Glu Reports Second Quarter 2014 Financial Results

SAN FRANCISCO--(BUSINESS WIRE)--Glu Mobile Inc. (NASDAQ:GLUU), a new leading global

developer along with publisher regarding free-to-play video games for smartphone as well as tablet
devices, today announced financial recent outcomes for its second quarter ended June 30, 2014.
"Our second quarter results were boosted from the continued strength of Deer Hunter 2014 along
with Eternity Warriors 3 additionally to the exceptional early performance involving Kim Kardashian:
Hollywood," stated Niccolo de Masi, Chief Executive Officer regarding Glu. "Kim Kardashian:
Showmanship has broken Glu single-day income and also sustained ARPDAU records, while Dino
Hunter: Deadly Shores, has achieved any Glu single-day download record. These a couple of titles
simultaneously achieved the #1 and #3 chart positions on the U.S. App Shop top Totally Free
pertaining to iPhone. Because a new result of these titles' momentum, we now anticipate
organization record non-GAAP revenue along with adjusted EBITDA inside Q3. Throughout addition,
we possess been substantially escalating guidance for each the most notable as well as main point
here for your full yr 2014."
De Masi continued, "Through our pending acquisition regarding Cie Games, we have been
furthermore pleased that people will be adding your existing #1 grossing racing game about the App
Retailer and also Google Play inside the U.S. towards the Glu family. Together With more than 100
million lifetime installs across all of Cie's games, we are excited in the prospect associated with
adding Racing Rivals along with its team's racing expertise for you to our strong portfolio."
Second Quarter 2014 Monetary Highlights:
Revenue: Total GAAP revenue had been $40.9 million in the 2nd quarter of 2014 in comparison to
$24.4 million within the second quarter involving 2013. Total non-GAAP revenue was $35.0 million
inside the second quarter involving 2014, an increase regarding 51% compared for you to $23.2
million within the 2nd quarter involving 2013. Non-GAAP revenue excludes alterations in deferred
revenue.
Gross Margin: GAAP gross margin had been 69% in the second quarter of 2014 in comparison in
order to 64% inside the second quarter associated with 2013. Non-GAAP gross margin has been 69%
for both the second quarters associated with 2014 as well as 2013, respectively. Non-GAAP gross
margin excludes alterations in deferred income and royalties as well as amortization regarding
intangible assets.
GAAP Operating Loss: GAAP operating loss had been $(3.7) million in the 2nd quarter of 2014 in
comparison to a $(6.0) million loss inside the 2nd quarter regarding 2013.
Non-GAAP Operating Loss: Non-GAAP operating loss has been $(1.5) million in the 2nd quarter
regarding 2014 in contrast for you to a loss associated with profits associated with $(3.6) million in
the course of the second quarter regarding 2013. Non-GAAP operating income (loss) excludes
modifications in deferred revenues as well as deferred price of revenues, amortization of intangible
assets, non-cash warrant expense, stock-based compensation expense, restructuring charges,
alteration of fair worth of your Blammo earnout, along with transitional costs.
Adjusted EBITDA: Adjusted EBITDA was a loss involving $(0.9) million for the 2nd quarter
associated with 2014 in contrast for you to a loss associated with profits regarding $(2.9) million in
the particular program of the next quarter involving 2013. Adjusted EBITDA will be thought as non-
GAAP operating income/(loss) much less depreciation.
GAAP Net Loss and EPS: GAAP net loss was $(3.8) million for the second quarter of 2014 in contrast
to a GAAP net loss involving $(2.9) million for your second quarter regarding 2013. GAAP EPS loss
ended up being $(0.04) for the 2nd quarter associated with 2014, depending on 85.5 million
weighted-average simple shares outstanding, in contrast in order to a loss of $(0.04) for your second
quarter involving 2013, based on 69.8 million weighted-average simple shares outstanding.
Non-GAAP Net Loss and also EPS: Non-GAAP net loss ended up being $(1.6) million for your 2nd
quarter involving 2014 in comparison in order to a loss associated with $(3.8) million for that second
quarter regarding 2013. Non-GAAP EPS loss has been $(0.02) for that 2nd quarter associated with
2014 depending on 85.5 million weighted-average simple shares outstanding, in comparison for you
to a loss of profits of $(0.05) for your 2nd quarter involving 2013 according to 69.8 million weighted-
average fundamental shares outstanding.
Cash Flows Generated (Used) throughout Operations: cash flows generated coming from operations
had been $5.0 million for that second quarter involving 2014 in contrast to cash flows utilized in
operations involving $(1.9) million for your 2nd quarter regarding 2013.
A reconciliation of GAAP in order to non-GAAP outcomes has been provided in the economic
statement tables included in this press release. An explanation of those measures is also included
under under the heading "Non-GAAP financial Measures."
Recent Developments along with Strategic Initiatives:
Today, we announced your entry in to always be able to a definitive agreement for you to acquire Cie
Games, a new leader inside racing along with automobile collection games.
In July, we announced which Kim Kardashian: The display biz industry as well as Dino Hunter:
Deadly Shores set organization revenue, download and also DAU records.
In July, we launched our Hercules game within coordination with most the worldwide theatrical
release.
In June, we announced support pertaining to Google's Android TV platform using both Deer Hunter
2014 as well as Eternity Warriors 2 right away accessible on the platform.
In June, we closed an underwritten public providing regarding 9,861,250 shares involving typical
stock together with net proceeds regarding approximately $32.1 million, following deducting
underwriter costs as well as estimated offering expenses.
In May, we completed the acquisition of PlayFirst - creators involving casual game franchises Diner
Dash, Cooking Dash, Resort Dash as well as Wedding Dash.
"We are usually very pleased with our general execution, specially the initial performance of Kim
Kardashian: Showmanship along with Dino Hunter: Deadly Shores," stated Eric R. Ludwig, Glu's
Chief financial Officer. "We anticipate the combination of Glu title execution coupled with Racing
Rivals via Cie games in order to result in demonstrable leverage within the enterprise inside the 2nd
half of 2014."
Business Outlook as of July 30, 2014:
The next forward-looking statements reflect expectations as of July 30, 2014 as well as are the
expected impact in the Cie Video Games acquisition assuming that we close the acquisition by the
center to end involving August 2014. results may always be materially various and therefore are
affected simply by many factors, such as: consumer demand for mobile entertainment as well as
specifically Glu's products; consumer need for smartphones, tablets and also next-generation
platforms; our capability to enhance your monetization in our titles and evolve our studio along with
continue to effectively launch games-as-a-service; our power to successfully integrate the company
enterprise associated with Cie games together with we as well as understand the particular
expected synergies in the acquisition; development delays upon Glu's products; continued
uncertainty in the global economic environment; competition inside the industry; local store
featuring; modifications in foreign exchange rates; Glu's efficient tax charge as well as other
elements in depth in this release as well as in Glu's SEC filings.
Third Quarter Anticipations - Quarter Ending September 30, 2014:
Non-GAAP revenues are expected to be between $80.0 million and also $85.0 million.
Non-GAAP gross margin is expected to become approximately 58%.
Non-GAAP operating expenses are expected being among $37.0 million and also $38.0 million.
Adjusted EBITDA, defined as non-GAAP operating loss excluding depreciation involving
approximately $700,000, is expected to range from $10.0 million for you to $12.0 million.
Income tax is predicted to be any advantage involving approximately $640,000.
Non-GAAP net income is anticipated to be between $10.0 and $12.0 million, or between $0.09 as
well as $0.11 per weighted-average diluted talk about outstanding, that excludes approximately $1.8
million regarding anticipated stock-based compensation expense and $653,000 for amortization
regarding intangibles. Additionally, non-GAAP net earnings excludes the actual transitional expenses
along with amortization associated with intangibles, if any, related to always be able to Cie games
which is likely to be recorded on conclusion in the transaction and obtain accounting.
Weighted-average typical shares outstanding are expected being approximately 99.3 million
fundamental as well as 108.8 million diluted.
2014 expectations - Total year Ending December 31, 2014:
Non-GAAP revenues are anticipated to become between $222.0 million and $232.0 million.
Non-GAAP gross margin is predicted being approximately 62%.
Adjusted EBITDA is anticipated for you to range via $19.1 million to always be able to $23.1 million.
Non-GAAP net income is expected to be among $16.5 million and also $20.6 million, or perhaps
among $0.17 along with $0.21 for each weighted-average diluted share outstanding, which usually
excludes approximately $11.7 million associated with anticipated stock-based compensation
expense, $2.6 million for amortization regarding intangibles, $835,000 of Blammo earnout mark to
promote charges and then any restructuring charges. Additionally, non-GAAP net earnings excludes
the transitional expenses along with amortization of intangibles, if any, associated for you to
PlayFirst as well as Cie games that will will be recorded upon achievement with the transactions and
buy accounting.
Weighted-average typical shares outstanding are expected being approximately 92.2 million basic
and also 99.7 million diluted.
We anticipate to get money as well as short-term investments at December 31, 2014 associated with
$64.0 million with no debt.
Quarterly Conference Call
Glu will talk about its quarterly results by means of teleconference these days from 1:30 p.m. Pacific
Period (4:30 p.m. Eastern Time). Please dial (866) 582-8907, or even if away from U.S., (760) 298-
5046, along with conference ID # 71612899 to gain access to the actual conference call no less than
5 minutes prior towards the 1:30 p.m. Pacific time commence time. The live webcast and also replay
with the call will even be obtainable on the investor relations portion in the company's site in
www.glu.com/investors. An audio replay is planning to be obtainable among 4:30 p.m. Pacific Time,
July 30, 2014, along with 8:59 p.m. Pacific Time, August 6, 2014, by simply calling (855) 859-2056,
or (404) 537-3406, along with conference ID # 71612899.
Disclosure Utilizing Social Media Channels
Glu currently announces material details for you to its investors making use of SEC filings, press
releases, public conference calls as well as webcasts. Glu uses these channels also as social media
channels to end up being able to announce information concerning the company, games, employees
and other issues. Given SEC guidance concerning the use regarding social media channels to
announce material info in order to investors, Glu is actually notifying investors, the particular media,
its players and others interested within the organization in which inside the future, it may decide to
communicate material info via social media channels or, it will be possible which information it
discloses through social media channels could be deemed to become material. Therefore, Glu
encourages investors, the actual media, players and others interested in Glu in order to assess the
info posted about the company forum (http://ggnbb.glu.com/forum.php) and the business Facebook
web site (https://www.facebook.com/glumobile) and in addition the organization twitter account
(https://twitter.com/glumobile). Investors, the actual media, players or another interested events
could subscribe to the organization blog along with twitter feed at the addresses outlined
above. Any updates to the list of social media channels Glu uses in order to announce material
details will be posted around the Investor Relations web page with the company's site at
www.glu.com/investors.
Use involving Non-GAAP Monetary Measures
To supplement Glu's unaudited condensed consolidated economic information presented in respect
using GAAP, Glu makes use of particular non-GAAP measures of economic performance. the
presentation of these non-GAAP financial measures just isn't intended to become considered inside
isolation from, instead for, or superior to, the particular financial information prepared and also
presented in respect together with GAAP, and could differ via non-GAAP economic measures
employed by some other companies. Inside addition, these non-GAAP measures get limitations in
that they are doing not reflect most of the quantities connected using Glu's results regarding
operations as determined in accordance with GAAP. The Particular non-GAAP financial measures
used by Glu include historical and estimated non-GAAP revenues, non-GAAP smartphone revenues,
non-GAAP price involving revenues, non-GAAP operating expenses, non-GAAP gross profit, non-
GAAP gross margins, non-GAAP operating income/(loss), non-GAAP net loss along with non-GAAP
fundamental and also diluted net loss per share. These non-GAAP monetary measures exclude your
subsequent items via Glu's unaudited consolidated statements regarding operations:
Change in deferred revenues as well as deferred expense involving revenues;
Amortization regarding intangible assets;
Non-cash warrant expense;
Stock-based compensation expense;
Restructuring charges;
Change throughout fair price of Blammo earnout;
Transitional costs;
Release associated with tax liabilities; and
Foreign forex gains and also losses primarily associated for the revaluation involving assets and
liabilities.
In addition, Glu has included on this release "Adjusted EBITDA" figures which are accustomed to
evaluate Glu's operating performance and is also defined as non-GAAP operating income/(loss)
excluding depreciation.
Glu might think about whether significant non-recurring items which arise inside the long term
ought to be also excluded within calculating the actual non-GAAP monetary measures it uses.
Glu believes in which these non-GAAP financial measures, when taken together with all the
corresponding GAAP monetary measures, provide meaningful supplemental more knowledge about
Glu's performance by simply excluding particular items that may not be indicative involving Glu's
core business, operating results or even future outlook. Glu's management uses, and believes that
investors take benefit of referring to, these non-GAAP economic measures within assessing Glu's
operating results, too as when planning, forecasting as well as analyzing long term periods. These
types of non-GAAP monetary measures also facilitate comparisons regarding Glu's performance for
you to prior periods.
Cautions Relating To Forward-Looking Statements
This information launch contains forward-looking statements, such as these relating to our "Business
Outlook as involving July 30, 2014" ("Third Quarter Anticipations - Quarter Ending September 30,
2014" along with "2014 Anticipations - Total year Ending December 31, 2014"), those regarding the
actual expected benefits of our own pending acquisition involving Cie Video Games as well as the
expect timing with the completion associated with this acquisition; and also the statements that we
now anticipate company record non-GAAP revenue and also adjusted EBITDA throughout Q3; along
with that we anticipate the actual mix of Glu title execution coupled with Racing Rivals through Cie
Video Games to result in demonstrable leverage in the company within the second half of 2014.
These types of forward-looking statements are usually topic in order to material risks along with
uncertainties that will could trigger actual results in order to differ materially coming from
individuals within the forward-looking statements. Investors must look into essential risk factors,
which include: the risks identified below "Business Outlook as associated with July 30, 2014"; the
actual danger in which Glu is not necessarily going to be capable of complete the actual acquisition
regarding Cie Games; your danger that will Glu is going to be unable to successfully integrate Cie
Video Games as well as its employees and also accomplish expected synergies, the particular danger
that will Glu will have difficulty retaining crucial Cie Video Games employees; your danger which
consumer need for smartphones, tablets and also next-generation platforms will not develop as
significantly even as anticipate or even that we will be struggling to capitalize about any such
growth; your danger that individuals don't realize the sufficient return in our investment along with
respect for you to our efforts to develop free-to-play video games regarding smartphones, tablets
and next-generation platforms, your danger that individuals won't end up being in any situation to
maintain our excellent relationships along with Apple and Google; the particular risk that our
development expenses regarding games pertaining to smartphones, tablets along with next-
generation platforms are usually greater when compared with we anticipate; the danger which our
just lately along with recently launched video games are generally less popular as compared to
anticipated or decline inside popularity and monetization price faster when compared with we
anticipate; your risk our newly released video games is going to be of a high quality under desired
simply by reviewers as well as consumers; the particular risk that the mobile games market,
particularly together with respect to free-to-play gaming, can be less space-consuming than
anticipated; and other risks in depth below the actual caption "Risk Factors" within our Form 10-Q
filed with almost all the Securities and Exchange Commission about Could 12, 2014 and also our
various other SEC filings. A Person can locate these studies via our site from
http://www.glu.com/investors. We are beneath simply no obligation, and also expressly disclaim any
obligation, to be able to update or alter our forward-looking statements regardless of whether as a
consequence of new information, long term events or perhaps otherwise.
About Glu Mobile
Glu Mobile (NASDAQ:GLUU) is a leading global developer and publisher of free-to-play video games
pertaining to smartphone and tablet devices. Glu is actually focused on creating compelling original
IP games for example CONTRACT KILLER, DEER HUNTER, ETERNITY WARRIORS, along with
FRONTLINE COMMANDO on a wide array of platforms such as iOS, Android, Windows Phone, and
MAC OS. Glu's unique technologies platform enables its titles to be available in order to a diverse
audience involving customers globally. Founded in 2001, Glu is actually headquartered within Bay
Area having a significant workplace outside Seattle, along with international spots throughout
Canada, China, India, Japan, Korea, and also Russia. consumers can find high-quality entertainment
wherever they will begin to see the 'g' character logo as well as in www.glu.com. for stay updates,
please comply with Glu through Twitter at www.twitter.com/glumobile or even become a Glu fan
from www.facebook.com/glumobile.
CONTRACT KILLER, COOKING DASH, DEER HUNTER, DINER DASH, DINO HUNTER: DEADLY
SHORES, ETERNITY WARRIORS, FRONTLINE COMMANDO, HOTEL DASH, WEDDING DASH,
GLU, GLU MOBILE as well as the 'g' character logo are usually trademarks regarding Glu Mobile
Inc.


Glu Mobile Inc.
Consolidated balance Sheets
(in thousands)
(unaudited)
June 30,
December 31,
2014
2013

ASSETS
Cash and cash equivalents
$
71,456
$
28,496
Accounts receivable, net
15,963
18,305
Prepaid expenses and other current assets

6,496


7,663

Total current assets
93,915
54,464

Property and equipment, net
4,272
5,096
Restricted cash
1,790
1,730
Other long-term assets
630
637
Intangible assets, net
8,049
5,599
Goodwill

30,809


19,485

Total assets
$
139,465

$
87,011


LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable
$
9,198
$
10,657
Accrued liabilities
2,458
1,971
Accrued compensation
8,239
5,378
Accrued royalties
1,556
1,727
Deferred revenues

14,738


18,224

Total existing liabilities
36,189
37,957
Other long-term liabilities

2,248


2,357

Total liabilities

38,437


40,314


Common stock
9
8
Additional paid-in capital
356,352
298,593
Accumulated various other comprehensive income
513
307
Accumulated deficit

(255,846
)

(252,211
)
Stockholders' equity

101,028


46,697

Total liabilities and stockholders' equity
$
139,465

$
87,011






Glu Mobile Inc.
Condensed Consolidated Statements involving Operations
(in thousands, except for each share data)
(unaudited)
Three A Couple Of Months Ended
Six months Ended
June 30,
June 30,
June 30,
June 30,
2014
2013
2014
2013

Revenues
$
40,910
$
24,445
$
85,490
$
49,050

Cost of revenues:
Platform commissions, royalties along with other
12,432
7,670
25,634
15,132
Amortization of intangible assets

441


1,078


995


2,152

Total price associated with revenues

12,873


8,748


26,629


17,284

Gross profit

28,037


15,697


58,861


31,766


Operating expenses:
Research and development
17,297
11,224
32,876
22,854
Sales and marketing
7,989
5,143
17,474
10,151
General along with administrative
6,131
3,852
11,057
7,771
Amortization associated with intangible assets
127
495
254
990
Restructuring charge

159


937


159


1,448

Total operating expenses

31,703


21,651


61,820


43,214


Loss coming from operations
(3,666
)
(5,954
)
(2,959
)
(11,448
)

Interest and other income/(expense), net:
Interest income
7
4
13
7
Other income/(expense), net

(31
)

159


(167
)

288

Interest as well as other income/(expense), net

(24
)

163


(154
)

295


Loss before income taxes
(3,690
)
(5,791
)
(3,113
)
(11,153
)
Income tax benefit/(provision)

(78
)

2,870


(522
)

2,735

Net loss
$
(3,768
)
$
(2,921
)
$
(3,635
)
$
(8,418
)

Net loss for each share - fundamental and diluted:
$
(0.04
)
$
(0.04
)
$
(0.04
)
$
(0.12
)

Weighted average common shares outstanding - simple as well as diluted
85,549
69,812
82,634
68,105

Stock-based compensation expense included in:
Research and development
$
3,605
$
163
$
5,922
$
831
Sales as well as marketing
$
190
93
$
291
160
General as well as administrative
$
771


480

$
1,332


990

Total stock-based compensation expense
$
4,566

$
736

$
7,545

$
1,981








Glu Mobile Inc.
GAAP in order to Non-GAAP Reconciliation
(in thousands, except for each discuss data)
(unaudited)

For the actual 3 Months Ended
March 31,
June 30,
September 30,
December 31,
March 31,
June 30,
2013
2013
2013
2013
2014
2014


GAAP revenues
24,605
24,445
21,722
34,841
44,580
40,910
Change inside deferred revenues

111


(1,251
)

886


8,005


2,377


(5,874
)
Non-GAAP Revenues

24,716


23,194


22,608


42,846


46,957


35,036


GAAP gross profit
16,069
15,697
12,769
24,034
30,824
28,037
Change in deferred revenues
111
(1,251
)
886
8,005
2,377
(5,874
)
Amortization regarding intangible assets
1,074
1,078
1,082
1,004
554
441
Non-cash warrant expense
-
-
427
-
-
-
Change inside deferred platform commissions and royalty expense

(138
)

419


(245
)

(1,753
)

(1,209
)

1,527

Non-GAAP gross profit

17,116


15,943


14,919


31,290


32,546


24,131


GAAP operating expense
21,563
21,651
20,612
27,505
30,117
31,703
Stock-based compensation
(1,245
)
(736
)
(720
)
(1,584
)
(2,979
)
(4,566
)
Amortization associated with intangible assets
(495
)
(495
)
(229
)
(117
)
(127
)
(127
)
Transitional costs
-
-
-
-
-
(682
)
Change throughout fair price of Blammo earnout
(29
)
47
31
(56
)
(304
)
(531
)
Restructuring charge

(511
)

(937
)

-


-


-


(159
)
Non-GAAP operating expense

19,283


19,530


19,694


25,748


26,707


25,638


GAAP operating income/(loss)
(5,494
)
(5,954
)
(7,843
)
(3,471
)
707
(3,666
)
Change inside deferred revenues
111
(1,251
)
886
8,005
2,377
(5,874
)
Non-GAAP expense involving revenues adjustment
936
1,497
1,264
(749
)
(655
)
1,968
Stock-based compensation
1,245
736
720
1,584
2,979
4,566
Amortization of intangible assets
495
495
229
117
127
127
Transitional costs
-
-
-
-
-
682
Change in fair value of Blammo earnout
29
(47
)
(31
)
56
304
531
Restructuring charge

511


937


-


-


-


159

Non-GAAP operating income/(loss)

(2,167
)

(3,587
)

(4,775
)

5,542


5,839


(1,507
)

GAAP net income/(loss)
(5,497
)
(2,921
)
(7,968
)
(3,523
)
133
(3,768
)
Change in deferred revenues
111
(1,251
)
886
8,005
2,377
(5,874
)
Non-GAAP cost regarding revenues adjustment
936
1,497
1,264
(749
)
(655
)
1,968
Non-GAAP operating expense adjustment
2,280
2,121
918
1,757
3,410
6,065
Foreign foreign exchange loss/(gain)
(129
)
(137
)
159
130
136
31
Release regarding tax liabilities

-


(3,148
)

-


-


-


-

Non-GAAP net income/(loss)
$
(2,299
)
$
(3,839
)
$
(4,741
)
$
5,620

$
5,401

$
(1,578
)


Reconciliation regarding net income/(loss) and net income/(loss) for each share:
GAAP net income/(loss) for each discuss - basic
$
(0.08
)
$
(0.04
)
$
(0.11
)
$
(0.05
)
$
0.00
$
(0.04
)
GAAP net income/(loss) per share - diluted
$
(0.08
)
$
(0.04
)
$
(0.11
)
$
(0.05
)
$
0.00
$
(0.04
)
Non-GAAP net income/(loss) for each talk about - basic
$
(0.03
)
$
(0.05
)
$
(0.07
)
$
0.07
$
0.07
$
(0.02
)
Non-GAAP net income/(loss) for each share - diluted
$
(0.03
)
$
(0.05
)
$
(0.07
)
$
0.07
$
0.06
$
(0.02
)
Shares utilized in computing Non-GAAP basic net income/(loss) per share
66,397
69,812
71,529
78,071
79,719
85,549
Shares used in computing Non-GAAP diluted net income/(loss) for each share
66,397
69,812
71,529
81,433
85,398
85,549

Non-GAAP operating expense break-out:
GAAP analysis and also development expense
$
11,630
$
11,224
$
11,405
$
12,618
$
15,579
$
17,297
Transitional costs
-
-
-
-
-
(20
)
Stock-based compensation

(668
)

(163
)

(268
)

(849
)

(2,317
)

(3,605
)
Non-GAAP analysis and development expense

10,962


11,061


11,137


11,769


13,262


13,672


GAAP sales and marketing expense
5,008
5,143
5,361
10,608
9,485
7,989
Stock-based compensation

(67
)

(93
)

(40
)

(103
)

(101
)

(190
)
Non-GAAP sales and advertising expense

4,941


5,050


5,321


10,505


9,384


7,799


GAAP general & administrative expense
3,919
3,852
3,617
4,162
4,926
6,131
Transitional costs
-
-
-
-
-
(662
)
Change inside fair price of Blammo earnout
(29
)
47
31
(56
)
(304
)
(531
)
Stock-based compensation

(510
)

(480
)

(412
)

(632
)

(561
)

(771
)
Non-GAAP general and administrative expense
$
3,380

$
3,419

$
3,236

$
3,474

$
4,061

$
4,167







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,
2013
2013
2013
2013
2014
2014


GAAP net income/(loss)
$
(5,497
)
$
(2,921
)
$
(7,968
)
$
(3,523
)
$
133
$
(3,768
)
Change throughout deferred revenues
111
(1,251
)
886
8,005
2,377
(5,874
)
Change throughout deferred platform commissions and also royalty expense
(138
)
419
(245
)
(1,753
)
(1,209
)
1,527
Non-cash warrant expense
-
-
427
-
-
-
Amortization of intangible assets
1,569
1,573
1,311
1,121
681
568
Depreciation
731
661
633
682
620
607
Stock-based compensation
1,245
736
720
1,584
2,979
4,566
Change throughout fair worth of Blammo earnout
29
(47
)
(31
)
56
304
531
Transitional costs
-
-
-
-
-
682
Restructuring charge
511
937
-
-
-
159
Foreign currency exchange loss/(gain)
(129
)
(137
)
159
130
136
31
Interest as well as other income
(3
)
(26
)
(4
)
-
(6
)
(7
)
Income tax provision/(benefit)

135


(2,870
)

(30
)

(78
)

444


78

Total Non-GAAP Adjusted EBITDA
$
(1,436
)
$
(2,926
)
$
(4,142
)
$
6,224

$
6,459

$
(900
)

In inclusion for the causes stated above, that are usually applicable to each of the items Glu excludes
from its non-GAAP monetary measures, Glu believes it is appropriate for you to exclude specific
objects for your next reasons:
Change throughout Deferred Revenues along with Deferred Expense involving Revenues. With your
date we offer specific premium games as well as micro-transactions, Glu comes together with an
obligation to provide extra services and also incremental unspecified digital content material in the
future without one more fee. Within these cases, we recognize the actual revenues and then
pertaining to any related expense associated with revenues, including platform commissions and
also royalties, on a straight-line basis more than the estimated existence of the paying user.
Internally, Glu's management excludes your impact of the modifications in deferred income and
deferred price regarding revenues associated to its premium along with free-to-play games within its
non-GAAP monetary measures when evaluating the particular company's operating performance,
when planning, forecasting as well as analyzing future periods, and when assessing the performance
regarding its management team. Glu believes in which excluding your impact with the alterations in
deferred revenues and also deferred expense regarding revenues coming from its operating
outcomes is very important in order to facilitate comparisons in order to prior intervals during which
Glu did not delay the recognition regarding significant levels of revenue related to always be able to
its video games and to understand Glu's operations.
Amortization of Intangible Assets. While analyzing the particular operating performance regarding
an acquired entity, Glu's management focuses about the total return provided by the investment
(i.e., operating profit generated in the acquired entity as in contrast to the buy value paid) with out
using into thought virtually any allocations made for accounting purposes. Simply Because
purchasing price to have an acquisition automatically reflects the actual accounting value assigned
for you to intangible assets (including acquired in-process technology and goodwill), when analyzing
your operating performance regarding an acquisition in subsequent periods, Glu's management
excludes the particular GAAP impact of acquired intangible assets for you to its monetary results.
Glu believes in which such an approach is advantageous throughout knowing the long-term return
provided by an acquisition and also that investors take benefit of a supplemental non-GAAP
monetary measure in which excludes the actual accounting expense associated using acquired
intangible assets.
Non-cash Warrant Expense. Inside the third quarter involving 2013, Glu recorded a non-cash charge
associated towards the vesting regarding warrants to buy shares regarding typical stock issued to a
brand name holder as portion of a 3rd party licensing, development along with publishing
arrangement. These kinds of fees had been computed making use of your Black-Scholes valuation
model along with had been recorded in cost associated with revenues. Whenever evaluating the
actual performance associated with its consolidated results, Glu does not think about non-cash
warrant expense as it places a greater emphasis about all round stockholder dilution as opposed to
the actual accounting charges associated using the vesting involving any kind of warrants. Because
the actual non-cash warrant expense impacts comparability from period for you to time period Glu
believes that will investors reap your benefits of the supplemental non-GAAP financial measure
which excludes these charges.
Stock-Based Compensation Expense. Glu adopted ASC 718, "Compensation - Stock Compensation"
starting within its fiscal yr ended December 31, 2006. Included inside the stock compensation
expense may be the contingent thought potentially issuable towards the Blammo employees who
were former shareholders regarding Blammo, that is recorded as research along with development
expense more than the term of the earn-out periods, as these employees are primarily employed in
item development. Glu re-measures your fair worth of your contingent consideration each reporting
time period and just records a new compensation expense for that part of the earn-out target that is
most likely to be achieved. in addition, Glu is confronted with potential continued fluctuations in the
fair marketplace worth of the contingent thought within each as well as every reporting period,
since re-measurement is actually impacted simply by alterations in Glu's reveal value and in addition
the assumptions utilized by Glu. Any time evaluating the performance associated with its
consolidated results, Glu does not contemplate stock-based compensation charges. Likewise, Glu's
management team excludes stock-based compensation expense coming from its short along with
long-term operating plans. Throughout contrast, Glu's management team is held accountable for
cash-based compensation and such amounts are generally included within its operating plans.
Further, when considering your impact involving equity award grants, Glu places the greater
emphasis about all round stockholder dilution as opposed to the actual accounting charges related
with your grants. Glu believes it is effective to always be able to give a non-GAAP financial measure
which excludes stock-based compensation to always be able to better view the long-term
performance involving its business.
Restructuring Charges. Glu undertook restructuring activities in the very first and 2nd quarters
involving 2013 as well as the 2nd quarter regarding 2014 as well as recorded (1) non-cash
restructuring fees thanks to be able to vacating the portion regarding its offices throughout
Washington, vacating its Brazil workplace and writing-off your cumulative translation adjustment
upon significant liquidation involving its Brazilian entity; and (2) money restructuring charges due
towards the termination associated with specific employees within its Brazil, China, Europe as well
as U.S. offices. Glu recorded your severance expenses being an operating expense in the wedding it
communicated the actual benefit arrangement for the employee and no significant future services,
additional than a minimum retention period, were necessary with the employee in order to create
the termination benefits. Glu believes in which these restructuring fees do not reflect its ongoing
operations as well as which investors benefit from a new supplemental non-GAAP economic measure
that excludes these charges.
Change inside Fair value of Blammo Earnout. Because part of the particular acquisition involving
Blammo, Glu dedicated in order to issue additional thought within the kind of Glu's typical stock to
the former, non-employee Blammo shareholders if certain revenue targets are usually achieved. Glu
recorded the estimated contingent thought liability at acquisition and will modify the particular fair
worth of the particular liability every reporting period. Any time analyzing the operating
performance regarding an acquired entity, Glu's management focuses about the total return
provided through the investment (i.e., operating gain generated from the acquired entity as
compared for the obtain cost paid such as the final quantities paid out regarding contingent
consideration) without having getting into thought just about any expenses acknowledged post-
acquisition associated towards the change in fair value of your contingent consideration. Since the
ultimate buy price compensated for an acquisition necessarily reflects your accounting value
assigned to be able to both the particular consideration, such as the contingent consideration, paid
out and also for the intangible assets (including goodwill) acquired, when analyzing the particular
operating performance associated with an acquisition inside subsequent periods, the particular
Company's management excludes your GAAP impact regarding any kind of adjustments for the fair
value of these acquisition-related balances for you to its financial results. Glu believes that the fair
worth adjustments affect comparability through period to end up being able to period along with
which investors reap your benefits of a new supplemental non-GAAP financial measure which
excludes these charges.
Transitional Costs. GAAP demands expenses being acknowledged for assorted forms of events
connected having a enterprise acquisition such as legal, accounting as well as other offer associated
expenses. Glu has incurred various costs associated for the acquisition and also integration involving
PlayFirst in to Glu's operations. Glu recorded these non-recurring acquisition and transitional
expenses as operating expenses when these were incurred. Glu believes that these acquisition as
well as transitional costs affect comparability through period regarding time in order to time period
and that will investors take advantage of a new supplemental non-GAAP monetary measure that
excludes these expenses.
Release involving tax liabilities. Throughout the second quarter of 2013, Glu recorded the non-cash
earnings tax advantage related to the relieve specific foreign earnings tax liabilities upon your
expiration of the statute involving limitations. Glu believes this one-time tax advantage will not
reflect its ongoing operations as well as which investors reap your advantages of a supplemental
non-GAAP financial measure which excludes this benefit.
Foreign foreign exchange gains along with losses. Foreign currency exchange gains and also losses
represent your net acquire as well as loss that Glu has recorded for that impact involving currency
exchange charge actions on cash and other assets as well as liabilities denominated throughout
foreign currencies related to the revaluation associated with assets and also liabilities. Accordingly,
foreign forex gains and losses are typically unpredictable as well as can cause Glu's reported results
to vary significantly. due towards the unusual magnitude of these gains along with losses, and the
fact that Glu has certainly not engaged within hedging as well as taken some other actions to lessen
the actual likelihood regarding incurring any sizeable net gain as well as loss inside future periods,
Glu began, using the quarter ended December 31, 2008, to become able to present non-GAAP net
loss along with net loss for each reveal excluding foreign exchange gains along with losses
pertaining to comparability purposes. Glu believes in which these gains as well as losses do not
reflect its ongoing operations and also that will investors benefit from a new supplemental non-GAAP
economic measure in which excludes these items, enabling investors to check Glu's core operating
results in numerous durations without having this variability. Foreign exchange gains/(losses)
acknowledged throughout 2013 as well as the 1st quarter involving 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
)
FY 2014
$
(167
)

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Results