Attached files
| file | filename |
|---|---|
| EX-99.2 - EXHIBIT 99.2 ER Q4-16 - REALNETWORKS INC | exhibit992erq4-16.htm |
| 8-K - 8-K SHELL Q4 2016 - REALNETWORKS INC | er8-kshellq42016.htm |
Exhibit 99.1
REALNETWORKS ANNOUNCES FOURTH QUARTER AND FULL YEAR 2016 RESULTS
SEATTLE - February 8, 2017
• | Stabilized revenue in 2016 with quarter over quarter improvement; |
• | Reduced year-over-year GAAP operating expenses by $31.5 million in 2016; |
• | Strong shift to mobile games in 2016, driven by new products; |
• | Continuing to roll out integration of new mobile products with carrier partners; and |
• | Year ended with Cash and short-term investments of $77.1 million |
RealNetworks, Inc. (Nasdaq: RNWK), a leader in digital media software and services, today announced results for the fourth quarter and full year ended December 31, 2016.
For the fourth quarter of 2016, revenue was $31.5 million, up from $31.1 million in the previous quarter and up from $29.9 million in the fourth quarter of 2015. For the full year 2016, GAAP revenue was $120.5 million, compared to $125.3 million in 2015. Excluding 2015 revenue from the social casino games business that was sold during the third quarter of 2015, revenue in 2015 was $120.4 million.
The Company's GAAP operating expenses for the full year 2016 were down $31.5 million or 25% from the prior year. Excluding the 2015 operating expenses directly attributable to the social casino games business, operating expenses for the full year 2016 were down $20.9 million or 18% from the prior year.
GAAP net loss for the fourth quarter of 2016 was $(10.0) million or $(0.27) per share, compared to $(8.4) million or $(0.23) per share in the fourth quarter of 2015. GAAP net loss for 2016 was $(36.6) million or $(0.99) per share, compared to $(81.8) million or $(2.26) in 2015.
Adjusted EBITDA for the fourth quarter of 2016 was a loss of $(4.2) million, compared to $(4.4) million for the previous quarter and $(4.2) million for the fourth quarter of 2015. Adjusted EBITDA for the full year 2016 was a loss of $(21.6) million, compared to $(45.8) million for the prior year. Excluding the social casino games business sold in 2015, adjusted EBITDA for 2015 was $(38.6) million. A reconciliation of GAAP net income (loss) to adjusted EBITDA is provided in the financial tables that accompany this release.
“During 2016, we achieved two of our three major financial goals,” said Rob Glaser, Chairman and CEO of RealNetworks. “We stabilized our businesses and saw quarter over quarter overall revenue growth.
“We’re continuing to roll out the integration of our Mobile Services products with carriers like Vivo, Verizon, and Vodafone. In our Games business, we scaled up our production of GameHouse Originals, leading to a 28% growth in mobile games revenue.
“While we did not return to profitability in 2016, we made significant progress. We enter 2017 with several new product initiatives well underway that we believe will build strong momentum towards a return to growth and profitability.”
As of December 31, 2016, the Company had $77.1 million in unrestricted cash, cash equivalents and short-term investments, compared to $80.7 million as of September 30, 2016.
Business Outlook
For the first quarter of 2017, RealNetworks expects total revenue in the range of $29 million to $32 million and an adjusted EBITDA loss for the first quarter in the range of $(4.0) million to $(6.0) million.
Webcast and Conference Call Information
The company will host a conference call today to review results and discuss the company’s performance at 5 p.m. ET/2 p.m. PT. You may join the conference call by calling 888-790-3440 or +1-517-308-9350 (Passcode: 4TH QUARTER). A live webcast of the call will be available at http://investor.realnetworks.com/ and an on-demand webcast will be available approximately one hour following the conclusion of the conference call. A telephonic replay will be available until 11:59 p.m. PT, February 28, 2017 by calling 800-813-5534 or +1-203-369-3348 (Passcode: 282017).
For More Information
Investor Relations for RealNetworks
+1-206-729-3625
IR@realnetworks.com
RNWK-F
About RealNetworks
RealNetworks creates innovative applications and services that make it easy to connect with and enjoy digital media. RealNetworks invented the streaming media category in 1995 and continues to connect consumers with their digital media both directly and through partners, aiming to support every network, device, media type and social network. RealNetworks’ corporate information is located at www.realnetworks.com/about-us.
RealNetworks and RealTimes are trademarks or registered trademarks of RealNetworks, Inc. or its subsidiaries. All other companies or products listed herein are trademarks or registered trademarks of their respective owners.
About Non-GAAP Financial Measures
To supplement RealNetworks' consolidated financial information presented in accordance with GAAP in this press release, the company also discloses certain non-GAAP financial measures, including adjusted EBITDA and contribution margin by reportable segment, which management believes provide investors with useful information.
In the financial tables of our earnings press release, RealNetworks has included reconciliations of GAAP net income (loss) to adjusted EBITDA and operating income (loss) by reportable segment to contribution margin by reportable segment.
The rationale for management's use of non-GAAP measures is included in the supplementary materials presented with the quarterly earnings materials. Please refer to Exhibit 99.2 (“Information Regarding Non-GAAP Financial Measures”) to the company's report on Form 8-K, which is being submitted today to the SEC.
Forward-Looking Statements
This press release contains forward-looking statements that involve risks and uncertainties, including statements relating to RealNetworks' current expectations regarding future revenue and adjusted EBITDA, our future growth, profitability, and market position, our strategic focus and initiatives, agreements with partners, and the growth and future prospects relating to our Rhapsody affiliate. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements. These statements
reflect RealNetworks’ expectations as of today, and actual results may differ materially from the results predicted. Factors that could cause actual results to differ from the results predicted include: RealNetworks' ability to realize operating efficiencies, growth and other benefits from the implementation of its growth plan, strategic initiatives, and restructuring efforts; the emergence of new entrants and competition in the market for digital media products and services; other competitive risks, including the growth of competing technologies, products and services; the potential outcomes and effects of claims and legal proceedings on RealNetworks' business, prospects, financial condition or results of operations; risks associated with key customer or strategic relationships, business acquisitions and the introduction of new products and services; changes in consumer and advertising spending in response to disruptions in the global financial markets; fluctuations in foreign currencies; and changes in RealNetworks' effective tax rate. More information about potential risk factors that could affect RealNetworks' business and financial results is included in RealNetworks' annual report on Form 10-K for the most recent year ended December 31, its quarterly reports on Form 10-Q and in other reports and documents filed by RealNetworks from time to time with the Securities and Exchange Commission. The preparation of RealNetworks' financial statements and forward-looking financial guidance requires the company to make estimates and assumptions that affect the reported amount of assets and liabilities, and revenues and expenses during the reported period. Actual results may differ materially from these estimates under different assumptions or conditions. The company assumes no obligation to update any forward-looking statements or information, which are in effect as of their respective dates.
RealNetworks, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
Quarter Ended December 31, | Year ended December 31, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
(in thousands, except per share data) | ||||||||||||||||
Net revenue | $ | 31,453 | $ | 29,922 | $ | 120,468 | $ | 125,296 | ||||||||
Cost of revenue | 17,358 | 15,828 | 64,968 | 70,297 | ||||||||||||
Gross profit | 14,095 | 14,094 | 55,500 | 54,999 | ||||||||||||
Operating expenses: | ||||||||||||||||
Research and development | 6,738 | 8,945 | 29,923 | 43,626 | ||||||||||||
Sales and marketing | 7,451 | 9,409 | 31,608 | 48,231 | ||||||||||||
General and administrative | 6,035 | 3,237 | 27,415 | 24,549 | ||||||||||||
Restructuring and other charges | 192 | (284 | ) | 1,489 | 5,279 | |||||||||||
Lease exit and related charges | 48 | 293 | 2,239 | 2,501 | ||||||||||||
Total operating expenses | 20,464 | 21,600 | 92,674 | 124,186 | ||||||||||||
Operating income (loss) | (6,369 | ) | (7,506 | ) | (37,174 | ) | (69,187 | ) | ||||||||
Other income (expenses): | ||||||||||||||||
Interest income, net | 133 | 83 | 449 | 680 | ||||||||||||
Gain (loss) on investments, net | 2,495 | 63 | 8,473 | (159 | ) | |||||||||||
Equity in net loss of Rhapsody | (5,904 | ) | (690 | ) | (6,533 | ) | (14,521 | ) | ||||||||
Other income (expense), net | (128 | ) | (122 | ) | (643 | ) | 506 | |||||||||
Total other income (expense), net | (3,404 | ) | (666 | ) | 1,746 | (13,494 | ) | |||||||||
Income (loss) before income taxes | (9,773 | ) | (8,172 | ) | (35,428 | ) | (82,681 | ) | ||||||||
Income tax expense (benefit) | 203 | 241 | 1,122 | (834 | ) | |||||||||||
Net income (loss) | $ | (9,976 | ) | $ | (8,413 | ) | $ | (36,550 | ) | $ | (81,847 | ) | ||||
Basic net income (loss) per share | $ | (0.27 | ) | $ | (0.23 | ) | $ | (0.99 | ) | $ | (2.26 | ) | ||||
Diluted net income (loss) per share | $ | (0.27 | ) | $ | (0.23 | ) | $ | (0.99 | ) | $ | (2.26 | ) | ||||
Shares used to compute basic net income (loss) per share | 37,042 | 36,257 | 36,781 | 36,165 | ||||||||||||
Shares used to compute diluted net income (loss) per share | 37,042 | 36,257 | 36,781 | 36,165 | ||||||||||||
RealNetworks, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(Unaudited)
December 31, 2016 | December 31, 2015 | ||||||
(in thousands) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 33,721 | $ | 47,315 | |||
Short-term investments | 43,331 | 51,814 | |||||
Trade accounts receivable, net | 22,162 | 22,511 | |||||
Deferred costs, current portion | 760 | 460 | |||||
Prepaid expenses and other current assets | 4,910 | 7,140 | |||||
Total current assets | 104,884 | 129,240 | |||||
Equipment and software | 46,231 | 66,702 | |||||
Leasehold improvements | 3,317 | 3,122 | |||||
Total equipment, software, and leasehold improvements | 49,548 | 69,824 | |||||
Less accumulated depreciation and amortization | 44,294 | 61,024 | |||||
Net equipment, software, and leasehold improvements | 5,254 | 8,800 | |||||
Restricted cash equivalents and investments | 2,700 | 2,890 | |||||
Available for sale securities | — | 1,721 | |||||
Other assets | 1,742 | 2,307 | |||||
Deferred costs, non-current portion | 1,246 | 212 | |||||
Deferred tax assets, net | 816 | 957 | |||||
Other intangible assets, net | 938 | 2,136 | |||||
Goodwill | 12,857 | 13,080 | |||||
Total assets | $ | 130,437 | $ | 161,343 | |||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 18,225 | $ | 17,050 | |||
Accrued and other current liabilities | 15,425 | 17,320 | |||||
Commitment to Rhapsody | 1,500 | — | |||||
Deferred revenue, current portion | 3,430 | 3,497 | |||||
Total current liabilities | 38,580 | 37,867 | |||||
Deferred revenue, non-current portion | 240 | 105 | |||||
Deferred rent | 748 | 620 | |||||
Deferred tax liabilities, net | 87 | 88 | |||||
Other long-term liabilities | 2,201 | 1,980 | |||||
Total liabilities | 41,856 | 40,660 | |||||
Shareholders' equity | 88,581 | 120,683 | |||||
Total liabilities and shareholders' equity | $ | 130,437 | $ | 161,343 | |||
RealNetworks, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Year ended December 31, | |||||||
2016 | 2015 | ||||||
(in thousands) | |||||||
Cash flows from operating activities: | |||||||
Net income (loss) | $ | (36,550 | ) | $ | (81,847 | ) | |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | |||||||
Depreciation and amortization | 7,057 | 10,410 | |||||
Stock-based compensation | 5,424 | 4,698 | |||||
Equity in net loss of Rhapsody | 6,533 | 14,521 | |||||
Deferred income taxes, net | 130 | (1,558 | ) | ||||
Loss (gain) on investments, net | (8,473 | ) | 159 | ||||
Realized translation loss (gain) | 272 | (264 | ) | ||||
Fair value of warrants granted in 2015, net of subsequent mark to market adjustments in 2016 and 2015 | 280 | (1,053 | ) | ||||
Net change in certain operating assets and liabilities | 999 | (14,048 | ) | ||||
Net cash provided by (used in) operating activities | (24,328 | ) | (68,982 | ) | |||
Cash flows from investing activities: | |||||||
Purchases of equipment, software, and leasehold improvements | (2,438 | ) | (1,319 | ) | |||
Proceeds from sale of equity and other investments | 4,967 | 459 | |||||
Purchases of short-term investments | (75,766 | ) | (72,136 | ) | |||
Proceeds from sales and maturities of short-term investments | 84,249 | 78,775 | |||||
Decrease (increase) in restricted cash equivalents and investments, net | 190 | 110 | |||||
Acquisitions | (150 | ) | (161 | ) | |||
Advance to Rhapsody | (3,500 | ) | (5,000 | ) | |||
Receipt of payment from Rhapsody | — | 5,000 | |||||
Proceeds from the sale of Slingo and social casino business | 4,000 | 10,000 | |||||
Net cash provided by (used in) investing activities | 11,552 | 15,728 | |||||
Cash flows from financing activities: | |||||||
Proceeds from issuance of common stock (stock options and stock purchase plan) | 535 | 426 | |||||
Tax payments from shares withheld upon vesting of restricted stock | (880 | ) | (85 | ) | |||
Net cash provided by (used in) financing activities | (345 | ) | 341 | ||||
Effect of exchange rate changes on cash and cash equivalents | (473 | ) | (3,025 | ) | |||
Net increase (decrease) in cash and cash equivalents | (13,594 | ) | (55,938 | ) | |||
Cash and cash equivalents, beginning of year | 47,315 | 103,253 | |||||
Cash and cash equivalents, end of year | $ | 33,721 | $ | 47,315 | |||
RealNetworks, Inc. and Subsidiaries
Supplemental Financial Information
(Unaudited)
2016 | 2015 | ||||||||||||||||||||||||||||||||||||||
YTD | Q4 | Q3 | Q2 | Q1 | YTD | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||||||||||||
Net Revenue by Line of Business | |||||||||||||||||||||||||||||||||||||||
Consumer Media (A) | $ | 25,051 | $ | 6,443 | $ | 6,482 | $ | 6,400 | $ | 5,726 | $ | 28,613 | $ | 6,848 | $ | 6,495 | $ | 7,281 | $ | 7,989 | |||||||||||||||||||
Mobile Services (B) | 70,278 | 18,833 | 17,683 | 17,297 | 16,465 | 65,935 | 16,369 | 16,484 | 18,578 | 14,504 | |||||||||||||||||||||||||||||
Games (C) | 25,139 | 6,177 | 6,886 | 6,037 | 6,039 | 30,748 | 6,705 | 7,844 | 8,095 | 8,104 | |||||||||||||||||||||||||||||
Total net revenue | $ | 120,468 | $ | 31,453 | $ | 31,051 | $ | 29,734 | $ | 28,230 | $ | 125,296 | $ | 29,922 | $ | 30,823 | $ | 33,954 | $ | 30,597 | |||||||||||||||||||
Net Revenue by Product | |||||||||||||||||||||||||||||||||||||||
Consumer Media | |||||||||||||||||||||||||||||||||||||||
- License (D) | $ | 15,406 | $ | 4,252 | $ | 4,136 | $ | 3,914 | $ | 3,104 | $ | 16,475 | $ | 3,967 | $ | 3,628 | $ | 4,208 | $ | 4,672 | |||||||||||||||||||
- Subscriptions (E) | 7,448 | 1,671 | 1,931 | 1,871 | 1,975 | 8,957 | 2,054 | 2,147 | 2,372 | 2,384 | |||||||||||||||||||||||||||||
- Media Properties (F) | 2,197 | 520 | 415 | 615 | 647 | 3,181 | 827 | 720 | 701 | 933 | |||||||||||||||||||||||||||||
Mobile Services | |||||||||||||||||||||||||||||||||||||||
- SaaS (G) | 69,295 | 18,726 | 17,141 | 17,208 | 16,220 | 63,914 | 16,157 | 16,217 | 18,218 | 13,322 | |||||||||||||||||||||||||||||
- Technology License & Other (H) | 983 | 107 | 542 | 89 | 245 | 2,021 | 212 | 267 | 360 | 1,182 | |||||||||||||||||||||||||||||
Games | |||||||||||||||||||||||||||||||||||||||
- License (I) | 12,415 | 3,178 | 3,683 | 2,793 | 2,761 | 15,174 | 3,268 | 4,128 | 3,943 | 3,835 | |||||||||||||||||||||||||||||
- Subscriptions (J) | 11,894 | 2,836 | 3,005 | 3,024 | 3,029 | 13,300 | 3,126 | 3,231 | 3,373 | 3,570 | |||||||||||||||||||||||||||||
- Media Properties (K) | 830 | 163 | 198 | 220 | 249 | 2,274 | 311 | 485 | 779 | 699 | |||||||||||||||||||||||||||||
Total net revenue | $ | 120,468 | $ | 31,453 | $ | 31,051 | $ | 29,734 | $ | 28,230 | $ | 125,296 | $ | 29,922 | $ | 30,823 | $ | 33,954 | $ | 30,597 | |||||||||||||||||||
Net Revenue by Geography | |||||||||||||||||||||||||||||||||||||||
United States | $ | 41,505 | $ | 10,125 | $ | 10,642 | $ | 10,355 | $ | 10,383 | $ | 46,893 | $ | 10,781 | $ | 11,460 | $ | 12,303 | $ | 12,349 | |||||||||||||||||||
Rest of world | 78,963 | 21,328 | 20,409 | 19,379 | 17,847 | 78,403 | 19,141 | 19,363 | 21,651 | 18,248 | |||||||||||||||||||||||||||||
Total net revenue | $ | 120,468 | $ | 31,453 | $ | 31,051 | $ | 29,734 | $ | 28,230 | $ | 125,296 | $ | 29,922 | $ | 30,823 | $ | 33,954 | $ | 30,597 | |||||||||||||||||||
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. | |||||||||||||||||||||||||||||||||||||||
RealNetworks, Inc. and Subsidiaries
Segment Results of Operations and Reconciliation to non-GAAP Contribution Margin
(Unaudited)
2016 | 2015 | 2016 | 2015 | |||||||||||||||||
Q4 | Q3 | Q4 | YTD | YTD | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
Consumer Media | ||||||||||||||||||||
Net revenue | $ | 6,443 | $ | 6,482 | $ | 6,848 | $ | 25,051 | $ | 28,613 | ||||||||||
Cost of revenue | 1,589 | 1,507 | 3,084 | 7,074 | 13,257 | |||||||||||||||
Gross profit | 4,854 | 4,975 | 3,764 | 17,977 | 15,356 | |||||||||||||||
Gross margin | 75 | % | 77 | % | 55 | % | 72 | % | 54 | % | ||||||||||
Operating expenses | 4,459 | 4,271 | 6,644 | 18,399 | 26,526 | |||||||||||||||
Operating income (loss), a GAAP measure | $ | 395 | $ | 704 | $ | (2,880 | ) | $ | (422 | ) | $ | (11,170 | ) | |||||||
Depreciation and amortization | 239 | 295 | 1,038 | 2,212 | 2,546 | |||||||||||||||
Contribution margin, a non-GAAP measure | $ | 634 | $ | 999 | $ | (1,842 | ) | $ | 1,790 | $ | (8,624 | ) | ||||||||
Mobile Services | ||||||||||||||||||||
Net revenue | $ | 18,833 | $ | 17,683 | $ | 16,369 | $ | 70,278 | $ | 65,935 | ||||||||||
Cost of revenue | 13,679 | 13,026 | 11,032 | 50,026 | 47,834 | |||||||||||||||
Gross profit | 5,154 | 4,657 | 5,337 | 20,252 | 18,101 | |||||||||||||||
Gross margin | 27 | % | 26 | % | 33 | % | 29 | % | 27 | % | ||||||||||
Operating expenses | 7,786 | 8,075 | 9,158 | 34,439 | 44,311 | |||||||||||||||
Operating income (loss), a GAAP measure | $ | (2,632 | ) | $ | (3,418 | ) | $ | (3,821 | ) | $ | (14,187 | ) | $ | (26,210 | ) | |||||
Acquisitions related intangible asset amortization | 198 | 208 | 379 | 923 | 1,544 | |||||||||||||||
Depreciation and amortization | 290 | 403 | 484 | 1,723 | 2,136 | |||||||||||||||
Contribution margin, a non-GAAP measure | $ | (2,144 | ) | $ | (2,807 | ) | $ | (2,958 | ) | $ | (11,541 | ) | $ | (22,530 | ) | |||||
Games | ||||||||||||||||||||
Net revenue | $ | 6,177 | $ | 6,886 | $ | 6,705 | $ | 25,139 | $ | 30,748 | ||||||||||
Cost of revenue | 2,054 | 2,203 | 1,698 | 7,919 | 9,291 | |||||||||||||||
Gross profit | 4,123 | 4,683 | 5,007 | 17,220 | 21,457 | |||||||||||||||
Gross margin | 67 | % | 68 | % | 75 | % | 68 | % | 70 | % | ||||||||||
Operating expenses | 4,975 | 4,649 | 5,253 | 19,644 | 29,086 | |||||||||||||||
Operating income (loss), a GAAP measure | $ | (852 | ) | $ | 34 | $ | (246 | ) | $ | (2,424 | ) | $ | (7,629 | ) | ||||||
Acquisitions related intangible asset amortization | 27 | 29 | 24 | 115 | 799 | |||||||||||||||
Depreciation and amortization | 146 | 104 | 197 | 583 | 952 | |||||||||||||||
Contribution margin, a non-GAAP measure | $ | (679 | ) | $ | 167 | $ | (25 | ) | $ | (1,726 | ) | $ | (5,878 | ) | ||||||
Corporate | ||||||||||||||||||||
Cost of revenue | $ | 36 | $ | 4 | $ | 14 | $ | (51 | ) | $ | (85 | ) | ||||||||
Gross profit | (36 | ) | (4 | ) | (14 | ) | 51 | 85 | ||||||||||||
Gross margin | N/A | N/A | N/A | N/A | N/A | |||||||||||||||
Operating expenses | 3,244 | 5,705 | 545 | 20,192 | 24,263 | |||||||||||||||
Operating income (loss), a GAAP measure | $ | (3,280 | ) | $ | (5,709 | ) | $ | (559 | ) | $ | (20,141 | ) | $ | (24,178 | ) | |||||
Other income (expense), net | (128 | ) | (243 | ) | (122 | ) | (643 | ) | 506 | |||||||||||
Depreciation and amortization | 260 | 634 | 336 | 1,501 | 2,433 | |||||||||||||||
Restructuring and other charges | 192 | 499 | (284 | ) | 1,489 | 5,279 | ||||||||||||||
Stock-based compensation | 867 | 778 | 937 | 5,424 | 4,698 | |||||||||||||||
Lease exit and related charges | 48 | 1,233 | 293 | 2,239 | 2,501 | |||||||||||||||
Contribution margin, a non-GAAP measure | $ | (2,041 | ) | $ | (2,808 | ) | $ | 601 | $ | (10,131 | ) | $ | (8,761 | ) | ||||||
RealNetworks, Inc. and Subsidiaries
Reconciliation of Net income (loss) to adjusted EBITDA, a non-GAAP measure
(Unaudited)
2016 | 2015 | 2016 | 2015 | |||||||||||||||||
Q4 | Q3 | Q4 | YTD | YTD | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
Reconciliation of GAAP Net income (loss) to adjusted EBITDA: | ||||||||||||||||||||
Net income (loss) | $ | (9,976 | ) | $ | (3,056 | ) | $ | (8,413 | ) | $ | (36,550 | ) | $ | (81,847 | ) | |||||
Income tax expense (benefit) | 203 | 331 | 241 | 1,122 | (834 | ) | ||||||||||||||
Interest income, net | (133 | ) | (119 | ) | (83 | ) | (449 | ) | (680 | ) | ||||||||||
Gain (loss) on investments, net | (2,495 | ) | (6,021 | ) | (63 | ) | (8,473 | ) | 159 | |||||||||||
Equity in net loss of Rhapsody | 5,904 | 233 | 690 | 6,533 | 14,521 | |||||||||||||||
Acquisitions related intangible asset amortization | 225 | 237 | 403 | 1,038 | 2,343 | |||||||||||||||
Depreciation and amortization | 935 | 1,436 | 2,055 | 6,019 | 8,067 | |||||||||||||||
Restructuring and other charges | 192 | 499 | (284 | ) | 1,489 | 5,279 | ||||||||||||||
Stock-based compensation | 867 | 778 | 937 | 5,424 | 4,698 | |||||||||||||||
Lease exit and related charges | 48 | 1,233 | 293 | 2,239 | 2,501 | |||||||||||||||
Adjusted EBITDA, a non-GAAP measure | $ | (4,230 | ) | $ | (4,449 | ) | $ | (4,224 | ) | $ | (21,608 | ) | $ | (45,793 | ) | |||||