Glu Mobile (GLUU) Misses Q3 EPS by 30c

November 3, 2016 4:15 PM EDT
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Glu Mobile (NASDAQ: GLUU) reported Q3 EPS of ($0.33), $0.30 worse than the analyst estimate of ($0.03). Revenue for the quarter came in at $51.4 million versus the consensus estimate of $50.93 million.

As of September 30, 2016, Glu had cash and cash equivalents of $147.5 million and no debt. Cash flows used in operations were $(9.8) million for the third quarter of 2016 compared to $(7.8) million used in the third quarter of 2015.

Business Outlook as of November 3, 2016:

The following forward-looking statements reflect expectations as of November 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 to create evergreen games 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.

Fourth Quarter Expectations – Quarter Ending December 31, 2016:

Glu does not provide guidance on a GAAP basis primarily due to the fact that Glu is unable to predict, with reasonable accuracy, future changes in its deferred revenue and corresponding cost of revenue. The amount of Glu’s deferred revenue and cost of revenue for any given period is difficult to predict due to differing estimated useful lives of paying users across games, variability of monthly revenue, platform commissions and royalties by game and unpredictability of revenue from new game releases. Future changes in deferred revenue and deferred cost of revenue are uncertain and could be material to Glu’s results computed in accordance with GAAP. Accordingly, Glu is unable to provide a reconciliation of the non-GAAP financial measure guidance to the corresponding GAAP measure without unreasonable effort.

Bookings are expected to be between $46.0 million and $48.0 million.
Adjusted gross margin (as previously defined) is expected to be approximately 64.6%.
Adjusted operating expenses are expected to be between $40.0 million and $40.3 million.
Depreciation expense is expected to be $0.8 million.
Income tax is expected to be an expense of approximately $0.3 million.
Stock-based compensation expense is expected to be $3.5 million and amortization of intangible assets is expected to be $2.2 million.
Weighted-average common shares outstanding are expected to be approximately 134.0 million basic and diluted.

2016 Expectations – Full Year Ending December 31, 2016:

Glu does not provide guidance on a GAAP basis primarily due to the fact that Glu is unable to predict, with reasonable accuracy, future changes in its deferred revenue and corresponding cost of revenue. The amount of Glu’s deferred revenue and cost of revenue for any given period is difficult to predict due to differing estimated useful lives of paying users across games, variability of monthly revenue, platform commissions and royalties by game and unpredictability of revenue from new game releases. Future changes in deferred revenue and deferred cost of revenue are uncertain and could be material to Glu’s results computed in accordance with GAAP. Accordingly, Glu is unable to provide a reconciliation of the non-GAAP financial measure guidance to the corresponding GAAP measure without unreasonable effort.

Bookings are expected to be between $202.2 million and $204.2 million.
Adjusted gross margin (as previously defined) is expected to be approximately 48%.
Adjusted operating expenses are expected to range from $147.3 million to $147.6 million.
Depreciation expense is expected to be $2.9 million.
Income tax expense is expected to be $0.5 million.
Stock-based compensation expense is expected to be $13.1 million, amortization and impairment of intangible assets is expected to be $14.2 million and restructuring charges are expected to be $2.3 million.
Weighted-average common shares outstanding are expected to be approximately 131.9 million basic and diluted.
We expect to have cash and short-term investments at December 31, 2016 of at least $80.0 million.

For earnings history and earnings-related data on Glu Mobile (GLUU) click here.



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