September 2013 Here Investor Presentation Exhibit 99.01 |
Page 2 Safe-Harbor Statement This presentation contains "forward-looking" statements including those regarding: that Glu is positioned to capitalize on the next evolution of the market; that Glu is focused on large growth opportunities in GaaS, 3 party publishing and APAC; Glu’s growing 2014 launch schedule; that Glu has strong upside leverage and is investing for sustainable growth and consistent profit potential; estimated growth and expected trends in smartphone users and global mobile traffic; momentum in global tablet growth; the quad screen future; our belief that we have the foundation in place for long-term growth; that GaaS has the potential to create longer-life and higher monetizing games; Glu’s growth opportunity and strategy with regard to its publishing business; our planned use of the net proceeds from the offering; the expected number of games Glu expects to publish in 2014; that Glu’s pipeline is well positioned for success in Asia; our guidance for Q3 2013, Q4 2013 and FY 2013; that Glu is well funded to pursue growth initiatives; our expected pro forma cash balance at December 31, 2013; and that Glu is poised to return to 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 free-to-play 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, newly and planned launched games are less popular or monetize less well 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, free-to-play gaming, is smaller than anticipated; risks related to the restatement of certain of our historical financial statements and other risks detailed under the caption "Risk Factors" in our Form 10-Q for the quarter ended June 30, 2013 filed with the Securities and Exchange Commission on August 9, 2013 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 September 9, 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. © Glu Mobile Inc. – Proprietary rd |
Use of Non-GAAP Financial Measures 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 cost of revenues, non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating margin, non-GAAP net income/(loss), non-GAAP net income/(loss) per share 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 deferred cost of revenues; • 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 June 30, 2013, which is available on our website at http://www.glu.com/investors. © Glu Mobile Inc. – Proprietary Page 3 |
© Glu Mobile Inc. – Proprietary Page 4 Offering Summary Issuer: Glu Mobile Inc. Exchange/Ticker: NASDAQ / GLUU Offering Format: Confidentially Marketed Public Offering Offering Amount: $15.3 million (including 15% overallotment option) Use of Proceeds: General corporate purposes Lock-ups: 90 days for directors, executive officers Sole Bookrunner: Canaccord Genuity Expected Pricing: Week of September 9th |
Page 5 1. Pure play mobile gaming company positioned to capitalize on next evolution of market 2. Focused on large growth opportunities in GaaS, 3 rd party publishing, APAC 3. Strong line up of 2H 2013 titles and growing 2014 launch schedule 4. Strong upside leverage; investing for sustainable growth and consistent profit potential 5. Expanded management team with enhanced expertise in core strategic areas © Glu Mobile Inc. – Proprietary Investment Highlights |
Market Page 6 © Glu Mobile Inc. – Proprietary |
• Featurephone focus • Titles are packaged goods • Premium pricing • No community/social Page 7 Evolution of Mobile Gaming Now Compelling to Mass Market • Smartphone & Tablet • Free-to-play with virtual goods • Games are social & persistent services © Glu Mobile Inc. – Proprietary |
Macro Trends Page 8 Global Smartphone vs. Mobile Phone Users 2013E 0 1000 2000 3000 4000 5000 6000 Smartphone Mobile Phone 1.5B Smartphone Users 5B+ Mobile Phone Users © Glu Mobile Inc. – Proprietary Global Mobile Traffic as % of Total Internet Traffic, 12/08 – 5/13 (with Trendline Projection to 5/15E) Source: Internet Trends D11 Conference, 5/29/2013, Mary Meeker, KPCB Morgan Stanley Research estimates. Source: StatCounter Global Stats, 5/13. Internet Trends D11 Conference, 5/29/2013, Mary Meeker, KPCB. Note that PC-based Internet data bolstered by streaming. |
Global Tablet Momentum Page 9 © Glu Mobile Inc. – Proprietary Quarters After Launch First 12 Quarters Cumulative Unit Shipments, iPhone vs. iPad Source: Internet Trends D11 Conference, 5/29/2013, Mary Meeker, KPCB; Katy Huberty, Ehud Gelblum, Morgan Stanley Research. Gartner. Apple, as of CQ1:13 (12 quarters post iPad launch). Launch Dates: iPhone (6/29/07), iPad (4/3/10) |
Aligned with Ecosystem © Glu Mobile Inc. – Proprietary Page 10 |
Page 11 Quad Screen Future © Glu Mobile Inc. – Proprietary |
Strategic Overview Page 12 © Glu Mobile Inc. – Proprietary |
Foundations for Long Term Growth 13 1. Strong c-suite 2. 1 st party core business 3. 3 rd party began in 2013 President of Studios President of Publishing CFO CEO © Glu Mobile Inc. – Proprietary |
Page 14 • Announced two firsts for Glu: • High fidelity <50MB binary game in DH14 • Airplay support for EW2 • Refined December launch schedule to capitalize on GluOn (GaaS) investments • Announced major partnership to develop games for high profile theatrical releases • Launched first 3 rd party titles; pipeline building • Aligned Wall Street guidance with new model & launch strategy © Glu Mobile Inc. – Proprietary Recent Progress |
© Glu Mobile Inc. – Proprietary Page 15 GluOn “GaaS” Platform • Always online • Investment in a persistent “world” • Frequently updated content & events • Ongoing player interactions • e-commerce operations and analysis • Potentially more engaging, longer-life and higher monetizing games • Gathers and utilizes behavioral data to optimize and tune game performance • Enables more effective targeting of customers • Core game engines that are re-usable Key Elements of GaaS Why GaaS Matters to Glu |
Page 16 © Glu Mobile Inc. – Proprietary Annual Revenue Start-up Global Scale Resources Global Scale Global Scale Start-up Start-up Start-up Start-up Start-up Start-up Start-up • Glu as platform for developers to go global • Technology value- added publisher Evolving Industry Structure |
Page 17 Glu Publishing Platform Devices (750+) Localization (10+) Distribution (13+ stores) • English • Chinese • Korean • Japanese • Portuguese • Russian • French • German • Italian • Spanish GluOn • Server & socio- competitive layer • BI/analytics • 3rd Party SDKs • Subscriptions • Advanced user acquisition © Glu Mobile Inc. – Proprietary |
Page 18 © Glu Mobile Inc. – Proprietary Glu Publishing Models 1 st Party 2 nd Party 3 rd Party Gross Margin Risk Supermajority currently Introduced 2013 Pipeline validated |
Robust Roadmap: 2H 2013 Deer Hunter 2014 – launching late Sept’13 • Franchise Sequel; PVP tournaments • Beta: Reached #1/#20 top free/grossing Canada; #18/#18 top free/grossing Sweden Gang Lords – launching end of Sept’13 • Franchise derivative; card battle/gacha mechanics • ARPDAU improvements over original (Big Time Gangsta’) seen in Beta Motocross Meltdown – launching Dec’13 • PVP; deepened monetization mechanics Frontline Commando 2 – launching Dec’13 • Franchise Sequel; PVP and PVE Eternity Warriors 3 – launching Dec’13 • Franchise Sequel; deep PVE and PVP thereafter Page 19 © Glu Mobile Inc. – Proprietary |
Growth Opportunities Page 20 © Glu Mobile Inc. – Proprietary |
Page 21 GluOn (“GaaS”) Investment Grow 2 nd and 3 rd Party • Expand volume for 2014 • Incremental account management fixed overhead • Marketing investment in 3rd party titles • Royalty advances – higher quality titles & margins • ‘Games-as-a-service’ platform • Highly scalable server-side infrastructure • Supports greater margin capture • ‘Big data’ future © Glu Mobile Inc. – Proprietary Glu Growth Pillars * Represents assumed net proceeds from the offering of approximately $14.0 million to Glu, taking into account underwriting discounts and estimated offering expenses and assuming full exercise of the underwriters’ over-allotment option. |
Grow 2 nd & 3 rd Party Page 22 • Leverage Glu strengths and infrastructure for independent developers globally • Compete on quality and services, not on revenue share Account Management Value-Added Services 1. Right deals with long term lock-in 2. Grow volume 3. Connect with, follow-through on VAS offerings 4. Complete developer lifecycle management 1. Distribution (UA, x-promo, featuring) 2. Consulting (UI, monetization, art) 3. Reach (Android, W8, MacOS…) 4. Technology (GluOn, BI, plug-ins) © Glu Mobile Inc. – Proprietary |
Page 23 2013 2014 * 14 - 8 22 © Glu Mobile Inc. – Proprietary Expand Title Volume 1 Party 2 Party 3 Party 12 2 - 4 16 - 20 30 - 36 * The 2 nd and 3 rd Party title projections for 2014 are based on management’s expectation that it will use the net proceeds from the offering, assuming full exercise of the underwriter’s over-allotment option, primarily to grow our third-party publishing business and to further invest in our GluOn games-as-a-service technology platform. st nd rd |
• Largest and fastest growing mobile market globally • Increasing percentage of Glu revenue (30% and growing) • Glu strong in China, expanding presence in key markets of Japan and Korea • Glu pipeline positioned for APAC success Localizing content Reducing file sizes Expanding user acquisition channels Deploying GaaS © Glu Mobile Inc. – Proprietary Page 24 Build on Momentum in APAC |
Financial Summary Page 25 © Glu Mobile Inc. – Proprietary |
2013 Quarterly Non-GAAP Guidance Page 26 © Glu Mobile Inc. – Proprietary |
© Glu Mobile Inc. – Proprietary Page 27 Pro Forma Balance Sheet (6/30/13) • $33 million cash and equivalents (pro forma 6/30/13)* • No debt • Well funded to pursue growth initiatives • 12/31/2013 proforma ending cash balance $23m+* * $19.1 million of cash and equivalents at 6/30/13 plus assumed net proceeds from the offering of approximately $14.0 million to Glu, taking into account underwriting discounts and estimated offering expenses and assuming full exercise of the underwriters’ over-allotment option |
Glu Mobile: Investment Overview • Strong secular global growth opportunity • New Monetization and User Acquisition teams showing tangible results • Strong 2H 2013 new title release slate leveraging GluOn “GaaS” Page 28 © Glu Mobile Inc. – Proprietary |
Appendix Page 29 © Glu Mobile Inc. – Proprietary |
Annual Non-GAAP Revenue Page 30 © Glu Mobile Inc. – Proprietary Non-GAAP revenue has been restated or revised, as appropriate, to reflect gross accounting for digital storefronts for 2010, 2011 and 2012 as outlined in the Company’s Amended Annual Report on Form 10-K/A for the year ended December 31, 2012 filed with the SEC on August 9, 2013. • Leadership in gaming for smartphones • Proven ability to successfully transition as eco- system evolves • Poised for return to growth |
Quarterly GAAP Revenue by Region Page 31 © Glu Mobile Inc. – Proprietary GAAP revenue has been restated to reflect gross accounting for digital storefronts for 2010, 2011, 2012 and Q113 and prospectively, as outlined in the Company’s Amended Annual Report on Form 10-K/A for the year ended December 31, 2012 and Amended Form 10-Q/A for the quarter ended March 31, 2013, each filed with the SEC on August 9, 2013. $m Smartphone transition drives topline to highest levels since IPO |
Page 32 © Glu Mobile Inc. – Proprietary Quarterly GAAP Revenue Trend by Region Strong Asian presence drives China + Korea revenues GAAP revenue has been restated to reflect gross accounting for digital storefronts for 2010, 2011, 2012 and Q113 and prospectively, as outlined in the Company’s Amended Annual Report on Form 10-K/A for the year ended December 31, 2012 and Amended Form 10-Q/A for the quarter ended March 31, 2013, each filed with the SEC on August 9, 2013. |