PR Newswire | Feb 10, 2021 04:02PM EST

02/10 15:01 CST

RealNetworks Announces Fourth Quarter And Full Year 2020 Financial Results SEATTLE, Feb. 10, 2021

SEATTLE, Feb. 10, 2021 /PRNewswire/ -- RealNetworks, Inc. (Nasdaq: RNWK), a leader in AI-powered digital media software and services, today announced its financial results* for the fourth quarter and full year ended December 31, 2020.

* 2020 revenue from continuing operations of $68.1 million, up 3% year-over-year due to aggregate growth of over 110% from two key growth initiatives (free-to-play mobile Games and SAFR), offset by declines in legacy businesses * 2020 net loss from continuing operations of $(5.1) million, an improvement of $10.1 million compared to 2019; 2020 adjusted EBITDA loss of $(8.6) million, an improvement of $11.4 million compared to 2019 * Continued traction with SAFR driven by successes in the U.S. Federal market and in Japan and Korea * Completed the sale of Napster to MelodyVR for total consideration of $26.6 million and buyer's assumption of approximately $44.0 million in payment obligations * Ended the year with $23.9 million in unrestricted cash and cash equivalents, up from $8.5 million on December 31, 2019

Management Commentary

"2020 was a year of strong achievements for RealNetworks in spite of the challenges associated with the Global Pandemic that had a huge impact on businesses and people around the globe," said Rob Glaser, Founder, Chairman, and Chief Executive Officer of RealNetworks. "Revenue from two of our key growth initiatives - free-to-play mobile Games and SAFR - grew over 110% from 2019. We are also pleased to have completed the sale of Napster to MelodyVR. We believe the sale of Napster simplifies Real and will help us deepen our focus on our growth initiatives and create long-term shareholder value."

Full Year 2020 Financial Highlights from Continuing Operations

* Revenue was $68.1 million, up 3% compared to $65.8 million in 2019. * Revenue from key growth initiatives, free-to-play mobile Games and SAFR, increased over 110% from 2019. * Games revenue was $28.6 million, up 12% compared to $25.5 million in 2019. * Gross profit margin was 76%, up from 74% in 2019. * Operating expenses decreased $19.0 million, or 25%, from 2019. Normalizing for certain one-time and non-cash items, operating expenses decreased $10.0 million, or 14%, from 2019. * Net loss attributable to RealNetworks was $(4.8) million, or $(0.13) per diluted share, compared to a net loss of $(15.1) million, or $(0.40) per diluted share in 2019. Included in net loss attributable to RealNetworks in 2020 was a gain of $8.6 million and in 2019 was a gain of $12.3 million related to the transaction involving the Company's interest in Napster. * Adjusted EBITDA was a loss of $(8.6) million compared to a loss of $(19.9) million in 2019. A reconciliation of GAAP net income (loss) including noncontrolling interests to adjusted EBITDA, a non-GAAP measure, is provided in the financial tables that accompany this release. * At December 31, 2020, the Company had $23.9 million in unrestricted cash and cash equivalents compared to $13.2 million at September 30, 2020 and $8.5 million at December 31, 2019.

Fourth Quarter 2020 Financial Highlights from Continuing Operations

* Revenue was $17.6 million, up 6% compared to $16.6 million in the prior quarter and up 2% compared to $17.3 million in the prior year period. * Games revenue was $6.9 million, down 10% compared to $7.6 million in the prior quarter and up 5% compared to $6.6 million in the prior year period. * Gross profit margin was 77%, up from 75% in the prior quarter and up from 76% in the prior year period. * Operating expenses decreased $7.2 million, or 47%, from the prior quarter and decreased $9.3 million, or 53%, from the prior year period. Normalizing for certain one-time and non-cash items, operating expenses were relatively flat with the prior quarter and decreased $1.7 million, or 10%, from the prior year period. * Net income attributable to RealNetworks was $6.1 million, or $0.16 per diluted share, compared to a net loss of $(3.2) million, or $(0.08) per diluted share, in the prior quarter and a net loss of $(4.5) million, or $(0.12) per diluted share, in the prior year period. Included in net loss attributable to RealNetworks in the fourth quarter of 2020 was a gain of $8.4 million related to the transaction involving the Company's interest in Napster. * Adjusted EBITDA was a loss of $(0.9) million compared to a loss of $(1.9) million in the prior quarter and a loss of $(2.9) million in the prior year period.

Corporate Developments

* On December 30, 2020, the Company announced the completion of the sale of Napster to MelodyVR for a total transaction value of approximately $70.6 million valued at the closing date, comprising $15.0 million in cash, $11.6 million in MelodyVR stock, and assumption by MelodyVR of approximately $44.0 million in payment obligations, primarily to various music industry entities. The Company received $10.6 million in MelodyVR stock and $6.7 million in cash as debt repayment and liquidation preference plus $3.0 million of cash to be held in an 18-month indemnity escrow. The Company expects to provide $4.8 million of consideration (equity and/or cash) to a third party to fulfill the terms of a January 2019 agreement to acquire its stake in Napster. * Effective March 1, 2021, Christine Chambers will be appointed to the position of Senior Vice President, Chief Financial Officer and Treasurer. Ms. Chambers will be rejoining RealNetworks, having served the Company in various finance roles for nearly a decade, most recently as Vice President, Finance. Ms. Chambers will report to President and COO Mike Ensing. Ms. Chambers succeeds Judd Lee, who will be transitioning out of the Company in March.

Business Outlook

As has been the case over the past year, RealNetworks is not providing guidance for the first quarter ending March 31, 2021.

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, March 3, 2021, by dialing 1-844-512-2921 (United States) or 1-412-317-6671 (International) and entering the replay pin number: 13714971.

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 RealNetworksBuilding on a rich history 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. Real's portfolio includes SAFR, the world's premier computer vision platform for live video, Kontxt, an industry leading NLP (Natural Language Processing) platform for text and multi-media analysis, and leveraging its digital media expertise, a mobile games business focused on the large free-to-play segment. For information about all of our products, visit www.realnetworks.com.

About Continuing and Discontinued Operations and Non-GAAP Financial Measures

*This release refers to "continuing" and "discontinued" operations due to the completion of the sale of Napster, RealNetworks' 84%-owned subsidiary, to MelodyVR Group PLC, which closed on December 30, 2020. Effective as of the August 25, 2020 announcement date, Napster has been 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.

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) from continuing operations 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 StatementsThis 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, and expectations and contingencies relating to the sale of Napster. 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; and fluctuations in foreign currencies. More information about potential risk factors that could affect our business and financial results is included in RealNetworks' latest annual report on Form 10-K for 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 RealNetworksKimberly Orlando, Addo Investor Relations310-829-5400IR@realnetworks.comRNWK-F

RealNetworks, Inc. and SubsidiariesCondensed Consolidated Statements of Operations(Unaudited)

Quarter Ended Year ended December 31, December 31,

2020 2019 2020 2019

(in thousands, except per share data)

Net revenue $ 17,601 $ 17,311 $ 68,062 $ 65,802

Cost of revenue 4,036 4,204 16,465 17,226

Gross profit 13,565 13,107 51,597 48,576

Operating expenses:

Research and development 5,944 6,411 24,319 27,850

Sales and marketing 5,073 5,515 21,042 23,016

General and administrative 4,068 4,846 17,331 21,820

Fair value adjustments to contingent consideration liability (8,400) 300 (8,600) 1,000

Restructuring and other charges 1,432 367 2,529 1,954

Total operating expenses 8,117 17,439 56,621 75,640

Operating income (loss) 5,448 (4,332) (5,024) (27,064)

Other income (expenses):

Interest expense (8) - (20) -

Interest income 7 9 38 98

Gain on equity and other investments, net 201 - 111 12,338

Other income (expenses), net (227) (95) (164) 102

Total other income (expenses), net (27) (86) (35) 12,538

Income (loss) from continuing operations before income taxes 5,421 (4,418) (5,059) (14,526)

Income tax expense (benefit) (551) 187 55 702

Net income (loss) from continuing operations 5,972 (4,605) (5,114) (15,228)

Net income (loss) from discontinued operations, net of tax 2,260 (2,158) (206) (6,030)

Net income (loss) 8,232 (6,763) (5,320) (21,258)

Net loss attributable to noncontrolling interests of continuing operations (88) (57) (284) (163)

Net income (loss) attributable to noncontrolling interests of discontinued 180 (342) (184) (1,094)operations

Net income (loss) attributable to RealNetworks $ 8,140 $ (6,364) $ (4,852) $ (20,001)

Net income (loss) from continuing operations attributable to RealNetworks $ 6,060 $ (4,548) $ (4,830) $ (15,065)

Net income (loss) from discontinued operations attributable to RealNetworks 2,080 (1,816) (22) (4,936)

Net income (loss) attributable to RealNetworks $ 8,140 $ (6,364) $ (4,852) $ (20,001)

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

Continuing operations $ 0.16 $ (0.12) $ (0.13) $ (0.40)

Discontinued operations 0.05 (0.05) - (0.13)

Net income (loss) per share attributable to RealNetworks- Basic $ 0.21 $ (0.17) $ (0.13) $ (0.53)

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

Continuing operations $ 0.16 $ (0.12) $ (0.13) $ (0.40)

Discontinued operations 0.05 (0.05) - (0.13)

Net income (loss) per share attributable to RealNetworks- Diluted $ 0.21 $ (0.17) $ (0.13) $ (0.53)

Shares used to compute basic net income (loss) per share 38,345 38,142 38,272 37,944

Shares used to compute diluted net income (loss) per share 38,489 38,142 38,272 37,944

RealNetworks, Inc. and SubsidiariesCondensed Consolidated Balance Sheets(Unaudited)

December 31, December 31,

2020 2019

(in thousands)

ASSETS

Current assets:

Cash and cash equivalents $ 23,940 $ 8,472

Trade accounts receivable, net 10,229 12,767

Deferred costs, current portion 196 537

Investments 9,965 -

Prepaid expenses and other current assets 3,480 4,428

Current assets of discontinued operations - 28,376

Total current assets 47,810 54,580

Equipment and software 30,726 31,699

Leasehold improvements 2,776 3,071

Total equipment, software, and leasehold improvements 33,502 34,770

Less accumulated depreciation and amortization 31,631 32,350

Net equipment, software, and leasehold improvements 1,871 2,420

Operating lease assets 7,937 10,198

Restricted cash equivalents 1,630 4,880

Other assets 4,150 1,808

Deferred costs, non-current portion 74 388

Deferred tax assets, net 909 761

Goodwill 17,375 16,908

Non-current assets of discontinued operations - 67,811

Total assets $ 81,756 $ 159,754

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

Accounts payable $ 2,750 $ 4,042

Accrued and other current liabilities 17,850 17,495

Deferred revenue, current portion 2,122 2,003

Current liabilities of discontinued operations - 72,641

Total current liabilities 22,722 96,181

Deferred revenue, non-current portion 45 96

Deferred tax liabilities, net 1,129 1,076

Long-term lease liabilities 6,837 8,234

Long-term debt 2,895 3,900

Other long-term liabilities 2,241 10,151

Non-current liabilities of discontinued operations - 1,843

Total liabilities 35,869 121,481

Total shareholders' equity 46,149 38,775

Noncontrolling interests (262) (502)

Total equity 45,887 38,273

Total liabilities and equity $ 81,756 $ 159,754

RealNetworks, Inc. and SubsidiariesCondensed Consolidated Statements of Cash Flows(Unaudited)

Year ended December 31,

2020 2019

(in thousands)

Cash flows from operating activities:

Net loss from continuing operations $ (5,114) $ (15,228)

Adjustment to reconcile net loss from continuing operations to net cash used inoperatingactivities:

Depreciation and amortization 944 1,195

Stock-based compensation 1,420 2,881

Gain on equity and other investments, net (111) (12,338)

Loss on impairment of operating lease asset 1,055 -

Deferred income taxes, net (191) (29)

Foreign currency (gain) loss 330 7

Fair value adjustments to contingent consideration liability (8,600) 1,000

Net change in certain operating assets and liabilities 2,184 1,197

Net cash used in operating activities - continuing operations (8,083) (21,315)

Net cash used in operating activities - discontinued operations (2,555) (4,055)

Net cash used in operating activities (10,638) (25,370)

Cash flows from investing activities:

Purchases of equipment, software, and leasehold improvements (408) (949)

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

Acquisitions, net of cash acquired - 12,249

Net cash provided by (used in) investing activities - continuing operations (408) 11,324

Net cash used in investing activities - discontinued operations (2,160) (243)

Net cash provided by (used in) investing activities (2,568) 11,081

Cash flows from financing activities:

Proceeds from issuance of common stock - 199

Proceeds from issuance of preferred stock 10,000 -

Tax payments from shares withheld upon vesting of restricted stock (26) (309)

Proceeds from notes payable and long-term debt 2,876 3,900

Repayments of notes payable and long-term debt (3,922) -

Payment of financing fees - (622)

Other financing activities 2,106 900

Net cash provided by financing activities - continuing operations 11,034 4,068

Net cash provided by (used in) financing activities - discontinued operations 4,945 (4,691)

Net cash provided by (used in) financing activities 15,979 (623)

Effect of exchange rate changes on cash, cash equivalents and restricted cash 618 (100)

Net increase (decrease) in cash, cash equivalents and restricted cash 3,391 (15,012)

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

Cash, cash equivalents, and restricted cash, end of year 25,570 22,179

Less: Cash, cash equivalent and restricted cash from discontinued operations - 8,827

Cash and cash equivalents from continuing operations, end of year $ 25,570 $ 13,352

RealNetworks, Inc. and SubsidiariesSupplemental Financial Information(Unaudited)

2020 2019

YTD Q4 Q3 Q2 Q1 YTD Q4 Q3 Q2 Q1

(in thousands)

Net Revenue by Segment

Consumer Media (A) $ 12,581 $ 3,384 $ 2,543 $ 3,159 $ 3,495 $ 13,170 $ 4,432 $ 3,632 $ 2,620 $ 2,486

Mobile Services (B) 26,889 7,338 6,400 6,461 6,690 27,143 6,312 6,895 6,997 6,939

Games (C) 28,592 6,879 7,611 7,465 6,637 25,489 6,567 7,164 6,048 5,710

Total net revenue $ 68,062 $ 17,601 $ 16,554 $ 17,085 $ 16,822 $ 65,802 $ 17,311 $ 17,691 $ 15,665 $ 15,135

Net Revenue by Product

Consumer Media

- Software License (D) $ 5,957 $ 1,593 $ 642 $ 1,702 $ 2,020 $ 6,522 $ 2,856 $ 1,987 $ 944 $ 735

- Subscription Services (E) 3,586 867 892 898 929 4,148 992 1,028 1,040 1,088

- Product Sales (F) 1,301 625 193 261 222 825 193 207 206 219

- Advertising & Other (G) 1,737 299 816 298 324 1,675 391 410 430 444

Mobile Services

- Software License (H) 5,110 2,376 931 972 831 3,101 657 888 957 599

- Subscription Services (I) 21,779 4,962 5,469 5,489 5,859 24,042 5,655 6,007 6,040 6,340

Games

- Subscription Services (J) 10,794 2,589 2,705 2,730 2,770 12,121 3,007 3,056 3,073 2,985

- Product Sales (K) 13,879 3,315 3,874 3,712 2,978 9,823 2,580 3,078 2,177 1,988

- Advertising & Other (L) 3,919 975 1,032 1,023 889 3,545 980 1,030 798 737

Total net revenue $ 68,062 $ 17,601 $ 16,554 $ 17,085 $ 16,822 $ 65,802 $ 17,311 $ 17,691 $ 15,665 $ 15,135

Net Revenue by Geography

United States $ 43,704 $ 10,893 $ 11,855 $ 10,742 $ 10,214 $ 39,724 $ 10,153 $ 10,588 $ 9,480 $ 9,503

Rest of world 24,358 6,708 4,699 6,343 6,608 26,078 7,158 7,103 6,185 5,632

Total net revenue $ 68,062 $ 17,601 $ 16,554 $ 17,085 $ 16,822 $ 65,802 $ 17,311 $ 17,691 $ 15,665 $ 15,135

Net Revenue by Segment

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

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

(C) The Games segment primarily includes revenue from player purchases ofin-game virtual goods within our free-to-play games, mobile and PC games,online games subscription services, and advertising on games sites and socialnetwork sites.

Net Revenue by Product

(D) Software licensing revenue within Consumer Media includes revenues fromlicenses of our video codec technologies.

(E) Subscriptions revenue within Consumer Media includes revenue fromsubscriptions such as our RealPlayer Plus and SuperPass offerings.

(F) Product sales within Consumer Media includes sales of RealPlayer Plussoftware to consumers.

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

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

(I) Subscription services revenue within Mobile Services includes revenue fromringback tones and our messaging platform services, as well as from relatedprofessional services provided to mobile carriers.

(J) Subscription services revenue within Games includes revenue from onlinegames subscriptions.

(K) Product sales revenue within Games includes revenue from player purchasesof in-game virtual goods, retail and wholesale games-related revenue, sales ofmobile games.

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

RealNetworks, Inc. and SubsidiariesSegment Results of Operations and Reconciliation to non-GAAP ContributionMargin(Unaudited)

2020 2019 2020 2019

Q4 Q3 Q4 YTD YTD

(in thousands)

Consumer Media

Net revenue $ 3,384 $ 2,543 $ 4,432 $ 12,581 $ 13,170

Cost of revenue 550 593 690 2,273 3,031

Gross profit 2,834 1,950 3,742 10,308 10,139

Gross margin 84 % 77 % 84 % 82 % 77 %

Operating expenses 2,135 2,092 2,498 8,889 11,186

Operating income (loss), a GAAP measure $ 699 $ (142) $ 1,244 $ 1,419 $ (1,047)

Depreciation and amortization 17 17 34 62 178

Contribution margin, a non-GAAP measure $ 716 $ (125) $ 1,278 $ 1,481 $ (869)

Mobile Services

Net revenue $ 7,338 $ 6,400 $ 6,312 $ 26,889 $ 27,143

Cost of revenue 1,736 1,511 1,866 6,725 7,500

Gross profit 5,602 4,889 4,446 20,164 19,643

Gross margin 76 % 76 % 70 % 75 % 72 %

Operating expenses 5,940 5,577 7,198 24,787 29,340

Operating income (loss), a GAAP measure $ (338) $ (688) $ (2,752) $ (4,623) $ (9,697)

Depreciation and amortization 130 88 100 418 518

Contribution margin, a non-GAAP measure $ (208) $ (600) $ (2,652) $ (4,205) $ (9,179)

Games

Net revenue $ 6,879 $ 7,611 $ 6,567 $ 28,592 $ 25,489

Cost of revenue 1,744 1,955 1,716 7,451 6,975

Gross profit 5,135 5,656 4,851 21,141 18,514

Gross margin 75 % 74 % 74 % 74 % 73 %

Operating expenses 4,885 5,152 4,744 19,936 20,220

Operating income (loss), a GAAP measure $ 250 $ 504 $ 107 $ 1,205 $ (1,706)

Acquisitions related intangible asset amortization - - - - 27

Depreciation and amortization 72 71 85 347 341

Contribution margin, a non-GAAP measure $ 322 $ 575 $ 192 $ 1,552 $ (1,338)

Corporate

Cost of revenue $ 6 $ 3 $ (68) $ 16 $ (280)

Gross profit (6) (3) 68 (16) 280

Gross margin N/A N/A N/A N/A N/A

Operating expenses (4,843) 2,521 2,999 3,009 14,894

Operating income (loss), a GAAP measure $ 4,837 $ (2,524) $ (2,931) $ (3,025) $ (14,614)

Other expense, net (227) (104) (95) (164) 102

Foreign currency loss 305 143 157 330 7

Depreciation and amortization 28 28 33 117 131

Fair value adjustments to contingent consideration liability (8,400) - 300 (8,600) 1,000

Restructuring and other charges 1,432 307 367 2,529 1,954

Stock-based compensation 327 390 461 1,420 2,881

Contribution margin, a non-GAAP measure $ (1,698) $ (1,760) $ (1,708) $ (7,393) $ (8,539)

RealNetworks, Inc. and SubsidiariesReconciliation of Net income (loss) from continuing operations to adjustedEBITDA, a non-GAAP measure(Unaudited)

2020 2019 2020 2019

Q4 Q3 Q4 YTD YTD

(in thousands)

Reconciliation of GAAP Net income (loss) from continuing operations to adjustedEBITDA:

Net income (loss) from continuing operations $ 5,972 $ (3,308) $ (4,605) $ (5,114) $ (15,228)

Income tax expense (benefit) (551) 316 187 55 702

Interest expense 8 7 - 20 -

Interest income (7) (6) (9) (38) (98)

(Gain) loss on equity and other investments, net (201) 37 - (111) (12,338)

Foreign currency loss 305 143 157 330 7

Acquisitions related intangible asset amortization - - - - 27

Depreciation and amortization 247 204 252 944 1,168

Fair value adjustments to contingent consideration liability (8,400) - 300 (8,600) 1,000

Restructuring and other charges 1,432 307 367 2,529 1,954

Stock-based compensation 327 390 461 1,420 2,881

Adjusted EBITDA, a non-GAAP measure $ (868) $ (1,910) $ (2,890) $ (8,565) $ (19,925)

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SOURCE RealNetworks, Inc.