RealNetworks Announces Third Quarter 2006 Financial Results

RealNetworks Announces Third Quarter 2006 Financial Results

Achieves Record Quarterly Revenue

SEATTLE, Nov. 6 /PRNewswire-FirstCall/ -- RealNetworks(R), Inc. (NASDAQ:RNWK), the leading creator of digital media services and software, today announced results for the third quarter ended September 30, 2006.

Quarterly Highlights:

-- Record revenue of $93.7 million
-- Net income of $42.2 million
-- Earnings per diluted share of $0.24 and adjusted earnings per
diluted share of $0.05
-- Agreement to acquire WiderThan announced on September 12th;
successfully acquired approximately 95% of shares on October 31st

"This quarter has been both very successful financially and very eventful strategically for Real," said Rob Glaser, chairman and CEO of RealNetworks. "By joining forces with WiderThan, Real greatly accelerates our efforts in mobile entertainment, and deepens our relationships with Tier 1 mobile carriers. And by launching the world's first Rhapsody-optimized MP3 players and home audio systems, we have put the celestial jukebox into the palm of consumers' hands."

For the third quarter of 2006, revenue grew 14% to $93.7 million compared to $82.2 million for the third quarter of 2005. For the third quarter of 2006, revenue in the Consumer Products and Services segment was as follows: Games revenue was $22.5 million, a 53% increase over the third quarter of 2005; Music revenue was $30.4 million, a 16% increase over the third quarter of 2005; and Media Software and Services revenue was $29.6 million, a decrease of 4% from the third quarter of 2005. In the Technology Products and Solutions segment, revenue was $11.2 million, a 7% increase over the third quarter of 2005. Foreign currency exchange rate fluctuations positively impacted 2006 third quarter revenue by approximately $0.4 million compared to the third quarter of 2005.

Net income for the third quarter of 2006 was $42.2 million or $0.24 per diluted share, compared to $11.2 million or $0.06 per diluted share in the third quarter of 2005. Adjusted net income, which excludes the impact of our agreements with Microsoft, equity investment gains, stock-based compensation expenses and estimated income tax expense related to these items, was $8.7 million or $0.05 per diluted share, compared to $6.3 million or $0.03 per diluted share in the third quarter of 2005. A reconciliation of GAAP net income to adjusted net income is provided in the financial tables that accompany this release.

Gross margin was 70% in the third quarter of both 2006 and 2005. Operating expenses for the third quarter of 2006 were $8.1 million compared to $57.7 million in the prior year's quarter. Third quarter 2006 operating expenses include a benefit related to Microsoft's payment under the settlement and commercial agreements signed in the fourth quarter of 2005. Operating expenses also include non-cash stock-based compensation expense. Excluding the impact from the Microsoft agreements and stock-based compensation expense, adjusted operating expenses in the third quarter of 2006 were $62.2 million compared to $54.1 million in the third quarter of 2005. A reconciliation of GAAP operating expenses to adjusted operating expenses is provided in the financial tables that accompany this release. For the third quarter of 2006, Real's effective tax rate was approximately 38%.

As of September 30, 2006, Real had approximately $845 million in unrestricted cash, cash equivalents and short-term investments which include the proceeds from $100 million of convertible debt. Further, Real expects to receive up to $122 million in additional payments related to the Microsoft agreements over the next two quarters. Microsoft can earn credits against its future payments as a result of delivering music users to Real through its promotional efforts.

Under Real's stock repurchase program, approximately 200,000 shares were repurchased for $1.9 million during the third quarter of 2006. As of September 30, 2006, approximately $78.1 million remained available under the existing stock repurchase program.

Acquisition of WiderThan

On October 31, 2006, Real acquired approximately 95% of WiderThan Co., Ltd. (NASDAQ:WTHN) through a cash tender offer. As a result of the tender offer, WiderThan became a majority-owned subsidiary of Real, and the financial results of WiderThan will be included in Real's consolidated financial statements subsequent to the acquisition date. Real paid approximately $320 million for its purchase of 95% of WiderThan shares.

The Real executive responsible for the WiderThan operations will be John Giamatteo, who is being promoted to President, Technology Products and Solutions and International Operations, RealNetworks. WiderThan executives reporting to Mr. Giamatteo include DJ Lee, President and CEO of WiderThan APAC, Vern Poyner, President and CEO of WiderThan Americas, and Dr. Jinsoo Yoon, Head of Global Technology for WiderThan.

Business Outlook

The following forward looking statements reflect Real's expectations as of November 6, 2006. The Company currently does not intend to update these forward-looking statements until the next quarterly results announcement. This guidance reflects the acquisition of approximately 95% of WiderThan effective October 31, 2006. This guidance is also based on preliminary purchase price adjustments resulting from the acquisition of WiderThan, which are subject to change upon finalization of the purchase price allocation. 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. For the fourth quarter of 2006, GAAP net income per diluted share is expected to be $0.18 to $0.21 and adjusted net income per diluted share is expected to be $0.00 to $0.03. For the full year 2006, Real expects revenue in the range of $387 million to $393 million, including approximately $22 million to $24 million related to WiderThan. Real expects full year GAAP net income per diluted share of $0.77 to $0.80 and adjusted net income per diluted share of $0.09 to $0.12. The guidance for the fourth quarter and full year 2006 assumes an effective tax rate of approximately 37%, which may vary due to fluctuations in certain assets and liabilities, including unrealized gains on equity investments and the valuation of our deferred tax assets. These rate variations generally have no material impact on the amount paid for income taxes. For both the fourth quarter and full year 2006, the impact of the WiderThan acquisition is expected to be slightly dilutive to GAAP net income per share and slightly accretive to adjusted net income per share.

Adjusted net income per diluted share for both the fourth quarter and full year 2006 excludes approximately $2.7 million of WiderThan acquisition related charges. The expected fourth quarter 2006 results of WiderThan subsequent to the date of acquisition are not necessarily indicative of results of WiderThan for the entire fourth quarter. A reconciliation of expected GAAP net income per diluted share to expected adjusted net income per diluted share is provided in the financial tables that accompany this release.

About Non-GAAP Financial Measures

To supplement the Company's consolidated financial results presented in accordance with GAAP, RealNetworks uses non-GAAP measures for certain components of financial performance. These non-GAAP measures include adjusted net income, adjusted net income per diluted share and adjusted operating expenses. Adjusted net income excludes the impact related to non-cash stock- based compensation expense, income and expenses including charitable contributions, related to the Microsoft agreements, equity investment gains and losses, amortization of intangible assets resulting from the WiderThan acquisition and an estimate of the income taxes from the aforementioned items. The presentation of these non-GAAP financial measures is not intended to be considered as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP. These non-GAAP measures are provided to enhance investors' overall understanding of the Company's current and expected future financial performance. The Company believes these non-GAAP measures provide useful information to management and investors by excluding certain income, expenses and gains and losses that may not be indicative of its core operating and financial results. Management uses these measures on an ongoing basis to track and assess the Company's financial performance. The accompanying financial tables provide reconciliations to the nearest GAAP measure of all non-GAAP measures provided in this press release.

The Company will host a webcast and conference call today at 5:00pm (Eastern)/2:00pm (Pacific). The live webcast featuring slides and audio, will be available at http://investor.realnetworks.com/. Listeners will require RealPlayer(R) to listen to the conference call, which can be downloaded for free at www.real.com. The on-demand webcast will be available approximately two hours following the conclusion of the live webcast. Participants may access the conference call by dialing 800-857-5305 (773-681-5857 for international callers). The passcode is "Third Quarter Earnings," and the leader is Rob Glaser. A telephonic replay will be available until 8:00pm (Eastern) on November 15, 2006 and may be accessed by dialing 888-568-0723 (203-369-3193 for international callers).

ABOUT REALNETWORKS

RealNetworks, Inc. is a leading creator of digital media services and software including Rhapsody, RealPlayer(R) 10, and casual PC and mobile games. Broadcasters, network operators, media companies and enterprises use RealNetworks' products and services to create and deliver digital media to PCs, mobile phones and consumer electronics devices. Consumers can access and experience audio/video programming and download RealNetworks' consumer software at http://www.real.com/. RealNetworks' corporate information is located at http://www.realnetworks.com/company.

Forward Looking Statements: This press release contains forward-looking statements that involve risks and uncertainties, including statements relating to: (a) Real's future revenue, GAAP and adjusted net income per diluted share and GAAP and adjusted operating expenses; (b) Real's position in the mobile music entertainment market, and the related growth and profitability potential; (c) the impact of the WiderThan acquisition on Real's earnings and Real's expectations regarding the timing of consolidation of WiderThan's financial results into Real's financial statements; (d) the effect of final purchase price accounting relating to the WiderThan acquisition; and (e) expected future payments resulting from the Microsoft agreements. Actual results may differ materially from the results predicted. Factors that could cause actual results to differ from the results predicted include: development and consumer acceptance of legal online music distribution services generally and RealNetworks' content services in particular because these are relatively new and unproven business models and markets; risks associated with acquisitions generally, and the acquisition of WiderThan in particular, including the risks of integration, unknown liabilities and operations in new markets and geographies, as well as risks specifically associated with WiderThan's business; the potential that we will be unable to continue to enter into commercially attractive agreements with third parties for the provision of compelling content for our subscription service offerings; the risk that the collaborative agreements we have with Microsoft will be less successful than we expect; the emergence of new entrants and competition in the market for digital media subscription offerings and online music sales; the impact on our gross margins from content costs and from the mix of subscribers to subscription offerings with higher content costs than others; competitive risks, including competing technologies, products and services, and the competitive activities of our larger competitors, some of which have strong ties to streaming media users through other products; risks associated with the introduction of new products and services; risks inherent in strategic relationships, especially with competitors, and technology and service integration efforts; and risks relating to the ability of Real's strategic partners to generate subscribers for Real's digital content services. More information about potential risk factors that could affect RealNetworks' business and financial results is included in RealNetworks' annual report on Form 10-K for the most recent year ended December 31, and its quarterly reports on Form 10-Q and from time to time in other reports filed by RealNetworks with the Securities and Exchange Commission. The preparation of our financial statements and forward looking financial guidance requires us to make estimates and assumptions that affect the reported amount of assets and liabilities and the reported amounts of revenues and expenses during the reported period. Actual results may differ materially from these estimates under different assumptions or conditions. The Company assumes no obligation to update any forward-looking statements or information, which are in effect as of their respective dates.

NOTE: RealNetworks, Rhapsody and RealPlayer are trademarks or registered trademarks of RealNetworks, Inc. All other companies or products listed herein are trademarks or registered trademarks of their respective owners.

RealNetworks, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)

Quarters Ended Nine Months Ended
September 30, September 30,
2006 2005 2006 2005
(in thousands, except per share data)

Net revenue $93,676 $82,233 $269,687 $241,491

Cost of revenue 28,389 24,695 81,788 74,273

Gross profit 65,287 57,538 187,899 167,218

Operating expenses:
Research and development 18,344 16,354 55,127 45,381
Sales and marketing 37,560 30,745 111,604 93,809
General and administrative 14,043 7,037 41,586 21,120
Loss on excess
office facilities(A) - - 738 -
Subtotal operating expenses 69,947 54,136 209,055 160,310

Antitrust litigation expenses
(benefit) (B) (61,861) 3,531 (159,554) 11,925
Total operating expenses,
net 8,086 57,667 49,501 172,235

Operating income (loss) 57,201 (129) 138,398 (5,017)

Other income (expense), net:
Interest income, net 10,618 2,904 27,978 7,499
Equity in net loss of MusicNet - - - (1,068)
Gain on sales of equity
investments - 11,740 2,286 19,330
Other, net 242 124 432 (276)
Other income, net 10,860 14,768 30,696 25,485

Income before income taxes 68,061 14,639 169,094 20,468
Income tax provision (25,908) (3,457) (63,180) (3,763)

Net income $42,153 $11,182 $105,914 $16,705

Basic net income per share $0.26 $0.07 $0.66 $0.10
Diluted net income per share $0.24 $0.06 $0.59 $0.09

Shares used to compute basic net
income per share 160,578 170,797 160,467 170,761
Shares used to compute diluted net
income per share 178,913 184,180 178,551 184,276

(A) The loss on unoccupied excess office facilities represents an increase
in the estimate of the loss from building operating costs not expected to
be recovered.

(B) Consists of amounts received under the Settlement and Commercial
agreements with Microsoft, net of certain legal fees, personnel costs,
public relations and other professional service fees incurred
related to antitrust complaints against Microsoft, including
proceedings in the European Union.

RealNetworks, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(Unaudited)

September 30, December 31,
2006 2005
(in thousands)
ASSETS

Current assets:
Cash and cash equivalents $693,057 $651,971
Short-term investments 151,745 129,356
Trade accounts receivable, net
of allowances for doubtful
accounts and sales returns 24,481 16,721
Deferred tax assets, net,
current portion 7,046 54,204
Prepaid expenses and other
current assets 11,488 11,933
Total current assets 887,817 864,185

Equipment, software and leasehold
improvements, at cost:
Equipment and software 65,551 56,402
Leasehold improvements 29,139 27,964
Total equipment, software and
leasehold improvements 94,690 84,366
Less accumulated depreciation
and amortization 60,235 51,228
Net equipment, software and
leasehold improvements 34,455 33,138

Restricted cash equivalents 17,300 17,300
Equity investments 26,269 46,163
Other assets 4,177 2,397
Deferred tax assets, net, non-current
portion 15,967 19,147
Goodwill 132,789 123,330
Other intangible assets, net 7,386 7,337

Total assets $1,126,160 $1,112,997

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
Accounts payable $14,905 $11,397
Accrued and other liabilities 72,105 112,340
Deferred revenue, current
portion 25,469 25,021
Accrued loss on excess office
facilities, current portion 4,053 4,623
Total current liabilities 116,532 153,381

Deferred revenue, non-current portion 340 276
Accrued loss on excess office
facilities, non-current portion 11,323 13,393
Deferred rent 4,472 4,018
Convertible debt 100,000 100,000
Other long-term liabilities 1,679 196

Total liabilities 234,346 271,264

Total shareholders' equity 891,814 841,733

Total liabilities and
shareholders' equity $1,126,160 $1,112,997

RealNetworks, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)

Nine Months Ended September 30,
2006 2005
(in thousands)

Cash flows from operating activities:
Net income $105,914 $16,705
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 12,480 11,869
Stock-based compensation 12,332 109
Equity in net losses of MusicNet - 1,068
Changes in accrued loss on excess
office facilities and content
agreement (2,640) (6,230)
Loss on disposal of equipment 76 250
Gain on sales of equity investments (2,286) (19,330)
Deferred income taxes 56,508 3,324
Other 73 48
Net change in certain operating
assets and liabilities, net of
balances from businesses
acquired during the year (48,496) 6,127
Net cash provided by operating
activities 133,961 13,940

Cash flows from investing activities:
Purchases of equipment, software and
leasehold improvements (9,316) (10,728)
Purchases of intangible assets - (1,000)
Purchases of short-term investments (177,868) (121,540)
Proceeds from sales and maturities of
short-term investments 156,006 127,790
Decrease in restricted cash
equivalents - 2,095
Proceeds from sales of equity
investments 2,286 19,530
Purchases of cost based investments (834) (647)
Payment of acquisition costs, net of
cash acquired (7,086) (14,705)
Net cash provided by (used in)
investing activities (36,812) 795

Cash flows from financing activities:
Net proceeds from sale of common
stock under employee purchase plan
and exercise of stock options 41,976 4,926
Repayment of long-term note payable - (648)
Repurchase of common stock (98,869) (29,275)
Net cash used in financing activities (56,893) (24,997)

Effect of exchange rate changes on
cash and cash equivalents 830 (492)
Net decrease in cash and cash
equivalents 41,086 (10,754)
Cash and cash equivalents at
beginning of period 651,971 219,426
Cash and cash equivalents at end of
period $693,057 $208,672

RealNetworks, Inc. and Subsidiaries
Supplemental Financial Information
(Unaudited)

2006
Q3 Q2 Q1
(in thousands)
Net Revenue by
Line of
Business: *
Consumer products and services(A) $82,497 $77,442 $74,811
Technology products and solutions(B) 11,179 11,967 11,791
Total net revenue $93,676 $89,409 $86,602

Consumer Products and Services: *
Subscriptions (C) $50,878 $47,452 $47,832
Media properties (D) 13,883 11,546 9,484
E-commerce and other (E) 17,736 18,444 17,495
Total consumer products and
services revenue $82,497 $77,442 $74,811

Consumer Products and Services: *
Music (F) $30,375 $30,118 $28,918
Media software and services (G) 29,586 26,127 27,277
Games (H) 22,536 21,197 18,616
Total consumer products and
services revenue $82,497 $77,442 $74,811

Net Revenue by Geography:
United States $69,433 $66,542 $65,700
Rest of world 24,243 22,867 20,902
Total net revenue $93,676 $89,409 $86,602

Gross Margin by Line of Business:
Consumer products and services 68% 68% 67%
Technology products and solutions 81% 81% 83%
Total gross margin 70% 70% 69%

Subscribers (presented as greater
than) **
Total 2,450 2,400 2,400
Music 1,650 1,625 1,575

RealNetworks, Inc. and Subsidiaries
Supplemental Financial Information
(Unaudited)

2005
Q4 Q3 Q2 Q1
(in thousands)

Net Revenue by
Line of
Business: *
Consumer products and services(A) $73,415 $71,750 $70,593 $64,206
Technology products
and solutions(B) 10,153 10,483 12,093 12,366
Total net revenue $83,568 $82,233 $82,686 $76,572

Consumer Products and Services: *
Subscriptions (C) $47,508 $47,347 $47,821 $44,400
Media properties (D) 10,224 9,606 8,986 6,033
E-commerce and other (E) 15,683 14,797 13,786 13,773
Total consumer products and
services revenue $73,415 $71,750 $70,593 $64,206

Consumer Products and Services: *
Music (F) $27,760 $26,193 $24,933 $22,883
Media software and services (G) 29,914 30,858 32,012 29,134
Games (H) 15,741 14,699 13,648 12,189
Total consumer products and
services revenue $73,415 $71,750 $70,593 $64,206

Net Revenue by Geography:
United States $65,177 $63,478 $63,443 $57,757
Rest of world 18,391 18,755 19,243 18,815
Total net revenue $83,568 $82,233 $82,686 $76,572

Gross Margin by Line of Business:
Consumer products and services 70% 68% 68% 65%
Technology products and solutions 81% 82% 83% 82%
Total gross margin 71% 70% 70% 68%

Subscribers (presented as
greater than) **
Total 2,250 2,200 2,000 1,850
Music 1,425 1,300 1,150 975

*Reclassifications were made to the presentation of 2005 data
to conform to the presentation for 2006
**Beginning the quarter ended March 31, 2005, total and music
subscribers reflect the inclusion of subscribers that
registered for the Comcast Rhapsody Radio Plus service

(A) Revenue is derived from consumer digital media subscription
services, RealPlayer Plus and related products, sales and distribution of
third party software products, content such as games and music, and
advertising

(B) Revenue is derived from media delivery system software, support and
maintenance services, broadcast hosting services and consulting services

(C) Revenue is derived from consumer digital media subscription services
including: SuperPass, RadioPass, Rhapsody, GamePass and stand-alone
subscriptions

(D) Revenue is derived from all advertising and through the distribution
of third party products

(E) Revenue is derived from RealPlayer Plus and related products, sales
of third party software products, and content such as games
and music

(F) Revenue is derived from Rhapsody and RadioPass subscription services
and sales of music content, advertising generated from our music and
music related websites and the distribution of third party products

(G) Revenue is derived from SuperPass subscriptions, RealPlayer Plus and
related products, stand-alone subscription services, sales and
distribution of third party software products and advertising related to
our non-game and non-music related web properties

(H) Revenue is derived from the GamePass subscription service, sales of
games, advertising generated from our games and game-related websites
and the distribution of third party products

RealNetworks, Inc. and Subsidiaries
Supplemental Financial Information
(Unaudited)

A reconciliation of net income in accordance with GAAP to total adjusted
net income (loss) is as follows:

Quarters Ended
September 30, June 30, March 31,
2006 2006 2006
(in thousands, except per share data)

Net income in accordance with GAAP $42,153 $38,878 $24,883
Stock based compensation 5,021 3,673 3,638
Loss (gain) on equity
investments - (2,286) -
Expenses (benefit) related to
antitrust litigation:
Income (62,000) (58,000) (40,000)
Expenses 1,000 997 971
Charitable contributions 1,889 1,805 1,225
Tax impact of proforma items 20,587 19,732 12,717
Total adjusted net income
(loss) $8,650 $4,799 $3,434

GAAP basic net income per share $0.26 $0.24 $0.15
GAAP diluted net income per share $0.24 $0.22 $0.14

Adjusted basic net income (loss) per
share $0.05 $0.03 $0.02
Adjusted diluted net income per share $0.05 $0.03 $0.02

Shares used to compute basic net
income (loss) per share 160,578 159,938 160,887
Shares used to compute diluted net
income per share 178,913 177,337 176,923

RealNetworks, Inc. and Subsidiaries
Supplemental Financial Information
(Unaudited)

A reconciliation of net income in accordance with GAAP to total adjusted
net income (loss) is as follows:

Quarters Ended
December September June March
31, 30, 30, 31,
2005 2005 2005 2005
(in thousands, except per share data)

Net income in accordance with GAAP $295,640 $11,182 $4,709 $814
Stock based compensation 19 25 48 36
Loss (gain) on equity
investments 266 (11,740) (7,590) -
Expenses (benefit) related to
antitrust litigation:
Income (478,571) - - -
Expenses 50,850 3,531 4,650 3,744
Charitable contributions 14,786 - - -
Tax impact of proforma items 113,325 3,324 - -
Total adjusted net income
(loss) $(3,685) $6,322 $1,817 $4,594

GAAP basic net income per share $1.76 $0.07 $0.03 $0.00
GAAP diluted net income per share $1.61 $0.06 $0.03 $0.00

Adjusted basic net income (loss) per
share $(0.02) $0.04 $0.01 $0.03
Adjusted diluted net income per share n/a $0.03 $0.01 $0.02

Shares used to compute basic net
income (loss) per share 167,573 170,797 171,393 170,947
Shares used to compute diluted net
income per share 183,728 184,180 184,816 184,686

A reconciliation of GAAP cost of revenue and operating expenses for the
quarters ended September 30, 2006 and 2005 to
adjusted cost of revenue and operating expenses is as follows:

Quarter ended September 30, 2006

Stock- Antitrust
As Based Litigation
Reported Compensation Related Adjusted
(in thousands)
Expenses in accordance with GAAP

Cost of revenue $28,389 $(57) $- $28,332

Operating expenses:
Research and development $18,344 $(1,878) $- $16,466
Sales and marketing 37,560 (1,920) - 35,640
General and adminstrative 14,043 (1,166) (2,750) 10,127
Antitrust litigation benefit (61,861) - 61,861 -
Total adjusted operating
expenses, net $8,086 $(4,964) $59,111 $62,233

Quarter ended September 30, 2005
Stock- Antitrust
As Based Litigation
Reported Compensation Related Adjusted
(in thousands)
Expenses in accordance with GAAP

Cost of revenue $24,695 $- $- $24,695

Operating expenses:
Research and development $16,354 $(20) $- $16,334
Sales and marketing 30,745 - - 30,745
General and adminstrative 7,037 (5) - 7,032
Antitrust litigation expenses 3,531 - (3,531) -
Total adjusted operating
expenses, net $57,667 $(25) $(3,531) $54,111

Forward Looking Guidance

A reconciliation of GAAP net income per diluted share guidance for the
quarter and the full year ending December 31, 2006
to adjusted net income per diluted share guidance is as follows:

Quarter Ending Year Ending
December 31, 2006 December 31, 2006
Low High Low High

Net Income per diluted share in
accordance with GAAP $0.18 $0.21 $0.77 $0.80
Intangible amortization related
to WiderThan acquisition 0.01 0.01 0.01 0.01
Antitrust litigation related
benefit, net (0.33) (0.33) (1.18) (1.18)
Stock-based compensation 0.03 0.03 0.10 0.10
Gains on sales of equity
investments - - (0.01) (0.01)
Tax effect of above proforma
items 0.11 0.11 0.40 0.40
Total adjusted net income
per diluted share $0.00 $0.03 $0.09 $0.12

FCMN Contact: meggers@real.com

Source: RealNetworks, Inc.

CONTACT: Bill Hankes, +1-206-892-6614, or bhankes@real.com, or
Financial, Roy Goodman, +1-206-674-2330, or rgoodman@real.com

Web site: http://www.realnetworks.com/

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