JAMDAT Mobile Announces Second Quarter Results

Second quarter 2005 revenues were $19.3 million, a 27% sequentialincrease over the $15.1 million reported in the first quarter of 2005,and a 128% increase over the $8.4 million reported in the secondquarter of 2004.

GAAP net income for the second quarter of 2005 was $2.6 million,or $0.11 per diluted share, compared to approximately $0.4 million inthe prior year period. GAAP net income included a $2.6 millionnon-cash acquired in process research and development ("IPR&D")expense related to the Blue Lava acquisition and a $1.7 million incometax benefit resulting from the release of a valuation allowanceagainst certain deferred tax assets. Excluding the IPR&D expense andthe tax benefit, net income would have been $3.4 million or $0.14 perdiluted share as compared to prior GAAP guidance of $0.12 per dilutedshare.

Adjusted net income, which excludes amortization of stockcompensation, other acquired intangibles and IPR&D expense, was $7.2million for the second quarter of 2005, or $0.30 per diluted share,compared to $1.3 million in the prior year period. Excluding the taxbenefit, adjusted net income would have been $5.4 million or $0.23 perdiluted share as compared to prior guidance of $0.18 per dilutedshare.

"We are very pleased with our strong second quarter results, andin particular, with the completion of our integration of Blue Lava andthe Tetris property into our product slate," said Chief ExecutiveOfficer, Mitch Lasky.

Cash, cash equivalents and short-term investments at June 30,2005, totaled $21.3 million, accounts receivable totaled $17.9 millionand bank debt totaled $15.0 million. During the first half of 2005,JAMDAT generated approximately $10.5 million in cash from operations,compared to approximately $1.9 million of cash used in operationsduring the prior year period.

"We believe that our cash balance, available cash under our creditfacility and ability to generate cash from operations are sufficientfor our current operational needs," said Chief Financial Officer,Michael Marchetti.

Second Quarter Highlights and Recent Developments

-- In April 2005, JAMDAT acquired Blue Lava Wireless and a 15 year, exclusive license to the wireless rights for Tetris. JAMDAT immediately received the rights to publish Tetris in North America, Latin America and India. The European wireless rights to publish Tetris reverted to JAMDAT on June 8, 2005 and the Korean wireless rights to publish Tetris reverted to JAMDAT on August 8, 2005. JAMDAT will acquire the Tetris wireless rights for China, Japan, Australia and New Zealand as the current licensee's rights expire later this year.

-- JAMDAT Mobile signed a multiyear license agreement with id Software for exclusive wireless distribution rights to DOOM RPG for mobile phones.

-- JAMDAT acquired exclusive wireless distribution rights to SOCOM: U.S. Navy SEALs through a multiyear license agreement with Sony Computer Entertainment America.

-- JAMDAT Mobile launched Tony Hawk's Pro Skater: 3D, a 3D version of the popular skateboarding game, on V CAST from Verizon Wireless.

Third Quarter and Full Year 2005 Outlook

JAMDAT today also provided guidance for the three months endingSeptember 30, 2005, and reaffirmed its previous guidance for the fullyear ending December 31, 2005.

Third Quarter 2005 Outlook

For the three months ending September 30, 2005, JAMDAT expectsrevenue in the range of $20 to $21 million, GAAP net income in therange of $0.04 to $0.06 per diluted share and adjusted net income inthe range of $0.13 to $0.15 per diluted share. Net income per sharecalculations for the three months ending September 30, 2005 are basedon an estimated 26.1 million weighted average shares outstanding.

The reconciling items between GAAP net income and adjusted netincome for the period are amortization of acquired intangible assetsof approximately $2.0 million and employee stock based compensation ofapproximately $0.3 million.

Full Year 2005 Outlook

For the full year ending December 31, 2005, JAMDAT reaffirmed itsguidance for revenue of approximately $80 million. JAMDAT expects GAAPearnings per diluted share of approximately $0.42, and adjusted netincome of approximately $0.83 per diluted share. The full yearearnings per share include a $0.07 per share tax benefit realized inQ2. JAMDAT currently does not expect its earnings in the second halfof 2005 to be materially impacted by taxes. Net income per sharecalculations for the full year 2005 are based on an estimated 24.6million weighted average shares outstanding. The reconciling itemsbetween GAAP net income and adjusted net income for the period areamortization of acquired intangible assets and acquired in-processresearch and development of approximately $8.9 million and employeestock based compensation of approximately $1.3 million.

Investor Conference Call

JAMDAT's quarterly earnings conference call is scheduled to beginlater today (Thursday, August 11, 2005) at 1:45 p.m., Pacific DaylightTime (USA). The conference call will be broadcast live over theInternet. Investors may listen to the live webcast at www.jamdat.com.For those who are not available for the live broadcast, the call willbe archived on JAMDAT's investor website.

Non-GAAP Measures

To supplement JAMDAT's consolidated financial statements presentedin accordance with generally accepted accounting principles, or GAAP,JAMDAT uses non-GAAP measures of certain components of financialperformance, including net income, gross profit and earnings pershare, which are adjusted from results based on GAAP to excludecertain expenses. These non-GAAP results provide useful information toboth management and investors by excluding certain expenses that maynot be indicative of core operating results. These measures should beconsidered in addition to results prepared in accordance withgenerally accepted accounting principles, but should not be considereda substitute for, or superior to, GAAP results. The non-GAAP measuresincluded in this press release have been reconciled to the nearestGAAP measure.

These non-GAAP measures exclude the following items from theCompany's statement of operations:

-- Amortization of acquired intangibles

-- Acquired in-process research and development

-- Employee stock-based compensation

About JAMDAT Mobile Inc.

JAMDAT Mobile Inc. is a global publisher of wireless entertainmentapplications, including games, ring tones, images and other content.JAMDAT's application portfolio is based on original and licensedintellectual properties and includes JAMDAT Bowling, Tetris(R),Downtown Texas Hold 'Em, Lemonade Tycoon(R), Bejeweled, The Lord ofthe Rings(R), Tony Hawk's(R) Underground and Scrabble(R). JAMDATdistributes its applications through wireless carriers around theworld. For more information, please visit www.jamdat.com.

Safe Harbor Statement

This press release may include forward-looking statements withinthe meaning of the Private Securities Litigation Reform Act of 1995,including statements related to anticipated revenues, expenses,earnings, operating cash flows, the outlook for JAMDAT's markets andthe demand for its products. Factors that could cause JAMDAT's actualresults to differ materially from these forward-looking statementsinclude its ability to market and sell products in diverse marketsegments, its reliance on a limited number of products and third-partyvendors and distributors, its ability to expand studio operations,increases in fulfillment costs, disruptions to information technologysystems, unpredictable events and circumstances relating tointernational suppliers, increased competition, government regulatoryaction and general economic conditions. Please refer to JAMDAT'sreports and filings with the Securities and Exchange Commission for afurther discussion of these risks and uncertainties. Readers arecautioned not to place undue reliance on forward-looking statements,which speak only as of the date they are made. JAMDAT undertakes noobligation to update publicly any forward-looking statements toreflect new information, events or circumstances after the date theywere made or to reflect the occurrence of unanticipated events.

(C) 2005 JAMDAT Mobile Inc. JAMDAT, JAMDAT Mobile and the bubbleslogo are trademarks of JAMDAT Mobile Inc. All other trademarks are theproperty of their respective owners and are used with permission.
JAMDAT Mobile Inc.
Condensed Consolidated Balance Sheets
(in thousands)

As of As of
December 31, June 30,
2004 2005
-------------- -----------
Assets (Unaudited)
Current assets:
Cash and cash equivalents $31,395 $21,254
Restricted cash 11 11
Short-term investments 33,523 -
Accounts receivable, net of allowance for
doubtful accounts of $75 and $311
(unaudited), respectively 12,927 17,865
Prepaid expenses and other current assets 1,849 2,746
Prepaid royalties 2,114 2,550
Deferred tax asset - 2,600
-------------- -----------
Total current assets 81,819 47,026
Property and equipment, net 1,998 2,150
Goodwill 4,081 27,355
Intangible assets, net 226 98,470
Non-current deferred tax asset - 863
Other non-current assets 2,490 2,067
-------------- -----------
Total assets $90,614 $177,931
-------------- -----------

Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $1,185 $1,502
Accrued expenses and other liabilities 2,929 7,354
Deferred revenue 97 114
Current portion of notes payable 64 16,923
-------------- -----------
Total current liabilities 4,275 25,893
Other non-current liabilities - 51
Notes payable, net of current portion 2 11,000
-------------- -----------
Total liabilities 4,277 36,944
-------------- -----------
Commitments and contingencies
Total stockholders' equity 86,337 140,987
-------------- -----------
Total liabilities and stockholders'
equity $90,614 $177,931
-------------- -----------


JAMDAT Mobile Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share data)

Three Months Ended June Six Months Ended June
30, 30,
----------------------- ----------------------
2004 2005 2004 2005
----------- ----------- ---------- -----------
(Unaudited) (Unaudited)

Revenues $8,446 $19,259 $15,479 $34,391

Cost of Revenues 1,395 5,101 2,360 8,557
----------- ----------- ---------- -----------
Gross profit 7,051 14,158 13,119 25,834
----------- ----------- ---------- -----------
Operating Expenses:
Research and
development 2,699 4,781 5,054 8,943
Selling and
marketing 1,416 2,004 2,312 3,690
General and
administrative 1,739 3,328 3,054 5,995
Acquired in-
process research
and development - 2,640 - 2,890
Stock-based
compensation 787 322 1,498 679
----------- ----------- ---------- -----------
Total operating
expenses 6,641 13,075 11,918 22,197
----------- ----------- ---------- -----------
Income from
operations 410 1,083 1,201 3,637
Interest and other
income (expense),
net 13 (278) (40) (25)
----------- ----------- ---------- -----------
Income before
income tax
benefit 423 805 1,161 3,612
----------- ----------- ---------- -----------
Income tax
benefit - 1,746 - 1,668
----------- ----------- ---------- -----------
Net income $423 $2,551 $1,161 $5,280
=========== =========== ========== ===========

Net income per
common share:
Basic $0.12 $0.11 $0.35 $0.25
=========== =========== ========== ===========
Diluted $0.09 $0.11 (1) $0.25 $0.24 (1)
=========== =========== ========== ===========

Weighted average
shares used in
computing net
income per common
share:
Basic 3,425,750 22,691,254 3,334,844 21,328,871
=========== =========== ========== ===========
Diluted 4,937,528 24,880,879 4,651,786 22,994,295
=========== =========== ========== ===========

Non-GAAP Results (in thousands, except per share data)

The following table shows the Company's non-GAAP resultsreconciled to the Generally Accepted Accounting Principles ("GAAP")Condensed Consolidated Statements of Operations. The Company'snon-GAAP results do not include amortization of acquired intangiblesand employee stock-based compensation and charges for acquiredin-process research and development.
Three Months Ended June Six Months Ended June 30,
30,
------------------------- -------------------------
2004 2005 2004 2005
---------- ----------- ---------- -----------

Net income $423 $2,551 $1,161 $5,280
Amortization of
acquired
intangibles 67 1,681 134 1,998
Acquired in-process
research and
development - 2,640 - 2,890
Stock-based
compensation 787 322 1,498 679
---------- ----------- ---------- -----------
Adjusted net income $1,277 $7,194 $2,793 $10,847
========== =========== ========== ===========

Adjusted net income
per diluted share $0.26 $0.30 (1) $0.60 $0.48 (1)
========== =========== ========== ===========

Weighted average
shares used in
computing adjusted
net income per
common share: 4,937,528 24,880,879 4,651,786 22,994,295

Gross profit $7,051 $14,158 $13,119 $25,834
Amortization of
acquired
intangibles 67 1,681 134 1,998
---------- ----------- ---------- -----------
Adjusted gross
profit $7,118 $15,839 $13,253 $27,832
========== =========== ========== ===========

(1) Imputed interest expense of $155 related to a promissory note
payable by the Company in cash or shares of common stock was added
back to net income in calculating the numerator for the diluted
earnings per share calculation for the three and six months ended
June 30, 2005 in accordance with GAAP.


JAMDAT Mobile Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)

Six Months Ended
June 30,
--------------------
2004 2005
----------- --------
(Unaudited)
Cash flows from operating activities:
Net income $1,161 $5,280
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 426 2,480
Acquired in-process research and development - 2,890
Stock-based compensation and warrant
amortization 1,498 679
Non-cash interest (income) expense, net (23) 155
Net tax benefit from release of valuation
allowance - (3,463)
Provision for bad debts, net - 242
Changes in operating assets and liabilities,
net of effect of acquisitions:
Accounts receivable (3,425) 1,245
Prepaid expenses and other assets (739) (781)
Prepaid royalties (690) (108)
Accounts payable and accrued expenses 330 1,724
Deferred revenue (476) 14
Other non-current liabilities - 180
----------- --------
Net cash provided by (used in) operating
activities (1,938) 10,537
----------- --------
Cash flows from investing activities:
Purchases of property and equipment (962) (538)
Purchases of short-term investments - (18,102)
Sales of short-term investments - 51,625
Restricted cash 819 -
Business acquisitions and investments - (68,716)
----------- --------
Net cash used in investing activities (143) (35,731)
----------- --------
Cash flows from financing activities:
Borrowing under term loan and credit facility - 15,000
Bank facilities repayments (395) (58)
Proceeds from issuance of restricted common stock 27 58
Proceeds from issuance of common stock upon
exercise of warrants 270 -
Payment of note payable (1,837) -
----------- --------
Net cash provided by (used in) financing
activities (1,935) 15,000
----------- --------
Effect of exchange rate changes on cash 48 53
Net decrease in cash and cash equivalents (3,968) (10,141)
Cash and cash equivalents, beginning of period 11,133 31,395
----------- --------
Cash and cash equivalents, end of period $7,165 $21,254
----------- --------