Mobile gaming specialist Glu Mobile's (NASDAQ:GLUU) net loss almost tripled in the first quarter despite a slight jump in revenue from the prior-year period. Its adjusted net loss of $0.15 per share was more than twice than Wall Street's expectations of a $0.07-per-share loss.

Still, investors seemed to like what they saw as Glu stock has received a bump after the results, largely due to a major boost in the company's bookings guidance for the year.

Bookings guidance indicates stronger revenue

Glu Mobile's first-quarter bookings of $69 million were higher than its $54 million guidance, indicating that its development of platform-centric games is reaping results. What's more, the mobile gaming company increased its 2017 bookings guidance to a range of $280 million to $290 million, a substantial jump from the prior guidance range of $215 million to $225 million.

The higher bookings indicate that Glu has gotten stronger commitments from customers for in-app purchases, which will be eventually realized going forward and boost its revenue. The company's revenue and bookings guidance closely mirror each other, so investors can get an idea of how its top line might look this year.

Year

Non-GAAP revenue

Bookings

2015

$242 million

$242 million

2016

$201 million

$214 million

2017

N/A

$285 million (estimate midpoint)

Data Source: GLU MOBILE. GAAP = GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. Non-GAAP = adjusted.

If Glu manages to convert 90% of its annual bookings into revenue like it did last year, its top line could grow over 20% in 2017.

Glu users are spending more money

Though Glu Mobile's monthly active user (MAU) count dropped over 22% from the prior-year period to 32.8 million, the average bookings per MAU jumped almost 67%. This isn't surprising as the company now wants to develop games that have longer staying power as compared to its earlier strategy of capitalizing on short-term social media fads.

Image showing Glu Mobile's gaming portfolio.

Image Source: Glu Mobile 

For instance, Glu had made the most of Kim Kardashian's popularity back in 2014 with the Kim Kardashian Hollywood title. The game got off to a great start and made $100 million in the first 18 months, before fizzling out with only $33 million in 2016 sales.

Not surprisingly, Glu is now focused on creating more consistent revenue streams by building platform-type games to earn what it has deemed "repeatable, predictable revenue that stacks year over year." The company is doing this by regularly updating its existing games through better graphics and advanced gameplay to boost the stickiness of its titles and encourage more in-app purchases, which explains the jump in spending by users.

Glu's "evergreen" games are driving bookings higher

Glu Mobile has divided its portfolio into growth games, legacy games, and evergreen games. The 80 legacy titles are currently on autopilot mode as they generate revenue without the need for regular updates or a large employee count supporting them. On the other hand, the 60 evergreen games are being regularly updated with new content to ensure a large user base to generate robust long-term revenue.

The good news is that Glu's strategy is working as Kim Kardashian Hollywood's bookings remained flat sequentially in the first quarter. This was the first time in the title's history that bookings didn't fall sequentially, thanks to a major update in December last year and the celebrity's return to social media earlier year.

Moreover, Glu will continue to update this "evergreen" title, along with other games such as MLB Tap Sports Baseball 2017, Design Home, and Covet Fashion to maintain the bookings momentum. These four titles accounted for 53% of Glu's bookings last quarter.

It won't be surprising if their contribution grows going forward as MLB Tap Sports Baseball 2017 was launched late in the quarter on March 28, so its full impact is yet to be seen. Additionally, the company is collaborating with Kim Kardashian on another update to mark the third anniversary of the game this summer, which could lead to a stronger bookings performance and give Glu Mobile another shot in the arm this year.

Harsh Chauhan has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.