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Record bookings drive Glu Mobile ever closer to profit in Q3

Design Home, Tap Sports Baseball and Covet Fashion represented 79% of all bookings

Glu Mobile came within a whisker of making a net profit in Q3, after reducing its losses from $11.7 million in the same quarter last year.

In the three months ended September 30 2018, Glu made a $0.3 million loss, far smaller than the amount from Q3 of the previous year. Revenue for the period was up 22% year-on-year to $99.3 million.

The mobile publisher - which has navigated difficult waters since the peak of Kim Kardashian: Hollywood - also continued its strong performance in growing bookings, which were up 17.5% year-on-year to a record $100.7 million.

"Our strong top line marks our seventh consecutive quarter of reporting improved year over year bookings growth," said Eric Ludwig, COO and CFO of Glu Mobile, in a statement.

"This accomplishment reflects our decision to pivot away from celebrity titles and focus our resources on Growth games that can grow bookings year over year while generating sustainable profitability and free cash flow."

This strategy is exemplified by three games: Design Home, Tap Sports Baseball and Covet Fashion, which collectively accounted for 79% of bookings, up from 64% in Q3 last year. Of those, Design Home has been Glu's strongest performer, with $114 million in bookings so far this year, already $16 million more than its bookings for the whole of 2017.

Speaking to investors, Ludwig detailed an increasing separation between Glu's three "Growth" games, and the many other products in its Legacy and Evergreen categories (the latter includes Kim Kardashian: Hollywood). The company has seen declines in MAUs and DAUs over the last 12 months, he acknowledged, but that is an outcome of this shifting strategy.

"I think most of our declines in the MAU and the DAU over the last 12 months have come from the degradation of the catalog titles, catalog being both the Evergreens and the legacy titles, which, if you look at our average bookings per daily active user, we're at $0.32 this quarter," he said.

"All of our three Growth games are above that average. All of our Evergreen and catalog titles are kind of below that average, and it really is [decline] from the catalog titles on DAU and MAU. I believe we are about up 100,000 daily actives from the core Growth games on a year-over-year basis. So it really is a tale of two halves."

In the next year, Glu expects to launch three more Growth titles: Diner Dash Town, WWE: Universe, and an unnamed Disney game.

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