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| 8-K - FORM 8-K - GLU MOBILE INC | d596718d8k.htm |
 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. |