JAMDAT Mobile Announces Second Quarter Results

JAMDAT Mobile Inc. (NASDAQ: JMDT), a global wireless
entertainment publisher, today reported financial results for the
three months ended June 30, 2005.
   Second quarter 2005 revenues were $19.3 million, a 27% sequential
increase over the $15.1 million reported in the first quarter of 2005,
and a 128% increase over the $8.4 million reported in the second
quarter 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 in
the prior year period. GAAP net income included a $2.6 million
non-cash acquired in process research and development ("IPR&D")
expense related to the Blue Lava acquisition and a $1.7 million income
tax benefit resulting from the release of a valuation allowance
against certain deferred tax assets. Excluding the IPR&D expense and
the tax benefit, net income would have been $3.4 million or $0.14 per
diluted share as compared to prior GAAP guidance of $0.12 per diluted
share.
   Adjusted net income, which excludes amortization of stock
compensation, other acquired intangibles and IPR&D expense, was $7.2
million for the second quarter of 2005, or $0.30 per diluted share,
compared to $1.3 million in the prior year period. Excluding the tax
benefit, adjusted net income would have been $5.4 million or $0.23 per
diluted share as compared to prior guidance of $0.18 per diluted
share.
   "We are very pleased with our strong second quarter results, and
in particular, with the completion of our integration of Blue Lava and
the Tetris property into our product slate," said Chief Executive
Officer, Mitch Lasky.
   Cash, cash equivalents and short-term investments at June 30,
2005, totaled $21.3 million, accounts receivable totaled $17.9 million
and 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 operations
during the prior year period.
   "We believe that our cash balance, available cash under our credit
facility and ability to generate cash from operations are sufficient
for 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 ending
September 30, 2005, and reaffirmed its previous guidance for the full
year ending December 31, 2005.

   Third Quarter 2005 Outlook

   For the three months ending September 30, 2005, JAMDAT expects
revenue in the range of $20 to $21 million, GAAP net income in the
range of $0.04 to $0.06 per diluted share and adjusted net income in
the range of $0.13 to $0.15 per diluted share. Net income per share
calculations for the three months ending September 30, 2005 are based
on an estimated 26.1 million weighted average shares outstanding.
   The reconciling items between GAAP net income and adjusted net
income for the period are amortization of acquired intangible assets
of approximately $2.0 million and employee stock based compensation of
approximately $0.3 million.

   Full Year 2005 Outlook

   For the full year ending December 31, 2005, JAMDAT reaffirmed its
guidance for revenue of approximately $80 million. JAMDAT expects GAAP
earnings per diluted share of approximately $0.42, and adjusted net
income of approximately $0.83 per diluted share. The full year
earnings per share include a $0.07 per share tax benefit realized in
Q2. JAMDAT currently does not expect its earnings in the second half
of 2005 to be materially impacted by taxes. Net income per share
calculations for the full year 2005 are based on an estimated 24.6
million weighted average shares outstanding. The reconciling items
between GAAP net income and adjusted net income for the period are
amortization of acquired intangible assets and acquired in-process
research and development of approximately $8.9 million and employee
stock based compensation of approximately $1.3 million.

   Investor Conference Call

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

   Non-GAAP Measures

   To supplement JAMDAT's consolidated financial statements presented
in accordance with generally accepted accounting principles, or GAAP,
JAMDAT uses non-GAAP measures of certain components of financial
performance, including net income, gross profit and earnings per
share, which are adjusted from results based on GAAP to exclude
certain expenses. These non-GAAP results provide useful information to
both management and investors by excluding certain expenses that may
not be indicative of core operating results. These measures should be
considered in addition to results prepared in accordance with
generally accepted accounting principles, but should not be considered
a substitute for, or superior to, GAAP results. The non-GAAP measures
included in this press release have been reconciled to the nearest
GAAP measure.
   These non-GAAP measures exclude the following items from the
Company'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 entertainment
applications, including games, ring tones, images and other content.
JAMDAT's application portfolio is based on original and licensed
intellectual properties and includes JAMDAT Bowling, Tetris(R),
Downtown Texas Hold 'Em, Lemonade Tycoon(R), Bejeweled, The Lord of
the Rings(R), Tony Hawk's(R) Underground and Scrabble(R). JAMDAT
distributes its applications through wireless carriers around the
world. For more information, please visit www.jamdat.com.

   Safe Harbor Statement

   This press release may include forward-looking statements within
the 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 and
the demand for its products. Factors that could cause JAMDAT's actual
results to differ materially from these forward-looking statements
include its ability to market and sell products in diverse market
segments, its reliance on a limited number of products and third-party
vendors and distributors, its ability to expand studio operations,
increases in fulfillment costs, disruptions to information technology
systems, unpredictable events and circumstances relating to
international suppliers, increased competition, government regulatory
action and general economic conditions. Please refer to JAMDAT's
reports and filings with the Securities and Exchange Commission for a
further discussion of these risks and uncertainties. Readers are
cautioned not to place undue reliance on forward-looking statements,
which speak only as of the date they are made. JAMDAT undertakes no
obligation to update publicly any forward-looking statements to
reflect new information, events or circumstances after the date they
were made or to reflect the occurrence of unanticipated events.
   (C) 2005 JAMDAT Mobile Inc. JAMDAT, JAMDAT Mobile and the bubbles
logo are trademarks of JAMDAT Mobile Inc. All other trademarks are the
property of their respective owners and are used with permission.
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                          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
                    =========== ===========  ========== ===========
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   Non-GAAP Results (in thousands, except per share data)

   The following table shows the Company's non-GAAP results
reconciled to the Generally Accepted Accounting Principles ("GAAP")
Condensed Consolidated Statements of Operations. The Company's
non-GAAP results do not include amortization of acquired intangibles
and employee stock-based compensation and charges for acquired
in-process research and development.
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                   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
                                                  ----------- --------
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