Company Press Release
SOURCE: RealNetworks, Inc.
RealNetworks Announces Fourth Quarter and Year-End Results
Marks 10th Consecutive Quarter of Revenue Growth
SEATTLE, Jan. 28 /PRNewswire/ -- RealNetworks(TM), Inc. (Nasdaq: RNWK - news), the recognized leader in streaming
media, today announced its results for the quarter and year ended December 31, 1997.
For the fourth quarter of 1997, RealNetworks reported total revenues of $10.3 million, an increase of 80% from $5.7 million
for the fourth quarter of 1996. The Company's net loss for the fourth quarter was $2.6 million or ($0.09) per share on 30.6
million shares outstanding, compared to a net loss of $1.5 million or ($0.05) per share on 28.0 million shares outstanding for
the same period of 1996.
For 1997, the Company as a whole reported total revenue of $32.7 million, an increase of 134% from $14.0 million in 1996.
The net loss for 1997 was $11.2 million or ($0.40) per share on 28.9 million shares outstanding, compared to $3.8 million or
($0.14) per share for 1996 on 27.8 million shares outstanding.
''Capping a very successful year, RealNetworks achieved strong growth in the fourth quarter of 1997, led by our introduction
and shipment of RealSystem(TM) 5.0,'' said Rob Glaser, chairman and chief executive officer, RealNetworks, Inc.
''RealSystem 5.0 drove rapid adoption of server technology by both our Internet and Intranet customers. On the client side,
we saw a 50% increase in player distribution compared to the third quarter 1997.''
Intranet customers demonstrated strong demand for RealSystem 5.0 solutions. For instance, 3Com Corporation deployed the
RealSystem 5.0 Intranet solution on 15,000 corporate desktops, allowing 3Com employees worldwide to view live or
on-demand video programming such as corporate communications or on-line interactive training. Novell, Mercedes Benz,
Eastman Kodak and Lockheed Martin were among other companies adopting RealSystem 5.0 Intranet solutions in the fourth
quarter of 1997.
Leading broadcast, entertainment and technology companies, including Media One, MGM, PBS, America Online's
Entertainment Asylum and Paramount Digital Entertainment were among the new customers adopting RealSystem 5.0 Internet
solutions in the fourth quarter. RealNetworks also worked with electronic commerce vendors on support of RealSystem 5.0
commerce features that allow customers to directly generate revenue from streaming media. CyberCash, Cyber Source, Open
Market and VeriFone were among the leading ecommerce companies announcing their support for RealSystem 5.0.
In conjunction with the release of RealSystem 5.0, RealNetworks and Macromedia announced RealFlash(TM), a data type
jointly developed by the two companies. RealFlash combines the best Web animation technology from Macromedia and the
leading streaming technology from RealNetworks to deliver high quality full length animated programs synchronized with
RealAudio(R) over a 28.8 modem.
Since the introduction of RealSystem 5.0 in the fourth quarter, the number of Web pages using streaming media has grown by
50%. 85% of those Web pages are using RealAudio, RealVideo(R) and RealFlash content (Source: HotBot search extensions,
12/19/97). Following the RealSystem 5.0 release, RealNetworks saw downloads of its RealPlayer(TM) client software
increase to more than 600,000 per week, bringing total player downloads to 35 million.
On November 26, 1997, RealNetworks completed its initial public offering of 3,450,000 shares of common stock, which
included over-allotments exercised by the underwriters. Net proceeds from the offering were approximately $38.5 million. As
of December 31, 1997, the Company had $92.0 million in cash and investments.
RealNetworks announced several strategic partnerships in 1997. In the third quarter, RealNetworks and MCI launched the
Real Broadcast Network(TM) (RBN), a service designed to allow customers to reach large-scale Internet audiences. Also in
the third quarter, RealNetworks and Microsoft Corporation [Nasdaq:MSFT - news] announced an agreement allowing
Microsoft to distribute RealNetworks free RealPlayer client software in its Internet Explorer 4.0 Web browser.
Most recently, RealNetworks announced a continuation of its Microsoft relationship when it announced this week that
RealSystem 5.0 Servers would support Microsoft Windows Media Player. Also announced this week was a marketing and
technology agreement with Sun Microsystems, Inc. RealNetworks and Sun Microsystems announced plans to deliver
RealSystem 5.0 Internet and Intranet solutions on the scalable Sun Solaris platform.
About RealNetworks
RealNetworks, (Nasdaq: RNWK - news), based in Seattle, WA, is the recognized leader in the streaming media market. It
develops and markets software products and services designed to enable users of personal computers and other consumer
electronic devices to send and receive audio, video and other multimedia services using the Web. RealNetworks can be found
on the World Wide Web at www.real.com.
NOTE: This announcement contains forward looking statements that involve risks and uncertainties, including those relating to
the company's ability to continue to maintain its leadership in streaming media and to advance its product and service offerings.
Actual results may differ materially from the results predicted and reported results should not be considered an indication of
future performance. The potential risks and uncertainties include, among others, the company's limited operating history; the
unpredictability of future revenues; the increasingly competitive environment for streaming media products and services; the
evolving nature of the market for the company's products and services; the ability of the company to continue to innovate and
sustain or grow demand for its products; the importance of strategic relationships with leading companies in the broadcast,
entertainment and technology industries, and the company's dependence on third parties for sales, technology, content and
distribution. More information about potential risk factors that could affect the company's business and financial results is
included in the company's registration statement on Form S-1 declared effective on November 20, 1997 which is on file with
the Securities and Exchange Commission.
RealSystem, RealPlayer, Real Broadcast Network, RealAudio and RealVideo are trademarks or registered trademark of
RealNetworks, Inc. All other companies or products listed herein are trademarks or registered trademarks of their respective
owners. RealFlash is a trademark of Macromedia, Inc. and RealNetworks, Inc. Macromedia and Flash are registered
trademarks of Macromedia, Inc. |
