Attached files
| file | filename |
|---|---|
| EX-99.1 - EXHIBIT 99.1 - REALNETWORKS INC | exhibit991erq1-16.htm |
| EX-99.2 - EXHIBIT 99.2 - REALNETWORKS INC | exhibit992erq1-16.htm |
| 8-K - 8-K - REALNETWORKS INC | er8-kshellq12016.htm |
Exhibit 99.3
RealNetworks, Inc. and Subsidiaries
Segment Results of Operations
(Unaudited)
2014 | 2015 | |||||||||||||||||||||||||||||||||||||||
Q1 | Q2 | Q3 | Q4 | YTD | Q1 | Q2 | Q3 | Q4 | YTD | |||||||||||||||||||||||||||||||
(in thousands) | (in thousands) | |||||||||||||||||||||||||||||||||||||||
Consumer Media | ||||||||||||||||||||||||||||||||||||||||
Net revenue | $ | 15,215 | $ | 8,556 | $ | 6,527 | $ | 8,823 | $ | 39,121 | $ | 7,989 | $ | 7,281 | $ | 6,495 | $ | 6,848 | $ | 28,613 | ||||||||||||||||||||
Cost of revenue | 3,344 | 3,375 | 3,240 | 3,507 | 13,466 | 3,464 | 3,567 | 3,142 | 3,084 | 13,257 | ||||||||||||||||||||||||||||||
Gross profit | 11,871 | 5,181 | 3,287 | 5,316 | 25,655 | 4,525 | 3,714 | 3,353 | 3,764 | 15,356 | ||||||||||||||||||||||||||||||
Gross margin | 78 | % | 61 | % | 50 | % | 60 | % | 66 | % | 57 | % | 51 | % | 52 | % | 55 | % | 54 | % | ||||||||||||||||||||
Operating expenses | 14,511 | 9,018 | 8,997 | 9,424 | 41,950 | 6,594 | 6,867 | 6,421 | 6,644 | 26,526 | ||||||||||||||||||||||||||||||
Operating income (loss) | $ | (2,640 | ) | $ | (3,837 | ) | $ | (5,710 | ) | $ | (4,108 | ) | $ | (16,295 | ) | $ | (2,069 | ) | $ | (3,153 | ) | $ | (3,068 | ) | $ | (2,880 | ) | $ | (11,170 | ) | ||||||||||
Adjusted EBITDA | $ | (2,041 | ) | $ | (3,199 | ) | $ | (5,101 | ) | $ | (3,446 | ) | $ | (13,787 | ) | $ | (1,558 | ) | $ | (2,675 | ) | $ | (2,549 | ) | $ | (1,842 | ) | $ | (8,624 | ) | ||||||||||
Mobile Services | ||||||||||||||||||||||||||||||||||||||||
Net revenue | $ | 19,913 | $ | 23,182 | $ | 19,228 | $ | 17,658 | $ | 79,981 | $ | 14,504 | $ | 18,578 | $ | 16,484 | $ | 16,369 | $ | 65,935 | ||||||||||||||||||||
Cost of revenue | 12,313 | 14,706 | 13,146 | 12,028 | 52,193 | 10,308 | 13,982 | 12,512 | 11,032 | 47,834 | ||||||||||||||||||||||||||||||
Gross profit | 7,600 | 8,476 | 6,082 | 5,630 | 27,788 | 4,196 | 4,596 | 3,972 | 5,337 | 18,101 | ||||||||||||||||||||||||||||||
Gross margin | 38 | % | 37 | % | 32 | % | 32 | % | 35 | % | 29 | % | 25 | % | 24 | % | 33 | % | 27 | % | ||||||||||||||||||||
Operating expenses | 14,422 | 14,594 | 12,129 | 12,382 | 53,527 | 11,961 | 12,099 | 11,093 | 9,158 | 44,311 | ||||||||||||||||||||||||||||||
Operating income (loss) | $ | (6,822 | ) | $ | (6,118 | ) | $ | (6,047 | ) | $ | (6,752 | ) | $ | (25,739 | ) | $ | (7,765 | ) | $ | (7,503 | ) | $ | (7,121 | ) | $ | (3,821 | ) | $ | (26,210 | ) | ||||||||||
Adjusted EBITDA | $ | (5,508 | ) | $ | (4,748 | ) | $ | (5,064 | ) | $ | (5,589 | ) | $ | (20,909 | ) | $ | (6,793 | ) | $ | (6,540 | ) | $ | (6,239 | ) | $ | (2,958 | ) | $ | (22,530 | ) | ||||||||||
Games | ||||||||||||||||||||||||||||||||||||||||
Net revenue | $ | 10,596 | $ | 9,087 | $ | 8,402 | $ | 9,025 | $ | 37,110 | $ | 8,104 | $ | 8,095 | $ | 7,844 | $ | 6,705 | $ | 30,748 | ||||||||||||||||||||
Cost of revenue | 3,129 | 2,717 | 2,573 | 2,655 | 11,074 | 2,794 | 2,286 | 2,513 | 1,698 | 9,291 | ||||||||||||||||||||||||||||||
Gross profit | 7,467 | 6,370 | 5,829 | 6,370 | 26,036 | 5,310 | 5,809 | 5,331 | 5,007 | 21,457 | ||||||||||||||||||||||||||||||
Gross margin | 70 | % | 70 | % | 69 | % | 71 | % | 70 | % | 66 | % | 72 | % | 68 | % | 75 | % | 70 | % | ||||||||||||||||||||
Operating expenses | 9,766 | 8,769 | 8,658 | 9,977 | 37,170 | 8,683 | 8,719 | 6,431 | 5,253 | 29,086 | ||||||||||||||||||||||||||||||
Operating income (loss) | $ | (2,299 | ) | $ | (2,399 | ) | $ | (2,829 | ) | $ | (3,607 | ) | $ | (11,134 | ) | $ | (3,373 | ) | $ | (2,910 | ) | $ | (1,100 | ) | $ | (246 | ) | $ | (7,629 | ) | ||||||||||
Adjusted EBITDA | $ | (1,674 | ) | $ | (1,798 | ) | $ | (2,246 | ) | $ | (3,024 | ) | $ | (8,742 | ) | $ | (2,783 | ) | $ | (2,354 | ) | $ | (716 | ) | $ | (25 | ) | $ | (5,878 | ) | ||||||||||
Corporate | ||||||||||||||||||||||||||||||||||||||||
Net revenue | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||||
Cost of revenue | — | (12 | ) | (31 | ) | (309 | ) | (352 | ) | (19 | ) | (3 | ) | (77 | ) | 14 | (85 | ) | ||||||||||||||||||||||
Extinguishment of liability | (10,580 | ) | — | — | — | (10,580 | ) | — | — | — | — | — | ||||||||||||||||||||||||||||
Gross profit | 10,580 | 12 | 31 | 309 | 10,932 | 19 | 3 | 77 | (14 | ) | 85 | |||||||||||||||||||||||||||||
Gross margin | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | ||||||||||||||||||||||||||||||
Operating expenses | 7,695 | 6,490 | 6,208 | 6,524 | 26,917 | 5,824 | 7,144 | 10,750 | 545 | 24,263 | ||||||||||||||||||||||||||||||
Operating income (loss) | $ | 2,885 | $ | (6,478 | ) | $ | (6,177 | ) | $ | (6,215 | ) | $ | (15,985 | ) | $ | (5,805 | ) | $ | (7,141 | ) | $ | (10,673 | ) | $ | (559 | ) | $ | (24,178 | ) | |||||||||||
Adjusted EBITDA | $ | (4,695 | ) | $ | (3,336 | ) | $ | (1,946 | ) | $ | (3,140 | ) | $ | (13,117 | ) | $ | (3,040 | ) | $ | (3,632 | ) | $ | (2,690 | ) | $ | 601 | $ | (8,761 | ) | |||||||||||
Total | ||||||||||||||||||||||||||||||||||||||||
Net revenue | $ | 45,724 | $ | 40,825 | $ | 34,157 | $ | 35,506 | $ | 156,212 | $ | 30,597 | $ | 33,954 | $ | 30,823 | $ | 29,922 | $ | 125,296 | ||||||||||||||||||||
Cost of revenue | 18,786 | 20,786 | 18,928 | 17,881 | 76,381 | 16,547 | 19,832 | 18,090 | 15,828 | 70,297 | ||||||||||||||||||||||||||||||
Extinguishment of liability | (10,580 | ) | — | — | — | (10,580 | ) | — | — | — | — | — | ||||||||||||||||||||||||||||
Gross profit | 37,518 | 20,039 | 15,229 | 17,625 | 90,411 | 14,050 | 14,122 | 12,733 | 14,094 | 54,999 | ||||||||||||||||||||||||||||||
Gross margin | 82 | % | 49 | % | 45 | % | 50 | % | 58 | % | 46 | % | 42 | % | 41 | % | 47 | % | 44 | % | ||||||||||||||||||||
Operating expenses | 46,394 | 38,871 | 35,992 | 38,307 | 159,564 | 33,062 | 34,829 | 34,695 | 21,600 | 124,186 | ||||||||||||||||||||||||||||||
Operating income (loss) | $ | (8,876 | ) | $ | (18,832 | ) | $ | (20,763 | ) | $ | (20,682 | ) | $ | (69,153 | ) | $ | (19,012 | ) | $ | (20,707 | ) | $ | (21,962 | ) | $ | (7,506 | ) | $ | (69,187 | ) | ||||||||||
Adjusted EBITDA | $ | (13,918 | ) | $ | (13,081 | ) | $ | (14,357 | ) | $ | (15,199 | ) | $ | (56,555 | ) | $ | (14,174 | ) | $ | (15,201 | ) | $ | (12,194 | ) | $ | (4,224 | ) | $ | (45,793 | ) | ||||||||||
RealNetworks, Inc. and Subsidiaries
Reconciliation of segment operating income (loss) to adjusted EBITDA by segment
(Unaudited)
2014 | 2015 | |||||||||||||||||||||||||||||||||||||||
Q1 | Q2 | Q3 | Q4 | YTD | Q1 | Q2 | Q3 | Q4 | YTD | |||||||||||||||||||||||||||||||
(in thousands) | (in thousands) | |||||||||||||||||||||||||||||||||||||||
Consumer Media | ||||||||||||||||||||||||||||||||||||||||
Reconciliation of segment GAAP operating income (loss) to adjusted EBITDA by segment: | ||||||||||||||||||||||||||||||||||||||||
Operating income (loss) | $ | (2,640 | ) | $ | (3,837 | ) | $ | (5,710 | ) | $ | (4,108 | ) | $ | (16,295 | ) | $ | (2,069 | ) | $ | (3,153 | ) | $ | (3,068 | ) | $ | (2,880 | ) | $ | (11,170 | ) | ||||||||||
Acquisitions related intangible asset amortization | 60 | 103 | 89 | 65 | 317 | — | — | — | — | — | ||||||||||||||||||||||||||||||
Depreciation and amortization | 539 | 535 | 520 | 597 | 2,191 | 511 | 478 | 519 | 1,038 | 2,546 | ||||||||||||||||||||||||||||||
Adjusted EBITDA | $ | (2,041 | ) | $ | (3,199 | ) | $ | (5,101 | ) | $ | (3,446 | ) | $ | (13,787 | ) | $ | (1,558 | ) | $ | (2,675 | ) | $ | (2,549 | ) | $ | (1,842 | ) | $ | (8,624 | ) | ||||||||||
Mobile Services | ||||||||||||||||||||||||||||||||||||||||
Reconciliation of segment GAAP operating income (loss) to adjusted EBITDA by segment: | ||||||||||||||||||||||||||||||||||||||||
Operating income (loss) | $ | (6,822 | ) | $ | (6,118 | ) | $ | (6,047 | ) | $ | (6,752 | ) | $ | (25,739 | ) | $ | (7,765 | ) | $ | (7,503 | ) | $ | (7,121 | ) | $ | (3,821 | ) | $ | (26,210 | ) | ||||||||||
Acquisitions related intangible asset amortization | 607 | 650 | 301 | 302 | 1,860 | 392 | 384 | 389 | 379 | 1,544 | ||||||||||||||||||||||||||||||
Depreciation and amortization | 707 | 720 | 682 | 861 | 2,970 | 580 | 579 | 493 | 484 | 2,136 | ||||||||||||||||||||||||||||||
Adjusted EBITDA | $ | (5,508 | ) | $ | (4,748 | ) | $ | (5,064 | ) | $ | (5,589 | ) | $ | (20,909 | ) | $ | (6,793 | ) | $ | (6,540 | ) | $ | (6,239 | ) | $ | (2,958 | ) | $ | (22,530 | ) | ||||||||||
Games | ||||||||||||||||||||||||||||||||||||||||
Reconciliation of segment GAAP operating income (loss) to adjusted EBITDA by segment: | ||||||||||||||||||||||||||||||||||||||||
Operating income (loss) | $ | (2,299 | ) | $ | (2,399 | ) | $ | (2,829 | ) | $ | (3,607 | ) | $ | (11,134 | ) | $ | (3,373 | ) | $ | (2,910 | ) | $ | (1,100 | ) | $ | (246 | ) | $ | (7,629 | ) | ||||||||||
Acquisitions related intangible asset amortization | 314 | 314 | 314 | 314 | 1,256 | 293 | 312 | 170 | 24 | 799 | ||||||||||||||||||||||||||||||
Depreciation and amortization | 311 | 287 | 269 | 269 | 1,136 | 297 | 244 | 214 | 197 | 952 | ||||||||||||||||||||||||||||||
Adjusted EBITDA | $ | (1,674 | ) | $ | (1,798 | ) | $ | (2,246 | ) | $ | (3,024 | ) | $ | (8,742 | ) | $ | (2,783 | ) | $ | (2,354 | ) | $ | (716 | ) | $ | (25 | ) | $ | (5,878 | ) | ||||||||||
Corporate | ||||||||||||||||||||||||||||||||||||||||
Reconciliation of segment GAAP operating income (loss) to adjusted EBITDA by segment: | ||||||||||||||||||||||||||||||||||||||||
Operating income (loss) | $ | 2,885 | $ | (6,478 | ) | $ | (6,177 | ) | $ | (6,215 | ) | $ | (15,985 | ) | $ | (5,805 | ) | $ | (7,141 | ) | $ | (10,673 | ) | $ | (559 | ) | $ | (24,178 | ) | |||||||||||
Other income (expense), net | (77 | ) | (95 | ) | 325 | (10 | ) | 143 | 443 | (112 | ) | 297 | (122 | ) | 506 | |||||||||||||||||||||||||
Depreciation and amortization | 445 | 553 | 556 | 675 | 2,229 | 430 | 394 | 1,273 | 336 | 2,433 | ||||||||||||||||||||||||||||||
Restructuring and other charges | 1,216 | 541 | 2,048 | 1,187 | 4,992 | 485 | 1,964 | 3,114 | (284 | ) | 5,279 | |||||||||||||||||||||||||||||
Stock-based compensation | 1,337 | 1,673 | 1,148 | 1,046 | 5,204 | 1,329 | 1,254 | 1,178 | 937 | 4,698 | ||||||||||||||||||||||||||||||
Lease exit and related charges, net of sublease income | 79 | 470 | 154 | 177 | 880 | 78 | 9 | 2,121 | 293 | 2,501 | ||||||||||||||||||||||||||||||
Extinguishment of liability | (10,580 | ) | — | — | — | (10,580 | ) | — | — | — | — | — | ||||||||||||||||||||||||||||
Adjusted EBITDA | $ | (4,695 | ) | $ | (3,336 | ) | $ | (1,946 | ) | $ | (3,140 | ) | $ | (13,117 | ) | $ | (3,040 | ) | $ | (3,632 | ) | $ | (2,690 | ) | $ | 601 | $ | (8,761 | ) | |||||||||||
Total | ||||||||||||||||||||||||||||||||||||||||
Reconciliation of segment GAAP operating income (loss) to adjusted EBITDA by segment: | ||||||||||||||||||||||||||||||||||||||||
Operating income (loss) | $ | (8,876 | ) | $ | (18,832 | ) | $ | (20,763 | ) | $ | (20,682 | ) | $ | (69,153 | ) | $ | (19,012 | ) | $ | (20,707 | ) | $ | (21,962 | ) | $ | (7,506 | ) | $ | (69,187 | ) | ||||||||||
Other income (expense), net | (77 | ) | (95 | ) | 325 | (10 | ) | 143 | 443 | (112 | ) | 297 | (122 | ) | 506 | |||||||||||||||||||||||||
Acquisitions related intangible asset amortization | 981 | 1,067 | 704 | 681 | 3,433 | 685 | 696 | 559 | 403 | 2,343 | ||||||||||||||||||||||||||||||
Depreciation and amortization | 2,002 | 2,095 | 2,027 | 2,402 | 8,526 | 1,818 | 1,695 | 2,499 | 2,055 | 8,067 | ||||||||||||||||||||||||||||||
Restructuring and other charges | 1,216 | 541 | 2,048 | 1,187 | 4,992 | 485 | 1,964 | 3,114 | (284 | ) | 5,279 | |||||||||||||||||||||||||||||
Stock-based compensation | 1,337 | 1,673 | 1,148 | 1,046 | 5,204 | 1,329 | 1,254 | 1,178 | 937 | 4,698 | ||||||||||||||||||||||||||||||
Lease exit and related charges, net of sublease income | 79 | 470 | 154 | 177 | 880 | 78 | 9 | 2,121 | 293 | 2,501 | ||||||||||||||||||||||||||||||
Extinguishment of liability | (10,580 | ) | — | — | — | (10,580 | ) | — | — | — | — | — | ||||||||||||||||||||||||||||
Adjusted EBITDA | $ | (13,918 | ) | $ | (13,081 | ) | $ | (14,357 | ) | $ | (15,199 | ) | $ | (56,555 | ) | $ | (14,174 | ) | $ | (15,201 | ) | $ | (12,194 | ) | $ | (4,224 | ) | $ | (45,793 | ) | ||||||||||
RealNetworks, Inc. and Subsidiaries
Supplemental Financial Information
(Unaudited)
2014 | 2015 | |||||||||||||||||||||||||||||||||||||||
Q1 | Q2 | Q3 | Q4 | YTD | Q1 | Q2 | Q3 | Q4 | YTD | |||||||||||||||||||||||||||||||
(in thousands) | (in thousands) | |||||||||||||||||||||||||||||||||||||||
Net Revenue by Line of Business | ||||||||||||||||||||||||||||||||||||||||
Consumer Media (A) | $ | 15,215 | $ | 8,556 | $ | 6,527 | $ | 8,823 | $ | 39,121 | $ | 7,989 | $ | 7,281 | $ | 6,495 | $ | 6,848 | $ | 28,613 | ||||||||||||||||||||
Mobile Services (B) | 19,913 | 23,182 | 19,228 | 17,658 | 79,981 | 14,504 | 18,578 | 16,484 | 16,369 | 65,935 | ||||||||||||||||||||||||||||||
Games (C) | 10,596 | 9,087 | 8,402 | 9,025 | 37,110 | 8,104 | 8,095 | 7,844 | 6,705 | 30,748 | ||||||||||||||||||||||||||||||
Total net revenue | $ | 45,724 | $ | 40,825 | $ | 34,157 | $ | 35,506 | $ | 156,212 | $ | 30,597 | $ | 33,954 | $ | 30,823 | $ | 29,922 | $ | 125,296 | ||||||||||||||||||||
Net Revenue by Product | ||||||||||||||||||||||||||||||||||||||||
Consumer Media | ||||||||||||||||||||||||||||||||||||||||
- License (D) | $ | 5,018 | $ | 3,273 | $ | 3,255 | $ | 4,496 | $ | 16,042 | $ | 4,672 | $ | 4,208 | $ | 3,628 | $ | 3,967 | $ | 16,475 | ||||||||||||||||||||
- Subscriptions (E) | 2,777 | 2,569 | 2,642 | 2,649 | 10,637 | 2,384 | 2,372 | 2,147 | 2,054 | 8,957 | ||||||||||||||||||||||||||||||
- Media Properties (F) | 7,420 | 2,714 | 630 | 1,678 | 12,442 | 933 | 701 | 720 | 827 | 3,181 | ||||||||||||||||||||||||||||||
Mobile Services | ||||||||||||||||||||||||||||||||||||||||
- SaaS (G) | 18,463 | 20,175 | 17,957 | 16,769 | 73,364 | 13,322 | 18,218 | 16,217 | 16,157 | 63,914 | ||||||||||||||||||||||||||||||
- Technology License and Other (H) | 1,450 | 3,007 | 1,271 | 889 | 6,617 | 1,182 | 360 | 267 | 212 | 2,021 | ||||||||||||||||||||||||||||||
Games | ||||||||||||||||||||||||||||||||||||||||
- License (I) | 3,849 | 3,399 | 2,988 | 3,854 | 14,090 | 3,835 | 3,943 | 4,128 | 3,268 | 15,174 | ||||||||||||||||||||||||||||||
- Subscriptions (J) | 5,241 | 4,440 | 4,320 | 3,947 | 17,948 | 3,570 | 3,373 | 3,231 | 3,126 | 13,300 | ||||||||||||||||||||||||||||||
- Media Properties (K) | 1,506 | 1,248 | 1,094 | 1,224 | 5,072 | 699 | 779 | 485 | 311 | 2,274 | ||||||||||||||||||||||||||||||
Total net revenue | $ | 45,724 | $ | 40,825 | $ | 34,157 | $ | 35,506 | $ | 156,212 | $ | 30,597 | $ | 33,954 | $ | 30,823 | $ | 29,922 | $ | 125,296 | ||||||||||||||||||||
Net Revenue by Geography: | ||||||||||||||||||||||||||||||||||||||||
United States | $ | 20,428 | $ | 15,092 | $ | 12,280 | $ | 13,860 | $ | 61,660 | $ | 12,349 | $ | 12,303 | $ | 11,460 | $ | 10,781 | $ | 46,893 | ||||||||||||||||||||
Rest of world | 25,296 | 25,733 | 21,877 | 21,646 | 94,552 | 18,248 | 21,651 | 19,363 | 19,141 | 78,403 | ||||||||||||||||||||||||||||||
Total net revenue | $ | 45,724 | $ | 40,825 | $ | 34,157 | $ | 35,506 | $ | 156,212 | $ | 30,597 | $ | 33,954 | $ | 30,823 | $ | 29,922 | $ | 125,296 | ||||||||||||||||||||
Net Revenue by Line of Business | ||||||||||||||||||||||||||||||||||||||||
(A) The Consumer Media division primarily includes revenue from RealPlayer and related products, such as the distribution of third-party software products, advertising on RealPlayer websites, sales of RealPlayer Plus software licenses to consumers, sales of intellectual property licenses, and consumer subscriptions such as RealPlayer Plus and SuperPass. | ||||||||||||||||||||||||||||||||||||||||
(B) The Mobile Services division primarily includes revenue from SaaS services and sales of professional services provided to mobile carriers. | ||||||||||||||||||||||||||||||||||||||||
(C) The Games division primarily includes revenue from sales of games licenses, online games subscription services, advertising on games sites and social network sites, microtransactions from online and social games, and sales of mobile games. | ||||||||||||||||||||||||||||||||||||||||
Net Revenue by Product | ||||||||||||||||||||||||||||||||||||||||
(D) Licensing revenue within Consumer Media includes sales of intellectual property licenses and RealPlayer Plus software licenses to consumers. | ||||||||||||||||||||||||||||||||||||||||
(E) Subscriptions revenue within Consumer Media includes revenue from subscriptions such as our RealPlayer Plus and SuperPass offerings. | ||||||||||||||||||||||||||||||||||||||||
(F) Media Properties revenue within Consumer Media includes distribution of third-party software products and advertising on RealPlayer websites. | ||||||||||||||||||||||||||||||||||||||||
(G) SaaS revenue within Mobile Services includes revenue from music on demand, ringback tones, intercarrier messaging services, and RealTimes. | ||||||||||||||||||||||||||||||||||||||||
(H) Technology licensing and other revenue within Mobile Services includes revenue from professional services provided to mobile carriers. | ||||||||||||||||||||||||||||||||||||||||
(I) Licensing revenue within Games includes retail games-related revenue and sales of mobile games. | ||||||||||||||||||||||||||||||||||||||||
(J) Subscriptions revenue within Games includes revenue from online games subscriptions as well as microtransactions from mobile and social games. | ||||||||||||||||||||||||||||||||||||||||
(K) Media Properties revenue within Games includes advertising on games sites and social network sites. | ||||||||||||||||||||||||||||||||||||||||