glu reports second quarter 2014 financial results

8/10/2019 Glu Reports Second Quarter 2014 Financial Results

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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 tabletdevices, 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 alongwith 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 DinoHunter: Deadly Shores, has achieved any Glu single-day download record. These a couple of titlessimultaneously achieved the #1 and #3 chart positions on the U.S. App Shop top Totally Freepertaining 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 pointhere for your full yr 2014."

De Masi continued, "Through our pending acquisition regarding Cie Games, we have beenfurthermore pleased that people will be adding your existing #1 grossing racing game about the AppRetailer and also Google Play inside the U.S. towards the Glu family. Together With more than 100million lifetime installs across all of Cie's games, we are excited in the prospect associated withadding 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 millioninside the second quarter involving 2014, an increase regarding 51% compared for you to $23.2million within the 2nd quarter involving 2013. Non-GAAP revenue excludes alterations in deferredrevenue.

Gross Margin: GAAP gross margin had been 69% in the second quarter of 2014 in comparison inorder 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 regardingintangible assets.

GAAP Operating Loss: GAAP operating loss had been $(3.7) million in the 2nd quarter of 2014 incomparison 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 quarterregarding 2014 in contrast for you to a loss associated with profits associated with $(3.6) million inthe course of the second quarter regarding 2013. Non-GAAP operating income (loss) excludesmodifications 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.


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Adjusted EBITDA: Adjusted EBITDA was a loss involving $(0.9) million for the 2nd quarterassociated with 2014 in contrast for you to a loss associated with profits regarding $(2.9) million inthe 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 contrastto a GAAP net loss involving $(2.9) million for your second quarter regarding 2013. GAAP EPS lossended up being $(0.04) for the 2nd quarter associated with 2014, depending on 85.5 millionweighted-average simple shares outstanding, in contrast in order to a loss of $(0.04) for your secondquarter 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 2ndquarter involving 2014 in comparison in order to a loss associated with $(3.8) million for that secondquarter regarding 2013. Non-GAAP EPS loss has been $(0.02) for that 2nd quarter associated with2014 depending on 85.5 million weighted-average simple shares outstanding, in comparison for youto 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 operationshad been $5.0 million for that second quarter involving 2014 in contrast to cash flows utilized inoperations 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 economicstatement tables included in this press release. An explanation of those measures is also includedunder 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 CieGames, 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 theatricalrelease.

In June, we announced support pertaining to Google's Android TV platform using both Deer Hunter2014 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 typicalstock together with net proceeds regarding approximately $32.1 million, following deductingunderwriter costs as well as estimated offering expenses.

In May, we completed the acquisition of PlayFirst - creators involving casual game franchises DinerDash, Cooking Dash, Resort Dash as well as Wedding Dash.

"We are usually very pleased with our general execution, specially the initial performance of KimKardashian: Showmanship along with Dino Hunter: Deadly Shores," stated Eric R. Ludwig, Glu'sChief financial Officer. "We anticipate the combination of Glu title execution coupled with RacingRivals via Cie games in order to result in demonstrable leverage within the enterprise inside the 2nd


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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 theexpected impact in the Cie Video Games acquisition assuming that we close the acquisition by thecenter to end involving August 2014. results may always be materially various and therefore areaffected simply by many factors, such as: consumer demand for mobile entertainment as well asspecifically Glu's products; consumer need for smartphones, tablets and also next-generationplatforms; our capability to enhance your monetization in our titles and evolve our studio along withcontinue to effectively launch games-as-a-service; our power to successfully integrate the companyenterprise associated with Cie games together with we as well as understand the particularexpected synergies in the acquisition; development delays upon Glu's products; continueduncertainty in the global economic environment; competition inside the industry; local storefeaturing; modifications in foreign exchange rates; Glu's efficient tax charge as well as otherelements 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 involvingapproximately $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 aswell as $0.11 per weighted-average diluted talk about outstanding, that excludes approximately $1.8million regarding anticipated stock-based compensation expense and $653,000 for amortizationregarding intangibles. Additionally, non-GAAP net earnings excludes the actual transitional expensesalong with amortization associated with intangibles, if any, related to always be able to Cie gameswhich is likely to be recorded on conclusion in the transaction and obtain accounting.

Weighted-average typical shares outstanding are expected being approximately 99.3 millionfundamental 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 perhapsamong $0.17 along with $0.21 for each weighted-average diluted share outstanding, which usuallyexcludes approximately $11.7 million associated with anticipated stock-based compensation


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expense, $2.6 million for amortization regarding intangibles, $835,000 of Blammo earnout mark topromote charges and then any restructuring charges. Additionally, non-GAAP net earnings excludesthe transitional expenses along with amortization of intangibles, if any, associated for you toPlayFirst as well as Cie games that will will be recorded upon achievement with the transactions andbuy accounting.

Weighted-average typical shares outstanding are expected being approximately 92.2 million basicand 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. PacificPeriod (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 replaywith the call will even be obtainable on the investor relations portion in the company's site inwww.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, pressreleases, 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, employeesand other issues. Given SEC guidance concerning the use regarding social media channels toannounce 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 tocommunicate material info via social media channels or, it will be possible which information itdiscloses through social media channels could be deemed to become material. Therefore, Gluencourages investors, the actual media, players and others interested in Glu in order to assess theinfo posted about the company forum (http://ggnbb.glu.com/forum.php) and the business Facebookweb 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 outlinedabove. Any updates to the list of social media channels Glu uses in order to announce materialdetails will be posted around the Investor Relations web page with the company's site atwww.glu.com/investors.

Use involving Non-GAAP Monetary Measures

To supplement Glu's unaudited condensed consolidated economic information presented in respectusing GAAP, Glu makes use of particular non-GAAP measures of economic performance. thepresentation 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 alsopresented in respect together with GAAP, and could differ via non-GAAP economic measuresemployed by some other companies. Inside addition, these non-GAAP measures get limitations inthat they are doing not reflect most of the quantities connected using Glu's results regarding


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operations as determined in accordance with GAAP. The Particular non-GAAP financial measuresused 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-GAAPfundamental and also diluted net loss per share. These non-GAAP monetary measures exclude yoursubsequent 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 andliabilities.

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 termought 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 thecorresponding GAAP monetary measures, provide meaningful supplemental more knowledge aboutGlu's performance by simply excluding particular items that may not be indicative involving Glu'score 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'soperating results, too as when planning, forecasting as well as analyzing long term periods. Thesetypes 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 "BusinessOutlook 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 theexpect timing with the completion associated with this acquisition; and also the statements that wenow anticipate company record non-GAAP revenue and also adjusted EBITDA throughout Q3; alongwith that we anticipate the actual mix of Glu title execution coupled with Racing Rivals through Cie


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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 withuncertainties that will could trigger actual results in order to differ materially coming fromindividuals 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"; theactual danger in which Glu is not necessarily going to be capable of complete the actual acquisitionregarding 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 dangerthat will Glu will have difficulty retaining crucial Cie Video Games employees; your danger whichconsumer need for smartphones, tablets and also next-generation platforms will not develop assignificantly even as anticipate or even that we will be struggling to capitalize about any suchgrowth; your danger that individuals don't realize the sufficient return in our investment along withrespect for you to our efforts to develop free-to-play video games regarding smartphones, tabletsand next-generation platforms, your danger that individuals won't end up being in any situation tomaintain our excellent relationships along with Apple and Google; the particular risk that ourdevelopment 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 toanticipated or decline inside popularity and monetization price faster when compared with weanticipate; your risk our newly released video games is going to be of a high quality under desiredsimply 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 thananticipated; and other risks in depth below the actual caption "Risk Factors" within our Form 10-Qfiled 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 fromhttp://www.glu.com/investors. We are beneath simply no obligation, and also expressly disclaim anyobligation, 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 gamespertaining to smartphone and tablet devices. Glu is actually focused on creating compelling originalIP games for example CONTRACT KILLER, DEER HUNTER, ETERNITY WARRIORS, along withFRONTLINE COMMANDO on a wide array of platforms such as iOS, Android, Windows Phone, andMAC OS. Glu's unique technologies platform enables its titles to be available in order to a diverseaudience involving customers globally. Founded in 2001, Glu is actually headquartered within Bay

Area having a significant workplace outside Seattle, along with international spots throughoutCanada, China, India, Japan, Korea, and also Russia. consumers can find high-quality entertainmentwherever 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 fanfrom www.facebook.com/glumobile.


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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 MobileInc.

Glu Mobile Inc.

Consolidated balance Sheets

(in thousands)

(unaudited)

June 30,

December 31,

2014

2013

ASSETS

Cash and cash equivalents

$

71,456


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9/59

8,049

5,599

Goodwill

30,809

19,485

Total assets

$

139,465

$

87,011

LIABILITIES AND STOCKHOLDERS' EQUITY

Accounts payable


10/59

$

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


11/59

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

)


12/59

(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


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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


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Amortization of intangible assets

441

1,078

995

2,152

Total price associated with revenues

12,873

8,748

26,629

17,284


15/59

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


16/59

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


17/59

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


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Other income/(expense), net

(31

)

159

(167

)

288

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

(24

)

163

(154

)

295


19/59

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


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)

$

(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


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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


24/59

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


25/59

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


26/59

(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

)


27/59

419

(245

)

(1,753

)

(1,209

)

1,527

Non-GAAP gross profit

17,116

15,943

14,919

31,290


28/59

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

)


29/59

(4,566

)

Amortization associated with intangible assets

(495

)

(495

)

(229

)

(117

)

(127

)

(127

)

Transitional costs

-

-

-

-

-

(682

)

Change throughout fair price of Blammo earnout

(29

)


30/59

47

31

(56

)

(304

)

(531

)


(511

)

(937

)

-

-

-

(159


31/59

)

Non-GAAP operating expense

19,283

19,530

19,694

25,748

26,707

25,638

GAAP operating income/(loss)

(5,494

)

(5,954

)


32/59

(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



33/59

1,245

736

720

1,584

2,979

4,566


495

495

229

117

127

127

Transitional costs

-

-

-

-

-

682

Change in fair value of Blammo earnout

29

(47

)

(31

)


34/59

56

304

531


511

937

-

-

-

159

Non-GAAP operating income/(loss)

(2,167

)


35/59


36/59


37/59

3,410

6,065

Foreign foreign exchange loss/(gain)

(129

)

(137

)

159

130

136

31

Release regarding tax liabilities

-

(3,148

)

-

-

-


38/59

-

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:


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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

)

$


40/59

(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


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)

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


42/59

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

-

-

-

-


43/59

-

(20

)


(668

)

(163

)

(268

)

(849

)

(2,317

)

(3,605

)

Non-GAAP analysis and development expense

10,962


44/59

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


(67


45/59

)

(93

)

(40

)

(103

)

(101

)

(190

)

Non-GAAP sales and advertising expense

4,941

5,050

5,321


46/59


47/59

(29

)

47

31

(56

)

(304

)

(531

)


(510

)

(480

)

(412

)

(632

)

(561

)


48/59

(771

)

Non-GAAP general and administrative expense

$

3,380

$

3,419

$

3,236

$

3,474

$

4,061

$

4,167


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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

)


50/59


51/59

419

(245

)

(1,753

)

(1,209

)

1,527

Non-cash warrant expense

-

-

427

-

-

-


1,569

1,573

1,311

1,121

681

568

Depreciation

731

661


52/59

633

682

620

607


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

-

-

-

-

-


53/59

682


511

937

-

-

-

159

Foreign currency exchange loss/(gain)

(129

)

(137

)

159

130

136

31

Interest as well as other income

(3

)

(26

)

(4

)

-

(6


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)

(7

)

Income tax provision/(benefit)

135

(2,870

)

(30

)

(78

)

444

78

Total Non-GAAP Adjusted EBITDA

$

(1,436

)


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$

(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 excludesfrom its non-GAAP monetary measures, Glu believes it is appropriate for you to exclude specificobjects 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 anobligation to provide extra services and also incremental unspecified digital content material in thefuture without one more fee. Within these cases, we recognize the actual revenues and thenpertaining to any related expense associated with revenues, including platform commissions andalso 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 anddeferred price regarding revenues associated to its premium along with free-to-play games within itsnon-GAAP monetary measures when evaluating the particular company's operating performance,when planning, forecasting as well as analyzing future periods, and when assessing the performanceregarding 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 operatingoutcomes is very important in order to facilitate comparisons in order to prior intervals during whichGlu did not delay the recognition regarding significant levels of revenue related to always be able toits video games and to understand Glu's operations.


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Amortization of Intangible Assets. While analyzing the particular operating performance regardingan 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 outusing into thought virtually any allocations made for accounting purposes. Simply Becausepurchasing price to have an acquisition automatically reflects the actual accounting value assignedfor you to intangible assets (including acquired in-process technology and goodwill), when analyzing

your operating performance regarding an acquisition in subsequent periods, Glu's managementexcludes 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 returnprovided by an acquisition and also that investors take benefit of a supplemental non-GAAPmonetary measure in which excludes the actual accounting expense associated using acquiredintangible assets.

Non-cash Warrant Expense. Inside the third quarter involving 2013, Glu recorded a non-cash chargeassociated towards the vesting regarding warrants to buy shares regarding typical stock issued to abrand name holder as portion of a 3rd party licensing, development along with publishingarrangement. 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 theactual performance associated with its consolidated results, Glu does not think about non-cashwarrant expense as it places a greater emphasis about all round stockholder dilution as opposed tothe actual accounting charges associated using the vesting involving any kind of warrants. Becausethe actual non-cash warrant expense impacts comparability from period for you to time period Glubelieves that will investors reap your benefits of the supplemental non-GAAP financial measurewhich 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 whowere former shareholders regarding Blammo, that is recorded as research along with developmentexpense more than the term of the earn-out periods, as these employees are primarily employed initem development. Glu re-measures your fair worth of your contingent consideration each reportingtime period and just records a new compensation expense for that part of the earn-out target that ismost likely to be achieved. in addition, Glu is confronted with potential continued fluctuations in thefair 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 additionthe assumptions utilized by Glu. Any time evaluating the performance associated with itsconsolidated results, Glu does not contemplate stock-based compensation charges. Likewise, Glu's

management team excludes stock-based compensation expense coming from its short along withlong-term operating plans. Throughout contrast, Glu's management team is held accountable forcash-based compensation and such amounts are generally included within its operating plans.Further, when considering your impact involving equity award grants, Glu places the greateremphasis about all round stockholder dilution as opposed to the actual accounting charges relatedwith your grants. Glu believes it is effective to always be able to give a non-GAAP financial measurewhich excludes stock-based compensation to always be able to better view the long-termperformance 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-cashrestructuring fees thanks to be able to vacating the portion regarding its offices throughoutWashington, vacating its Brazil workplace and writing-off your cumulative translation adjustmentupon significant liquidation involving its Brazilian entity; and (2) money restructuring charges due


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towards the termination associated with specific employees within its Brazil, China, Europe as wellas U.S. offices. Glu recorded your severance expenses being an operating expense in the wedding itcommunicated 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 createthe termination benefits. Glu believes in which these restructuring fees do not reflect its ongoingoperations as well as which investors benefit from a new supplemental non-GAAP economic measurethat excludes these charges.

Change inside Fair value of Blammo Earnout. Because part of the particular acquisition involvingBlammo, Glu dedicated in order to issue additional thought within the kind of Glu's typical stock tothe former, non-employee Blammo shareholders if certain revenue targets are usually achieved. Glurecorded the estimated contingent thought liability at acquisition and will modify the particular fairworth of the particular liability every reporting period. Any time analyzing the operatingperformance regarding an acquired entity, Glu's management focuses about the total returnprovided through the investment (i.e., operating gain generated from the acquired entity ascompared for the obtain cost paid such as the final quantities paid out regarding contingentconsideration) without having getting into thought just about any expenses acknowledged post-

acquisition associated towards the change in fair value of your contingent consideration. Since theultimate buy price compensated for an acquisition necessarily reflects your accounting valueassigned to be able to both the particular consideration, such as the contingent consideration, paidout and also for the intangible assets (including goodwill) acquired, when analyzing the particularoperating performance associated with an acquisition inside subsequent periods, the particularCompany'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 fairworth adjustments affect comparability through period to end up being able to period along withwhich investors reap your benefits of a new supplemental non-GAAP financial measure whichexcludes these charges.

Transitional Costs. GAAP demands expenses being acknowledged for assorted forms of eventsconnected having a enterprise acquisition such as legal, accounting as well as other offer associatedexpenses. Glu has incurred various costs associated for the acquisition and also integration involvingPlayFirst in to Glu's operations. Glu recorded these non-recurring acquisition and transitionalexpenses as operating expenses when these were incurred. Glu believes that these acquisition aswell as transitional costs affect comparability through period regarding time in order to time periodand that will investors take advantage of a new supplemental non-GAAP monetary measure thatexcludes these expenses.

Release involving tax liabilities. Throughout the second quarter of 2013, Glu recorded the non-cashearnings tax advantage related to the relieve specific foreign earnings tax liabilities upon yourexpiration of the statute involving limitations. Glu believes this one-time tax advantage will notreflect its ongoing operations as well as which investors reap your advantages of a supplementalnon-GAAP financial measure which excludes this benefit.

Foreign foreign exchange gains along with losses. Foreign currency exchange gains and also lossesrepresent your net acquire as well as loss that Glu has recorded for that impact involving currencyexchange charge actions on cash and other assets as well as liabilities denominated throughoutforeign 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 resultsto vary significantly. due towards the unusual magnitude of these gains along with losses, and thefact that Glu has certainly not engaged within hedging as well as taken some other actions to lessenthe actual likelihood regarding incurring any sizeable net gain as well as loss inside future periods,


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Glu began, using the quarter ended December 31, 2008, to become able to present non-GAAP netloss along with net loss for each reveal excluding foreign exchange gains along with lossespertaining to comparability purposes. Glu believes in which these gains as well as losses do notreflect its ongoing operations and also that will investors benefit from a new supplemental non-GAAPeconomic measure in which excludes these items, enabling investors to check Glu's core operatingresults 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 (inthousands):

March 31, 2013

$

129

June 30, 2013

137

September 30, 2013

(159

)

December 31, 2013

(130

)

FY 2013

$

(23

)

March 31, 2014

$


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(136

)

June 30, 2014

(31

)

FY 2014

$

(167

)

http://www.businesswire.com/news/home/20140730006194/en/Glu-Reports-Quarter-2014-Financial-Results
http://www.businesswire.com/news/home/20140730006194/en/Glu-Reports-Quarter-2014-Financial-Resultshttp://www.businesswire.com/news/home/20140730006194/en/Glu-Reports-Quarter-2014-Financial-Resultshttp://www.businesswire.com/news/home/20140730006194/en/Glu-Reports-Quarter-2014-Financial-Resultshttp://www.businesswire.com/news/home/20140730006194/en/Glu-Reports-Quarter-2014-Financial-Results

glu reports second quarter 2014 financial results

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