RealNetworks (RNWK) Reports Q3 Loss of $0.08, Revenues Miss

RealNetworks (NASDAQ: RNWK) reported Q3 EPS of ($0.08), versus ($0.14) reported last year. Revenue for the quarter came in at $16.6 million versus the consensus estimate of $33.11 million.

Third Quarter 2020 Financial Highlights from Continuing Operations

• Revenue was $16.6 million compared to $17.1 million in the prior quarter and $17.7 million in the prior year period.
• Games revenue was $7.6 million, up 2% compared to $7.5 million in the prior quarter and up 6% compared to $7.2 million in the prior year period.
• Gross profit margin was 75%, unchanged from 75% in the prior quarter and down from 76% in the prior year period.
• Operating expenses decreased $0.3 million, or 2%, from the prior quarter and decreased $3.2 million, or 17%, from the prior year period.
• Net loss attributable to RealNetworks was $(3.2) million, or $(0.08) per diluted share, compared to a net loss of $(3.1) million, or $(0.08) per diluted share, in the prior quarter and a net loss of $(5.2) million, or $(0.14) per diluted share, in the prior year period.
• Adjusted EBITDA was a loss of $(1.9) million compared to a loss of $(1.4) million in the prior quarter and a loss of $(3.2) million in the prior year period.
• At September 30, 2020, the Company had $13.2 million in unrestricted cash and cash equivalents compared to $14.4 million at June 30, 2020 and $8.5 million at December 31, 2019.

Management Commentary

"In Q3 we continued to make solid progress on several fronts" said Rob Glaser, Founder, Chairman, and Chief Executive Officer of RealNetworks. "Our commitment to improving business performance led to our fifth consecutive quarter of year-over-year improvement in our adjusted EBITDA loss. Our two largest growth opportunities remain our free-to-play Games, which grew 60% year-over-year, and the SAFR platform. We also made great progress in streamlining, optimizing and monetizing other parts of Real, as demonstrated by the pending sale of Napster to MelodyVR and the successful capital raise for Scener. Finally, we also significantly strengthened our management team by bringing in Mike Ensing as President and COO, and Brad Donaldson as VP, Computer Vision to lead the strategic development and market expansion of SAFR."

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

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