REALNETWORKS ANNOUNCES SECOND QUARTER 2009 RESULTS

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SEATTLE — July 30, 2009

— Digital entertainment services company RealNetworks®, Inc. (Nasdaq: RNWK) today announced results for the second quarter ended June 30, 2009.

Quarterly Highlights

"In spite of a difficult consumer environment, our business remained relatively stable in the second quarter," said Rob Glaser, RealNetworks' Chairman and CEO. "Looking forward, even though we expect the economy to remain weak, we expect to show sequential improvement in the second half of the year based in part on new products such as our innovative RealPlayer SP."

Second Quarter Results

For the second quarter of 2009, revenue was $135.7 million, a decrease of 11%, compared with $152.6 million in the second quarter of 2008. Foreign currency exchange rate fluctuations negatively affected 2009 second quarter revenue by approximately $6.3 million compared with the year-ago quarter. Excluding the effects of these foreign exchange rate changes, revenue declined 7% year over year. Revenue trends in each of Real's businesses in the second quarter of 2009, including the effects of foreign currency exchange rate changes, compared with the year-earlier quarter were: a 9% increase in Music revenue to $40.5 million, offset by a 10% decrease in Technology Products and Solutions revenue to $46.2 million, a 15% decrease in Games revenue to $29.8 million, and a 34% decrease in Media Software and Services revenue to $19.3 million.

Net loss for the second quarter of 2009 was $(188.3) million, or $(1.40) per share, compared with a net loss of $(1.3) million, or $(0.01) per share, in the second quarter of 2008. Included in the second quarter 2009 net loss were non-cash goodwill impairment charges of $175.6 million. Adjusted EBITDA for the second quarter of 2009 was $4.1 million compared with $17.4 million in the second quarter of 2008. A reconciliation of GAAP net income to adjusted EBITDA is provided in the financial tables that accompany this release.

Gross margin was 59% in the second quarter of 2009 compared with 64% in the second quarter of 2008. Income tax provision was $(1.2) million in the second quarter of 2009, compared with $(3.7) million in the year-earlier period. Interest income in the second quarter of 2009 was $754,000 compared with $3.4 million in the year-earlier period.

As of June 30, 2009, Real had approximately $362.8 million in unrestricted cash, cash equivalents and short-term investments, of which nearly 90% is located in the U.S. In addition, Real had approximately $37 million in restricted cash and equity investments at June 30, 2009.

Business Outlook

Due to the high level of uncertainty regarding consumer spending, global economic trends, foreign currency exchange rate fluctuations and credit markets, RealNetworks is not providing quantitative guidance. The company expects 2009 to continue to be a challenging year for consumer spending, online advertising and corporate infrastructure spending.

For the third quarter of 2009, Real expects overall revenue to increase sequentially but to decline year-over-year. Sequentially, the company expects revenue to be flat or increase in each of our segments. Compared with the year-ago third quarter, Real expects third-quarter Media Software and Services revenue to be flat, and revenue in Music, Games and Technology Products and Solutions to decline.

The foregoing forward-looking statements reflect Real's expectations as of July 30, 2009. It is not Real's general practice to update these forward-looking statements until its next quarterly results announcement.

Webcast and Conference Call Information

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 athttp://investor.realnetworks.com

Listeners must use RealPlayer® to listen to the conference call, which can be downloaded for free atwww.real.com.

The on-demand Webcast will be available approximately two hours following the conclusion of the live Webcast.

Conference Call Details

Time:
5:00 pm (Eastern) / 2:00 pm (Pacific)
Dial In:
800-857-5305 Domestic
773-681-5857 International
Passcode: Second Quarter Earnings
Leader: Rob Glaser

Telephonic replay will be available until 8:00 pm (Eastern), August 13, 2009.
Dial In:
866-873-2049 Domestic
403-220-5369 International

RNWK-F

For More Information:

Press:

Bill Hankes
(206) 892-6614

bhankes@real.com

Financial:

Marj Charlier
(206) 892-6718

mcharlier@real.com

ABOUT REALNETWORKS

RealNetworks, Inc. delivers digital entertainment services to consumers via PC, portable music player, home entertainment system and mobile phone. Real created the streaming media category in 1995 and has continued to lead the market with pioneering products and services, including: RealPlayer®, the first mainstream media player to enable one-click downloading and recording of Internet video; the award-winning Rhapsody® digital music service, which delivers more than 1 billion songs per year; RealArcade®, one of the largest casual games destinations on the Web; and a variety of mobile entertainment services, such as ringback tones, offered to consumers through leading wireless carriers around the world. RealNetworks' corporate information is located atinvestor.realnetworks.com.

About Non-GAAP Financial Measures

To supplement RealNetworks' condensed consolidated financial statements presented in accordance with GAAP in this press release, the company also discloses certain non-GAAP financial measures, including adjusted revenue, adjusted EBITDA excluding impairments, adjusted EBITDA, adjusted EBITDA by reporting segment, adjusted cost of revenue and adjusted operating expenses, which management believes provide investors with useful information.

In the financial tables of our earnings press release, RealNetworks has included reconciliations of GAAP net income (loss) to adjusted EBITDA, to adjusted EBITDA excluding impairments, and to adjusted EBITDA by reporting segment; GAAP cost of revenue to adjusted cost of revenue; and GAAP operating expenses to adjusted operating expenses for the relevant periods.

The rationale for management's use of non-GAAP measures is included in the supplementary materials presented with the second quarter earnings materials, available in Exhibit 99.2 ("Information Regarding Non-GAAP Financial Measures") to the company's report on Form 8-K, which is being submitted today to the SEC.

News Source : REALNETWORKS ANNOUNCES SECOND QUARTER 2009 RESULTS