EX-99.02 3 a50553556_ex99-02.htm EXHIBIT 99.02

Exhibit 99.02

GRAPHIC

Glu Mobile Q412 Earnings Call February 5, 2013  


GRAPHIC

Safe-Harbor Statement This presentation contains "forward-looking" statements including those regarding: forecasted smartphone and feature phone unit sales growth and that we are early in the smartphone upgrade cycle globally; the potential growth opportunity in Glu’s addressable consumer base; forecasted smartphone and tablet unit sales growth in comparison to projected sales growth of computers; Glu being well positioned for where the mobile games market is going with respect to social gaming; our guidance for Q1 2013 and FY 2013; and our target non-GAAP operating model; and forecasted mobile device subscriber growth. 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 freemium games for smartphones and tablets, the risk that we do not maintain our good relationships with Apple and Google; the risk that our development expenses for games for smartphones are greater than we anticipate; the risk that our recently and newly launched games are less popular than anticipated; the risk that our newly released games will be of a quality less than desired by reviewers and consumers; the risk that the mobile games market, particularly with respect to social, freemium gaming, is smaller than anticipated; and other risks detailed under the caption "Risk Factors" in our Form 10-Q filed with the Securities and Exchange Commission on November 9, 2012 and our other SEC filings. You can locate these reports through our website at http://www.glu.com/investors. These "forward-looking" statements are based on estimates and information available to us on February 5, 2013 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.  


GRAPHIC

Use of Non-GAAP Financial Measures © Glu Mobile Inc. – Proprietary Glu uses in this presentation certain non-GAAP measures of financial performance. The presentation of these non-GAAP financial measures is not intended to be considered in isolation from, as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP, and may be different from non-GAAP financial measures used by other companies. In addition, these non-GAAP measures have limitations in that they do not reflect all of the amounts associated with Glu's results of operations as determined in accordance with GAAP. The non-GAAP financial measures used by Glu include non-GAAP revenues, non-GAAP Smartphone revenues, non-GAAP freemium revenues, non-GAAP gross margins, non-GAAP operating expenses, non-GAAP operating margin, non-GAAP Profit/(Loss) and Adjusted EBITDA. These non-GAAP financial measures exclude the following items from Glu's unaudited consolidated statements of operations: •Change in deferred revenues and royalties; •Amortization of in-process development contracts; •Amortization of intangible assets; •Stock-based compensation expense; •Restructuring charges; •Change in fair value of Blammo earnout; •Transitional costs; •Impairment of goodwill; •Release of tax liabilities; and •Foreign currency exchange gains and losses primarily related to the revaluation of assets and liabilities. In addition, Glu has included in this presentation “Adjusted EBITDA” figures which are used to evaluate Glu’s operating performance and is defined as non-GAAP operating income/(loss) excluding depreciation. 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 attached to Glu’s earnings press release for the quarter ended December 31, 2012, which is available on our website at http://www.glu.com/investors. Page 3  


GRAPHIC

Intersection of Two Rising Tides: 1)Growth in gaming on mobile devices 2)Growth in freemium gaming © Glu Mobile Inc. – Proprietary Page 4 Leading Freemium Social Mobile Gaming Company  


GRAPHIC

•Featurephone focus •Branded IP/71% gross margin •Titles are packaged goods •Premium pricing •No community/social Page 5 Evolution of Mobile Gaming © Glu Mobile Inc. – Proprietary Now Compelling to Mass Market + •Smartphone & Tablet •Original IP/90% gross margin •Persistent titles •Freemium with virtual goods •Games are social  


GRAPHIC

Smartphone Inflection Point © Glu Mobile Inc. – Proprietary Page 6 •Very early in smartphone upgrade cycle globally -500 1,000 1,500 2,000 2,500 201120122013201420152016Worldwide sales (millions)Data Source:BI Intelligence Global Smartphone Unit Sales forecast 2/29/2012SmartphoneSalesFeaturePhone SalesSmartphones projected to reach 44% of total handset sales  


GRAPHIC

-1,000 2,000 3,000 4,000 5,000 6,000 SmartphoneMobile PhoneGlobal Units (MM)Global Smartphone vs. Mobile Phone Users, 2012E5x 1.0B Smartphone Users 5.0B Mobile Phone Users  


GRAPHIC

Smartphones & Tablets: Two Screens of High Growth © Glu Mobile Inc. – Proprietary Page 8 -500 1,000 1,500 2,000 2,500 (in millions)TabletsSmartphoneLaptopDesktopData Source:BI Intelligence Global Smartphone Unit Sales forecast 2/29/2012; Gartner 4/10/2012 2011 2012 20132014 2015 2016  


GRAPHIC

Corporate Overview  


GRAPHIC

Corporate Overview •Approx. 600 employees and full-time contractors •6 global studios •18 development teams Toronto San Francisco Seattle Moscow Beijing Hyderabad  


GRAPHIC

Evolution of Glu Mobile © Glu Mobile Inc. – Proprietary Page 11 Freemium, social, original IP & smartphone focus $13.5m raised $15.9m raised First freemium products launched Second batch of freemium products launched Acquisition of Griptonite & Blammo 2nd generation freemium titles Acquisition of Deer Hunter Brand Acquisition of GameSpy Technologies New President of Studios Creation of Glu Publishing  


GRAPHIC

Annual Non-GAAP Revenue Page 12 © Glu Mobile Inc. – Proprietary 1.87.025.746.266.989.883.764.372.987.801020304050607080901002003200420052006200720082009201020112012Revenue ($mm)Featurephone RevSmartphone Rev 1  


GRAPHIC

Success of Original IP Titles Drives Gross Margin Growth © Glu Mobile Inc. – Proprietary Page 13 Note: 2010 figures are GAAP. All figures for Q111 and later are non-GAAP 73%73%75%76%78%83%81%87%88%91%89%90%70%75%80%85%90%95%Q110Q210Q310Q410Q111Q211Q311Q411Q112Q212Q312Q412Total Glu GAAP/Non-GAAP GM%GM% w/o impairments & amortization of intangibles  


GRAPHIC

Glu Tightly Aligned with Ecosystem • IAP/Sub Distribution Channel Technology Integration New Devices at Launch Quality Pipeline 90%+ Featuring Track Record • IAP/Subscriptions • Universal currency • Beam • APK  


GRAPHIC

Public Company Rankings No. Titles in Top 200 Grossing USA USA 4 2 3 0 8 9 1 3 Korea 5 9 1 0 6 17 1 2 Korea China 3 5 13 3 13 0 5 3 7 1 1 0 5 2 5 1 Apple iPhone and Google Play Games Category Data Source: AppAnnie 12/31/2012 8 9 7 5 13 5 5 1  


GRAPHIC

Note: MAU/DAU calculation methodology was changed in Q411 to more accurately reflect the user metrics which had the effect of increasing our Q411 MAU/DAU by less than 5% from what it would have been under our previous methodology. This change affects the comparability of Q411 and subsequent MAU/DAU data to prior quarters. © Glu Mobile Inc. – Proprietary Page 16 953 1,639 2,103 2,873 3,218 3,412 3,835 3,535 - 1,000 2,000 3,000 4,000 5,000Q111Q211Q311Q411Q112Q212Q312Q412DAUDaily Active Users (Average DAU) (In 000s)11,882 16,517 22,090 31,363 29,814 29,034 37,676 34,795 0%5%10%15%20% - 10,000 20,000 30,000 40,000 50,000Q111Q211Q311Q411Q112Q212Q312Q412DAU/MAU %MAUMonthly Active Users (MAU) (In 000s)MAUDAU/MAU % User Metrics •New installs reached 54M in Q412, 21% increase vs. Q411 •Q412 DAU increased 23% vs. Q411; Q412 MAU increased 11% vs. Q411  


GRAPHIC

Dec 2012 Conversion Metrics* © Glu Mobile Inc. – Proprietary 9.1¢ 8.7¢ 8.5¢ 7.5¢ 7.0¢ 6.6¢ 4.7¢ 4.4¢ 6.7¢ ARPDAU** Average*** *All metrics are average for the month. Efforts were taken to remove jailbroken and hacked transactions from calculation – including detecting which devices had purchases come through a jailbroken OS and how much & how often players made IAPs. All numbers are for English, iOS SKUs only. All metrics are for total active users, not total active unique users. **Calculation includes revenue from all sources (not only IAP). *** Average includes titles on this page only: Stardom, DH:R, CKZ2, CK2, Frontline Commando, CK, EW2, BGL. 0.8% 0.7% 0.8% 0.9% 0.8%  


GRAPHIC

Future of Mobile Gaming  


GRAPHIC

Social Gaming 2.0 © Glu Mobile Inc. – Proprietary Page 19 Resource mgmt and casual games broaden audience of gamers on mobile devices Audience evolves to want deeper, more immersive and realistic experiences Glu positioned well for where the market is going Success Pillars  Core gameplay Production values Reach Monetization  


GRAPHIC

Future of Mobile Gaming 2.0 © Glu Mobile Inc. – Proprietary Page 20 3D Realistic 2D Cartoon Production Values Multi-Player In-Game Community Longer session Single Player Facebook Short session Core Gameplay Phones & Tablets iOS & Android iOS Phone Consumer Reach 1.0 Viability: 1-2 pillars working 2.0 Winners: All pillars working Deep Complex Simple Monetization System 2013 Focus  


GRAPHIC

New Division: 3rd Party Publishing  


GRAPHIC

Porting Power •Glu is the gateway beyond iOS •Uniquely positioned as turnkey solution for access beyond iOS •Never been done at scale with rev share – preserves upside Page 22  


GRAPHIC

What Glu Offers 3rd Party Developers © Glu Mobile Inc. – Proprietary Page 23 Technology Distribution Funding Reach Expertise •Featuring •Direct marketing •Cross promo •In-game community •Leaderboards •Automated merchandising •Android subscriptions •Android porting •MacOS, W8 extension •Translation •Royalty advances •Marketing spend •Investment •Western culture •Monetization  


GRAPHIC

Why Work with Glu? English, Chinese, Korean, Japanese, Portuguese, Russian, French, German, Italian, Spanish Developer Ourselves OS Reach Device Coverage (700+ devices) Localization (10 languages at launch)  


GRAPHIC

Quad Screen Future © Glu Mobile Inc. – Proprietary  


GRAPHIC

De-Risked Franchise Creation Initial Test Validation Future  


GRAPHIC

Financials  


GRAPHIC

$17.5$15.9$15.3$15.5$17.2$17.9$17.8$20.1$21.6$24.2$21.2$20.8-5 10 15 20 25 30 Q110Q210Q310Q410Q111Q211Q311Q411Q112Q212Q312Q412Non-GAAP Revenue ($M)Smartphone RevFeaturephone RevPage 28 Smartphone  


GRAPHIC

Non-GAAP Smartphone Revenue Mix Page 29 © Glu Mobile Inc. – Proprietary 3%14%34%29%28%30%33%32%6.7 9.7 10.5 15.0 17.4 20.4 18.3 18.5 74%71%47%65%67%64%60%60%510152025Q111Q211Q311Q411Q112Q212Q312Q412($M)Non-GAAP Revenue by PlatformAll OtherAndroidiOS31%42%56%59%68%63%59%70%3%2%6%9%10%13%13%10%36%36%14%22%13%18%18%11%510152025Q111Q211Q311Q411Q112Q212Q312Q412($M)Non-GAAP Revenue by CategoryPremiumOffers & Incented AdsNon-Incented AdsIn-App Purchases (incl. freemium preloads)


GRAPHIC

$18.5M Non-GAAP Smartphone Revenue in Q412 Frontline Commando $1.8M Stardom: The A-List $0.9M Contract Killer: Zombies $0.7M Blood & Glory $0.4M Eternity Warriors 2 $2.5M Blood & Glory: Legend $1.0M Indestructible $0.4M Deer Hunter Reloaded $1.5M Contract Killer 2 10/24 $2.7M Contract Killer Zombies 2 11/28 $0.5M Death Dome 10/11 $0.4M Launch Date   


GRAPHIC

Q412 Financial Results Summary (non-GAAP) © Glu Mobile Inc. – Proprietary Page 31 ($ in millions) Q412 Q312 Q/Q Q411 Y/Y Featurephone Revenue2.42.9(19%)5.1(54%) Smartphone Revenue18.518.31%15.024%Total Revenue $ 20.8 $ 21.2 (2%) $ 20.1 4%Gross Margin 18.718.9(1%)17.47%Gross Margin %90%89%8 bp87%291 bpOperating Expense 21.221.6-2%18.614%Operating Income/(Loss) (2.5) (2.7) (1.2)Adjusted EBITDA $ (1.8) $ (2.1)(15%) $ (0.7)172%  


GRAPHIC

Maintaining Strong Balance Sheet © Glu Mobile Inc. – Proprietary Page 32 ($ in millions) Q412Q312Q411Cash and cash equivalents 22.3 24.1 32.2 Accounts receivable, net 11.9 14.6 11.8 Prepaid expenses, royalties and other current assets 2.5 3.0 2.4 Other assets 5.3 5.1 4.3 Intangible assets & goodwill 30.3 31.7 32.1 Total Assets $ 72.3 $ 78.5 $ 82.8 Accounts payable and accrued liabilities 10.2 9.4 7.8 Accrued expenses, royalties and other liabilities 14.2 15.3 18.7 Deferred revenue 9.0 8.8 7.1 Common stock/Paid in capital 271.0 269.8 260.8 Accumulated deficit & other comprehensive income(232.1)(224.8) (211.6)Total Liabilities and Stockholders’ Equity $ 72.3 $ 78.5 $ 82.8  


GRAPHIC

Q113 and Full Year 2013 Guidance and Long Term Model  


GRAPHIC

Q113 Guidance (Non-GAAP) © Glu Mobile Inc. – Proprietary Page 34 ($ in millions, except EPS) Q412 ActualQ113 GuidanceQ113 Guidance Hih Low High Featurephone Revenue2.4 1.01.5 Smartphone Revenue18.5 16.017.0Total Revenue20.8 17.018.5Gross Margin (%) 90%89%90%Operating Expense21.2 20.520.7Operating Income/(Loss) (2.5)(5.4)(4.1) Depreciation Addback 0.7 0.80.8Adjusted EBITDA(1.8)(4.6)(3.3)Net Income/(Loss)(3.2)(5.6)(4.3)Basic Shares65.7 66.266.2Diluted Shares69.2 70.870.8Earnings/(Loss) Per Basic Share $(0.05)$(0.08)$(0.06)  


GRAPHIC

2013 Full Year Guidance (Non-GAAP) © Glu Mobile Inc. – Proprietary Page 35 ($ in millions)Low HighLowHigh Featurephone Revenue13.1 4.0 4.0 -70%-70% Smartphone Revenue74.6 80.0 88.0 7%18%Total Revenue87.884.092.0-4%5%Gross Margin (%) 91.5%91.5%Operating Expense87.7 89.3 Operating Income/(Loss)(10.8)(5.1) Depreciation Addback 3.3 3.3 Adjusted EBITDA(2.3)(7.5)(1.8)Net Income/(Loss)(11.6)(5.9)Basic Shares (millions)Diluted Shares (millions)Earnings/(Loss) Per Basic Share (0.17)(0.09)Cash Balance (millions)2.4(5.1)(0.08)2013 Guidance vs. 201220122013 Guidance$14.0+$22.364.367.389.8%69.473.083.4(4.6)  


GRAPHIC

Target Operating Model (Non-GAAP) Gross Margin R&D Sales & Marketing G&A Operating Margin Adjusted EBITDA •Note: Gross margin excludes change in deferred revenue & royalties and amortization of intangible assets. R&D, S&M and G&A exclude stock based-compensation expense. Operating margin excludes amortization of intangible assets, restructuring and transitional expenses, impairment of goodwill and stock-based compensation expense. Adjusted EBITDA is Non-GAAP Operating Margin excluding depreciation expense. 82% 51% 20% 16% (5)% (2)% 2011 90% 36-40% 18-19% 10-11% 20-25% 22-26% Long-Term Target © Glu Mobile Inc. – Proprietary Page 36 90% 58% 23% 14% (5)% (3)% 2012 •Significant leverage expected after hitting break-even  


GRAPHIC

Key Statistics © Glu Mobile Inc. – Proprietary Page 37 •Cash balance as of 12/31/2012 •Average Daily Volume is calculated using the last 90 calendar days (in millions except per share and volume data)Stock Price$2.59 52 Week High$5.90 52 Week Low$1.99 Basic Shares Outstanding65.7 Avg. Daily Volume (last 90 days)1,585,260 Market Capitalization$170.1 Debt$0 Cash*$22.3 Enterprise Value$147.8 Market Statistics (as of January 31, 2013)  


GRAPHIC

Key Operating Metrics •Detailed figures referred to in the 2/5/2013 earnings call, CFO script: Page 38 © Glu Mobile Inc. – Proprietary (All Revenue figures are non-GAAP)Q311Q411Q112Q212Q312Q412Freemium Smartphone Revenue (in thousands)$8,142$13,480$15,979$19,233$16,508$16,651Premium Smartphone Revenue (in thousands)$2,390$1,479$1,457$1,212$1,748$1,828Sub-total Smartphone Revenue (in thousands)$10,532$14,959$17,436$20,445$18,256$18,478Featurephone Revenue (in thousands)$7,253$5,092$4,158$3,727$2,903$2,353Total Revenue (in thousands)$17,785$20,051$21,594$24,172$21,159$20,831Freemium Smartphone Revenue Growth Q/Q6%66%19%20% (14%)1%Freemium Smartphone Revenue % of Total Smartphone Revenue77%90%92%94%90%90%Smartphone Revenue Growth Y/Y326%340%158%111%73%24%Smartphone Revenue % of total59%75%81%85%86%89%Original IP % of total non-GAAP Revenues**53%70%76%84%82%84%Original IP % of Smartphone non-GAAP Revenues73%86%89%95%91%91%Daily Active Users (DAU)* (in millions)2.12.93.23.43.83.5Monthly Active Users (MAU)* (in millions)22.131.429.829.037.734.8Installs (in millions)29.444.755.045.952.854.0Cumulative Installs (in millions)131.3176.1231.1277.0329.8383.8In-App Purchase billable transactions (in thousands)8661,5222,4892,4991,8661,859Average Revenue per billable transaction$6.40$5.79$4.71$5.06$5.70$6.81non-GAAP Operating Expenses (in thousands)$16,490$18,590$19,119$21,500$21,630$21,184Adjusted EBITDA (in thousands)$(1,618)$(672)$539$1,158$(2,141)$(1,830)Headcount*** (at quarter-end)581585610644663564*DAU & MAU reflects the DAU & MAU figures for the last month of the quarter Above figures represent a more detailed methodology in calculating Original IP % of total non-GAAP revenues. ***FTE only, excludes contractors, temporary employees and consultants**In prior publication Original IP % of total non-GAAP Revenues was reported as 68% in Q411, 75% in Q112 and 83% in Q212.  


GRAPHIC

Glu Mobile: Investment Overview •Strong secular global growth opportunity •Original IP titles driving gross margin improvements •Well positioned for Social Gaming 2.0 Page 39