GigaMedia Announces First-Quarter 2024 Financial Results
GigaMedia (NASDAQ: GIGM) announced its first quarter 2024 unaudited financial results, reporting revenues of $0.73 million, a gross profit of $0.35 million, and a net loss of $0.90 million. The company experienced a decrease in revenues by 16.7% compared to the previous quarter. GigaMedia plans to continue exploring digital entertainment to promote its products and services in 2024.
- None.
Revenues decreased by 16.7% compared to the previous quarter.
Consolidated gross profit decreased by 56.3% year-over-year.
Net loss for the first quarter of 2024 was $0.90 million, a decrease from the previous quarter's net loss of $2.02 million.
Cash, cash equivalents, and restricted cash decreased by approximately $1.96 million from the previous quarter.
Insights
In light of GigaMedia's reported first-quarter financials, several metrics stand out. The revenue decline of
Their operational loss has widened, hinting at inefficiencies or increased investment, which might be concerning in a market that rewards lean operations and profit maximization. However, the reduction in net loss from $2.02 million to $0.90 million quarter-on-quarter could indicate that some of the company's corrective measures might be yielding results. Still, the losses are worrisome and call for a watchful eye on subsequent quarters for positive trends.
It's positive to note that despite these challenges, the company maintains a strong cash reserve ($36.82 million), which provides a cushion for strategic flexibility. As a retail investor, one must weigh the potential for turnaround against the evident operational struggles of the company.
The broader context for GigaMedia's performance includes the fiercely competitive digital entertainment sector where innovation and user retention are keys to growth. The report hints at resource consolidation and remediation of disruptive factors in sales channels. This could be interpreted as necessary pruning for future growth, albeit the short-term effects can be unsettling.
Stabilizing gamer traffic in higher margin legacy casual games is a positive development. This suggests GigaMedia is possibly reinforcing its foothold in niche segments. However, the extent to which this translates into revenue remains unclear, particularly when juxtaposed with the overall revenue decline.
The company's plan to explore digital entertainment further could imply an intention to diversify or strengthen its product offering. However, with the current financials, it's critical for investors to discern whether these explorative efforts could indeed pivot the company toward profitability or might drain the existing cash reserves without a clear return on investment.
Comments from Management
For the first quarter of 2024, GigaMedia reported revenues of
If compared to the previous quarter, the revenues decreased by
With a slimmer team in place, for 2024 we plan to continue our exploration of digital entertainment to further develop and promote our own products and services.
First Quarter Overview
- Operating revenues decreased by
16.7% in quarter-on-quarter comparison. - While loss from operations increased to
$1.11 million $0.65 million $0.90 million $2.02 million
Unaudited Consolidated Financial Results
GigaMedia Limited is a diversified provider of digital entertainment services. GigaMedia's digital entertainment service business FunTown develops and operates a suite of digital entertainments in
For the First Quarter
GIGAMEDIA 1Q24 UNAUDITED CONSOLIDATED FINANCIAL RESULTS | ||||||||||||||||||||||||
(unaudited, all figures in US$ thousands, except per share amounts) | 1Q24 | 4Q23 | Change | 1Q24 | 1Q23 | Change | ||||||||||||||||||
Revenues | 725 | 870 | (16.7) % | 725 | 1,325 | (45.3) % | ||||||||||||||||||
Gross Profit | 346 | 504 | (31.3) % | 346 | 792 | (56.3) % | ||||||||||||||||||
Loss from Operations | (1,114) | (645) | NM | (1,114) | (698) | NM | ||||||||||||||||||
Net Loss Attributable to GigaMedia | (902) | (2,018) | NM | (902) | (313) | NM | ||||||||||||||||||
Loss Per Share Attributable to GigaMedia, Diluted | (0.08) | (0.18) | NM | (0.08) | (0.03) | NM | ||||||||||||||||||
EBITDA (A) | (1,358) | (2,522) | NM | (1,358) | (705) | NM | ||||||||||||||||||
Cash, Cash Equivalents and Restricted Cash | 36,815 | 38,783 | (5.1) % | 36,815 | 38,119 | (3.4) % | ||||||||||||||||||
NM= Not Meaningful (A) EBITDA (earnings before interest, taxes, depreciation, and amortization) is provided as a supplement to results provided in accordance with |
First-Quarter Financial Results
- Consolidated revenues for the first quarter of 2024 decreased by
16.7% quarter-on-quarter to$0.73 million $0.87 million 45.3% year-over-year from$1.32 million - Consolidated gross profit decreased to
$0.35 million $0.50 million 56.3% from$0.79 million - Consolidated operating expenses were
$1.46 million 27.1% when compared to prior quarter. - Net loss for the first quarter of 2024 was
$0.90 million $2.02 million - Cash, cash equivalents and restricted cash at the first quarter-end of 2024 amounted to
$36.82 million $1.96 million $38.78 million
Financial Position
GigaMedia maintained its solid financial position, with cash, cash equivalents and restricted cash amounting to
Business Outlook
The following forward-looking statements reflect GigaMedia's expectations as of May 3, 2024. Given potential changes in economic conditions and consumer spending, the evolving nature of digital entertainments, and various other risk factors, including those discussed in the Company's 2023 Annual Report on Form 20-F filed with the
"Since late 2023, we have being re-examining mechanisms in our legacy casual games and to reconstruct players' ecosystem," said GigaMedia CEO James Huang. "While the effect would take some time to exhibit, we believe that will lead to a healthier gross margin in the long-run for our own offerings."
Meanwhile, our business strategies always include expanding through mergers and acquisitions. We will keep looking for investment opportunities that have strategic capacity to accelerate our growth and enhance shareholders' value.
Use of Non-GAAP Measures
To supplement GigaMedia's consolidated financial statements presented in accordance with
About the Numbers in This Release
Quarterly results
All quarterly results referred to in the text, tables and attachments to this release are unaudited. The financial statements from which the financial results reported in this press release are derived have been prepared in accordance with
Q&A
For Q&A regarding the first quarter 2024 performance upon the release, investors may send the questions via email to IR@gigamedia.com.tw, and the responses will be replied individually.
About GigaMedia
Headquartered in
The statements included above and elsewhere in this press release that are not historical in nature are "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements regarding expected financial performance (as described without limitation in the "Business Outlook" section and in quotations from management in this press release) and GigaMedia's strategic and operational plans. These statements are based on management's current expectations and are subject to risks and uncertainties and changes in circumstances. There are important factors that could cause actual results to differ materially from those anticipated in the forward looking statements, including but not limited to, our ability to license, develop or acquire additional online games that are appealing to users, our ability to retain existing online game players and attract new players, and our ability to launch online games in a timely manner and pursuant to our anticipated schedule. Further information on risks or other factors that could cause results to differ is detailed in GigaMedia's Annual Report on Form 20-F filed in April 2024 and its other filings with the United States Securities and Exchange Commission.
GIGAMEDIA LIMITED
CONSOLIDATED STATEMENTS OF OPERATIONS
Three months ended | ||||||||||||
3/31/2024 | 12/31/2023 | 3/31/2023 | ||||||||||
unaudited | unaudited | unaudited | ||||||||||
USD | USD | USD | ||||||||||
Operating revenues | ||||||||||||
Digital entertainment service revenues | 725 | 870 | 1,325 | |||||||||
725 | 870 | 1,325 | ||||||||||
Operating costs | ||||||||||||
Cost of digital entertainment service revenues | 379 | 366 | 533 | |||||||||
379 | 366 | 533 | ||||||||||
Gross profit | 346 | 504 | 792 | |||||||||
Operating expenses | ||||||||||||
Product development and engineering expenses | 185 | 179 | 178 | |||||||||
Selling and marketing expenses | 378 | 344 | 431 | |||||||||
General and administrative expenses | 896 | 626 | 880 | |||||||||
Other | 1 | — | 1 | |||||||||
1,460 | 1,149 | 1,490 | ||||||||||
Loss from operations | (1,114) | (645) | (698) | |||||||||
Non-operating income (expense) | ||||||||||||
Interest income | 471 | 518 | 405 | |||||||||
Foreign exchange (loss) gain - net | (276) | 339 | (1) | |||||||||
Loss on disposal of investments | — | (1) | — | |||||||||
Changes in the fair value of an instrument recognized at fair value | 9 | (2,229) | (19) | |||||||||
Other-net | 8 | — | — | |||||||||
212 | (1,373) | 385 | ||||||||||
Loss from continuing operations before income taxes | (902) | (2,018) | (313) | |||||||||
Income tax expense | — | — | — | |||||||||
Net loss attributable to shareholders of GigaMedia | (902) | (2,018) | (313) | |||||||||
Loss per share attributable to GigaMedia: | ||||||||||||
Basic | (0.08) | (0.18) | (0.03) | |||||||||
Diluted | (0.08) | (0.18) | (0.03) | |||||||||
Weighted average shares outstanding: | ||||||||||||
Basic | 11,052 | 11,052 | 11,052 | |||||||||
Diluted | 11,052 | 11,052 | 11,052 | |||||||||
GIGAMEDIA LIMITED
CONSOLIDATED BALANCE SHEETS
3/31/2024 | 12/31/2023 | 3/31/2023 | ||||||||||
unaudited | audited | unaudited | ||||||||||
USD | USD | USD | ||||||||||
Assets | ||||||||||||
Current assets | ||||||||||||
Cash and cash equivalents | 36,502 | 38,470 | 37,806 | |||||||||
Investment in securities-current | — | — | 7,950 | |||||||||
Accounts receivable - net | 239 | 227 | 155 | |||||||||
Prepaid expenses | 374 | 54 | 368 | |||||||||
Restricted cash | 313 | 313 | 313 | |||||||||
Other receivables | 371 | 2 | 767 | |||||||||
Other current assets | 138 | 141 | 123 | |||||||||
Total current assets | 37,937 | 39,207 | 47,482 | |||||||||
Investment in securities - noncurrent | 5,798 | 5,777 | 2,371 | |||||||||
Property, plant & equipment - net | 112 | 111 | 146 | |||||||||
Intangible assets - net | 10 | 13 | 17 | |||||||||
Prepaid licensing and royalty fees | 251 | 24 | 141 | |||||||||
Other assets | 1,322 | 1,365 | 1,546 | |||||||||
Total assets | 45,430 | 46,497 | 51,703 | |||||||||
Liabilities and equity | ||||||||||||
Accounts payable | 23 | 44 | 78 | |||||||||
Accrued compensation | 157 | 396 | 134 | |||||||||
Accrued expenses | 784 | 786 | 878 | |||||||||
Unearned revenue | 579 | 573 | 872 | |||||||||
Other current liabilities | 688 | 665 | 637 | |||||||||
Total current liabilities | 2,231 | 2,464 | 2,599 | |||||||||
Other liabilities | 379 | 495 | 794 | |||||||||
Total liabilities | 2,610 | 2,959 | 3,393 | |||||||||
Total equity | 42,820 | 43,538 | 48,310 | |||||||||
Total liabilities and equity | 45,430 | 46,497 | 51,703 | |||||||||
GIGAMEDIA LIMITED
Reconciliations of Non-GAAP Results of Operations
Three months ended | ||||||||||||
3/31/2024 | 12/31/2023 | 3/31/2023 | ||||||||||
unaudited | unaudited | unaudited | ||||||||||
USD | USD | USD | ||||||||||
Reconciliation of Net Loss to EBITDA | ||||||||||||
Net loss attributable to GigaMedia | (902) | (2,018) | (313) | |||||||||
Depreciation | 12 | 11 | 10 | |||||||||
Amortization | 3 | 3 | 3 | |||||||||
Interest income | (471) | (518) | (405) | |||||||||
Interest expense | — | — | — | |||||||||
Income tax expense | — | — | — | |||||||||
EBITDA | (1,358) | (2,522) | (705) | |||||||||
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SOURCE GigaMedia
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