RealD Delivers Strong Results in Q2, But Loss of Samsung Deal Crushes Stock

Posted by Joe Zaller
Nov 03 2011

3D technology provider RealD reported that its net revenue for its second quarter of its 2012 fiscal year was $88m, up 35% from the same period a year ago.

Licensing revenue in the quarter was $52m, up 119% from last year.  License revenue increased to 59% of gross revenue during the quarter from 46% of gross revenue in the second quarter of fiscal 2011. 56% of licensing revenue in the quarter came from international markets, compared to 52% last year.

Product revenue for the quarter was $36m, a decline of 13% versus last year.  Product revenue decreased to 41% of gross revenue during the quarter from 54% of gross revenue in the second quarter of fiscal 2011. The company attributed the lower product revenue to an increasing number of international consumers returning to the cinema with RealD eyewear purchased at a previous RealD showing.

GAAP net income for the quarter was $18.9m versus a GAAP net loss of $5.1m last year.  Gross margins for the quarter were 48%, up from 21% last year.

On a non-GAP basis, the company’s “adjusted EBITDA” in the quarter was $44.4m, an increase of 169% versus last year.

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Loss of Samsung Deal

As part of the earnings announcement, RealD also disclosed that consumer electronics giant Samsung has decided not to proceed with a previous plan to build TVs using the RealD’s technology.

The company said in a statement: “ RealD today is announcing revised expectations for its license agreement with Samsung Electronics LCD Business. In May 2011, RealD and Samsung announced that panels featuring RealD 3D display technology were expected to be made available to consumer electronics manufacturers by early 2012. RealD has recently learned that Samsung’s initiative to manufacture panels under the RealD license agreement is not being pursued at this time. As a result, RealD is now pursuing other potential partners for its 3D display technology among consumer electronics panel manufacturers.”  This news sent the company’s shares down sharply on the day following the release of this news.

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RealD Screen Deployments

The company said that at the end of the quarter it had deployed approximately 18,700 RealD-enabled screens, an increase of 101% versus the same period a year ago, and an increase of 7% versus the previous quarter.  Of these deployments 59% are in the United States, with the remaining 41% in international locations.

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Related Content:

Press Release: RealD Inc. Reports Financial Results for Second Quarter of Fiscal 2012

Previous Quarter: RealD Inc. Reports Financial Results for First Quarter of Fiscal 2012

Previous Year: RealD Q2 2010: Revenue up 69%, Deployments up 24%, Losses Remain

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