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Form 8-K GLU MOBILE INC For: Feb 04

February 4, 2015 4:11 PM EST

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 4, 2015
(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

91-2143667

(Commission File Number)

(IRS Employer Identification No.)

500 Howard Street, Suite 300

San Francisco, California

94105

(Address of Principal Executive Offices) (Zip Code)


(415) 800-6100
(Registrants 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 4, 2015, Glu issued a press release announcing its financial results for the fourth quarter and full year ended December 31, 2014. A copy of the press release is attached as Exhibit�99.01 to this report. In addition, on February 4, 2015, Glu made available on its corporate website at www.glu.com/investors supplemental slides that were referenced during the Companys earnings call to discuss its financial results for the fourth quarter and full year ended December 31, 2014. 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, 2014, dated February 4, 2015.
99.02 Supplemental slides made available by Glu on its corporate website on February 4, 2015.

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.

Glu Mobile Inc.

Date: February 4, 2015

By: �/s/ Scott J. Leichtner����������������������

Name:�Scott J. Leichtner

Title:���Vice President and General Counsel


EXHIBIT�INDEX

Number

Description

99.01

Press release issued by Glu regarding its financial results for the fourth quarter and full year ended December 31, 2014, dated February 4, 2015.

99.02

Supplemental slides made available by Glu on its corporate website on February 4, 2015.

Exhibit 99.01

Glu Reports Fourth Quarter and Full Year 2014 Financial Results

  • Q4 non-GAAP revenues of $76.2 million, up 78% year-over-year and significantly exceeding guidance
  • Record Q4 GAAP revenues of $72.9 million
  • Q4 Adjusted EBITDA of $14.1 million; record Adjusted EBITDA margin of 18.5%  both significantly exceeding guidance
  • Record Q4 cash flow from operations of $19.3 million
  • 2014 full year non-GAAP revenue represents a four-year compounded annual growth rate of 37.9% since 2010
  • Full year 2015 non-GAAP revenue guidance raised significantly
  • Signed a five-year, exclusive mobile gaming partnership with world-renowned singer and songwriter Katy Perry

SAN FRANCISCO--(BUSINESS WIRE)--February 4, 2015--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, 2014.

The fourth quarter marked a fantastic finish to a record year for Glu, highlighted by all key metrics coming in above guidance, stated Niccolo de Masi, Chief Executive Officer of Glu. The strength during the quarter was led by the ongoing traction of Kim Kardashian: Hollywood, Racing Rivals and Deer Hunter 2014, as well as the solid performance of recently released Contract Killer: Sniper.

Mr. de Masi continued, 2014 full year results take our trailing four-year non-GAAP revenue compound annual growth rate to 37.9%. Today we are also raising our full year 2015 guidance to record levels for Glu. I am also delighted to announce a five-year exclusive mobile gaming partnership with Katy Perry, arguably the most recognized musician in America following her recent Super Bowl halftime performance. Glu is focused on building the premier Hollywood gaming platform and improving the annuity characteristics of our franchises. We look forward to our growth in 2015 and beyond with confidence.

Fourth Quarter 2014 Financial Highlights:

  • Revenue: Total GAAP revenue was $72.9 million in the fourth quarter of 2014 compared to $34.8 million in the fourth quarter of 2013. Total non-GAAP revenue was $76.2 million in the fourth quarter of 2014, an increase of 78% compared to $42.8 million in the fourth quarter of 2013. Non-GAAP revenue excludes changes in deferred revenue.
  • Gross Margin: GAAP gross margin was 56% in the fourth quarter of 2014 compared to 69% in the fourth quarter of 2013. Non-GAAP gross margin was 61% in the fourth quarter of 2014 compared to 73% in the fourth quarter of 2013. Non-GAAP gross margin excludes changes in deferred revenue, change in deferred cost of revenues, amortization of intangible assets and non-cash warrant expense.
  • GAAP Operating Income (Loss): GAAP operating income was $5.1 million in the fourth quarter of 2014 compared to a loss of $(3.5) million in the fourth quarter of 2013.
  • Non-GAAP Operating Income: Non-GAAP operating income was $13.5 million in the fourth quarter of 2014 compared to $5.5 million during the fourth quarter of 2013. Non-GAAP operating income excludes changes in deferred revenues and deferred cost of revenues, amortization of intangible assets, non-cash warrant expense, stock-based compensation expense, restructuring charges, change in fair value of the Blammo earnout, and transitional costs.
  • Adjusted EBITDA: Adjusted EBITDA was $14.1 million for the fourth quarter of 2014, an increase of 127% compared to $6.2 million during the fourth quarter of 2013. Adjusted EBITDA margin was 18.5% for the fourth quarter of 2014 compared with 14.5% for the fourth quarter of 2013. Adjusted EBITDA is defined as non-GAAP operating income/(loss) less depreciation. Adjusted EBITDA margin is defined as Adjusted EBITDA divided by non-GAAP revenue.
  • GAAP Net Income (Loss) and EPS: GAAP net income was $1.4 million for the fourth quarter of 2014 compared to a GAAP net loss of $(3.5) million for the fourth quarter of 2013. GAAP EPS was $0.01 for the fourth quarter of 2014, based on 107.0 million weighted-average diluted shares outstanding, compared to a GAAP EPS loss of $(0.05) for the fourth quarter of 2013, based on 78.1 million weighted-average basic shares outstanding.
  • Non-GAAP Net Income and EPS: Non-GAAP net income was $12.2 million for the fourth quarter of 2014 compared to $5.6 million for the fourth quarter of 2013. Non-GAAP EPS was $0.11 for the fourth quarter of 2014 based on 107.0 million weighted-average diluted shares outstanding, compared to non-GAAP EPS of $0.07 for the fourth quarter of 2013 based on 81.4 million weighted-average diluted shares outstanding.
  • Cash Flows Generated from Operations: Cash flows generated from operations were $19.3 million for the fourth quarter of 2014 compared to $1.9 million generated for the fourth quarter of 2013.

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:

  • In February 2015, we announced a five-year, exclusive mobile gaming partnership with Katy Perry. We will create a free-to-play mobile game using her likeness and voice that we expect to release in the second half of 2015.
  • In November 2014, we announced the availability of Contract Killer: Sniper.
  • In October 2014, we announced the launch of the first free-to-play Diner Dash game.

We are very pleased with our strong execution during the fourth quarter, particularly our ability to achieve record Adjusted EBITDA margins and operating cash flows, stated Eric R. Ludwig, Glus EVP, Chief Operating Officer and Chief Financial Officer. The increase in our full year 2015 guidance reflects the momentum of current catalog titles, as well as our confidence in the upcoming pipeline, which includes a number of sequels to successful franchises. Glus strong balance sheet and global scale positions the company for sustained growth and profitability in 2015 and beyond.


Fiscal 2014 Financial Highlights:

  • Revenues: Total GAAP revenues were $223.1 million for the year ended December 31, 2014 compared to $105.6 million for the year ended December 31, 2013. Total non-GAAP revenues were $241.8 million for the year ended December 31, 2014, an increase of 113% compared to $113.4 million for the year ended December 31, 2013.
  • Gross Margin: GAAP gross margin was 62% for the year ended December 31, 2014 compared to 65% for the year ended December 31, 2013. Non-GAAP gross margin was 63% for the year ended December 31, 2014 compared to 70% for the year ended December 31, 2013.
  • GAAP Operating Income (Loss): GAAP operating income was $2.1 million for the year ended December 31, 2014 compared to a $(22.8) million loss for the year ended December 31, 2013.
  • Non-GAAP Operating Income (Loss): Non-GAAP operating income was $32.6 million for the year ended December 31, 2014 compared to a loss of $(5.0) million for the year ended December 31, 2013.
  • Adjusted EBITDA: Adjusted EBITDA was $35.1 million for the year ended December 31, 2014 compared to a $(2.3) million loss for the year ended December 31, 2013. Adjusted EBITDA margin was 14.5% for the full year of 2014.
  • GAAP Net Income (Loss) and EPS: GAAP net income was $8.1 million for the year ended December 31, 2014 compared to a loss of $(19.9) million for the year ended December 31, 2013. GAAP EPS was $0.08 for the year ended December 31, 2014, based on 96.9 million weighted-average diluted shares outstanding, compared to a loss of $(0.28) for the year ended December 31, 2013, based on 71.5 million weighted-average basic shares outstanding.
  • Non-GAAP Net Income (Loss) and EPS: Non-GAAP net income was $33.3 million for the year ended December 31, 2014 compared to a loss of $(5.3) million for the year ended December 31, 2013. Non-GAAP EPS was $0.34 for the year ended December 31, 2014 based on 96.9 million weighted-average diluted shares outstanding, compared to a loss of $(0.07) for the year ended December 31, 2013 based on 71.5 million weighted-average basic shares outstanding.
  • Cash Flows Generated from (Used in) Operations: Cash flows generated from operations were $30.6 million for the year ended December 31, 2014 compared to cash flows used in operations of $(9.6) million for the year ended December 31, 2013.

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 4, 2015:

The following forward-looking statements reflect expectations as of February 4, 2015. Results may be materially different and are affected by many factors, such as: consumer demand for mobile entertainment and specifically Glus 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, 2015:

  • Non-GAAP revenues are expected to be between $50.0 million and $52.0 million.
  • Non-GAAP gross margin is expected to be approximately 60%.
  • Non-GAAP operating expenses are expected to be between $33.1 million and $32.3 million.
  • Adjusted EBITDA, defined as non-GAAP operating income (loss) excluding depreciation of approximately $0.9 million, is expected to range from breakeven to a loss of $(2.0) million.
  • Income tax is expected to be an expense of approximately $0.2 million.
  • Non-GAAP net loss is expected to be between $(1.0) million and $(3.0) million or between $(0.01) and $(0.03) per weighted-average basic share outstanding, which excludes approximately $2.1 million of anticipated stock-based compensation expense, $2.6 million for amortization of intangibles and $0.1 million of transitional costs related to the Cie Games integration.
  • Weighted-average common shares outstanding are expected to be approximately 103.8 million basic and 108.0 million diluted.

2015 Expectations  Full Year Ending December 31, 2015:

  • Non-GAAP revenues are expected to be between $245.0 million and $275.0 million.
  • Non-GAAP gross margin is expected to be approximately 61%.
  • Adjusted EBITDA is expected to range from $30.0 million to $35.0 million.
  • Non-GAAP net income is expected to be between $26.0 million and $31.0 million or between $0.23 and $0.28 per weighted-average diluted share outstanding, which excludes approximately $11.3 million of anticipated stock-based compensation expense, $9.7 million for amortization of intangibles, and $0.1 million of transitional costs related to the Cie Games integration.
  • Weighted-average common shares outstanding are expected to be approximately 104.8 million basic and 111.0 million diluted.
  • We expect to have cash and short-term investments at December 31, 2015 of at least $85.0 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 # 62294869 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 4, 2015, and 8:59 p.m. Pacific Time, February 11, 2015, by calling (855) 859-2056, or (404) 537-3406, with conference ID # 62294869.

Disclosure Using Social Media Channels

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 Masis 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 Masis 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.

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 revenues, non-GAAP smartphone revenues, non-GAAP cost of revenues, 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:

  • Change in deferred revenues and deferred cost of revenues;
  • Amortization of intangible assets;
  • Non-cash warrant expense;
  • Stock-based compensation expense;
  • Restructuring charges;
  • Change in fair value of Blammo earnout;
  • Transitional 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 release Adjusted EBITDA figures which are used to evaluate Glus 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 4, 2015 (First Quarter Expectations  Quarter Ending March 31, 2015 and 2015 Expectations  Full Year Ending December 31, 2015), and the statements that we are focused on building the premier Hollywood gaming platform and improving the annuity characteristics of our franchises, we look forward to our growth in 2015 and beyond with confidence; we will create a free-to-play mobile game using Katy Perrys likeness and voice that we expect to release in Q4-2015; and our strong balance sheet and global scale positioning us for sustained growth and profitability in 2015 and beyond. 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 4, 2015"; 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 and other risks detailed under the caption "Risk Factors" in our Form 10-Q filed with the Securities and Exchange Commission on November 10, 2014 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, DEER HUNTER, DINER DASH, DINO HUNTER: DEADLY SHORES, ETERNITY WARRIORS, and FRONTLINE COMMANDO, and branded IP games including KIM KARDASHIAN: HOLLYWOOD, ROBOCOP: THE OFFICIAL GAME, and HERCULES: THE OFFICIAL GAME, on the App Store, Google Play, Amazon App Store, Facebook, Mac App Store, and Windows Phone. Glus 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, DEER HUNTER, DINER DASH, DINO HUNTER: DEADLY SHORES, ETERNITY WARRIORS, FRONTLINE COMMANDO, GLU, GLU MOBILE and the 'g' character logo are trademarks of Glu Mobile Inc. or its subsidiaries.


Glu Mobile Inc.
Consolidated Balance Sheets
(in thousands)
(unaudited)
December 31, December 31,
2014 2013
ASSETS
Cash and cash equivalents $ 70,912 $ 28,496
Accounts receivable, net

32,231

18,305
Prepaid expenses and other current assets 17,421 7,663
Total current assets

120,564

54,464
Property and equipment, net 6,116 5,096
Restricted cash 1,990 1,730
Other long-term assets 6,674 637
Intangible assets, net 27,524 5,599
Goodwill 87,964 19,485
Total assets $

250,832

$ 87,011
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $

11,685

$ 10,657
Accrued liabilities 3,812 1,971
Accrued compensation 10,751 5,378
Accrued royalties 12,440 1,727
Deferred revenues 37,333 18,224
Total current liabilities 76,021 37,957
Other long-term liabilities 3,105 2,357
Total liabilities 79,126 40,314
Common stock 11 8
Additional paid-in capital 415,766 298,593
Accumulated other comprehensive (loss)/income (8 ) 307
Accumulated deficit

(244,063

) (252,211 )
Stockholders' equity

171,706

46,697
Total liabilities and stockholders' equity $

250,832

$ 87,011

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,
2014 2013 2014 2013
Revenues $ 72,865 $ 34,841 $ 223,146 $ 105,613
Cost of revenues:
Platform commissions, royalties and other 29,625 9,803 80,992 32,371
Amortization of intangible assets 2,434 1,004 4,767 4,673
Total cost of revenues 32,059 10,807 85,759 37,044
Gross profit 40,806 24,034 137,387 68,569
Operating expenses:
Research and development 16,053 12,618 64,284 46,877
Sales and marketing 12,275 10,608 45,076 26,120
General and administrative 7,154 4,162 25,019 15,550
Amortization of intangible assets 127 117 508 1,336
Restructuring charge 67 - 435 1,448
Total operating expenses 35,676 27,505 135,322 91,331
Income/(loss) from operations 5,130 (3,471 ) 2,065 (22,762 )
Interest and other income/(expense), net:
Interest income 10 5 30 16
Other expense (988 ) (135 ) (1,502 ) (6 )
Interest and other income/(expense), net (978 ) (130 ) (1,472 ) 10
Loss before income taxes 4,152 (3,601 ) 593 (22,752 )
Income tax (provision)/benefit (2,773 ) 78 7,555 2,843
Net income/(loss) $ 1,379 $ (3,523 ) $ 8,148 $ (19,909 )
Net income /(loss) per share:
Basic $ 0.01 $ (0.05 ) $ 0.09 $ (0.28 )
Diluted $ 0.01 $ (0.05 ) $ 0.08 $ (0.28 )
Weighted average common shares outstanding:
Basic 103,406 78,071 91,826 71,453
Diluted 106,954 78,071 96,922 71,453
Stock-based compensation expense included in:
Research and development $ 736 $ 849 $ 7,422 $ 1,948
Sales and marketing

209 103

701 303
General and administrative

1,189 632

3,510 2,034
Total stock-based compensation expense $ 2,134 $ 1,584 $ 11,633 $ 4,285

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,
2013 2013 2013 2013 2014 2014 2014 2014
GAAP revenues 24,605 24,445 21,722 34,841 44,580 40,910 64,791 72,865
Change in deferred revenues 111 (1,251 ) 886 8,005 2,377 (5,874 ) 18,762 3,363
Non-GAAP Revenues 24,716 23,194 22,608 42,846 46,957 35,036 83,553 76,228
GAAP gross profit 16,069 15,697 12,769 24,034 30,824 28,037 37,720 40,806
Change in deferred revenues 111 (1,251 ) 886 8,005 2,377 (5,874 ) 18,762 3,363
Amortization of intangible assets 1,074 1,078 1,082 1,004 554 441 1,338 2,434
Non-cash warrant expense - - 427 - - - 1,126 66
Change in deferred platform commissions and royalty expense (138 ) 419 (245 ) (1,753 ) (1,209 ) 1,527 (9,122 ) (108 )
Non-GAAP gross profit 17,116 15,943 14,919 31,290 32,546 24,131 49,824 46,561
GAAP operating expense 21,563 21,651 20,612 27,505 30,117 31,703 37,826 35,676
Stock-based compensation (1,245 ) (736 ) (720 ) (1,584 ) (2,979 ) (4,566 ) (1,954 ) (2,134 )
Amortization of intangible assets (495 ) (495 ) (229 ) (117 ) (127 ) (127 ) (127 ) (127 )
Transitional costs - - - - - (682 ) (493 ) (255 )
Change in fair value of Blammo earnout (29 ) 47 31 (56 ) (304 ) (531 ) - -
Restructuring charge (511 ) (937 ) - - - (159 ) (209 ) (67 )
Non-GAAP operating expense 19,283 19,530 19,694 25,748 26,707 25,638 35,043 33,093
GAAP operating income/(loss) (5,494 ) (5,954 ) (7,843 ) (3,471 ) 707 (3,666 ) (106 ) 5,130
Change in deferred revenues 111 (1,251 ) 886 8,005 2,377 (5,874 ) 18,762 3,363
Non-GAAP cost of revenues adjustment 936 1,497 1,264 (749 ) (655 ) 1,968 (6,658 ) 2,392
Stock-based compensation 1,245 736 720 1,584 2,979 4,566 1,954 2,134
Amortization of intangible assets 495 495 229 117 127 127 127 127
Transitional costs - - - - - 682 493 255
Change in fair value of Blammo earnout 29 (47 ) (31 ) 56 304 531 - -
Restructuring charge 511 937 - - - 159 209 67
Non-GAAP operating income/(loss) (2,167 ) (3,587 ) (4,775 ) 5,542 5,839 (1,507 ) 14,781 13,468
GAAP net income/(loss) (5,497 ) (2,921 ) (7,968 ) (3,523 ) 133 (3,768 ) 10,404 1,379
Change in deferred revenues 111 (1,251 ) 886 8,005 2,377 (5,874 ) 18,762 3,363
Non-GAAP cost of revenues adjustment 936 1,497 1,264 (749 ) (655 ) 1,968 (6,658 ) 2,392
Non-GAAP operating expense adjustment 2,280 2,121 918 1,757 3,410 6,065 2,783 2,583
Foreign currency exchange loss/(gain) (129 ) (137 ) 159 130 136 31 347 981
Release of tax liabilities and valuation allowance - (3,148 ) - - - - (8,352 ) 1,531
Non-GAAP net income/(loss) $ (2,299 ) $ (3,839 ) $ (4,741 ) $ 5,620 $ 5,401 $ (1,578 ) $ 17,286 $ 12,229
Reconciliation of net income/(loss) and net income/(loss) per share:
GAAP net income/(loss) per share - basic $ (0.08 ) $ (0.04 ) $ (0.11 ) $ (0.05 ) $ 0.00 $ (0.04 ) $ 0.11 $ 0.01
GAAP net income/(loss) per share - diluted $ (0.08 ) $ (0.04 ) $ (0.11 ) $ (0.05 ) $ 0.00 $ (0.04 ) $ 0.10 $ 0.01
Non-GAAP net income/(loss) per share - basic $ (0.03 ) $ (0.05 ) $ (0.07 ) $ 0.07 $ 0.07 $ (0.02 ) $ 0.18 $ 0.12
Non-GAAP net income/(loss) per share - diluted $ (0.03 )

$ (0.05 ) $ (0.07 ) $ 0.07 $ 0.06 $ (0.02 ) $ 0.16 $ 0.11
Shares used in computing Non-GAAP basic net income/(loss) per share 66,397 69,812 71,529 78,071 79,719 85,549 98,628 103,406
Shares used in computing Non-GAAP diluted net income/(loss) per share 66,397 69,812 71,529 81,433 85,398 85,549 105,438 106,954
Non-GAAP operating expense break-out:
GAAP research and development expense $ 11,630 $ 11,224 $ 11,405 $ 12,618 $ 15,579 $ 17,297 $ 15,355 $ 16,053
Transitional costs - - - - - (20 ) - -
Stock-based compensation (668 ) (163 ) (268 ) (849 ) (2,317 ) (3,605 ) (764 ) (736 )
Non-GAAP research and development expense 10,962 11,061 11,137 11,769 13,262 13,672 14,591 15,317
GAAP sales and marketing expense 5,008 5,143 5,361 10,608 9,485 7,989 15,327 12,275
Stock-based compensation (67 ) (93 ) (40 ) (103 ) (101 ) (190 ) (201 ) (209 )
Non-GAAP sales and marketing expense 4,941 5,050 5,321 10,505 9,384 7,799 15,126 12,066
GAAP general & administrative expense 3,919 3,852 3,617 4,162 4,926 6,131 6,808 7,154
Transitional costs - - - - - (662 ) (493 ) (255 )
Change in fair value of Blammo earnout (29 ) 47 31 (56 ) (304 ) (531 ) - -
Stock-based compensation (510 ) (480 ) (412 ) (632 ) (561 ) (771 ) (989 ) (1,189 )
Non-GAAP general and administrative expense $ 3,380 $ 3,419 $ 3,236 $ 3,474 $ 4,061 $ 4,167 $ 5,326 $ 5,710
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,
2013 2013 2013 2013 2014 2014 2014 2014
GAAP net income/(loss) $ (5,497 ) $ (2,921 ) $ (7,968 ) $ (3,523 ) $ 133 $ (3,768 ) $ 10,404 $ 1,379
Change in deferred revenues 111 (1,251 ) 886 8,005 2,377 (5,874 ) 18,762 3,363
Change in deferred platform commissions and royalty expense (138 ) 419 (245 ) (1,753 ) (1,209 ) 1,527 (9,122 ) (108 )
Non-cash warrant expense - - 427 - - - 1,126 66
Amortization of intangible assets 1,569 1,573 1,311 1,121 681 568 1,465 2,561
Depreciation 731 661 633 682 620 607 617 669
Stock-based compensation 1,245 736 720 1,584 2,979 4,566 1,954 2,134
Change in fair value of Blammo earnout 29 (47 ) (31 ) 56 304 531 - -
Transitional costs - - - - - 682 493 255
Restructuring charge 511 937 - - - 159 209 67
Foreign currency exchange loss/(gain) (129 ) (137 ) 159 130 136 31 347 981
Interest and other income (3 ) (26 ) (4 ) - (6 ) (7 ) (7 ) (3 )
Income tax provision/(benefit) 135 (2,870 ) (30 ) (78 ) 444 78 (10,850 ) 2,773
Total Non-GAAP Adjusted EBITDA $ (1,436 ) $ (2,926 ) $ (4,142 ) $ 6,224 $ 6,459 $ (900 ) $ 15,398 $ 14,137

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 Revenues and Deferred Cost of Revenues. 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 revenues and any associated cost of revenues, including platform commissions and royalties, on a straight-line basis over the estimated life of the paying user. Internally, Glus management excludes the impact of the changes in deferred revenue and deferred cost of revenues related to its premium and free-to-play games in its non-GAAP financial measures when evaluating the companys 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 revenues and deferred cost of revenues from its operating results is important to facilitate comparisons to prior periods during which Glu did not delay the recognition of significant amounts of revenue related to its games and to understand Glus 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 2013 and 2014, 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 third party licensing, development and publishing arrangements. These charges were computed using the Black-Scholes valuation model and were recorded in cost of revenues. 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. Glu adopted ASC 718, "Compensation  Stock Compensation" beginning in its fiscal year ended December 31, 2006. Included in the stock compensation expense is the contingent consideration potentially issuable to the Blammo employees who were former shareholders of Blammo, which is recorded as research and development expense over the term of the earn-out periods, since these employees are primarily employed in product development. Glu re-measures the fair value of the contingent consideration each reporting period and only records a compensation expense for the portion of the earn-out target which is likely to be achieved. In addition, Glu is exposed to potential continued fluctuations in the fair market value of the contingent consideration in each reporting period, since re-measurement is impacted by changes in Glus share price and the assumptions used by Glu. 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 first and second quarters of 2013 and the second, third and fourth quarters of 2014 and recorded (1) non-cash restructuring charges due to vacating a portion of its offices in Washington, vacating its Brazil office and writing-off the cumulative translation adjustment upon substantial liquidation of its Brazilian entity; and (2) cash restructuring charges due to the termination of certain employees in its Brazil, 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 Glus common stock to the former, non-employee Blammo shareholders if certain revenue targets are achieved. Glu recorded the estimated contingent consideration liability at acquisition and will adjust the fair value of the liability each reporting period. When analyzing the operating performance of an acquired entity, Glus 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 Companys 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.


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 Glus 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 second quarter of 2013, Glu recorded a non-cash income tax benefit related to the release of certain foreign income tax liabilities upon the expiration of the statute of limitations. Additionally, 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 Glus 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 began, with the quarter ended December 31, 2008, to present non-GAAP net loss and net loss per share excluding 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 Glus core operating results in different periods without this variability. Foreign exchange gains/(losses) recognized during 2013 and 2014 were as follows (in thousands):

March 31, 2013 $ 129
June 30, 2013 137
September 30, 2013 (159 )
December 31, 2013 (130 )
FY 2013 $ (23 )
March 31, 2014 $ (136 )
June 30, 2014 (31 )
September 30, 2014 (347 )
December 31, 2014 (981 )
FY 2014 $ (1,495 )

CONTACT:
Investor Relations:
ICR, Inc.
Seth Potter, 646-277-1230
[email protected]

Exhibit 99.02

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Glu Mobile Q414 Earnings Call February 4, 2015


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Safe Harbor Statement This presentation contains "forward-looking" statements including: Glu has an expanding global presence, particularly in APAC; we expect to announce additional celebrity partnerships throughout the first half of 2015; we expect to have a total reach of approximately 400 million social followers by the end of 2016 once we sign up these new expected celebrity partnerships; the expected next title releases for each of our core franchises and Hollywood partnerships; that we are minimally exposed to increases in advertising rates; Glu is benefitting from strong mobile secular trends in the installed base for smartphones and tablets and the popularity of games among all apps; Glu has multiple growth opportunities through wearables, the quad screen future, mobile ad spending and international expansion; that we have a growing and engaged installed base; Glus expected strong 2015 title roadmap and the expected half of 2015 in which we expect these titles to launch; and our Q1-2015 and full year 2015 guidance.��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 our development expenses for games for smartphones are greater than we anticipate; 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 10, 2014 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 4, 2015 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.


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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 revenues, non-GAAP smartphone revenues, non-GAAP cost of revenues, 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 revenues and deferred cost of revenues;Amortization of intangible assets; Non-cash warrant expense;Stock-based compensation expense; Restructuring charges; Change in fair value of Blammo earnout; Transitional costs; Release of tax liabilities and valuation allowance; andForeign 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 Glus 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.


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Executive Summary


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� Glu Mobile Inc.  Proprietary


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Seasoned Management Team Pres. of Pub.Chris Akhavan7 Quarters EVP, COO & CFOEric R. Ludwig40 Quarters CEONiccolo de Masi20 Quarters


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Glu: Global Leader In Mobile Gaming Pure-play mobile gaming companyDeeply aligned with mobile ecosystem (iOS & Android)Expanding global presence, particularly APAC14 year history, 8 on NASDAQ650+ employees in major sites: San Francisco, CABellevue, WA,Long Beach, CAToronto, CanadaMoscow, RussiaBeijing, China Hyderabad, India


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Q4 non-GAAP revenues of $76.2 millionQ4 Adjusted EBITDA of $14.1 million; Record Adjusted EBITDA margin of 18.5%.��Beat bottom line Adjusted EBITDA midpoint guidance by 214%�����Record Q4 cash flow from operations of $19.3 million2014 full non-GAAP year revenue represents a four-year compound annual growth rate of 37.9% since 2010Signed five-year, exclusive mobile game partnership with Katy Perry�Recent Highlights


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~248M total social followers of Glu celebrity brands*Additional partnerships will be announced throughout the first half of 2015Anticipated total social reach to be ~400M by the end of 2016 through new partnerships* Social Power Long term partnerships with annuity characteristics *Aggregate # of followers across Facebook + Twitter + Instagram + Vevo + Vine + Tumblr followers as of January 30, 2015. There is some overlap of these social audiences between channels and celebrities.


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37.9% 4-Year Topline CAGR 4 Year CAGR of 37.9% Non-GAAP revenues have 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 Companys 8/6/2013 Form 8-K and press release Non-GAAP Revenue


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Batting Average Improving* Non-GAAP Revenue per Title Launch *Computed based on the respective years total non-GAAP smartphone revenue from games internally developed by Glu, except that Racing Rivals is included in revenue for 2014, divided by the # of internally developed games launched by Glu in that year, including Racing Rivals for 2014.��Certain games that were launched in one year, may contribute significantly to revenues in a subsequent year, such as Deer Hunter 2014, which was launched in 2013, but also contributes to the batting average for 2014. Non-GAAP revenues have 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 Companys 8/6/2013 Form 8-K and press release


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Hit Ratio Improving *Based on top grossing ranking for all games on the US App Store for iPhone through December 31, 2014; Racing Rivals has been considered a 2014 launch in the above analysis


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Hollywood Leadership Glus 2015 Partnerships *Source: Asymco.com January 22, 2015; App Store billing and box office revenue estimates in millions


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Leader in 4 genres with 8 game engines Core Casual Racing Sports


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Staying Power of Top Grossing Games *Based on top grossing ranking for all games on the US App Store for iPhone taken on December 21st 2014, AppAnnie.com**Based on total number of full calendar months between October 2012  December 2014 the respective game ranked as a top 30 grossing iPhone game on aggregate in the United States, App Annie Intelligence


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Robocop��$6.5M Diversified Portfolio Kim Kardashian: Hollywood��$74.3M Deer Hunter 2014��$52.0M Eternity Warriors 3��$20.9M Racing Rivals��$18.3M Dino Hunter: Deadly Shores��$10.0M Frontline Commando: D-Day��$6.6M Contract Killer: Sniper��$6.2M Frontline Commando 2��$5.8M��Other��catalog���$36.9M��Contract Killer 2��$4.4M $241.8M Total Non-GAAP Revenues in 2014


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Ad Revenues Hedge Against Increases to CPI Minimally exposed to increases in CPIGlobal distribution with localization in up to 12 languages


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Total downloads:�28,441,117 Total sessions:�2,744,215,107 Total minutes player:�11,150,312,402 Level-ups 1,682,790,742 number of happy dances performed #DropItLow�Outfit best-sellers #Major #Swag Flights 6,298,594,356 #WhatJetlag Dates 403,864,598 #Exhausting Photoshoots 748,738,866 #Workit Downloads through Dec 31, 2014. All other data through Jan 29, 2015. Glu Mobile Inc. Glu and the G-man logo are the trademarks or registered trademarks of Glu Mobile Inc. in the United States and other jurisdictions. All rights reserved.


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Deer Hunter 2014 by the numbers 121 million downloads in 192 countries 32,920,499,399 animals total kills 132,332,635,490 shots fired 61,029 years spent hunting in Deer Hunter 2014 Deer Hunter 2014 recorded a peak of over 4 million daily active users.


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Racing Rivals 18 months of racing for pink slips total downloads 34 million total hours spent playing 187.3 million total number of cars won in pink slip races 24.5 million


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Example Franchise Over Time Launch Year Cumulative lifetime non-GAAP revenue through December 31, 2014 2011 2012 2013 $3.9M $13.5M $81.8M 2010 2009 $3.2M


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Glu & Big Data Analytics Glu Analytics Capabilities:Capable of processing 70 million events per secondIngesting 2 billion events per dayAggregating 75 million KPI metrics per day2 trillion event capacity, easily scalableUsage of Analytics:Optimization of user acquisition, retention, paying user conversion & LTVContinually refining game performance through testing and analysis


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Strategy Analytics 2014.Flurry Analytics 2012.(3)������App Annie Intelligence  Top 100 grossing apps, December 2013. Title:�Strong Mobile Secular Trends Smartphone & Tablet Installed Base (m)(1) Games are the #1 Category (Mobile Devices)(2&3) Smartphone Tablet % of Time Spent Worldwide Top Grossing AppsUnited States Smartphones Tablets iPhone iPad Games Other


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Multiple Long-Term Growth Opportunities International Expansion Mobile Ad Spending as eCPMs Converge Quad Screen Wearables Opportunity / Revenue / Value Time $ $ $


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Financial Overview


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Strong Top Line GrowthDiversified Portfolio of FranchisesCost-Effective Customer AcquisitionLong Tail Games Provide Significant VisibilityGrowing & Engaged Installed Base��Financial Investment Highlights


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Revenue 76.2 60.0 65.0 Gross Profit 46.6 34.9 37.9 Gross Margin 61.1% 58.2% 58.2% Operating Expenses 33.1 32.0 32.9 Depreciation 0.7 0.6 0.6 Adjusted EBITDA 14.1 3.5 5.5 Adjusted EBITDA Margin 18.5% 5.8% 8.5% Basic: Earnings per Share $0.12 $ 0.01 $ 0.03 Basic Shares (in 000s) 103,406 103,700 103,700 Diluted: Earnings per Share $ 0.11 $0.01 $0.03 Diluted Shares (in 000s) 106,954 108,100 108,100


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($ in millions) Q414 Q314 Q/Q Q413 Y/Y Total Revenue $ 76.2 $ 83.6 (9%) $ 42.8 78% Gross Profit 46.6 49.8 (7%) 31.3 49% Gross Margin 61.1% 59.6% 150 bp 73.0% (1, 190) bp Operating Expense 33.1 35.0 6% 25.7 (29%) Operating Income/(Loss) 13.5 14.8 (9%) 5.5 -143% Adjusted EBITDA $ 14.1 $ 15.4 8% $ 6.2 (127%)


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Non-GAAP Revenue and Adjusted EBITDA Non-GAAP revenues have been restated to reflect gross accounting for digital storefronts Q113 and prospectively, as outlined in the Companys 8/6/2013 Form 8-K and press release.��(In millions) Non-GAAP Revenue (In millions) Adjusted EBITDA


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% of Non-GAAP Revenue Non-GAAP revenues have been restated to reflect gross accounting for digital storefronts Q113 and prospectively, as outlined in the Companys 8/6/2013 Form 8-K and press release.


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Non-GAAP Revenue by Geography Q4 2014 (In millions)


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Non-GAAP Revenue Mix Non-GAAP revenues have been restated to reflect gross accounting for digital storefronts for Q113 and prospectively, as outlined in the Companys 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 revenues. All prior percentages in the above graphs have been updated to reflect each categorys respective percentage of total non-GAAP revenues. The Premium/All Other revenues include featurephone revenues.


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Non-GAAP Revenue by Title Kim Kardashian: Hollywood $29.3M PlayFirst Legacy* ��$1.0M $76.2M Total Non-GAAP Revenues in Q414 Eternity Warriors 3 $2.4M Contract Killer: Sniper $6.1M Diner Dash $2.3M Contract Killer 2 $0.8M Stardom Hollywood $0.5M Frontline Commando 2 $0.7M Robocop $0.5M Racing Rivals $12.5M Dino Hunter: Deadly Shores $2.7M Tap Sports: Baseball $2.1M Deer Hunter 2014 $10.6M *Comprised of legacy games already live prior to acquisition of PlayFirst by Glu on May 14, 2014


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* Presented in millions of USD, except percentages Organic Non-GAAP Revenue Growth Acquisition Acquisition Date Q414 Non-GAAP�Revenues*�% of Total Non-GAAP�Revenues Pick6 Studios PlayFirst, Inc. Cie Games, Inc. Subtotal:�Inorganic Non-GAAP�Revenues Glu Organic Non-GAAP�Revenues Q414 Total Non-GAAP�Revenues Q413 Total Non-GAAP Revenues Y/Y Organic Revenue Growth Oct-13 May-14 Aug-14 $ 2.1 3.2 12.7 $ 18.0 23.6% 58.2 $ 76.2 76.4% 100.0% $ 42.8 36%


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Organic Non-GAAP Revenue Growth��* Presented in millions of USD, except percentages 113% non-GAAP revenue growth Y/Y including acquisitions89% organic non-GAAP revenue growth Y/Y 89% Y/Y Organic Revenue Growth $3.8 $4.5


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Strong Balance Sheet ($ in millions) Q414 Q314 Q413 Cash and cash equivalents 70.9 54.3 28.5 Accounts receivable, net 32.2 34.6 18.3 Prepaid expenses, royalties and other current assets 17.4 16.8 7.7 Other assets 14.8 13.0 7.5 Intangible assets & goodwill 115.5 119.6 25.1 Total Assets $250.8 $238.3 $ 87.0 Accounts payable and accrued liabilities 15.5 13.1 12.6 Accrued expenses, royalties and other liabilities 26.3 22.3 9.5 Deferred revenue 37.3 34.2 18.2 Common stock/Paid in capital 415.8 413.9 298.6 Accumulated deficit & other comprehensive income (244.1) (245.2) (251.9) Total Liabilities and Stockholders Equity $250.8 $238.3 $ 87.0


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Strong Consumer Interest Installs Cumulative Installs


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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.


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Guidance


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2015 Roadmap * Title launches within each respective half year are listed in no particular order


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2015 Full Year Guidance Guidance ($ in millions) Q115 Q215 Q315 Q415 2015 Total Revenue (Low) $50.0��$245.0 Total Revenue (High) $52.0��$275.0 Adjusted EBITDA (Low) ($2.0)��$30.0 Adjusted EBITDA (High) $0.0��$35.0


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Q115 Guidance ($ in millions, except EPS) Q414 Act Q115 Q115 Guidance Guidance Low High Total Revenue $76.2 $50.0 $52.0 Gross Margin 61.1% 60.4% 60.4% Operating Expense 33.1 33.1 32.3 Operating��Income/(Loss) Depreciation Addback 13.5 (2.9) (0.9)��0.7 0.9 0.9 Adjusted EBITDA $14.1 ($2.0) $0.0 Net Income/(Loss) 12.2 (3.0) (1.0) Basic Shares (millions) 103.4 103.8 103.8 Diluted Shares (millions) 107.0 108.0 108.0 Net Income/(Loss) Per Basic Share $0.12 ($0.03) ($0.01) Net Income/(Loss) Per Diluted Share $0.11 ($0.03) ($0.01)


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2015 Full Year Guidance ($ in millions, except EPS) 2014 Act 2015 Guidance Low High Total Revenue $241.8 $245.0 $275.0 Gross Margin Operating Expense Operating Income Depreciation Addback 63.3% 61.3% 61.3%��120.5 123.4 136.8��32.6 26.8 31.8��2.5 3.2 3.2 Adjusted EBITDA $35.1 $30.0 $35.0 Net Income 33.3 26.0 31.0 Basic Shares (millions) 91.8 104.8 Diluted Shares (millions) 96.9 111.0 Net Income Per Basic Share $0.36 $0.25 $0.30 Net Income Per Diluted Share $0.34 $0.23 $0.28 Cash and ST Investments Balance $70.9 $85.0


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Key Statistics Market Statistics (as of Jan 30, 2015) (in millions except per share and volume data)Stock Price $3.51 52 Week High $7.60 52 Week Low $3.27 Shares Outstanding 107.2 Avg. Daily Volume (last 90 days) 2,510,936 Market Capitalization $376.2 Debt $0 Cash $70.9 Enterprise Value $305.3 Shares Outstanding is as of 1/30/2015 Cash balance is as of 12/31/2014 Average Daily Volume is calculated using the last 90 calendar days


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Benefitting from Strong Secular Global Mobile GrowthLeader in Mobile GamingDiversified Portfolio of FranchisesStrong 2015 Title RoadmapFinancials Benefitting from Significant Investments Investment Highlights


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Non-GAAP Reconciliations


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