RealNetworks, Inc (RNWK) saw its loss widen to $9.98 million, or $0.27 a share for the quarter ended Dec. 31, 2016. In the previous year period, the company reported a loss of $8.41 million, or $0.23 a share. Revenue during the quarter grew 5.12 percent to $31.45 million from $29.92 million in the previous year period. Gross margin for the quarter contracted 229 basis points over the previous year period to 44.81 percent. Operating margin for the quarter stood at negative 20.25 percent as compared to a negative 25.09 percent for the previous year period.
Operating loss for the quarter was $6.37 million, compared with an operating loss of $7.51 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at negative $4.23 million compared to negative $4.22 million in the prior year second quarter. At the same time, adjusted EBITDA margin stood at negative 13.45 percent for the quarter compared to negative 14.12 percent in the last year period.
"During 2016, we achieved two of our three major financial goals," said Rob Glaser, chairman and chief executive officer of RealNetworks. “We stabilized our businesses and saw quarter over quarter overall revenue growth. “We’re continuing to roll out the integration of our Mobile Services products with carriers like Vivo, Verizon, and Vodafone. In our Games business, we scaled up our production of GameHouse Originals, leading to a 28% growth in mobile games revenue. “While we did not return to profitability in 2016, we made significant progress. We enter 2017 with several new product initiatives well underway that we believe will build strong momentum towards a return to growth and profitability."
For the first-quarter 2017, RealNetworks, Inc projects revenue to be in the range of $29 million to $32 million.
Operating cash flow remains negative
RealNetworks, Inc has spent $24.33 million cash to meet operating activities during the year as against cash outgo of $68.98 million in the last year. Cash flow from investing activities was $11.55 million for the year, down 26.55 percent or $4.18 million, when compared with the last year.
The company has spent $0.34 million cash to carry out financing activities during the year as against cash inflow of $0.34 million in the last year period.
Cash and cash equivalents stood at $33.72 million as on Dec. 31, 2016, down 28.73 percent or $13.59 million from $47.32 million on Dec. 31, 2015.
Working capital drops significantly
RealNetworks, Inc has witnessed a decline in the working capital over the last year. It stood at $66.30 million as at Dec. 31, 2016, down 27.44 percent or $25.07 million from $91.37 million on Dec. 31, 2015. Current ratio was at 2.72 as on Dec. 31, 2016, down from 3.41 on Dec. 31, 2015.
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