What happened

Shares of Glu Mobile (NASDAQ:GLUU) climbed 76.1% across 2018's first two quarters, according to data from S&P Global Market Intelligence. Shares gained substantial ground following indications that the company is making progress on its turnaround effort.

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The mobile-games publisher posted two encouraging quarterly reports in the first half of the year and saw strong early results for the launch of MLB Tap Sports Baseball 18. The earnings performance and game launch signaled to the market that Glu was successfully moving away from games based on celebrity brands.

A group of people standing in a circle using their mobile phones.

Image source: Getty Images.

So what

Following the success of Kim Kardashian Hollywood in 2014, Glu Mobile responded by becoming a company focused on games built around popular celebrities. This approach produced great results in the short term, but a shift in the market's tastes proved that the strategy wasn't viable over the long term. While Kim Kardashian continues to be a solid performer the company, other big titles underperformed, and the cost of licensing celebrity brands weighed on the company's earnings.

The company's fourth-quarter results were published in February, delivering 73% year-over-year sales growth and demonstrating a successful move away from celebrity-based games. In the company's next reported quarter, sales climbed roughly 41% year over year -- and 69% of its bookings from original intellectual properties that required no license payments. Shares gained roughly 29% in May on the strength of the earnings results and continued performance for its late-March release MLB Tap Sports Baseball 18. Glu posted another big month of stock gains in June, thanks to the game evidencing staying power and favorable ratings coverage from Piper Jaffray.

Now what

Glu has stated that it plans to launch several new games this year, so investors should keep an eye on new properties in the pipeline and the performance for already-released games such as Design Home, MLB Tap Sports Baseball 18, and Kim Kardashian Hollywood. App Annie lists Tap Baseball as the 13th highest grossing free-game on U.S. mobile stores over the past week, indicating that the game continues to be a strong performer for Glu despite a recent downward trend in overall app downloads. The mobile app tracker also lists Design Home as the 10th-highest grossing game in the U.S. market across the stretch. 

Glu's turnaround initiative appears to be proceeding well, but investors should keep in mind that the long-term outlook is less certain. The company is operating in a highly competitive industry and will need to prove that it can sustain its legacy titles and create new hit properties.