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Realnetworks Inc (RNWK) SEC Filing 10-Q Quarterly report for the period ending Wednesday, September 30, 2020

Realnetworks Inc

CIK: 1046327 Ticker: RNWK

Exhibit 99.1
REALNETWORKS ANNOUNCES THIRD QUARTER 2020 FINANCIAL RESULTS

SEATTLE — November 3, 2020
-

RealNetworks, Inc. (Nasdaq: RNWK), a leader in digital media software and services, today announced its financial results for the third quarter ended September 30, 2020. This release refers to “continuing” and “discontinued” operations due to the pending sale of Napster, RealNetworks’ 84%-owned subsidiary, to MelodyVR Group PLC, which is expected to close in the fourth quarter of 2020. Effective as of the signing date, August 25, 2020, Napster is treated as a discontinued operation for accounting and disclosure purposes; therefore, unless otherwise noted, results presented in this release relate to the continuing operations of RealNetworks, which exclude Napster.

Revenue from continuing operations of $16.6 million and net loss of $(3.2) million
Games revenue was up 6% year-over-year and 2% quarter-over-quarter driven by success of free-to-play strategy, which grew 60% year-over-year
Adjusted EBITDA loss of $(1.9) million, our 5th consecutive quarter of year-over-year improvement
Significant progress with SAFR initiative
Appointed Brad Donaldson as Vice President, Computer Vision to lead the strategic development and market expansion of SAFR
Launched SAFR Version 3.0 featuring enhanced COVID-19 response features and a new high-sensitivity face detector
Awarded contract for SAFR with Tijuana International Airport's Cross Border XpressTM (CBX)
Progress with monetizing and scaling assets
Sale of Napster to MelodyVR expected to close in Q4 2020 in a transaction valued at approximately $70 million, which includes the assumption of approximately $44 million in Napster liabilities and $26.3 million in a mix of cash and equity consideration
Spun-out and raised $2.1 million in external funding for Scener after incubating the RealNetworks' startup for two years

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.”

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.


The following information was filed by Realnetworks Inc (RNWK) on Tuesday, November 3, 2020 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Inside Realnetworks Inc's 10-Q Quarterly Report:

Financial Statements, Disclosures and Schedules

Inside this 10-Q Quarterly Report

Document And Entity Information
Recent Accounting Pronouncements
Condensed Consolidated Statements Of Operations And Comprehensive Income (Loss) (Parenthetical)
Unaudited Condensed Consolidated Balance Sheets
Unaudited Condensed Consolidated Balance Sheets (Parenthetical)
Unaudited Condensed Consolidated Statements Of Cash Flows
Unaudited Condensed Consolidated Statements Of Comprehensive Income (Loss) (Statement)
Unaudited Condensed Consolidated Statements Of Operations
Unaudited Condensed Consolidated Statements Of Shareholders' Equity Unaudited Condensed Consolidated Statements Of Shareholders' Equity
Accrued And Other Current Liabilities
Accrued And Other Current Liabilities (Detail)
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Acquisitions (Notes)
Acquisitions (Tables)
Acquisitions - Intangible Assets Acquired (Details)
Acquisitions - Narrative (Details)
Acquisitions - Net Assets Acquired (Details)
Acquisitions And Dispositions - Napster Disposal Income Statement Disclosures (Details)
Acquisitions And Dispositions - Napster Disposition Narrative (Details)
Acquisitions And Dispositions - Napster Disposition Schedule Of Assets And Liabilities (Details)
Commitments And Contingencies
Commitments And Contingencies Commitments And Contingencies (Details)
Debt
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Description Of Business And Summary Of Significant Accounting Policies
Description Of Business And Summary Of Significant Accounting Policies (Details)
Description Of Business And Summary Of Significant Accounting Policies (Policies)
Earnings (Loss) Per Share
Earnings (Loss) Per Share (Additional Information) (Detail)
Earnings (Loss) Per Share (Calculation Of Basic And Diluted Earnings Per Share) (Detail)
Earnings (Loss) Per Share (Tables)
Fair Value Measurements
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Segment Information (Revenue By Geographic Region) (Detail)
Segment Information (Segment Results) (Detail)
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Stock-Based Compensation
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Ticker: RNWK
CIK: 1046327
Form Type: 10-Q Quarterly Report
Accession Number: 0001046327-20-000075
Submitted to the SEC: Wed Nov 04 2020 4:17:01 PM EST
Accepted by the SEC: Wed Nov 04 2020
Period: Wednesday, September 30, 2020
Industry: Computer Programming Services

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