SEATTLE, November 3, 2014 – RealNetworks, Inc. (NASDAQ: RNWK) a leader in personal digital entertainment, today announced results for the third quarter ended September 30, 2014. For the third quarter of 2014, revenue was $34.2 million, compared to $40.8 million in the previous quarter and $49.0 million in the third quarter of 2013. “During the third quarter of 2014, we continued to make progress in our strategic transition to our new multi-device, multi-platform, cloud-based products and services, led by RealPlayer Cloud” said Rob Glaser, Chairman and CEO of RealNetworks. “Just over a year after its introduction, RealPlayer Cloud has over 8 million users worldwide, up from 5 million three months ago. RealPlayer Cloud makes it easy to watch, save and share video across every type of popular digital device.” “In addition, we’re encouraged by our progress in our other businesses. In our Games division, we successfully launched our Slingo Adventure game on Facebook during the third quarter, and on the iOS and Android platforms more recently. We also saw continued revenue growth for Rhapsody, of which we own approximately 45%. At the same time, we continued to manage costs carefully, making cost reductions related to our legacy businesses of over $15 million annually.” GAAP net loss for the third quarter of 2014 was $(22.2) million or $(0.62) per diluted share, compared to $(31.4) million or $(0.88) per diluted share in the third quarter of 2013. Adjusted EBITDA for the third quarter of 2014 was a loss of $(14.4) million compared to $(8.4) million for the third quarter of 2013. A reconciliation of GAAP operating income (loss) to adjusted EBITDA is provided in the financial tables that accompany this release. As of September 30, 2014, the company had $178.0 million in unrestricted cash, cash equivalents and short-term investments, compared to $226.2 million as of December 31, 2013. Segment Operating Results
Business Outlook
For the fourth quarter of 2014, RealNetworks expects total revenue in the range of $33.0 million to $36.0 million. We expect adjusted EBITDA for the quarter to be a loss in the range of $(16.0) million to $(18.0) 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 by calling 888-790-3440 or +1-517-308-9350 (Passcode: Third Quarter Earnings). 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, November 25, 2014 by calling 866-443-2932 or +1-203-369-1106 (Passcode: 110314). For More Information Michael Newman, StreetConnect 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, RealPlayer and GameHouse 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 adjusted EBITDA 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 operating income (loss) to adjusted EBITDA and to adjusted EBITDA by reportable segment. The rationale for management’s use of non-GAAP measures is included in the supplementary materials presented with the 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, strategic focus and initiatives. 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: risks associated with the implementation of RealNetworks’ growth plan, strategic initiatives, and restructuring efforts; its ability to successfully introduce and monetize new products and services; competitive risks, including the growth of competing technologies, products and services, and the emergence of new entrants and competition in the market; 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 ANNOUNCES THIRD QUARTER 2014 RESULTS
Investor Relations for RealNetworks
+1-206-729-3625
IR@realnetworks.com
Mon, 11/03/2014