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Glu Reports Fourth Quarter and Full Year 2017 Financial Results


 Tags:   News: Games                This was published: 8 Feb 2018 - 09:26 pm         Print article: Printer friendly page
          

Glu Mobile Inc. (NASDAQ-NMS: GLUU), a leading global developer and publisher of mobile games, today announced financial results for its fourth quarter and full year ended December 31, 2017. In addition, the company provided its initial outlook for its financial performance in the first quarter and for the full year 2018.



Nick Earl, Chief Executive Officer, stated, “Our fourth quarter performance and financial results capped off a historic year for Glu. We successfully executed on our three-pillar growth strategy built around creative IP, operating excellence, and financial discipline. While much work remains, we made significant progress in transforming the company to a creative, product driven mobile game developer that generates more consistent and improved operating and financial results.”

“As we look to 2018 and beyond we are focused on delivering live ops within our existing portfolio, including social interaction and new features that will enhance our user engagement and game experience. As far as new titles, we have significant activity in our new game pipeline highlighted by our recent announcement with Disney Interactive, including the first two major greenlit titles under our new growth strategy. We believe we are well positioned to deliver significantly improved results in 2018 to further build shareholder value.”

Fourth Quarter 2017 Financial Highlights:

    Three Months Ended
December 31,

$ in millions, except per share data

2017     2016
   
Revenue $80.2 $46.3
Bookings $83.2 $57.8
Gross margin 29.5% 55.9%
Net loss ($39.6) ($17.2)
Net loss per share – basic and diluted ($0.29) ($0.13)

Weighted-average common shares
outstanding – basic and diluted

137.7 133.7
Cash and cash equivalents $63.8 $102.1

Cash (used in) / generated from
operations

$5.1 ($0.2)

Cash paid for royalty advances
that are included in cash (used in) /
generated from operations

($3.4) ($4.1)
 

Full Year 2017 Financial Highlights:

   

       Year Ended       

December 31,
$ in millions, except per share data

  2017  

   

  2016  

   
Revenue $286.8 $200.6
Bookings $320.4 $214.0
Gross margin 50.8% 40.1%
Net loss ($97.6) ($87.4)

Net loss per share – basic and diluted

($0.72) ($0.66)

Weighted-average common shares
outstanding – basic and diluted

135.7 131.8
Cash and cash equivalents $63.8 $102.1

Cash used in generated from
operations

($28.1) ($19.8)

Cash paid for royalty advances that
are included in cash used in
operations

($24.4) ($25.8)
 

“Over the last 18 months we streamlined the business by consolidating studios and moving more of our operations to our low-cost India location as well as to our San Francisco creative center. Our bookings grew approximately 50% on a year over year basis, driven by the strength of our Growth games and outperformance by key Evergreen titles,” Said Eric R. Ludwig, Chief Operating Officer and Chief Financial Officer. “This outperformance enabled us to reach our goal of profitability on an adjusted EBITDA basis, excluding $26.1 million in royalty impairment charges, one quarter ahead of our expectation.”

“We expect sustained, growing adjusted EBITDA profitability quarter over quarter throughout 2018 with significant growth in absolute dollars from the first half of the year to the second half. As such, we expect to achieve meaningful adjusted EBITDA profitability and to generate positive free cash flow in 2018.”

Recent Developments and Strategic Initiatives:

  • Glu Collaborates with Disney Interactive on Upcoming Mobile Game: Glu announced today it is collaborating with Disney Interactive on the development of an upcoming mobile game led by Glu Senior Vice President and Creative Leader Mike Olsen. The game is expected to include characters and stories from across Disney and Pixar franchises.
  • Glu Announces Sale of its Moscow Studio: During the quarter, Glu announced it has completed the divestiture of its Moscow studio along with the sale of several titles developed by that location. Glu will receive aggregate consideration of approximately $4.7 million, consisting of $3.2 million in cash and the assumption of approximately $1.5 million in minimum guaranteed royalty payments. In addition, Glu will receive transitional services with a fair value of $0.5 million.
  • Glu Adds Tesla’s Chief People Officer Gabrielle Toledano to Board of Directors: Glu announced the appointment of Gabrielle Toledano to the company’s Board of Directors. In addition to her current role at Tesla, Toledano has an extensive background in gaming and strategic talent development, having spent 10 years at Electronic Arts Inc. most recently as the company’s Chief Talent Officer and Executive Vice President. She is uniquely positioned to offer world-class experience as Glu continues to evolve its talent and growth strategies.

Financial Outlook as of February 8, 2018:

Glu is providing its financial outlook for the first quarter of 2018 and for the full year 2018 as follows:

First Quarter 2018 Guidance:

In millions    

  Low  

   

  High  

Bookings $72.0 $74.0
Platform commissions, excluding any impact of deferred platform commissions $18.5 $19.1
Royalties, excluding any impact of deferred royalties $4.7 $4.8
Hosting and other costs $1.9 $2.0
Marketing expenses $17.7 $18.0
Adjusted other operating expenses $28.1 $28.1
Depreciation $1.0 $1.0
Income tax $0.1 $0.1
Stock-based compensation $5.0 $5.0
Transitional costs $1.8 $1.9
Restructuring costs $0.0 $0.0
Amortization of intangible assets $1.5 $1.5
Weighted-average common shares outstanding – basic 138.9 138.9

Weighted-average common shares outstanding – diluted

146.0 146.0
 

Full Year 2018 Guidance:

In millions    

  Low  

   

  High  

Bookings $325.0 $335.0
Platform commissions, excluding any impact of deferred platform commissions $84.2 $86.8
Royalties, excluding any impact of deferred platform royalties $24.2 $24.9
Hosting and other costs $7.4 $7.6
Marketing expenses $76.0 $78.5
Adjusted other operating expenses $119.0 $119.0
Depreciation $3.8 $3.8
Income tax $0.4 $0.4
Stock-based compensation $20.2 $20.2
Transitional costs $1.8 $1.9
Restructuring costs $0.0 $0.0
Amortization of intangible assets $6.4 $6.4
Weighted-average common shares outstanding – basic 140.3 140.3

Weighted-average common shares outstanding – diluted

146.8 146.8
Cash and short-term investments At least $80m
 

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.

Quarterly Conference Call Information:

Glu will discuss its quarterly results via teleconference today at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time). Please dial (866) 582-8907 (domestic), or (760) 298-5046 (international), with conference ID # 9881828 to access the conference call at least five minutes prior to the 2:00 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 5:00 p.m. Pacific Time, February 8, 2017, and 8:59 p.m. Pacific Time, February 15, 2017, by calling (855) 859-2056, or (404) 537-3406, with conference ID # 9881828.

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;
  • Non-cash warrant (benefit)/expense;
  • Impairment and amortization of intangible assets;
  • Stock-based compensation expense;
  • Restructuring charges; and
  • Transitional 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 and litigation settlement proceeds.

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.

Cautions Regarding Forward-Looking Statements

This news release contains forward-looking statements, including those regarding our “Financial Outlook as of February 8, 2018” (“First Quarter 2018 Guidance” and “Full Year 2018 Guidance”), and the statements that we are focused on delivering live ops within our existing portfolio, including social interaction and new features that will enhance our user engagement and game experience; we have significant activity in our new game pipeline highlighted by our recent announcement with Disney Interactive, including the first two major greenlit titles under our new growth strategy; we believe we are well positioned to deliver significantly improved results in 2018 to further build shareholder value; we expect sustained, growing adjusted EBITDA profitability quarter over quarter throughout 2018 with significant growth in absolute dollars from the first half of the year to the second half; we expect to achieve meaningful adjusted EBITDA profitability and to generate positive free cash flow in 2018; our upcoming title on which we are collaborating with Disney Interactive is expected to include characters and stories from across Disney and Pixar franchises; and that Gabrielle Toledano is uniquely positioned to offer world-class experience as Glu continues to evolve its talent and growth strategies. 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 Glu may not realize the expected benefits of its collaboration with Disney Interactive; 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 titles 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; and other risks detailed under the caption "Risk Factors" in our Form 10-Q filed with the Securities and Exchange Commission on November 9, 2017 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.

Article source - Business Wire, all right reserved. Copyright 2018
Trademarks, logos, pictures and other items may be copyright of firms mentioned in this article.




Further information:
Organisation name:    Glu Mobile Inc.
Organisation stock symbol: NASDAQ:GLUU


Latest stock price data for NASDAQ:GLUU

 


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