Positive Engagement and Monetization Trends
Continue
Raises Second Quarter and Full Year 2020
Financial Guidance
Expects Increased Bookings Guidance to Drive
Better Than Anticipated Flow Through to the Bottom Line
Glu Mobile Inc. (NASDAQ: GLUU), a leading developer and
publisher of mobile games, today provided an update on its
operating and expected financial performance for the second quarter
ended June 30, 2020.
Nick Earl, Chief Executive Officer, said, “Since our recent
first quarter report and earnings conference call, we’ve seen
significant momentum in the business and broad-based growth across
our live game portfolio driven by successful live operations
execution and continued positive industry trends. Our three Growth
Games, along with Diner DASH Adventures, Kim Kardashian: Hollywood
and Disney Sorcerer’s Arena, are performing above our expectations,
with several setting new records for daily bookings along the way.
These positive trends are driving increased scale and better than
anticipated flow through to the bottom line. This gives us
confidence in raising our expected financial outlook for the
current quarter and full year.”
The company now expects to report bookings in the range of
$162.5 million to $167.5 million in the second quarter of 2020, an
increase over the prior guidance range of $150.0 million to $155.0
million. This updated quarterly bookings guidance represents 62%
year-over-year growth at the midpoint of the range. As planned, the
company decreased its user acquisition investment in May, driving
strong bottom line flow through. The cost per install (CPI)
environment remains favorable, and although CPIs are higher than in
April, they remain below historical averages.
For the full year 2020, the company has increased its bookings
outlook to $502.5 million to $512.5 million from its prior guidance
of $490.0 million to $500.0 million reflecting the guidance
increase for the second quarter. The bookings guidance includes
contributions from current live games and excludes any unlaunched
titles.
The company’s key titles have outperformed in the second quarter
to date, specifically:
- Design Home and Covet Fashion are both on pace for record
quarters driven by continued strength in live operations
- Tap Sports Baseball 2020 has experienced increased
year-over-year bookings growth of 27% from April 1st to May 25th,
an acceleration from the 23% year-over-year growth reported on the
May 7th earnings call
- Diner DASH Adventures and Kim Kardashian: Hollywood have seen
their strong first quarter momentum continue
- Disney Sorcerer’s Arena has outperformed across major KPI’s and
is showing the foundational signs of a Growth Game
Eric Ludwig, Chief Operating Officer and Chief Financial
Officer, stated, “We believe our increased bookings expectations
for the second quarter paired with strong marginal flow-through
positions us extremely well to execute against our long-term
strategic growth plan. Our updated outlook puts us on pace to be
over $42 million above our prior record quarterly bookings at the
low-end of the range. Other than the revised guidance we announced
today, all other assumptions regarding live game performance and
user acquisition investment for the second half of 2020 that were
made on our May 7th first quarter earnings conference call remain
in place. We continue to take a conservative view on the back half
of the year in light of macroeconomic uncertainty.”
The company is providing this business update in advance of Glu
management participating in the following upcoming investor
presentations and meetings:
- One-on-one meetings and a fireside chat at the Cowen 2020
Technology, Media & Telecom Virtual Conference on Friday, May
29, 2020 at 10:10 a.m. Pacific time (1:10 p.m. Eastern time).
- One-on-one meetings at the Piper Sandler 40th Annual Virtual
Consumer Marketplace Conference on Thursday, June 4, 2020.
- One-on-one meetings and a fireside chat at the Baird 2020
Virtual Global Consumer, Technology & Services Conference on
Thursday, June 4, 2020 at 9:15 a.m. Pacific time (12:15 p.m.
Eastern time).
A live webcast, as well as a replay, of the fireside chats at
the Cowen 2020 Technology, Media & Telecom Virtual Conference,
as well as the Baird 2020 Virtual Global Consumer, Technology &
Services Conference will be available on the company’s investor
relations website at www.glu.com/investors.
Additionally, the company expects to issue its actual second
quarter financial results for the period ending June 30, 2020 in
early August.
Updated Second Quarter 2020 Guidance:
in millions
Low
High
Bookings
$162.5
$167.5
Platform commissions, excluding any impact of deferred platform
commissions
$44.2
$45.6
Royalties, excluding any impact of deferred royalties
$12.4
$12.7
Hosting costs
$2.3
$2.3
User acquisition and marketing expenses
$56.1
$56.1
Adjusted other operating expenses
$37.0
$37.3
Depreciation
$1.5
$1.5
Supplemental information:
Income tax
$0.7
$0.7
Stock-based compensation
$6.7
$6.7
Amortization of intangible assets
$0.9
$0.9
Weighted-average common shares outstanding – basic
153.1
153.1
Weighted-average common shares outstanding – diluted
163.5
163.5
Updated Full Year 2020 Guidance:
in millions
Low
High
Bookings
$502.5
$512.5
Platform commissions, excluding any impact of deferred platform
commissions
$135.7
$138.4
Royalties, excluding any impact of deferred royalties
$33.7
$34.3
Hosting costs
$7.4
$7.5
User acquisition and marketing expenses
$127.5
$130.1
Adjusted other operating expenses
$152.0
$153.0
Depreciation
$5.8
$5.8
Supplemental information:
Income tax
$0.4
$0.4
Stock-based compensation
$28.0
$28.0
Amortization of intangible assets
$3.3
$3.3
Weighted-average common shares outstanding – basic
154.5
154.5
Weighted-average common shares outstanding – diluted
165.8
165.8
Cash and cash equivalent balance
At least $160.0
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) and the company twitter
account (https://twitter.com/glumobile). Investors, the media,
players or other interested parties can subscribe to the company
blog and 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 bookings, platform commissions, excluding any impact of
deferred platform commissions, royalties, excluding any impact of
deferred royalties, and adjusted operating expenses. These non-GAAP
financial measures exclude the following items from Glu's unaudited
consolidated statements of operations:
- Change in deferred platform commissions;
- Change in deferred royalties;
- Amortization of intangible assets;
- Stock-based compensation expense;
- Transitional costs; and
- Litigation costs
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.
Glu may consider whether significant 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.
Glu does not provide guidance on a GAAP basis primarily due to
the fact that Glu is unable to predict, with reasonable accuracy,
future changes in its deferred revenue and corresponding cost of
revenue. The amount of Glu’s deferred revenue and cost of revenue
for any given period is difficult to predict due to differing
estimated useful lives of paying users across games, variability of
monthly revenue, platform commissions and royalties by game and
unpredictability of revenue from new game releases. Future changes
in deferred revenue and deferred cost of revenue are uncertain and
could be material to Glu’s results computed in accordance with
GAAP. Accordingly, Glu is unable to provide a reconciliation of the
non-GAAP financial measure guidance to the corresponding GAAP
measure without unreasonable effort, and as a result, Glu is unable
to assess the probable significant of the unavailable information,
which could materially impact the amount of the future directly
comparable GAAP measures.
Cautions Regarding Forward-Looking Statements
This news release contains forward-looking statements, including
the information under the headings “Updated Second Quarter 2020
Guidance” and “Updated Full Year 2020 Guidance,” and the statements
regarding that we’ve seen significant momentum in the business and
broad-based growth across our live game portfolio driven by
successful live operations execution and continued positive
industry trends, that the positive trends in our business are
driving increased scale and better than anticipated flow through to
the bottom line and gives us confidence in raising our expected
financial outlook for the current quarter and full year, that we
believe our increased bookings expectations for the second quarter
paired with strong marginal flow-through positions us extremely
well to execute against our long-term strategic growth plan, that
the updated outlook puts us on pace to be over $42 million above
our prior record quarterly bookings at the low-end of the range and
that we continue to take a conservative view on the back half of
the year in light of macroeconomic uncertainty.
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 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 be unable build successful Growth Games that provide
predictable bookings and year over year growth; the risk that we
will not be able to maintain our good relationships with Apple and
Google; the risk that our development expenses for games for
smartphones, tablets and next-generation platforms are greater than
we anticipate; the risk that our recently and newly launched games
are less popular than anticipated or decline in popularity and
monetization rate more quickly than we anticipate; the risk that
our newly released games will be of a quality less than desired by
reviewers and consumers; the risk that the mobile games market,
particularly with respect to free-to-play gaming, is smaller than
anticipated; the risk that we may lose a key intellectual property
license; the risk that we are unable to recruit and retain
qualified personnel for developing and maintaining the games in our
product pipeline resulting in reduced monetization of a game,
product launch delays or games being eliminated from our pipeline
altogether; the risks related to the COVID-19 pandemic, including
potentially higher variability in bookings and useful life of users
over the near term, and other risks detailed under the caption
"Risk Factors" in our Form 10-Q filed with the Securities and
Exchange Commission on May 11, 2020 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 developer and publisher
of mobile games. Founded in 2001, Glu is headquartered in San
Francisco with additional locations in Foster City, Toronto and
Hyderabad. With a history spanning over a decade, Glu’s culture is
rooted in taking smart risks and fostering creativity to deliver
world-class interactive experiences for our players. Glu’s diverse
portfolio features top-grossing and award-winning original and
licensed IP titles including, Covet Fashion, Deer Hunter, Design
Home, Diner DASH Adventures, Disney Sorcerer’s Arena, Kim
Kardashian: Hollywood and MLB Tap Sports Baseball available
worldwide on various platforms including the App Store and Google
Play. For more information, visit www.glu.com or follow Glu on
Twitter, Facebook and Instagram.
COVET FASHION, DEER HUNTER, DESIGN HOME, DINER DASH, TAP SPORTS,
GLU, GLU MOBILE, and the 'g' character logo are trademarks of Glu
Mobile Inc.
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version on businesswire.com: https://www.businesswire.com/news/home/20200528005788/en/
Investor Relations: Bob Jones / Taylor Krafchik Ellipsis
IR@glu.com 646-776-0886
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