RealNetworks (RNWK) Reports Q4 Loss of $0.18, Revenues Miss; Offers Q1 Revenue Below Consensus

RealNetworks (NASDAQ: RNWK) reported Q4 EPS of ($0.18), versus $0.02 reported last year. Revenue for the quarter came in at $16.56 million versus the consensus estimate of $33.11 million.

• 2018 revenue of $69.5 million, compared to $78.7 million in 2017
• Commercializing four key growth initiatives: SAFR, Kontxt, RMHD and mobile games
• Reduced 2018 operating expenses by 3% year-over-year
• Subsequent to year-end, doubled stake to become 84% majority owner of Napster at compelling economic terms for RealNetworks

"In 2018 we did not achieve our financial goals. Nonetheless, 2018 was a solid year strategically, in which we made progress on our key growth initiatives, especially SAFR, our world-class facial recognition platform," said Rob Glaser, Chairman and CEO of RealNetworks. "2019 will also be an important year of commercial progress for SAFR, as well as our other key growth initiatives: Kontxt, our anti-spam and classification platform for messaging; RMHD, our video codec in China; and GameHouse, our casual mobile games business."

Mr. Glaser added, "We are also delighted to welcome Napster more fully back into the RealNetworks family through our recent acquisition of an additional 42% stake, bringing our ownership to 84%. Bill Patrizio and his team have done an outstanding job of refocusing Napster around B2B and returning Napster to profitability. Through the first nine months of 2018, Napster generated over $14 million in operating income. The addition of Napster significantly increases our scale, with combined full-year revenue of over $200 million."

GUIDANCE:

RealNetworks sees Q1 2019 revenue of $40-43 million, versus the consensus of $30 million.

For earnings history and earnings-related data on RealNetworks (RNWK) click here.

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