Real Networks shocked the Street today with an unexpected 1Q05 profit instead of an anticipated loss. The company turned a very narrow net incolme of $814,000 compared to the 1Q04 loss of $10.4 million. Revenue was up 27 percent, a record $76 million from $60.4 million the previous year. It also achieved GAAP profitability. (I may have to subtract points for use of the dreaded “GAAP,” which has replaced EBITDA as my most disliked earnings term.)
From the fine print:
– The consumer segment jumped 37 percent to $4.2 million from $47 million last year. Music revenue was up 86 percent to $22.2 million while games revenue grew 80 percent to $12.2 million.
– The business segment was down from 1Q04, $12.4 million compared to $13.4 million, but up from $11 million in 4Q04.
At the quarter’s closem Real had 1.85 million-plus subscribers compared to 1.85 million the previous year. Total music subscribers more than doubled to 975,000-plus from 450,000-plus in 1Q04. Real reported breaking the 1 million mark in April; those numbers include wholesale subs through a deal with Comcast.
I had problems on two different computers connecting to the conference call but will have some notes from the replay later.
Earnings release Financials
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