Glu Mobile Inc. Q3 2016 Earnings Call - Seeking Alpha...Jan 09, 2017 · Glu Mobile Q3 2016...
Transcript of Glu Mobile Inc. Q3 2016 Earnings Call - Seeking Alpha...Jan 09, 2017 · Glu Mobile Q3 2016...
Glu Mobile Q3 2016 Earnings © Glu Mobile Inc. – Proprietary
Glu Mobile Inc.
Q3 2016 Earnings Call
November 3, 2016
Page 1
Glu Mobile Q3 2016 Earnings © Glu Mobile Inc. – Proprietary
Safe Harbor Statement
Page 2
This presentation contains "forward-looking" statements including: that we intend to focus on “winner takes all” “blue ocean genres”, and our four
game labels 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 intends to prioritize making its genre-leading games into evergreen games;
Glu intends to focus on retaining and monetizing elder players; Glu has multiple growth opportunities through virtual and augmented reality, quad
screen, mobile ad spending and international expansion; the planned evolution of Glu’s business, including our intention to have our games
function as platforms; our goal for catalog Bookings to cover fixed operating expenses and for new launches to account for less than 25% of
Bookings in a given year; our expectation regarding Crowdstar’s 2016 bookings and EBITDA; the expected launch date for Crowdstar’s Design
Home; the expected synergies we expect to realize from the Crowdstar acquisition, including increasing their ad revenues and decreasing their
user acquisition spending; the expected launch dates of games featuring celebrities we have signed to long-term partnerships; that we believe we
have a strong pipeline of games featuring celebrities that will be released in 2016 through 2018; our expected title release slate for 2016; the
expected contribution margin flow through of our Bookings; and our Q4-2016 and full year 2016 guidance including Crowdstar. 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: Glu may be unable to successfully integrate Crowdstar and its
employees and achieve expected synergies, Glu may have difficulty retaining key Crowdstar employees; 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 and strategic investments; 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 August 9, 2016 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 November 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.
Glu Mobile Q3 2016 Earnings © Glu Mobile Inc. – Proprietary
Use of Non-GAAP Financial Measures
Page 3
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 Bookings, Adjusted gross profit (as
previously defined) (2), Adjusted gross margin (as previously defined) (1), Adjusted operating expenses and Adjusted EBITDA (as previously defined) (3). 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 and impairment of intangible assets;
• Non-cash warrant expense;
• Stock-based compensation expense;
• Restructuring charges;
• Transitional costs;
• Litigation proceeds and costs;
• Change in fair value of strategic investments;
• Release of tax liabilities and valuation allowance; and
• Foreign currency exchange gains and losses primarily related to the revaluation of assets and liabilities.
Bookings do not reflect the deferral of certain game revenue that Glu recognizes over the estimated useful lives of paying users of Glu’s games and excludes changes in
deferred revenue and litigation settlement proceeds.
In addition, Glu has included in this presentation “Adjusted EBITDA (as previously defined)” figures which are used to evaluate Glu’s operating performance.
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.
(1) See Appendix
(2) See Appendix
(3) See Appendix
Glu Mobile Q3 2016 Earnings © Glu Mobile Inc. – Proprietary Page 4
Executive Summary
Glu Mobile Q3 2016 Earnings © Glu Mobile Inc. – Proprietary Page 5
Glu Mobile Q3 2016 Earnings © Glu Mobile Inc. – Proprietary
Glu Management Team: Nick Earl Promoted to CEO
Chris Akhavan Chief Revenue Officer
Eric R. Ludwig COO & CFO
Niccolo de Masi Executive Chairman
Page 6
Tim Wilson Chief Technology Officer
Nick Earl President & CEO*
*Nick Earl promotion to President
& CEO effective 11/10/2016
Glu Mobile Q3 2016 Earnings © Glu Mobile Inc. – Proprietary
Diversified Studio Infrastructure
Page 7
• Game studios:
San Francisco, CA
San Mateo, CA
Long Beach, CA
Bellevue, WA
Portland, OR
Toronto, Canada
Moscow, Russia
• Support offices:
Beijing, China
Hyderabad, India
London, UK
Tokyo, Japan
Glu Mobile Q3 2016 Earnings © Glu Mobile Inc. – Proprietary
Glu’s 4 Game Labels
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Label Franchises
Action
Celebrity
Sports & Racing
Simulation
• Focus on ‘winner-
takes-all’ ‘blue-
ocean’ genres
• These represent
categories where we
believe we can be
the best in the world
in 2016/2017
Nicki Minaj, Taylor Swift
Future simulation games
Glu Mobile Q3 2016 Earnings © Glu Mobile Inc. – Proprietary
17%
16%
13%
12%
9%
7% 5%3%
18%
YTD 2016: Bookings Delivery from a Broad Portfolio
Page 9
Kendall and Kylie $14.1M
Kim Kardashian: Hollywood $26.2M
Deer Hunter 2016 $10.4M Gordon Ramsay DASH $8.5M
Cooking Dash 2016 $25.9M
Tap Sports Baseball 2016 $20.5M
Other Catalog $27.8M
Racing Rivals $18.5M
Deer Hunter 2014 $4.4M
Glu Mobile Q3 2016 Earnings © Glu Mobile Inc. – Proprietary
Bookings Diversity: Ad Bookings Hedge Against CPI Increases
Page 10
• We believe Glu has one of the leading % bookings contributions from
ads in the industry
• Minimally exposed to increases in CPI
$0.0
$2.0
$4.0
$6.0
$8.0
$10.0
$12.0
$14.0
Q114 Q214 Q314 Q414 Q115 Q215 Q315 Q415 Q116 Q216 Q316
(in Millions)
Ad & Other Bookings Marketing Expense
14.7%
19.5%
14.9%
15.5%
14.8%
17.8% 16.8%
20.7%
15.7%
18.0% 18.3%
15.5%
15.6%
15.3%
12.6%
15.5%
17.6% 16.6%
13.8%
18.5%
17.0%14.6%
0%
5%
10%
15%
20%
25%
Q114 Q214 Q314 Q414 Q115 Q215 Q315 Q415 Q116 Q216 Q316
Ad & Other Bookings as % of Total Bookings Marketing as % of Total Bookings
Glu Mobile Q3 2016 Earnings © Glu Mobile Inc. – Proprietary Page 11
Glu Mobile Q3 2016 Earnings © Glu Mobile Inc. – Proprietary
Growth Landscape
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Glu Mobile Q3 2016 Earnings © Glu Mobile Inc. – Proprietary
Typical
mobile
game
Strong Social & Elder Game = Long Tail Revenues
Peak at launch, then
declining curve
Flat to increasing curve, peak
bookings 16 months post launch
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VS. Launch Date 18+ Months From Launch
18+ Months From Launch Launch Date
Glu Mobile Q3 2016 Earnings © Glu Mobile Inc. – Proprietary
Our Genre Leaders
85 titles shipped over past 6.5 years
Prioritize Making into Evergreen Games
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Glu Mobile Q3 2016 Earnings © Glu Mobile Inc. – Proprietary
Evergreen Games
1. Grow year on year
2. System/mode updates
3. Community does much of the work
Focus on retaining & monetizing elder players
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Glu Mobile Q3 2016 Earnings © Glu Mobile Inc. – Proprietary
Bookings Downloads
Page 16
Tap Sports Baseball Franchise
*Downloads and Bookings represent actual results for the first 150 days since global launch
Glu Mobile Q3 2016 Earnings © Glu Mobile Inc. – Proprietary
ABPDAU ABPD
Page 17
Monetization Improvements
Average Bookings per DAU (“ABPDAU”) is computed as our total Bookings for the applicable title during the first 110 days from launch, divided by 110, divided by the DAU for the title during the
period.
Average Bookings per Download (“ABPD”) is computed as our total Bookings for the applicable title during the first 110 days from launch, divided by 110, divided by, the number of downloads for the
title during the period.
Glu Mobile Q3 2016 Earnings © Glu Mobile Inc. – Proprietary Page 18
Multiple Long-Term Growth Opportunities
$ $ $
Glu Mobile Q3 2016 Earnings © Glu Mobile Inc. – Proprietary
$67 $83 $109 $113
$242 $242
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Glu Evolution
1. Ramping smartphone business
2. Running off feature-phone
operations
1. New launches ~50% of Bookings
2. Forward investing for topline growth
3. Fixed OPEX > catalog Bookings
1. Games-as-Platforms
2. Catalog bookings covers fixed
OPEX
3. New launches <25% of
Bookings
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Bo
okin
gs (
$m
)
The goal of Bookings growth in 2020 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 August 9, 2016 and our other SEC filings..
Fixed OPEX
Catalog Bookings
Glu Mobile Q3 2016 Earnings © Glu Mobile Inc. – Proprietary Page 20
Crowdstar Acquisition
Glu Mobile Q3 2016 Earnings © Glu Mobile Inc. – Proprietary
Glu’s History of Accretive M&A
• Aug ’11: Highly profitable, DH14 and Dino Hunter developer
• Aug ’11: Stardom developer, including Kim Kardashian: Hollywood
• Mar ’12: Paid $5m for brand; saved approx. 7X in royalties in 4 yrs
• Aug ’12: 90 days cash on cash return; core tech for GaaS platform
• Nov ’13: Acqui-hire for $250K; Tap Sports #1 Glu title for 2016
• May’14: $15m for developer of Cooking Dash and Gordon Ramsay
• Aug’14: Racing Rivals developer
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Glu Mobile Q3 2016 Earnings © Glu Mobile Inc. – Proprietary
Crowdstar Introduction
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• Leading Developer in fashion space
• 88 employees based in Burlingame, CA. Good cultural fit, local team, high
quality talent, IP and engine
• 2016 Bookings of $48m expected; $(1) million EBITDA loss
• Covet Fashion revenue has grown last 3 years in a row; platform-like
properties and revenue quality
• Covet Fashion: #80 Top Grossing (USA, iPhone, All Apps, 11/2/2016)
• Design Home launching early 2017; built off Covet engine with platform
capabilities targeting interior design/home market
• Design Home performing well in beta; currently #54 top grossing in Canada (Canada, iPhone, All Apps,
11/2/2016)
Glu Mobile Q3 2016 Earnings © Glu Mobile Inc. – Proprietary
Design Home in Beta
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Strong Beta Revenue in Canada Downloads in Canada
Glu Mobile Q3 2016 Earnings © Glu Mobile Inc. – Proprietary
Deal Structure & Consideration
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• Acquired controlling interest in all-cash transaction
valuing Crowdstar at approximately $45.5 million
• Closed on November 2, 2016
• Represents 0.9X multiple on projected 2016 bookings
Glu Mobile Q3 2016 Earnings © Glu Mobile Inc. – Proprietary
Crowdstar Rationale and Potential Synergies
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• Platform like product with evergreen revenue
• Expected Synergies by 2018:
• We believe we can increase Ad revenues from 8% (Crowdstar actuals) to 16% (Glu’s actuals) by
leveraging Glu ad network contract terms and expanded use of video ads
• We believe we can decrease UA spend from 35% of gross revenue (Crowdstar actuals) to 15-
20% (Glu’s actuals) by leveraging Glu’s User Tracking System for campaign level ROI
performance
Glu Mobile Q3 2016 Earnings © Glu Mobile Inc. – Proprietary
User Engagement
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Glu Mobile Q3 2016 Earnings © Glu Mobile Inc. – Proprietary Page 27
Consumer Interest
105.6
60.2
107.7
89.4
72.6
87.6
78.882.2
70.5
56.459.6
0.0
20.0
40.0
60.0
80.0
100.0
120.0
Q114 Q214 Q314 Q414 Q115 Q215 Q315 Q415 Q116 Q216 Q316
(in Millions) Installs
711.9772.1
879.8969.2
1,041.81,129.5
1,208.21,290.4
1,360.91,417.3
1,476.9
0.0
200.0
400.0
600.0
800.0
1,000.0
1,200.0
1,400.0
1,600.0
Q114 Q214 Q314 Q414 Q115 Q215 Q315 Q415 Q116 Q216 Q316
(in Millions) Cumulative Installs
Glu Mobile Q3 2016 Earnings © Glu Mobile Inc. – Proprietary Page 28
DAU and MAU 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.
7.0
5.3
7.2 7.2
6.0 6.1
5.55.1 4.9
4.1
3.5
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
Q114 Q214 Q314 Q414 Q115 Q215 Q315 Q415 Q116 Q216 Q316
(in Millions) DAU64.5
51.9
60.362.6
54.6
59.6
53.049.4
42.4
35.8
29.6
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
Q114 Q214 Q314 Q414 Q115 Q215 Q315 Q415 Q116 Q216 Q316
(in Millions) MAU
Glu Mobile Q3 2016 Earnings © Glu Mobile Inc. – Proprietary Page 29
ABPDAU and ABPMAU Trends
Average Bookings per DAU (“ABPDAU”) is computed as our total Bookings in a given period, divided by the number of days in that period, divided by, the DAU during the period.
Average Bookings per MAU (“ABPMAU”) is computed as our total Bookings in a given period, divided by the number of months in that period, divided by, the MAU during the period.
Aggregate DAU and MAU for each period presented represents the aggregate metric for the last month of the period.
$0.07 $0.07
$0.13
$0.11 $0.12
$0.10
$0.13 $0.12 $0.12
$0.14
$0.16
$0.00
$0.02
$0.04
$0.06
$0.08
$0.10
$0.12
$0.14
$0.16
$0.18
Q114 Q214 Q314 Q414 Q115 Q215 Q315 Q415 Q116 Q216 Q316
ABPDAU
$0.24$0.23
$0.46
$0.41$0.38
$0.32
$0.41 $0.39$0.42
$0.47
$0.58
$0.00
$0.10
$0.20
$0.30
$0.40
$0.50
$0.60
$0.70
Q114 Q214 Q314 Q414 Q115 Q215 Q315 Q415 Q116 Q216 Q316
ABPMAU
Glu Mobile Q3 2016 Earnings © Glu Mobile Inc. – Proprietary
• 1.5 Billion* total social
followers inked
• Long-term partnerships
• Strong pipeline of games
to be released in 2016
through 2018
Social Power CELEBRITY REACH*
LAUNCH OR
EXPECTED LAUNCH
Kim Kardashian West 154m June 24, 2014
Jason Statham 62m October 22, 2015
Katy Perry 235m December 17, 2015
Kylie & Kendall Jenner 196m February 19, 2016
Britney Spears 102m May 19, 2016
Gordon Ramsay 13m June 28, 2016
Nicki Minaj 136m Soft Launch, Fall 2016
Taylor Swift 261m 2017
Signed but not announced 330m+ 2017-2018
*Aggregate # of followers across Facebook + Twitter + Instagram + Vevo followers as of November 1, 2016. There is overlap of these social audiences between channels and celebrities.
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Glu Mobile Q3 2016 Earnings © Glu Mobile Inc. – Proprietary
Financial Overview
Page 31
Glu Mobile Q3 2016 Earnings © Glu Mobile Inc. – Proprietary Page 32
Q316 Financial Summary
Q316
Guidance
(in millions, except EPS) Actuals* Low High
Bookings 51.3$ 50.0$ 52.0$
Adjusted Gross Profit (as previously defined) (2)
2.3 31.1 32.3
Adjusted Gross Margin (as previously defined) (1)
4.5% 62.1% 62.1%
Adjusted Operating Expenses 34.1 35.7 36.4
Depreciation 0.8 0.6 0.6
Adjusted EBITDA (as previously defined) (3)
(31.0)$ (4.0)$ (3.5)$
Basic & Diluted:
Earnings/(Loss) per Share (0.24)$ (0.04)$ (0.03)$
Basic & Diluted Shares 133.1 132.9 132.9 *Q316 results include $29.8 million of prepaid royalty impairments
(1) See Appendix
(2) See Appendix
(3) See Appendix
Glu Mobile Q3 2016 Earnings © Glu Mobile Inc. – Proprietary
*Q316 results include $29.8 million of prepaid royalty impairments
(1) See Appendix
(2) See Appendix
(3) See Appendix
Page 33
Q316 Non-GAAP Results
($ in millions) Q316* Q216 Q/Q Q315 Y/Y
Bookings $ 51.3 $ 50.9 1% $ 64.4 (20%)
Adjusted Gross Profit (as previously defined) (2) 2.3 31.9 (93%) 38.1 (94%)
Adjusted Gross Margin (as previously defined) (1) 4.5% 62.7% -5820 bp 59.1% -5460 bp
Adjusted Operating Expense 34.1 35.8 (5%) 30.4 12%
Adjusted EBITDA (as previously defined) (3) $ (31.0) $ (3.2) (869%) $ 8.5 (1115%)
Glu Mobile Q3 2016 Earnings © Glu Mobile Inc. – Proprietary Page 34
Bookings and Adjusted EBITDA
$47.0
$35.0
$83.6
$76.2
$62.4$57.5
$64.4
$57.9$54.0
$50.9 $51.3
$0.0
$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 Q116 Q216 Q316
Bookings(in Millions)
$6.5
($0.9)
$15.4 $14.1
$3.9 $1.7
$8.5
$2.8
($3.8) ($3.2)
($31.0)($35.0)
($25.0)
($15.0)
($5.0)
$5.0
$15.0
Q114 Q214 Q314 Q414 Q115 Q215 Q315 Q415 Q116 Q216 Q316
Adjusted EBITDA (as previously defined) (3)
(in Millions)
* *
*Q316 Adjusted EBITDA includes $29.8 million of prepaid royalty impairments
(3) See Appendix
Glu Mobile Q3 2016 Earnings © Glu Mobile Inc. – Proprietary Page 35
% of Bookings
9% 12% 6% 8% 10% 9% 4% 8% 11% 10% 10%
20%22%
18% 16%20% 22%
19%18%
23% 21% 19%
28%
39%
17% 20%
28% 30%
24%33%
35% 39% 37%
25%
23%
26% 25%
26% 25%
25%
24%
25% 25%25%
2%
2%
58%
2%
4%
13% 11%
10% 10%
11%
8%
10% 10%
10%
3%
4%
2% 2%
2%3%
3%
4%
3% 3%
2%
0%
20%
40%
60%
80%
100%
120%
140%
160%
180%
Q114 Q214 Q314 Q414 Q115 Q215 Q315 Q415 Q116 Q216 Q316
Hosting and other costs
Royalties
Royalty Impairments
Platform commissions
R&D Opex
S&M Opex
G&A Opex
Glu Mobile Q3 2016 Earnings © Glu Mobile Inc. – Proprietary Page 36
Bookings by Geography
17.2 14.7 13.0 11.6 10.5 9.6
19.6 24.5
5.6 5.5 7.1 7.0 7.8 6.6
7.3
10.4 6.4
5.9 6.3 6.0 6.1 5.6
8.0
9.7
-
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
45.0
50.0
Q212 Q312 Q412 Q113 Q213 Q313 Q413 Q114
NA APAC ROW
Q3 2016
24.120.0
56.950.7
44.5 41.849.6
44.1 41.4 41.5 40.6
12.6
6.8
9.8
9.8
8.57.6
6.4
6.25.1 4.1 5.010.3
8.2
16.9
15.7
9.48.1
8.4
7.67.5 5.3 5.7
$47.0
$35.0
$83.6
$76.2
$62.4 $57.5
$64.4
$57.9 $54.0
$50.9 $51.3
$0.0
$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 Q116 Q216 Q316
(in Millions)
NA APAC ROW
79%
10%
11%
Glu Mobile Q3 2016 Earnings © Glu Mobile Inc. – Proprietary Page 37
Bookings Mix
59%56%
67%62%
60% 61% 61%60% 64% 64% 61%
38%
38%
31%
36%
38%38%
38%39% 35%
34% 37%
3%
6%
2%
2%
2%1%
1%
1%1%
2% 2%$47.0
$35.0
$83.6
$76.2
$62.4 $57.5
$64.4
$57.9 $54.0
$50.9 $51.3
$0.0
$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 Q116 Q216 Q316
(in Millions) Bookings by Platform
iOS Android All Other
83%
76%
85%85%
85%82%
83%79% 84% 82% 83%
15%
20%
15%
15%
15%18%
17%
21% 16%18% 17%2%
4%
$0.0
$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 Q116 Q216 Q316
(in Millions) Bookings by Category
In-App Purchases Ads Premium/All Other
Glu Mobile Q3 2016 Earnings © Glu Mobile Inc. – Proprietary
Q214, $6.7M, 13%
Q314, $6.5M, 13%
Q414, $1.8M, 3%
Q215, $8.6M, 17%
Q315, $2.9M, 6%
Q116, $11.0M, 21%
Q216, $8.6M, 17%
Q316, $0.7M, 1%
Other, $4.4M, 9%
Page 38
Bookings by Vintage $51.3M Total Bookings in Q316
Cooking Dash 2016 $8.0M
Deer Hunter 2016 $2.2M
Deer Hunter 2014 $1.4M
Racing Rivals
$5.8M
Gordon Ramsay DASH $8.3M Tap Sports Baseball 2016 $9.1M
Kendall and Kylie $1.9M
Contract Killer: Sniper $1.2M
Kim Kardashian: Hollywood $6.7M
Rival Fire $0.6M
Glu Mobile Q3 2016 Earnings © Glu Mobile Inc. – Proprietary Page 39
Strong Balance Sheet
($ in millions) Q316 Q216 Q315
Cash and cash equivalents 147.5$ 158.0$ 182.3$
Accounts receivable, net 14.2 14.3 26.0
Prepaid expenses, royalties and other current assets 28.9 36.6 35.4
Other assets 42.4 67.5 51.7
Intangible assets & goodwill 99.0 106.0 108.0
Total Assets 332.0$ 382.4$ 403.4$
Accounts payable and accrued liabilities 12.3 10.8 12.4
Accrued expenses, royalties and other liabilities 40.3 52.1 50.3
Deferred revenue 32.4 33.2 34.1
Common stock/Paid in capital 568.4 564.7 554.9
Accumulated deficit & other comprehensive income (321.4) (278.4) (248.3)
Total Liabilities and Stockholders' Equity 332.0$ 382.4$ 403.4$
Glu Mobile Q3 2016 Earnings © Glu Mobile Inc. – Proprietary
Guidance
Page 40
Glu Mobile Q3 2016 Earnings © Glu Mobile Inc. – Proprietary Page 41
6 Launches in 2016
January 2016 December 2016
*
*Soft launch expected
Glu Mobile Q3 2016 Earnings © Glu Mobile Inc. – Proprietary Page 42
Strong Contribution Margin Flow Through*
% of Bookings Original IP Low High
Bookings 100.0% 100.0% 100.0%
Platform Fees 24.5% 24.5% 24.5%
Royalties 0.0% 8.0% 24.1%
Adjusted Gross Margin (as previously defined) (1) 75.5% 67.4% 51.4%
User Acquisition 15.9% 15.9% 15.9%
Contribution Margin of Incremental $1.00 of
Bookings 59.6% 51.5% 35.5%
Branded IP Royalty
*All figures presented on an Adjusted basis.
(1) See Appendix
Glu Mobile Q3 2016 Earnings © Glu Mobile Inc. – Proprietary Page 43
2016 Full Year Non-GAAP Guidance - Glu + Crowdstar
Guidance ($ in millions) Q116 Q216 Q316 Q416 2016
Total Bookings (Low) $54.0 $50.9 $51.3 $46.0 $202.2
Total Bookings (High) $54.0 $50.9 $51.3 $48.0 $204.2
Glu Mobile Q3 2016 Earnings © Glu Mobile Inc. – Proprietary Page 44
2016 Full Year Non-GAAP Guidance - Glu + Crowdstar
Glu Standalone Guidance:
Guidance ($ in millions) Q116 Q216 Q316 Q416 2016
Total Bookings (Low) $54.0 $50.9 $51.3 $38.0 $194.2
Total Bookings (High) $54.0 $50.9 $51.3 $40.0 $196.2
Crowdstar Guidance:
Guidance ($ in millions) Q116 Q216 Q316 Q416 2016
Total Bookings (Low) $8.0 $8.0
Total Bookings (High) $8.0 $8.0
Glu + Crowdstar Guidance:
Guidance ($ in millions) Q116 Q216 Q316 Q416 2016
Total Bookings (Low) $54.0 $50.9 $51.3 $46.0 $202.2
Total Bookings (High) $54.0 $50.9 $51.3 $48.0 $204.2
Glu Mobile Q3 2016 Earnings © Glu Mobile Inc. – Proprietary Page 45
Q416 Non-GAAP Guidance – Glu + Crowdstar
($ in millions, except EPS) Q316*
Act
Q416
Guidance
Q416
GuidanceLow High
Bookings $51.3 $46.0 $48.0
Adjusted Gross Margin (as previously defined) (1) 4.5% 64.6% 64.6%
Adjusted Operating Expense 34.1 40.0 40.3
Depreciation Addback 0.8 0.8 0.8
Basic & Diluted Shares (millions) 133.1 134.0 134.0
(1) See Appendix
Glu Mobile Q3 2016 Earnings © Glu Mobile Inc. – Proprietary Page 46
2016 Full Year Non-GAAP Guidance – Glu + Crowdstar
($ in millions, except EPS) 2015
ActLow High
Bookings $242.2 $202.2 $204.2
Adjusted Gross Margin (as previously defined) (1) 61.6% 47.9% 48.1%
Adjusted Operating Expense 135.3 147.3 147.6
Depreciation Addback 2.9 2.9 2.9
Basic Shares (millions) 118.8 131.9 131.9
Diluted Shares (millions) 122.8 131.9 131.9
Cash and ST Investments Balance $180.5 $80.0
2016 Guidance
(1) See Appendix
Glu Mobile Q3 2016 Earnings © Glu Mobile Inc. – Proprietary Page 47
Key Statistics
Stock Price $1.99
52 Week High $4.45
52 Week Low $1.98
Shares Outstanding 133.5
Avg. Daily Volume (last 90 days) 1,641,761
Market Capitalization $265.6
Debt $0
Cash $146.7
Enterprise Value $118.9
Shares Outstanding is as of October 28, 2016
Cash balance is as of September 30, 2016
Average Daily Volume is calculated using the last 90 calendar days
Market Statistics (as of October 28, 2016)
(in millions except per share and volume data)
Glu Mobile Q3 2016 Earnings © Glu Mobile Inc. – Proprietary Page 48
Investment Highlights
• Diversified portfolio of franchises
• Long-tail social and evergreen games provide visibility
• Strengthened studio and technology leadership
• Strong balance sheet with no debt
Glu Mobile Q3 2016 Earnings © Glu Mobile Inc. – Proprietary
Non-GAAP Reconciliations
Page 49
Glu Mobile Q3 2016 Earnings © Glu Mobile Inc. – Proprietary Page 50
GAAP to Adjusted Results Reconciliation
(2) See Appendix
Glu Mobile Q3 2016 Earnings © Glu Mobile Inc. – Proprietary Page 51
Adjusted EBITDA (as previously defined) (3) Reconciliation
(3) See Appendix
Glu Mobile Q3 2016 Earnings © Glu Mobile Inc. – Proprietary
Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual
Q114 Q214 Q314 Q414 Q115 Q215 Q315 Q415 Q116 Q216 Q316
Total Bookings (in millions) $47.0 $35.0 $83.6 $76.2 $62.4 $57.5 $64.4 $57.9 $54.0 $50.9 $51.3
Total Bookings Growth Q/Q 10% (25%) 138% (9%) (18%) (8%) 12% (10%) (7%) (6%) 1%
Total Bookings Growth Y/Y 90% 51% 270% 78% 33% 64% (23%) (24%) (14%) (11%) (20%)
Original IP % of Total Bookings 91% 93% 37% 41% 43% 41% 38% 50% 43% 37% 33%
Adjusted Operating Expenses (in millions) $26.7 $25.6 $35.0 $33.1 $35.9 $35.0 $30.4 $34.1 $37.4 $35.8 $34.1
Marketing Expense (in millions) 7.3 5.5 12.8 9.6 9.7 10.1 10.7 8.0 10.0 8.6 7.5
Marketing as % of Total Bookings 15% 16% 15% 13% 16% 18% 17% 14% 19% 17% 15%
Adjusted EBITDA (as previously defined) (3)
(in millions) 6.5 (0.9) 15.4 14.1 3.9 1.7 8.5 2.8 (3.8) (3.2) (31.0)
Headcount** (at quarter-end) 547 562 630 653 695 732 770 759 738 664 667
Daily Active Users (DAU)* (in millions) 7.0 5.3 7.2 7.2 6.0 6.1 5.5 5.1 4.9 4.1 3.5
Monthly Active Users (MAU)* (in millions) 64.5 51.9 60.3 62.6 54.6 59.6 53.0 49.4 42.4 35.8 29.6
Installs (in millions) 105.6 60.2 107.7 89.4 72.6 87.6 78.8 82.2 70.5 56.4 59.6
Cumulative Installs (in millions) 711.9 772.1 879.8 969.2 1,041.8 1,129.5 1,208.2 1,290.4 1,360.9 1,417.3 1,476.9
In-App Purchase Billable Transactions (in millions)*** 3.3 2.3 7.8 6.9 5.3 4.8 6.0 4.9 5.0 4.4 4.6
Average Bookings per Billable Transaction*** $11.79 $11.84 $9.14 $9.31 $10.06 $9.78 $8.91 $9.44 $9.15 $9.61 $9.08
Page 52
Key Operating Metrics
*DAU & MAU reflects the DAU & MAU figures for the last month of the quarter
**FTE only, excludes contractors, temporary employees and consultants
***Q314 in-app purchase billable transactions and average booking per billable transaction has been revised to include the impact of Cie Games activity after its acquisition on August 20, 2014; Q115 and Q215 in-app
purchase billable transactions and average bookings per billable transaction have been revised to reflect corrected data
(3) See Appendix
Glu Mobile Q3 2016 Earnings © Glu Mobile Inc. – Proprietary Page 53
Appendix
Glu Mobile Q3 2016 Earnings © Glu Mobile Inc. – Proprietary
Non-GAAP (as previously defined) and Non-GAAP (redefined) Financial Measures
Page 54
(1) We have provided Adjusted gross margin (as previously defined) in this presentation. Adjusted gross margin (as previously defined) excludes the impact from revenue
and cost of revenue deferrals accounting treatment on our products. This is the last quarter we will report Adjusted gross margin (as previously defined) and going
forward, we will only be providing GAAP and Adjusted gross margin (redefined) results which includes the impact from revenue and cost of revenue deferrals accounting
treatment on our products .
(2) We have provided Adjusted gross profit (as previously defined) in this presentation. Adjusted gross profit (as previously defined) excludes the impact from revenue
and cost of revenue deferrals accounting treatment on our products. This is the last quarter we will report Adjusted gross profit (as previously defined) and going forward,
we will only be providing GAAP and Adjusted gross profit (redefined) results which includes the impact from revenue and cost of revenue deferrals accounting treatment
on our products .
(3) We have provided Adjusted EBITDA (as previously defined) in this presentation. Adjusted EBITDA (as previously defined) excludes the impact from revenue and cost
of revenue deferrals accounting treatment on our products. This is the last quarter we will report Adjusted EBITDA (as previously defined) and going forward, we will only
be providing GAAP net Income/(loss) and Adjusted EBITDA (redefined) results which includes the impact from revenue and cost of revenue deferrals accounting
treatment on our products.