RealNetworks Announces First Quarter 2020 Financial Results

SEATTLE, May 6, 2020 /PRNewswire/ -- RealNetworks, Inc. (Nasdaq: RNWK), a leader in digital media software and services, today announced its financial results for the first quarter ended March 31, 2020.

    --  Generated consolidated revenue of $43.1 million
    --  Games revenue up 16% year-over-year driven by success of free-to-play
        strategy
    --  Pivoting SAFR strategy to focus on the intersection of public health and
        public safety
    --  CEO Rob Glaser invested $10.0 million into the Company
    --  Judd Lee Named Senior Vice President, Chief Financial Officer and
        Treasurer

Management Commentary

"The new decade is off to a completely unexpected start, as everyone knows. We mourn the loss of a quarter of a million people around the world due to COVID-19. We're also very mindful that, for most of the world, including our home country, the pandemic continues to be massively disruptive to our daily lives," said Rob Glaser, Chairman and CEO of RealNetworks.

Mr. Glaser continued, "In that context, at RealNetworks, we have four primary areas of focus:

(1) The safety and well-being of our employees and their families, our customers, and our communities;
(2) Running Real in a fundamentally different way than we have run the company before;
(3) Operating with mission, focus, and excellence; and
(4) Finding new ways for us to contribute with our products and services to the new challenges the world is facing."

"I'm very impressed by how well our team is responding to these challenges with purpose, focus, clarity, and creativity. Our first quarter financial performance reflects this, especially in the third month of the quarter. I am grateful to our team members for their excellent work, and am hopeful that the impact of the team's great work will become even more significant and impactful in the weeks and months ahead," concluded Mr. Glaser.

First Quarter 2020 Financial Highlights

    --  Revenue was $43.1 million (inclusive of $26.3 million from Napster)
        compared to $43.4 million (inclusive of $26.1 million from Napster) in
        the prior quarter and $39.5(1) million (inclusive of $24.3 million from
        Napster) in the prior year period.
    --  Games revenue was $6.6 million, consistent with the prior quarter and up
        16% compared to $5.7 million in the prior year period.
    --  Gross profit margin was 44%, up from 43% in the prior quarter and 37% in
        the prior year period.
    --  Operating expenses decreased $0.5 million, or 2%, from the prior quarter
        and decreased $1.4 million, or 6%, from the prior year period.
    --  Net loss attributable to RealNetworks was $(4.6) million, or $(0.12) per
        diluted share, compared to a net loss of $(6.4) million, or $(0.17) per
        diluted share, in the prior quarter and net income of $1.5 million, or
        $0.04 per diluted share, in the prior year period. Net income in the
        first quarter of 2019 included a $12.3 million gain from the acquisition
        of Napster.
    --  Adjusted EBITDA was a loss of $(3.3) million compared to a loss of
        $(2.7) million in the prior quarter and a loss of $(7.9) million in the
        prior year period.
    --  At March 31, 2020, the Company had $19.0 million in unrestricted cash
        and cash equivalents compared to $16.8 million at December 31, 2019.

(1)The first quarter of 2019 included a partial quarter of revenue from Napster following the acquisition by RealNetworks on January 18, 2019 of an additional 42% interest in Napster.

Corporate Developments

    --  On February 10, 2020, the Company entered into a purchase agreement with
        Rob Glaser, RealNetworks' Founder, Chairman of the Board, Chief
        Executive Officer, and largest shareholder by which Mr. Glaser acquired
        approximately 8 million shares of RealNetworks Series B Preferred Stock,
        for aggregate gross proceeds to RealNetworks of approximately $10.0
        million.
    --  As planned, on April 20, 2020, Judd Lee succeeded Michael Ensing as
        Senior Vice President, Chief Financial Officer and Treasurer. Mr. Lee
        has served as Chief Financial Officer and in senior leadership roles for
        technology companies and investment firms for over two decades and
        brings to RealNetworks an extensive background in financial management,
        strategic planning, and operational accounting and finance.
    --  On April 24, 2020, RealNetworks received $2.9 million in funding
        pursuant to the Paycheck Protection Program ("PPP") established as part
        of the Coronavirus Aid, Relief, and Economic Security (or CARES) Act.
        RealNetworks intends to use the proceeds from the loan to cover payroll
        costs, rent and utilities, in accordance with program guidelines. In
        early May 2020, Napster expects to receive $1.7 million pursuant to the
        program.
    --  RealNetworks received a notification from The Nasdaq Stock Market that
        as of April 23, 2020, the company no longer meets Nasdaq's minimum bid
        price requirement. Amid the extreme market uncertainty, Nasdaq recently
        implemented a grace period through June 30, 2020 for compliance with its
        bid price rule, allowing companies to focus on managing their businesses
        through the challenges caused by the COVID-19 pandemic. RealNetworks has
        until December 28, 2020 to regain compliance with the minimum bid price
        requirement and expects to take action well before then to bring the
        company back into compliance.

Business Outlook

Given the ongoing uncertainty surrounding the global economy and the future impact of COVID-19, RealNetworks is not providing guidance for the second quarter ending June 30, 2020.

Conference Call and Webcast Information

RealNetworks will host a conference call today to review its results and discuss its performance at approximately 4:30 p.m. ET / 1:30 p.m. PT. Participants may join the conference call by dialing 1-877-451-6152 (United States) or 1-201-389-0879 (International). A telephonic replay of the call will also be available shortly after the completion of the call, until 11:59 pm ET on Wednesday, May 27, 2020, by dialing 1-844-512-2921 (United States) or 1-412-317-6671 (International) and entering the replay pin number: 13701794.

A live webcast will be available on RealNetworks' Investor Relations site under the Events & Presentations section at http://investor.realnetworks.com and will be archived online upon completion of the conference call.

About RealNetworks

Building on a legacy of digital media expertise and innovation, RealNetworks has created a new generation of products that employ best-in-class artificial intelligence and machine learning to enhance and secure our daily lives. SAFR (www.safr.com) is the world's premier facial recognition platform for live video. Leading in real-world performance and accuracy as evidenced in testing by NIST, SAFR enables new applications for security, convenience, and analytics. Kontxt (www.kontxt.com) is the foremost platform for categorizing A2P messages to help mobile carriers build customer loyalty and drive new revenue through text message classification and antispam. For information about our other products, visit www.realnetworks.com.

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) including noncontrolling interests 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 our current expectations regarding our future growth, profitability, and market position, our financial condition and liquidity, our strategic focus and initiatives, product plans, agreements with partners, use of loan proceeds, our ability to regain compliance with Nasdaq listing standards, and the growth and future prospects relating to our Napster segment. 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 our expectations as of today, and actual results may differ materially from the results predicted. Factors that could cause actual results for RealNetworks, on a consolidated basis, to differ from the results predicted include: our ability to realize operating efficiencies, growth and other benefits from the implementation of our growth initiatives and restructuring efforts; cash usage and conservation, and the pursuit of additional funding sources; successful monetization of our products and services; competitive risks, including the emergence or growth of competing technologies, products and services; potential outcomes and effects of claims and legal proceedings; risks associated with key customer or strategic relationships and business acquisitions; challenges caused by the COVID-19 pandemic; disruptions in the global financial markets, including changes in consumer spending and impacts to credit availability; fluctuations in foreign currencies; and unique risk factors that relate to our Napster segment, such as risks stemming from its streaming music service and related music royalties. More information about potential risk factors that could affect our business and financial results is included in RealNetworks' annual report on Form 10-K for the most recent year ended December 31, 2019, 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 our financial statements and forward-looking financial guidance requires us 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. RealNetworks assumes no obligation to update any forward-looking statements or information, which are in effect as of their respective dates.

For More Information:
Investor Relations for RealNetworks
Kimberly Orlando, Addo Investor Relations
310-829-5400
IR@realnetworks.com
RNWK-F


                              
         
             RealNetworks, Inc. and Subsidiaries


                        
            
          Condensed Consolidated Statements of Operations


                                      
            
              (Unaudited)




                                         
            
              Quarter Ended
                                                      March 31,




                                         2020                                    2019




                                                        (in thousands, except per share data)





      Net revenue                               $
            43,145                             $
      39,472


       Cost of revenue                 24,176                                    24,870


                 Gross profit          18,969                                    14,602





      Operating expenses:


             Research and
              development               8,618                                     8.833


             Sales and marketing        8,117                                     8,142


             General and
              administrative            7,113                                     8,364


             Restructuring and
              other charges               209                                       167




                 Total operating
                  expenses             24,057                                    25,506




       Operating loss                 (5,088)                                 (10,904)





      Other income (expenses):


             Interest expense           (262)                                    (166)


             Interest income                5                                        77


             Gain (loss) on equity
              investment, net               -                                   12,338


             Other income
              (expenses), net             795                                       127




                 Total other income
                  (expenses), net         538                                    12,376




       Income (loss) before
        income taxes                  (4,550)                                    1,472


       Income tax expense                 139                                       258




      Net income (loss)
       including
       noncontrolling
       interests                      (4,689)                                    1,214


      Net income (loss)
       attributable to
       noncontrolling
       interests                         (47)                                    (319)


      Net income (loss)
       attributable to
       RealNetworks                             $
            (4,642)                             $
      1,533




      Net income (loss) per
       share attributable
       to RealNetworks-
       Basic:                                    $
            (0.12)                              $
      0.04


      Net income (loss) per
       share attributable
       to RealNetworks-
       Diluted:                                  $
            (0.12)                              $
      0.04




       Shares used to
        compute basic net
        income (loss) per
        share                          38,229                                    37,820


       Shares used to
        compute diluted net
        income (loss) per
        share                          38,229                                    37,912


                                      
      
         RealNetworks, Inc. and Subsidiaries


                                     
      
         Condensed Consolidated Balance Sheets


                                          
       
                (Unaudited)




                                                 March 31,                                  December 31,
                                                      2020                           2019


                                                                  (in thousands)


                                            
        
                ASSETS



      Current assets:


       Cash and cash equivalents                              $
              19,046                         $
       16,805


       Trade accounts receivable,
        net                                         26,991                           29,507


       Deferred costs, current
        portion                                        865                              823


       Prepaid expenses and other
        current assets                               8,873                            7,445


          Total current assets                      55,775                           54,580




       Equipment and software                       30,419                           32,167


       Leasehold improvements                        2,903                            3,311


          Total equipment, software,
           and leasehold
           improvements                             33,322                           35,478


       Less accumulated
        depreciation and
        amortization                                30,801                           32,657


          Net equipment, software,
           and leasehold
           improvements                              2,521                            2,821




       Operating lease assets                       10,961                           11,592


       Restricted cash
        equivalents                                  5,374                            5,374



      Other assets                                  1,150                            1,891


       Deferred costs, non-
        current portion                              1,156                            1,021


       Deferred tax assets, net                        752                              761


       Other intangible assets,
        net                                         18,016                           19,286



      Goodwill                                     62,202                           62,428





      Total assets                                          $
              157,907                        $
       159,754




                                     
      
          LIABILITIES AND SHAREHOLDERS' EQUITY





      Current liabilities:


       Accounts payable                                        $
              4,996                          $
       4,927


       Accrued royalties,
        fulfillment and other
        current liabilities                         77,127                           77,303


       Deferred revenue, current
        portion                                      6,437                            6,620



      Notes payable                                 4,797                            7,331


          Total current liabilities                 93,357                           96,181




       Deferred revenue, non-
        current portion                                287                               96


       Deferred tax liabilities,
        net                                          1,116                            1,172


       Long-term lease
        liabilities                                  7,770                            8,466



      Long-term debt                                3,900                            3,900


       Other long-term
        liabilities                                  8,420                           11,666




       Total liabilities                           114,850                          121,481




       Total shareholders' equity                   43,606                           38,775




      Noncontrolling interests                       (549)                           (502)





      Total equity                                 43,057                           38,273




       Total liabilities and
        equity                                               $
              157,907                        $
       159,754


                        
              
                RealNetworks, Inc. and Subsidiaries


                  
              
                Condensed Consolidated Statements of Cash Flows


                                    
              
                (Unaudited)




                                                                  Three Months Ended
                                                           March 31,


                                             2020                                      2019




                                                                    (in thousands)




      Cash flows from operating activities:


     Net income (loss)
      including noncontrolling
      interests                                     $
              (4,689)                       $
     1,214


     Adjustments to reconcile net income (loss)
      including noncontrolling interests to net
      cash used in operating activities:


     Depreciation and
      amortization                          1,436                                       1,482


     Stock-based compensation                 380                                       1,384


     (Gain) loss on equity
      investment, net                           -                                   (12,338)


     Foreign currency (gain)
      loss                                  (767)                                      (151)


     Fair value adjustments to
      contingent consideration
      liability                             (300)


     Net change in certain
      operating assets and
      liabilities                           (684)                                      (910)


       Net cash used in operating
        activities                        (4,624)                                    (9,319)


      Cash flows from investing activities:


     Purchases of equipment,
      software, and leasehold
      improvements                           (94)                                      (482)


     Proceeds from sales and
      maturities of short-term
      investments                               -                                         24


     Acquisition, net of cash
      acquired                                  -                                     12,260




      Net cash (used in)
       provided by investing
       activities                            (94)                                     11,802




      Cash flows from financing activities:


     Proceeds from issuance of
      preferred stock                      10,000


     Tax payments from shares
      withheld upon vesting of
      restricted stock                          -                                      (271)


     Proceeds from notes
      payable and revolving
      credit facility                       8,768                                       9,733


     Repayments of notes
      payable and revolving
      credit facility                    (11,172)                                    (8,437)


     Other financing activities                 -                                        450


      Net cash provided by
       financing activities                 7,596                                       1,475


      Effect of exchange rate
       changes on cash, cash
       equivalents and
       restricted cash                      (637)                                      (207)


      Net increase in cash, cash
       equivalents and
       restricted cash                      2,241                                       3,751


      Cash, cash equivalents and
       restricted cash,
       beginning of period                 22,179                                      37,191


      Cash, cash equivalents and
       restricted cash, end of
       period                                        $
              24,420                       $
     40,942


                                                                                                                       
              
                RealNetworks, Inc. and Subsidiaries


                                                                                                                        
              
                Supplemental Financial Information


                                                                                                                                   
              
                (Unaudited)




                                                                     2020                                                                                                                                                       2019


                                                                       Q1                                                 Q4                                        Q3                                     Q2                                   Q1


                                                                                                                 
              
                 (in thousands)


                     Net Revenue by Segment


        Consumer Media (A)                                                   $
              3,495                                            $
              4,432                                                                 $
              3,632              $
        2,620  $
        2,486


        Mobile Services (B)                                         6,690                                   6,312                                               6,895                                                                    6,997      6,939



       Games (C)                                                   6,637                                   6,567                                               7,164                                                                    6,048      5,710



       Napster (D)                                                26,323                                  26,089                                              27,302                                                                   28,583     24,337


                          Total net revenue                                 $
              43,145                                           $
              43,400                                                                $
              44,993             $
        44,248 $
        39,472




                     Net Revenue by Product


                     Consumer Media

    ---

        -Software License (E)                                                $
              2,020                                            $
              2,856                                                                 $
              1,987                $
        944    $
        735


        -Subscription Services
         (F)                                                          929                                     992                                               1,028                                                                    1,040      1,088


        -Product Sales (G)                                            222                                     193                                                 207                                                                      206        219


        -Advertising & Other
         (H)                                                          324                                     391                                                 410                                                                      430        444




                     Mobile Services

    ---

        -Software License (I)                                         831                                     657                                                 888                                                                      957        599


        -Subscription Services
         (J)                                                        5,859                                   5,655                                               6,007                                                                    6,040      6,340




                     Games

    ---

        -Subscription Services
         (K)                                                        2,770                                   3,007                                               3,056                                                                    3,073      2,985


        -Product Sales (L)                                          2,978                                   2,580                                               3,078                                                                    2,177      1,988


        -Advertising & Other
         (M)                                                          889                                     980                                               1,030                                                                      798        737




                     Napster

    ---

        -Subscription Services
         (N)                                                       26,323                                  26,089                                              27,302                                                                   28,583     24,337




                          Total net revenue                                 $
              43,145                                           $
              43,400                                                                $
              44,993             $
        44,248 $
        39,472




                     Net Revenue by
                      Geography


        United States                                                       $
              22,420                                           $
              21,053                                                                $
              22,015             $
        21,322 $
        18,970


        Rest of world                                              20,725                                  22,347                                              22,978                                                                   22,926     20,502


                          Total net revenue                                 $
              43,145                                           $
              43,400                                                                $
              44,993             $
        44,248 $
        39,472





       
                Net Revenue by Segment


        (A) The Consumer Media segment primarily includes revenue from the licensing of our portfolio of video codec technologies. Also included is RealPlayer and related products, such as the distribution of third-party software products,
         advertising on RealPlayer websites, sales of RealPlayer Plus software to consumers, and consumer subscriptions such as RealPlayer Plus and SuperPass.



       (B) The Mobile Services segment primarily includes revenue from SaaS services and sales of professional services provided to mobile carriers.



       (C) The Games segment primarily includes revenue from sales of mobile and PC games, online games subscription services, player purchases of in-game virtual goods, and advertising on games sites and social network sites.


        (D) The Napster segment primarily includes revenue from subscription music offerings from on-demand streaming services and conditional downloads. Napster revenues are included in our consolidated results from the January 18, 2019
         acquisition date forward.



       
                Net Revenue by Product



       (E) Software licensing revenue within Consumer Media includes revenues from licenses of our video codec technologies.



       (F) Subscriptions revenue within Consumer Media includes revenue from subscriptions such as our RealPlayer Plus and SuperPass offerings.



       (G) Product sales within Consumer Media includes sales of RealPlayer Plus software to consumers.



       (H) Advertising & other revenue within Consumer Media includes distribution of third-party software products and advertising on RealPlayer websites.



       (I) Software license revenue within Mobile Services includes revenue from our integrated RealTimes platform and our facial recognition platform, SAFR.



       (J) Subscription services revenue within Mobile Services includes revenue from ringback tones and our messaging platform services, as well as from related professional services provided to mobile carriers.



       (K) Subscription services revenue within Games includes revenue from online games subscriptions.



       (L) Product sales revenue within Games includes revenue from retail and wholesale games-related revenue, sales of mobile games, and player purchases of in-game virtual goods.



       (M) Advertising & other revenue within Games includes advertising on games sites and social network sites.



       (N) Subscription services revenue within Napster includes music tracks by way of on-demand streaming and conditional downloads offered directly to end consumers and distribution partners.


                                                         
              
                RealNetworks, Inc. and Subsidiaries


                                     
            
                Segment Results of Operations and Reconciliation to non-GAAP Contribution Margin


                                                                     
              
                (Unaudited)




                                         2020                                                                                         2019


                                           Q1                                                 Q4                                          Q1


                                                                  
              
                 (in thousands)


                   Consumer Media





     Net revenue                                 $
              3,495                                                                             $
          4,432                $
         2,486



     Cost of revenue                     611                                                                690                                                     833



     Gross profit                      2,884                                                              3,742                                                   1,653





     Gross margin                 83
          %                                                      84
            %                                               66
        %




      Operating expenses                2,458                                                              2,498                                                   3,119


      Operating income (loss), a
       GAAP measure                                 $
              426                                                                             $
          1,244              $
         (1,466)


      Depreciation and
       amortization                        13                                                                 34                                                      54




      Contribution margin, a non-
       GAAP measure                                 $
              439                                                                             $
          1,278              $
         (1,412)




                   Mobile Services





     Net revenue                                 $
              6,690                                                                             $
          6,312                $
         6,939



     Cost of revenue                   1,696                                                              1,866                                                   2,048



     Gross profit                      4,994                                                              4,446                                                   4,891





     Gross margin                 75
          %                                                      70
            %                                               70
        %




      Operating expenses                7,588                                                              7,198                                                   7,561


      Operating income (loss), a
       GAAP measure                             $
              (2,594)                                                                          $
          (2,752)             $
         (2,670)


      Depreciation and
       amortization                        98                                                                100                                                     231




      Contribution margin, a non-
       GAAP measure                             $
              (2,496)                                                                          $
          (2,652)             $
         (2,439)




                   Games





     Net revenue                                 $
              6,637                                                                             $
          6,567                $
         5,710



     Cost of revenue                   1,794                                                              1,716                                                   1,670



     Gross profit                      4,843                                                              4,851                                                   4,040





     Gross margin                 73
          %                                                      74
            %                                               71
        %




      Operating expenses                4,923                                                              4,744                                                   5,037


      Operating income (loss), a
       GAAP measure                                $
              (80)                                                                              $
          107                $
         (997)


      Acquisitions related
       intangible asset
       amortization                                                                                                                                                 23


      Depreciation and
       amortization                       138                                                                 85                                                      83




      Contribution margin, a non-
       GAAP measure                                  $
              58                                                                               $
          192                $
         (891)




                   Napster





     Net revenue                                $
              26,323                                                                            $
          26,089               $
         24,337



     Cost of revenue                  20,072                                                             20,493                                                  20,396



     Gross profit                      6,251                                                              5,596                                                   3,941





     Gross margin                 24
          %                                                      21
            %                                               16
        %




      Operating expenses                6,461                                                              7,147                                                   5,532


      Operating income (loss), a
       GAAP measure                               $
              (210)                                                                          $
          (1,551)             $
         (1,591)


      Acquisitions related
       intangible asset
       amortization                     1,125                                                              1,126                                                     943


      Depreciation and
       amortization                        32                                                                 60                                                     115


      Restructuring and other
       charges                            122                                                                544




      Contribution margin, a non-
       GAAP measure                               $
              1,069                                                                               $
          179                $
         (533)




                   Corporate





     Cost of revenue                                 $
              3                                                                              $
          (68)                $
         (77)



     Gross profit                        (3)                                                                68                                                      77





     Gross margin                        N/A                                                               N/A                                                    N/A




      Operating expenses                2,627                                                              2,999                                                   4,257


      Operating income (loss), a
       GAAP measure                             $
              (2,630)                                                                          $
          (2,931)             $
         (4,180)


      Other income (expense), net         795                                                              (431)                                                    127


      Foreign currency (gain) loss      (767)                                                               494                                                   (151)


      Depreciation and
       amortization                        30                                                                 32                                                      33


      Fair value adjustments to
       contingent consideration
       liability                        (300)                                                               300


      Restructuring and other
       charges                             87                                                                367                                                     167


      Stock-based compensation            380                                                                461                                                   1,384




      Contribution margin, a non-
       GAAP measure                             $
              (2,405)                                                                          $
          (1,708)             $
         (2,620)


                                                              
              
                RealNetworks, Inc. and Subsidiaries


                         
              
                Reconciliation of Net income (loss) including noncontrolling interests to adjusted EBITDA, a non-GAAP measure


                                                                          
              
                (Unaudited)




                                                                2020                                                 2019


                                                                  Q1                                                  Q4                                         Q1






                   Reconciliation of GAAP Net income (loss) including noncontrolling interests
                    to adjusted EBITDA:




      Net income (loss) including
       noncontrolling interests                                        $
              (4,689)                                            $
              (6,763)                $
       1,214


      Income tax expense (benefit)                               139                                        256                                                    258



     Interest expense                                           262                                        207                                                    166



     Interest income                                            (5)                                      (14)                                                  (77)


      (Gain) loss on equity
       investment, net                                                                                                                                      (12,338)


      Foreign currency (gain) loss                             (767)                                       494                                                  (151)


      Acquisitions related
       intangible asset
       amortization                                            1,125                                      1,126                                                    966


      Depreciation and
       amortization                                              311                                        311                                                    516


      Fair value adjustments to
       contingent consideration
       liability                                               (300)                                       300


      Restructuring and other
       charges                                                   209                                        911                                                    167


      Stock-based compensation                                   380                                        461                                                  1,384


         Adjusted EBITDA, a non-GAAP
          measure                                                      $
              (3,335)                                            $
              (2,711)              $
       (7,895)

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SOURCE RealNetworks, Inc.