Exhibit 99.1
REALNETWORKS ANNOUNCES FIRST QUARTER 2012 RESULTS
SEATTLE – May 2, 2012– RealNetworks, Inc. (Nasdaq: RNWK) today announced results for the first quarter ended March 31, 2012.
Quarterly Summary:
| • | Revenue of $67.0 million |
| • | Net loss of $(17.0) million or $(0.49) per share |
| • | Adjusted EBITDA of $(7.4) million |
| • | Cash and short term investments of $167.0 million as of March 31, 2012 |
| • | Closed $120 million sale of patent assets to Intel on April 5, 2012 |
“In the first quarter, we made progress on our turn-around plan for RealNetworks,” said Thomas Nielsen, President and CEO of RealNetworks. “While it will take a while for financial results to reflect the work we are doing, we are confident that we are on the right path in simplifying our company and developing a strategy for future growth.”
First Quarter Results
For the first quarter of 2012, revenue was $67.0 million, a sequential decrease of 17% from the fourth quarter of 2011, and a decrease of 23% compared with the first quarter of 2011. Revenue trends in each of RealNetworks’ businesses in the first quarter of 2012 compared with the year-earlier quarter were: a 9% decrease in Emerging Products revenue to $10.2 million, a 22% decrease in Core Products revenue to $37.7 million and a 32% decrease in Games revenue to $19.1 million.
Net loss for the first quarter of 2012 was $(17.0) million, or $(0.49) per share, compared with a net loss of $(12.3) million, or $(0.36) per share, in the first quarter of 2011. The loss for the most-recent quarter was affected primarily by the decline in revenue. The loss widened in spite of a decline in restructuring costs to $(1.6) million, compared with $(6.9) million in the first quarter of 2011; a decline in RealNetworks’ share of Rhapsody losses to $(0.4) million in the first quarter of 2012 from $(3.3) million in the first quarter of 2011; and lower tax expense of $(0.2) million, compared with $(3.6) million in the year-ago quarter. The year-ago net loss reflected a $6.4 million insurance reimbursement for legal expenses.
Adjusted EBITDA for the first quarter was $(7.4) million, excluding costs related to the Intel transaction, compared with adjusted EBITDA of $7.5 million for the first quarter of 2011. A reconciliation of GAAP operating income (loss) to adjusted EBITDA is provided in the financial tables that accompany this release.
As of March 31, 2012, RealNetworks had $167.0 million in unrestricted cash, cash equivalents and short-term investments, of which approximately $42.6 million is held in foreign jurisdictions, compared with cash of $185.1 million at Dec. 31, 2011. The $167.0 million at March 31, 2012, does not include the $120.0 million cash proceeds from the sale of patent assets to Intel, which closed on April 5, 2012.
In addition, RealNetworks had $55.8 million in restricted cash and available-for-sale securities as of March 31, 2012, an increase of $8.4 million from Dec. 31, 2011.
Segment Operating Results
| 2012 | 2011 | 2011 | ||||||||||
| Q1 | Q4 | Q1 | ||||||||||
| (in thousands) | ||||||||||||
Revenue | ||||||||||||
Core Products | $ | 37,697 | $ | 46,693 | $ | 48,107 | ||||||
Emerging Products | 10,159 | 11,974 | 11,135 | |||||||||
Games | 19,108 | 21,552 | 28,059 | |||||||||
Corporate | — | — | — | |||||||||
|
|
|
|
|
| |||||||
Total | $ | 66,964 | $ | 80,219 | $ | 87,301 | ||||||
|
|
|
|
|
| |||||||
Operating Income (loss) | ||||||||||||
Core Products | $ | 1,801 | $ | (10,733 | ) | $ | 7,737 | |||||
Emerging Products | 508 | 26 | (296 | ) | ||||||||
Games | (983 | ) | 228 | 2,711 | ||||||||
Corporate | (19,868 | ) | (13,198 | ) | (15,818 | ) | ||||||
|
|
|
|
|
| |||||||
Total | $ | (18,542 | ) | $ | (23,677 | ) | $ | (5,666 | ) | |||
|
|
|
|
|
| |||||||
Adjusted EBITDA | ||||||||||||
Core Products | $ | 4,400 | $ | 11,382 | $ | 10,260 | ||||||
Emerging Products | 754 | 986 | (188 | ) | ||||||||
Games | (324 | ) | 883 | 3,340 | ||||||||
Corporate | (12,247 | ) | (9,411 | ) | (5,870 | ) | ||||||
|
|
|
|
|
| |||||||
Total | $ | (7,417 | ) | $ | 3,840 | $ | 7,542 | |||||
|
|
|
|
|
| |||||||
Business Outlook
For the second quarter of 2012, RealNetworks expects revenue of $66 million to $69 million. The company expects revenue from Core Products to increase sequentially and decline year-over-year, and revenue from Emerging Products to be flat sequentially and decline year-over-year. The company expects revenue in Games to decline sequentially and year-over-year. RealNetworks expects to report a second-quarter adjusted EBITDA loss similar to that of the first quarter.
Anticipating significant restructuring activities in 2012, which we expect will include acquisitions and divestitures as well as changes in RealNetworks’ operating segments, RealNetworks is not providing full-year guidance for 2012.
The foregoing forward-looking statements reflect RealNetworks’ expectations as of May 2, 2012. It is not RealNetworks’ general practice to update these forward-looking statements until its next quarterly results announcement.
2
Webcast and Conference Call Information
The company will host an audio Webcast conference call to review results and discuss the company’s operations for the first quarter at 5:00 p.m. ET on May 2. The Webcast will be available at: http://investor.realnetworks.com
Webcast participants will need RealPlayer® to hear the webcast, which can be downloaded at www.real.com.
The on-demand Webcast will be available beginning approximately two hours following the conclusion of the live Webcast.
Conference Call Details
5:00 p.m. ET / 2:00 p.m. PT
Dial in:
888-323-9869 Domestic
517-308-9139 International
Passcode: First Quarter Earnings
Leader: Thomas Nielsen
Telephonic replay will be available until 8 p.m. ET, May 16, 2012.
Replay dial in:
800-944-8789 Domestic
402-220-3521 International
For More Information:
Marj Charlier, Investor Relations at RealNetworks, Inc.
206-892-6785 or mcharlier@real.com
Press Only:
Barbara Krause, Krause Taylor Associates for RealNetworks, Inc.
408-981-2429 or barbara@krause-taylor.com.
About RealNetworks:
RealNetworks creates innovative applications and services that make it easy to connect with and enjoy digital media. RealNetworks invented the streaming media category in 1995 and continues to connect consumers with their digital media both directly and through partners, aiming to support every network, device, media type and social network. RealNetworks’ corporate information is located at http://www.realnetworks.com/about-us
About Non-GAAP Financial Measures
To supplement RealNetworks’ condensed consolidated financial statements presented in accordance with GAAP in this press release, the company also discloses certain non-GAAP financial measures, including adjusted EBITDA and adjusted EBITDA by reporting segment, which management believes provide investors with useful information.
3
In the financial tables of our earnings press release, RealNetworks has included reconciliations of GAAP operating income (loss) to adjusted EBITDA and to adjusted EBITDA by reporting segment.
The rationale for management’s use of non-GAAP measures is included in the supplementary materials presented with the first quarter earnings materials. Please refer to Exhibit 99.2 (“Information Regarding Non-GAAP Financial Measures”) to the company’s report on Form 8-K, which is being submitted today to the SEC.
Forward-Looking Statements: This press release contains forward-looking statements that involve risks and uncertainties, including statements relating to RealNetworks’ current expectations for revenue, adjusted EBITDA, the development of its strategy for future growth and plans to undertake restructuring activities, including acquisitions and divestitures. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements. Actual results may differ materially from the results predicted. Factors that could cause actual results to differ from the results predicted include: fluctuations in foreign currencies; RealNetworks’ ability to realize operating efficiencies, growth and other benefits from the implementation of its strategic initiatives; the emergence of new entrants and competition in the market for digital media products and services; other competitive risks, including the growth of competing technologies, products and services; the potential outcomes and effects of claims and legal proceedings on RealNetworks’ business, prospects, financial condition or results of operations; risks associated with key customer or strategic relationships, business acquisitions and the introduction of new products and services; changes in consumer and advertising spending in response to disruptions in the global financial markets; and changes in RealNetworks’ effective tax rate. More information about potential risk factors that could affect RealNetworks’ business and financial results is included in RealNetworks’ annual report on Form 10-K for the most recent year ended December 31, its quarterly reports on Form 10-Q and in other reports and documents filed by RealNetworks from time to time with the Securities and Exchange Commission. The preparation of RealNetworks’ financial statements and forward-looking financial guidance requires the company to make estimates and assumptions that affect the reported amount of assets and liabilities and the reported amounts of revenues and expenses during the reported period. Actual results may differ materially from these estimates under different assumptions or conditions. The company assumes no obligation to update any forward-looking statements or information, which are in effect as of their respective dates.
RealNetworks, RealPlayer and GameHouse are trademarks or registered trademarks of RealNetworks, Inc. or its subsidiaries. All other companies or products listed herein are trademarks or registered trademarks of their respective owners.
4
RealNetworks, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
| Quarters Ended March 31, | ||||||||
| 2012 | 2011 | |||||||
| (in thousands, except per share data) | ||||||||
Net revenue | $ | 66,964 | $ | 87,301 | ||||
Cost of revenue | 27,427 | 32,066 | ||||||
|
|
|
| |||||
Gross profit | 39,537 | 55,235 | ||||||
|
|
|
| |||||
Sale of patents and other technology assets, net of costs (A) | (1,580 | ) | — | |||||
Operating expenses: | ||||||||
Research and development | 17,818 | 19,895 | ||||||
Sales and marketing | 23,796 | 28,480 | ||||||
General and administrative | 13,276 | 5,622 | ||||||
Restructuring and other charges | 1,609 | 6,904 | ||||||
|
|
|
| |||||
Total operating expenses | 56,499 | 60,901 | ||||||
|
|
|
| |||||
Operating income (loss) | (18,542 | ) | (5,666 | ) | ||||
|
|
|
| |||||
Other income (expenses): | ||||||||
Interest income, net | 644 | 379 | ||||||
Equity in net loss of Rhapsody investment | (368 | ) | (3,281 | ) | ||||
Other income (expense), net | 1,475 | (122 | ) | |||||
|
|
|
| |||||
Total other income (expense), net | 1,751 | (3,024 | ) | |||||
|
|
|
| |||||
Income (loss) before income taxes | (16,791 | ) | (8,690 | ) | ||||
Income tax (expense) benefit | (224 | ) | (3,615 | ) | ||||
|
|
|
| |||||
Net income (loss) attributable to common shareholders | $ | (17,015 | ) | $ | (12,305 | ) | ||
|
|
|
| |||||
Basic net income (loss) per share | $ | (0.49 | ) | $ | (0.36 | ) | ||
Diluted net income (loss) per share | $ | (0.49 | ) | $ | (0.36 | ) | ||
Shares used to compute basic net income (loss) per share | 34,488 | 34,066 | ||||||
Shares used to compute diluted net income (loss) per share | 34,488 | 34,066 | ||||||
| (A) | On April 5, 2012, RealNetworks completed the sale of certain patents and other technology assets to Intel for a cash purchase of $120.0 million. Because the transaction closed subsequent to March 31, 2012, the gain on the transaction will be reflected in our financial statements for the second quarter of 2012. For the first quarter of 2012, $1.6 million of direct costs of the transaction were incurred. |
RealNetworks, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(Unaudited)
| March 31, 2012 | December 31, 2011 | |||||||
| (in thousands) | ||||||||
| ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 83,332 | $ | 106,333 | ||||
Short-term investments | 83,681 | 78,739 | ||||||
Trade accounts receivable, net | 40,160 | 41,165 | ||||||
Deferred costs, current portion | 1,338 | 1,424 | ||||||
Prepaid expenses and other current assets | 24,984 | 21,902 | ||||||
|
|
|
| |||||
Total current assets | 233,495 | 249,563 | ||||||
|
|
|
| |||||
Equipment, software, and leasehold improvements, at cost: | ||||||||
Equipment and software | 108,173 | 104,352 | ||||||
Leasehold improvements | 26,224 | 25,947 | ||||||
|
|
|
| |||||
Total equipment, software, and leasehold improvements | 134,397 | 130,299 | ||||||
Less accumulated depreciation and amortization | 95,672 | 92,825 | ||||||
|
|
|
| |||||
Net equipment, software, and leasehold improvements | 38,725 | 37,474 | ||||||
Restricted cash equivalents and investments | 10,173 | 10,168 | ||||||
Equity method investments | 7,430 | 7,798 | ||||||
Available for sale securities | 45,630 | 37,204 | ||||||
Other assets | 2,960 | 2,954 | ||||||
Deferred costs, non-current portion | 691 | 843 | ||||||
Deferred tax assets, net, non-current portion | 18,320 | 18,419 | ||||||
Other intangible assets, net | 6,177 | 7,169 | ||||||
Goodwill | 6,297 | 6,198 | ||||||
|
|
|
| |||||
Total assets | $ | 369,898 | $ | 377,790 | ||||
|
|
|
| |||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 17,935 | $ | 17,151 | ||||
Accrued and other liabilities | 58,783 | 59,194 | ||||||
Deferred revenue, current portion | 11,270 | 11,835 | ||||||
Accrued loss on excess office facilities, current portion | 505 | 596 | ||||||
|
|
|
| |||||
Total current liabilities | 88,493 | 88,776 | ||||||
Deferred revenue, non-current portion | 220 | 195 | ||||||
Accrued loss on excess office facilities, non-current portion | 1,843 | 2,151 | ||||||
Deferred rent | 2,867 | 2,944 | ||||||
Deferred tax liabilities, net, non-current portion | 1,217 | 1,443 | ||||||
Other long-term liabilities | 9,884 | 10,994 | ||||||
|
|
|
| |||||
Total liabilities | 104,524 | 106,503 | ||||||
|
|
|
| |||||
Shareholders’ equity | 265,374 | 271,287 | ||||||
|
|
|
| |||||
Total liabilities and shareholders’ equity | $ | 369,898 | $ | 377,790 | ||||
|
|
|
| |||||
RealNetworks, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
| Quarters Ended March 31, | ||||||||
| 2012 | 2011 | |||||||
| (in thousands) | ||||||||
Cash flows from operating activities: | ||||||||
Net income (loss) | $ | (17,015 | ) | $ | (12,305 | ) | ||
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||||||||
Depreciation and amortization | 4,118 | 3,819 | ||||||
Stock-based compensation | 2,343 | 3,453 | ||||||
Equity in net loss of Rhapsody investment | 368 | 3,281 | ||||||
Excess tax benefit from stock option exercises | — | (26 | ) | |||||
Deferred income taxes, net | (19 | ) | (161 | ) | ||||
Realized translation gain | (1,611 | ) | — | |||||
Other | (3 | ) | 105 | |||||
Net change in certain operating assets and liabilities | (5,423 | ) | (3,352 | ) | ||||
|
|
|
| |||||
Net cash provided by (used in) operating activities | (17,242 | ) | (5,186 | ) | ||||
|
|
|
| |||||
Cash flows from investing activities: | ||||||||
Purchases of equipment, software, and leasehold improvements | (2,798 | ) | (1,165 | ) | ||||
Purchases of short-term investments | (9,969 | ) | (22,091 | ) | ||||
Proceeds from sales and maturities of short-term investments | 5,027 | 38,020 | ||||||
|
|
|
| |||||
Net cash provided by (used in) investing activities | (7,740 | ) | 14,764 | |||||
|
|
|
| |||||
Cash flows from financing activities: | ||||||||
Proceeds from issuance of common stock (stock options and stock purchase plan) | 675 | 1,101 | ||||||
Excess tax benefit from stock option exercises | — | 26 | ||||||
|
|
|
| |||||
Net cash provided by (used in) financing activities | 675 | 1,127 | ||||||
|
|
|
| |||||
Effect of exchange rate changes on cash and cash equivalents | 1,306 | 2,385 | ||||||
|
|
|
| |||||
Net increase (decrease) in cash and cash equivalents | (23,001 | ) | 13,090 | |||||
Cash and cash equivalents, beginning of period | 106,333 | 236,018 | ||||||
|
|
|
| |||||
Cash and cash equivalents, end of period | $ | 83,332 | $ | 249,108 | ||||
|
|
|
| |||||
RealNetworks, Inc. and Subsidiaries
Supplemental Financial Information
(Unaudited)
| 2012 | 2011 | |||||||||||||||||||
| Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||
| (in thousands) | ||||||||||||||||||||
Net Revenue by Line of Business: | ||||||||||||||||||||
Core Products (A) | $ | 37,697 | $ | 46,693 | $ | 50,705 | $ | 45,735 | $ | 48,107 | ||||||||||
Emerging Products (B) | 10,159 | 11,974 | 10,764 | 12,717 | 11,135 | |||||||||||||||
Games (C) | 19,108 | 21,552 | 22,945 | 25,300 | 28,059 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total net revenue | $ | 66,964 | $ | 80,219 | $ | 84,414 | $ | 83,752 | $ | 87,301 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Core Products Revenue by Product: | ||||||||||||||||||||
SaaS (D) | $ | 23,463 | $ | 28,255 | $ | 30,381 | $ | 30,216 | $ | 30,526 | ||||||||||
Systems Integration / Professional Services (E) | 426 | 771 | 3,844 | 388 | 1,840 | |||||||||||||||
Technology Licensing (F) | 6,207 | 9,246 | 6,250 | 6,508 | 6,425 | |||||||||||||||
Consumer Subscriptions (G) | 7,601 | 8,421 | 10,230 | 8,623 | 9,316 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total Core Products net revenue | $ | 37,697 | $ | 46,693 | $ | 50,705 | $ | 45,735 | $ | 48,107 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net Revenue by Geography: | ||||||||||||||||||||
United States | $ | 31,814 | $ | 37,298 | $ | 38,969 | $ | 41,984 | $ | 44,469 | ||||||||||
Rest of world | 35,150 | 42,921 | 45,445 | 41,768 | 42,832 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total net revenue | $ | 66,964 | $ | 80,219 | $ | 84,414 | $ | 83,752 | $ | 87,301 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Product Metrics (subscribers and ICM presented as greater than): | ||||||||||||||||||||
Addressable subscribers of mobile operators under contract (H) | 725,000 | 725,000 | 700,000 | 775,000 | 775,000 | |||||||||||||||
SaaS subscribers (I) | 30,500 | 30,050 | 34,000 | 34,550 | 35,900 | |||||||||||||||
Monthly SaaS ARPU (in cents) (J) | $ | 0.15 | $ | 0.19 | $ | 0.17 | $ | 0.18 | $ | 0.18 | ||||||||||
ICM delivered in billions (K) | 166 | 165 | 162 | 157 | 151 | |||||||||||||||
Consumer subscribers (L) | 400 | 425 | 500 | 475 | 500 | |||||||||||||||
Net Revenue by Line of Business:
| (A) | The Core Products segment primarily includes revenue from SaaS services, system integration and professional services to carriers and mobile handset companies, sales of technology licenses of our software products such as Helix for handsets, consumer subscriptions such as SuperPass and our international radio subscription services. |
| (B) | The Emerging Products segment primarily includes revenue from RealPlayer and related products, such as the distribution of third party software products, advertising on RealPlayer websites and sales of RealPlayerPlus software licenses to consumers. |
| (C) | The Games segment primarily includes revenue from sales of games licenses, online games subscription services, advertising on game sites and social network sites, games syndication services, microtransactions from online and social games and sales of mobile games. |
Core Products Revenue by Product:
| (D) | Software as a Service (SaaS) revenue includes revenue from music on demand (MOD), video on demand (VOD), ringtones, ringback tones (RBT) and intercarrier messaging services provided to network service providers, who are largely mobile phone networks. |
| (E) | Systems Integrations / Professional Services revenue includes professional services, other than those associated with software sales, provided to mobile carriers and handset manufacturers. |
| (F) | Technology Licensing includes revenue from sales of software and other intellectual property licenses such as Helix server licenses and Helix software licenses for handsets. |
| (G) | Consumer Subscriptions includes revenue from SuperPass as well as our international radio subscription services. |
Product Metrics:
| (H) | Total subscribers reported at the end of the quarter of mobile carriers that offer one or more of our SaaS services, other than intercarrier messaging services, to their customers. |
| (I) | SaaS subscribers include RBT, MOD and VOD services, measured at the end of the quarter. |
| (J) | Monthly SaaS ARPU (Average Revenue Per User) is calculated by dividing (a) the total quarterly revenue from SaaS subscription services, including RBT, MOD, VOD, by (b) the number of SaaS subscribers at the end of the quarter, and dividing the resulting quotient by three. |
| (K) | ICM (Intercarrier message) represents the total number of messages delivered across our messaging platform during the quarter. |
| (L) | Consumer subscribers primarily includes our SuperPass and GamePass products. |
RealNetworks, Inc. and Subsidiaries
Segment Results of Operations
(Unaudited)
| 2012 | 2011 | |||||||||||
| Q1 | Q4 | Q1 | ||||||||||
Core Products | ||||||||||||
Net revenue | $ | 37,697 | $ | 46,693 | $ | 48,107 | ||||||
Cost of revenue | 17,828 | 20,867 | 20,984 | |||||||||
Impairment of deferred costs | — | 19,329 | — | |||||||||
|
|
|
|
|
| |||||||
Gross profit | 19,869 | 6,497 | 27,123 | |||||||||
Gross margin | 53 | % | 14 | % | 56 | % | ||||||
Operating expenses | 18,068 | 17,230 | 19,386 | |||||||||
|
|
|
|
|
| |||||||
Operating income (loss) | $ | 1,801 | $ | (10,733 | ) | $ | 7,737 | |||||
Adjusted EBITDA | $ | 4,400 | $ | 11,382 | $ | 10,260 | ||||||
Emerging Products | ||||||||||||
Net revenue | $ | 10,159 | $ | 11,974 | $ | 11,135 | ||||||
Cost of revenue | 2,105 | 3,448 | 1,540 | |||||||||
Impairment of deferred costs | — | 633 | — | |||||||||
|
|
|
|
|
| |||||||
Gross profit | 8,054 | 7,893 | 9,595 | |||||||||
Gross margin | 79 | % | 66 | % | 86 | % | ||||||
Operating expenses | 7,546 | 7,867 | 9,891 | |||||||||
|
|
|
|
|
| |||||||
Operating income (loss) | $ | 508 | $ | 26 | $ | (296 | ) | |||||
Adjusted EBITDA | $ | 754 | $ | 986 | $ | (188 | ) | |||||
Games | ||||||||||||
Net revenue | $ | 19,108 | $ | 21,552 | $ | 28,059 | ||||||
Cost of revenue | 6,661 | 6,875 | 8,534 | |||||||||
|
|
|
|
|
| |||||||
Gross profit | 12,447 | 14,677 | 19,525 | |||||||||
Gross margin | 65 | % | 68 | % | 70 | % | ||||||
Operating expenses | 13,430 | 14,449 | 16,814 | |||||||||
|
|
|
|
|
| |||||||
Operating income (loss) | $ | (983 | ) | $ | 228 | $ | 2,711 | |||||
Adjusted EBITDA | $ | (324 | ) | $ | 883 | $ | 3,340 | |||||
Corporate | ||||||||||||
Net revenue | $ | — | $ | — | $ | — | ||||||
Cost of revenue | 833 | 899 | 1,008 | |||||||||
|
|
|
|
|
| |||||||
Gross profit | (833 | ) | (899 | ) | (1,008 | ) | ||||||
Gross margin | N/A | N/A | N/A | |||||||||
Sale of patents and other technology assets, net of costs | 1,580 | — | — | |||||||||
Operating expenses | 17,455 | 12,299 | 14,810 | |||||||||
|
|
|
|
|
| |||||||
Operating income (loss) | $ | (19,868 | ) | $ | (13,198 | ) | $ | (15,818 | ) | |||
Adjusted EBITDA | $ | (12,247 | ) | $ | (9,411 | ) | $ | (5,870 | ) | |||
Total | ||||||||||||
Net revenue | $ | 66,964 | $ | 80,219 | $ | 87,301 | ||||||
Cost of revenue | 27,427 | 32,089 | 32,066 | |||||||||
Impairment of deferred costs | — | 19,962 | — | |||||||||
|
|
|
|
|
| |||||||
Gross profit | 39,537 | 28,168 | 55,235 | |||||||||
Gross margin | 59 | % | 35 | % | 63 | % | ||||||
Sale of patents and other technology assets, net of costs | 1,580 | — | — | |||||||||
Operating expenses | 56,499 | 51,845 | 60,901 | |||||||||
|
|
|
|
|
| |||||||
Operating income (loss) | $ | (18,542 | ) | $ | (23,677 | ) | $ | (5,666 | ) | |||
Adjusted EBITDA | $ | (7,417 | ) | $ | 3,840 | $ | 7,542 | |||||
RealNetworks, Inc. and Subsidiaries
Reconciliation of segment GAAP operating income (loss) to adjusted EBITDA by reporting segment
(Unaudited)
| 2012 | 2011 | |||||||||||
| Q1 | Q4 | Q1 | ||||||||||
| Core Products | ||||||||||||
Reconciliation of segment GAAP operating income (loss) to adjusted EBITDA by reporting segment: | ||||||||||||
Operating income (loss) | $ | 1,801 | $ | (10,733 | ) | $ | 7,737 | |||||
Acquisitions related intangible asset amortization | 802 | 789 | 474 | |||||||||
Depreciation and amortization | 1,797 | 1,997 | 2,049 | |||||||||
Impairment of deferred costs | — | 19,329 | — | |||||||||
|
|
|
|
|
| |||||||
Adjusted EBITDA | $ | 4,400 | $ | 11,382 | $ | 10,260 | ||||||
| Emerging Products | ||||||||||||
Reconciliation of segment GAAP operating income (loss) to adjusted EBITDA by reporting segment: | ||||||||||||
Operating income (loss) | $ | 508 | $ | 26 | $ | (296 | ) | |||||
Acquisitions related intangible asset amortization | 79 | 79 | — | |||||||||
Depreciation and amortization | 167 | 248 | 108 | |||||||||
Impairment of deferred costs | — | 633 | — | |||||||||
|
|
|
|
|
| |||||||
Adjusted EBITDA | $ | 754 | $ | 986 | $ | (188 | ) | |||||
| Games | ||||||||||||
Reconciliation of segment GAAP operating income (loss) to adjusted EBITDA by reporting segment: | ||||||||||||
Operating income (loss) | $ | (983 | ) | $ | 228 | $ | 2,711 | |||||
Acquisitions related intangible asset amortization | 209 | 229 | 254 | |||||||||
Depreciation and amortization | 450 | 426 | 375 | |||||||||
|
|
|
|
|
| |||||||
Adjusted EBITDA | $ | (324 | ) | $ | 883 | $ | 3,340 | |||||
| Corporate | ||||||||||||
Reconciliation of segment GAAP operating income (loss) to adjusted EBITDA by reporting segment: | ||||||||||||
Operating income (loss) | $ | (19,868 | ) | $ | (13,198 | ) | $ | (15,818 | ) | |||
Other income (expense), net | 1,475 | 188 | (122 | ) | ||||||||
Depreciation and amortization | 614 | 608 | 559 | |||||||||
Restructuring and other charges | 1,609 | 800 | 6,904 | |||||||||
Stock-based compensation | 2,343 | 2,663 | 2,607 | |||||||||
Sale of patents and other technology assets, net of costs | 1,580 | — | — | |||||||||
Gain on excess office facilities | — | (472 | ) | — | ||||||||
|
|
|
|
|
| |||||||
Adjusted EBITDA | $ | (12,247 | ) | $ | (9,411 | ) | $ | (5,870 | ) | |||
| Total | ||||||||||||
Reconciliation of GAAP operating income (loss) to adjusted EBITDA: | ||||||||||||
Operating income (loss) | $ | (18,542 | ) | $ | (23,677 | ) | $ | (5,666 | ) | |||
Other income (expense), net | 1,475 | 188 | (122 | ) | ||||||||
Acquisitions related intangible asset amortization | 1,090 | 1,097 | 728 | |||||||||
Depreciation and amortization | 3,028 | 3,279 | 3,091 | |||||||||
Gain on excess office facilities | — | (472 | ) | — | ||||||||
Restructuring and other charges | 1,609 | 800 | 6,904 | |||||||||
Stock-based compensation | 2,343 | 2,663 | 2,607 | |||||||||
Impairment of deferred costs | — | 19,962 | — | |||||||||
Sale of patents and other technology assets, net of costs | 1,580 | — | — | |||||||||
|
|
|
|
|
| |||||||
Adjusted EBITDA | $ | (7,417 | ) | $ | 3,840 | $ | 7,542 | |||||