SEATTLE, Nov. 8, 2022
/PRNewswire/ -- RealNetworks, Inc. (Nasdaq: RNWK), an emerging
leader in AI-based software and solutions, today announced its
financial results for the third quarter ended September 30, 2022.
- Revenue was $11.7 million, net
loss of $(6.7) million and Adjusted
EBITDA loss of $(5.8) million
- SAFR Scan received its first large order and smaller orders are
creating a sales opportunity pipeline
- Pending merger process continues and the company is managing
its resources responsibly through the process
Management Commentary
"In the third quarter we
continued to manage our business rigorously while Real's transition
moves forward. Shareholders will be asked to vote on the Merger
Agreement and approval of the merger at a shareholder meeting which
we expect to take place December 14, 2022," said Rob Glaser, Founder, Chairman, and Chief
Executive Officer of RealNetworks. "Our financial results showed
stable revenue sequentially, while our bottom line was negatively
impacted by costs associated with the potential go private
transaction. We will continue to manage our resources responsibly
through the transition."
Mr. Glaser continued: "SAFR Scan has been receiving encouraging
feedback from initial clients, and during the quarter we closed our
first large SAFR Scan customer as well as a pipeline of sales
opportunities for this exciting new product."
Third Quarter 2022 Financial Results
- Revenue was $11.7 million,
compared to $11.9 million in the
prior quarter and $14.3 million in
the prior year period.
- Net loss attributable to RealNetworks was ($6.7) million, or $(0.14) per diluted share, compared to a net loss
of ($5.1) million, or $(0.11) per diluted share, in the prior quarter
and a net loss of ($7.7) million, or
($0.16) per diluted share, in the
prior year period.
- Adjusted EBITDA was a loss of $(5.8)
million compared to Adjusted EBITDA loss of $(4.2) million in the prior quarter and Adjusted
EBITDA loss of $(2.7) million in the
prior year period.
Corporate Developments
During the quarter, it was
announced that RealNetworks and Founder, Chairman and CEO
Rob Glaser entered into a definitive
merger agreement pursuant to which the company will merge with and
into Greater Heights LLC, an affiliate of Mr. Glaser, and each
outstanding share of common stock of the Company will be converted
into the right to receive cash consideration of $0.73 per share. The Company's shareholders will
be asked to vote upon the adoption of the Merger Agreement and
approval of the merger at a shareholder meeting on December 14, 2022. The transaction is expected to
close in the fourth quarter of 2022.
Given the pending merger, the Company will not be providing any
forward-looking guidance, and is withdrawing any previously
provided goals and outlook.
Conference Call and Webcast Information
RealNetworks
will host a conference call today to review its results and discuss
its performance at approximately 4:30 p.m.
ET / 1:30 p.m. PT.
Participants may join the conference call by dialing 1-877-550-1707
(United States) or 1-848-488-9020
(International). A telephonic replay of the call will also be
available shortly after the completion of the call, until
11:59 pm ET on November 22, by dialing 1-844-512-2921
(United States) or 1-412-317-6671
(International) and entering the replay pin number: 11152769.
A live webcast will be available on RealNetworks's Investor
Relations site under the Events & Presentations section at
http://investor.realnetworks.com and will be archived online upon
completion of the conference call.
About RealNetworks
Building on a rich history of
digital media expertise and innovation, RealNetworks has created a
new generation of products that employ best-in-class artificial
intelligence and machine learning to enhance and secure our daily
lives. Real's portfolio includes SAFR, the world's premier computer
vision platform for live video; KONTXT, an industry leading NLP
(Natural Language Processing) platform for text and multi-media
analysis; and leveraging its digital media expertise, a mobile
games business focused on the large free-to-play segment. For
information about all of our products, visit
www.realnetworks.com.
About Non-GAAP Financial Measures
To supplement
RealNetworks's consolidated financial information presented in
accordance with GAAP in this press release, the company also
discloses certain non-GAAP financial measures, including adjusted
EBITDA and contribution margin by reportable segment, which
management believes provide investors with useful information.
In the financial tables of our earnings press release,
RealNetworks has included reconciliations of GAAP net income (loss)
from continuing operations to adjusted EBITDA and operating income
(loss) by reportable segment to contribution margin by reportable
segment.
The rationale for management's use of non-GAAP measures is
included in the supplementary materials presented with the
quarterly earnings materials. Please refer to Exhibit 99.2
("Information Regarding Non- GAAP Financial Measures") to the
company's report on Form 8-K, which is being submitted today to the
SEC.
Additional Information and Where to Find
It
RealNetworks, its directors and certain executive
officers are participants in the solicitation of proxies from
shareholders in connection with the pending merger of RealNetworks
(the "Transaction"). RealNetworks has filed a definitive proxy
statement (the "Transaction Proxy Statement") with the Securities
and Exchange Commission (the "SEC") in connection with the
solicitation of proxies to approve the Transaction. Additional
information regarding such participants, including their direct or
indirect interests, by security holdings or otherwise,
is included in the Transaction Proxy Statement and other
relevant documents to be filed with the SEC in connection with the
Transaction. To the extent that holdings of RealNetworks's
securities have changed since the amounts printed in the
Transaction Proxy Statement, such changes have been or will be
reflected on Statements of Change in Ownership on Form 4 filed with
the SEC. Prior to the special meeting to consider the Transaction,
RealNetworks will furnish a Transaction Proxy Statement to is
shareholders, together with a proxy card. SHAREHOLDERS ARE URGED TO
READ THE TRANSACTION PROXY STATEMENT (INCLUDING ANY AMENDMENTS OR
SUPPLEMENTS THERETO) AND ANY OTHER RELEVANT DOCUMENTS THAT
REALNETWORKS WILL FILE WITH THE SEC WHEN THEY BECOME AVAILABLE
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Shareholders may
obtain, free of charge, the preliminary and definitive versions of
the Transaction Proxy Statement, any amendments or supplements
thereto, and any other relevant documents filed by RealNetworks
with the SEC in connection with the Transaction at the SEC's
website (http://www.sec.gov). Copies of RealNetworks's Transaction
Proxy Statement, any amendments or supplements thereto, and any
other relevant documents filed by RealNetworks with the SEC in
connection with the Transaction will also be available, free of
charge, from RealNetworks's website at www.realnetworks.com.
Forward-Looking Statements
This press release contains
forward-looking statements that involve risks and uncertainties,
including statements relating to our current expectations regarding
our future growth, profitability, and market position, the
anticipated closing of the merger, expectations following the
closing of the merger, our financial condition and liquidity, our
strategic focus and initiatives, product plans, and agreements with
partners. All statements contained in this press release that do
not relate to matters of historical fact should be considered
forward- looking statements. These statements reflect our
expectations as of today, and actual results may differ materially
from the results predicted. Factors that could cause actual results
for RealNetworks, on a consolidated basis, to differ from the
results predicted include: the possibility that the conditions to
the closing of the merger are not satisfied, including the risk
that required shareholder approval for the merger is not obtained;
potential litigation relating to the merger; uncertainties as to
the timing of the consummation of the merger; the ability of each
party to consummate the merger; risks relating to the substantial
costs and diversion of personnel's attention and resources due to
the merger; our ability to realize operating efficiencies, growth
and other benefits from the implementation of our growth
initiatives and restructuring efforts; cash usage and conservation,
and the pursuit of additional funding sources; successful
monetization of our products and services; competitive risks,
including the emergence or growth of competing technologies,
products and services; issues with the use of AI; potential
outcomes and effects of claims and legal proceedings; risks
associated with key customer or strategic relationships and
business acquisitions and dispositions; challenges caused by the
COVID-19 pandemic; disruptions in the global financial markets,
including changes in consumer spending and impacts to credit
availability, and fluctuations in foreign currencies; volatility of
our stock price; material asset impairment; continued declines in
subscription revenue; difficulty recruiting and retaining key
personnel; regulatory, tax, accounting, and cross-border risks; and
risks related to our governance structure. More information about
potential risk factors that could affect our business and financial
results is included in RealNetworks's latest annual report on Form
10-K for year ended December 31,
2021, its quarterly reports on Form 10-Q and in other
reports and documents filed by RealNetworks from time to time with
the Securities and Exchange Commission. The preparation of our
financial statements requires us to make estimates and assumptions
that affect the reported amount of assets and liabilities, and
revenues and expenses during the reported period. Actual results
may differ materially from these estimates under different
assumptions or conditions. RealNetworks assumes no obligation to
update any forward-looking statements or information, which are in
effect as of their respective dates.
For More Information:
Investor Relations for
RealNetworks
Brian M. Prenoveau, CFA
MZ North America
561-489-5315
IR@realnetworks.com
RNWK-F
RealNetworks, Inc.
and Subsidiaries
Condensed
Consolidated Statements of Operations
(Unaudited)
|
|
|
|
|
Quarter Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
|
|
|
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands,
except per share data)
|
|
|
|
|
|
|
|
|
|
|
Net
revenue
|
|
|
$
11,708
|
|
$
14,332
|
|
$
36,840
|
|
$
44,781
|
Cost of
revenue
|
|
|
2,787
|
|
3,119
|
|
8,228
|
|
10,370
|
Gross profit
|
|
|
8,921
|
|
11,213
|
|
28,612
|
|
34,411
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
Research and
development
|
|
|
4,870
|
|
5,250
|
|
16,000
|
|
17,818
|
Sales and
marketing
|
|
|
4,726
|
|
7,177
|
|
13,810
|
|
17,573
|
General and
administrative
|
|
|
6,020
|
|
4,228
|
|
14,918
|
|
13,502
|
Fair value adjustments
to contingent consideration liability
|
|
|
—
|
|
—
|
|
—
|
|
(1,040)
|
Restructuring
and other charges
|
|
|
118
|
|
1,017
|
|
573
|
|
4,906
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
|
15,734
|
|
17,672
|
|
45,301
|
|
52,759
|
|
|
|
|
|
|
|
|
|
|
Operating
loss
|
|
|
(6,813)
|
|
(6,459)
|
|
(16,689)
|
|
(18,348)
|
|
|
|
|
|
|
|
|
|
|
Other income
(expenses):
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
(3)
|
|
(27)
|
|
(47)
|
|
(146)
|
Interest
income
|
|
|
7
|
|
7
|
|
21
|
|
27
|
Gain on
forgiveness of Paycheck Protection Program loan
|
|
|
—
|
|
—
|
|
—
|
|
2,897
|
Loss on equity
and other investments, net
|
|
|
(207)
|
|
(1,229)
|
|
(806)
|
|
(6,070)
|
Other income,
net
|
|
|
364
|
|
46
|
|
651
|
|
2,066
|
|
|
|
|
|
|
|
|
|
|
Total other income (expenses), net
|
|
|
161
|
|
(1,203)
|
|
(181)
|
|
(1,226)
|
|
|
|
|
|
|
|
|
|
|
Loss before income
taxes
|
|
|
(6,652)
|
|
(7,662)
|
|
(16,870)
|
|
(19,574)
|
Income tax
expense
|
|
|
16
|
|
6
|
|
159
|
|
133
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
(6,668)
|
|
(7,668)
|
|
(17,029)
|
|
(19,707)
|
Net loss attributable
to noncontrolling interests
|
|
|
—
|
|
—
|
|
—
|
|
(244)
|
Net loss attributable
to RealNetworks
|
|
|
$
(6,668)
|
|
$
(7,668)
|
|
$ (17,029)
|
|
$ (19,463)
|
|
|
|
|
|
|
|
|
|
|
Net loss per share
attributable to RealNetworks- Basic
|
|
|
$
(0.14)
|
|
$
(0.16)
|
|
$
(0.36)
|
|
$
(0.45)
|
|
|
|
|
|
|
|
|
|
|
Net loss per share
attributable to RealNetworks- Diluted
|
|
|
$
(0.14)
|
|
$
(0.16)
|
|
$
(0.36)
|
|
$
(0.45)
|
|
|
|
|
|
|
|
|
|
|
Shares used to
compute basic net loss per share
|
|
|
47,506
|
|
47,055
|
|
47,367
|
|
43,312
|
Shares used to
compute diluted net loss per share
|
|
|
47,506
|
|
47,055
|
|
47,367
|
|
43,312
|
RealNetworks, Inc.
and Subsidiaries
Condensed
Consolidated Balance Sheets
(Unaudited)
|
|
|
September
30,
2022
|
|
December 31,
2021
|
|
(in
thousands)
|
ASSETS
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
9,156
|
|
$
27,109
|
Trade accounts
receivable, net
|
8,659
|
|
9,556
|
Deferred costs,
current portion
|
45
|
|
49
|
Investments
|
—
|
|
1,755
|
Prepaid expenses
and other current assets
|
4,179
|
|
3,166
|
Total current
assets
|
22,039
|
|
41,635
|
|
|
|
|
Equipment and
software
|
22,086
|
|
29,464
|
Leasehold
improvements
|
1,678
|
|
2,750
|
Total equipment,
software, and leasehold improvements
|
23,764
|
|
32,214
|
Less accumulated
depreciation and amortization
|
22,700
|
|
30,744
|
Net equipment,
software, and leasehold improvements
|
1,064
|
|
1,470
|
|
|
|
|
Operating lease
assets
|
3,092
|
|
3,992
|
Restricted cash
equivalents
|
1,500
|
|
1,630
|
Other
assets
|
2,680
|
|
2,878
|
Deferred tax
assets, net
|
517
|
|
727
|
Goodwill
|
16,116
|
|
16,976
|
|
|
|
|
Total
assets
|
$
47,008
|
|
$
69,308
|
|
|
|
|
LIABILITIES
AND SHAREHOLDERS' EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
1,951
|
|
$
2,578
|
Accrued and
other current liabilities
|
11,637
|
|
13,286
|
Deferred
revenue, current portion
|
2,245
|
|
2,614
|
Total current
liabilities
|
15,833
|
|
18,478
|
|
|
|
|
Deferred revenue,
non-current portion
|
60
|
|
183
|
Deferred tax
liabilities, net
|
995
|
|
1,132
|
Long-term lease
liabilities
|
1,703
|
|
2,300
|
Other long-term
liabilities
|
10
|
|
1,142
|
|
|
|
|
Total
liabilities
|
18,601
|
|
23,235
|
|
|
|
|
|
|
|
|
Total
equity
|
28,407
|
|
46,073
|
|
|
|
|
Total
liabilities and equity
|
$
47,008
|
|
$
69,308
|
RealNetworks, Inc.
and Subsidiaries
Condensed
Consolidated Statements of Cash Flows
(Unaudited)
|
|
|
Nine Months Ended
September 30,
|
|
2022
|
|
2021
|
|
(in
thousands)
|
|
Cash flows from
operating activities:
|
|
|
|
Net loss
|
$
(17,029)
|
|
$
(19,707)
|
Adjustment to reconcile
net loss to net cash used in operating activities:
|
|
|
|
Depreciation and
amortization
|
530
|
|
600
|
Stock-based
compensation
|
1,789
|
|
3,789
|
Loss on equity and
other investments, net
|
806
|
|
6,070
|
Loss on impairment of
operating lease assets
|
—
|
|
2,461
|
Deferred income taxes,
net
|
93
|
|
—
|
Foreign currency
gain
|
(624)
|
|
(62)
|
Fair value adjustments
to contingent consideration liability
|
—
|
|
(1,040)
|
Gain on
deconsolidation of subsidiary
|
—
|
|
(1,961)
|
Gain on forgiveness of
Paycheck Protection Program loan
|
—
|
|
(2,897)
|
Net change in certain
operating assets and liabilities
|
(1,928)
|
|
1,331
|
Net cash used in
operating activities
|
(16,363)
|
|
(11,416)
|
Cash flows from
investing activities:
|
|
|
|
Purchases of equipment,
software, and leasehold improvements
|
(211)
|
|
(280)
|
Deconsolidation of
subsidiary, net
|
—
|
|
(836)
|
Other
|
(595)
|
|
—
|
Net cash used in
investing activities
|
(806)
|
|
(1,116)
|
Cash flows from
financing activities:
|
|
|
|
Proceeds from issuance
of common stock (stock options)
|
—
|
|
534
|
Proceeds from equity
offering, net of costs
|
—
|
|
20,114
|
Tax payments from
shares withheld upon vesting of restricted stock
|
(102)
|
|
(186)
|
Payment of contingent
consideration liability
|
—
|
|
(2,500)
|
Net cash provided by
(used in) financing activities
|
(102)
|
|
17,962
|
Effect of exchange rate
changes on cash, cash equivalents and restricted cash
|
(812)
|
|
(380)
|
Net decrease in cash,
cash equivalents and restricted cash
|
(18,083)
|
|
5,050
|
Cash, cash equivalents,
and restricted cash, beginning of period
|
28,739
|
|
25,570
|
Cash, cash equivalents,
and restricted cash, end of period
|
$
10,656
|
|
$
30,620
|
RealNetworks, Inc.
and Subsidiaries
Supplemental
Financial Information
(Unaudited)
|
|
|
|
2022
|
|
2021
|
|
|
|
Q3
|
|
Q2
|
|
Q1
|
|
Q4
|
|
Q3
|
|
Q2
|
|
Q1
|
|
|
(in
thousands)
|
Net Revenue by
Segment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer Media
(A)
|
|
|
$
1,415
|
|
$
2,499
|
|
$
2,111
|
|
$
2,168
|
|
$
2,763
|
|
$
2,061
|
|
$
3,309
|
Mobile Services
(B)
|
|
|
5,226
|
|
4,457
|
|
5,640
|
|
5,680
|
|
5,772
|
|
6,356
|
|
5,980
|
Games (C)
|
|
|
5,067
|
|
4,900
|
|
5,525
|
|
5,554
|
|
5,797
|
|
6,144
|
|
6,599
|
Total net
revenue
|
|
|
$ 11,708
|
|
$
11,856
|
|
$
13,276
|
|
$
13,402
|
|
$
14,332
|
|
$
14,561
|
|
$
15,888
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Revenue by
Product
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer
Media
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Software License
(D)
|
|
|
$ 248
|
|
$
1,393
|
|
$ 987
|
|
$ 854
|
|
$
1,506
|
|
$ 841
|
|
$
1,875
|
- Subscription Services
(E)
|
|
|
682
|
|
710
|
|
742
|
|
768
|
|
779
|
|
793
|
|
818
|
- Product Sales
(F)
|
|
|
280
|
|
144
|
|
163
|
|
268
|
|
270
|
|
330
|
|
438
|
- Advertising &
Other (G)
|
|
|
205
|
|
252
|
|
219
|
|
278
|
|
208
|
|
97
|
|
178
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mobile
Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Software License
(H)
|
|
|
2,005
|
|
879
|
|
1,531
|
|
1,616
|
|
1,459
|
|
1,931
|
|
1,391
|
- Subscription Services
(I)
|
|
|
3,221
|
|
3,578
|
|
4,109
|
|
4,064
|
|
4,313
|
|
4,425
|
|
4,589
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Games
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Subscription Services
(J)
|
|
|
2,052
|
|
2,116
|
|
2,219
|
|
2,286
|
|
2,361
|
|
2,431
|
|
2,528
|
- Product Sales
(K)
|
|
|
2,090
|
|
1,986
|
|
2,377
|
|
2,453
|
|
2,612
|
|
2,830
|
|
3,163
|
- Advertising &
Other (L)
|
|
|
925
|
|
798
|
|
929
|
|
815
|
|
824
|
|
883
|
|
908
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total net
revenue
|
|
|
$ 11,708
|
|
$
11,856
|
|
$
13,276
|
|
$
13,402
|
|
$
14,332
|
|
$
14,561
|
|
$
15,888
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Revenue by
Geography
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United
States
|
|
|
$
7,004
|
|
$
8,237
|
|
$
8,187
|
|
$
8,126
|
|
$
9,227
|
|
$
9,209
|
|
$
9,932
|
Rest of
world
|
|
|
4,704
|
|
3,619
|
|
5,089
|
|
5,276
|
|
5,105
|
|
5,352
|
|
5,956
|
Total net
revenue
|
|
|
$ 11,708
|
|
$
11,856
|
|
$
13,276
|
|
$
13,402
|
|
$
14,332
|
|
$
14,561
|
|
$
15,888
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Revenue by
Segment
|
(A) The Consumer Media
segment primarily includes revenue from the licensing of our
portfolio of video codec technologies. Also included is RealPlayer
and related products, such as the distribution of third-party
software products, advertising on RealPlayer websites, sales of
RealPlayer Plus software to consumers, and consumer subscriptions
such as RealPlayer Plus and SuperPass.
|
(B) The Mobile Services
segment primarily includes revenue from SaaS services and sales of
professional services provided to mobile carriers.
|
(C) The Games segment
primarily includes revenue from player purchases of in-game virtual
goods within our free-to-play games, mobile and PC games, online
games subscription services, and advertising on games sites and
social network sites.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Revenue by
Product
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(D) Software licensing
revenue within Consumer Media includes revenues from licenses of
our video codec technologies.
|
(E) Subscriptions
revenue within Consumer Media includes revenue from subscriptions
such as our RealPlayer Plus and SuperPass offerings.
|
(F) Product sales
within Consumer Media includes sales of RealPlayer Plus software to
consumers.
|
(G) Advertising &
other revenue within Consumer Media includes distribution of
third-party software products and advertising on RealPlayer
websites.
|
(H) Software license
revenue within Mobile Services includes revenue from our facial
recognition platform, SAFR, and our integrated RealTimes
platform.
|
(I) Subscription
services revenue within Mobile Services includes revenue from our
messaging products, including Metcalf intercarrier messaging
services and KONTXT, as well as ringback tones and related
professional services provided to mobile carriers.
|
(J) Subscription
services revenue within Games includes revenue from online games
subscriptions.
|
(K) Product sales
revenue within Games includes revenue from player purchases of
in-game virtual goods, retail and wholesale games-related revenue,
as well as sales of mobile games.
|
(L) Advertising &
other revenue within Games includes advertising on games sites and
social network sites.
|
RealNetworks, Inc.
and Subsidiaries
Segment Results of
Operations and Reconciliation to non-GAAP Contribution
Margin
(Unaudited)
|
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
|
Q3
|
|
Q2
|
|
Q3
|
|
YTD
|
|
YTD
|
|
|
(in
thousands)
|
Consumer
Media
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue
|
|
$
1,415
|
|
$
2,499
|
|
$
2,763
|
|
$
6,025
|
|
$
8,133
|
Cost of
revenue
|
|
374
|
|
432
|
|
418
|
|
1,194
|
|
1,393
|
Gross
profit
|
|
1,041
|
|
2,067
|
|
2,345
|
|
4,831
|
|
6,740
|
|
|
|
|
|
|
|
|
|
|
|
Gross
margin
|
|
74 %
|
|
83 %
|
|
85 %
|
|
80 %
|
|
83 %
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
1,371
|
|
1,397
|
|
1,495
|
|
4,240
|
|
6,028
|
Operating income
(loss), a GAAP measure
|
|
$ (330)
|
|
$ 670
|
|
$ 850
|
|
$ 591
|
|
$ 712
|
Depreciation and
amortization
|
|
13
|
|
14
|
|
16
|
|
43
|
|
37
|
|
|
|
|
|
|
|
|
|
|
|
Contribution margin, a
non-GAAP measure
|
|
$ (317)
|
|
$ 684
|
|
$ 866
|
|
$ 634
|
|
$ 749
|
|
|
|
|
|
|
|
|
|
|
|
Mobile
Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue
|
|
$
5,226
|
|
$
4,457
|
|
$
5,772
|
|
$ 15,323
|
|
$ 18,108
|
Cost of
revenue
|
|
1,116
|
|
965
|
|
1,282
|
|
3,126
|
|
4,291
|
Gross
profit
|
|
4,110
|
|
3,492
|
|
4,490
|
|
12,197
|
|
13,817
|
|
|
|
|
|
|
|
|
|
|
|
Gross
margin
|
|
79 %
|
|
78 %
|
|
78 %
|
|
80 %
|
|
76 %
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
5,950
|
|
6,510
|
|
5,890
|
|
19,126
|
|
18,367
|
Operating loss, a GAAP
measure
|
|
$
(1,840)
|
|
$ (3,018)
|
|
$ (1,400)
|
|
$ (6,929)
|
|
$ (4,550)
|
Depreciation and
amortization
|
|
77
|
|
104
|
|
80
|
|
265
|
|
243
|
|
|
|
|
|
|
|
|
|
|
|
Contribution margin, a
non-GAAP measure
|
|
$
(1,763)
|
|
$ (2,914)
|
|
$ (1,320)
|
|
$ (6,664)
|
|
$ (4,307)
|
|
|
|
|
|
|
|
|
|
|
|
Games
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue
|
|
$
5,067
|
|
$
4,900
|
|
$
5,797
|
|
$ 15,492
|
|
$ 18,540
|
Cost of
revenue
|
|
1,288
|
|
1,300
|
|
1,414
|
|
3,883
|
|
4,671
|
Gross
profit
|
|
3,779
|
|
3,600
|
|
4,383
|
|
11,609
|
|
13,869
|
|
|
|
|
|
|
|
|
|
|
|
Gross
margin
|
|
75 %
|
|
73 %
|
|
76 %
|
|
75 %
|
|
75 %
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
3,648
|
|
3,826
|
|
4,844
|
|
11,473
|
|
14,791
|
Operating income
(loss), a GAAP measure
|
|
$ 131
|
|
$ (226)
|
|
$
(461)
|
|
$ 136
|
|
$
(922)
|
Depreciation and
amortization
|
|
18
|
|
61
|
|
78
|
|
140
|
|
235
|
|
|
|
|
|
|
|
|
|
|
|
Contribution margin, a
non-GAAP measure
|
|
$ 149
|
|
$ (165)
|
|
$
(383)
|
|
$ 276
|
|
$
(687)
|
|
|
|
|
|
|
|
|
|
|
|
Corporate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenue
|
|
$
9
|
|
$
8
|
|
$
5
|
|
$
25
|
|
$
15
|
Gross
profit
|
|
(9)
|
|
(8)
|
|
(5)
|
|
(25)
|
|
(15)
|
|
|
|
|
|
|
|
|
|
|
|
Gross
margin
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
4,765
|
|
2,337
|
|
5,443
|
|
10,462
|
|
13,573
|
Operating loss, a GAAP
measure
|
|
$
(4,774)
|
|
$
(2,345)
|
|
$
(5,448)
|
|
$
(10,487)
|
|
$
(13,588)
|
Other income (expense),
net
|
|
364
|
|
268
|
|
46
|
|
651
|
|
105
|
Foreign currency (gain)
loss
|
|
(349)
|
|
(272)
|
|
(47)
|
|
(624)
|
|
(62)
|
Depreciation and
amortization
|
|
28
|
|
25
|
|
29
|
|
82
|
|
85
|
Fair value adjustments
to contingent consideration liability
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(1,040)
|
Restructuring and other
charges
|
|
118
|
|
165
|
|
1,017
|
|
573
|
|
4,906
|
Stock-based
compensation
|
|
727
|
|
367
|
|
2,518
|
|
1,789
|
|
3,789
|
|
|
|
|
|
|
|
|
|
|
|
Contribution margin, a
non-GAAP measure
|
|
$
(3,886)
|
|
$
(1,792)
|
|
$
(1,885)
|
|
$
(8,016)
|
|
$
(5,805)
|
RealNetworks, Inc.
and Subsidiaries
Reconciliation of
Net loss to adjusted EBITDA, a non-GAAP measure
(Unaudited)
|
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
|
Q3
|
|
Q2
|
|
Q3
|
|
YTD
|
|
YTD
|
|
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
GAAP Net loss to adjusted EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
(6,668)
|
|
$ (5,136)
|
|
$ (7,668)
|
|
$
(17,029)
|
|
$
(19,707)
|
Income tax
expense
|
|
16
|
|
60
|
|
6
|
|
159
|
|
133
|
Interest
expense
|
|
3
|
|
22
|
|
27
|
|
47
|
|
146
|
Interest
income
|
|
(7)
|
|
(7)
|
|
(7)
|
|
(21)
|
|
(27)
|
Loss on equity and
other investments, net
|
|
207
|
|
410
|
|
1,229
|
|
806
|
|
6,070
|
Foreign currency (gain)
loss
|
|
(349)
|
|
(272)
|
|
(47)
|
|
(624)
|
|
(62)
|
Depreciation and
amortization
|
|
136
|
|
204
|
|
203
|
|
530
|
|
600
|
Fair value adjustments
to contingent consideration liability
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(1,040)
|
Gain on forgiveness of
Paycheck Protection Program loan
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(2,897)
|
Gain on deconsolidation
of subsidiary
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(1,961)
|
Restructuring and other
charges
|
|
118
|
|
165
|
|
1,017
|
|
573
|
|
4,906
|
Stock-based
compensation
|
|
727
|
|
367
|
|
2,518
|
|
1,789
|
|
3,789
|
Adjusted
EBITDA, a non-GAAP measure
|
|
$ (5,817)
|
|
$ (4,187)
|
|
$ (2,722)
|
|
$
(13,770)
|
|
$
(10,050)
|
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SOURCE RealNetworks, Inc.