Given that Niccolo De Masi joined Glu Mobile as CEO in January 2010 - with a mandate to drive change - it could be suggested share holders have been very patient.

Posting its FY11 financials last week, GAAP revenue is down 17 percent from two years ago.

The company hasn't made a profit for at least 10 quarters. It isn't predicted to breakeven for another three quarters either.

The only way is up

De Masi is in bullish mood, however.

Compared to the company he inherited - focused on the carrier business, reliant on expensive licences, burdened with debt and strategically rudderless - a majority of Glu's sales now come from smartphone games; in-app purchases, advertising, incentivised actions and some legacy paid downloads.

The company is debt-free, successfully releasing original IP such as Gun Bros., and finally experiencing growth, at least in terms of quarterly year-on-year revenue.

"What really matters is we provided full year guidance at the start of the year for the first time, and we beat it," De Masi argues.

"We're also burning less cash than we thought. We expected to end the year with $29 million in cash, and we've actually got $32 million.

Acting smart

Indeed, he says that if Glu hadn't acquired two studios during 2011, doubling its internal production capacity and increasing wage costs proportionally, it would already be profitable.

The reason for the deal was to double down in terms of launching free-to-play smartphone games; the fastest growing part of the industry.

"Our smartphone sales crushed our guidance," he says.

"We've seen strong growth in smartphone sales for eight quarters. Smartphone games now account for three quarters of our sales.

"We feel confident about life."

Rising robot

As with most mobile games companies, iOS is the bedrock of Glu's business, but it's the growth of Android - and its early support for the platform - that marks it out, and is one of the main reasons for De Masi's future expectations.

"I think we're the leading publisher on Android; at the very least first among equals," he says.

One element is its support for Amazon, and Kindle Fire in particular. The company has 13 titles available for the tablet.

Around 30 percent of Glu's freemium sales now come from Android: around $3 million in Q4 in terms of GAAP figures, or $5 million in terms of non-GAAP.

"A lot of the growth you've seen on Android this year came from Google reducing the ability of people to pirate games. It also got better at curating the store," says De Masi.

"Adding features such as in-app purchases and carrier billing led to an tremendous boost."

Across all platforms, Glu ended 2011 with 2.9 million daily active users and 31.4 million monthly active users. Total cumulative downloads are 176 million.

As a comparison point, Zynga claims 15 million daily active users on mobile, although it's not entirely clear what its metric for 'active' is.

Much more of the same

As for Glu's plans for 2012, it's more games - lots more games.

With around 10 development teams prior to its acquisition of Blammo Games and Griptonite, it now has over 20. Of course, some will continue to support successful, live games such as Gun Bros. and Contract Killer.

But with Blammo's first release Stardom now out, and Griptonite's debut expected in March, there's likely to be a total of ten releases from these during the next 12 months. 

"Generally, we'll have a full team on a game for less than a year, but we'll generate meaningful revenue for more than a year. Our business is a portfolio," De Masi, says of the Glu's development philosophy.

"Why take the risk trying to get one big hit a year? We don't have to gamble the entire company on one IP."

Batting average

He views games such as Angry Birds as outliers.

"It's had more downloads than Glu, Zynga and EA combined," points out De Masi.

"We're looking to have games that are $5-10 million a year successes, not $50 million a year successes."

Indeed, Glu's most successful game is Gun Bros., which has generated $7.9 million to-date, of which $1.4 million came in Q4.

It's since been overtaken in current sales by Contract Killer, which generated $1.9 million in Q4. Big Time Gangsta did $1.2 million and Eternity Warriors $1 million during the same period.

More generally, during Q4, Glu generated 1.5 million billable transactions, with the average IAP being $5.79, compared to $6.04 in FY11 Q3.

De Masi said this was due to the company running more promotions, which increased volume at the cost of margins.