RealNetworks Announces Record Revenues for Second Quarter
Reaches Milestone with More than 27 Million Registered Users of the
RealPlayer
SEATTLE, July 21 /PRNewswire/ -- RealNetworks, Inc. (Nasdaq: RNWK - news
), the recognized leader in streaming media, today reported results for
the second quarter of fiscal 1998. Revenues for the quarter ended June
30, 1998, were $15.1 million, a 115% increase over revenue of $7.0
million reported in the second quarter of 1997. This represents the 12th
consecutive quarter of revenue growth. Net loss for the quarter was $2.1
million, or ($0.07) per share, compared to a net loss of $2.7 million,
or ($0.12) per share on a pro-forma basis, in the prior year quarter.
For the six month period ended June 30, 1998, revenues were $27.6
million, a 106% increase from revenues of $13.4 million for the
comparable prior year period. Net loss for the six month period ended
June 30, 1998, including a charge of $17.9 million related to the VIVO
acquisition in the first quarter of 1998, was $22.2 million or $0.70 per
share. Net loss for the six month period excluding this charge was $4.3
million, or ($0.14) per share, compared to a net loss of $6.4 million,
or ($0.29) per share on a pro-forma basis, in the prior year period.
''RealNetworks showed continued momentum in the second quarter, with
strengths across all of RealNetworks' core businesses,'' said Rob
Glaser, chairman and CEO, RealNetworks, Inc. ''We also continued to
expand the streaming media market while maintaining more than 85% share
of the category.''
RealNetworks also announced today that it has reached more than 27
million registered users of its RealPlayer(TM), an increase of 13
million since the end of 1997. In addition, RealNetworks announced today
that there have been a total of more than 50 million end-user downloads
of the RealPlayer, making it the most downloaded application on the
Internet after the two Internet browsers. Currently, more than 85% of
all Web pages on the Internet with streaming media use industry leading
RealAudio(R), RealVideo(R) or RealFlash(TM) and more than 200,000 hours
of live RealAudio(R), and RealVideo programming are available each week.
During the second quarter, RealNetworks held the second annual
RealNetworks Conference. This event brought together more than 1,200
attendees from the business, entertainment, developer and technology
industries. More than forty companies exhibited new products developed
for RealNetworks streaming media solutions. At the RealNetworks
Conference, RealNetworks introduced RealSystem(TM) G2, the next
generation streaming media system for the Internet and corporate
intranets. RealSystem(TM) G2 is the first open, extensible
standards-based streaming media system, which delivers new rich media
experiences to users through the synchronization and playback of
multiple data types. RealSystem G2 provides the first commercial
implementation of two critical industry standards; Real-Time Streaming
Protocol (''RTSP'') and Synchronized Multimedia Integration Language
(''SMIL'').
''Now that the industry has agreed on a standard for authoring and
delivering Web-based multimedia, the streaming media market is poised
for mass market adoption,'' said Glaser. ''We were very pleased to see
more than 100 companies pledge their support and commitment to develop
on RealSystem(TM) G2 and these important new Internet standards.''
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 real.com.
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 annual report on Form 10-K for the
year ended December 31, 1997 and, from time to time, in other reports
filed by the Company with the Securities and Exchange Commission.
RealSystem. RealPlayer, RealAudio(R), and RealVideo are trademarks or
registered trademarks 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.
RealNetworks, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
Proforma Results
Excluding
Non-Recurring
Acquisition Charges
Quarter Six Months Six Months
Ended Ended Ended
June 30, June 30, June 30,
1997 1998 1997 1998 1998
(In thousands, except per share data)
Net revenues:
Software license fees$5,532 $10,796 $10,070 $20,214 $20,214
Service revenues 907 3,495 2,189 6,117 6,117
Advertising 571 765 1,107 1,227 1,227
Total net revenues 7,010 15,056 13,366 27,558 27,558
Cost of revenues:
Sofware license fees 591 1,800 1,134 3,386 3,386
Service revenues 285 755 1,612 1,276 1,276
Advertising 157 406 308 738 738
Total cost of
revenues 1,033 2,961 3,054 5,400 5,400
Gross profit 5,977 12,095 10,312 22,158 22,158
Operating expenses:
Research and
development 2,738 4,789 5,463 9,208 9,208
Selling and marketing 4,811 8,135 9,161 14,965 14,965
General and
administrative 1,325 2,467 2,496 4,567 4,567
Non-recurring
acquisition charges -- -- -- 17,879 --
Total operating
expenses 8,874 15,391 17,120 46,619 28,740
Operating loss (2,897) (3,296) (6,808) (24,461) (6,582)
Other income, net 231 1,192 436 2,269 2,269
Net loss $(2,666) $(2,104) $(6,372) $(22,192) (4,313)
Historical basic
and diluted net
loss per share $(3.99) $(0.07) $(10.17) $(0.70)
Shares used to compute
historical basic and
diluted net loss
per share 685 32,119 640 31,551
Performa basic and
diluted net loss
per share (A) $(0.12) $(0.29) $(0.14)
Shares used to compute
proforma basic and
diluted net loss
per share (B) 22,743 22,698 31,551
(A) The calculation of proforma basic and diluted net loss per share
for the six months ended June 30, 1998 excludes $17,879 of non-recurring
acquisition charges. (B) Shores used to compute proforma basic and
diluted net loss per short for the quarter ended June 30, 1997 and the
six months ended June 30, 1997 include 22,058 shares of preferred stock
outstanding during the respective periods.
Net Revenues by Geography
Quarter Ended June 30, Six Months Ended June 30,
1997 1998 1997 1998
North America $4,801 $9,828 $9,804 $17,840
Europe 1,063 1,615 1,576 2,634
Rest of world 1,146 1,196 1,986 2,250
Subtotal 7,010 12,639 13,366 22,724
Microsoft license revenue -- 2,417 -- 4,834
Total $7,010 $15,056 $13,366 $27,558
RealNetworks, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
December 31, June 30,
1997 1998
(unaudited)
(in thousands)
ASSETS
Current assets:
Cash, cash equivalents and
short-term investments $ 92,028 $ 98,033
Trade accounts receivable, net of allowance
for doubtful accounts and sales returns 5,073 5,345
Other receivables 10,706 227
Prepaid expenses and other current assets 2,052 2,847
Total current assets 109,859 106,452
Property and equipment, net 5,143 5,348
Investment in joint venture 816 599
Goodwill -- 1,414
Other assets 886 790
Total assets $ 116,704 $ 114,603
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $2,136 $2,881
Accrued compensation 974 1,266
Other accrued expenses 2,679 5,843
Deferred revenue 16,550 20,438
Total current liabilities 22,339 30,428
Deferred revenue, excluding current portion 15,500 10,667
Notes payable 963 1,002
Shareholders' equity:
Preferred stock -- --
Common stock 28 29
Special common stock 3 3
Additional paid-in capital 95,557 112,405
Accumulated deficit (17,524) (39,716)
Accumulated other comprehensive loss (162) (215)
Total shareholders' equity 77,902 72,506
Total liabilities and shareholders' equity $ 116,704 $ 114,603
SOURCE: RealNetworks, Inc. |
