After its revenue fell two quarters in a row, mobile game maker Glu Mobile (Nasdaq: GLUU) made heads turn with a sudden jump in its first-quarter revenue. Sadly, its bottom line continued to be in the red, pretty much unchanged from the time it went public back in 2007.

That brings us to the obvious question: Will Glu's legacy of losses eventually turn into profits? Before we discuss that, let's take a brief look at the financial highlights for its first quarter.

Into the numbers
Glu's revenue increased by 31% from the year-ago period, to $21.5 million, predominantly driven by revenue derived from smartphone-based games, which jumped by an astounding 158%. However, this also meant that its operating expenses increased by 71%, thanks to research and development-related costs that doubled over the previous year. The result was that the company's bottom line stayed in the red, recording a net loss of $6.8 million.

There's plenty to smile about, though. Here's why.

A smart future
Smartphones such as Apple's (Nasdaq: AAPL) iPhone and Google Android-based devices are all the rage today. And the success story looks set to continue as smartphone shipments are expected to grow by 33.6% from the previous year to 660 million units in 2012, according to research firm International Data Corp. (IDC). The firm also predicts a jaw-dropping 1.16 billion smartphone unit shipments by 2016. That's obviously great news for Glu, which saw 81% of its first-quarter non-GAAP revenues come from the smartphone segment, significantly up from just 39% in the prior-year period.

And Glu is doing its best to grab a larger share of the smartphone market with a lineup of 23 gaming titles scheduled for release this year. With the company responsible for the greatest number of gaming titles in Google Play's top 100 grossers, apart from fellow game maker Zynga (Nasdaq: ZNGA), Glu could very well witness another year of spectacular growth. In fact, some analysts are predicting that Glu could be a potential takeover target for gaming companies that thrive on acquisitions, such as Zynga.

A technological leap for gaming
Research firm Gartner suggests that within the gaming industry, growth in mobile gaming will be the highest. And that's slated to happen with smartphones and tablets evolving into even more powerful devices, with Apple being one of the most visible examples. And with Apple set to release the iPhone 5 later this year, Glu has the opportunity to shore up its revenue even further, given that it already derives 67% of its smartphone-based gaming revenue from Apple's platform.

Moreover, with NVIDIA (Nasdaq: NVDA) predicting that tablets based on its powerful quad core Tegra 3 processors will cost as low as $199, such devices would bring gaming to a much wider audience. This again puts Glu in an advantageous position as it formed a pact with the chip maker last year, to produce games optimized to run on its Tegra line of processors.

A Foolish conclusion
Glu has zero debt and expects its operating cash flows to turn positive by the fourth quarter of this year, which points to an eventually profitable scenario for the company. Especially when you consider that Glu's fortunes are closely linked to the booming smartphone industry. If you wish to stay up to speed with Glu's march toward profitability, you can add it to your free watchlist.

Glu is just one of the companies cashing in on the boom in tablets and smartphones. I invite you to read this special free report from The Motley Fool to learn more about companies that our analysts think are set to take advantage of the "Next Trillion-Dollar Revolution" in mobile devices. Check it out now, while it's still available!