RealNetworks posts $8.2M quarterly profit, boosted by Napster sale, stock jumps 16% on results

RealNetworks says revenue from its SAFR facial recognition technology (pictured), as well as its free-to-play mobile games, rose 110% on the year. (RealNetworks Photo)

RealNetworks stock rose more than 15% in after-hours trading after the company posted a $8.2 million profit on $17.6 million in revenue, up 2%, for the December quarter.

The Seattle-based digital media company’s bottom line was boosted by an $8.4 million accounting adjustment related to its sale of the Napster music service to MelodyVR for $70.6 million. The deal, announced in August, was completed at the end of December. It consisted of $15 million in cash, $11.6 million in MelodyVR stock, and assumption of $44 million in debt by MelodyVR.

“We believe the sale of Napster simplifies Real and will help us deepen our focus on our growth initiatives and create long-term shareholder value,” said Rob Glaser, the RealNetwork founder and CEO, announcing the company’s results on Thursday afternoon.

RealNetworks stock rose more than 16% to $3.63 in after-hours trading as of publication time.

The company’s revenue for the full year was $68.1 million, up 3%, driven by a $12% increase in games revenue, to $28.6 million. The company said revenue from two key growth areas — its SAFR facial recognition technology and free-to-play mobile games — rose 110% on the year. Net loss for 2020 was $4.8 million, an improvement over its net loss of $15.1 million the year before.