Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | Apr. 28, 2017 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | RNWK | |
Entity Registrant Name | REALNETWORKS INC | |
Entity Central Index Key | 1,046,327 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 37,102,003 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 38,498 | $ 33,721 |
Short-term investments | 27,778 | 43,331 |
Trade accounts receivable, net of allowances | 26,833 | 22,162 |
Deferred costs, current portion | 541 | 760 |
Prepaid expenses and other current assets | 4,843 | 4,910 |
Total current assets | 98,493 | 104,884 |
Equipment, software, and leasehold improvements, at cost: | ||
Equipment and software | 44,640 | 46,231 |
Leasehold improvements | 3,330 | 3,317 |
Total equipment, software, and leasehold improvements, at cost | 47,970 | 49,548 |
Less accumulated depreciation and amortization | 43,181 | 44,294 |
Net equipment, software, and leasehold improvements | 4,789 | 5,254 |
Restricted cash equivalents and investments | 2,700 | 2,700 |
Other assets | 2,412 | 1,742 |
Deferred costs, non-current portion | 1,071 | 1,246 |
Deferred tax assets, net | 836 | 816 |
Other intangible assets, net | 729 | 938 |
Goodwill | 12,915 | 12,857 |
Total assets | 123,945 | 130,437 |
Current liabilities: | ||
Accounts payable | 19,432 | 18,225 |
Accrued and other current liabilities | 15,425 | 15,425 |
Commitment to Rhapsody | 0 | 1,500 |
Deferred revenue, current portion | 3,918 | 3,430 |
Total current liabilities | 38,775 | 38,580 |
Deferred revenue, non-current portion | 724 | 240 |
Deferred rent | 679 | 748 |
Deferred tax liabilities, net | 87 | 87 |
Other long-term liabilities | 1,890 | 2,201 |
Total liabilities | 42,155 | 41,856 |
Commitments and contingencies | ||
Preferred stock, $0.001 par value, no shares issued and outstanding: | ||
Common stock, $0.001 par value authorized 250,000 shares; issued and outstanding 37,099 shares in 2017 and 37,501 shares in 2016 | 37 | 37 |
Additional paid-in capital | 635,963 | 633,928 |
Accumulated other comprehensive loss | (61,047) | (61,645) |
Retained deficit | (493,163) | (483,739) |
Total shareholders’ equity | 81,790 | 88,581 |
Total liabilities and shareholders’ equity | 123,945 | 130,437 |
Preferred stock, Series A | ||
Preferred stock, $0.001 par value, no shares issued and outstanding: | ||
Preferred stock | 0 | 0 |
Preferred stock, Undesignated series | ||
Preferred stock, $0.001 par value, no shares issued and outstanding: | ||
Preferred stock | $ 0 | $ 0 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2017 | Dec. 31, 2016 |
Preferred stock, par value (USD per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (USD per share) | $ 0.001 | $ 0.001 |
Common stock, authorized | 250,000,000 | 250,000,000 |
Common stock, issued | 37,099,000 | 37,501,000 |
Common stock, outstanding | 37,099,000 | 37,501,000 |
Preferred stock, Series A | ||
Preferred stock, authorized | 200,000 | 200,000 |
Preferred stock, Undesignated series | ||
Preferred stock, authorized | 59,800,000 | 59,800,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | ||
Income Statement [Abstract] | |||
Net revenue | [1] | $ 30,576 | $ 28,230 |
Cost of revenue | [2] | 17,293 | 15,172 |
Gross profit | 13,283 | 13,058 | |
Operating expenses: | |||
Research and development | 7,349 | 9,319 | |
Sales and marketing | 7,155 | 9,225 | |
General and administrative | 5,303 | 8,077 | |
Restructuring and other charges | 1,564 | 385 | |
Lease exit and related charges | 0 | 831 | |
Total operating expenses | 21,371 | 27,837 | |
Operating income (loss) | (8,088) | (14,779) | |
Other income (expenses): | |||
Interest income, net | 128 | 117 | |
Gain (loss) on investments, net | 0 | 3 | |
Equity in net loss of Rhapsody investment | (748) | 0 | |
Other income (expense), net | (226) | (287) | |
Total other income (expenses), net | (846) | (167) | |
Income (loss) before income taxes | (8,934) | (14,946) | |
Income tax expense (benefit) | 490 | 225 | |
Net income (loss) | $ (9,424) | $ (15,171) | |
Basic net income (loss) per share (USD per share) | $ (0.25) | $ (0.42) | |
Diluted net income (loss) per share (USD per share) | $ (0.25) | $ (0.42) | |
Shares used to compute basic net income (loss) per share | 37,030 | 36,520 | |
Shares used to compute diluted net income (loss) per share | 37,030 | 36,520 | |
Comprehensive income (loss): | |||
Unrealized investment holding gains (losses), net of reclassification adjustments | $ 4 | $ 151 | |
Foreign currency translation adjustments, net of reclassification adjustments | 594 | 700 | |
Total other comprehensive income (loss) | 598 | 851 | |
Net income (loss) | (9,424) | (15,171) | |
Comprehensive income (loss) | $ (8,826) | $ (14,320) | |
[1] | Quarters ended March 31, Components of Revenue2017 2016License Fees6,594 5,777Service Revenue23,982 22,453Net Revenue30,576 28,230 | ||
[2] | Quarters ended March 31, Components of Cost of Revenue2017 2016License Fees1,511 1,304Service Revenue15,782 13,868Net Revenue Costs17,293 15,172 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | ||
Components of net revenue: | |||
License fees | $ 6,594 | $ 5,777 | |
Service revenue | 23,982 | 22,453 | |
Net revenue | [1] | 30,576 | 28,230 |
Components of cost of revenue: | |||
License fees | 1,511 | 1,304 | |
Service revenue | 15,782 | 13,868 | |
Cost of revenue | [2] | $ 17,293 | $ 15,172 |
[1] | Quarters ended March 31, Components of Revenue2017 2016License Fees6,594 5,777Service Revenue23,982 22,453Net Revenue30,576 28,230 | ||
[2] | Quarters ended March 31, Components of Cost of Revenue2017 2016License Fees1,511 1,304Service Revenue15,782 13,868Net Revenue Costs17,293 15,172 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Cash flows from operating activities: | ||
Net income (loss) | $ (9,424) | $ (15,171) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 921 | 2,598 |
Stock-based compensation | 1,434 | 3,171 |
Equity in net loss of Rhapsody | 748 | 0 |
Deferred income taxes, net | (20) | (128) |
Loss (gain) on investments, net | 0 | (3) |
Fair value of warrants granted in 2015 and 2017, net of subsequent mark to market adjustments in 2017 and 2016 | (471) | 44 |
Trade accounts receivable | (3,451) | (487) |
Prepaid expenses and other assets | 452 | 1,322 |
Accounts payable | 147 | (2,106) |
Accrued and other liabilities | 254 | (451) |
Net cash provided by (used in) operating activities | (9,410) | (11,211) |
Cash flows from investing activities: | ||
Purchases of equipment, software, and leasehold improvements | (207) | (828) |
Purchases of short-term investments | (6,142) | (17,876) |
Proceeds from sales and maturities of short-term investments | 21,695 | 23,401 |
Decrease (increase) in restricted cash equivalents and investments, net | 0 | (210) |
Advance to Rhapsody | (1,500) | 0 |
Net cash provided by (used in) investing activities | 13,846 | 4,487 |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock (stock options and stock purchase plan) | 34 | 16 |
Tax payments from shares withheld upon vesting of restricted stock | (181) | (787) |
Net cash provided by (used in) financing activities | (147) | (771) |
Effect of exchange rate changes on cash and cash equivalents | 488 | 719 |
Net increase (decrease) in cash and cash equivalents | 4,777 | (6,776) |
Cash and cash equivalents, beginning of period | 33,721 | 47,315 |
Cash and cash equivalents, end of period | 38,498 | 40,539 |
Supplemental disclosure of cash flow information: | ||
Cash received from income tax refunds | 0 | 389 |
Cash paid for income taxes | 446 | 624 |
Non-cash investing activities: | ||
Increase (decrease) in accrued purchases of equipment, software, and leasehold improvements | $ 37 | $ 44 |
Description of Business and Sum
Description of Business and Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Description of Business and Summary of Significant Accounting Policies | Note 1 Description of Business and Summary of Significant Accounting Policies Description of Business. RealNetworks, Inc. and subsidiaries is a global provider of network-delivered digital media applications and services that make it easy to manage, play and share digital media. The Company also develops and markets software products and services that enable the creation, distribution and consumption of digital media, including audio and video. Inherent in our business are various risks and uncertainties, including a limited history of certain of our product and service offerings. RealNetworks' success will depend on the acceptance of our technology, products and services and the ability to generate related revenue. In this Quarterly Report on Form 10-Q (10-Q or Report), RealNetworks, Inc. and Subsidiaries is referred to as “RealNetworks”, the “Company”, “we”, “us”, or “our”. "RealPlayer ® " and other trademarks of ours appearing in this report are our property. Basis of Presentation. The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. Intercompany balances and transactions have been eliminated in consolidation. The unaudited condensed consolidated financial statements reflect all adjustments, consisting only of normal, recurring adjustments that, in the opinion of management, are necessary for a fair presentation of the results of operations for the periods presented. Operating results for the quarter ended March 31, 2017 are not necessarily indicative of the results that may be expected for any subsequent period or for the year ending December 31, 2017 . Certain information and disclosures normally included in financial statements prepared in conformity with accounting principles generally accepted in the United States of America (GAAP) have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2016 (the 10-K). Use of Estimates. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | Note 2 Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (FASB) issued new revenue recognition guidance, which was subsequently updated and amended in 2015 and 2016. The guidance requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The new guidance will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. While we are evaluating all of our revenue streams, we currently expect the greatest impact in certain areas where we will be required to estimate usage which drives the underlying revenue. Under the current guidance, we do not recognize revenues until we achieve fixed and determinable status, which would typically be at a later date. However, our analysis is not complete and we may identify other areas of additional impact. The guidance permits two methods of adoption: the full retrospective method where the standard would be applied to each prior reporting period presented and the cumulative effect of applying the standard would be recognized at the earliest period shown, or the modified retrospective method, where the cumulative effect of applying the standard would be recognized at the date of initial application. While we are continuing to evaluate the method of adoption and the quantitative impact of the new revenue standard, as amended, we currently expect to adopt using the modified retrospective method in the first quarter of fiscal year 2018. In February 2016, the FASB issued new guidance related to the accounting for leases by lessees. A major change in the new guidance is that lessees will be required to present right-of-use assets and lease liabilities on the balance sheet. The new guidance will be effective for us on January 1, 2019. We will be evaluating the effect that the guidance will have on our consolidated financial statements and related disclosures. In January 2017, the FASB issued new guidance simplifying the test for goodwill impairment. The new guidance eliminates Step 2 from the goodwill impairment test, instead requiring an entity to recognize a goodwill impairment charge for the amount by which the reporting unit's carrying amount exceeds the reporting unit's fair value. This guidance is effective for interim and annual goodwill impairment tests beginning on December 15, 2019, with early adoption permitted. We will be evaluating the impact of the guidance, but do not currently expect the adoption to have a material impact on our consolidated financial statements and related disclosures. There have been no other recent accounting pronouncements or changes in accounting pronouncements to be implemented that are of significance or potential significance to RealNetworks. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Note 3 Stock-Based Compensation Total stock-based compensation expense recognized in our unaudited condensed consolidated statements of operations and comprehensive income (loss) includes amounts related to stock options, restricted stock, and employee stock purchase plans and was as follows (in thousands): Quarter Ended 2017 2016 Total stock-based compensation expense $ 1,434 $ 3,171 The fair value of options granted determined using the Black-Scholes model used the following weighted-average assumptions: Quarter Ended 2017 2016 Expected dividend yield 0 % 0 % Risk-free interest rate 2.23 % 1.54 % Expected life (years) 6.8 5.5 Volatility 38 % 38 % The total stock-based compensation amounts for 2017 and 2016 disclosed above are recorded in their respective line items within operating expenses in the unaudited condensed consolidated statements of operations and comprehensive income (loss). Included in the expense for the quarters ended March 31, 2017 and 2016 was stock compensation expense recorded in the first quarter of 2017 and 2016 related to our 2016 and 2015 incentive bonuses paid in fully vested restricted stock units, which were authorized and granted in the first quarter of 2017 and 2016, respectively. As of March 31, 2017 , $5.2 million of total unrecognized compensation cost, net of estimated forfeitures, related to stock awards. The unrecognized compensation cost is expected to be recognized over a weighted-average period of approximately 2 years. |
Rhapsody Joint Venture
Rhapsody Joint Venture | 3 Months Ended |
Mar. 31, 2017 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Rhapsody Joint Venture | Note 4 Rhapsody Joint Venture As of March 31, 2017 we owned approximately 42% of the issued and outstanding stock of Rhapsody and account for our investment using the equity method of accounting. Rhapsody was initially formed in 2007 as a joint venture between RealNetworks and MTV Networks, a division of Viacom International Inc. (MTVN), to own and operate a business-to-consumer digital audio music service known as Rhapsody. Following certain restructuring transactions effective March 31, 2010, we began accounting for our investment in Rhapsody using the equity method of accounting. As part of the 2010 restructuring transactions, RealNetworks contributed $18.0 million in cash, the Rhapsody brand and certain other assets, including content licenses, in exchange for shares of convertible preferred stock of Rhapsody, carrying a $10.0 million preference upon certain liquidation events. We recorded our share of losses of Rhapsody of $0.7 million and $0.0 million for the quarters ended March 31, 2017 and 2016 , respectively. Because of the $10.0 million liquidation preference on the preferred stock we hold in Rhapsody, under the equity method of accounting we did not record any share of Rhapsody losses that would reduce our carrying value of Rhapsody, which is impacted by Rhapsody equity transactions, below $10.0 million , until Rhapsody's book value was reduced below $10.0 million . This occurred in the first quarter of 2015. As of March 31, 2017 , the carrying value of our Rhapsody equity investment was zero , as we do not have further commitment to provide future support to Rhapsody. Unless we commit to provide future financial support to Rhapsody, we do not record our share of Rhapsody losses that would reduce our carrying value of Rhapsody below zero, and instead we track those suspended losses separately. In December 2016, RealNetworks entered into an agreement to loan up to $5 million to Rhapsody for general operating purposes, as did the other large owner of Rhapsody, Columbus Nova. In 2016, $3.5 million of the loan was made by each lender. In January 2017, the remaining $1.5 million commitment was funded by each lender. The loan is subordinate to all existing loans, and bears an interest a rate of 10% per annum, which accretes into the outstanding principal balance and will be due at the December 7, 2017 maturity date. Under the terms of the loan agreement between RealNetworks and Rhapsody, a default by Rhapsody under its agreements with other third party lenders that would entitle such parties to accelerate repayments with an aggregate value in excess of $1 million , would constitute a cross default of the RealNetworks and Columbus Nova loans. In that case, RealNetworks and Columbus Nova could elect to declare to all outstanding obligations to us by Rhapsody to become immediately due and payable. We recognized previously suspended losses up to the amount of the commitment at the time of signing the agreement in the fourth quarter of 2016, and, consequently, we do not have a receivable recorded related to this loan. As of the date of this report, we have no further commitments for additional fundings to Rhapsody. In late March 2017, we were notified that Rhapsody would likely be in default of existing agreements with its third party lenders, which was confirmed in April 2017. We believe this default would constitute a cross default under the loan agreements between Rhapsody and RealNetworks and Rhapsody and Columbus Nova. The default with the third party lenders relates to Rhapsody's failure to meet a quarterly revenue target that included assumptions regarding the launch of a new product with a different business model than Rhapsody's subscription service. Rhapsody subsequently determined that it would not be in their best interest to continue the planned launch of the new product due to associated costs of launch and operation, thus contributing to a revenue shortfall. Rhapsody is in discussions with the third party lenders to agree on a waiver or forbearance of Rhapsody's covenant breach, however there is no assurance such waiver or forbearance will be achieved. As of the date of this report, RealNetworks and Columbus Nova have not elected to declare all amounts outstanding under our loan agreements to be immediately due and payable. No loan impairment charge to RealNetworks is required in connection with this default as we have no recorded receivable related to this loan. Summarized financial information for Rhapsody, which represents 100% of their financial information, is as follows (in thousands): Quarter Ended 2017 2016 Net revenue $ 47,462 $ 52,507 Gross profit 6,583 7,243 Net income (loss) (5,640 ) (5,148 ) |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 5 Fair Value Measurements Items Measured at Fair Value on a Recurring Basis The following table presents information about our financial assets that have been measured at fair value on a recurring basis as of March 31, 2017 and December 31, 2016 , and indicates the fair value hierarchy of the valuation inputs utilized to determine such fair value (in thousands). Fair Value Measurements as of Amortized Cost as of March 31, 2017 March 31, 2017 Level 1 Level 2 Level 3 Total Cash and cash equivalents: Cash $ 22,671 $ — $ — $ 22,671 $ 22,671 Money market funds 15,427 — — 15,427 15,427 Corporate notes and bonds — 400 — 400 400 Total cash and cash equivalents 38,098 400 — 38,498 38,498 Short-term investments: Corporate notes and bonds 27,778 — 27,778 27,784 Total short-term investments — 27,778 — 27,778 27,784 Restricted cash equivalents and investments — 2,700 — 2,700 2,700 Warrants issued by Rhapsody (included in Other assets) — — 1,244 1,244 — Total $ 38,098 $ 30,878 $ 1,244 $ 70,220 $ 68,982 Fair Value Measurements as of Amortized Cost as of December 31, 2016 December 31, 2016 Level 1 Level 2 Level 3 Total Cash and cash equivalents: Cash $ 32,585 $ — $ — $ 32,585 $ 32,585 Money market funds 136 — — 136 136 Corporate notes and bonds — 1,000 — 1,000 1,000 Total cash and cash equivalents 32,721 1,000 — 33,721 33,721 Short-term investments: Corporate notes and bonds — 43,331 — 43,331 43,343 Total short-term investments — 43,331 — 43,331 43,343 Restricted cash equivalents and investments — 2,700 — 2,700 2,700 Warrant issued by Rhapsody (included in Other assets) — — 773 773 — Total $ 32,721 $ 47,031 $ 773 $ 80,525 $ 79,764 Restricted cash equivalents and investments as of March 31, 2017 and December 31, 2016 relate to cash pledged as collateral against letters of credit in connection with lease agreements. Realized gains or losses on sales of short-term investment securities for the quarters ended March 31, 2017 and 2016 were not significant. Gross unrealized gains and gross unrealized losses on short-term investment securities as of March 31, 2017 and December 31, 2016 were also not significant. Investments with remaining contractual maturities of five years or less are classified as short-term because the investments are marketable and highly liquid, and we have the ability to utilize them for current operations. Contractual maturities of short-term investments as of March 31, 2017 (in thousands): Estimated Fair Value Within one year $ 27,778 Between one year and five years — Total short-term investments $ 27,778 In February 2015, Rhapsody issued warrants to purchase Rhapsody common shares to each of RealNetworks and Rhapsody's one other large stockholder, Columbus Nova. The warrants were issued as compensation for past services provided by RealNetworks and Columbus Nova, and both warrants covered the same number of underlying shares. The exercise price of the warrants was equal to the fair value of the underlying shares on the issuance date, and we used the Black-Scholes option-pricing model to calculate the fair value of the warrant, using an expected term of 5 years and expected volatility of 55% . On the date of issuance, we recognized and recorded the $1.2 million fair value of the warrant issued to RealNetworks within other assets in the unaudited condensed consolidated balance sheets, and as an expense reduction within General and administrative expense in the unaudited condensed consolidated statements of operations. The warrants are free-standing derivatives and as such their fair value is determined each quarter using updated inputs in the Black-Scholes option-pricing model. During the three months ended March 31, 2017 , the decrease in the fair value of the warrants was insignificant. In February 2017, Rhapsody issued additional warrants to purchase Rhapsody common shares to both RealNetworks and Columbus Nova. Consistent with the warrants issued in 2015, the 2017 warrants were issued as compensation for past services provided by RealNetworks and Columbus Nova, and both warrants covered the same number of underlying shares. The exercise price of the warrants exceeded the fair value of the underlying shares on the issuance date, and we used the Black-Scholes option-pricing model to calculate the fair value of the warrant, using an expected term of 5 years and expected volatility of 55% , resulting in a recognized fair value of $0.5 million in Other assets in the unaudited condensed consolidated balance sheets, and as an expense reduction within general and administrative expense in the unaudited condensed consolidated statements of operations. Items Measured at Fair Value on a Non-recurring Basis Certain of our assets and liabilities are measured at estimated fair value on a non-recurring basis, using Level 3 inputs. These instruments are subject to fair value adjustments only in certain circumstances (for example, when there is evidence of impairment). During the three months ended March 31, 2017 and 2016 , we did not record any impairments on those assets required to be measured at fair value on a non-recurring basis. See Note 11 , Lease Exit and Related Charges , for a discussion of the losses related to reductions in the use of RealNetworks' office space, which were recorded at the estimated fair value of remaining lease obligations, less expected sub-lease income. |
Allowance for Doubtful Accounts
Allowance for Doubtful Accounts Receivable and Sales Returns | 3 Months Ended |
Mar. 31, 2017 | |
Receivables [Abstract] | |
Allowance for Doubtful Accounts Receivable and Sales Returns | Note 6 Allowance for Doubtful Accounts Receivable and Sales Returns Activity in the allowance for doubtful accounts receivable and sales returns (in thousands): Allowance For Doubtful Accounts Receivable Sales Returns Balances, December 31, 2016 $ 633 $ 169 Addition (reduction) to allowance 9 — Amounts written off — — Foreign currency translation (15 ) (1 ) Balances, March 31, 2017 $ 627 $ 168 One customer accounted for 60% of trade accounts receivable as of March 31, 2017 . At December 31, 2016 , one customer accounted for 64% of trade accounts receivable. One customer accounted for 36% or $10.9 million of consolidated revenue during the quarter ended March 31, 2017 which is reflected in our Mobile Services segment. One customer accounted for 30% of consolidated revenue or $8.4 million during the quarter ended March 31, 2016 , which is reflected in our Mobile Services segment. One customer accounted for 12% of consolidated revenue, or $3.5 million , during the quarter ended March 31, 2016 , also reflected in our Mobile Services segment. |
Other Intangible Assets
Other Intangible Assets | 3 Months Ended |
Mar. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Other Intangible Assets | Note 7 Other Intangible Assets Other intangible assets (in thousands): March 31, 2017 December 31, 2016 Gross Amount Accumulated Amortization Net Gross Amount Accumulated Amortization Net Amortizing intangible assets: Customer relationships $ 30,980 $ 30,512 $ 468 $ 29,308 $ 28,781 $ 527 Developed technology 24,440 24,262 178 23,574 23,263 311 Patents, trademarks and tradenames 3,715 3,632 83 3,530 3,430 100 Service contracts 5,378 5,378 — 5,205 5,205 — Total $ 64,513 $ 63,784 $ 729 $ 61,617 $ 60,679 $ 938 No impairments of other intangible assets were recognized in either of the three months ended March 31, 2017 or 2016 . |
Goodwill
Goodwill | 3 Months Ended |
Mar. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Note 8 Goodwill Changes in goodwill (in thousands): Balance, December 31, 2016 $ 12,857 Effects of foreign currency translation 58 Balance, March 31, 2017 $ 12,915 Goodwill by segment (in thousands): March 31, Consumer Media $ 580 Mobile Services 2,037 Games 10,298 Total goodwill $ 12,915 No impairment of goodwill was recognized in either of the three months ended March 31, 2017 or in 2016 . |
Accrued and Other Current Liabi
Accrued and Other Current Liabilities | 3 Months Ended |
Mar. 31, 2017 | |
Payables and Accruals [Abstract] | |
Accrued and Other Current Liabilities | Note 9 Accrued and Other Current Liabilities Accrued and other current liabilities (in thousands): March 31, 2017 December 31, 2016 Royalties and other fulfillment costs $ 2,967 $ 2,629 Employee compensation, commissions and benefits 5,701 5,136 Sales, VAT and other taxes payable 2,941 3,258 Other 3,816 4,402 Total accrued and other current liabilities $ 15,425 $ 15,425 |
Restructuring Charges
Restructuring Charges | 3 Months Ended |
Mar. 31, 2017 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Charges | Note 10 Restructuring Charges Restructuring and other charges in 2017 and 2016 consist of costs associated with the ongoing reorganization of our business operations and our ongoing expense re-alignment efforts. The expense amounts in both years relate primarily to severance costs due to workforce reductions. Restructuring charges are as follows (in thousands): Employee Separation Costs Costs incurred and charged to expense for the three months ended March 31, 2017 $ 1,564 Costs incurred and charged to expense for the three months ended March 31, 2016 $ 385 Changes to the accrued restructuring liability (which is included in Accrued and other current liabilities) for 2017 (in thousands) are as follows: Employee Separation Costs Accrued liability at December 31, 2016 $ 209 Costs incurred and charged to expense for the three months ended March 31, 2017 1,564 Cash payments (664 ) Accrued liability at March 31, 2017 $ 1,109 |
Lease Exit and Related Charges
Lease Exit and Related Charges | 3 Months Ended |
Mar. 31, 2017 | |
Disclosure Changes To Accrued Loss On Excess Office Facilities [Abstract] | |
Lease Exit and Related Charges | Note 11 Lease Exit and Related Charges As a result of the reduction in use of RealNetworks' office space, lease exit and related charges have been recognized representing rent and contractual operating expenses over the remaining life of the leases, including estimates of sublease income expected to be received. We continue to regularly evaluate the market for office space. If the market for such space changes further in future periods, we may have to revise our estimates which may result in future adjustments to expense for excess office facilities. Changes to accrued lease exit and related charges (which is included in Accrued and other current liabilities) for 2017 (in thousands) are as follows: Accrued loss at December 31, 2016 $ 3,186 Additions and adjustments to the lease loss accrual, including estimated sublease income — Less amounts paid, net of sublease amounts (727 ) Accrued loss at March 31, 2017 2,459 Less current portion (included in Accrued and other current liabilities) (612 ) Accrued loss, non-current portion (included in Other long term liabilities) $ 1,847 |
Shareholders_ Equity
Shareholders’ Equity | 3 Months Ended |
Mar. 31, 2017 | |
Equity [Abstract] | |
Shareholders’ Equity | Note 12 Shareholders’ Equity Accumulated Other Comprehensive Income (Loss) Changes in components of accumulated other comprehensive income (loss) (in thousands): Quarter Ended 2017 2016 Investments Accumulated other comprehensive income (loss), beginning of period $ (6 ) $ 1,297 Unrealized gains (losses), net of tax effects of $2, and $90 4 151 Net current period other comprehensive income (loss) 4 151 Accumulated other comprehensive income (loss) balance, end of period $ (2 ) $ 1,448 Foreign currency translation Accumulated other comprehensive income (loss), beginning of period $ (61,639 ) $ (60,777 ) Translation adjustments 594 700 Net current period other comprehensive income (loss) 594 700 Accumulated other comprehensive income (loss) balance, end of period $ (61,045 ) $ (60,077 ) Total accumulated other comprehensive income (loss), end of period $ (61,047 ) $ (58,629 ) |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 13 Income Taxes As of March 31, 2017 , there have been no material changes to RealNetworks’ uncertain tax positions disclosures as provided in Note 14 of the 2016 10-K. We do not anticipate that the total amount of unrecognized tax benefits will significantly change within the next twelve months. We file numerous consolidated and separate income tax returns in the U.S. including federal, state and local, as well as foreign jurisdictions. With few exceptions, we are no longer subject to U.S. federal income tax examinations for tax years before 2013 or state, local, or foreign income tax examinations for years before 1993. We are currently under audit by various states and foreign jurisdictions for certain tax years subsequent to 1993. |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) Per Share | Note 14 Earnings (Loss) Per Share Basic net income (loss) per share (EPS) is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted EPS is computed by dividing net income (loss) by the weighted average number of common and dilutive potential common shares outstanding during the period. Basic and diluted EPS (in thousands, except per share amounts): Quarter Ended 2017 2016 Net income (loss) $ (9,424 ) $ (15,171 ) Weighted average common shares outstanding used to compute basic EPS 37,030 36,520 Dilutive effect of stock based awards — — Weighted average common shares outstanding used to compute diluted EPS 37,030 36,520 Basic EPS $ (0.25 ) $ (0.42 ) Diluted EPS $ (0.25 ) $ (0.42 ) During the quarters ended March 31, 2017 , and March 31, 2016 4.9 million and 5.3 million shares of common stock, respectively, of potentially issuable shares from stock awards were excluded from the calculation of diluted EPS because of their antidilutive effect. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 15 Commitments and Contingencies From time to time we are and may be subject to legal proceedings, governmental investigations and claims in the ordinary course of business, including employment claims, contract-related claims, and claims of alleged infringement of third-party patents, trademarks and other intellectual property rights. Although we believe that resolving such claims, individually or in aggregate, will not have a material adverse impact on our business or financial condition, these matters are subject to inherent uncertainties. Such claims, even if not meritorious, could force us to expend significant financial and managerial resources. In addition, given the broad distribution of some of our consumer products, any individual claim related to those products could give rise to liabilities that may be material to us. In the event of a determination adverse to us, we may incur substantial monetary liability, and/or be required to change our business practices. Either of these could have a material adverse effect on our consolidated financial statements. |
Guarantees
Guarantees | 3 Months Ended |
Mar. 31, 2017 | |
Guarantees [Abstract] | |
Guarantees | Note 16 Guarantees In the ordinary course of business, RealNetworks is subject to potential obligations for standard warranty and indemnification provisions that are contained within many of our customer license and service agreements. Our warranty provisions are consistent with those prevalent in our industry, and we do not have a history of incurring losses on warranties; therefore, we do not maintain accruals for warranty-related obligations. With regard to indemnification provisions, nearly all of our carrier contracts obligate us to indemnify our carrier customers for certain liabilities that may be incurred by them. We have received in the past, and may receive in the future, claims for indemnification from some of our carrier customers. In relation to certain patents and other technology assets we sold to Intel in the second quarter of 2012, we have specific obligations to indemnify Intel for breaches of the representations and warranties that we made and covenants that we agreed to in the asset purchase agreement for certain potential future intellectual property infringement claims brought by third parties against Intel. The amount of any potential liabilities related to our indemnification obligations to Intel will not be determined until a claim has been made, but we are obligated to indemnify Intel up to the amount of the gross purchase price that we received in the sale. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2017 | |
Segment Reporting [Abstract] | |
Segment Information | Note 17 Segment Information We manage our business and report revenue and operating income (loss) in three segments: (1) Consumer Media, which includes our PC-based RealPlayer products, including RealPlayer Plus and related products and intellectual property licensing; (2) Mobile Services, which includes our SaaS services, our LISTEN ® product, and our mobile RealTimes ® product that is primarily sold through mobile carriers; and (3) Games, which includes all our games-related businesses, including sales of mobile games, sales of games licenses, online games subscription services, advertising on games sites and social network sites, and microtransactions from online games. We allocate certain corporate expenses which are directly attributable to supporting our businesses, including but not limited to a portion of finance, legal, human resources and headquarters facilities, to our reportable segments. Remaining expenses, which are not directly attributable to supporting the business, are reported as corporate items. Also reported in our corporate segment are restructuring charges, lease exit and related charges, as well as stock compensation charges. RealNetworks reports three reportable segments based on factors such as how we manage our operations and how our Chief Operating Decision Maker (CODM) reviews results. The CODM reviews financial information presented on both a consolidated basis and on a business segment basis. The accounting policies used to derive segment results are the same as those described in Note 1, Description of Business and Summary of Significant Accounting Policies, in the 10-K. Segment results for the quarters ended March 31, 2017 and 2016 (in thousands): Consumer Media Quarter Ended 2017 2016 Revenue $ 5,669 $ 5,726 Cost of revenue 1,405 2,417 Gross profit 4,264 3,309 Operating expenses 4,010 5,376 Operating income (loss) $ 254 $ (2,067 ) Mobile Services Quarter Ended 2017 2016 Revenue $ 19,084 $ 16,465 Cost of revenue 13,914 10,917 Gross profit 5,170 5,548 Operating expenses 8,119 9,794 Operating income (loss) $ (2,949 ) $ (4,246 ) Games Quarter Ended 2017 2016 Revenue $ 5,823 $ 6,039 Cost of revenue 1,937 1,845 Gross profit 3,886 4,194 Operating expenses 4,947 5,295 Operating income (loss) $ (1,061 ) $ (1,101 ) Corporate Quarter Ended 2017 2016 Cost of revenue $ 37 $ (7 ) Operating expenses 4,295 7,372 Operating income (loss) $ (4,332 ) $ (7,365 ) Our customers consist primarily of consumers and corporations located in the U.S., Europe, Republic of Korea and various foreign countries (Rest of the World). Revenue by geographic region (in thousands): Quarter Ended 2017 2016 United States $ 9,740 $ 10,383 Europe 3,195 3,384 Republic of Korea 12,853 9,233 Rest of the World 4,788 5,230 Total net revenue $ 30,576 $ 28,230 Long-lived assets (which consist of equipment, software, leasehold improvements, other intangible assets, and goodwill) by geographic region (in thousands) are as follows: March 31, December 31, United States $ 12,754 $ 13,052 Europe 3,738 3,920 Republic of Korea 156 168 Rest of the World 1,785 1,909 Total long-lived assets $ 18,433 $ 19,049 |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 18 Related Party Transactions See Note 4 , Rhapsody Joint Venture , and Note 5 , Fair Value Measurements , for details on transactions involving Rhapsody. |
Description of Business and S25
Description of Business and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Description of Business | Description of Business. RealNetworks, Inc. and subsidiaries is a global provider of network-delivered digital media applications and services that make it easy to manage, play and share digital media. The Company also develops and markets software products and services that enable the creation, distribution and consumption of digital media, including audio and video. Inherent in our business are various risks and uncertainties, including a limited history of certain of our product and service offerings. RealNetworks' success will depend on the acceptance of our technology, products and services and the ability to generate related revenue. In this Quarterly Report on Form 10-Q (10-Q or Report), RealNetworks, Inc. and Subsidiaries is referred to as “RealNetworks”, the “Company”, “we”, “us”, or “our”. "RealPlayer ® " and other trademarks of ours appearing in this report are our property. |
Basis of Presentation | Basis of Presentation. The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. Intercompany balances and transactions have been eliminated in consolidation. The unaudited condensed consolidated financial statements reflect all adjustments, consisting only of normal, recurring adjustments that, in the opinion of management, are necessary for a fair presentation of the results of operations for the periods presented. Operating results for the quarter ended March 31, 2017 are not necessarily indicative of the results that may be expected for any subsequent period or for the year ending December 31, 2017 . Certain information and disclosures normally included in financial statements prepared in conformity with accounting principles generally accepted in the United States of America (GAAP) have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2016 (the 10-K). |
Use of Estimates | Use of Estimates. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Segments | We manage our business and report revenue and operating income (loss) in three segments: (1) Consumer Media, which includes our PC-based RealPlayer products, including RealPlayer Plus and related products and intellectual property licensing; (2) Mobile Services, which includes our SaaS services, our LISTEN ® product, and our mobile RealTimes ® product that is primarily sold through mobile carriers; and (3) Games, which includes all our games-related businesses, including sales of mobile games, sales of games licenses, online games subscription services, advertising on games sites and social network sites, and microtransactions from online games. We allocate certain corporate expenses which are directly attributable to supporting our businesses, including but not limited to a portion of finance, legal, human resources and headquarters facilities, to our reportable segments. Remaining expenses, which are not directly attributable to supporting the business, are reported as corporate items. Also reported in our corporate segment are restructuring charges, lease exit and related charges, as well as stock compensation charges. RealNetworks reports three reportable segments based on factors such as how we manage our operations and how our Chief Operating Decision Maker (CODM) reviews results. The CODM reviews financial information presented on both a consolidated basis and on a business segment basis. The accounting policies used to derive segment results are the same as those described in Note 1, Description of Business and Summary of Significant Accounting Policies, in the 10-K. |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation Expense | Total stock-based compensation expense recognized in our unaudited condensed consolidated statements of operations and comprehensive income (loss) includes amounts related to stock options, restricted stock, and employee stock purchase plans and was as follows (in thousands): Quarter Ended 2017 2016 Total stock-based compensation expense $ 1,434 $ 3,171 |
Weighted-Average Assumptions Used to Determine Fair Value of Options Granted | The fair value of options granted determined using the Black-Scholes model used the following weighted-average assumptions: Quarter Ended 2017 2016 Expected dividend yield 0 % 0 % Risk-free interest rate 2.23 % 1.54 % Expected life (years) 6.8 5.5 Volatility 38 % 38 % |
Rhapsody Joint Venture (Tables)
Rhapsody Joint Venture (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Summarized Financial Operating Information for Rhapsody | Summarized financial information for Rhapsody, which represents 100% of their financial information, is as follows (in thousands): Quarter Ended 2017 2016 Net revenue $ 47,462 $ 52,507 Gross profit 6,583 7,243 Net income (loss) (5,640 ) (5,148 ) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Financial Assets Measured at Fair Value on a Recurring Basis | The following table presents information about our financial assets that have been measured at fair value on a recurring basis as of March 31, 2017 and December 31, 2016 , and indicates the fair value hierarchy of the valuation inputs utilized to determine such fair value (in thousands). Fair Value Measurements as of Amortized Cost as of March 31, 2017 March 31, 2017 Level 1 Level 2 Level 3 Total Cash and cash equivalents: Cash $ 22,671 $ — $ — $ 22,671 $ 22,671 Money market funds 15,427 — — 15,427 15,427 Corporate notes and bonds — 400 — 400 400 Total cash and cash equivalents 38,098 400 — 38,498 38,498 Short-term investments: Corporate notes and bonds 27,778 — 27,778 27,784 Total short-term investments — 27,778 — 27,778 27,784 Restricted cash equivalents and investments — 2,700 — 2,700 2,700 Warrants issued by Rhapsody (included in Other assets) — — 1,244 1,244 — Total $ 38,098 $ 30,878 $ 1,244 $ 70,220 $ 68,982 Fair Value Measurements as of Amortized Cost as of December 31, 2016 December 31, 2016 Level 1 Level 2 Level 3 Total Cash and cash equivalents: Cash $ 32,585 $ — $ — $ 32,585 $ 32,585 Money market funds 136 — — 136 136 Corporate notes and bonds — 1,000 — 1,000 1,000 Total cash and cash equivalents 32,721 1,000 — 33,721 33,721 Short-term investments: Corporate notes and bonds — 43,331 — 43,331 43,343 Total short-term investments — 43,331 — 43,331 43,343 Restricted cash equivalents and investments — 2,700 — 2,700 2,700 Warrant issued by Rhapsody (included in Other assets) — — 773 773 — Total $ 32,721 $ 47,031 $ 773 $ 80,525 $ 79,764 |
Schedule of Contractual Maturity Date | Contractual maturities of short-term investments as of March 31, 2017 (in thousands): Estimated Fair Value Within one year $ 27,778 Between one year and five years — Total short-term investments $ 27,778 |
Allowance for Doubtful Accoun29
Allowance for Doubtful Accounts Receivable and Sales Returns (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Receivables [Abstract] | |
Activity in Allowance for Doubtful Accounts Receivable and Sales Returns | Activity in the allowance for doubtful accounts receivable and sales returns (in thousands): Allowance For Doubtful Accounts Receivable Sales Returns Balances, December 31, 2016 $ 633 $ 169 Addition (reduction) to allowance 9 — Amounts written off — — Foreign currency translation (15 ) (1 ) Balances, March 31, 2017 $ 627 $ 168 |
Other Intangible Assets (Tables
Other Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Other Intangible Assets | Other intangible assets (in thousands): March 31, 2017 December 31, 2016 Gross Amount Accumulated Amortization Net Gross Amount Accumulated Amortization Net Amortizing intangible assets: Customer relationships $ 30,980 $ 30,512 $ 468 $ 29,308 $ 28,781 $ 527 Developed technology 24,440 24,262 178 23,574 23,263 311 Patents, trademarks and tradenames 3,715 3,632 83 3,530 3,430 100 Service contracts 5,378 5,378 — 5,205 5,205 — Total $ 64,513 $ 63,784 $ 729 $ 61,617 $ 60,679 $ 938 |
Goodwill (Tables)
Goodwill (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes in Goodwill | Changes in goodwill (in thousands): Balance, December 31, 2016 $ 12,857 Effects of foreign currency translation 58 Balance, March 31, 2017 $ 12,915 |
Goodwill Assigned by Segments | Goodwill by segment (in thousands): March 31, Consumer Media $ 580 Mobile Services 2,037 Games 10,298 Total goodwill $ 12,915 |
Accrued and Other Current Lia32
Accrued and Other Current Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Payables and Accruals [Abstract] | |
Accrued and Other Liabilities | Accrued and other current liabilities (in thousands): March 31, 2017 December 31, 2016 Royalties and other fulfillment costs $ 2,967 $ 2,629 Employee compensation, commissions and benefits 5,701 5,136 Sales, VAT and other taxes payable 2,941 3,258 Other 3,816 4,402 Total accrued and other current liabilities $ 15,425 $ 15,425 |
Restructuring Charges (Tables)
Restructuring Charges (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring Charges by Type of Cost | Restructuring charges are as follows (in thousands): Employee Separation Costs Costs incurred and charged to expense for the three months ended March 31, 2017 $ 1,564 Costs incurred and charged to expense for the three months ended March 31, 2016 $ 385 Changes to the accrued restructuring liability (which is included in Accrued and other current liabilities) for 2017 (in thousands) are as follows: Employee Separation Costs Accrued liability at December 31, 2016 $ 209 Costs incurred and charged to expense for the three months ended March 31, 2017 1,564 Cash payments (664 ) Accrued liability at March 31, 2017 $ 1,109 |
Lease Exit and Related Charges
Lease Exit and Related Charges (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Disclosure Changes To Accrued Loss On Excess Office Facilities [Abstract] | |
Changes to Accrued Loss on Excess Office Facilities | Changes to accrued lease exit and related charges (which is included in Accrued and other current liabilities) for 2017 (in thousands) are as follows: Accrued loss at December 31, 2016 $ 3,186 Additions and adjustments to the lease loss accrual, including estimated sublease income — Less amounts paid, net of sublease amounts (727 ) Accrued loss at March 31, 2017 2,459 Less current portion (included in Accrued and other current liabilities) (612 ) Accrued loss, non-current portion (included in Other long term liabilities) $ 1,847 |
Shareholders_ Equity (Tables)
Shareholders’ Equity (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | Changes in components of accumulated other comprehensive income (loss) (in thousands): Quarter Ended 2017 2016 Investments Accumulated other comprehensive income (loss), beginning of period $ (6 ) $ 1,297 Unrealized gains (losses), net of tax effects of $2, and $90 4 151 Net current period other comprehensive income (loss) 4 151 Accumulated other comprehensive income (loss) balance, end of period $ (2 ) $ 1,448 Foreign currency translation Accumulated other comprehensive income (loss), beginning of period $ (61,639 ) $ (60,777 ) Translation adjustments 594 700 Net current period other comprehensive income (loss) 594 700 Accumulated other comprehensive income (loss) balance, end of period $ (61,045 ) $ (60,077 ) Total accumulated other comprehensive income (loss), end of period $ (61,047 ) $ (58,629 ) |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
Calculation of Basic and Diluted Earnings Per Share | Basic and diluted EPS (in thousands, except per share amounts): Quarter Ended 2017 2016 Net income (loss) $ (9,424 ) $ (15,171 ) Weighted average common shares outstanding used to compute basic EPS 37,030 36,520 Dilutive effect of stock based awards — — Weighted average common shares outstanding used to compute diluted EPS 37,030 36,520 Basic EPS $ (0.25 ) $ (0.42 ) Diluted EPS $ (0.25 ) $ (0.42 ) |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Segment Reporting [Abstract] | |
Segment Results | Games Quarter Ended 2017 2016 Revenue $ 5,823 $ 6,039 Cost of revenue 1,937 1,845 Gross profit 3,886 4,194 Operating expenses 4,947 5,295 Operating income (loss) $ (1,061 ) $ (1,101 ) Mobile Services Quarter Ended 2017 2016 Revenue $ 19,084 $ 16,465 Cost of revenue 13,914 10,917 Gross profit 5,170 5,548 Operating expenses 8,119 9,794 Operating income (loss) $ (2,949 ) $ (4,246 ) Corporate Quarter Ended 2017 2016 Cost of revenue $ 37 $ (7 ) Operating expenses 4,295 7,372 Operating income (loss) $ (4,332 ) $ (7,365 ) Consumer Media Quarter Ended 2017 2016 Revenue $ 5,669 $ 5,726 Cost of revenue 1,405 2,417 Gross profit 4,264 3,309 Operating expenses 4,010 5,376 Operating income (loss) $ 254 $ (2,067 ) |
Revenue by Geographic Region | Our customers consist primarily of consumers and corporations located in the U.S., Europe, Republic of Korea and various foreign countries (Rest of the World). Revenue by geographic region (in thousands): Quarter Ended 2017 2016 United States $ 9,740 $ 10,383 Europe 3,195 3,384 Republic of Korea 12,853 9,233 Rest of the World 4,788 5,230 Total net revenue $ 30,576 $ 28,230 |
Long-Lived Assets by Geographic Region | Long-lived assets (which consist of equipment, software, leasehold improvements, other intangible assets, and goodwill) by geographic region (in thousands) are as follows: March 31, December 31, United States $ 12,754 $ 13,052 Europe 3,738 3,920 Republic of Korea 156 168 Rest of the World 1,785 1,909 Total long-lived assets $ 18,433 $ 19,049 |
Stock-Based Compensation (Recog
Stock-Based Compensation (Recognized Stock-Based Compensation Expense) (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Total stock-based compensation expense | $ 1,434 | $ 3,171 |
Stock-Based Compensation (Weigh
Stock-Based Compensation (Weighted-Average Assumptions Used to Determine Fair Value of Options Granted) (Detail) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Expected dividend yield | 0.00% | 0.00% |
Risk-free interest rate | 2.23% | 1.54% |
Expected life | 6 years 9 months 18 days | 5 years 6 months |
Volatility | 38.00% | 38.00% |
Stock-Based Compensation (Addit
Stock-Based Compensation (Additional Information) (Detail) $ in Millions | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Total unrecognized compensation cost | $ 5.2 |
Total unrecognized compensation cost, expected recognition period (in years) | 2 years |
Rhapsody Joint Venture (Additio
Rhapsody Joint Venture (Additional Information) (Detail) - USD ($) | 1 Months Ended | 3 Months Ended | ||||
Jan. 31, 2017 | Dec. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2010 | Dec. 01, 2016 | |
Schedule of Equity Method Investments [Line Items] | ||||||
Losses recorded in the operations of Rhapsody | $ 748,000 | $ 0 | ||||
Advance to Rhapsody | $ 1,500,000 | 0 | ||||
Rhapsody America LLC | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Percentage of ownership interest in Rhapsody | 42.00% | |||||
Payments for restructuring | $ 18,000,000 | |||||
Liquidation preference amount | $ 10,000,000 | |||||
Losses recorded in the operations of Rhapsody | 700,000 | $ 0 | ||||
Carrying value | 0 | |||||
Loan principal to related party | $ 5,000,000 | |||||
Advance to Rhapsody | $ 1,500,000 | $ 3,500,000 | ||||
Related party loan rate | 10.00% | |||||
Maximum allowable cross default allowed before receivables become immediately due | $ 1,000,000 |
Rhapsody Joint Venture (Summari
Rhapsody Joint Venture (Summarized Financial Operating Information for Rhapsody) (Detail) - Rhapsody America LLC - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Schedule of Equity Method Investments [Line Items] | ||
Net revenue | $ 47,462 | $ 52,507 |
Gross profit | 6,583 | 7,243 |
Net loss | $ (5,640) | $ (5,148) |
Fair Value Measurements (Financ
Fair Value Measurements (Financial Assets Measured at Fair Value on a Recurring Basis) (Detail) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | $ 70,220 | $ 80,525 |
Amortized Cost | 68,982 | 79,764 |
Cash and Cash Equivalents | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 38,498 | 33,721 |
Amortized Cost | 38,498 | 33,721 |
Cash and Cash Equivalents | Cash | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 22,671 | 32,585 |
Amortized Cost | 22,671 | 32,585 |
Cash and Cash Equivalents | Money market funds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 15,427 | 136 |
Amortized Cost | 15,427 | 136 |
Cash and Cash Equivalents | Corporate notes and bonds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 400 | 1,000 |
Amortized Cost | 400 | 1,000 |
Short-term Investments | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 27,778 | 43,331 |
Amortized Cost | 27,784 | 43,343 |
Short-term Investments | Corporate notes and bonds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 27,778 | 43,331 |
Amortized Cost | 27,784 | 43,343 |
Restricted cash equivalents and investments | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 2,700 | 2,700 |
Amortized Cost | 2,700 | 2,700 |
Related Party Transaction | Warrants issued by Rhapsody | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 1,244 | 773 |
Amortized Cost | 0 | 0 |
Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 38,098 | 32,721 |
Level 1 | Cash and Cash Equivalents | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 38,098 | 32,721 |
Level 1 | Cash and Cash Equivalents | Cash | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 22,671 | 32,585 |
Level 1 | Cash and Cash Equivalents | Money market funds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 15,427 | 136 |
Level 1 | Cash and Cash Equivalents | Corporate notes and bonds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 0 | 0 |
Level 1 | Short-term Investments | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 0 | 0 |
Level 1 | Short-term Investments | Corporate notes and bonds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 0 | |
Level 1 | Restricted cash equivalents and investments | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 0 | 0 |
Level 1 | Related Party Transaction | Warrants issued by Rhapsody | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 0 | 0 |
Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 30,878 | 47,031 |
Level 2 | Cash and Cash Equivalents | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 400 | 1,000 |
Level 2 | Cash and Cash Equivalents | Cash | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 0 | 0 |
Level 2 | Cash and Cash Equivalents | Money market funds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 0 | 0 |
Level 2 | Cash and Cash Equivalents | Corporate notes and bonds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 400 | 1,000 |
Level 2 | Short-term Investments | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 27,778 | 43,331 |
Level 2 | Short-term Investments | Corporate notes and bonds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 27,778 | 43,331 |
Level 2 | Restricted cash equivalents and investments | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 2,700 | 2,700 |
Level 2 | Related Party Transaction | Warrants issued by Rhapsody | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 0 | 0 |
Level 3 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 1,244 | 773 |
Level 3 | Cash and Cash Equivalents | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 0 | 0 |
Level 3 | Cash and Cash Equivalents | Cash | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 0 | 0 |
Level 3 | Cash and Cash Equivalents | Money market funds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 0 | 0 |
Level 3 | Cash and Cash Equivalents | Corporate notes and bonds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 0 | 0 |
Level 3 | Short-term Investments | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 0 | 0 |
Level 3 | Short-term Investments | Corporate notes and bonds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 0 | 0 |
Level 3 | Restricted cash equivalents and investments | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 0 | 0 |
Level 3 | Related Party Transaction | Warrants issued by Rhapsody | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | $ 1,244 | $ 773 |
Fair Value Measurements (Short-
Fair Value Measurements (Short-term Investments) (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total short-term investments | $ 70,220 | $ 80,525 |
Short-term Investments | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total short-term investments | 27,778 | $ 43,331 |
Estimate of Fair Value Measurement | Short-term Investments | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Within one year | 27,778 | |
Between one year and five years | 0 | |
Total short-term investments | $ 27,778 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Detail) - USD ($) $ in Thousands | 1 Months Ended | |||
Feb. 28, 2017 | Feb. 28, 2015 | Mar. 31, 2017 | Dec. 31, 2016 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Financial assets fair value | $ 70,220 | $ 80,525 | ||
Warrants issued by Rhapsody | Related Party Debt Obligation | Rhapsody America LLC | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Expected term | 5 years | 5 years | ||
Expected volatility rate | 55.00% | 55.00% | ||
Financial assets fair value | $ 500 | $ 1,200 |
Allowance for Doubtful Accoun46
Allowance for Doubtful Accounts Receivable and Sales Returns (Activity in Allowance for Doubtful Accounts Receivable and Sales Returns) (Detail) $ in Thousands | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Allowance for Doubtful Accounts Receivable | |
Movement in Valuation Allowances and Reserves [Roll Forward] | |
Beginning Balance | $ 633 |
Addition (reduction) to allowance | 9 |
Amounts written off | 0 |
Foreign currency translation | (15) |
Ending Balance | 627 |
Allowance for Sales Returns | |
Movement in Valuation Allowances and Reserves [Roll Forward] | |
Beginning Balance | 169 |
Addition (reduction) to allowance | 0 |
Amounts written off | 0 |
Foreign currency translation | (1) |
Ending Balance | $ 168 |
Allowance for Doubtful Accoun47
Allowance for Doubtful Accounts Receivable and Sales Returns (Additional Information) (Detail) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2017USD ($)Customer | Mar. 31, 2016USD ($)Customer | Dec. 31, 2016Customer | ||
Concentration Risk [Line Items] | ||||
Revenue | $ | [1] | $ 30,576 | $ 28,230 | |
Accounts Receivable | ||||
Concentration Risk [Line Items] | ||||
Number of customers | Customer | 1 | 1 | ||
Percentage by major customer | 60.00% | 64.00% | ||
Revenue by Segment | Mobile Services | ||||
Concentration Risk [Line Items] | ||||
Number of customers | Customer | 1 | |||
Percentage by major customer | 36.00% | |||
Revenue | $ | $ 10,900 | |||
Revenue by Segment | Mobile Services | Company A | ||||
Concentration Risk [Line Items] | ||||
Number of customers | Customer | 1 | |||
Percentage by major customer | 30.00% | |||
Revenue | $ | $ 8,400 | |||
Revenue by Segment | Mobile Services | Company B | ||||
Concentration Risk [Line Items] | ||||
Number of customers | Customer | 1 | |||
Percentage by major customer | 12.00% | |||
Revenue | $ | $ 3,500 | |||
[1] | Quarters ended March 31, Components of Revenue2017 2016License Fees6,594 5,777Service Revenue23,982 22,453Net Revenue30,576 28,230 |
Other Intangible Assets (Detail
Other Intangible Assets (Detail) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Finite-Lived Intangible Assets, Net [Abstract] | ||
Gross Amount | $ 64,513 | $ 61,617 |
Accumulated Amortization | 63,784 | 60,679 |
Net | 729 | 938 |
Customer relationships | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Gross Amount | 30,980 | 29,308 |
Accumulated Amortization | 30,512 | 28,781 |
Net | 468 | 527 |
Developed technology | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Gross Amount | 24,440 | 23,574 |
Accumulated Amortization | 24,262 | 23,263 |
Net | 178 | 311 |
Patents, trademarks and tradenames | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Gross Amount | 3,715 | 3,530 |
Accumulated Amortization | 3,632 | 3,430 |
Net | 83 | 100 |
Service contracts | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Gross Amount | 5,378 | 5,205 |
Accumulated Amortization | 5,378 | 5,205 |
Net | $ 0 | $ 0 |
Goodwill (Changes in Goodwill)
Goodwill (Changes in Goodwill) (Detail) $ in Thousands | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Goodwill [Roll Forward] | |
Beginning Balance | $ 12,857 |
Effects of foreign currency translation | 58 |
Ending Balance | $ 12,915 |
Goodwill (Goodwill by Segments)
Goodwill (Goodwill by Segments) (Detail) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Goodwill [Line Items] | ||
Goodwill | $ 12,915 | $ 12,857 |
Consumer Media | ||
Goodwill [Line Items] | ||
Goodwill | 580 | |
Mobile Services | ||
Goodwill [Line Items] | ||
Goodwill | 2,037 | |
Games | ||
Goodwill [Line Items] | ||
Goodwill | $ 10,298 |
Accrued and Other Current Lia51
Accrued and Other Current Liabilities (Detail) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Payables and Accruals [Abstract] | ||
Royalties and other fulfillment costs | $ 2,967 | $ 2,629 |
Employee compensation, commissions and benefits | 5,701 | 5,136 |
Sales, VAT and other taxes payable | 2,941 | 3,258 |
Other | 3,816 | 4,402 |
Total accrued and other liabilities | $ 15,425 | $ 15,425 |
Restructuring Charges (Details)
Restructuring Charges (Details) - Employee Separation Costs - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Restructuring Cost and Reserve [Line Items] | ||
Costs incurred and charged to expense | $ 1,564 | $ 385 |
Restructuring Reserve [Roll Forward] | ||
Accrued liability beginning balance | 209 | |
Costs incurred and charged to expense | 1,564 | |
Cash payments | (664) | |
Accrued liability ending balance | $ 1,109 |
Lease Exit and Related Charge53
Lease Exit and Related Charges (Changes to Accrued Loss on Excess Office Facilities) (Detail) $ in Thousands | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Accrued Loss on Excess Office Facilities [Roll Forward] | |
Accrued loss at December 31, 2016 | $ 3,186 |
Additions and adjustments to the lease loss accrual, including estimated sublease income | 0 |
Less amounts paid, net of sublease amounts | (727) |
Accrued loss at March 31, 2017 | 2,459 |
Less current portion (included in Accrued and other current liabilities) | (612) |
Accrued loss, non-current portion (included in Other long term liabilities) | $ 1,847 |
Shareholders_ Equity (Accumulat
Shareholders’ Equity (Accumulated Other Comprehensive Income (Loss)) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||
Accumulated other comprehensive income (loss), beginning of period | $ 88,581 | ||
Unrealized gains (losses), net of tax effects of $2, and $90 | 4 | $ 151 | |
Total other comprehensive income (loss) | 598 | 851 | |
Accumulated other comprehensive income (loss) balance, end of period | 81,790 | ||
Total accumulated other comprehensive income (loss), end of period | (61,047) | (58,629) | $ (61,645) |
Investments | |||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||
Accumulated other comprehensive income (loss), beginning of period | (6) | 1,297 | |
Unrealized gains (losses), net of tax effects of $2, and $90 | 4 | 151 | |
Total other comprehensive income (loss) | 4 | 151 | |
Accumulated other comprehensive income (loss) balance, end of period | (2) | 1,448 | |
Accumulated Other Comprehensive Income (Loss), Tax [Abstract] | |||
Unrealized gains (losses), tax effects | 2 | 90 | |
Foreign currency translation | |||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||
Accumulated other comprehensive income (loss), beginning of period | (61,639) | (60,777) | |
Translation adjustments | 594 | 700 | |
Total other comprehensive income (loss) | 594 | 700 | |
Accumulated other comprehensive income (loss) balance, end of period | $ (61,045) | $ (60,077) |
Earnings (Loss) Per Share (Calc
Earnings (Loss) Per Share (Calculation of Basic and Diluted Earnings Per Share) (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Earnings Per Share [Abstract] | ||
Net income (loss) | $ (9,424) | $ (15,171) |
Weighted average common shares outstanding used to compute basic EPS | 37,030 | 36,520 |
Dilutive effect of stock based awards | 0 | 0 |
Weighted average common shares outstanding used to compute diluted EPS | 37,030 | 36,520 |
Basic EPS (USD per share) | $ (0.25) | $ (0.42) |
Diluted EPS (USD per share) | $ (0.25) | $ (0.42) |
Earnings (Loss) Per Share (Addi
Earnings (Loss) Per Share (Additional Information) (Detail) - shares shares in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Earnings Per Share [Abstract] | ||
Shares of common stock excluded from the calculation of diluted net income per share because of antidilutive effect | 4.9 | 5.3 |
Segment Information (Additional
Segment Information (Additional Information) (Detail) | 3 Months Ended |
Mar. 31, 2017Segment | |
Segment Reporting [Abstract] | |
Number of reporting segments | 3 |
Segment Information (Segment Re
Segment Information (Segment Results) (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | ||
Segment Reporting Information [Line Items] | |||
Revenue | [1] | $ 30,576 | $ 28,230 |
Cost of revenue | [2] | 17,293 | 15,172 |
Gross profit | 13,283 | 13,058 | |
Operating expenses | 21,371 | 27,837 | |
Operating income (loss) | (8,088) | (14,779) | |
Operating Segments | Consumer Media | |||
Segment Reporting Information [Line Items] | |||
Revenue | 5,669 | 5,726 | |
Cost of revenue | 1,405 | 2,417 | |
Gross profit | 4,264 | 3,309 | |
Operating expenses | 4,010 | 5,376 | |
Operating income (loss) | 254 | (2,067) | |
Operating Segments | Mobile Services | |||
Segment Reporting Information [Line Items] | |||
Revenue | 19,084 | 16,465 | |
Cost of revenue | 13,914 | 10,917 | |
Gross profit | 5,170 | 5,548 | |
Operating expenses | 8,119 | 9,794 | |
Operating income (loss) | (2,949) | (4,246) | |
Operating Segments | Games | |||
Segment Reporting Information [Line Items] | |||
Revenue | 5,823 | 6,039 | |
Cost of revenue | 1,937 | 1,845 | |
Gross profit | 3,886 | 4,194 | |
Operating expenses | 4,947 | 5,295 | |
Operating income (loss) | (1,061) | (1,101) | |
Corporate | |||
Segment Reporting Information [Line Items] | |||
Cost of revenue | 37 | (7) | |
Operating expenses | 4,295 | 7,372 | |
Operating income (loss) | $ (4,332) | $ (7,365) | |
[1] | Quarters ended March 31, Components of Revenue2017 2016License Fees6,594 5,777Service Revenue23,982 22,453Net Revenue30,576 28,230 | ||
[2] | Quarters ended March 31, Components of Cost of Revenue2017 2016License Fees1,511 1,304Service Revenue15,782 13,868Net Revenue Costs17,293 15,172 |
Segment Information (Revenue by
Segment Information (Revenue by Geographic Region) (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenue | [1] | $ 30,576 | $ 28,230 |
United States | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenue | 9,740 | 10,383 | |
Europe | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenue | 3,195 | 3,384 | |
Republic of Korea | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenue | 12,853 | 9,233 | |
Rest of the World | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenue | $ 4,788 | $ 5,230 | |
[1] | Quarters ended March 31, Components of Revenue2017 2016License Fees6,594 5,777Service Revenue23,982 22,453Net Revenue30,576 28,230 |
Segment Information (Long-Lived
Segment Information (Long-Lived Assets by Geographic Region) (Detail) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | $ 18,433 | $ 19,049 |
United States | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | 12,754 | 13,052 |
Europe | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | 3,738 | 3,920 |
Republic of Korea | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | 156 | 168 |
Rest of the World | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | $ 1,785 | $ 1,909 |