GLUU - Earnings call transcript Q2 2020

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Operator

Ladies and gentlemen, thank you for standing by. And welcome to the Second Quarter 2020 Glu Mobile Earnings Call. At this time, app participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised today's conference is being recorded. now Harman hand Singh. would to conference I speaker your Instructions] like the to over [Operator Please ahead. go

Harman Singh

Thank you, XXXX operator. for joining Good afternoon, everyone, on Mobile's and Glu second quarter earnings call. us conference thank you

call and Ludwig, Officer; the Chief Officer. Chief Eric today President COO Earl, On and Nick Executive Financial and are

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

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

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

on in discuss all we revenue, our information the financial a This the quarter’s financial cost provide whereas from on in and based to and GAAP we’ve used the As in of of financial data basis will a otherwise same non-GAAP changes you reconciliation the aside stated refer consistent presentation and deferred operating bookings, revenue tables. with the expense for to deferred our results prior of quarters. below, results reminder, GAAP will non-GAAP total methodology a

supplementary on to providing easily a Both accessible call and also are this to the with you aid the file to conference website. now like reconciliation. during And, over turn would along encourage our Nick. Excel We are with the IR that, We to the file PowerPoint Excel in more follow website this I slides call. on

Nick Earl

today's and our strong go results Thanks, of Harman. afternoon for financial growth call, thanks and progress detail outlook highlights Good quarter for On on XXXX. game Eric will second development strategy. will everyone results on our update an our and provide more then joining. I and into

growth quarter The in to Glu's year-over-year leading live driven exceptional execution results upwardly growth financial bookings of second revised million, our was the guidance. XX% Bookings to This beating great shelter grew record easily three our by and of games. ops $XXX mandates, continued best place in history. all were nearly in quarterly

also full Arena. resurgence Hollywood! of quarter benefited the of Kardashian: from Disney Kim Sorcerer's first and We continued the

while making even investments for growth. Our expected future significant better bottom user much was flow-through in line than acquisition

strategy Our clear. is

on focused We stack potential margin time. increased growth creating are nurturing scale bookings, that games and acquiring can over and

new to performance, a growth is on driving developing robust strategically of objective continue strong layering Our acquisitions. game pipeline and accretive titles

and into significantly to and year June organic growth add capital puts of position great our in the future. in to expands opportunities raise successful Our universe a us potential the acquisition this

Despite live series and XX% quarter. of the grew of increased Looking team's quarter's launched milestone XX% over live Fashion the quarter. month bookings execution, in continuing events. $X.X after ops outperformance second the to live last stack in in crossed by the Sports successful ability show year-over-year MVP grew Design particularly season, by was was to our Home other Tap MLB title year, scheduling, ops event bookings the daily by Rankings. amazing billion record-performing of performance several with and the addition year The Leaderboards at Covet Baseball over World lifetime an along phenomenal a with for The delay year. season summer robust year-over-year XX% driven performance bookings. the each and strong driven

our We is extending the accessibility to This audience, to play Baseball players. deepen consistent connections with and develop to platform play, our by with browser. Sports Design also continue our opportunities web initiative Home connected cross with PC strategy Tap and expand increase

and of quarter, early payoff the the transition monetization. Diner Disney Our XXXX, first grew year-over-year in two of ops still discussed XXX% live game resiliency IP - Adventures quarter, launch, quarter saw since bookings generated bookings have around title. drive Hollywood ops Dash the showing built potential. Last quarter from Kardashian Arena incredible the year-over-year growth signs growth the In showing to to titles, and status. reported Kim in and In Sorcerer's and this live that Disney/Pixar highest its success the $XX potential grew which Kim is quarter game we over second and engagement we investing while latest helped million in XXX% of over our

decided had growth have the Kim also Kardashian calendar. growing a Dash bookings to core offers quarter opportunity. originals programmable XX% strong loop which updated from elder on monthly an first in a compelling Diner to more Adventures an we softness event date reallocate resources quarter enhanced in based Given and beta Hollywood the retention, seen we've with to

the and we and calls, this lead have in sports. we to and Fashion our intention and expertise Design Covet to believe add PX leaders maintain show promise Crowdstars continues closed umbrella on In leadership beta. As and Home which position discussed are our brands our category, that leverage we can proven in with to is previous lifestyle build lifestyle expand

Over years, launched of potential games growth the last globally have have the long-term two to Glu-developed profitability. two which three we drive and

sets competitive differentiation mobile where market to years. players is for in that defined keep engaged by higher entertained and feature today's also very recognize the much We deep bar success is and

continues more risk much first is work time robust to to to the the extend experience to Deer of that we franchise World, allow XXXX have loop the in the As add fully core history. development for play Hunter a on decided team connected into player

We are depth Baseball. continue social to Sports this IP this and allow game for potential this. with chance believe this many immense game will play competitive in has want see to for and in that we best Home ensure category its lead Design years adding to like as Tap experienced We with the

until from they As a reminder, our titles guidance the new are after to exclude any contribution quarter philosophy is launched.

growth expect new any strong balance far benefit year-over-year year. in in of to show without we the Given the record so performance launches the the XXXX, of

forthcoming key our are towards the We areas, beta investment by year. is end fiscal our games of into a product, launched team PX network suite drive a initiative Home, hyper-casual These services, we product, additional working accelerating fourth user have lifestyle our and in seeing services, positive On lifestyle into the to to users e-commerce beta tested this continue focusing PX. The and store that drivers network. and been network, are acquisition our prototype launch now launch investing U.S. have On in encouraging a including Design a on WEBGL - for we Covet e-commerce gaming in three we brand and will metrics. compelling the quarter. market early installs of Crowdstar a the On a to potential actively relaunched into XX,XXX-person we become we hold, targeting retention. initiative seeing indicators Fashion,

base. we the to potential the UA evolution of invest industry, to us for across our the changes user believe expanding ecosystem is critical Given it in

strong have with and momentum depth excited drive with and to are brand. extensions Crowdstar We very more Studio the this

a record team identifying studios of to Lastly, The on track and want and touch strategy. proven M&A I focus games. our exceptional Glu has

games out our Diner were along Dash and growth three all Kim Our with acquisitions. of developed

live each infrastructure. We due those have scaled our successfully expertise robust ops titles central of and to

We mobile to investing and we for higher the would spectrum raise which year, The business capital believe asset. expand of We long-term a a portfolio. and stage Glu's from the size mandates we lift summary, half while to opportunity position quarter growth. shelter-in-place financial the a early we allows saw studios in to of us the we're history, a now continued be perspective. created can fit the In in puts reported a build recent range first transformative and the has establish best with that in long-term support are opportunities the of potential right base the in able across user engagement In cultural business. larger across pursue acquire to from to us the looking

beyond. will growth Looking strong pieces ahead, in we think show to that next meaningfully year performance place and developing to in our to new strong continue are year-over-year core contribute business while the titles

bookings, stacking part have to long-term into margin scale growth by which an We our value. our Eric? outlook. to is of turn our also will overall to are I details firepower through position we growth shareholder will and results driving We added go believe increasing strategy. it more financial over and opportunities our business who in pursue Eric, M&A, now on excellent important expansion,

Eric Ludwig

how Thanks, Nick. managing half full during I walk And financial for update XXXX. and and second phenomenal and our we call. guidance the pandemic, then the business the through good afternoon will plans COVID-XX quarter our are our to provide results, review an everyone on on second year

been have to managing continue Tap and be the a successful effectively Disney as unprecedented by of launches work-from-home times Regarding Baseball and the evidenced in first these Arena. XXXX and our Sorcerer's far we COVID-XX environment thus half results strong pandemic Sport

million installs performance Bookings new the bookings. quarter we all-time or remotely for proud Arena, continuation we and investment XXXX Glu Baseball of year's compared we bottom have million, over and bookings acquisition on titles In the increased Glu employee were great $XXX a to of in-person in of Over environment. increased well our in to X.X XX. stronger driven IP was X% navigated increase. in Disney through bookings, XX% us light than a strong having of hired am record provided Ad onboarded exceeded XX% the due This user months year-over-year second Revenue I representing significantly all Tap and Hollywood. our base was $XX.X Kardashian by without hires Sports a an challenging a Royalty favorable of $XXX.X launches significant reduction a The the last free reached line a Sorcerer's Kim of of total dozens resurgence engagement CPI effectively guidance XX% is last any million. of increase quarter, the our recruited quarterly player quarter. as expected very the second as May environment. quarter-over-quarter organic bookings of and generated interactions.

hit the was all-time in Arena, Home which and bookings. momentum Arena from XX.X% Baseball bookings XX.X% total and In Design XX% and increase XX.X% million, to of Sorcerer's two coupled also growth active addition grew franchise base Adventure growth million. users the shelter-in-place. potential recorded our monetization. is The and year-over-year on bookings Covet quarterly overall record the MLB bookings representing XXX% $XX.X basis bookings a strong as daily year-over-year Underpinning of growth Disney we the increase daily to at quarterly continued in XX.X% in start games in significant delay evidenced This growth of year-over-year the saw record by representing monetization despite to QX to Kim monetization ramp increase contributed growth our Kardashian $X.XX. campaigns season. three million with new growing reported from year-over-year $XX.X $X.X active million, a XX.X% Breaking million. Dash second increase $X.X looking its quarter reflects In UA the in users three improved a years base this an of our in Sports Disney its to ever million. the a five in increased regards games, per quarter from highest of Tap Diner growth. XX% to $XX.X average its increasing in of and dramatically tandem launched user organic grew our with year-over-year, late an user had Hollywood Our our of user discovery $XX.X was subcomponents. And Sorcerer's bookings. quarter results Fashion gains our million, $XX.X from basis, XX% an and first up these our On million daily great quarter active our $XX.X biggest

group and daily games grew $X.XX year-over-year Our three growth Disney active a plus as to user. XX% Dash Diner monetization per

game Kim the due catalog leveraged as merchandising to whole $X.XX tremendous Our and growth Kardashian a XXX% monetization user active increasing year-over-year titles saw per live in daily second which in the Hollywood, to quarter, ops.

XX.X% compared were were UA expense million, over million quarter, increase we the ramp costs fact bookings quarter. side, months representing average compared $X.X midpoint on Operating expense million marketing million in quarter, in will adjusted or were June. the our last basis $XXX.X a expect UA from end million. were in range million million balance bookings and the marketing second includes hosting the last over million, the was second bookings, royalties and $X.X during quarter. the $XX.X $XX the excluding platform quarter. as GAAP was a spend On $XXX year's mainly year. which to $XXX last loss capital and million. while had at with XX% year's net expenses a On million that of of $XX.X – commissions of $XX.X recognized six proceeds net million, Adjusted a $XX to be raise in the costs increased the due of to looking of significant the UA the We incurred third or at at $XXX.X million cash $XX XXX In third

quarters and than for third of pre-shelter-in-place. half guidance higher the we guidance implied Our provided in fourth XXXX that remained second for the bookings significantly February

bookings our than basis year-over-year third the quarter our XXXX. a quarterly on from prior is Additionally guidance of higher record

are a we quarter. quarter-over-quarter to of basis, expecting second in we reduction saw the the across record on in bookings our Now due titles a most results

should flat quarter compared at bookings the Specifically levels from bookings numbers, bookings Tap record will second the results. QX all-time down And Adventures high Arena's down Sorcerer's their compared Diner to title to we quarter. higher from mandates, be QX Hollywood to Phase quarter. as our than excluding on dialing bookings of QX quarter. as be Dash comfortably for second when Home and DAU X down Design spend to we transition This the first in second XXXX. quarter down XXXX the as but pre shelter-in-place as Sports slightly QX, on margins MAU than as its breakeven stand-alone focus quarter long-term record well Fashion the be of the to But second to second our are third user growing this we Kim of above pathway quarter quarter expected Phase to expect our reflects Baseball the be in Covet a and title. UA Kardashian X XXXX to profitability, numbers should first and will as Disney overall, benefits be higher the as back and base

As ramped it to and context we late April, heavily quarters. and on to profitability, fourth substantial some into the and are the modeling spend. in March In third decrease leaned relates how investments and UA want provide CPIs I we

call a line flow updated outperformed mid-quarter marginal monetization that May guidance, saw the through earnings We downloads and substantially due our the and and guidance also number second significant organic quarter We to on increased bottom user high quarter. the of top beat. on engagement line in second the from during the

has to to the The top increased outperformance effect DAU play line May. a of base second second XXXX, half as quarter in flow-through continues the

second guidance We half second in in the the $XXX.X back to guidance out million of would almost increasing point originally our by year. of shelter are for that before second $XX place started. our $XXX.X million XXXX of UA the X% given bookings for I from XXXX half half was or February, million

CPIs to for are flowing implying and and UA fund February, we QX seeing compared through full additional we the the that QX January maintaining our as With in in QX. beat EBITDA the lower are guidance to July and year

over start ROI target XX-month are seeing in have favorable and to be adjusted believe growth into quarter margins games. to as ROI least positive horizon, still we fourth in we will to MLB within we our are We season that expect a potential XX- UA what the the our incremental the the opportunities, at XX%. our time achieve of July, with that expect games of leaned EBITDA range We in growth coupled be

line well in our expected discussed on to adjusted XXXX, lower bottom bookings of midpoint $X.X results platform prior quarter-over-quarter be growth UA be reflecting the from our UA are and as guidance, I just costs $XX.X other adjusted potential implied bookings expense million. expected side all of million, will hosting million other $X.X commissions royalties million as million. investment the This as TSB of we expect games growth the approximately in and at games. reduction the of million, up operating approximately our and our And adjusted expenses due $XX.X spend. to increased $XX On guidance, costs $XX

For we of this million. range the in bookings $XXX million bookings. the year's to expect would At full $XXX represent XX.X% a last year increase of XXXX, midpoint, over the

second of the reflecting have the XXXX. in our million behind quarter raised back beat year We and guidance by of of $XX.X added the million, full the half increased confidence $XX

On we year XXXX our All costs of million at million, $X.X hosting adjusted million. million. XX.X% the $XX.X platform expenses expect costs forecasted the be the of of are $XXX.X of bookings approximately reflecting other for be million, guidance, $XXX.X to adjusted $XXX of of royalties midpoint UA expense side full commissions bookings. operating and will adjusted

million now our into free a is Generally, annual of the the flow business quarter, we be want fourth with as the from third the cash free to XX% the in increased flow. in the $X will and profitability $X has greater increasing quarter. third to but cash following This CapEx-light are to than quarters third both third but second million fourth EBITDA to guidance the discuss converted expected spending UA I Our quarter. fourth quarter's to quarter decreasing in result to with CapEx. then last quarter

end approximately as and quarters. to cash the cash with for the million I'm The first half year $XX outstanding second a generate For base increased million investments XXXX the XXXX as pleased with us of in XXXX, extremely beyond. will and third we user larger the expect $XXX fourth half debt. the in strategic flow acquire our UA to quarter, outlook increased and made in the performance and no free we benefit of approximately well second in with of

and environment average for daily for more more of is Additionally, believe time an predictable consumers will we lifetime profitability. gaming have increased reflective provide bookings the active user values per where and higher

second the am to look from investment I live and three progress our beyond, As social of our continued stacking games in bookings profits towards our excited game I on and very half competitive XXXX operations growth play. and via

we provide focusing continue In believe we on our top to games. recent Kardashian: Glu that new to questions. to good and a on to will studios seek up acquiring a to I capital, fold is we early or title mobile a lines. to are XXXX expect game team the It's will turn than market. not a XXXX. the are core strong provide long-term adjusted the targets DASH margins growing the We that business. core too for XX%-plus scale operator I can quarter into in Arena, in studio growth as specific infrastructure grow are footprint Disney at this realize of making we the Phase we believe look Kim the XXXX, have being be now With our raise, we of year Adventures over Operator? fund map set business and Hollywood Sorcerer's Diner western their the we to also top this grow and growth and add reflects on and progress our potential believe and robust new as call where know-how to forward nurture launched and we our bottom into fourth EBITDA that We road to higher scaled titles in but bookings quarters figure baseline one business.

Operator

Sheridan And from our with first Eric question comes UBS.

open. Your is line

Eric Sheridan

can. Two if I

out one game to Just 'XX. the on pushing

into you get development time the saw time that and positions your you there want game game that of some on how you take Just the understand right wanted 'XX. side what the sort think to to

in the Just sure clarity little constructive clear make in XX there? the as bit the still little that on changes wanted on of you with this of Do year? to user do you maybe or ROIs the year factor so want not to the year in part acquisition expect iOS seeing were are more CPI just earlier ROIs back the And the you found And you but a front obviously very much. as messaging. user some the acquisition? environment Apple Thank making second how we're same

Nick Earl

then you I'll board. I'll and the can one Hi, the add do take second. Eric. Eric Yes, probably on to some Good thoughts. have first

we the launch which we elder build a or really competitive PVP So years strong realize developing been social really we really want given been over so PVP. been played The little that tremendous or want time of more flesh game we And the and social to World, mature yes been exist the live such spent play part of come game features we into spent really with a just a year year, that also the history. game almost for out part really more more over two not it many that and out its and and the competitive and it a on we in it we've making investing the Deer a is guess experience I more full really out the we very with have market, success. -- that to Hunter at saw depth which now on We've out. the that

of side years. balance game allow for this be potentially on contributor out months that was a extra a to us could just few invest with while the just months it really have more take those it So in year serious this get we few many better to and we felt game that

So that there. the thinking was

Eric Sheridan

and CPIs go bottoms the on June Eric fantastic July. And so up front, started saw to in from Yes. late and March, we May they in UA and in those April

time that February year CPIs and month the the are the below back for guidance half the only seeing We and really of the time February. our still in gave we guidance was horizons. in then prior we're increased mid-quarter January the May May We quarter. on XX. back second And July, touched guidance in However, of

shelter-in-place really we UA in a had touched environment. not so And post

we're And And fantastic ROIs they updated and still April CPIs really in the levels January, so lower at yes, really were in less last fantastic seeing. this to guidance and elevated year. but slightly reflects are June the fantastic from May February prior in

that So user thing maintaining we just by be We that EBITDA this the funding base. beat to quarter increasing UA. is have right in year quarters the and believe by doing EBITDA the effectively overall second to with third that our into and that be building the to able guidance funded the fourth for were

Nick Earl

just XX. the changes I'll imminent iOS add with one upcoming Yes thought on

view we So pretty serious. as that

However, we opportunity. do potential think it's a

UA. be given early in and opportunity of be terms it's we'll effective ready believe throw as on exactly We're on some marketplace seriously the to side. entire But give to UA come our and opportunity anything still probably very, this at the just structure marketing feel will other that it this developers at take more technology have side team have very an taking scaled, and in what other out We change us that the kind on to something will the the we it means. it it. benefit We looking technology stronger our of and is not really closely org that more publishers if do very working on process that we

Eric Sheridan

well Great. much Thanks and the hope so for and safe. everyone color

Nick Earl

Thanks, Eric.

Operator

Thank you.

with question next Doug Our Cowen. from comes Creutz

Doug Creutz

Yes.

to Just a get clarification.

the You business baseline talked as your margins XX% about EBITDA being matures.

floor to of be expect EBITDA you not the clear think Just margin that that's a we as necessarily - should correct? and

Eric Ludwig

breakeven floor. the launching that was Phase is the launch then floor of we of talked we us have a where the are if floor. forward X five But number said when that's of I in in we that would yes expect of Once that get months kind it's sure. kind I when not escape That we months correct, be or into or first quarters in spend to of six a - titles kind about X three stage velocity. getting at for Phase of kind title to what floor yes I And kind a XX%

Doug Creutz

Yes.

if are the then from you is you now can Or resources that ask just over? take moving team of to that mentioned mean moving the And of more I one to out you're I originals part Kim. Okay. Should pipeline? originals

Nick Earl

It's haven't on that. Yes. decision we a final - made

We will an extraordinary make And is just of such studio developed there. they're that very part game, in still got We've We the at KPIs with elder looked shortly. well in just you the does same doing. are how the originals but early It not the Kim. as opportunity know both Toronto.

in originals the had So to we from where do quarters felt Kim to just over resources was right especially move to QX. thing we've significant growth the few last

make decision update. But we'll and just the on certain shortly that numbers there's our such final a know it's you not return originals as for stronger a we'll Just there, be to year. given in

Doug Creutz

Yes.

Okay. Thank you.

Nick Earl

Doug. All right. Thanks,

Operator

Thank you.

Parker Capital with comes KeyBanc Market. question Tyler next Our from

Your line is open.

Unidentified Analyst

on Ashley for Hi, guys. This is Tyler.

Just a couple questions. of

in update given same from you're Or can you users give with is Are seeing Thanks. that March? time or and last they year? old cohorts? there what just few is And there learnings also MLB are the new to since of there? is the Sports then gained note cohorts similar acting season a engagement guys have any anything since you to there how to relapsed us as any it tracking compared Tap started to it first So ago weeks the started baseball

Nick Earl

Great. Yes.

questions. Ashley thanks those for

seen time frame So well yes organic on downloads back since uptick MLB, as as of have July in engagement an we and XX-ish the kind season launched monetization.

too season. early It's a ravaging good will the of kind it of teams of probably be will little a season COVID-XX be or whether been some outcome. partial it's that's So to a see season the as to the a some full given

with the a little on be what would down organization Marlin over too being about would we up that be slightly flat second with and our canceled my the just the we're some said cautious backs remarks cohorts kind in I numbers. the skis to significantly of of of monetization on In regards the So about that are seeing teams overrun of the kind in with engagement on why the to being my QX and quarter. Dow being prepared talked games COVID. I how That's

obviously our alike, We behaving quarter about go things. those expect I did even monetization way think but were will in a The view And would that had anomalistic engagement that. we a a and user cohorts then able base more shelter-in-place. really into So core -- is help two are and kind that to XXXX. that record we big us third I the business outperformed lot second as with QX saw down would of just shelter-in-place parlay COVID a an that did QX, we into QX the quarter from we It top quarters. the spending second of bump on organically. would I quarter. build bump COVID

horizon. that new was quarter. with think not it because is it's that user about base and be in strategic environment But low camp. on very way a defense we anomalistic leverage I UA So base big a comps to CPI the - to a The year now it did year-over-year an from forward hard such will that we time spend a build was a

Eric Ludwig

just and in whether what's been there that as or doesn't add as just the given in recently. its more season take way is a on it's season flourishes where really I'll amazing the has up much just just game the sixth that that - been is past. from VIP they've hold really And extraordinary the pretty spenders all are Regardless of Yes. thoughts year not a has this until couple that it growing because TSP

time every and last so much we've year VIPs QX-to-QX growth XX% surprise and of to us It backs that year, the like So, hit over continues sort based spenders. the every so ceiling. on these this saw the of we feel we year

ops they it's live just of how is is, it's strong really game. what to absence testament the how real game just deep team this day-to-day even run a So, a - and in

that for in shape the our we the grateful of very portfolio. what think of really have good happens regardless we're rest and still in to So, season,

Unidentified Analyst

Awesome. guys. Thanks,

Eric Ludwig

Thank you.

Nick Earl

Thanks, Ashley.

Operator

our Securities. with comes of And you. Matthew the next Thornton SunTrust Thank question line from

line open. is Your

Matthew Thornton

well. quick Nick, I Hey, question could. Maybe and a I everyone's two if hope follow-ups Eric.

thinking that I want IDFA, then a in certainly Are thinking Hunter make in you then just too about And that's in just there. early PX, to is into relative touched [indiscernible] hasn't clarification, thoughts to case. terms of XXXX, you headwind? it in of Thanks, it curious outlook it a that what sounds -- long-term September, think being guys. that are with neutral? -- just Is fact message you is I and you question, couple with can pushed of think to a kind are sure our on from First touched you coming -- maybe Deer opportunity. changed on the And to I'm like right realize your

Nick Earl

Yes. difficult Matt. It Hey, a little hear was to you.

we'll about So cover hopefully, about I'll questions. a bit we'll the a you and what But IDFA hopefully all little got little and talk talk bit pipeline, asked. then I the

World, Hunter the top XX, we in out, bring like part be industry, Any XX, that the we we flesh PVP. on the launch on So, is very We're further get - as realized XXX. game where are cycle of going of we've should with pay the and we it. the and just in it's really in advantage top just a we and even can also or into kind what that's two yes, you harder bullish to Deer harder as seen feel top are experience, to we

mode, to kind want get Hunter in very right. loop, XXXX, to we and feature take the fleshed been asynchronous core sports as game. like and either a PVP or So, synchronous in layer been set just the out especially really never just games we of especially that connected of it's kind is of but part more outdoor all Deer in really socio-competitive a so this been to time There's minor never important it's that games, little believe

work continued extra get and to core deepening loop going opportunity team of just forward. the have want is that big, We not the just we view into as move we mechanic. months the refinement it that that game to gets the really elder our the feature so going the So others core time as and bigger well signal on a that now few -- are as and if

So, but and about happening there, for XXXX lots we that feel beyond. great

there. of also a and story, on about lots feel loop of core the gone same settled last of good through mechanic, creating mechanic We terms there. lot fishing, work few into finally going has depth really the the which the In over changes but core months, we've

really Design much one that, its on frame focus and Giants strategy tighter and And this really PX, like. lot of good Crowdstar year. for or meta really we that Covet fit shoulders a going this we sits time it's right is feel Crowdstar learned PVP, a next think of the lifestyle not about this the two, we track on and looks is type be to to Home, So another squarely standing very vertical and brand. we that good genre big social a to that but is about those We're think what in feel a and is but give around as alongside category. then future with now than And really to that the pillar good going

yes, I gain it's it So, switching be or next us to whether what setback think is know a to shows going early excited And net then to year. or that too about it's neutral. IDFA,

this acquisition think but challenge think really acquisition user maybe our of level, tech an don't are I across scaled real companies I refine industry, that good the be that sure, and be it understand think opportunity marketing we macro perspective, from know may an really our we user and may opportunity. process. at the think to the depth have We a but for for

effort around marketing, We doing Disney in are the spend going for we've last to especially more such. year, which been traditional and branding

could So, building could aggregating we good us the installs. in really offset. think we're and to potentially and think there suite of and offset games We that a market Crowdstar bringing building be help an that's world in hyper-casual the

feel like brave do net next of we us six if a that, we new positive over very yes, as a So think will this against seriously. is navigate But we three, year. for this hopefully taking it get lot probably going months. well we we it. And a it cycles be We've be are into the next to got world

Operator

question our comes from you. Stifel. Crum Drew And Thank [Operator Instructions] with next

Your line is open.

Drew Crum

Good guys. morning. Hey, Thanks. Okay.

any the So at games intend of include that Eric it you Nick Can is company up you I you you're that opportunities. tolerance early-stage purchased? think a And include to grow the mobile set for just something the Thanks. your at as new that next does relates year? that or launch end is your to above dilution Does prepared acquisition? made M&A, at looking said remarks you you market. clarify western to comment What that on

Eric Ludwig

first answer part. part I'll the the answer Nick Sure. M&A can then and

core that includes new M&A. does and include So business titles not

Nick Earl

we say Yes. so few about on market. on of initially question a of low the this M&A over I – lot the more talked we And the end kind how last calls about, were were we've the focused would

door up look it's really of the Given the at much June, capital higher end in to us opened the for raise of range. $XXX million the

hefty company transformative great a and So a it for price profoundly was Crowdstar. at tag transformative incredibly back the that a for could be such Even fit just accretive we though something wasn't that us. absolutely look really

Crowdstar So or and time another the we're like both middle the the that's at at end but certainly And we first there now can out shop high now for may looking range. not it the something feel of there, for close. be we lower

knowledge don't as dilution, can can longer that accretive think using studios. synergies accretive of and we our efficiencies the very have sort In do something give number to term. you, to but and we terms drive If very, I a anything have of we're central well out other I invest and or any will going I either it's with gate of build infrastructure really and our know-how as be

deal, So tell lot can energy too time get this. as a to got will talk about. we'll a something we have activity soon going closer signing hopefully, of into that And of not we a but we've lot

Drew Crum

Great.

Okay. Thanks, guys.

Nick Earl

Drew. Thanks,

Operator

And Thank question from comes Morgan Matthew Stanley. next with you. our Cost

open. is line Your

Matthew Cost

Kim think opportunity that now license real that you there's can sort the taking a And that can Hi, what for has user behind acquisition guys. you that question. name do of change out I'm that the the renegotiated in like do you wondering, couple Thanks how of experience into like changed game? Kardashian, the net of Thanks. and a now growth with months that terms expenses? just of your you're

Nick Earl

Matt, yes. Hi, Yes.

before felt much those earlier And a did that that allowed hear deal who a was out the and shelter-in-place was return. net timing, in better liberally and much we got turned strategy to we as out us costs because all behind paid the this into more grow mandates title, perfect to thoughtfully So this greater royalties. year marketing to it to really we time that didn't get we allowed for last QX with be us with spend much

an integral invest. enormous why would in crucial reason point to absolutely being that and And as of see franchise. deal to one been we yes, as the it's growth able why reasons the I such we've So to

itself in the momentum a more going think title going very really systems feel lot doubt, just it think can being just new at a time, a there's got curve content. of a as anniversary look game certainly about more. around we of growth had would merchandising, We've bullish gives this as regardless resources interesting sixth much more yes, on without spend event, And I built a features we new But over We've I more especially title. out And just deeper June, lot the daily around. got basis. that elder of yield have well much spend with with to on, we customization a got had us We've it. we that we new game on UA deal. got the forward. The has opportunity that that's

it So we're have happy in mix. to the very

Eric Ludwig

And Yes. on the look rate the Matt effective overall portfolio. if royalty just at you

the XX.X%. baseball So second Kim of quarter-to-quarter from license and XX.X%, effective of revenue Disney IP, which rate including our was in we quarter was an down had from Kardashian came royalty and that XX%

down went royalty higher rate a the reflects by basis for of though So titles. overall much royalties license points XXX dollars that effective really bucket the on even it's

Matthew Cost

Great. Thank you.

Operator

Thank comes Aftahi with from you. our And next question Darren Capital. ROTH

open. is line Your

Darren Aftahi

just curious taking years. mentioned you in e-commerce launching probably e-commerce for Nick something question. the with an general quarter. kind Thanks my several if pull guys. Hi, of fourth with the may. I store I'm about Two in forward

in in people games an the of of for can past fits more of about second quarter talked then with light how effectively popularity store e-commerce and You've you app around of going the that just on kind strategy basis? on kind the rise of just kind of kind Design there. the on you And curious what in look phones, Home, games M&A what's think of Glu in-house M&A in I'm and spending take Thanks. scale then the model if what time of their type fit with in

Nick Earl

Hi, Darren. sure. Yes

But even e-commerce the something variety We in the yes, we interesting journey pan first years the at for us. didn't initiated maybe reasons. been end a calls for effort lot and ago. of it know And over So, talked XXXX. of XXXX about has design I really about just an out X.X a the

it's of was KPIs keeping the but However, experience absolutely of make the something gamified the is enough It's just more feel into game. fabric built the where really experience. feedback and good in to mind in us especially there, a shopping than enough like had Home loop, lifestyle good really there not is kind Design we core only

get on to something in game in we the the out a allow beta now And we logistics, persevered, And this core and feel in right changed very important something. of logistics we've KPIs the we're into buy this that It's results positive now of you we ties all the much get The experience U.S. then in and regards data to a is for continues U.S. territories other the going would got place fourth like And the of it's it so loop, few and going better sector buying launch built terms to intention stay partners. also to continue and how that being And category that close work. and small because a We've launching really at lot. us game away when currency you quarter that about with fine-tune in that kind expertise. We then have we're But if be after we'll we it really. the the something don't a yes, Are out. purposely talk to we answer to M&A a a is or only just way question, type the as look of There's the plays genre. experience. then not going is the from. are

that. incredibly And types that and which with many and would is the fit of that gate example logistical cultural But fit many accretive interesting form looks for I of important. would of can a of a genres that comes the or take companies. say be sizes either said like is another games open-minded social on of answer, term. that casino we're good a us, I So accretive good about that team many really that's earlier that's anything a out very good long And

a we the really portfolio. we're fit in us portfolio just something bringing for the and for anything looking of for we open landscape And mix. given good that's capable wide is really have think the a we're that So

Darren Aftahi

Thank you.

Nick Earl

Darren. Thanks,

Operator

Thank you call. conference today's for your participation. concludes this gentlemen, and Ladies

You Everyone disconnect. day. have may now good a

Glu Mobile (GLUU) 4 Aug 202020 Q2 Earnings call transcript