RealNetworks' Profits Up, Revenues Increase on Music

Release: RealNetworks reported increased revenues for Q2, of $82.7 million, up 26 percent from $65.5 million in year-ago quarter. It had a net income of $4.7 million, compared to a net loss of $4.6 million in the year-ago quarter.
Q2 results include a gain of $7.6 million associated with the sale of MusicNet, and a $6.5 million of incremental marketing expenses associated with the launch of a new version of its Rhapsody online music service.
The company has a total of 2 million content subscribers, and 1.15 million on which are music related (music subscribers up from more than 550,000 for the year-ago quarter).
-- Music revenue grew 61 percent to $24.1 million, up from $15.0 million in the year-ago quarter.
-- Games revenue grew 63 percent to $13.6 million, up from $8.4 million in the year-ago quarter.
-- Media properties revenue, which includes advertising, increased 22 percent to $8.2 million, up from $6.7 million durinthe year-ago quarter and compared to $5.6 million in Q1 2005.
-- Real's business products and services generated $12.1 million in revenues, compared to $11.7 million in the prior year's second quarter.
For Q3, its revenues are expected to go down to be between $80 million and $82 million, slightly below Q2, based in part on the discontinuation of several low margin standalone video products and a $1.5 million revenue decrease related to an expiring legacy systems license agreement.