Glu Mobile (GLUU) did something on Wednesday afternoon that it hasn't done in nearly two years: the mobile gaming specialist posted year-over-year revenue growth in its latest quarter. Glu Mobile is checking in with revenue of $56.8 million for the first quarter. The top-line showing is a mere 4% uptick since the prior year, but it puts an end to the unwelcome streak of six consecutive quarterly losses. Analysts were actually bracing for a slight decline.

The growth isn't organic. Glu Mobile is crediting the success of Design Home for its rising revenue, a new release by an app developer that it acquired late last year. Glu Mobile shelled out $45.5 million for Crowdstar in November, the company behind the Covet: Fashion fashion-centric dress-up game. Design Home -- giving the Covet: Fashion platform a home designer spin -- was in beta at the time. It came out in mid-November, and it's doing well enough to offset declines elsewhere in Glu Mobile's overall business. According to app tracker App Annie it remains among the ten most popular downloads for iOS and Android devices in the simulation games category, no small feat for a game that is now nearly half a year old.

It was a different story at the other end of the income statement. Every major expense line item crept higher for the quarter, and Glu Mobile's net loss more than doubled to $0.17 a share.

The home screen for Glu's Kim Kardashian: Hollywood app.

Image source: Glu Mobile.

Booking a turnaround

Glu Mobile's bookings are growing even faster than its revenue, soaring 28% to top $69 million for the quarter. The app developer's guidance back in February was for just $53 million to $55 million in bookings. 

The two biggest contributors are Crowdstar releases. Design Home led the way with $14.9 million, and Covet: Fashion followed with $11.5 million. That's 38% of the total bookings, and one can imagine how poorly Glu Mobile's results would look if it hadn't acquired Crowdstar six months ago.

The lion's share of Glu Mobile's bookings came from just six games, and none of the other four cracked into eight digits.

  • Gordon Ramsay Dash -- $7.9 million
  • Cooking Dash -- $7.1 million
  • Kim Kardashian: Hollywood -- $6.9 million
  • Deer Hunter 2017 -- $5.3 million

MLB Tap Sports Baseball 2017 has fared well since its March launch, but it rolled out too late in the quarter to be a material driver. It will be a different story for the current quarter now that the Major League Baseball's regular season is in full swing. 

Glu Mobile is taking a different approach to its games these days. It's hoping to extend the popularity of its more popular releases, devoting more marketing and developer muscle to hits and rolling out more live events. The strategy appears to be working. Sequential bookings for Kim Kardashian: Hollywood -- the game that made Glu Mobile a brief investor darling in 2014 -- saw flat sequential bookings, the first time that it hasn't experienced a sequential dip. Sequential bookings actually rose for Deer Hunter 2017.

One thing that's clear is that Glu Mobile got a bargain in its all-cash purchase of Crowdstar. Glu Mobile now sees $270 million to $280 million in bookings for all of 2017, a dramatic boost from the $215 million to $225 million in bookings it was targeting just three months ago. Red ink remains a problem. This is the sixth quarterly deficit in a row for Glu Mobile, but its clean balance sheet is flush with cash to see it through this transition. 

Glu Mobile stock was already trading higher year-to-date ahead of the report, a welcome break for shareholders that had seen the stock cut in half over the two previous years. If its new strategy to extend the popularity of its bigger games pans out -- no easy goal given the fickle nature of casual gaming app players -- there's no reason why the stock can't continue to bounce back in 2017.