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:
- 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.
- 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.