RealNetworks has reported its Q3 results, showing record revenue of $93.7 million, up 14 percent over $82.2 million in 3Q05. For detailed coverage check out Staci’s report at PaidContent. On the mobile side the big news is the effect RealNetwork’s purchase of WiderThan had. In the earnings call there was a lot of talk about it…this from Rob Glaser, Chairman and CEO:
“In addition to providing innovative products and services, WiderThan has demonstrated solid financial results with a high proportion of recurring revenues and very scalable margins. During 2005, their revenues grew by more than 60% to over $100 million and the growth continued in the first half of 2006, with revenue growing 39% over the same period in 2005. In addition, WiderThan’s operating margin for the first half of 2006 exceeded 15%.”
From the press release: “For the fourth quarter of 2006, Real expects revenue in the range of $117 million to $123 million, including approximately $22 million to $24 million related to two months of WiderThan results.”
RealNetworks has already paid $320 million for its 95% share of WiderThan and is keen on nabbing the whole amount. It will include all of WiderThan’s revenue in its earnings and count the part paid to the minority shareholders as an expense. After this report the WiderThan figures will be consolidated with the rest of the earnings.
More from Glaser: “The acquisition allows us to approach carriers with an even broader range of advanced digital video, music and game services. We believe that in addition to product synergies, there are substantial market synergies to be realized through complementary geographic strengths. WiderThan that has strong carrier relationships throughout Asia, while Real has historically been a leading media technology provider to carriers throughout Europe. Both companies have strong carrier relationships in the United States. We intend to leverage the strength of each company’s product set and market to each optimize our collective opportunities.” That gives a pretty good idea of the earnings call, there’s a lot of enthusiasm for WiderThan.
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