $(0.14) per
weighted-average basic share outstanding, which excludes approximately
$17.7 million of anticipated stock-based compensation expense and $9.2
million for amortization of intangibles.
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Weighted-average common shares outstanding are expected to be
approximately 132.2 million basic and 134.7 million diluted.
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We expect to have cash and short-term investments at December 31, 2016
of at least $140.0 million with no debt.
Quarterly Conference Call
Glu will discuss its quarterly results via teleconference today at 1:30
p.m. Pacific Time (4:30 p.m. Eastern Time). Please dial (866) 582-8907,
or if outside the U.S., (760) 298-5046, with conference ID # 22306718 to
access the conference call at least five minutes prior to the 1:30 p.m.
Pacific Time start time. A live webcast and replay of the call will also
be available on the investor relations portion of the company's website
at www.glu.com/investors. An audio replay will be available
between 4:30 p.m. Pacific Time, February 3, 2016, and 8:59 p.m. Pacific
Time, February 10, 2016, by calling (855) 859-2056, or (404) 537-3406,
with conference ID # 22306718.
Disclosure Using Social Media Channels and Calculation of Social
Followers
Glu currently announces material information to its investors using SEC
filings, press releases, public conference calls and webcasts. Glu uses
these channels as well as social media channels to announce information
about the company, games, employees and other issues. Given SEC guidance
regarding the use of social media channels to announce material
information to investors, Glu is notifying investors, the media, its
players and others interested in the company that in the future, it
might choose to communicate material information via social media
channels or, it is possible that information it discloses through social
media channels may be deemed to be material. Therefore, Glu encourages
investors, the media, players and others interested in Glu to review the
information posted on the company forum (http://ggnbb.glu.com/forum.php)
and the company Facebook site (https://www.facebook.com/glumobile),
the company twitter account (https://twitter.com/glumobile) and
Mr. de Masi’s twitter account (https://twitter.com/niccolodemasi). Investors,
the media, players or other interested parties can subscribe to the
company blog and twitter feed and Mr. de Masi’s twitter feed at the
addresses listed above. Any updates to the list of social media channels
Glu will use to announce material information will be posted on the
Investor Relations page of the company's website at www.glu.com/investors.
*Glu calculates the aggregate number of social followers of a particular
celebrity licensor by adding the total followers on Facebook, Twitter,
Instagram, Vevo and Vine for such celebrity. There is fan overlap among
these social channels and among Glu’s various celebrity licensors, and
such aggregate numbers have not been deduplicated.
The approximately 1.3 billion total social followers supporting
celebrity titles that Glu expects to be live by the end of 2017 is based
on the combined Facebook, Twitter, Instagram, Vevo, and Vine audiences
of Taylor Swift, Gordon Ramsay, Katy Perry, Kim Kardashian West, Kendall
and Kylie Jenner, Britney Spears, Nicki Minaj, Jason Statham and
additional yet-to-be announced celebrities as of February 3, 2016.
Use of Non-GAAP Financial Measures
To supplement Glu's unaudited condensed consolidated financial data
presented in accordance with GAAP, Glu uses certain non-GAAP measures of
financial performance. The presentation of these non-GAAP financial
measures is not intended to be considered in isolation from, as a
substitute for, or superior to, the financial information prepared and
presented in accordance with GAAP, and may be different from non-GAAP
financial measures used by other companies. In addition, these non-GAAP
measures have limitations in that they do not reflect all of the amounts
associated with Glu's results of operations as determined in accordance
with GAAP. The non-GAAP financial measures used by Glu include
historical and estimated non-GAAP revenue, non-GAAP smartphone revenue,
non-GAAP cost of revenue, non-GAAP operating expenses, non-GAAP gross
profit, non-GAAP gross margin, non-GAAP operating income/(loss),
non-GAAP net income/(loss) and non-GAAP basic and diluted net
income/(loss) per share. These non-GAAP financial measures exclude the
following items from Glu's unaudited consolidated statements of
operations:
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Change in deferred revenue and deferred cost of revenue;
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Amortization of intangible assets;
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Non-cash warrant expense;
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Stock-based compensation expense;
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Restructuring charges;
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Change in fair value of Blammo earnout;
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Litigation settlement proceeds and costs;
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Transitional costs;
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Release of tax liabilities and valuation allowance; and
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Foreign currency exchange gains and losses primarily related to the
revaluation of assets and liabilities.
In addition, Glu has included in this release “Adjusted EBITDA” figures
which are used to evaluate Glu’s operating performance. Adjusted EBITDA
is defined as non-GAAP operating income/(loss) excluding depreciation.
Adjusted EBITDA margin is defined as Adjusted EBITDA divided by non-GAAP
revenue.
Glu may consider whether significant non-recurring items that arise in
the future should also be excluded in calculating the non-GAAP financial
measures it uses.
Glu believes that these non-GAAP financial measures, when taken together
with the corresponding GAAP financial measures, provide meaningful
supplemental information regarding Glu's performance by excluding
certain items that may not be indicative of Glu's core business,
operating results or future outlook. Glu's management uses, and believes
that investors benefit from referring to, these non-GAAP financial
measures in assessing Glu's operating results, as well as when planning,
forecasting and analyzing future periods. These non-GAAP financial
measures also facilitate comparisons of Glu's performance to prior
periods.
Cautions Regarding Forward-Looking Statements
This news release contains forward-looking statements, including those
regarding our “Business Outlook as of February 3, 2016” (“First Quarter
Expectations – Quarter Ending March 31, 2016” and “2016 Expectations –
Full Year Ending December 31, 2016”), and the statements regarding that
we have exclusive partnerships with celebrities with approximately 1.3
billion social followers and expect games featuring these celebrities to
be live by the end of 2017; that we anticipate that our global studio
improvements will significantly enhance our ability to deliver product
quality on a go forward basis; that we extended our lead in building the
premier celebrity gaming platform via a multi-year exclusive gaming
partnership with a new celebrity partner that is a powerful addition to
our celebrity gaming partnerships; that the strength of our catalog, new
launch roadmap, and strong balance sheet, positions us for growth in
2016 and beyond; the expected launch date of the game we are developing
featuring Gordon Ramsay; our intention to implement a stock repurchase
program and to enter into a Rule 10b5-1 trading plan as part of such
efforts; and that we remain committed to enhancing the long-term value
of the company through the ongoing investment in internal and external
opportunities supported by our strong balance sheet. These
forward-looking statements are subject to material risks and
uncertainties that could cause actual results to differ materially from
those in the forward-looking statements. Investors should consider
important risk factors, which include: the risks identified under
"Business Outlook as of February 3, 2016"; the risk that our global
studio improvements will not improve our ability to deliver to date and
quality; the risk that Glu does not realize the anticipated strategic
benefits from our celebrity partnerships, including our partnerships
with our newly announced celebrity partners; the risk that the number of
social followers of our celebrity partners does not correlate to strong
performance for our celebrity titles; the risk that consumer demand for
smartphones, tablets and next-generation platforms does not grow as
significantly as we anticipate or that we will be unable to capitalize
on any such growth; the risk that we do not realize a sufficient return
on our investment with respect to our efforts to develop free-to-play
games for smartphones, tablets and next-generation platforms, the risk
that we will not be able to maintain our good relationships with Apple
and Google; the risk that our development expenses for games for
smartphones, tablets and next-generation platforms are greater than we
anticipate; the risk that our recently and newly launched games are less
popular than anticipated or decline in popularity and monetization rate
more quickly than we anticipate; the risk that our newly released games
will be of a quality less than desired by reviewers and consumers; the
risk that the mobile games market, particularly with respect to
free-to-play gaming, is smaller than anticipated; the risk that we may
lose a key intellectual property license; the risk that we are unable to
recruit and retain qualified personnel for developing and maintaining
the games in our product pipeline resulting in reduced monetization of a
game, product launch delays or games being eliminated from our pipeline
altogether; the risk that the timing and amount of any shares
repurchased by the company in its stock repurchase program will be
determined by Glu’s management based on its evaluation of market
conditions and other factors and, as a result, the company may determine
to repurchase a smaller amount of shares than anticipated, or none at
all; and other risks detailed under the caption "Risk Factors" in our
Form 10-Q filed with the Securities and Exchange Commission on November
9, 2015 and our other SEC filings. You can locate these reports through
our website at http://www.glu.com/investors. We are under no
obligation, and expressly disclaim any obligation, to update or alter
our forward-looking statements whether as a result of new information,
future events or otherwise.
About Glu Mobile
Glu Mobile (NASDAQ:GLUU) is a leading global developer and publisher of
free-to-play games for smartphone and tablet devices. Glu is focused on
creating compelling original IP games such as CONTRACT KILLER,
COOKING DASH, DEER HUNTER, DINER DASH, DINO HUNTER: DEADLY SHORES,
ETERNITY WARRIORS, FRONTLINE COMMANDO, RACING RIVALS, TAP SPORTS
BASEBALL, and TAP SPORTS FOOTBALL, and branded IP games
including KIM KARDASHIAN: HOLLYWOOD, KATY PERRY POP, JAMES BOND:
WORLD OF ESPIONAGE, MISSION IMPOSSIBLE: ROGUE NATION and SNIPER X
WITH JASON STATHAM on the App Store, Google Play, Amazon Appstore,
Facebook, Mac App Store, and Windows Phone. Glu’s unique technology
platform enables its titles to be accessible to a broad audience of
consumers globally. Founded in 2001, Glu is headquartered in San
Francisco with major U.S. offices outside Seattle and in Long Beach, and
international locations in Canada, China, India, Japan, Korea, and
Russia. Consumers can find high-quality entertainment wherever they see
the ‘g’ character logo or at www.glu.com.
For live updates, please follow Glu via Twitter at www.twitter.com/glumobile
or become a Glu fan at www.facebook.com/glumobile.
CONTRACT KILLER, COOKING DASH, DEER HUNTER, DINER DASH, DINO HUNTER:
DEADLY SHORES, ETERNITY WARRIORS, FRONTLINE COMMANDO, RACING RIVALS, TAP
SPORTS BASEBALL, TAP SPORTS FOOTBALL, SNIPER X, GLU, GLU MOBILE, and
the 'g' character logo are trademarks of Glu Mobile Inc.
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Glu Mobile Inc.
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Consolidated Balance Sheets
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(in thousands)
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(unaudited)
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December 31,
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December 31,
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2015
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2014
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ASSETS
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Cash and cash equivalents
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$
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180,542
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$
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70,912
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Accounts receivable, net
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17,956
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32,231
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Prepaid royalties
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28,715
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864
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Prepaid expenses and other current assets
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14,657
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17,388
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Total current assets
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241,870
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121,395
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Property and equipment, net
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5,447
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6,116
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Restricted cash
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1,498
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1,990
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Long-term prepaid royalties
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46,944
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5,870
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Other long-term assets
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1,386
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804
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Intangible assets, net
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17,767
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27,524
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Goodwill
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87,890
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87,964
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Total assets
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$
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402,802
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$
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251,663
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LIABILITIES AND STOCKHOLDERS' EQUITY
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Accounts payable
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$
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9,145
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$
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11,685
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Accrued liabilities
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1,654
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3,812
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Accrued compensation
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7,100
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10,751
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Accrued royalties
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21,032
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12,440
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Accrued restructuring
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342
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-
|
|
|
Deferred revenue
|
|
|
31,112
|
|
|
|
37,333
|
|
|
Total current liabilities
|
|
|
70,385
|
|
|
|
76,021
|
|
|
Long-term accrued royalties
|
|
|
24,347
|
|
|
|
870
|
|
|
Other long-term liabilities
|
|
|
1,642
|
|
|
|
3,066
|
|
|
Total liabilities
|
|
|
96,374
|
|
|
|
79,957
|
|
|
|
|
|
|
|
|
Common stock
|
|
|
13
|
|
|
|
11
|
|
|
Additional paid-in capital
|
|
|
557,748
|
|
|
|
415,766
|
|
|
Accumulated other comprehensive loss
|
|
|
(85
|
)
|
|
|
(8
|
)
|
|
Accumulated deficit
|
|
|
(251,248
|
)
|
|
|
(244,063
|
)
|
|
Stockholders' equity
|
|
|
306,428
|
|
|
|
171,706
|
|
|
Total liabilities and stockholders' equity
|
|
$
|
402,802
|
|
|
$
|
251,663
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Glu Mobile Inc.
|
|
|
|
|
|
|
|
|
|
Condensed Consolidated Statements of Operations
|
|
|
|
|
|
|
|
|
|
(in thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Twelve Months Ended
|
|
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
61,030
|
|
|
$
|
72,865
|
|
|
$
|
249,900
|
|
|
$
|
223,146
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
Platform commissions, royalties and other
|
|
|
23,109
|
|
|
|
29,625
|
|
|
|
98,184
|
|
|
|
80,992
|
|
|
Amortization of intangible assets
|
|
|
2,325
|
|
|
|
2,434
|
|
|
|
9,553
|
|
|
|
4,767
|
|
|
Total cost of revenue
|
|
|
25,434
|
|
|
|
32,059
|
|
|
|
107,737
|
|
|
|
85,759
|
|
|
Gross profit
|
|
|
35,596
|
|
|
|
40,806
|
|
|
|
142,163
|
|
|
|
137,387
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
Research and development
|
|
|
20,001
|
|
|
|
16,053
|
|
|
|
72,856
|
|
|
|
64,284
|
|
|
Sales and marketing
|
|
|
10,729
|
|
|
|
12,275
|
|
|
|
48,240
|
|
|
|
45,076
|
|
|
General and administrative
|
|
|
6,838
|
|
|
|
7,154
|
|
|
|
26,092
|
|
|
|
25,019
|
|
|
Amortization of intangible assets
|
|
|
11
|
|
|
|
127
|
|
|
|
201
|
|
|
|
508
|
|
|
Restructuring charge
|
|
|
1,075
|
|
|
|
67
|
|
|
|
1,075
|
|
|
|
435
|
|
|
Total operating expenses
|
|
|
38,654
|
|
|
|
35,676
|
|
|
|
148,464
|
|
|
|
135,322
|
|
|
|
|
|
|
|
|
|
|
|
|
Income/(loss) from operations
|
|
|
(3,058
|
)
|
|
|
5,130
|
|
|
|
(6,301
|
)
|
|
|
2,065
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income and other expense, net:
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
|
15
|
|
|
|
10
|
|
|
|
49
|
|
|
|
30
|
|
|
Other expense
|
|
|
(149
|
)
|
|
|
(988
|
)
|
|
|
(792
|
)
|
|
|
(1,502
|
)
|
|
Interest income and other expense, net
|
|
|
(134
|
)
|
|
|
(978
|
)
|
|
|
(743
|
)
|
|
|
(1,472
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Income/(loss) before income taxes
|
|
|
(3,192
|
)
|
|
|
4,152
|
|
|
|
(7,044
|
)
|
|
|
593
|
|
|
Income tax benefit/(provision)
|
|
|
234
|
|
|
|
(2,773
|
)
|
|
|
(141
|
)
|
|
|
7,555
|
|
|
Net income/(loss)
|
|
$
|
(2,958
|
)
|
|
$
|
1,379
|
|
|
$
|
(7,185
|
)
|
|
$
|
8,148
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income/(loss) per share:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.02
|
)
|
|
$
|
0.01
|
|
|
$
|
(0.06
|
)
|
|
$
|
0.09
|
|
|
Diluted
|
|
$
|
(0.02
|
)
|
|
$
|
0.01
|
|
|
$
|
(0.06
|
)
|
|
$
|
0.08
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
127,775
|
|
|
|
103,406
|
|
|
|
118,775
|
|
|
|
91,826
|
|
|
Diluted
|
|
|
127,775
|
|
|
|
106,954
|
|
|
|
118,775
|
|
|
|
96,922
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation expense included in:
|
|
|
|
|
|
|
|
|
|
Research and development
|
|
$
|
1,099
|
|
|
$
|
736
|
|
|
$
|
3,563
|
|
|
$
|
7,422
|
|
|
Sales and marketing
|
|
|
305
|
|
|
|
209
|
|
|
|
1,082
|
|
|
|
701
|
|
|
General and administrative
|
|
|
2,065
|
|
|
|
1,189
|
|
|
|
7,041
|
|
|
|
3,510
|
|
|
Total stock-based compensation expense
|
|
$
|
3,469
|
|
|
$
|
2,134
|
|
|
$
|
11,686
|
|
|
$
|
11,633
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Glu Mobile Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP to Non-GAAP Reconciliation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
|
|
March 31,
|
|
June 30,
|
|
September 30,
|
|
December 31,
|
|
March 31,
|
|
June 30,
|
|
September 30,
|
|
December 31,
|
|
|
|
2014
|
|
2014
|
|
2014
|
|
2014
|
|
2015
|
|
2015
|
|
2015
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP revenue
|
|
$
|
44,580
|
|
|
$
|
40,910
|
|
|
$
|
64,791
|
|
|
$
|
72,865
|
|
|
$
|
69,470
|
|
|
$
|
56,150
|
|
|
$
|
63,250
|
|
|
$
|
61,030
|
|
|
Change in deferred revenue and litigation settlement proceeds
|
|
|
2,377
|
|
|
|
(5,874
|
)
|
|
|
18,762
|
|
|
|
3,363
|
|
|
|
(7,023
|
)
|
|
|
1,329
|
|
|
|
1,174
|
|
|
|
(3,135
|
)
|
|
Non-GAAP revenue
|
|
|
46,957
|
|
|
|
35,036
|
|
|
|
83,553
|
|
|
|
76,228
|
|
|
|
62,447
|
|
|
|
57,479
|
|
|
|
64,424
|
|
|
|
57,895
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP gross profit
|
|
|
30,824
|
|
|
|
28,037
|
|
|
|
37,720
|
|
|
|
40,806
|
|
|
|
40,726
|
|
|
|
32,396
|
|
|
|
33,445
|
|
|
|
35,596
|
|
|
Change in deferred revenue and litigation settlement proceeds
|
|
|
2,377
|
|
|
|
(5,874
|
)
|
|
|
18,762
|
|
|
|
3,363
|
|
|
|
(7,023
|
)
|
|
|
1,329
|
|
|
|
1,174
|
|
|
|
(3,135
|
)
|
|
Amortization of intangible assets
|
|
|
554
|
|
|
|
441
|
|
|
|
1,338
|
|
|
|
2,434
|
|
|
|
2,434
|
|
|
|
2,434
|
|
|
|
2,360
|
|
|
|
2,325
|
|
|
Non-cash warrant expense
|
|
|
-
|
|
|
|
-
|
|
|
|
1,126
|
|
|
|
66
|
|
|
|
93
|
|
|
|
135
|
|
|
|
1,896
|
|
|
|
(116
|
)
|
|
Change in deferred platform commissions and royalty expense
|
|
|
(1,209
|
)
|
|
|
1,527
|
|
|
|
(9,122
|
)
|
|
|
(108
|
)
|
|
|
2,819
|
|
|
|
(321
|
)
|
|
|
(780
|
)
|
|
|
1,497
|
|
|
Non-GAAP gross profit
|
|
|
32,546
|
|
|
|
24,131
|
|
|
|
49,824
|
|
|
|
46,561
|
|
|
|
39,049
|
|
|
|
35,973
|
|
|
|
38,095
|
|
|
|
36,167
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating expense
|
|
|
30,117
|
|
|
|
31,703
|
|
|
|
37,826
|
|
|
|
35,676
|
|
|
|
38,214
|
|
|
|
38,540
|
|
|
|
33,056
|
|
|
|
38,654
|
|
|
Stock-based compensation
|
|
|
(2,979
|
)
|
|
|
(4,566
|
)
|
|
|
(1,954
|
)
|
|
|
(2,134
|
)
|
|
|
(2,129
|
)
|
|
|
(3,032
|
)
|
|
|
(3,056
|
)
|
|
|
(3,469
|
)
|
|
Amortization of intangible assets
|
|
|
(127
|
)
|
|
|
(127
|
)
|
|
|
(127
|
)
|
|
|
(127
|
)
|
|
|
(127
|
)
|
|
|
(32
|
)
|
|
|
(31
|
)
|
|
|
(11
|
)
|
|
Litigation costs and settlement proceeds
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(476
|
)
|
|
|
390
|
|
|
|
-
|
|
|
Transitional costs
|
|
|
-
|
|
|
|
(682
|
)
|
|
|
(493
|
)
|
|
|
(255
|
)
|
|
|
(72
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Change in fair value of Blammo earnout
|
|
|
(304
|
)
|
|
|
(531
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Restructuring charge
|
|
|
-
|
|
|
|
(159
|
)
|
|
|
(209
|
)
|
|
|
(67
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,075
|
)
|
|
Non-GAAP operating expense
|
|
|
26,707
|
|
|
|
25,638
|
|
|
|
35,043
|
|
|
|
33,093
|
|
|
|
35,886
|
|
|
|
35,000
|
|
|
|
30,359
|
|
|
|
34,099
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating income/(loss)
|
|
|
707
|
|
|
|
(3,666
|
)
|
|
|
(106
|
)
|
|
|
5,130
|
|
|
|
2,512
|
|
|
|
(6,144
|
)
|
|
|
389
|
|
|
|
(3,058
|
)
|
|
Change in deferred revenue and litigation settlement proceeds
|
|
|
2,377
|
|
|
|
(5,874
|
)
|
|
|
18,762
|
|
|
|
3,363
|
|
|
|
(7,023
|
)
|
|
|
1,329
|
|
|
|
1,174
|
|
|
|
(3,135
|
)
|
|
Non-GAAP cost of revenue adjustment
|
|
|
(655
|
)
|
|
|
1,968
|
|
|
|
(6,658
|
)
|
|
|
2,392
|
|
|
|
5,346
|
|
|
|
2,248
|
|
|
|
3,476
|
|
|
|
3,706
|
|
|
Stock-based compensation
|
|
|
2,979
|
|
|
|
4,566
|
|
|
|
1,954
|
|
|
|
2,134
|
|
|
|
2,129
|
|
|
|
3,032
|
|
|
|
3,056
|
|
|
|
3,469
|
|
|
Amortization of intangible assets
|
|
|
127
|
|
|
|
127
|
|
|
|
127
|
|
|
|
127
|
|
|
|
127
|
|
|
|
32
|
|
|
|
31
|
|
|
|
11
|
|
|
Transitional costs
|
|
|
-
|
|
|
|
682
|
|
|
|
493
|
|
|
|
255
|
|
|
|
72
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Change in fair value of Blammo earnout
|
|
|
304
|
|
|
|
531
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Litigation costs and settlement proceeds
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
476
|
|
|
|
(390
|
)
|
|
|
-
|
|
|
Restructuring charge
|
|
|
-
|
|
|
|
159
|
|
|
|
209
|
|
|
|
67
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,075
|
|
|
Non-GAAP operating income/(loss)
|
|
|
5,839
|
|
|
|
(1,507
|
)
|
|
|
14,781
|
|
|
|
13,468
|
|
|
|
3,163
|
|
|
|
973
|
|
|
|
7,736
|
|
|
|
2,068
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income/(loss)
|
|
|
133
|
|
|
|
(3,768
|
)
|
|
|
10,404
|
|
|
|
1,379
|
|
|
|
1,124
|
|
|
|
(5,509
|
)
|
|
|
158
|
|
|
|
(2,958
|
)
|
|
Change in deferred revenue and litigation settlement proceeds
|
|
|
2,377
|
|
|
|
(5,874
|
)
|
|
|
18,762
|
|
|
|
3,363
|
|
|
|
(7,023
|
)
|
|
|
1,329
|
|
|
|
1,174
|
|
|
|
(3,135
|
)
|
|
Non-GAAP cost of revenue adjustment
|
|
|
(655
|
)
|
|
|
1,968
|
|
|
|
(6,658
|
)
|
|
|
2,392
|
|
|
|
5,346
|
|
|
|
2,248
|
|
|
|
3,476
|
|
|
|
3,706
|
|
|
Non-GAAP operating expense adjustment
|
|
|
3,410
|
|
|
|
6,065
|
|
|
|
2,783
|
|
|
|
2,583
|
|
|
|
2,328
|
|
|
|
3,540
|
|
|
|
2,697
|
|
|
|
4,555
|
|
|
Foreign currency exchange loss
|
|
|
136
|
|
|
|
31
|
|
|
|
347
|
|
|
|
981
|
|
|
|
290
|
|
|
|
186
|
|
|
|
167
|
|
|
|
149
|
|
|
Release of tax liabilities and valuation allowance
|
|
|
-
|
|
|
|
-
|
|
|
|
(8,352
|
)
|
|
|
1,531
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Non-GAAP net income/(loss)
|
|
$
|
5,401
|
|
|
$
|
(1,578
|
)
|
|
$
|
17,286
|
|
|
$
|
12,229
|
|
|
$
|
2,065
|
|
|
$
|
1,794
|
|
|
$
|
7,672
|
|
|
$
|
2,317
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of net income/(loss) and net income/(loss) per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income/(loss) per share - basic
|
|
$
|
0.00
|
|
|
$
|
(0.04
|
)
|
|
$
|
0.11
|
|
|
$
|
0.01
|
|
|
$
|
0.01
|
|
|
$
|
(0.05
|
)
|
|
$
|
0.00
|
|
|
$
|
(0.02
|
)
|
|
GAAP net income/(loss) per share - diluted
|
|
$
|
0.00
|
|
|
$
|
(0.04
|
)
|
|
$
|
0.10
|
|
|
$
|
0.01
|
|
|
$
|
0.01
|
|
|
$
|
(0.05
|
)
|
|
$
|
0.00
|
|
|
$
|
(0.02
|
)
|
|
Non-GAAP net income/(loss) per share - basic
|
|
$
|
0.07
|
|
|
$
|
(0.02
|
)
|
|
$
|
0.18
|
|
|
$
|
0.12
|
|
|
$
|
0.02
|
|
|
$
|
0.02
|
|
|
$
|
0.06
|
|
|
$
|
0.02
|
|
|
Non-GAAP net income/(loss) per share - diluted
|
|
$
|
0.06
|
|
|
$
|
(0.02
|
)
|
|
$
|
0.16
|
|
|
$
|
0.11
|
|
|
$
|
0.02
|
|
|
$
|
0.01
|
|
|
$
|
0.06
|
|
|
$
|
0.02
|
|
|
Shares used in computing Non-GAAP basic net income/(loss) per share
|
|
|
79,719
|
|
|
|
85,549
|
|
|
|
98,628
|
|
|
|
103,406
|
|
|
|
103,869
|
|
|
|
116,169
|
|
|
|
127,287
|
|
|
|
127,775
|
|
|
Shares used in computing Non-GAAP diluted net income/(loss) per share
|
|
|
85,398
|
|
|
|
85,549
|
|
|
|
105,438
|
|
|
|
106,954
|
|
|
|
107,851
|
|
|
|
122,538
|
|
|
|
131,486
|
|
|
|
129,381
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP operating expense break-out:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP research and development expense
|
|
$
|
15,579
|
|
|
$
|
17,297
|
|
|
$
|
15,355
|
|
|
$
|
16,053
|
|
|
$
|
18,243
|
|
|
$
|
18,308
|
|
|
$
|
16,304
|
|
|
$
|
20,001
|
|
|
Transitional costs
|
|
|
-
|
|
|
|
(20
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Stock-based compensation
|
|
|
(2,317
|
)
|
|
|
(3,605
|
)
|
|
|
(764
|
)
|
|
|
(736
|
)
|
|
|
(760
|
)
|
|
|
(836
|
)
|
|
|
(868
|
)
|
|
|
(1,099
|
)
|
|
Non-GAAP research and development expense
|
|
|
13,262
|
|
|
|
13,672
|
|
|
|
14,591
|
|
|
|
15,317
|
|
|
|
17,483
|
|
|
|
17,472
|
|
|
|
15,436
|
|
|
|
18,902
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP sales and marketing expense
|
|
|
9,485
|
|
|
|
7,989
|
|
|
|
15,327
|
|
|
|
12,275
|
|
|
|
12,438
|
|
|
|
12,771
|
|
|
|
12,302
|
|
|
|
10,729
|
|
|
Stock-based compensation
|
|
|
(101
|
)
|
|
|
(190
|
)
|
|
|
(201
|
)
|
|
|
(209
|
)
|
|
|
(218
|
)
|
|
|
(282
|
)
|
|
|
(277
|
)
|
|
|
(305
|
)
|
|
Non-GAAP sales and marketing expense
|
|
|
9,384
|
|
|
|
7,799
|
|
|
|
15,126
|
|
|
|
12,066
|
|
|
|
12,220
|
|
|
|
12,489
|
|
|
|
12,025
|
|
|
|
10,424
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP general & administrative expense
|
|
|
4,926
|
|
|
|
6,131
|
|
|
|
6,808
|
|
|
|
7,154
|
|
|
|
7,406
|
|
|
|
7,429
|
|
|
|
4,419
|
|
|
|
6,838
|
|
|
Transitional costs
|
|
|
-
|
|
|
|
(662
|
)
|
|
|
(493
|
)
|
|
|
(255
|
)
|
|
|
(72
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Change in fair value of Blammo earnout
|
|
|
(304
|
)
|
|
|
(531
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Stock-based compensation
|
|
|
(561
|
)
|
|
|
(771
|
)
|
|
|
(989
|
)
|
|
|
(1,189
|
)
|
|
|
(1,151
|
)
|
|
|
(1,914
|
)
|
|
|
(1,911
|
)
|
|
|
(2,065
|
)
|
|
Litigation costs
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(476
|
)
|
|
|
390
|
|
|
|
-
|
|
|
Non-GAAP general and administrative expense
|
|
$
|
4,061
|
|
|
$
|
4,167
|
|
|
$
|
5,326
|
|
|
$
|
5,710
|
|
|
$
|
6,183
|
|
|
$
|
5,039
|
|
|
$
|
2,898
|
|
|
$
|
4,773
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Glu Mobile Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
|
|
March 31,
|
|
June 30,
|
|
September 30,
|
|
December 31,
|
|
March 31,
|
|
June 30,
|
|
September 30,
|
|
December 31,
|
|
|
|
2014
|
|
2014
|
|
2014
|
|
2014
|
|
2015
|
|
2015
|
|
2015
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income/(loss)
|
|
$
|
133
|
|
|
$
|
(3,768
|
)
|
|
$
|
10,404
|
|
|
$
|
1,379
|
|
|
$
|
1,124
|
|
|
$
|
(5,509
|
)
|
|
$
|
158
|
|
|
$
|
(2,958
|
)
|
|
Change in deferred revenue and litigation settlement proceeds
|
|
|
2,377
|
|
|
|
(5,874
|
)
|
|
|
18,762
|
|
|
|
3,363
|
|
|
|
(7,023
|
)
|
|
|
1,329
|
|
|
|
1,174
|
|
|
|
(3,135
|
)
|
|
Change in deferred platform commissions and royalty expense
|
|
|
(1,209
|
)
|
|
|
1,527
|
|
|
|
(9,122
|
)
|
|
|
(108
|
)
|
|
|
2,819
|
|
|
|
(321
|
)
|
|
|
(780
|
)
|
|
|
1,497
|
|
|
Non-cash warrant expense
|
|
|
-
|
|
|
|
-
|
|
|
|
1,126
|
|
|
|
66
|
|
|
|
93
|
|
|
|
135
|
|
|
|
1,896
|
|
|
|
(116
|
)
|
|
Amortization of intangible assets
|
|
|
681
|
|
|
|
568
|
|
|
|
1,465
|
|
|
|
2,561
|
|
|
|
2,561
|
|
|
|
2,466
|
|
|
|
2,391
|
|
|
|
2,336
|
|
|
Depreciation
|
|
|
620
|
|
|
|
607
|
|
|
|
617
|
|
|
|
669
|
|
|
|
706
|
|
|
|
732
|
|
|
|
718
|
|
|
|
706
|
|
|
Stock-based compensation
|
|
|
2,979
|
|
|
|
4,566
|
|
|
|
1,954
|
|
|
|
2,134
|
|
|
|
2,129
|
|
|
|
3,032
|
|
|
|
3,056
|
|
|
|
3,469
|
|
|
Change in fair value of Blammo earnout
|
|
|
304
|
|
|
|
531
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Transitional costs
|
|
|
-
|
|
|
|
682
|
|
|
|
493
|
|
|
|
255
|
|
|
|
72
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Litigation costs and settlement proceeds
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
476
|
|
|
|
(390
|
)
|
|
|
-
|
|
|
Restructuring charge
|
|
|
-
|
|
|
|
159
|
|
|
|
209
|
|
|
|
67
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,075
|
|
|
Foreign currency exchange loss
|
|
|
136
|
|
|
|
31
|
|
|
|
347
|
|
|
|
981
|
|
|
|
290
|
|
|
|
186
|
|
|
|
167
|
|
|
|
149
|
|
|
Interest income and other expense
|
|
|
(6
|
)
|
|
|
(7
|
)
|
|
|
(7
|
)
|
|
|
(3
|
)
|
|
|
(6
|
)
|
|
|
(12
|
)
|
|
|
(15
|
)
|
|
|
(15
|
)
|
|
Income tax provision/(benefit)
|
|
|
444
|
|
|
|
78
|
|
|
|
(10,850
|
)
|
|
|
2,773
|
|
|
|
1,104
|
|
|
|
(809
|
)
|
|
|
79
|
|
|
|
(234
|
)
|
|
Total Non-GAAP Adjusted EBITDA
|
|
$
|
6,459
|
|
|
$
|
(900
|
)
|
|
$
|
15,398
|
|
|
$
|
14,137
|
|
|
$
|
3,869
|
|
|
$
|
1,705
|
|
|
$
|
8,454
|
|
|
$
|
2,774
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In addition to the reasons stated above, which are generally applicable
to each of the items Glu excludes from its non-GAAP financial measures,
Glu believes it is appropriate to exclude certain items for the
following reasons:
Change in Deferred Revenue and Deferred Cost of Revenue. At the
date we sell certain premium games and micro-transactions, Glu has an
obligation to provide additional services and incremental unspecified
digital content in the future without an additional fee. In these cases,
we recognize the revenue and any associated cost of revenue, including
platform commissions and royalties, on a straight-line basis over the
estimated life of the paying user. Internally, Glu’s management excludes
the impact of the changes in deferred revenue and deferred cost of
revenue related to its premium and free-to-play games in its non-GAAP
financial measures when evaluating the company’s operating performance,
when planning, forecasting and analyzing future periods, and when
assessing the performance of its management team. Glu believes that
excluding the impact of the changes in deferred revenue and deferred
cost of revenue from its operating results is important to facilitate
comparisons to prior periods and to understand Glu’s operations.
Amortization of Intangible Assets. When analyzing the operating
performance of an acquired entity, Glu's management focuses on the total
return provided by the investment (i.e., operating profit generated from
the acquired entity as compared to the purchase price paid) without
taking into consideration any allocations made for accounting purposes.
Because the purchase price for an acquisition necessarily reflects the
accounting value assigned to intangible assets (including acquired
in-process technology and goodwill), when analyzing the operating
performance of an acquisition in subsequent periods, Glu's management
excludes the GAAP impact of acquired intangible assets to its financial
results. Glu believes that such an approach is useful in understanding
the long-term return provided by an acquisition and that investors
benefit from a supplemental non-GAAP financial measure that excludes the
accounting expense associated with acquired intangible assets.
Non-cash Warrant Expense. In the third and fourth quarters of
2014 and the full year of 2015, Glu recorded a non-cash charge related
to the vesting of warrants to purchase shares of common stock issued to
brand holders as part of fourth party licensing, development and
publishing arrangements. These charges were computed using the
Black-Scholes valuation model and were recorded in cost of revenue. When
evaluating the performance of its consolidated results, Glu does not
consider non-cash warrant expense as it places a greater emphasis on
overall stockholder dilution rather than the accounting charges
associated with the vesting of any warrants. As the non-cash warrant
expense impacts comparability from period to period Glu believes that
investors benefit from a supplemental non-GAAP financial measure that
excludes these charges.
Stock-Based Compensation Expense. The Company applies the fair
value provisions of ASC 718, Compensation-Stock Compensation (“ASC
718”). ASC 718 requires the recognition of compensation expense, using a
fair-value based method, for costs related to all share-based payments.
Included in the stock compensation expense was the contingent
consideration that was subsequently issued to the Blammo employees who
were former shareholders of Blammo, which was recorded as research and
development expense over the term of the earn-out periods, since these
employees were primarily employed in product development. Glu
re-measured the fair value of the contingent consideration each
reporting period and only recorded a compensation expense for the
portion of the earn-out target which was achieved. When evaluating the
performance of its consolidated results, Glu does not consider
stock-based compensation charges. Likewise, Glu's management team
excludes stock-based compensation expense from its short and long-term
operating plans. In contrast, Glu's management team is held accountable
for cash-based compensation and such amounts are included in its
operating plans. Further, when considering the impact of equity award
grants, Glu places a greater emphasis on overall stockholder dilution
rather than the accounting charges associated with such grants. Glu
believes it is useful to provide a non-GAAP financial measure that
excludes stock-based compensation in order to better understand the
long-term performance of its business.
Restructuring Charges. Glu undertook restructuring activities in
the second, third and fourth quarters of 2014 and the fourth quarter of
2015 and recorded cash restructuring charges due to the termination of
certain employees in its China, Europe and U.S. offices. Glu recorded
the severance costs as an operating expense when it communicated the
benefit arrangement to the employee and no significant future services,
other than a minimum retention period, were required of the employee to
earn the termination benefits. Glu believes that these restructuring
charges do not reflect its ongoing operations and that investors benefit
from a supplemental non-GAAP financial measure that excludes these
charges.
Change in Fair Value of Blammo Earnout. As part of the
acquisition of Blammo, Glu committed to issue additional consideration
in the form of Glu’s common stock to the former, non-employee Blammo
shareholders if certain revenue targets were achieved. Glu recorded the
estimated contingent consideration liability at acquisition and adjusted
the fair value of the liability each reporting period. When analyzing
the operating performance of an acquired entity, Glu’s management
focuses on the total return provided by the investment (i.e., operating
profit generated from the acquired entity as compared to the purchase
price paid including the final amounts paid for contingent
consideration) without taking into consideration any expenses recognized
post-acquisition related to the change in fair value of the contingent
consideration. Because the final purchase price paid for an acquisition
necessarily reflects the accounting value assigned to both the
consideration, including the contingent consideration, paid and to the
intangible assets (including goodwill) acquired, when analyzing the
operating performance of an acquisition in subsequent periods, the
Company’s management excludes the GAAP impact of any adjustments to the
fair value of these acquisition-related balances to its financial
results. Glu believes that the fair value adjustments affect
comparability from period to period and that investors benefit from a
supplemental non-GAAP financial measure that excludes these charges.
Litigation Settlement Proceeds and Costs. These proceeds and
expenses consist primarily of one-time settlement payments received
from, and legal fees incurred in connection with, intellectual property
infringement matters. The Company has treated the settlement proceeds as
a multiple element arrangement and has allocated a significant portion
of the proceeds to revenue as deemed royalty revenue for the settlement
of past infringement. The residual proceeds have been allocated to
contra general and administrative expenses and offset legal fees
incurred. The Company excludes these proceeds and costs from its
non-GAAP measures as these proceeds and costs are isolated,
unpredictable and not expected to recur regularly, and the Company
believes that these non-recurring proceeds and costs have no direct
correlation to the operation of the Company’s ongoing core business.
Transitional Costs. GAAP requires expenses to be recognized for
various types of events associated with a business acquisition such as
legal, accounting and other deal related expenses. Glu has incurred
various costs related to the acquisition and integration of PlayFirst
and Cie Games into Glu’s operations. Glu recorded these non-recurring
acquisition and transitional costs as operating expenses when they were
incurred. Glu believes that these acquisition and transitional costs
affect comparability from period to period and that investors benefit
from a supplemental non-GAAP financial measure that excludes these
expenses.
Release of tax liabilities and valuation allowance. In the third
and fourth quarters of 2014 Glu adjusted a portion of its deferred tax
asset valuation allowance as a result of the deferred tax liabilities
recorded in connection with the Cie Games acquisition. Glu believes that
these non-recurring, one-time tax adjustments do not reflect its ongoing
operations and that investors benefit from a supplemental non-GAAP
financial measure that excludes these adjustments.
Foreign currency exchange gains and losses. Foreign currency
exchange gains and losses represent the net gain or loss that Glu has
recorded for the impact of currency exchange rate movements on cash and
other assets and liabilities denominated in foreign currencies related
to the revaluation of assets and liabilities. Accordingly, foreign
currency exchange gains and losses are generally unpredictable and can
cause Glu’s reported results to vary significantly. Due to the unusual
magnitude of these gains and losses, and the fact that Glu has not
engaged in hedging or taken other actions to reduce the likelihood of
incurring a sizeable net gain or loss in future periods, Glu excludes
foreign exchange gains and losses for comparability purposes. Glu
believes that these gains and losses do not reflect its ongoing
operations and that investors benefit from a supplemental non-GAAP
financial measure that excludes these items, enabling investors to
compare Glu’s core operating results in different periods without this
variability. Foreign exchange losses recognized during 2014 and 2015
were as follows (in thousands):
|
|
|
March 31, 2014
|
|
$
|
(136)
|
June 30, 2014
|
|
|
(31)
|
September 30, 2014
|
|
|
(347)
|
December 31, 2014
|
|
|
(981)
|
FY 2014
|
|
$
|
(1,495)
|
|
|
|
|
|
|
March 31, 2015
|
|
$
|
(290)
|
June 30, 2015
|
|
|
(186)
|
September 30, 2015
|
|
|
(167)
|
December 31, 2015
|
|
|
(149)
|
FY 2015
|
|
$
|
(792)
|
|
|
|
|
CONTACT:
Investor Relations:
ICR, Inc.
Seth Potter,
646-277-1230
ir@glu.com
Exhibit 99.02
Mobile Q4 2015 Earnings ©
Glu Mobile Inc. – Proprietary Glu Mobile Inc. Q4 2015 Earnings Call
February 3, 2016 Page 1
Glu Mobile Q4 2015 Earnings
© Glu Mobile Inc. – Proprietary Safe Harbor Statement This presentation
contains "forward-looking" statements including: that we intend to focus
on “winner takes all” “blue ocean genres, and the four categories in
which we are currently leaders are ones where we believe we can be the
best in the world in 2016/2017; that we are minimally exposed to
increases in CPI; that strong social features in a game will lead to
long tail revenues; Glu’s expected approach to integrating social
features in its games; Glu has multiple growth opportunities through
wearables, the quad screen future, mobile ad spending and international
expansion; the planned evolution of Glu’s business, including our
intention to have our games function as platforms, our catalog cover
fixed operating expenses and for new launches to account for less than
25% of revenues in a given year; the expected launch dates of Frontline
Commando Rivals in various territories; that certain features in this
game will be implemented in future updates; that the usage of chat and
discussion boards in QuizUp drives much better retention; that there is
an opportunity to create a primetime TV show featuring QuizUp; our
expected title release slate for 2016, including that additional games
may be launched if they pass our new central milestone process; the
expected contribution margin flow through of our gross revenue; our
Q1-2016 and full year 2016 guidance; our five year goals of annual
revenue growth of 20% to 30%, $1 billion of non-GAAP revenue by 2020 and
all quarters being Adjusted EBITDA profitable; and our long-term margin
targets. These forward-looking statements are subject to material risks
and uncertainties that could cause actual results to differ materially
from those in the forward-looking statements. Investors should consider
important risk factors, which include: consumer demand for smartphones,
tablets and next-generation platforms does not grow as significantly as
we anticipate or that we will be unable to capitalize on any such
growth; the risk that we do not realize a sufficient return on our
investment with respect to our efforts to develop free-to-play games for
smartphones and tablets; the risk that we do not maintain our good
relationships with Apple and Google; the risk that Glu does not realize
the anticipated strategic benefits from its celebrity partnerships; the
risk that our development expenses are greater than we anticipate or
that we experience product delays; the risk that our recently and newly
launched games are less popular than anticipated; the risk that our
newly released games will be of a quality less than desired by reviewers
and consumers; the risk that the mobile games market, particularly with
respect to social, free-to-play gaming, is smaller than anticipated;
risks related to the restatement of certain of our historical financial
statements and other risks detailed under the caption "Risk Factors" in
our Form 10-Q filed with the Securities and Exchange Commission on
November 9, 2015 and our other SEC filings. You can locate these reports
through our website at http://www.glu.com/investors. These
"forward-looking" statements are based on estimates and information
available to us on February 3, 2016 and we are under no obligation, and
expressly disclaim any obligation, to update or alter our
forward-looking statements whether as a result of new information,
future events or otherwise.Page 2
Glu Mobile Q4 2015 Earnings
© Glu Mobile Inc. – Proprietary Use of Non-GAAP Financial Measures Glu
uses in this presentation certain non-GAAP measures of financial
performance. The presentation of these non-GAAP financial measures is
not intended to be considered in isolation from, as a substitute for, or
superior to, the financial information prepared and presented in
accordance with GAAP, and may be different from non-GAAP financial
measures used by other companies. In addition, these non-GAAP measures
have limitations in that they do not reflect all of the amounts
associated with Glu's results of operations as determined in accordance
with GAAP. The non-GAAP financial measures used by Glu include non-GAAP
revenue, non-GAAP smartphone revenue, non-GAAP cost of revenue, non-GAAP
gross profit, non-GAAP gross margin, non-GAAP operating expenses,
non-GAAP operating margin, non-GAAP net income/(loss), non-GAAP net
income/(loss) per share, Adjusted EBITDA and Adjusted EBITDA margin.
These non-GAAP financial measures exclude the following items from Glu's
unaudited consolidated statements of operations: Change in deferred
revenue and deferred cost of revenue; Amortization of intangible assets;
Non-cash warrant expense; Stock-based compensation expense;
Restructuring charges; Change in fair value of Blammo earnout;
Transitional costs; Litigation proceeds and costs; Release of tax
liabilities and valuation allowance; and Foreign currency exchange gains
and losses primarily related to the revaluation of assets and
liabilities. In addition, Glu has included in this presentation
“Adjusted EBITDA” figures which are used to evaluate Glu’s operating
performance and is defined as non-GAAP operating income/(loss) excluding
depreciation. Adjusted EBITDA margin is defined as Adjusted EBITDA
divided by non-GAAP revenue. Glu believes that these non-GAAP financial
measures, when taken together with the corresponding GAAP financial
measures, provide meaningful supplemental information regarding Glu's
performance by excluding certain items that may not be indicative of
Glu's core business, operating results or future outlook. Glu's
management uses, and believes that investors benefit from referring to,
these non-GAAP financial measures in assessing Glu's operating results,
as well as when planning, forecasting and analyzing future periods.
These non-GAAP financial measures also facilitate comparisons of Glu's
performance to prior periods. For a reconciliation of these non-GAAP
financial measures to their most directly comparable GAAP financial
measures, please refer to the tables at the end of this presentation.
Page 3
Glu Mobile Q4 2015 Earnings
© Glu Mobile Inc. – Proprietary Executive Summary Page 4
Executive SummaryGlu Mobile
Q4 2015 Earnings © Glu Mobile Inc. – Proprietary Page 5
Glu Mobile Q4 2015 Earnings
© Glu Mobile Inc. – Proprietary Strengthened Management Team Chris
Akhavan Pres. of Publishing Eric R. Ludwig COO & CFO Niccolo de Masi
Chairman & CEO Tim Wilson CTO Nick Earl Pres. of Studios Page 6
© Glu Mobile Inc. –
Proprietary Glu Mobile Q4 2015 Earnings Diversified Studio
Infrastructure Game teams in diverse locations: San Francisco, CA San
Mateo, CA Long Beach, CA Bellevue, WA, Portland, OR Toronto, Canada
Moscow, Russia Beijing, China Hyderabad, India Regional support offices:
London, UK Seoul, Korea Tokyo, Japan Page 7
Glu Mobile Q4 2015 Earnings
© Glu Mobile Inc. – Proprietary 29.4% 5-Year Topline CAGR $66.9 $82.7
$108.9 $113.4 $241.8 $242.2 201020112012201320142015 Non-GAAP revenue
has been restated or revised, as appropriate, to reflect gross
accounting for digital storefronts for 2010, 2011, 2012 and Q113 and
prospectively, as outlined in the Company’s 8/6/2013 Form 8-K and press
release Page 8
Focus on ‘winner-takes-all’
‘blue-ocean’ genres Leader in 4 Key Gamer Genres These represent
categories where we believe we can be the best in the world in 2016/2017
Glu Mobile Q4 2015 Earnings © Glu Mobile Inc. – Proprietary Page 9
Building Annuities *Based
on top grossing ranking for all games on the US App Store for iPhone
taken on January 16th, 2016, AppAnnie.com **Based on total number of
full calendar months between October 2012 – January 2016 the respective
game ranked as a top 30 grossing iPhone game based on aggregate revenue
estimates for each game on a monthly basis in the United States, App
Annie Intelligence Page 10
© Glu Mobile Inc. –
Proprietary Glu Mobile Q4 2015 Earnings Deer Hunter 2016 $9.9M Kim
Kardashian: Hollywood $71.8M Deer Hunter 2014 $23.8M Contract Killer:
Sniper $17.7M Cooking Dash $16.9M Tap Sports Baseball 2015 $12.9M Dino
Hunter $5.4M Diner Dash $5.0M Other Catalog $35.6M Frontline Commando:
D-Day $3.2M 2015: Non-GAAP Revenue Delivery from a Broad Portfolio
Racing Rivals $40.0M Page 11
Glu Mobile Q4 2015 Earnings
© Glu Mobile Inc. – Proprietary Revenue Diversity: Ad Revenues Hedge
Against CPI Increases One of the leading % revenue contributions from
ads in the industry Minimally exposed to increases in CPI $- $2,000
$4,000 $6,000 $8,000 $10,000 $12,000
$14,000Q114Q214Q314Q414Q115Q215Q315Q415Ad Revenue (in Thousands)Variable
Marketing Expense (in thousands) 14.7 %19.5%14.9%15.5%14.8%17.8
%16.8%20.7%15.5%15. 6%15.3%12.6%15.5%17.6%16.6%13 .8%0%5%10%15 %20%25%Q
114Q214Q 314Q414Q115Q215Q315Q415 Ad Revenue as % of Total
RevenueVariable Marketing as % of Total RevenuePage 12
Glu Mobile Q4 2015 Earnings
© Glu Mobile Inc. – Proprietary Growth Landscape Page 13
Glu Mobile Q4 2015 Earnings
© Glu Mobile Inc. – Proprietary Strong Social = Long Tail Revenues
Typical mobile game Peak at launch, then declining curve VS. Flat to
increasing curve, peak revenue 16 months post launch Glu Mobile Q4 2015
Earnings © Glu Mobile Inc. – Proprietary Page 14
Glu Analytics Capabilities:
Capable of processing 70 million events per second Ingesting 2 billion
events per day Aggregating 75 million KPI metrics per day 2 trillion
event capacity, easily scalable Usage of Analytics: Optimization of user
acquisition, retention, paying user conversion & LTV Continually
refining game performance through testing and analysis Glu & Big Data
AnalyticsGlu Mobile Q4 2015 Earnings © Glu Mobile Inc. – Proprietary
Page 15
Multiple Long-Term Growth
Opportunities $ $ $Glu Mobile Q4 2015 Earnings © Glu Mobile Inc. –
Proprietary Page 16
Glu Evolution 1. Ramping
smartphone business 2. Running off feature-phone operations 1. New
launches ~50% of revenue 2. Forward investing for topline growth
3. Fixed OPEX > catalog revenue 1. Games-as-Platforms 2. Catalog
revenue covers fixed OPEX 3. New launches <25% of revenue $1BNon-GAAP
Revenue ($m) The goal of $1 billion in 2020 non-GAAP revenue represents
a potential outcome if our business strategies are successful. This
potential outcome should not be treated as a forecast, projection or
financial guidance. We cannot assure you that we will achieve any
particular growth rate and we may not grow at all. Our performance is
subject to many material risks and uncertainties that could cause our
actual performance to fall short of this example scenario, including the
risks discussed in our Quarterly Report on Form 10-Q filed with the SEC
on November 9, 2015 and our other SEC filings. Fixed OPEX Catalog
Revenue Page 17
Glu Mobile Q4 2015 Earnings
© Glu Mobile Inc. – Proprietary Tencent ‘WeFire West’ Publishing
Partnership Page 18
Glu Mobile Q4 2015 Earnings
© Glu Mobile Inc. – Proprietary Publishing Partnership •Glu partnering
with Tencent to westernize WeFire with Glu’s proven shooter IP Frontline
Commando •We believe WeFire to be the biggest revenue mobile shooter
ever •Sustained Top 10 grossing ranking in China and other territories
in Asia •Highly social game with PvP and scaled backend •Expected to be
live late Q2 2016 in North America, Australia and New Zealand with
additional countries in South America and EMEA live in Q3 2016 Page 19
Glu Mobile Q4 2015 Earnings
© Glu Mobile Inc. – Proprietary Product Overview COVER-BASED 3RD PERSON
SHOOTER MULTIPLE GAME MODES SOCIAL FEATURES Page 20
Glu Mobile Q4 2015 Earnings
© Glu Mobile Inc. – Proprietary Multiple Game Modes . 50+ missions
across 5 chapters . 3 difficulty levels . Exciting boss fights
. Beautiful maps. Engaging narrative . Voice acting . An exciting
and fun challenge of skill with a non-stop wave of enemies and
environments. . Real-time async battles . 1 vs. 1 . 2 vs 2 . 4 vs
4*. First-Person Shooter Mode* . Squad vs Squad* . Real-time async
missions with 4 players across multiple maps* *coming in future updates
Page 21
QuizUP Investment + Option
to Buy 100%
Glu Mobile Q4 2015 Earnings
© Glu Mobile Inc. – Proprietary Trivia for the 21st Century . Over 40M
registered users since Nov 2013 . 5 Billion online matches played
. Average user spends 30 minutes on the app per day . Usage of chat
and discussion boards drives much better retention . Monetization yet
to begin Page 23
Glu Mobile Q4 2015 Earnings
© Glu Mobile Inc. – Proprietary UGC & Interest-Based Social Network
. Biggest request from users was the ability to create their own topics
and questions . “My QuizUp” launched in end of Sept. 2015 . Completing
the QuizUp vision to create a fully crowd sourced platform . 70,000
topics and over 1.2M questions created in the first 4 weeks . Each
topic is a fully autonomous community Page 24
Glu Mobile Q4 2015 Earnings
© Glu Mobile Inc. – Proprietary Opportunity for Primetime TV Page 25
Glu Mobile Q4 2015 Earnings
© Glu Mobile Inc. – Proprietary Dairy Free Games Page 26
Glu Mobile Q4 2015 Earnings
© Glu Mobile Inc. – Proprietary Investment & Publishing Partnership •Glu
led the Series A Financing for Dairy Free Games, acquiring a minority
stake in the company •Dairy Free is based in San Francisco, with
development efforts taking place in Eastern Europe •The parties also
entered into a commercial agreement pursuant to which Glu provided
funding for a Dairy Free game under development, and received the
exclusive right to publish the game and any sequels Page 27
Glu Mobile Q4 2015 Earnings
© Glu Mobile Inc. – Proprietary User Engagement Page 28
Glu Mobile Q4 2015 Earnings
© Glu Mobile Inc. – Proprietary Consumer Interest
711.9772.1879.8969.21,041.81,129.5 1,208.21,290.40.0200.0400.0600.0800.0
1,000. 01, 200.01, 400.0Q11 4Q21 4Q314Q414Q115Q215Q315Q415(in Millions)
Cumulative Installs105.660.2107.789.472.687.678.882.20.020.
040.060.080.0100.0120 .0Q11 4Q214Q31 4Q414Q115Q215Q3 15Q415(in
Millions)In stalls Page 29
Glu Mobile Q4 2015 Earnings
© Glu Mobile Inc. – Proprietary MAU and DAU Trends Aggregate DAU and MAU
for each period presented represents the aggregate metric for the last
month of the period. An individual who plays two different games in the
same month is counted as two active users for that month when we
aggregate DAU and MAU across games. In addition, an individual who plays
the same game on two different devices during the same month (e.g., an
iPhone and an iPad) is also counted as two active users for each such
month when we average or aggregate DAU and MAU over time. Our
methodology for calculating DAU and MAU may differ from the methodology
used by other companies to calculate similar metrics.
7.05.37.27.26.06.15.55.10.01.02.03.04.05.0 6.07.08.0 Q11 4Q214
Q314Q414Q115Q215Q315Q415(in Milli ons)DAU6 4.551.960.362.654.659.653.0
49.40.01 0. 020.03 0.040 .050.060.070.0Q114 Q214Q314Q414
Q115Q215Q315Q415(in Millions)MAU Page 30
Glu Mobile Q4 2015 Earnings
© Glu Mobile Inc. – Proprietary Social Power •~1.3 Billion* total social
followers inked •Long-term partnerships •Strong pipeline of games to be
released in 2016 through 2017 Page 31
Financial Overview Page 32
Glu Mobile Q4 2015 Earnings
© Glu Mobile Inc. – Proprietary Page 33 Q415 Financial Summary
Q415Non-GAAPGuidance(in millions, except EPS)ActualsLowHighRevenue57.9$
50.0$ 52.0$ Gross Profit36.2 31.4 32.6 Gross
Margin62.5%62.7%62.7%Operating Expenses34.1 35.1 35.3 Depreciation0.7
0.7 0.7 Adjusted EBITDA2.8$ (3.0)$ (2.0)$ Basic:Earnings/(Loss) per
Share0.02$ ($0.03)(0.02)$ Basic Shares127.8 128.0 128.0 Diluted:Earnings
per Share0.02$ ($0.03)(0.02)$ Diluted Shares129.4 129.3 129.3 Net
Income/(Loss)2.3$ (3.9)$ (2.9)$
Glu Mobile Q4 2015 Earnings
© Glu Mobile Inc. – Proprietary Page 34 Q415 Non-GAAP Results ($ in
millions) Q415Q315Q/Q Q414Y/Y Total Revenue $ 57.9 $ 64.4 (10%) $ 76.2
(24%)Gross Profit36.238.1(5%)46.6(22%)Gross Margin62.5%59.1%340
bp61.1%140 bpOperating Expense 34.130.412%33.13%Operating Income/(Loss)
2.1 7.7 (73%) 13.5 (84%)Adjusted EBITDA $ 2.8 $ 8.5 (67%) $ 14.1 (80%)
Glu Mobile Q4 2015 Earnings
© Glu Mobile Inc. – Proprietary Page 35 Non-GAAP Revenue and Adjusted
EBITDA Non-GAAP revenue has been restated to reflect gross accounting
for digital storefronts Q113 and prospectively, as outlined in the
Company’s 8/6/2013 Form 8-K and press release.
$24.7$23.2$22.6$42.8$47.0$35.0$83.6$76.2$62.4$57.5$64.4$57.9 $- $10.0
$20.0 $30.0 $40.0 $50.0 $60.0 $70.0 $80.0
$90.0Q113Q213Q313Q413Q114Q214Q314Q414Q115Q215Q315Q415Non-GAAP Revenue(In
millions)($1.4)($2.9)($4.1)$6.2 $6.5 ($0.9)$15.4 $14.1 $3.9 $1.7 $8.5
$2.8 $(10.0) $(5.0) $- $5.0 $10.0 $15.0
$20.0Q113Q213Q313Q413Q114Q214Q314Q414Q115Q215Q315Q415Adjusted EBITDA(In
millions)
Glu Mobile Q4 2015 Earnings
© Glu Mobile Inc. – Proprietary Page 36 % of Non-GAAP Revenue Non-GAAP
revenue has been restated to reflect gross accounting for digital
storefronts Q113 and prospectively, as outlined in the Company’s
8/6/2013 Form 8-K and press release. 3% 4% 5% 3% 3% 4% 2% 2% 2% 3% 3% 4%
0% 20 %4 0% 60 %8 0% 100 %1 20 % Q1 13Q 213 Q3 13Q 413 Q1 14Q 214 Q3
14Q414Q115Q215Q315Q415Hosting andother
costsRoyaltiesPlatformcommissionsR&D OpexS&M OpexG&A Opex
Glu Mobile Q4 2015 Earnings
© Glu Mobile Inc. – Proprietary Page 37 Non-GAAP Revenue by Geography
NAAPACROWQ4 2015 (In millions) 24.1 20.0 56.9 50.7 44.5 41.8 49.6 44.1
12.6 6.8 9.8 9.8 8.5 7.6 6.4 6.2 10.3 8.2 16.9 15.7 9.4 8.1 8.4 7.6
$47.0$35.0$83.6$76.2$62.4$57.5$64.4$57.9 $- $10.0 $20.0 $30.0 $40.0
$50.0 $60.0 $70.0 $80.0 $90.0 Q114 Q214 Q314 Q414 Q115 Q215 Q315 Q415
NAAP ACROW76%11%13%
Glu Mobile Q4 2015 Earnings
© Glu Mobile Inc. – Proprietary Page 38 Non-GAAP Revenue Mix Non-GAAP
revenue has been restated to reflect gross accounting for digital
storefronts for Q113 and prospectively, as outlined in the Company’s
8/6/2013 Form 8-K and press release. The presentation of platform and
category mix contribution in prior presentations was reported as a
percentage of non-GAAP smartphone revenue. All prior percentages in the
above graphs have been updated to reflect each category’s respective
percentage of total non-GAAP revenue. The ‘Premium/All Other’ revenue
include featurephone revenue. 59% 59% 60% 61% 59% 56% 67%
62%60%61%61%60%27%29%29%35%38%38%31%36%38%38%38%39%14%12%11%4%3%6%2%2%2%1%1%1%$24.7
$23.2 $22.6 $42.8 $47.0 $35.0 $83.6 $76.2 $62.4 $57.5 $64.4 $57.9 $0.0
$10.0 $20.0 $30.0 $40.0 $50.0 $60.0 $70.0 $80.0 $90.0 Q113 Q213 Q313
Q413 Q114 Q214 Q314 Q414Q115Q215Q315Q415(In millions)Non-GAAP Revenue by
PlatformiOSAndroidAll Other 73% 78% 77% 76% 83% 76% 85% 85% 85% 82% 83%
79% 11% 10% 12% 20% 15% 20% 15% 15% 15% 18% 17% 21% 16% 12% 11% 4% 2% 4%
$0.0
$10.0$20.0$30.0$40.0$50.0$60.0$70.0$80.0$90.0Q113Q213Q313Q413Q114Q214Q314Q414Q115Q215Q315Q415(In
millions)Non-GAAP Revenue by CategoryIn-App PurchasesAdsPremium/All Other
Glu Mobile Q4 2015 Earnings
© Glu Mobile Inc. – Proprietary Non-GAAP Revenue by Vintage $57.9M Total
Non-GAAP Revenue in Q415 Kim Kardashian: Hollywood $13.6M Racing Rivals
$7.8M Dino Hunter: Deadly Shores $0.9M Contract Killer: Sniper $2.3M
Diner Dash $0.8M Cooking Dash 2016 $8.6M Tap Sports Baseball 2015 $2.7M
Deer Hunter 2016 $8.0M Eternity Warriors 4 $1.4M Tap Sports Football
$1.0M Mission Impossible $0.9M Deer Hunter 2014 $3.1M Frontline
Commando: D-Day $0.8M Sniper X $1.9M Page 39
Glu Mobile Q4 2015 Earnings
© Glu Mobile Inc. – Proprietary Page 40 Strong Balance Sheet ($ in
millions)Q415Q315Q414Cash and cash equivalents180.5$ 182.3$ 70.9$
Accounts receivable, net18.0 26.0 32.2 Prepaid expenses, royalties and
other current assets43.4 35.4 17.4 Other assets55.2 51.7 15.7 Intangible
assets & goodwill105.7 108.0 115.5 Total Assets402.8$ 403.4$ 251.7$
Accounts payable and accrued liabilities10.8 12.4 15.5 Accrued expenses,
royalties and other liabilities54.4 50.3 27.2 Deferred revenue31.1 34.1
37.3 Common stock/Paid in capital557.8 554.9 415.8 Accumulated deficit &
other comprehensive income(251.3) (248.3) (244.1) Total Liabilities and
Stockholders' Equity402.8$ 403.4$ 251.7$
© Glu Mobile Inc. –
Proprietary Glu Mobile Q4 2015 Earnings Page 41 Guidance
Glu Mobile Inc. –
Proprietary Glu Mobile Q4 2015 Earnings 8 Launches in 2016* *Additional
games may be launched in 2H16 if they pass our new central milestone
process January 2016 December 2016 Gordon Ramsay Nicki Minaj Taylor
Swift To be announced game Page 42
© Glu Mobile Inc. –
Proprietary Glu Mobile Q4 2015 Earnings Strong Contribution Margin Flow
Through % of Gross RevenuesOriginal IPLowHighGross
Revenue100.0%100.0%100.0%Platform
Fees25.6%25.6%25.6%Royalties0.0%6.9%24.0%Gross Margin74.4%67.5%50.4%User
Acquisition15.0%15.0%15.0%Contribution Margin of Incremental $1.00 of
Gross Revenue59.4%52.5%35.4%Branded IP Royalty Page 43
© Glu Mobile Inc. –
Proprietary Glu Mobile Q4 2015 Earnings Page 44 2016 Full Year Guidance
Guidance ($ in millions)Q116Q216Q316Q4162016Total Revenue (Low)$46.0
$250.0 Total Revenue (High)$48.0 $275.0 Adjusted EBITDA
(Low)($7.0)($15.0)Adjusted EBITDA (High)($6.0)($7.0)
© Glu Mobile Inc. –
Proprietary Glu Mobile Q4 2015 Earnings Page 45 Q116 Guidance ($ in
millions, except EPS)Q415 ActQ116 GuidanceQ116 GuidanceLow HighTotal
Revenue$57.9 $46.0$48.0Gross Margin 62.5%59.9%59.9%Operating Expense34.1
35.235.4Operating Income/(Loss) 2.1 (7.6)(6.6) Depreciation Addback 0.7
0.60.6Adjusted EBITDA$2.8 ($7.0)($6.0)Net Income/(Loss)2.1
(7.8)(6.8)Basic Shares (millions)127.8 129.5129.5Diluted Shares
(millions)129.4 129.9129.9Net Income/(Loss) Per Basic Share $0.02
($0.06)($0.05)Net Income/(Loss) Per Diluted Share $0.02 ($0.06)($0.05)
© Glu Mobile Inc. –
Proprietary Glu Mobile Q4 2015 Earnings Page 46 Full Year Guidance ($ in
millions, except EPS)2015ActLow HighTotal Revenue$242.2 $250.0 $275.0
Gross Margin 61.6%56.2%56.2% Operating Expense135.3 158.0164.0Operating
Income/(Loss) 13.9 (17.5)(9.5) Depreciation Addback 2.9 2.52.5Adjusted
EBITDA$16.8 ($15.0)($7.0)Net Income/(Loss)13.8 (18.3)(10.3) Basic Shares
(millions) 118.8 132.2132.2Diluted Shares (millions)122.8 134.7134.7Net
Income/(Loss) Per Basic Share $0.12 ($0.14)($0.08)Net Income/(Loss) Per
Diluted Share $0.11 ($0.14)($0.08) Cash and ST Investments Balance$180.5
$140.0 2016 Guidance
© Glu Mobile Inc. –
Proprietary Glu Mobile Q4 2015 Earnings Page 47 Long-Term Model
© Glu Mobile Inc. –
Proprietary Glu Mobile Q4 2015 Earnings •Annual Revenue Growth of 20% to
30% •$1 Billion of Non-GAAP Revenue in 2020 •Long-term goal of all
quarters being Adjusted EBITDA Profitable Long Term Operating Model:
Five Year Goals Glu’s goals with respect to revenue growth and EBITDA
profitability illustrate potential outcomes if our business strategies
are successful. These goals should not be treated as forecasts,
projections or financial guidance. We cannot assure you that we will
achieve any particular growth rate and our revenue and EBITDA may not
grow at all. Our performance is subject to many material risks and
uncertainties that could cause our actual performance to fall short of
these goals, including the risks discussed in our Quarterly Report on
Form 10-Q filed with the SEC on November 9, 2015 and our other SEC
filings. Page 48
© Glu Mobile Inc. –
Proprietary Glu Mobile Q4 2015 Earnings Long Term Margin Targets % of
Non-GAAP RevenueLTMLowHighRevenue100.0%100.0%100.0%Platform
Fees24.8%24.8%24.0% Royalties 10.7%15.7% 14.0%Hosting2.9%1.8%1.8%Gross
Margin61.6%57.7%60.2%R&D28.6%15.9%14.2%S&M6.9%3.0%2.5%S&M: User
Acquisition 15.9%15.0%15.0% G&A7.8%4.8%4.5% Subtotal: Opex
59.2%38.7%36.2% Depreciation/Amortization1.2%1.0%1.0%Adjusted EBITDA
Margin3.6%20.0%25.0%Long Term Target Page 49
© Glu Mobile Inc. –
Proprietary Glu Mobile Q4 2015 Earnings Page 50 Key Statistics Stock
Price$2.21 52 Week High$7.03 52 Week Low$2.04 Shares Outstanding 131.6
Avg. Daily Volume (last 90 days)2,575,584 Market Capitalization$290.8
Debt$0 Cash$180.5 Enterprise Value$110.3 Shares Outstanding is as of
January 29, 2016Cash balance is as of December 31st, 2015Average Daily
Volume is calculated using the last 90 calendar daysMarket Statistics
(as of January 29, 2016) (in millions except per share and volume
data)Glu Mobile Q4 2015 Earnings
© Glu Mobile Inc. –
Proprietary Page 51 Investment Highlights Diversified portfolio of
franchises Cost-effective customer acquisition Long-tail social games
provide significant visibility Added new studio and technology
leadership Strong balance sheet with no debt
© Glu Mobile Inc. –
Proprietary Glu Mobile Q4 2015 Earnings Page 52 Non-GAAP
ReconciliationsGlu Mobile Q4 2015 Earnings
© Glu Mobile Inc. –
Proprietary Page 53 Q415 GAAP to Non-GAAP ReconciliationGlu Mobile Q4
2015 Earnings
© Glu Mobile Inc. –
Proprietary Page 54 Q414 GAAP to Non-GAAP ReconciliationGlu Mobile Q4
2015 Earnings
© Glu Mobile Inc. –
Proprietary Page 55 FY 2015 GAAP to Non-GAAP ReconciliationGlu Mobile Q4
2015 Earnings
© Glu Mobile Inc. –
Proprietary Page 56 FY 2014 GAAP to Non-GAAP ReconciliationGlu Mobile Q4
2015 Earnings
© Glu Mobile Inc. –
Proprietary Page 57 Non-GAAP EBITDA Reconciliation
Glu Mobile Q4 2015 Earnings
© Glu Mobile Inc. – Proprietary Key Operating Metrics Page 58
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