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TheStreet Open House

Glu Comments On Expectations Regarding Third Quarter 2012 Financial Results

Stocks in this article: GLUU

Glu Mobile Inc. (Nasdaq: GLUU), a leading global developer and publisher of freemium games for smartphone and tablet devices, today commented on its expectations regarding its financial results for the third quarter of 2012. “When we announced results for the second quarter on August 2, 2012, we stated that we expected non-GAAP revenues for Q3 2012 to be in the range of $20.25 million to $21.25 million, which includes $17.5 million to $18.5 million in non-GAAP smartphone revenues. We also stated that we expected an Adjusted EBITDA loss of between $3.1 million and $4.0 million for Q3 2012. We currently expect that, on our regularly scheduled earnings call on November 1, 2012, we will report third quarter 2012 revenue results that are consistent with that prior guidance. We also expect Adjusted EBITDA results to be slightly favorable to the $3.1 million high end of that guidance,” commented Eric R. Ludwig, Glu Mobile’s Chief Financial Officer.

When the company gave revenue guidance for the third quarter of 2012, only 1 of the 9 titles expected to be launched during the quarter was globally live. The company then commented that it used its “historical batting averages” of success and failures to calculate its revenue guidance on those back-end loaded titles. The company noted that if those 8 then-yet-to-be-launched titles performed better than its historical averages, then its guidance could prove conservative. However, “as shown by the publicly available Apple App Store and Google Play rankings, of the 11 titles actually launched during Q3, we did not have any titles that were successful at the level of some of our prior breakout hits, and we had more titles that underperformed our expectations,” noted Mr. Ludwig.

“As we have stated in the past, the revenue contribution across quarters of a title depends on its early peak performance. We did not have any breakout title launches in Q3 and are still evaluating our expectations of their lifetime performance. In the next several weeks, we expect to launch Contract Killer 2 and Death Dome, which titles will be important to Q4 revenue performance. Consequently, we have yet to form an updated view on fourth quarter 2012 results. However, we will manage the business to be Adjusted EBITDA break-even or better for Q4. We will provide an updated view on Q4 guidance along with our final Q3 results at our regularly scheduled earnings call” commented Niccolo de Masi, President and Chief Executive Officer of Glu Mobile.

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