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Real Networks reported EPS of $0.01 (excluding Microsoft litigation expenses), versus consensus of a loss of $0.01. The stock rose by over 4% in late trading. Here are details of the results and guidance:


Q4 Results

  • Revenue of $72.5 million was 34% higher than a year earlier.
  • Gross margin was 67% versus 62% a year earlier due to lower content costs in the consumer business.
  • Operating expenses, including antitrust litigation, were $50.7 million versus $38.6 million a year earlier.
  • The number of paying subscribers reached 1.55 million as of end-December, up from 1.3 million at end-2003.
  • Paying subscribers to Rhapsody and premium radio services increased to 700,000 from 625,000 at end-2003.
  • Ad-supported web services contributed $19.1 million of revenue, up 132% from $8.2 million in 2003.

Q1 Guidance

  • Net revenues of $73 million to $74.5 million.
  • Net loss per share of ($0.02) to ($0.01) including $3.75 million of litigation expenses; excluding litigation expenses, EPS of $0.00 to $0.01.
  • EBITDA before antitrust litigation expenses flat to slightly down from Q4.

2005 Full Year Guidance

  • Revenue growth of 16% to 20% and revenue of $310 million to $320 million.
  • Litigation expenses of about $15 million.
  • Gross margin of 65%.
  • Operating expenses of 35%-40%.
  • Operating income of 25-30%.
  • Positive quarterly net income exluding litigation expenses.
  • Full year EBITDA excluding litigation expenses of $20-$25 million.

One year chart below.
Rnwk

Source: Real Networks (RNWK) beats consensus, stock up