Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | ||
Sep. 30, 2020 | Oct. 30, 2020 | Dec. 31, 2019 | |
Document and Entity Information [Abstract] | |||
Document Type | 10-Q | ||
Amendment Flag | false | ||
Document Period End Date | Sep. 30, 2020 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | Q3 | ||
Entity Registrant Name | RealNetworks, Inc. | ||
Entity Central Index Key | 0001046327 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Common Stock, Shares Outstanding | 38,275,862 | ||
Document Quarterly Report | true | ||
Document Transition Report | false | ||
Entity File Number | 1-37745 | ||
Entity Incorporation, State or Country Code | WA | ||
Entity Tax Identification Number | 91-1628146 | ||
City Area Code | (206) | ||
Local Phone Number | 674-2700 | ||
Entity Address, Address Line One | 1501 First Avenue South, Suite 600 | ||
Entity Address, City or Town | Seattle | ||
Entity Address, State or Province | WA | ||
Entity Address, Postal Zip Code | 98134 | ||
Entity Interactive Data Current | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Shell Company | false | ||
Common stock, outstanding | 38,275,000 | 38,227,000 | |
Trading Symbol | RNWK | ||
Security Exchange Name | NASDAQ | ||
Document Information [Line Items] | |||
Entity Shell Company | false | ||
Common Stock [Member] | |||
Document and Entity Information [Abstract] | |||
Title of 12(b) Security | Common Stock, Par Value $0.001 per share | ||
Document Information [Line Items] | |||
Title of 12(b) Security | Common Stock, Par Value $0.001 per share | ||
Convertible Preferred Stock [Member] | |||
Document and Entity Information [Abstract] | |||
Title of 12(b) Security | Preferred Share Purchase Rights | ||
Document Information [Line Items] | |||
Title of 12(b) Security | Preferred Share Purchase Rights |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 3 Months Ended |
Sep. 30, 2020 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | Note 2 Recent Accounting Pronouncements Recently issued accounting pronouncements not yet adopted In August 2020, the Financial Accounting Standards Board ("FASB") issued new guidance that simplifies the accounting for convertible debt instruments and convertible preferred stock by reducing the number of accounting models and the number of embedded conversion features that could be recognized separately from the primary contract. The guidance enhances transparency and improves disclosures for convertible instruments and earnings per share guidance. It is effective for annual reporting periods beginning after December 15, 2023, with early adoption permitted. This update permits the use of either the modified retrospective or fully retrospective method of transition. We are in the process of evaluating the effect that this new 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 in fiscal years beginning after December 15, 2022, with early adoption permitted. We do not currently expect the adoption to have a material impact on our consolidated financial statements and related disclosures. In June 2016, the FASB issued new guidance amending existing guidance for the accounting of credit losses on financial instruments. Under the new guidance, the valuation allowance for credit losses is expected to be incurred over the financial asset’s contractual term. We reviewed the new credit loss standard and determined that it applies to our accounts receivable, which are typically of short duration and for which we have not historically experienced significant credit losses. This guidance is effective for us in fiscal years beginning after December 15, 2022 with any cumulative effect of adoption recorded as an adjustment to retained earnings. We are in the process of evaluating the effect that this new guidance will have on our consolidated financial statements and related disclosures. |
UNAUDITED CONDENSED CONSOLIDATE
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 13,245 | $ 8,472 |
Trade accounts receivable, net of allowances of $623 and $516 | 13,015 | 12,767 |
Deferred costs, current portion | 364 | 537 |
Prepaid expenses and other current assets | 3,552 | 4,428 |
Current assets of discontinued operations | 89,547 | 28,376 |
Total current assets | 119,723 | 54,580 |
Equipment, software, and leasehold improvements, at cost: | ||
Equipment and software | 30,675 | 31,699 |
Leasehold improvements | 2,720 | 3,071 |
Total equipment, software, and leasehold improvements, at cost | 33,395 | 34,770 |
Less accumulated depreciation and amortization | 31,459 | 32,350 |
Net equipment, software, and leasehold improvements | 1,936 | 2,420 |
Operating lease assets | 8,726 | 10,198 |
Restricted cash equivalents | 4,630 | 4,880 |
Other assets | 973 | 1,808 |
Deferred costs, non-current portion | 71 | 388 |
Deferred tax assets, net | 781 | 761 |
Goodwill | 17,073 | 16,908 |
Non-current assets of discontinued operations | 0 | 67,811 |
Total assets | 153,913 | 159,754 |
Current liabilities: | ||
Accounts payable | 3,398 | 4,042 |
Accrued and other current liabilities | 25,272 | 17,495 |
Deferred revenue, current portion | 2,302 | 2,003 |
Current debt | 3,900 | 0 |
Current liabilities of discontinued operations | 70,713 | 72,641 |
Total current liabilities | 105,585 | 96,181 |
Deferred revenue, non-current portion | 46 | 96 |
Deferred tax liabilities, net | 1,076 | 1,076 |
Operating Lease, Liability, Noncurrent | 6,672 | 8,234 |
Long-term Debt | 2,883 | 3,900 |
Other long-term liabilities | 2,243 | 10,151 |
Disposal Group, Including Discontinued Operation, Liabilities, Noncurrent | 0 | 1,843 |
Total liabilities | 118,505 | 121,481 |
Commitments and contingencies | ||
Preferred stock, $0.001 par value: | ||
Common stock, $0.001 par value, authorized 250,000 shares; issued and outstanding 38,275 shares in 2020 and 38,227 shares in 2019 | 38 | 38 |
Additional paid-in capital | 655,143 | 644,070 |
Accumulated other comprehensive loss | (61,717) | (61,323) |
Accumulated deficit | (557,002) | (544,010) |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | 35,408 | 38,273 |
Stockholders' Equity Attributable to Noncontrolling Interest | (1,062) | (502) |
Total shareholders’ equity | 36,470 | 38,775 |
Total liabilities and equity | 153,913 | 159,754 |
Preferred stock, Series A | ||
Preferred stock, $0.001 par value: | ||
Preferred stock | 0 | 0 |
Preferred stock, Undesignated series | ||
Preferred stock, $0.001 par value: | ||
Preferred stock | 0 | 0 |
Series B Preferred Stock | ||
Preferred stock, $0.001 par value: | ||
Preferred stock | $ 8 | $ 0 |
UNAUDITED CONDENSED CONSOLIDA_2
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Allowance for Doubtful Accounts Receivable, Current | $ 623 | $ 516 |
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 | 38,275,000 | 38,227,000 |
Common stock, outstanding | 38,275,000 | 38,227,000 |
Preferred stock, Series A | ||
Preferred stock, authorized | 200,000 | 200,000 |
Preferred stock, Undesignated series | ||
Preferred stock, authorized | 51,700,000 | 59,800,000 |
Series B Preferred Stock | ||
Preferred stock, shares issued | 8,065,000 | 0 |
Preferred stock, shares outstanding | 8,065,000 | 0 |
Preferred stock, authorized | 8,100,000 | 0 |
UNAUDITED CONDENSED CONSOLIDA_3
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Statement [Abstract] | ||||
Revenue | $ 16,554 | $ 17,691 | $ 50,461 | $ 48,491 |
Cost of revenue | 4,062 | 4,292 | 12,429 | 13,022 |
Gross profit | 12,492 | 13,399 | 38,032 | 35,469 |
Operating expenses: | ||||
Research and development | 5,781 | 6,931 | 18,375 | 21,439 |
Sales and marketing | 5,130 | 5,644 | 15,969 | 17,501 |
General and administrative | 4,124 | 5,242 | 13,063 | 17,674 |
Fair value adjustments to contingent consideration liability | (200) | 700 | ||
Restructuring and other charges | 307 | 691 | 1,097 | 1,587 |
Total operating expenses | 15,342 | 18,508 | 48,504 | 58,201 |
Operating loss | (2,850) | (5,109) | (10,472) | (22,732) |
Other income (expenses): | ||||
Interest Expense | (7) | 0 | (12) | 0 |
Interest income | 6 | 0 | 31 | 89 |
Gain (Loss) on Sale of Investments | (37) | 0 | (90) | 12,338 |
Other income (expenses), net | (104) | 85 | 63 | 197 |
Total other income (expenses), net | (142) | 85 | (8) | 12,624 |
Loss from continuing operations before income taxes | (2,992) | (5,024) | (10,480) | (10,108) |
Income tax expense | 316 | 233 | 606 | 515 |
Net loss from continuing operations | (3,308) | (5,257) | (11,086) | (10,623) |
Net loss from discontinued operations, net of tax | (1) | (997) | (2,466) | (3,872) |
Net loss | (3,309) | (6,254) | (13,552) | (14,495) |
Net loss attributable to noncontrolling interests of continuing operations | (77) | (54) | (196) | (106) |
Net income (loss) attributable to noncontrolling interests of discontinued operations | 6 | (232) | (364) | (752) |
Net loss attributable to RealNetworks | (3,238) | (5,968) | (12,992) | (13,637) |
Net loss from continuing operations attributable to RealNetworks | (3,231) | (5,203) | (10,890) | (10,517) |
Net loss from discontinued operations attributable to RealNetworks | (7) | (765) | (2,102) | (3,120) |
Net loss attributable to RealNetworks | $ (3,238) | $ (5,968) | $ (12,992) | $ (13,637) |
Continuing operations, basic (USD per share) | $ (0.08) | $ (0.14) | $ (0.28) | $ (0.28) |
Discontinued operations, basic (USD per share) | 0 | (0.02) | (0.06) | (0.08) |
Basic net income (loss) per share (USD per share) | (0.08) | (0.16) | (0.34) | (0.36) |
Continuing operations, diluted (USD per share) | (0.08) | (0.14) | (0.28) | (0.28) |
Discontinued operations, diluted (USD per share) | 0 | (0.02) | (0.06) | (0.08) |
Diluted net income (loss) per share (USD per share) | $ (0.08) | $ (0.16) | $ (0.34) | $ (0.36) |
Shares used to compute basic net income (loss) per share | 38,270 | 38,062 | 38,247 | 37,944 |
Shares used to compute diluted net income (loss) per share | 38,270 | 38,062 | 38,247 | 37,944 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Components of net revenue: | ||||
Revenue | $ 16,554 | $ 17,691 | $ 50,461 | $ 48,491 |
Components of cost of revenue: | ||||
Cost of revenue | $ 4,062 | $ 4,292 | $ 12,429 | $ 13,022 |
UNAUDITED CONDENSED CONSOLIDA_4
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Statement) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Net loss from continuing operations | $ (3,309) | $ (6,254) | $ (13,552) | $ (14,495) |
Foreign currency translation adjustments | (7) | (232) | ||
Total other comprehensive loss | (7) | (232) | (394) | (811) |
Comprehensive loss including noncontrolling interests | (3,316) | (6,486) | (13,946) | (15,306) |
Comprehensive loss attributable to noncontrolling interests | (71) | (286) | (560) | (858) |
Comprehensive loss including noncontrolling interests | (3,245) | (6,200) | (13,386) | (14,448) |
Accumulated Foreign Currency Adjustment Attributable to Parent [Member] | ||||
Foreign currency translation adjustments | $ (7) | $ (232) | $ (394) | $ (811) |
UNAUDITED CONDENSED CONSOLIDA_5
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Cash flows from operating activities: | ||
Net loss from continuing operations | $ (11,086) | $ (10,623) |
Adjustments to reconcile net income (loss) from continuing operations to net cash used in operating activities: | ||
Depreciation and amortization | 697 | 943 |
Stock-based compensation | 1,093 | 2,420 |
(Gain) loss on equity investments, net | (90) | 12,338 |
Foreign currency (gain) loss | (25) | 150 |
Fair value adjustments to contingent consideration liability | (200) | 700 |
Trade accounts receivable | (323) | (967) |
Prepaid expenses, operating lease and other assets | 3,700 | 3,731 |
Accounts payable | (645) | (289) |
Accrued, lease and other liabilities | (3,384) | (1,736) |
Net cash provided by (used in) operating activities- continuing operations | (10,033) | (18,309) |
Net cash provided by (used in) operating activities- discontinued operations | (4,086) | (1,988) |
Net cash provided by (used in) operating activities | (14,119) | (20,297) |
Cash flows from investing activities: | ||
Purchases of equipment, software, and leasehold improvements | (261) | (831) |
Proceeds from sales and maturities of short-term investments | 0 | 24 |
Acquisition, net of cash acquired | 0 | 12,260 |
Net cash provided by (used in) investing activities- continuing operations | (261) | 11,453 |
Net cash provided by (used in) investing activities- discontinued operations | (192) | (237) |
Net cash (used in) provided by investing activities | (453) | 11,216 |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock (stock options and stock purchase plan) | 0 | 144 |
Proceeds from issuance of preferred stock | 10,000 | 0 |
Tax payments from shares withheld upon vesting of restricted stock | (12) | (289) |
Proceeds from notes payable and long-term debt | 2,876 | 3,900 |
Payment of financing fees | 0 | (569) |
Other financing activities | 2,106 | 900 |
Net Cash Provided by (Used in) Financing Activities, Continuing Operations | 14,970 | 4,086 |
Cash Provided by (Used in) Financing Activities, Discontinued Operations | 2,007 | (8,331) |
Net cash provided by (used in) financing activities | 16,977 | (4,245) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 32 | (390) |
Net increase (decrease) in cash, cash equivalents and restricted cash | 2,437 | (13,716) |
Cash, cash equivalents and restricted cash, beginning of period | 22,179 | 37,191 |
Cash, cash equivalents and restricted cash end of period | 24,616 | 23,475 |
Less: Cash, cash equivalents and restricted cash from discontinued operations | 6,741 | 6,724 |
Cash and cash equivalents from continuing operations, end of period | $ 17,875 | $ 16,751 |
UNAUDITED CONDENSED CONSOLIDA_6
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Preferred Class B | Preferred Stock | Preferred StockPreferred Class B | Common Stock [Member] | Additional Paid-in Capital [Member] | Additional Paid-in Capital [Member]Preferred Class B | AOCI Attributable to Parent [Member] | Accumulated Foreign Currency Adjustment Attributable to Parent [Member] | Retained Earnings [Member] | Parent [Member] | Parent [Member]Preferred Class B | Noncontrolling Interest [Member] |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | $ 56,840 | $ 37 | $ 641,930 | $ (61,118) | $ (524,009) | $ 56,840 | $ 0 | ||||||
Shares, Outstanding at Dec. 31, 2018 | 37,728 | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 190 | ||||||||||||
Stock Issued During Period, Value, Stock Options Exercised | (271) | (271) | (271) | ||||||||||
Adjustments to Additional Paid in Capital, Other | (776) | (1,346) | (1,346) | 570 | |||||||||
Stock-based compensation | 1,384 | 1,384 | 1,384 | ||||||||||
Foreign currency translation adjustments | (87) | $ (87) | (87) | ||||||||||
Net loss attributable to RealNetworks | 1,533 | 1,533 | (319) | ||||||||||
Stockholders' Equity, Other | (450) | (362) | (362) | (88) | |||||||||
Shares, Outstanding at Mar. 31, 2019 | 37,918 | ||||||||||||
Net loss from continuing operations | 1,214 | ||||||||||||
Shares, Outstanding at Dec. 31, 2018 | 37,728 | ||||||||||||
Foreign currency translation adjustments | (811) | ||||||||||||
Net loss attributable to RealNetworks | (13,637) | ||||||||||||
Net loss attributable to noncontrolling interests of continuing operations | (106) | ||||||||||||
Proceeds from issuance of preferred stock | 0 | ||||||||||||
Shares, Outstanding at Sep. 30, 2019 | 38,067 | ||||||||||||
Net loss from continuing operations | (14,495) | ||||||||||||
Other Comprehensive Income (Loss), Net of Tax | (811) | ||||||||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | 58,754 | $ 37 | 642,059 | (61,205) | (522,476) | 58,415 | 339 | ||||||
Shares, Outstanding at Mar. 31, 2019 | 37,918 | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 131 | ||||||||||||
Stock Issued During Period, Value, Stock Options Exercised | 128 | 128 | 128 | ||||||||||
Stock-based compensation | 533 | 533 | 533 | ||||||||||
Foreign currency translation adjustments | (492) | (492) | (492) | ||||||||||
Net loss attributable to RealNetworks | (9,202) | (9,202) | (253) | ||||||||||
Shares, Outstanding at Jun. 30, 2019 | 38,049 | ||||||||||||
Net loss from continuing operations | (9,455) | ||||||||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | 49,468 | $ 37 | 642,720 | (61,697) | (531,678) | 49,382 | 86 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 18 | ||||||||||||
Stock Issued During Period, Value, Stock Options Exercised | (2) | (3) | |||||||||||
Stock-based compensation | 503 | 503 | 503 | ||||||||||
Foreign currency translation adjustments | (232) | (232) | (232) | ||||||||||
Net loss attributable to RealNetworks | (5,968) | (5,968) | (286) | ||||||||||
Net loss attributable to noncontrolling interests of continuing operations | (54) | ||||||||||||
Stockholders' Equity, Other | (450) | (353) | (353) | (97) | |||||||||
Shares, Outstanding at Sep. 30, 2019 | 38,067 | ||||||||||||
Net loss from continuing operations | (6,254) | ||||||||||||
Restricted Stock, Value, Shares Issued Net of Tax Withholdings | $ 1 | ||||||||||||
Stockholders Equity, Capital Transaction Of Equity Method Investee | (2) | ||||||||||||
Other Comprehensive Income (Loss), Net of Tax | (232) | ||||||||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | 43,933 | 38 | 643,573 | (61,929) | (537,646) | 44,036 | (103) | ||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | 38,273 | $ 0 | $ 38 | 644,070 | (61,323) | (544,010) | 38,775 | (502) | |||||
Shares, Outstanding at Dec. 31, 2019 | 0 | 38,227 | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 4 | ||||||||||||
Stock Issued During Period, Value, Stock Options Exercised | 0 | 0 | 0 | ||||||||||
Stock-based compensation | 380 | 380 | 380 | ||||||||||
Foreign currency translation adjustments | (907) | (907) | (907) | ||||||||||
Net loss attributable to RealNetworks | (4,642) | (4,642) | |||||||||||
Net loss attributable to noncontrolling interests of continuing operations | (47) | ||||||||||||
Shares, Outstanding at Mar. 31, 2020 | 8,065 | 38,231 | |||||||||||
Net loss from continuing operations | (4,689) | ||||||||||||
Issuance of Preferred B Stock (in shares) | 8,065 | ||||||||||||
Issuance of Preferred B Stock | $ 10,000 | $ 8 | $ 9,992 | $ 10,000 | |||||||||
Shares, Outstanding at Dec. 31, 2019 | 0 | 38,227 | |||||||||||
Foreign currency translation adjustments | (394) | ||||||||||||
Net loss attributable to RealNetworks | (12,992) | ||||||||||||
Net loss attributable to noncontrolling interests of continuing operations | (196) | ||||||||||||
Proceeds from issuance of preferred stock | 10,000 | ||||||||||||
Shares, Outstanding at Sep. 30, 2020 | 8,065 | 38,275 | |||||||||||
Net loss from continuing operations | (13,552) | ||||||||||||
Other Comprehensive Income (Loss), Net of Tax | (394) | ||||||||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | 43,057 | $ 8 | $ 38 | 654,442 | (62,230) | (548,652) | 43,606 | (549) | |||||
Shares, Outstanding at Mar. 31, 2020 | 8,065 | 38,231 | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | (23) | ||||||||||||
Stock Issued During Period, Value, Stock Options Exercised | (5) | (5) | (5) | ||||||||||
Stock-based compensation | 323 | 323 | 323 | ||||||||||
Foreign currency translation adjustments | 520 | 520 | 520 | ||||||||||
Net loss attributable to RealNetworks | (5,112) | (5,112) | |||||||||||
Net loss attributable to noncontrolling interests of continuing operations | (442) | ||||||||||||
Shares, Outstanding at Jun. 30, 2020 | 8,065 | 38,254 | |||||||||||
Net loss from continuing operations | (5,554) | ||||||||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | 38,341 | $ 8 | $ 38 | 654,760 | (61,710) | (553,764) | 39,332 | (991) | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | (21) | ||||||||||||
Stock Issued During Period, Value, Stock Options Exercised | (7) | (7) | (7) | ||||||||||
Stock-based compensation | 390 | 390 | 390 | ||||||||||
Foreign currency translation adjustments | (7) | $ (7) | (7) | ||||||||||
Net loss attributable to RealNetworks | (3,238) | (3,238) | (3,238) | ||||||||||
Net loss attributable to noncontrolling interests of continuing operations | (77) | (71) | |||||||||||
Shares, Outstanding at Sep. 30, 2020 | 8,065 | 38,275 | |||||||||||
Net loss from continuing operations | (3,309) | ||||||||||||
Other Comprehensive Income (Loss), Net of Tax | (7) | ||||||||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | $ 35,408 | $ 8 | $ 38 | $ 655,143 | $ (61,717) | $ (557,002) | $ 36,470 | $ (1,062) |
Description of Business and Sum
Description of Business and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2020 | |
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 provides digital media software and services to consumers, mobile carriers, device manufacturers, system integrators, and other businesses. Consumers use our digital media products and services to store, organize, play, manage and enjoy their digital media content, either directly from us or through our distribution partners. See Note 5 Acquisitions and Dispositions for information on the Napster music business, which offers a comprehensive set of digital music products and services designed to provide consumers with broad access to digital music. As of the third quarter of 2020, Napster is being treated as a discontinued operation for accounting and disclosure purposes. Napster’s operating results and financial condition have been recast to conform to this presentation. 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 and cash flow. In this Quarterly Report on Form 10-Q (10-Q or Report), RealNetworks, Inc., together with its subsidiaries, is referred to as "RealNetworks," the "Company," "we," "us," or "our." "RealPlayer," "RMHD," "RealMedia," "GameHouse," "Kontxt," "SAFR" 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 subsidiaries in which it has a more than 50% voting interest. Noncontrolling interests primarily represent third-party ownership in the equity of Napster and Scener Inc. ("Scener") are reflected separately in the Company's financial statements. 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 and nine months ended September 30, 2020 are not necessarily indicative of the results that may be expected for any subsequent period or for the year ending December 31, 2020. 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). Liquidity and Capital Resources. Our unrestricted cash and cash equivalents balance at September 30, 2020 was $13.2 million. Our operating losses for the quarter and nine months ended September 30, 2020 were $2.9 million and $10.5 million, respectively. We have evaluated our current liquidity position in light of our history of declining revenue and operating losses as well as our near-term expectations of net negative cash flows from operating activities. While we currently believe existing unrestricted cash balances along with current availability on our revolving line of credit will be sufficient to allow us to meet our obligations for the next 12 months, our assessment is subject to inherent risks and uncertainties. Moreover, our operating forecast is partly dependent on factors that are outside of our control. Compounding these risks, uncertainties, and other factors are the potential effects of the recent coronavirus pandemic and related impacts on global commerce and financial markets. These conditions, when evaluated within the guidance of ASC 205-40, raise substantial doubt about our ability to meet our obligations over the 12 months from the date of this filing and, therefore, to continue as a going concern. Our financial statements do not include any adjustment relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern. We have active plans to mitigate these conditions. Specifically, we plan to reduce negative cash flow through operating expense reductions, as well as through the deferral of certain obligations where we believe that we have the legal basis to do so. In addition, we are evaluating various strategic opportunities, which may include selling certain businesses or product lines, soliciting external investment into certain of our businesses, or seeking other strategic partnerships. Our plans are subject to inherent risks and uncertainties, which become significantly magnified when the effects of the current pandemic and related financial impacts are included in the assessment. Accordingly, there can be no assurance that our plans can be effectively implemented and, therefore, that the conditions can be effectively mitigated. 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, 2019 (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 |
Revenue Recognition Revenue Rec
Revenue Recognition Revenue Recognition | 9 Months Ended |
Sep. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Note 3 Revenue Recognition We generate all of our revenue through contracts with customers. Revenue is either recognized over time as the service is provided, or at a point in time when the product is transferred to the customer, depending on the contract type. Our performance obligations typically have an original duration of one year or less. Disaggregation of Revenue The following table presents our disaggregated revenue by source and segment (in thousands): Quarter Ended September 30, 2020 Nine Months Ended September 30, 2020 Consumer Media Mobile Services Games Consumer Media Mobile Services Games Business Line Software License $ 642 $ 931 $ — $ 4,364 $ 2,734 $ — Subscription Services 892 5,469 2,705 2,719 16,817 8,205 Product Sales 193 — 3,874 676 — 10,564 Advertising and Other 816 — 1,032 1,438 — 2,944 Total $ 2,543 $ 6,400 $ 7,611 $ 9,197 $ 19,551 $ 21,713 Quarter Ended September 30, 2019 Nine Months Ended September 30, 2019 Consumer Media Mobile Services Games Consumer Media Mobile Services Games Business Line Software License $ 1,987 $ 888 $ — $ 3,666 $ 2,444 $ — Subscription Services 1,028 6,007 3,056 3,156 18,387 9,114 Product Sales 207 — 3,078 632 — 7,243 Advertising and Other 410 — 1,030 1,284 — 2,565 Total $ 3,632 $ 6,895 $ 7,164 $ 8,738 $ 20,831 $ 18,922 The following table presents our disaggregated revenue by sales channel (in thousands): Quarter Ended September 30, 2020 Nine Months Ended September 30, 2020 Consumer Media Mobile Services Games Consumer Media Mobile Services Games Sales Channel Business to Business $ 1,457 $ 6,304 $ 1,191 $ 5,800 $ 19,250 $ 3,483 Direct to Consumer 1,086 96 6,420 3,397 301 18,230 Total $ 2,543 $ 6,400 $ 7,611 $ 9,197 $ 19,551 $ 21,713 Quarter Ended September 30, 2019 Nine Months Ended September 30, 2019 Consumer Media Mobile Services Games Consumer Media Mobile Services Games Sales Channel Business to Business $ 2,398 $ 6,784 $ 1,362 $ 4,951 $ 20,482 $ 3,513 Direct to Consumer 1,234 111 5,802 3,787 349 15,409 Total $ 3,632 $ 6,895 $ 7,164 $ 8,738 $ 20,831 $ 18,922 Contract Balances The timing of revenue recognition may differ from the timing of invoicing to our customers. We record accounts receivable when the right to consideration becomes unconditional, except for the passage of time. For certain contracts, payment schedules may exceed one year; for those contracts we recognize a long-term receivable. As of September 30, 2020 and December 31, 2019, our balance of long-term accounts receivable was $0.5 million and $0.3 million, respectively, and is included in other long-term assets on our condensed consolidated balance sheets. The increase in this balance from December 31, 2019 to September 30, 2020 is primarily due to a contract renewal in 2020. During the quarter and nine months ended September 30, 2020, we recorded no impairments to our contract assets. We record deferred revenue when cash payments are received in advance of our completion of the underlying performance obligation. As of September 30, 2020 and December 31, 2019, we had a deferred revenue balance of $2.3 million and $2.1 million, respectively. Practical Expedients |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Note 4 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 Nine Months Ended 2020 2019 2020 2019 Total stock-based compensation expense $ 390 $ 503 $ 1,093 $ 2,420 The fair value of RealNetworks options granted determined using the Black-Scholes model used the following weighted-average assumptions: Quarter Ended Nine Months Ended 2020 2019 2020 2019 Expected dividend yield 0 % 0 % 0 % 0 % Risk-free interest rate 0.21 % 1.71 % 0.40 % 2.16 % Expected life (years) 4.0 3.8 4.0 4.1 Volatility 45 % 41 % 45 % 41 % The total stock-based compensation amounts for 2020 and 2019 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 nine months ended September 30, 2019 was stock compensation expense recorded in the first quarter of 2019 related to our 2018 incentive bonuses paid in fully vested restricted stock units, which were authorized and granted in the first quarter of 2019. Our 2019 incentive bonuses were paid fully in cash. As of September 30, 2020, there was $1.7 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 3.1 years. |
Acquisitions (Notes)
Acquisitions (Notes) | Jan. 18, 2019 |
Business Combinations [Abstract] | |
Business Combination Disclosure [Text Block] | Note 5 Acquisitions and Dispositions Napster Acquisition On January 18, 2019, RealNetworks acquired an additional 42% interest in Rhapsody International, Inc. (doing business as Napster) which brought our aggregate ownership to 84% of Napster's outstanding equity, thus giving RealNetworks a majority voting interest. On August 24, 2020, RealNetworks announced that Napster is being sold to MelodyVR Group PLC in a transaction that is expected to close in the fourth quarter of 2020. See below for additional details. Subsequent to RealNetworks’ January 18, 2019 acquisition, Napster has continued to operate as an independent business with its own board of directors, strategy and leadership team. Napster's separate legal existence is further supported by each company's ongoing compliance with corporate formalities, the independent direction of Napster's activities, and the consistent treatment of each of RealNetworks and Napster as distinct organizations. Accordingly, Napster remains a distinct legal entity and RealNetworks assumes no ownership or control over the assets or liabilities of Napster. The 16% of Napster that we do not own has been accounted for as a noncontrolling interest in our consolidated financial statements. As part of the acquisition, we recorded a gain of $12.3 million recognized in Other income (expenses) in the Consolidated statement of operations in the first quarter of 2019. We recorded intangible assets of $23.7 million, consisting of trade name and |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 6 Fair Value Measurements Items Measured at Fair Value on a Recurring Basis The following tables present information about our financial assets that have been measured at fair value on a recurring basis as of September 30, 2020 and December 31, 2019, and indicates the fair value hierarchy of the valuation inputs utilized to determine fair value (in thousands) : Fair Value Measurements as of Amortized Cost as of September 30, 2020 September 30, 2020 Level 1 Level 2 Level 3 Total Assets: Cash and cash equivalents $ 13,245 $ — $ — $ 13,245 $ 13,245 Restricted cash equivalents 3,500 1,130 — 4,630 4,630 Total assets $ 16,745 $ 1,130 $ — $ 17,875 $ 17,875 Liabilities: Accrued and other current liabilities Napster acquisition contingent consideration $ — $ — $ 12,400 $ 12,400 N/A Other long-term liabilities Simple Agreements for Future Equity — — 2,106 2,106 N/A Total liabilities $ — $ — $ 14,506 $ 14,506 N/A Fair Value Measurements as of Amortized Cost as of December 31, 2019 December 31, 2019 Level 1 Level 2 Level 3 Total Assets: Cash and cash equivalents: Cash $ 8,472 $ — $ — $ 8,472 $ 8,472 Money market funds — — — — — Total cash and cash equivalents 8,472 — — 8,472 8,472 Restricted cash equivalents 3,500 1,380 — 4,880 4,880 Total assets $ 11,972 $ 1,380 $ — $ 13,352 $ 13,352 Liabilities: Accrued and other current liabilities Napster acquisition contingent consideration $ — $ — $ 2,800 $ 2,800 N/A Other long-term liabilities Napster acquisition contingent consideration — — 9,800 9,800 N/A Total liabilities $ — $ — $ 12,600 $ 12,600 N/A Restricted cash equivalents as of September 30, 2020 and December 31, 2019 relate to cash pledged as collateral against letters of credit in connection with lease agreements, and our Loan and Security Agreement ("Loan Agreement") requires us to maintain a minimum balance of $3.5 million unrestricted cash at the bank. See Note 8 Debt for additional details. Accrued and other current liabilities as of September 30, 2020 includes the estimated fair value of the contingent consideration for the Napster acquisition, which was determined using a fair value measurement categorized within Level 3 of the fair value hierarchy. As discussed in Note 5 Acquisitions and Dispositions, this liability is adjusted quarterly to fair value through earnings. During the nine months ended September 30, 2020, we recorded the change in fair value of the contingent consideration of $0.2 million, as a decrease to the total liability on the consolidated balance sheet and as a reduction of general and administrative expenses on the consolidated statement of operations. The fair value as of September 30, 2020 is based on a range of possible outcomes as the final payout is currently uncertain due to contingent conditions required to be met for closing Napster's merger transaction with MelodyVR and various uncertainties regarding merger consideration allocation and valuation. Scener is a RealNetworks subsidiary, which is developing a platform that transforms the experience of viewing video entertainment into a social, connected playground. As of September 30, 2020, RealNetworks owned approximately 82% of Scener's outstanding equity, and we consolidate its financial results into our financial statements. The financial results of the subsidiary are reported in our Consumer Media segment. In the third quarter of 2020, Scener received $2.1 million in cash in return for issuing rights to investors for certain shares of Scener's capital stock contingent upon the occurrence of specific future capital raising events by Scener. The rights were each issued as a Simple Agreement for Future Equity ("SAFE Notes"). The future contingent events also contemplate the possibility of Scener having to pay back the original cash investment to each investor. Under the applicable accounting guidance, SAFE Notes are recorded as a liability on our consolidated financial statements within Other long-term liabilities and are required to be recorded at fair value each quarter. The fair value of the SAFE Notes as of September 30, 2020 was determined to be equal to the proceeds received. 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 nine months ended September 30, 2020 and 2019, we did not record any impairments on those assets required to be measured at fair value on a non-recurring basis. |
Accrued and Other Current Liabi
Accrued and Other Current Liabilities | 9 Months Ended |
Sep. 30, 2020 | |
Payables and Accruals [Abstract] | |
Accrued and Other Current Liabilities | Note 7 Accrued and other current liabilities Accrued and other current liabilities (in thousands): September 30, 2020 December 31, 2019 Royalties and other fulfillment costs $ 1,157 $ 1,535 Employee compensation, commissions and benefits 4,172 4,655 Sales, VAT and other taxes payable 1,020 801 Operating lease liabilities - current 3,577 3,643 Napster acquisition contingent consideration 12,400 2,800 Other 2,946 4,061 Total accrued and other current liabilities $ 25,272 $ 17,495 |
Debt
Debt | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Debt | Note 8 Debt The Coronavirus Aid, Relief and Economic Security (CARES) Act, signed into law in March 2020, established the Paycheck Protection Program (PPP) to provide a direct incentive for small businesses to keep workers on their payroll. Through the PPP, participating banks write loans to eligible businesses and loan amounts are forgiven to the extent that employee retention criteria are met and proceeds are used to cover eligible costs over an elected 8-week or 24-week measurement period following loan funding. In April 2020, following an assessment of eligibility and approval of its Board of Directors, RealNetworks issued a promissory note to a participating bank in the principal amount of $2.9 million pursuant to the PPP. The note has a maturity of 2 years, an interest rate of 1.0%, no pre-payment penalty, a six-month deferment period, and is eligible for forgiveness pursuant to PPP guidelines. On April 28, 2020, the Secretary of the Treasury and Small Business Administration (SBA) announced that the government will review all PPP loans of more than $2.0 million before there is forgiveness. RealNetworks' PPP loan will be derecognized upon repayment of the loan in accordance with its terms and/or upon confirmation of forgiveness from the SBA. In August 2019, RealNetworks and Napster entered into a Loan and Security Agreement (Loan Agreement) with a third-party financial institution. Under the terms of the Loan Agreement, the bank extended a revolving line of credit not to exceed $10.0 million in the aggregate. Available advances on the revolving line of credit, which will be used for working capital and general corporate purposes, are based on a borrowing base that comprises accounts receivable and direct to consumer deposits. Borrowings under the Loan Agreement are secured by a first priority security interest in the assets of RealNetworks and Napster. Advances bear interest at a rate equal to one-half of one percentage point (0.5%) above the greater of the prime rate or 5.5%, with monthly payments of interest only and principal due at the end of the two-year term. The Loan Agreement contains customary covenants, including financial covenants, minimum EBITDA levels to be updated annually, and maintaining a minimum balance of $3.5 million unrestricted cash at the bank. As of September 30, 2020, RealNetworks had $3.9 million outstanding debt from the revolving line of credit, which was loaned to Napster bearing interest and fees commensurate with our costs. See Note 13 Related Party Transactions for additional details. |
Restructuring Charges
Restructuring Charges | 3 Months Ended |
Sep. 30, 2020 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Charges | Note 9 Restructuring Charges Restructuring and other charges in 2020 and 2019 consist of costs associated with the ongoing reorganization of our business operations and expense re-alignment efforts, which primarily relate to severance costs due to workforce reductions. Restructuring charges are as follows (in thousands): Employee Separation and Other Costs Asset Related and Other Costs Total Costs incurred and charged to expense for the nine months ended September 30, 2020 $ 965 $ 132 $ 1,097 Costs incurred and charged to expense for the nine months ended September 30, 2019 $ 1,050 $ 537 $ 1,587 Changes to the accrued restructuring liability (which is included in Accrued and other current liabilities) for 2020 are as follows (in thousands): Employee Separation Costs Asset Related and Other Costs Total Accrued liability at December 31, 2019 $ 110 $ 174 $ 284 Costs incurred and charged to expense for the nine months ended September 30, 2020 965 — 965 Cash payments (824) (174) (998) Accrued liability at September 30, 2020 $ 251 $ — $ 251 |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) Per Share | Note 10 Income (Loss) Per Share Basic net income (loss) per share (EPS) is computed by dividing net income (loss) attributable to RealNetworks by the weighted average number of common shares outstanding during the period. Diluted EPS is computed by dividing net income (loss) attributable to RealNetworks 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 Nine Months Ended 2020 2019 2020 2019 Net loss from continuing operations attributable to RealNetworks $ (3,231) $ (5,203) $ (10,890) $ (10,517) Net loss from discontinued operations attributable to RealNetworks (7) (765) (2,102) (3,120) Net loss attributable to RealNetworks $ (3,238) $ (5,968) $ (12,992) $ (13,637) Weighted average common shares outstanding used to compute basic EPS 38,270 38,062 38,247 37,944 Dilutive effect of stock based awards — — — — Weighted average common shares outstanding used to compute diluted EPS 38,270 38,062 38,247 37,944 Net loss per share attributable to RealNetworks- Basic: Continuing operations $ (0.08) $ (0.14) $ (0.28) $ (0.28) Discontinued operations — (0.02) (0.06) (0.08) Total net loss per share - Basic $ (0.08) $ (0.16) $ (0.34) $ (0.36) Net loss per share attributable to RealNetworks- Diluted: Continuing operations $ (0.08) $ (0.14) $ (0.28) $ (0.28) Discontinued operations — (0.02) (0.06) (0.08) Total net loss per share - Diluted $ (0.08) $ (0.16) $ (0.34) $ (0.36) During the quarter and nine months ended September 30, 2020, 6.7 million and 6.9 million shares of common stock, respectively, of potentially issuable shares from common stock awards were excluded from the calculation of diluted EPS because of their antidilutive effect. During the quarter and nine months ended September 30, 2019, 8.0 million and 7.6 million shares of common stock, respectively, of potentially issuable shares from common stock awards were excluded from the calculation of diluted EPS because of their antidilutive effect. In February 2020, Mr. Glaser, Chairman of the Board and Chief Executive Officer of RealNetworks, invested approximately $10.0 million in RealNetworks in exchange for the issuance to him of 8,064,516 shares of Series B Preferred Stock. The Series B Preferred Stock is convertible into common stock on a one-to-one basis subject to the limitation described in Note 13 Related Party Transactions. During the quarter and nine months ended September 30, 2020, these shares were also excluded from the calculation of diluted EPS because of their antidilutive effect. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 11 Commitments and Contingencies We have been in the past and could become in the future 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. 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. On April 6, 2020, RealNetworks Asia Pacific Co., Ltd. received notice of a civil lawsuit filed by Korean Music Copyright Association (KOMCA) seeking damages of $2.6 million. Also named as a defendant in the lawsuit is Kakao M Corp (formerly known as LOEN Entertainment Corp.), one of the largest media publishing companies in Korea, which operates the Melon music platform. The claim is for a late payment penalty under a music licensing contract, pursuant to which, from 2004 to 2017, RealNetworks licensed music for its services to LOEN for its Melon platform. The current lawsuit relates solely to the late payment of music licensing fees under the contract; the underlying music licensing fees were paid by Kakao M to KOMCA in a separate settlement prior to KOMCA’s filing of this lawsuit. While we believe we have meritorious defenses to this lawsuit and intend to vigorously defend RealNetworks, litigation is inherently uncertain and we cannot predict the outcome of this matter. We have not recorded an accrual related to this settlement as of September 30, 2020 as it is early in the litigation and any potential liability cannot be reasonably estimated. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 13 Related Party Transactions In December 2016, RealNetworks and the other then-owner of 42% of Napster each entered into an agreement to loan up to $5.0 million to Napster for general operating purposes, which loans were fully funded as of the end of January 2017 for an aggregate of $10.0 million. Included in RealNetworks' January 2019 acquisition of the additional 42% interest in Napster, as described in Note 5 Acquisitions and Dispositions, RealNetworks assumed the seller's $5.0 million note, resulting in RealNetworks holding $10.0 million of notes receivable from Napster. In May 2019, RealNetworks extended a short-term loan to Napster in the principal amount of $1.1 million. In August 2019, RealNetworks established a two-year term on this short-term loan and, as discussed in Note 8 Debt, loaned Napster an additional $3.9 million and charged Napster for associated fees. As a result, the principal amount on this two-year note is $5.4 million. Both the two-year note and the $10.0 million loan are subordinate to RealNetworks' and Napster's third party debt. In each of February 2015 and February 2017, Napster issued warrants to purchase shares of its common stock to each of RealNetworks and the other then-owner of 42% of Napster. The warrants have a 10-year contractual term and were issued as compensation for past services provided by these two significant stockholders of Napster. As part of RealNetworks' January 2019 acquisition of the additional 42% interest in Napster, RealNetworks assumed the warrants held by the seller. Upon RealNetworks' acquisition of a controlling interest in Napster, the notes and warrants were effectively settled and eliminated in our consolidated financial statements as they represent preexisting relationships between RealNetworks and Napster. Additionally, upon the expected close and receipt of proceeds for the sale of Napster to MelodyVR Group PLC in the fourth quarter of 2020, amounts previously loaned to Napster will be considered settled. In July 2020, Mr. Glaser invested $0.7 million into a RealNetworks subsidiary, Scener. This funding was in addition to $0.8 million that Mr. Glaser had previously directly invested in 2019. In August 2020, this same subsidiary entered into agreements and received $1.4 million in funding from outside investors. The 2020 investments were in the form of SAFEs, as described in Note 6 Fair Value Measurements. As of September 30, 2020, RealNetworks owned approximately 82% of the subsidiary's outstanding equity, and we consolidate its financial results into our financial statements. The financial results of the subsidiary are reported in our Consumer Media segment. In February 2020, we entered into a Series B Preferred Stock Purchase Agreement with Mr. Glaser, pursuant to which Mr. Glaser invested approximately $10.0 million in RealNetworks in exchange for the issuance to him of 8,064,516 shares of Series B Preferred Stock. The Series B Preferred Stock is non-voting and is convertible into common stock on a one-to-one basis, provided, however, that no conversion is permitted in the event that such conversion would cause Mr. Glaser’s beneficial ownership of our common stock to exceed the 38.5% threshold set forth in our Second Amended and Restated Shareholder Rights Plan dated November 30, 2018. The Series B Preferred Stock has no liquidation preference and no preferred dividend. |
Description of Business and S_2
Description of Business and Summary of Significant Accounting Policies (Policies) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2020 | Sep. 30, 2020 | |
Accounting Policies [Abstract] | ||
Description of Business | Description of Business. RealNetworks provides digital media software and services to consumers, mobile carriers, device manufacturers, system integrators, and other businesses. Consumers use our digital media products and services to store, organize, play, manage and enjoy their digital media content, either directly from us or through our distribution partners. See Note 5 Acquisitions and Dispositions for information on the Napster music business, which offers a comprehensive set of digital music products and services designed to provide consumers with broad access to digital music. As of the third quarter of 2020, Napster is being treated as a discontinued operation for accounting and disclosure purposes. Napster’s operating results and financial condition have been recast to conform to this presentation. 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 and cash flow. | |
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 | |
Segments | Note 12 Segment Information We manage our business and report revenue and operating income (loss) in three segments: (1) Consumer Media, which includes licensing of our codec technology and our PC-based RealPlayer products, including RealPlayer Plus and related products; (2) Mobile Services, which includes our SaaS services and our integrated RealTimes® platform which is sold to mobile carriers; and (3) Games, which includes all our games-related businesses, including sales of in-game virtual goods, mobile games, games licenses, games subscription services, and in-game advertising and advertising on game sites. RealNetworks allocates to its Consumer Media, Mobile Services and Games reportable segments certain corporate expenses which are directly attributable to supporting these businesses, including but not limited to a portion of finance, legal, human resources and headquarters facilities. Remaining expenses, which are not directly attributable to supporting these businesses, are reported as corporate items. These corporate items may also include changes in the fair value of the contingent consideration liability, restructuring charges, and stock compensation charges. RealNetworks reports three reportable segments based on factors such as how we manage our operations and how the 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 and nine months ended September 30, 2020 and 2019 (in thousands): Consumer Media Quarter Ended Nine Months Ended 2020 2019 2020 2019 Revenue $ 2,543 $ 3,632 $ 9,197 $ 8,738 Cost of revenue 593 705 1,723 2,341 Gross profit 1,950 2,927 7,474 6,397 Operating expenses 2,092 2,692 6,754 8,688 Operating income (loss) $ (142) $ 235 $ 720 $ (2,291) Mobile Services Quarter Ended Nine Months Ended 2020 2019 2020 2019 Revenue $ 6,400 $ 6,895 $ 19,551 $ 20,831 Cost of revenue 1,511 1,721 4,989 5,634 Gross profit 4,889 5,174 14,562 15,197 Operating expenses 5,577 7,143 18,847 22,142 Operating loss $ (688) $ (1,969) $ (4,285) $ (6,945) Games Quarter Ended Nine Months Ended 2020 2019 2020 2019 Revenue $ 7,611 $ 7,164 $ 21,713 $ 18,922 Cost of revenue 1,955 1,934 5,707 5,259 Gross profit 5,656 5,230 16,006 13,663 Operating expenses 5,152 5,151 15,051 15,476 Operating income (loss) $ 504 $ 79 $ 955 $ (1,813) Corporate Quarter Ended Nine Months Ended 2020 2019 2020 2019 Cost of revenue $ 3 $ (68) $ 10 $ (212) Operating expenses 2,521 3,522 7,852 11,895 Operating loss $ (2,524) $ (3,454) $ (7,862) $ (11,683) Our customers consist primarily of consumers and corporations located in the U.S., Europe, and various foreign countries (Rest of the World). Revenue by geographic region (in thousands): Quarter Ended Nine Months Ended 2020 2019 2020 2019 United States $ 11,855 $ 10,588 $ 32,810 $ 29,571 Europe 2,206 2,616 6,840 8,069 Rest of the World 2,493 4,487 10,811 10,851 Total net revenue $ 16,554 $ 17,691 $ 50,461 $ 48,491 Long-lived assets (consisting of goodwill, equipment, software, leasehold improvements, operating lease assets, and other intangible assets) by geographic region (in thousands) are as follows: September 30, December 31, United States $ 18,889 $ 20,515 Europe 7,475 7,221 Rest of the World 1,371 1,790 Total long-lived assets $ 27,735 $ 29,526 |
Segment Reporting (Policies)
Segment Reporting (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Segments | Note 12 Segment Information We manage our business and report revenue and operating income (loss) in three segments: (1) Consumer Media, which includes licensing of our codec technology and our PC-based RealPlayer products, including RealPlayer Plus and related products; (2) Mobile Services, which includes our SaaS services and our integrated RealTimes® platform which is sold to mobile carriers; and (3) Games, which includes all our games-related businesses, including sales of in-game virtual goods, mobile games, games licenses, games subscription services, and in-game advertising and advertising on game sites. RealNetworks allocates to its Consumer Media, Mobile Services and Games reportable segments certain corporate expenses which are directly attributable to supporting these businesses, including but not limited to a portion of finance, legal, human resources and headquarters facilities. Remaining expenses, which are not directly attributable to supporting these businesses, are reported as corporate items. These corporate items may also include changes in the fair value of the contingent consideration liability, restructuring charges, and stock compensation charges. RealNetworks reports three reportable segments based on factors such as how we manage our operations and how the 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 and nine months ended September 30, 2020 and 2019 (in thousands): Consumer Media Quarter Ended Nine Months Ended 2020 2019 2020 2019 Revenue $ 2,543 $ 3,632 $ 9,197 $ 8,738 Cost of revenue 593 705 1,723 2,341 Gross profit 1,950 2,927 7,474 6,397 Operating expenses 2,092 2,692 6,754 8,688 Operating income (loss) $ (142) $ 235 $ 720 $ (2,291) Mobile Services Quarter Ended Nine Months Ended 2020 2019 2020 2019 Revenue $ 6,400 $ 6,895 $ 19,551 $ 20,831 Cost of revenue 1,511 1,721 4,989 5,634 Gross profit 4,889 5,174 14,562 15,197 Operating expenses 5,577 7,143 18,847 22,142 Operating loss $ (688) $ (1,969) $ (4,285) $ (6,945) Games Quarter Ended Nine Months Ended 2020 2019 2020 2019 Revenue $ 7,611 $ 7,164 $ 21,713 $ 18,922 Cost of revenue 1,955 1,934 5,707 5,259 Gross profit 5,656 5,230 16,006 13,663 Operating expenses 5,152 5,151 15,051 15,476 Operating income (loss) $ 504 $ 79 $ 955 $ (1,813) Corporate Quarter Ended Nine Months Ended 2020 2019 2020 2019 Cost of revenue $ 3 $ (68) $ 10 $ (212) Operating expenses 2,521 3,522 7,852 11,895 Operating loss $ (2,524) $ (3,454) $ (7,862) $ (11,683) Our customers consist primarily of consumers and corporations located in the U.S., Europe, and various foreign countries (Rest of the World). Revenue by geographic region (in thousands): Quarter Ended Nine Months Ended 2020 2019 2020 2019 United States $ 11,855 $ 10,588 $ 32,810 $ 29,571 Europe 2,206 2,616 6,840 8,069 Rest of the World 2,493 4,487 10,811 10,851 Total net revenue $ 16,554 $ 17,691 $ 50,461 $ 48,491 Long-lived assets (consisting of goodwill, equipment, software, leasehold improvements, operating lease assets, and other intangible assets) by geographic region (in thousands) are as follows: September 30, December 31, United States $ 18,889 $ 20,515 Europe 7,475 7,221 Rest of the World 1,371 1,790 Total long-lived assets $ 27,735 $ 29,526 |
Revenue Recognition Revenue R_2
Revenue Recognition Revenue Recognition (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Segment Reporting Information, by Segment | Segment results for the quarters and nine months ended September 30, 2020 and 2019 (in thousands): Consumer Media Quarter Ended Nine Months Ended 2020 2019 2020 2019 Revenue $ 2,543 $ 3,632 $ 9,197 $ 8,738 Cost of revenue 593 705 1,723 2,341 Gross profit 1,950 2,927 7,474 6,397 Operating expenses 2,092 2,692 6,754 8,688 Operating income (loss) $ (142) $ 235 $ 720 $ (2,291) Mobile Services Quarter Ended Nine Months Ended 2020 2019 2020 2019 Revenue $ 6,400 $ 6,895 $ 19,551 $ 20,831 Cost of revenue 1,511 1,721 4,989 5,634 Gross profit 4,889 5,174 14,562 15,197 Operating expenses 5,577 7,143 18,847 22,142 Operating loss $ (688) $ (1,969) $ (4,285) $ (6,945) Games Quarter Ended Nine Months Ended 2020 2019 2020 2019 Revenue $ 7,611 $ 7,164 $ 21,713 $ 18,922 Cost of revenue 1,955 1,934 5,707 5,259 Gross profit 5,656 5,230 16,006 13,663 Operating expenses 5,152 5,151 15,051 15,476 Operating income (loss) $ 504 $ 79 $ 955 $ (1,813) Corporate Quarter Ended Nine Months Ended 2020 2019 2020 2019 Cost of revenue $ 3 $ (68) $ 10 $ (212) Operating expenses 2,521 3,522 7,852 11,895 Operating loss $ (2,524) $ (3,454) $ (7,862) $ (11,683) |
Disaggregation of Revenue | Disaggregation of Revenue The following table presents our disaggregated revenue by source and segment (in thousands): Quarter Ended September 30, 2020 Nine Months Ended September 30, 2020 Consumer Media Mobile Services Games Consumer Media Mobile Services Games Business Line Software License $ 642 $ 931 $ — $ 4,364 $ 2,734 $ — Subscription Services 892 5,469 2,705 2,719 16,817 8,205 Product Sales 193 — 3,874 676 — 10,564 Advertising and Other 816 — 1,032 1,438 — 2,944 Total $ 2,543 $ 6,400 $ 7,611 $ 9,197 $ 19,551 $ 21,713 Quarter Ended September 30, 2019 Nine Months Ended September 30, 2019 Consumer Media Mobile Services Games Consumer Media Mobile Services Games Business Line Software License $ 1,987 $ 888 $ — $ 3,666 $ 2,444 $ — Subscription Services 1,028 6,007 3,056 3,156 18,387 9,114 Product Sales 207 — 3,078 632 — 7,243 Advertising and Other 410 — 1,030 1,284 — 2,565 Total $ 3,632 $ 6,895 $ 7,164 $ 8,738 $ 20,831 $ 18,922 The following table presents our disaggregated revenue by sales channel (in thousands): Quarter Ended September 30, 2020 Nine Months Ended September 30, 2020 Consumer Media Mobile Services Games Consumer Media Mobile Services Games Sales Channel Business to Business $ 1,457 $ 6,304 $ 1,191 $ 5,800 $ 19,250 $ 3,483 Direct to Consumer 1,086 96 6,420 3,397 301 18,230 Total $ 2,543 $ 6,400 $ 7,611 $ 9,197 $ 19,551 $ 21,713 Quarter Ended September 30, 2019 Nine Months Ended September 30, 2019 Consumer Media Mobile Services Games Consumer Media Mobile Services Games Sales Channel Business to Business $ 2,398 $ 6,784 $ 1,362 $ 4,951 $ 20,482 $ 3,513 Direct to Consumer 1,234 111 5,802 3,787 349 15,409 Total $ 3,632 $ 6,895 $ 7,164 $ 8,738 $ 20,831 $ 18,922 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement [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 Nine Months Ended 2020 2019 2020 2019 Total stock-based compensation expense $ 390 $ 503 $ 1,093 $ 2,420 |
Weighted-Average Assumptions Used to Determine Fair Value of Options Granted | The fair value of RealNetworks options granted determined using the Black-Scholes model used the following weighted-average assumptions: Quarter Ended Nine Months Ended 2020 2019 2020 2019 Expected dividend yield 0 % 0 % 0 % 0 % Risk-free interest rate 0.21 % 1.71 % 0.40 % 2.16 % Expected life (years) 4.0 3.8 4.0 4.1 Volatility 45 % 41 % 45 % 41 % |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Business Combinations [Abstract] | |
Schedule of Napster Disposal | The following table summarizes the carrying amounts of major classes of assets and liabilities of discontinued operations for each of the periods presented: September 30, 2020 December 31, 2019 Cash and cash equivalents $ 6,247 $ 8,333 Trade accounts receivable, net of allowance 16,621 16,740 Other current assets 2,424 3,303 Total current assets of discontinued operations 25,292 28,376 Net equipment, software, and leasehold improvements 445 401 Other intangible assets 16,371 19,286 Goodwill 45,520 45,520 Other non-current assets 1,919 2,604 Total assets of discontinued operations $ 89,547 $ 96,187 Accrued royalties, fulfillment and other current liabilities $ 59,504 $ 65,310 Notes payable 7,945 7,331 Total current liabilities of discontinued operations 67,449 72,641 Other non-current liabilities 3,264 1,843 Total liabilities of discontinued operations $ 70,713 $ 74,484 The following tables summarize the loss from discontinued operations for each of the periods: Quarter Ended Nine Months Ended 2020 2019 2020 2019 Revenue $ 23,563 $ 27,302 $ 73,225 $ 80,222 Cost of revenue 17,438 21,986 56,280 65,408 Gross profit 6,125 5,316 16,945 14,814 Operating expenses 5,828 6,472 19,013 18,642 Operating income (loss) 297 (1,156) (2,068) (3,828) Other income (expenses) (261) 236 (299) 253 Income (loss) from discontinued operations before income taxes 36 (920) (2,367) (3,575) Income tax expense 37 77 99 297 Net income (loss) from discontinued operations (1) (997) (2,466) (3,872) Noncontrolling interests in net income (loss) from discontinued operations 6 (232) (364) (752) Net loss from discontinued operations attributable to RealNetworks $ (7) $ (765) $ (2,102) $ (3,120) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Financial Assets Measured at Fair Value on a Recurring Basis | The following tables present information about our financial assets that have been measured at fair value on a recurring basis as of September 30, 2020 and December 31, 2019, and indicates the fair value hierarchy of the valuation inputs utilized to determine fair value (in thousands) : Fair Value Measurements as of Amortized Cost as of September 30, 2020 September 30, 2020 Level 1 Level 2 Level 3 Total Assets: Cash and cash equivalents $ 13,245 $ — $ — $ 13,245 $ 13,245 Restricted cash equivalents 3,500 1,130 — 4,630 4,630 Total assets $ 16,745 $ 1,130 $ — $ 17,875 $ 17,875 Liabilities: Accrued and other current liabilities Napster acquisition contingent consideration $ — $ — $ 12,400 $ 12,400 N/A Other long-term liabilities Simple Agreements for Future Equity — — 2,106 2,106 N/A Total liabilities $ — $ — $ 14,506 $ 14,506 N/A Fair Value Measurements as of Amortized Cost as of December 31, 2019 December 31, 2019 Level 1 Level 2 Level 3 Total Assets: Cash and cash equivalents: Cash $ 8,472 $ — $ — $ 8,472 $ 8,472 Money market funds — — — — — Total cash and cash equivalents 8,472 — — 8,472 8,472 Restricted cash equivalents 3,500 1,380 — 4,880 4,880 Total assets $ 11,972 $ 1,380 $ — $ 13,352 $ 13,352 Liabilities: Accrued and other current liabilities Napster acquisition contingent consideration $ — $ — $ 2,800 $ 2,800 N/A Other long-term liabilities Napster acquisition contingent consideration — — 9,800 9,800 N/A Total liabilities $ — $ — $ 12,600 $ 12,600 N/A |
Accrued and Other Current Lia_2
Accrued and Other Current Liabilities (Tables) | 3 Months Ended |
Sep. 30, 2020 | |
Payables and Accruals [Abstract] | |
Accrued and Other Liabilities | Accrued and other current liabilities (in thousands): September 30, 2020 December 31, 2019 Royalties and other fulfillment costs $ 1,157 $ 1,535 Employee compensation, commissions and benefits 4,172 4,655 Sales, VAT and other taxes payable 1,020 801 Operating lease liabilities - current 3,577 3,643 Napster acquisition contingent consideration 12,400 2,800 Other 2,946 4,061 Total accrued and other current liabilities $ 25,272 $ 17,495 |
Restructuring Charges (Tables)
Restructuring Charges (Tables) | 3 Months Ended |
Sep. 30, 2020 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring Charges by Type of Cost | Restructuring charges are as follows (in thousands): Employee Separation and Other Costs Asset Related and Other Costs Total Costs incurred and charged to expense for the nine months ended September 30, 2020 $ 965 $ 132 $ 1,097 Costs incurred and charged to expense for the nine months ended September 30, 2019 $ 1,050 $ 537 $ 1,587 Changes to the accrued restructuring liability (which is included in Accrued and other current liabilities) for 2020 are as follows (in thousands): Employee Separation Costs Asset Related and Other Costs Total Accrued liability at December 31, 2019 $ 110 $ 174 $ 284 Costs incurred and charged to expense for the nine months ended September 30, 2020 965 — 965 Cash payments (824) (174) (998) Accrued liability at September 30, 2020 $ 251 $ — $ 251 |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 3 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Calculation of Basic and Diluted Earnings Per Share | Basic and diluted EPS (in thousands, except per share amounts): Quarter Ended Nine Months Ended 2020 2019 2020 2019 Net loss from continuing operations attributable to RealNetworks $ (3,231) $ (5,203) $ (10,890) $ (10,517) Net loss from discontinued operations attributable to RealNetworks (7) (765) (2,102) (3,120) Net loss attributable to RealNetworks $ (3,238) $ (5,968) $ (12,992) $ (13,637) Weighted average common shares outstanding used to compute basic EPS 38,270 38,062 38,247 37,944 Dilutive effect of stock based awards — — — — Weighted average common shares outstanding used to compute diluted EPS 38,270 38,062 38,247 37,944 Net loss per share attributable to RealNetworks- Basic: Continuing operations $ (0.08) $ (0.14) $ (0.28) $ (0.28) Discontinued operations — (0.02) (0.06) (0.08) Total net loss per share - Basic $ (0.08) $ (0.16) $ (0.34) $ (0.36) Net loss per share attributable to RealNetworks- Diluted: Continuing operations $ (0.08) $ (0.14) $ (0.28) $ (0.28) Discontinued operations — (0.02) (0.06) (0.08) Total net loss per share - Diluted $ (0.08) $ (0.16) $ (0.34) $ (0.36) |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Segment Results | Segment results for the quarters and nine months ended September 30, 2020 and 2019 (in thousands): Consumer Media Quarter Ended Nine Months Ended 2020 2019 2020 2019 Revenue $ 2,543 $ 3,632 $ 9,197 $ 8,738 Cost of revenue 593 705 1,723 2,341 Gross profit 1,950 2,927 7,474 6,397 Operating expenses 2,092 2,692 6,754 8,688 Operating income (loss) $ (142) $ 235 $ 720 $ (2,291) Mobile Services Quarter Ended Nine Months Ended 2020 2019 2020 2019 Revenue $ 6,400 $ 6,895 $ 19,551 $ 20,831 Cost of revenue 1,511 1,721 4,989 5,634 Gross profit 4,889 5,174 14,562 15,197 Operating expenses 5,577 7,143 18,847 22,142 Operating loss $ (688) $ (1,969) $ (4,285) $ (6,945) Games Quarter Ended Nine Months Ended 2020 2019 2020 2019 Revenue $ 7,611 $ 7,164 $ 21,713 $ 18,922 Cost of revenue 1,955 1,934 5,707 5,259 Gross profit 5,656 5,230 16,006 13,663 Operating expenses 5,152 5,151 15,051 15,476 Operating income (loss) $ 504 $ 79 $ 955 $ (1,813) Corporate Quarter Ended Nine Months Ended 2020 2019 2020 2019 Cost of revenue $ 3 $ (68) $ 10 $ (212) Operating expenses 2,521 3,522 7,852 11,895 Operating loss $ (2,524) $ (3,454) $ (7,862) $ (11,683) |
Revenue by Geographic Region | Our customers consist primarily of consumers and corporations located in the U.S., Europe, and various foreign countries (Rest of the World). Revenue by geographic region (in thousands): Quarter Ended Nine Months Ended 2020 2019 2020 2019 United States $ 11,855 $ 10,588 $ 32,810 $ 29,571 Europe 2,206 2,616 6,840 8,069 Rest of the World 2,493 4,487 10,811 10,851 Total net revenue $ 16,554 $ 17,691 $ 50,461 $ 48,491 |
Long-Lived Assets by Geographic Region | Long-lived assets (consisting of goodwill, equipment, software, leasehold improvements, operating lease assets, and other intangible assets) by geographic region (in thousands) are as follows: September 30, December 31, United States $ 18,889 $ 20,515 Europe 7,475 7,221 Rest of the World 1,371 1,790 Total long-lived assets $ 27,735 $ 29,526 |
Description of Business and S_3
Description of Business and Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||
Cash and cash equivalents | $ 13,245 | $ 13,245 | $ 8,472 | ||
Operating income (loss) | $ (2,850) | $ (5,109) | $ (10,472) | $ (22,732) |
Revenue Recognition (Additional
Revenue Recognition (Additional Information) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Accumulated deficit | $ (557,002) | $ (557,002) | $ (544,010) | ||
Revenue | 16,554 | $ 17,691 | 50,461 | $ 48,491 | |
Long-term accounts receivable | 500 | 500 | 300 | ||
Deferred revenue | $ 2,300 | $ 2,300 | $ 2,100 |
Revenue Recognition (Disaggrega
Revenue Recognition (Disaggregation of Revenue) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 16,554 | $ 17,691 | $ 50,461 | $ 48,491 |
Consumer Media | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 2,543 | 3,632 | 9,197 | 8,738 |
Consumer Media | Business to Business | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 1,457 | 2,398 | 5,800 | 4,951 |
Consumer Media | Direct to Consumer | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 1,086 | 1,234 | 3,397 | 3,787 |
Consumer Media | Software License | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 642 | 1,987 | 4,364 | 3,666 |
Consumer Media | Subscription Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 892 | 1,028 | 2,719 | 3,156 |
Consumer Media | Product Sales | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 193 | 207 | 676 | 632 |
Consumer Media | Advertising and Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 816 | 410 | 1,438 | 1,284 |
Mobile Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 6,400 | 6,895 | 19,551 | 20,831 |
Mobile Services | Business to Business | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 6,304 | 6,784 | 19,250 | 20,482 |
Mobile Services | Direct to Consumer | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 96 | 111 | 301 | 349 |
Mobile Services | Software License | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 931 | 888 | 2,734 | 2,444 |
Mobile Services | Subscription Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 5,469 | 6,007 | 16,817 | 18,387 |
Mobile Services | Product Sales | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 0 | 0 | 0 | 0 |
Mobile Services | Advertising and Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 0 | 0 | 0 | 0 |
Games | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 7,611 | 7,164 | 21,713 | 18,922 |
Games | Business to Business | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 1,191 | 1,362 | 3,483 | 3,513 |
Games | Direct to Consumer | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 6,420 | 5,802 | 18,230 | 15,409 |
Games | Software License | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 0 | 0 | 0 | 0 |
Games | Subscription Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 2,705 | 3,056 | 8,205 | 9,114 |
Games | Product Sales | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 3,874 | 3,078 | 10,564 | 7,243 |
Games | Advertising and Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 1,032 | $ 1,030 | $ 2,944 | $ 2,565 |
Stock-Based Compensation (Recog
Stock-Based Compensation (Recognized Stock-Based Compensation Expense) (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | ||||
Total stock-based compensation expense | $ 390 | $ 503 | $ 1,093 | $ 2,420 |
Stock-Based Compensation (Weigh
Stock-Based Compensation (Weighted-Average Assumptions Used to Determine Fair Value of Options Granted) (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | ||||
Expected dividend yield | 0.00% | 0.00% | 0.00% | 0.00% |
Risk-free interest rate | 0.21% | 1.71% | 0.40% | 2.16% |
Expected life | 4 years | 3 years 9 months 18 days | 4 years | 4 years 1 month 6 days |
Volatility | 45.00% | 41.00% | 45.00% | 41.00% |
Proceeds from issuance of common stock (stock options and stock purchase plan) | $ 0 | $ 144 |
Stock-Based Compensation (Addit
Stock-Based Compensation (Additional Information) (Detail) $ in Millions | 3 Months Ended |
Sep. 30, 2020USD ($) | |
Share-based Payment Arrangement [Abstract] | |
Total unrecognized compensation cost | $ 1.7 |
Total unrecognized compensation cost, expected recognition period (in years) | 3 years 1 month 6 days |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) - USD ($) | Jan. 18, 2019 | Mar. 31, 2019 | Sep. 30, 2020 |
Business Acquisition [Line Items] | |||
Goodwill acquired during period | $ 45,500,000 | ||
Rhapsody America LLC | |||
Business Acquisition [Line Items] | |||
Percentage of shares acquired | 42.00% | ||
Interest acquired, percent | 84.00% | ||
Acquired finite lived intangible assets | $ 23,700,000 | ||
Business Combination, Step Acquisition, Remeasurement Gain and Gains (Losses) From Other Preexisting Relationships | $ 12,300,000 | ||
Rhapsody America LLC | Rhapsody America LLC | |||
Business Acquisition [Line Items] | |||
Noncontrolling interest, ownership percent by noncontrolling interest | 16.00% |
Acquisitions and Dispositions -
Acquisitions and Dispositions - Napster Disposition Narrative (Details) - Napster Disposal - USD ($) $ in Thousands | Dec. 31, 2020 | Sep. 30, 2020 | Dec. 31, 2019 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Other current assets | $ 2,424 | $ 3,303 | |
Music Royalties | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Other current assets | $ 1,200 | $ 2,000 | |
Forecast | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Consideration from sale | $ 26,300 | ||
Indemnity escrow | 3,000 | ||
Cash consideration | 12,000 | ||
Ordinary shares consideration value | 11,300 | ||
Disposal Group, Including Discontinued Operations, Transaction Value | 70,000 | ||
Disposal Group, Including Discontinued Operations, | $ 44,000 |
Acquisitions and Dispositions_2
Acquisitions and Dispositions - Napster Disposition Schedule of Assets and Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Current assets of discontinued operations | $ 89,547 | $ 28,376 |
Current liabilities of discontinued operations | 70,713 | 72,641 |
Napster Disposal | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Cash and cash equivalents | 6,247 | 8,333 |
Trade accounts receivable, net of allowance | 16,621 | 16,740 |
Other current assets | 2,424 | 3,303 |
Current assets of discontinued operations | 25,292 | 28,376 |
Net equipment, software, and leasehold improvements | 445 | 401 |
Other intangible assets | 16,371 | 19,286 |
Goodwill | 45,520 | 45,520 |
Other non-current assets | 1,919 | 2,604 |
Total assets of discontinued operations | 89,547 | 96,187 |
Accrued royalties, fulfillment and other current liabilities | 59,504 | 65,310 |
Notes payable | 7,945 | 7,331 |
Total current liabilities of discontinued operations | 70,713 | 74,484 |
Other non-current liabilities | 3,264 | 1,843 |
Current liabilities of discontinued operations | 67,449 | 72,641 |
Napster Disposal | Music Royalties | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Other current assets | 1,200 | 2,000 |
Accrued royalties, fulfillment and other current liabilities | $ 49,700 | $ 54,200 |
Acquisitions and Dispositions_3
Acquisitions and Dispositions - Napster Disposal Income Statement Disclosures (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Net loss from discontinued operations, net of tax | $ (1) | $ (997) | $ (2,466) | $ (3,872) |
Net income (loss) attributable to noncontrolling interests of discontinued operations | 6 | (232) | (364) | (752) |
Net loss from discontinued operations attributable to RealNetworks | (7) | (765) | (2,102) | (3,120) |
Napster Disposal | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Revenue | 23,563 | 27,302 | 73,225 | 80,222 |
Cost of revenue | 17,438 | 21,986 | 56,280 | 65,408 |
Gross profit | 6,125 | 5,316 | 16,945 | 14,814 |
Operating expenses | 5,828 | 6,472 | 19,013 | 18,642 |
Operating income (loss) | 297 | (1,156) | (2,068) | (3,828) |
Other income (expenses) | (261) | 236 | (299) | 253 |
Income (loss) from discontinued operations before income taxes | 36 | (920) | (2,367) | (3,575) |
Income tax expense | 37 | 77 | 99 | 297 |
Net loss from discontinued operations, net of tax | (1) | (997) | (2,466) | (3,872) |
Net income (loss) attributable to noncontrolling interests of discontinued operations | 6 | (232) | (364) | (752) |
Net loss from discontinued operations attributable to RealNetworks | $ (7) | $ (765) | $ (2,102) | $ (3,120) |
Acquisitions - Net Assets Acqui
Acquisitions - Net Assets Acquired (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Business Acquisition [Line Items] | ||
Goodwill | $ 17,073 | $ 16,908 |
Acquisitions - Intangible Asset
Acquisitions - Intangible Assets Acquired (Details) | Jan. 18, 2019USD ($) |
Rhapsody America LLC | |
Business Acquisition [Line Items] | |
Acquired finite lived intangible assets | $ 23,700,000 |
Fair Value Measurements (Financ
Fair Value Measurements (Financial Assets Measured at Fair Value on a Recurring Basis) (Detail) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | $ 17,875 | $ 13,352 |
Amortized Cost | 17,875 | 13,352 |
Accrued royalties, fulfillment and other current liabilities, Napster acquisition contingent consideration | 12,400 | 2,800 |
Simple Agreements for Future Equity | 2,106 | |
Total liabilities | 14,506 | 12,600 |
Cash and Cash Equivalents | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 8,472 | |
Amortized Cost | 8,472 | |
Cash and Cash Equivalents | Cash | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 13,245 | 8,472 |
Amortized Cost | 13,245 | 8,472 |
Cash and Cash Equivalents | Money market funds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 0 | |
Amortized Cost | 0 | |
Restricted cash equivalents | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 4,630 | 4,880 |
Amortized Cost | 4,630 | 4,880 |
Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 16,745 | 11,972 |
Simple Agreements for Future Equity | 0 | |
Total liabilities | 0 | 0 |
Level 1 | Cash and Cash Equivalents | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 8,472 | |
Level 1 | Cash and Cash Equivalents | Cash | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 13,245 | 8,472 |
Level 1 | Cash and Cash Equivalents | Money market funds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 0 | |
Level 1 | Restricted cash equivalents | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 3,500 | 3,500 |
Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 1,130 | 1,380 |
Simple Agreements for Future Equity | 0 | |
Total liabilities | 0 | 0 |
Level 2 | Cash and Cash Equivalents | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 0 | |
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 | |
Level 2 | Restricted cash equivalents | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 1,130 | 1,380 |
Level 3 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 0 | 0 |
Simple Agreements for Future Equity | 2,106 | |
Total liabilities | 14,506 | 12,600 |
Level 3 | Cash and Cash Equivalents | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 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 | |
Level 3 | Restricted cash equivalents | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 0 | 0 |
Napster | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Accrued royalties, fulfillment and other current liabilities, Napster acquisition contingent consideration | 12,400 | 2,800 |
Napster acquisition contingent consideration | 9,800 | |
Napster | Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Accrued royalties, fulfillment and other current liabilities, Napster acquisition contingent consideration | 0 | 0 |
Napster acquisition contingent consideration | 0 | |
Napster | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Accrued royalties, fulfillment and other current liabilities, Napster acquisition contingent consideration | 0 | 0 |
Napster acquisition contingent consideration | 0 | |
Napster | Level 3 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Accrued royalties, fulfillment and other current liabilities, Napster acquisition contingent consideration | $ 12,400 | 2,800 |
Napster acquisition contingent consideration | $ 9,800 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |||
Unrestricted Cash And Cash Equivalents Minimum Amount Required | $ 3,500 | $ 3,500 | |
Fair value adjustments to contingent consideration liability | (200) | $ 700 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Fair value adjustments to contingent consideration liability | $ (200) | $ 700 | |
Cash received for future issuance of equity | $ 2,100 |
Accrued and Other Current Lia_3
Accrued and Other Current Liabilities (Detail) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Product Warranty Liability [Line Items] | ||
Royalties and other fulfillment costs | $ 1,157 | $ 1,535 |
Employee compensation, commissions and benefits | 4,172 | 4,655 |
Sales, VAT and other taxes payable | 1,020 | 801 |
Operating Lease, Liability, Current | 3,577 | 3,643 |
Other | 2,946 | 4,061 |
Total accrued and other liabilities | 25,272 | 17,495 |
Accrued royalties, fulfillment and other current liabilities, Napster acquisition contingent consideration | 12,400 | 2,800 |
Napster | ||
Product Warranty Liability [Line Items] | ||
Accrued royalties, fulfillment and other current liabilities, Napster acquisition contingent consideration | 12,400 | 2,800 |
Napster | Level 3 | ||
Product Warranty Liability [Line Items] | ||
Accrued royalties, fulfillment and other current liabilities, Napster acquisition contingent consideration | $ 12,400 | $ 2,800 |
Debt_2
Debt - USD ($) | 1 Months Ended | 6 Months Ended | 9 Months Ended | ||||
May 31, 2020 | Apr. 30, 2020 | Jun. 30, 2019 | Sep. 30, 2020 | Dec. 31, 2019 | Aug. 31, 2019 | Dec. 31, 2018 | |
Related Party Transaction [Line Items] | |||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 10,000,000 | ||||||
Related Party Transaction, Accounts Receivable Purchasing Agreement, Percent Upfront | 90.00% | ||||||
Unrestricted Cash And Cash Equivalents Minimum Amount Required | $ 3,500,000 | ||||||
Long-term Debt | 2,883,000 | $ 3,900,000 | |||||
Debt Issuance Costs, Line of Credit Arrangements, Gross | 600,000 | ||||||
Current debt | 3,900,000 | $ 0 | |||||
Notes Payable to Banks [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Proceeds from issuance of debt | $ 2,900,000 | ||||||
Proceeds from issuance of debt | $ 2,900,000 | ||||||
Other Current Assets [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Unamortized Debt Issuance Expense | $ 300,000 | ||||||
Napster | Notes Payable to Banks [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Proceeds from issuance of debt | $ 1,700,000 | ||||||
Proceeds from issuance of debt | $ 1,700,000 | ||||||
Revolving Credit Facility [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Debt Instrument, Description of Variable Rate Basis | 5.5 | ||||||
Revolving Credit Facility [Member] | Napster | |||||||
Related Party Transaction [Line Items] | |||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 15,000,000 | ||||||
Line of Credit Facility, Interest Rate at Period End | 2.25% | ||||||
Current debt | $ 7,900,000 | ||||||
Prime Rate [Member] | Revolving Credit Facility [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Debt Instrument, Basis Spread on Variable Rate | 0.50% | ||||||
EURIBOR [Member] | Revolving Credit Facility [Member] | Napster | |||||||
Related Party Transaction [Line Items] | |||||||
Debt Instrument, Basis Spread on Variable Rate | 2.25% | ||||||
Minimum | EURIBOR [Member] | Revolving Credit Facility [Member] | Napster | |||||||
Related Party Transaction [Line Items] | |||||||
Debt Instrument, Basis Spread on Variable Rate | 0.00% |
Debt_2_3
Debt - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Apr. 30, 2020 | Sep. 30, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | Aug. 31, 2019 | |
Debt Instrument [Line Items] | |||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 10,000,000 | ||||
Line of Credit Facility [Line Items] | |||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 10,000,000 | ||||
Unrestricted Cash And Cash Equivalents Minimum Amount Required | $ 3,500,000 | $ 3,500,000 | |||
Long-term Debt | 2,883,000 | 2,883,000 | $ 3,900,000 | ||
Debt Issuance Costs, Line of Credit Arrangements, Gross | 600,000 | 600,000 | |||
Other Long-term Debt, Noncurrent | 3,900,000 | 3,900,000 | |||
Other Current Assets [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Unamortized Debt Issuance Expense | $ 300,000 | $ 300,000 | |||
Notes Payable to Banks [Member] | |||||
Debt Disclosure [Abstract] | |||||
Proceeds from issuance of debt | $ 2,900,000 | ||||
Debt Instrument [Line Items] | |||||
Proceeds from issuance of debt | $ 2,900,000 | ||||
Debt instrument, term | 2 years | ||||
Debt instrument rate | 1.00% | 1.00% | |||
Revolving Credit Facility [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Debt Instrument, Description of Variable Rate Basis | 5.5 | ||||
Revolving Credit Facility [Member] | Prime Rate [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Debt Instrument, Basis Spread on Variable Rate | 0.50% |
Restructuring Charges (Details)
Restructuring Charges (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Restructuring Cost and Reserve [Line Items] | ||
Costs incurred and charged to expense | $ 1,097 | $ 1,587 |
Restructuring Reserve [Roll Forward] | ||
Accrued liability beginning balance | 284 | |
Costs incurred and charged to expense | 965 | |
Cash payments | (998) | |
Accrued liability ending balance | 251 | |
Employee Separation Costs | ||
Restructuring Cost and Reserve [Line Items] | ||
Costs incurred and charged to expense | 965 | 1,050 |
Restructuring Reserve [Roll Forward] | ||
Accrued liability beginning balance | 110 | |
Costs incurred and charged to expense | 965 | |
Cash payments | (824) | |
Accrued liability ending balance | 251 | |
Asset Related and Other Costs | ||
Restructuring Cost and Reserve [Line Items] | ||
Costs incurred and charged to expense | 132 | $ 537 |
Restructuring Reserve [Roll Forward] | ||
Accrued liability beginning balance | 174 | |
Costs incurred and charged to expense | 0 | |
Cash payments | (174) | |
Accrued liability ending balance | $ 0 |
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 | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |||||
Net loss from continuing operations attributable to RealNetworks | $ (3,231) | $ (5,203) | $ (10,890) | $ (10,517) | |
Net loss from discontinued operations attributable to RealNetworks | (7) | (765) | (2,102) | (3,120) | |
Net loss attributable to RealNetworks | $ (3,238) | $ (5,968) | $ (9,202) | $ (12,992) | $ (13,637) |
Shares used to compute basic net income (loss) per share | 38,270 | 38,062 | 38,247 | 37,944 | |
Dilutive effect of stock based awards | 0 | 0 | 0 | 0 | |
Shares used to compute diluted net income (loss) per share | 38,270 | 38,062 | 38,247 | 37,944 | |
Continuing operations, basic (USD per share) | $ (0.08) | $ (0.14) | $ (0.28) | $ (0.28) | |
Discontinued operations, basic (USD per share) | 0 | (0.02) | (0.06) | (0.08) | |
Basic net income (loss) per share (USD per share) | (0.08) | (0.16) | (0.34) | (0.36) | |
Continuing operations, diluted (USD per share) | (0.08) | (0.14) | (0.28) | (0.28) | |
Discontinued operations, diluted (USD per share) | 0 | (0.02) | (0.06) | (0.08) | |
Diluted net income (loss) per share (USD per share) | $ (0.08) | $ (0.16) | $ (0.34) | $ (0.36) |
Earnings (Loss) Per Share (Addi
Earnings (Loss) Per Share (Additional Information) (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Feb. 29, 2020 | Dec. 31, 2019 | |
Earnings Per Share [Abstract] | ||||||
Shares of common stock excluded from the calculation of diluted net income per share because of antidilutive effect | 6,700,000 | 8,000,000 | 6,900,000 | 7,600,000 | ||
Additional funding in exchange for preferred stock | $ 10 | $ 0.8 | ||||
Share of preferred stock in exchange for additional funding | 8,064,516 | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Shares of common stock excluded from the calculation of diluted net income per share because of antidilutive effect | 6,700,000 | 8,000,000 | 6,900,000 | 7,600,000 |
Commitments and Contingencies C
Commitments and Contingencies Commitments and Contingencies (Details) $ in Millions | Apr. 06, 2020USD ($) |
Korean Music Copyright Association (KOMCA) | |
Loss Contingencies [Line Items] | |
Damages sought | $ 2.6 |
Segment Information (Additional
Segment Information (Additional Information) (Detail) | 3 Months Ended |
Sep. 30, 2020Segment | |
Segment Reporting [Abstract] | |
Number of reporting segments | 3 |
Segment Reporting Information [Line Items] | |
Number of reporting segments | 3 |
Segment Information (Segment Re
Segment Information (Segment Results) (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Segment Reporting Information [Line Items] | ||||
Revenue | $ 16,554 | $ 17,691 | $ 50,461 | $ 48,491 |
Cost of revenue | 4,062 | 4,292 | 12,429 | 13,022 |
Gross profit | 12,492 | 13,399 | 38,032 | 35,469 |
Operating expenses | 15,342 | 18,508 | 48,504 | 58,201 |
Operating income (loss) | (2,850) | (5,109) | (10,472) | (22,732) |
Costs incurred and charged to expense | 965 | |||
Consumer Media | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 2,543 | 3,632 | 9,197 | 8,738 |
Mobile Services | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 6,400 | 6,895 | 19,551 | 20,831 |
Games | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 7,611 | 7,164 | 21,713 | 18,922 |
Operating Segments | Consumer Media | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 2,543 | 3,632 | 9,197 | 8,738 |
Cost of revenue | 593 | 705 | 1,723 | 2,341 |
Gross profit | 1,950 | 2,927 | 7,474 | 6,397 |
Operating expenses | 2,092 | 2,692 | 6,754 | 8,688 |
Operating income (loss) | (142) | 235 | 720 | (2,291) |
Operating Segments | Mobile Services | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 6,400 | 6,895 | 19,551 | 20,831 |
Cost of revenue | 1,511 | 1,721 | 4,989 | 5,634 |
Gross profit | 4,889 | 5,174 | 14,562 | 15,197 |
Operating expenses | 5,577 | 7,143 | 18,847 | 22,142 |
Operating income (loss) | (688) | (1,969) | (4,285) | (6,945) |
Operating Segments | Games | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 7,611 | 7,164 | 21,713 | 18,922 |
Cost of revenue | 1,955 | 1,934 | 5,707 | 5,259 |
Gross profit | 5,656 | 5,230 | 16,006 | 13,663 |
Operating expenses | 5,152 | 5,151 | 15,051 | 15,476 |
Operating income (loss) | 504 | 79 | 955 | (1,813) |
Corporate | ||||
Segment Reporting Information [Line Items] | ||||
Cost of revenue | 3 | (68) | 10 | (212) |
Operating expenses | 2,521 | 3,522 | 7,852 | 11,895 |
Operating income (loss) | $ (2,524) | $ (3,454) | $ (7,862) | $ (11,683) |
Segment Information (Revenue by
Segment Information (Revenue by Geographic Region) (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenue | $ 16,554 | $ 17,691 | $ 50,461 | $ 48,491 |
United States | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenue | 11,855 | 10,588 | 32,810 | 29,571 |
Europe | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenue | 2,206 | 2,616 | 6,840 | 8,069 |
Rest of the World | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenue | $ 2,493 | $ 4,487 | $ 10,811 | $ 10,851 |
Segment Information (Long-Lived
Segment Information (Long-Lived Assets by Geographic Region) (Detail) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | $ 27,735 | $ 29,526 |
United States | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | 18,889 | 20,515 |
Europe | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | 7,475 | 7,221 |
Rest of the World | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | $ 1,371 | $ 1,790 |
Related Party Transactions Rela
Related Party Transactions Related Party Transactions (Details) - USD ($) $ in Thousands | 1 Months Ended | 9 Months Ended | ||||||
Feb. 28, 2015 | Sep. 30, 2020 | Aug. 03, 2020 | Jul. 17, 2020 | Feb. 29, 2020 | Dec. 31, 2019 | Jan. 18, 2019 | Dec. 01, 2016 | |
Related Party Transaction [Line Items] | ||||||||
Payments for restructuring | $ 998 | |||||||
Additional funding in exchange for preferred stock | $ 10,000 | $ 800 | ||||||
Share of preferred stock in exchange for additional funding | 8,064,516 | |||||||
Maximum Ownership Mr Glaser Can Have | 38.50% | |||||||
Ownership Percentage | 82.00% | |||||||
Convertible Notes Payable | $ 1,400 | $ 700 | ||||||
Rhapsody America LLC | Other Debt Obligations [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Loans and Leases Receivable, Related Parties | $ 3,900 | |||||||
Rhapsody America LLC | Debt [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Loans and Leases Receivable, Related Parties | 5,400 | |||||||
Rhapsody America LLC | ||||||||
Related Party Transaction [Line Items] | ||||||||
Percentage of shares acquired | 42.00% | |||||||
Interest acquired, percent | 84.00% | |||||||
Rhapsody America LLC | ||||||||
Related Party Transaction [Line Items] | ||||||||
Loan principal to related party | 1,100 | $ 5,000 | ||||||
Notes Payable, Related Parties, Aggregate Amount | $ 10,000 | $ 10,000 | ||||||
Other Debt Obligations [Member] | Warrants issued by Rhapsody | ||||||||
Related Party Transaction [Line Items] | ||||||||
Total expected term for warrant | 10 years |