Company Quick10K Filing
Realnetworks
Price1.60 EPS-1
Shares38 P/E-3
MCap61 P/FCF-3
Net Debt-20 EBIT-19
TEV41 TEV/EBIT-2
TTM 2019-09-30, in MM, except price, ratios
10-Q 2020-09-30 Filed 2020-11-04
10-Q 2020-06-30 Filed 2020-08-06
10-Q 2020-03-31 Filed 2020-05-07
10-K 2019-12-31 Filed 2020-03-30
10-Q 2019-09-30 Filed 2019-10-31
10-Q 2019-06-30 Filed 2019-08-06
10-Q 2019-03-31 Filed 2019-05-09
10-K 2018-12-31 Filed 2019-03-08
10-Q 2018-09-30 Filed 2018-11-08
10-Q 2018-06-30 Filed 2018-08-02
10-Q 2018-03-31 Filed 2018-05-04
10-K 2017-12-31 Filed 2018-02-27
10-Q 2017-09-30 Filed 2017-11-02
10-Q 2017-06-30 Filed 2017-08-04
10-Q 2017-03-31 Filed 2017-05-04
10-K 2016-12-31 Filed 2017-02-27
10-Q 2016-09-30 Filed 2016-11-04
10-Q 2016-06-30 Filed 2016-08-04
10-Q 2016-03-31 Filed 2016-05-06
10-K 2015-12-31 Filed 2016-02-29
10-Q 2015-09-30 Filed 2015-11-09
10-Q 2015-06-30 Filed 2015-08-06
10-Q 2015-03-31 Filed 2015-05-07
10-K 2014-12-31 Filed 2015-02-26
10-Q 2014-09-30 Filed 2014-11-06
10-Q 2014-06-30 Filed 2014-08-07
10-Q 2014-03-31 Filed 2014-05-08
10-K 2013-12-31 Filed 2014-03-06
10-Q 2013-09-30 Filed 2013-11-07
10-Q 2013-06-30 Filed 2013-08-08
10-Q 2013-03-31 Filed 2013-05-08
10-Q 2012-09-30 Filed 2012-11-08
10-Q 2012-06-30 Filed 2012-08-09
10-Q 2012-03-31 Filed 2012-05-08
10-Q 2011-09-30 Filed 2011-11-08
10-Q 2011-06-30 Filed 2011-08-09
10-Q 2011-03-31 Filed 2011-05-10
10-K 2010-12-31 Filed 2011-03-16
10-Q 2010-09-30 Filed 2010-11-09
10-Q 2010-06-30 Filed 2010-08-09
10-Q 2010-03-31 Filed 2010-05-07
10-K 2009-12-31 Filed 2010-03-10
8-K 2020-11-03
8-K 2020-10-21
8-K 2020-08-25
8-K 2020-08-05
8-K 2020-08-04
8-K 2020-06-18
8-K 2020-05-26
8-K 2020-05-06
8-K 2020-04-29
8-K 2020-04-17
8-K 2020-03-25
8-K 2020-02-10
8-K 2020-02-05
8-K 2020-01-08
8-K 2019-12-09
8-K 2019-10-31
8-K 2019-10-30
8-K 2019-09-13
8-K 2019-08-01
8-K 2019-08-01
8-K 2019-05-02
8-K 2019-04-02
8-K 2019-02-06
8-K 2019-01-18
8-K 2018-11-28
8-K 2018-11-07
8-K 2018-10-02
8-K 2018-08-01
8-K 2018-08-01
8-K 2018-05-03
8-K 2018-04-24
8-K 2018-02-27
8-K 2018-02-07

RNWK 10Q Quarterly Report

Part I. Financial Information
Item 1.Financial Statements
Note 1Description of Business and Summary of Significant Accounting Policies
Note 2Recent Accounting Pronouncements
Note 3Revenue Recognition
Note 4Stock - Based Compensation
Note 5Acquisitions and Dispositions
Note 6Fair Value Measurements
Note 7Accrued and Other Current Liabilities
Note 8Debt
Note 9Restructuring Charges
Note 10Income (Loss) per Share
Note 11Commitments and Contingencies
Note 12Segment Information
Note 13Related Party Transactions
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II. Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Default Upon Senior Securities
Item 4. Mine Safety Disclosures
Item 5. Other Information
Item 6. Exhibits
EX-10.1 exhibit101-mensingxemp.htm
EX-31.1 exhibit311-10q2020q3.htm
EX-31.2 exhibit312-10q2020q3.htm
EX-32.1 exhibit321-10q2020q3.htm
EX-32.2 exhibit322-10q2020q3.htm

Realnetworks Earnings 2020-09-30

Balance SheetIncome StatementCash Flow
4353482611748702012201420172020
Assets, Equity
7049287-14-352012201420172020
Rev, G Profit, Net Income
4027141-12-252012201420172020
Ops, Inv, Fin

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM10-Q

ýQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended September 30, 2020
OR
¨TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from              to             
Commission file number 1-37745
RealNetworks, Inc.
(Exact name of registrant as specified in its charter)
Washington91-1628146
(State of incorporation) 
(I.R.S. Employer
Identification Number)
1501 First Avenue South, Suite 600 98134
Seattle,Washington
(Address of principal executive offices) (Zip Code)
(206)674-2700
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ☒    No  ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer   Accelerated filer
Non-Accelerated Filer   Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  ☒
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, Par Value $0.001 per shareRNWKThe NASDAQ Stock Market
Preferred Share Purchase RightsRNWKThe NASDAQ Stock Market
The number of shares of the registrant’s Common Stock outstanding as of October 29, 2020 was 38,275,862.




TABLE OF CONTENTS
 
 

2


PART I. FINANCIAL INFORMATION
Item 1.Financial Statements
REALNETWORKS, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
September 30,
2020
December 31,
2019
ASSETS
Current assets:
Cash and cash equivalents$13,245 $8,472 
Trade accounts receivable, net of allowances of $623 and $51613,015 12,767 
Deferred costs, current portion364 537 
Prepaid expenses and other current assets3,552 4,428 
Current assets of discontinued operations89,547 28,376 
Total current assets119,723 54,580 
Equipment, software, and leasehold improvements, at cost:
Equipment and software30,675 31,699 
Leasehold improvements2,720 3,071 
Total equipment, software, and leasehold improvements, at cost33,395 34,770 
Less accumulated depreciation and amortization31,459 32,350 
Net equipment, software, and leasehold improvements1,936 2,420 
Operating lease assets8,726 10,198 
Restricted cash equivalents 4,630 4,880 
Other assets973 1,808 
Deferred costs, non-current portion71 388 
Deferred tax assets, net781 761 
Goodwill17,073 16,908 
Non-current assets of discontinued operations 67,811 
Total assets$153,913 $159,754 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable$3,398 $4,042 
Accrued and other current liabilities25,272 17,495 
Deferred revenue, current portion2,302 2,003 
Current debt3,900  
Current liabilities of discontinued operations70,713 72,641 
Total current liabilities105,585 96,181 
Deferred revenue, non-current portion46 96 
Deferred tax liabilities, net1,076 1,076 
Long-term lease liabilities6,672 8,234 
Long-term debt2,883 3,900 
Other long-term liabilities2,243 10,151 
Non-current liabilities of discontinued operations 1,843 
Total liabilities118,505 121,481 
Commitments and contingencies
Shareholders’ equity:
Preferred stock, $0.001 par value:
Series A: authorized 200 shares, no shares issued and outstanding  
Series B: authorized 8,100 shares; issued and outstanding 8,065 shares in 2020 and 0 shares in 20198  
Undesignated series: authorized 51,700 shares  
Common stock, $0.001 par value, authorized 250,000 shares; issued and outstanding 38,275 shares in 2020 and 38,227 shares in 201938 38 
Additional paid-in capital655,143 644,070 
Accumulated other comprehensive loss(61,717)(61,323)
Accumulated deficit(557,002)(544,010)
Total shareholders’ equity36,470 38,775 
Noncontrolling interests(1,062)(502)
Total equity35,408 38,273 
Total liabilities and equity$153,913 $159,754 
See accompanying notes to unaudited condensed consolidated financial statements.
3


REALNETWORKS, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
 Quarter Ended
September 30,
Nine Months Ended
September 30,
 2020201920202019
Net revenue$16,554 $17,691 $50,461 $48,491 
Cost of revenue4,062 4,292 12,429 13,022 
Gross profit12,492 13,399 38,032 35,469 
Operating expenses:
Research and development5,781 6,931 18,375 21,439 
Sales and marketing5,130 5,644 15,969 17,501 
General and administrative4,124 5,242 13,063 17,674 
Restructuring and other charges307 691 1,097 1,587 
Total operating expenses15,342 18,508 48,504 58,201 
Operating loss(2,850)(5,109)(10,472)(22,732)
Other income (expenses):
Interest expense(7) (12) 
Interest income6  31 89 
Gain (loss) on equity investments, net(37) (90)12,338 
Other income (expenses), net(104)85 63 197 
Total other income (expenses), net(142)85 (8)12,624 
Loss from continuing operations before income taxes(2,992)(5,024)(10,480)(10,108)
Income tax expense 316 233 606 515 
Net loss from continuing operations(3,308)(5,257)(11,086)(10,623)
Net loss from discontinued operations, net of tax(1)(997)(2,466)(3,872)
Net loss(3,309)(6,254)(13,552)(14,495)
Net loss attributable to noncontrolling interests of continuing operations(77)(54)(196)(106)
Net income (loss) attributable to noncontrolling interests of discontinued operations6 (232)(364)(752)
Net loss attributable to RealNetworks$(3,238)$(5,968)$(12,992)$(13,637)
Net loss from continuing operations attributable to RealNetworks$(3,231)$(5,203)$(10,890)$(10,517)
Net loss from discontinued operations attributable to RealNetworks(7)(765)(2,102)(3,120)
Net loss attributable to RealNetworks$(3,238)$(5,968)$(12,992)$(13,637)
Net loss per share attributable to RealNetworks- Basic:
Continuing operations$(0.08)$(0.14)$(0.28)$(0.28)
Discontinued operations (0.02)(0.06)(0.08)
Total net loss per share - Basic$(0.08)$(0.16)$(0.34)$(0.36)
Net loss per share attributable to RealNetworks- Diluted:
Continuing operations$(0.08)$(0.14)$(0.28)$(0.28)
Discontinued operations (0.02)(0.06)(0.08)
Total net loss per share - Diluted$(0.08)$(0.16)$(0.34)$(0.36)
Shares used to compute basic net loss per share38,270 38,062 38,247 37,944 
Shares used to compute diluted net loss per share38,270 38,062 38,247 37,944 
See accompanying notes to unaudited condensed consolidated financial statements.
4


REALNETWORKS, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(In thousands)

Quarter Ended
September 30,
Nine Months Ended
September 30,
2020201920202019
Net loss$(3,309)$(6,254)$(13,552)$(14,495)
Comprehensive loss:
Foreign currency translation adjustments(7)(232)(394)(811)
Total other comprehensive loss (7)(232)(394)(811)
Comprehensive loss including noncontrolling interests(3,316)(6,486)(13,946)(15,306)
Comprehensive loss attributable to noncontrolling interests(71)(286)(560)(858)
Comprehensive loss attributable to RealNetworks$(3,245)$(6,200)$(13,386)$(14,448)
See accompanying notes to unaudited condensed consolidated financial statements.
5


REALNETWORKS, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
 Nine Months Ended
September 30,
 20202019
Cash flows from operating activities:
Net loss from continuing operations$(11,086)$(10,623)
Adjustments to reconcile net income (loss) from continuing operations to net cash used in operating activities:
Depreciation and amortization697 943 
Stock-based compensation1,093 2,420 
(Gain) loss on equity investments, net90 (12,338)
Foreign currency (gain) loss25 (150)
Fair value adjustments to contingent consideration liability(200)700 
Net change in certain operating assets and liabilities:
Trade accounts receivable(323)(967)
Prepaid expenses, operating lease and other assets3,700 3,731 
Accounts payable(645)(289)
Accrued, lease and other liabilities(3,384)(1,736)
Net cash provided by (used in) operating activities- continuing operations(10,033)(18,309)
Net cash provided by (used in) operating activities- discontinued operations(4,086)(1,988)
Net cash provided by (used in) operating activities(14,119)(20,297)
Cash flows from investing activities:
Purchases of equipment, software, and leasehold improvements(261)(831)
Proceeds from sales and maturities of short-term investments 24 
Acquisition, net of cash acquired 12,260 
Net cash provided by (used in) investing activities- continuing operations(261)11,453 
Net cash provided by (used in) investing activities- discontinued operations(192)(237)
Net cash (used in) provided by investing activities(453)11,216 
Cash flows from financing activities:
Proceeds from issuance of common stock (stock options and stock purchase plan) 144 
Proceeds from issuance of preferred stock10,000  
Tax payments from shares withheld upon vesting of restricted stock(12)(289)
Proceeds from notes payable and long-term debt2,876 3,900 
Payment of financing fees (569)
Other financing activities2,106 900 
Net cash provided by (used in) financing activities- continuing operations14,970 4,086 
Net cash provided by (used in) financing activities- discontinued operations2,007 (8,331)
Net cash provided by (used in) financing activities16,977 (4,245)
Effect of exchange rate changes on cash, cash equivalents and restricted cash32 (390)
Net increase (decrease) in cash, cash equivalents and restricted cash2,437 (13,716)
Cash, cash equivalents and restricted cash, beginning of period22,179 37,191 
Cash, cash equivalents and restricted cash end of period24,616 23,475 
Less: Cash, cash equivalents and restricted cash from discontinued operations6,741 6,724 
Cash and cash equivalents from continuing operations, end of period$17,875 $16,751 
See accompanying notes to unaudited condensed consolidated financial statements.
6


REALNETWORKS, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(In thousands)
 Common Stock
Additional
Paid-In
Capital
Accumulated
Other
Comprehensive
Income (Loss)
Accumulated
Deficit
Total
Shareholders’
Equity
Noncontrolling InterestsTotal Equity
SharesAmount
 
Balances, January 1, 201937,728 $37 $641,930 $(61,118)$(524,009)$56,840 $ $56,840 
Common stock issued for exercise of stock options, employee stock purchase plan, and vesting of restricted shares, net of tax payments from shares withheld upon vesting of restricted stock190 — (271)— — (271)— (271)
Napster acquisition— — (1,346)— — (1,346)570 (776)
Stock-based compensation— — 1,384 — — 1,384 — 1,384 
Foreign currency translation adjustments— — — (87)— (87)— (87)
Net income (loss)— — — — 1,533 1,533 (319)1,214 
Other equity transactions— — 362 — — 362 88 450 
Balances, March 31, 201937,918 37 642,059 (61,205)(522,476)58,415 339 58,754 
Common stock issued for exercise of stock options, employee stock purchase plan, and vesting of restricted shares, net of tax payments from shares withheld upon vesting of restricted stock131 — 128 — — 128 — 128 
Stock-based compensation— — 533 — — 533 — 533 
Foreign currency translation adjustments— — — (492)— (492)— (492)
Net income (loss)— — — — (9,202)(9,202)(253)(9,455)
Balances, June 30, 201938,049 37 642,720 (61,697)(531,678)49,382 86 49,468 
Common stock issued for exercise of stock options, employee stock purchase plan, and vesting of restricted shares, net of tax payments from shares withheld upon vesting of restricted stock18 1 (3)— — (2)— (2)
Stock-based compensation— — 503 — — 503 — 503 
Foreign currency translation adjustments— — — (232)— (232)— (232)
Net income (loss)— — — — (5,968)(5,968)(286)(6,254)
Other equity transactions— — 353 — — 353 97 450 
Balances, September 30, 201938,067 $38 $643,573 $(61,929)$(537,646)$44,036 $(103)$43,933 

See accompanying notes to unaudited condensed consolidated financial statements.
7


REALNETWORKS, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(In thousands)
 Preferred StockCommon Stock
Additional
Paid-In
Capital
Accumulated
Other
Comprehensive
Income (Loss)
Accumulated
Deficit
Total
Shareholders’
Equity
Noncontrolling InterestsTotal Equity
SharesAmountSharesAmount
 
Balances, January 1, 2020 $ 38,227 $38 $644,070 $(61,323)$(544,010)$38,775 $(502)$38,273 
Common stock issued for exercise of stock options, and vesting of restricted shares, net of tax payments from shares withheld upon vesting of restricted stock— — 4 —  — —  —  
Stock-based compensation— — — — 380 — — 380 — 380 
Foreign currency translation adjustments— — — — — (907)— (907)— (907)
Net income (loss)— — — — — — (4,642)(4,642)(47)(4,689)
Issuance of Preferred B Stock8,065 8 — — 9,992 — — 10,000 — 10,000 
Balances, March 31, 20208,065 8 38,231 38 654,442 (62,230)(548,652)43,606 (549)43,057 
Common stock issued for exercise of stock options, and vesting of restricted shares, net of tax payments from shares withheld upon vesting of restricted stock— — 23 — (5)— — (5)— (5)
Stock-based compensation— — — — 323 — — 323 — 323 
Foreign currency translation adjustments— — — — — 520 — 520 — 520 
Net income (loss)— — — — — — (5,112)(5,112)(442)(5,554)
Balances, June 30, 20208,065 8 38,254 38 654,760 $(61,710)(553,764)39,332 (991)38,341 
Common stock issued for exercise of stock options, employee stock purchase plan, and vesting of restricted shares, net of tax payments from shares withheld upon vesting of restricted stock— — 21 — (7)— — (7)— (7)
Stock-based compensation— — — — 390 — — 390 — 390 
Foreign currency translation adjustments— — — — — (7)— (7)— (7)
Net income (loss)— — — — — — (3,238)(3,238)(71)(3,309)
Balances, September 30, 20208,065 $8 38,275 $38 $