A Look at Glu’s Expanding Bottom Line



Earnings have risen over the years

Glu Mobile (GLUU) reported a GAAP profit of $663,000 in the first quarter, marking the company’s first GAAP profit since the first quarter of 2015. Glu Mobile’s robust revenue growth, coupled with increased adjusted EBITDA, drove profitability in the first quarter.

Glu Mobile’s adjusted earnings per share have risen from -$0.03 in the first quarter of 2016 to $0.05 in the first quarter of 2019.

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User acquisition and marketing costs

Glu Mobil expects user acquisition and marketing costs at 27.4% of bookings and adjusted operating expenses of $32.9 million in the second quarter. For the full year, user acquisition and marketing costs are expected to reach $116.2 million or 25.8% of total bookings, which indicates that the company’s profit margins will expand at a faster rate in the second half of 2019.

Glu Mobile expects adjusted platform commissions in 2019 to reach $116.9 million, royalty payments to reach $30.2 million, and hosting costs to reach $6.8 million. Glu Mobile expects an adjusted EBITDA margin between 15% and 20% on bookings of $500 million. If bookings surpass the $500 million mark, Glu Mobile is confident about expanding profit margins further.

Wall Street expects Glu’s net margin to improve from -3.4% in 2018 to 4.7% in 2019, 7% in 2020 and 13% in 2021. Analysts expect Glu’s EBITDA to rise at a compound annual growth rate of 38.5% over the next three years.


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