Glu Mobile Inc. (GLUU)

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Glu Mobile Inc. (GLUU)

Q3 2017 Earnings Conference Call

November 1, 2017 4:30 PM ET


Bob Jones - IR

Nick Earl - President and CEO

Eric Ludwig - COO and CFO


Doug Creutz - Cowen

Darren Aftahi - ROTH Capital Partners

Michael Graham - Canaccord

Mike Hickey - Benchmark Company



Good day, ladies and gentlemen, and welcome to the Third Quarter 2017 Glu Mobile Earnings Conference Call. At this time all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions] As a reminder, this conference is being recorded.

I would now like to turn the call over to. Bob Jones, Investor Relations.

Bob Jones

Thank you, Andrew. Good afternoon, everyone, and thank you for joining us on the Glu Mobile third quarter 2017 financial results conference call. On the call today are Nick Earl, President and Chief Executive Officer; and Eric Ludwig, COO and Chief Financial Officer.

During the course of this call, we will be making forward-looking statements regarding future events and the future financial performance of the company. Any forward-looking statements that we make today are based on assumptions that we believe to be reasonable as of this date. We undertake no obligation to update these statements as a result of future events. We caution you to consider the important factors that could cause actual results to differ materially from those in the forward-looking statements in the press release and during this conference call. These risk factors are described more fully in our documents filed with the SEC, specifically the most recent reports on Form 10-K and Form 10-Q.

During this call, we will present both GAAP and non-GAAP financial measures. The non-GAAP financial measures are not intended to be considered in isolation from, a substitute for or superior to our GAAP results, and we encourage investors to consider all measures before making an investment decision.

For complete information regarding our non-GAAP financial information, the most directly comparable GAAP measures and a quantitative reconciliation of those figures, please refer to the supplemental presentation accompanying today's earnings call that can be accessed via our investor website, www.glu.investors.

In order to comply with SEC guidance on the use of non-GAAP financial measures, we have changed the way we present and discuss certain non-GAAP financial measures. Specifically, we no longer adjust for the change in deferred revenue when arriving at our non-GAAP measures. However, we will provide the change in deferred revenue and deferred cost of revenue information so that investors can calculate our non-GAAP results based on the same methodology we have used in prior quarters.

Lastly, our supplemental presentation that can be accessed via our investor website has been updated to mirror the order of our prepared remarks. We encourage investors to follow along with the slides during this earnings call.

And with that, I'd now like to turn the call over to Glu's CEO, Nick Earl.

Nick Earl

Thanks, Bob. Good afternoon to everyone. On today's call, I will review highlights of the quarter and provide an update on our growth strategy. Eric will then provide a more detailed discussion of the quarter's financial performance as well as our guidance for the fourth quarter and full year 2017. Today marks my one year anniversary as CEO of Glu. I'm delighted to say that our year-to-date performance has progressed better than we expected and 2017 is shaping up to be a record year. Our strong third quarter represents a record bookings quarter and underscores the progress we've made in creating a culture of creativity, operational excellence and financial discipline in this transformative year. We posted our fifth consecutive quarter of better-than-expected top line growth, driven by strong financial contribution from Design Home, MLB TAP Sports Baseball '17 and several of our key evergreen titles. Bookings increased to $85.7 million, above the high end of our guidance of $78 million to $80 million and a 67% increase over last year's third quarter, as well as an increase over the prior quarter's booking of $82.5 million. It's worth nothing that there were new launches in the third quarter; we continue to drive the strong top line performance completely from our live portfolio. Our effective user acquisitions investments and our strategic approach live operations and our growth in evergreen titles combined with the strong bookings increase led to improved bottom line performance in the quarter and we remain on track to meet our primary financial goal of returning to Adjusted EBITDA profitability beginning in the first quarter of 2018.

I'll dive into new quarter now starting with an update on Design Home. We are continued to execute well on our plans to maximize this title's potential as we close out the year and enter 2018. Booking have increased significantly since we acquired Crowdstar a year ago we believe Design Home continues to represent a significant growth opportunity in terms of booking and adjusted EBITDA Design Home have delivered outstanding growth quarter-over-quarter, the top grossing mobile games need to continuously delivery feature set enhancement in order to grow LTV. For Design Home, these upgrades will include deepening and strengthening the meta game, providing users with the reasons to keep coming back. Another area of focus will be introducing augment and reality that will create a more in-depth and interactive experience. We also intend to customizing game to specific global geographic locations which would expand addressable market and are considering introducing e-commerce capabilities.

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