REALNETWORKS ANNOUNCES STRONG FIRST
QUARTER RESULTS
Broad Adoption of RealNetworks Streaming Media Products
Fuels 97% Annualized Revenue Growth
Seattle, WA --April 21, 1998 --
RealNetworksT, Inc. (NASDAQ, "RNWK"),
the recognized leader in streaming media,
today reported its financial results for the first
quarter ended March 31, 1998. Net revenues for the first quarter of 1998 were
$12.5 million, an increase of 21% from $10.3 million for the previous quarter ended
December 31, 1997, and an increase of 97% from $6.4 million for the first quarter
of 1997. Excluding acquisition charges, the Company reported a net loss for the
quarter of $2.2 million or ($0.07) per common share, compared to a net loss of
$2.6 million or ($0.09) per share on a pro forma basis in the previous quarter, and
a net loss of $3.7 million or ($0.17) per share on a pro forma basis for the first
quarter of 1997. The Company incurred a one-time charge in the first quarter of
1998 of $17.9 million associated with the acquisition of Vivo Software, Inc. As a
result, net loss per common share for the first quarter was ($0.65).
"RealNetworks showed strong continued growth in the first quarter, built on rapid
acceptance and deployment of our products," said Rob Glaser, chairman and
chief executive officer, RealNetworks, Inc. "Our progress this quarter represents a
major step in our continuing efforts to transform the Internet into the next mass
medium."
During the quarter, RealNetworks entered into a number of strategic licensing
agreements with companies such as Sun Microsystems, Digital Equipment
Corporation, Intergraph Computer Systems and SCO. In addition, the Company
recently announced several broadcast relationships including ABC News Radio,
AudioNet, CNN Interactive, TCI, Quincy Jones Radio and Rolling Stone Network.
These business relationships are designed to maximize market penetration,
enhance adoption of the Company's technologies and aid content development on
the Internet and corporate intranets. The Company also announced support for
Synchronized Multimedia Integration Language (SMIL), a proposed standard by
the World Wide Web Consortium (W3C) which will provide a common
standards-based layout language for streaming media on the Internet and
corporate intranets.
On March 24, 1998, the Company completed the acquisition of Vivo Software,
Inc., the leader and award-winning developer of streaming media creation tools.
The acquisition was accounted for as a purchase transaction and resulted in a
non-recurring charge of $17.9 million to first quarter earnings.
"We are very pleased with our successful acquisition of Vivo Software," said
Glaser. "Vivo has world-class, easy-to-use streaming media tools and has done a
great job of developing the market for HTTP streaming. The addition of Vivo's
leading technology and talented people will significantly enhance RealNetworks
efforts to provide content creators with a broad range of powerful tools to produce
streaming media content."
About RealNetworks
RealNetworks, Inc., 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.
For more information, please contact:
Mark Klebanoff, Chief Financial Officer, RealNetworks (206) 674-2330
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, financial condition
and results of operations is included in the company's Form 10-K for the year
ended December 31, 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.
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