RealNetworks Announces Record Revenues for Second Quarter
PR Newswire - July 21, 1998 18:16
Reaches Milestone with More than 27 Million Registered Users of the RealPlayer
SEATTLE, July 21 /PRNewswire/ -- RealNetworks, Inc. (Nasdaq: RNWK), 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.
/CONTACT: Paul Bialek, Chief Financial Officer of RealNetworks,
206-674-2342/
/Web site: real.com
(RNWK)
another good daytrade, SR |
