GigaMedia Announces Third-Quarter 2023 Financial Results

Rhea-AI Summary

GigaMedia Limited reported its unaudited financial results for the third quarter of 2023. Revenues increased by 4.5% to $1.07 million, with a gross profit of $0.58 million. The operating loss was $0.89 million and the net loss was $0.51 million. The net asset value per share was $4.27. GigaMedia's digital entertainment service business, FunTown, focuses on mobile games and casual games in Taiwan and Hong Kong.

Positive

• Revenues increased by 4.5% to $1.07 million compared to the previous quarter.
• Gross profit increased by 3.0% to $0.58 million compared to the previous quarter.
• The net loss was reduced to $0.51 million compared to the previous quarter.
• The net asset value per share was $4.27.

Negative

• None.

TAIPEI, Oct. 31, 2023 /PRNewswire/ -- GigaMedia Limited (NASDAQ: GIGM) today announced its third-quarter 2023 unaudited financial results.

Comments from Management

In the third quarter of 2023, GigaMedia reported revenues of $1.07 million, with a gross profit of $0.58 million, an operating loss of $0.89 million and a net loss of $0.51 million. Total revenues increased by 4.5% and gross profit by 3.0% if compared to last quarter, while gross profit margin at 54.4% was slightly lower than 55.2% last quarter.

While this quarter saw the first post-COVID summer vacation in Taiwan and Hong Kong, where people tended to travel more and spent less time on digital entertainments, we managed to keep growth from last quarter and have the net loss reduced.

Third Quarter Overview

• Revenues increased by 4.5% quarter-on-quarter to approximately $1.07 million from $1.03 million last quarter.
• Consolidated loss from operations for the third quarter of 2023 amounted to $0.89 million, representing a reduction of loss from $0.92 million last quarter.
• The net asset value was around $4.27 per share.

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 Taiwan and Hong Kong, with focus on mobile games and casual games.

Unaudited consolidated results of GigaMedia are summarized in the table below.

For the Third Quarter

GIGAMEDIA 3Q23 UNAUDITED CONSOLIDATED FINANCIAL RESULTS
(unaudited, all figures in US$ thousands, except per share amounts)		3Q23			2Q23			Change (%)			3Q23			3Q22			Change (%)
Revenues			1,071			1,025			4.49 %			1,071			1,575			-32.00 %
Gross Profit			583			566			3.00 %			583			949			-38.57 %
Loss from Operations			(893)			(919)		NM				(893)			(674)		NM
Net Loss Attributable to GigaMedia			(507)			(562)		NM				(507)			(869)		NM
Net Loss Per Share Attributable to GigaMedia, Diluted			(0.05)			(0.05)		NM				(0.05)			(0.08)		NM
EBITDA (A)			(946)			(982)		NM				(946)			(1,106)		NM
Cash, Cash Equivalent and Restricted Cash			38,823			37,775			2.77 %			38,823			39,556			-1.85 %

NM= Not Meaningful (A)       EBITDA (earnings before interest, taxes, depreciation, and amortization) is provided as a supplement to results provided in accordance with U.S. generally accepted accounting principles ("GAAP"). (See, "Use of Non-GAAP Measures," for more details.)

• Consolidated revenues for the third quarter of 2023 were $1.07 million, representing an increase of 4.5% compared to $1.03 million in the prior quarter, but decreased by 32.0% year-over-year from $1.58 million the same quarter last year.
• Consolidated gross profit increased by 3.0% quarter-on-quarter to $0.58 million from $0.57 million last quarter, but decreased by 38.6% year-over-year from $0.95 million in the third quarter last year.
• Consolidated loss from operation of the third quarter of 2023 was $0.89 million, representing a slight decrease in loss from $0.92 million from last quarter.
• Consolidated net loss of the third quarter of 2023 was $0.51 million compared to $0.56 million in last quarter.
• Cash, cash equivalents and restricted cash at the end of the third quarter of 2023 was $38.8 million.

Financial Position

GigaMedia maintained its solid financial position, with cash, cash equivalents and restricted cash amounting to $38.8 million as of September 30, 2023, or $3.51 per share.

Business Outlook

The following forward-looking statements reflect GigaMedia's expectations as of October 31, 2023. Given potential changes in economic conditions and consumer spending, the evolving nature of online games, and various other risk factors, including those discussed in the Company's 2022 Annual Report on Form 20-F filed with the U.S. Securities and Exchange Commission as referenced below, actual results may differ materially.

"While the inflation is forecast to decline steadily, consumer sentiment still appears slow to recover," said GigaMedia CEO James Huang. "But we are cautiously optimistic for the coming quarter, where we will be dedicated to reaching a broader customer base and improving our revenue generation mechanism."

In the meantime, we will continue reviewing suitable prospects for strategic investment and acquisition targets to increase corporate growth and maximize shareholder value.

Use of Non-GAAP Measures

To supplement GigaMedia's consolidated financial statements presented in accordance with US GAAP, the Company uses the following measure defined as non-GAAP by the SEC: EBITDA. Management believes that EBITDA (earnings before interest, taxes, depreciation, and amortization) is a useful supplemental measure of performance because it excludes certain non-cash items such as depreciation and amortization and that EBITDA is a measure of performance used by some investors, equity analysts and others to make informed investment decisions. EBITDA is not a recognized earnings measure under GAAP and does not have a standardized meaning. Non-GAAP measures such as EBITDA should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, other financial measures prepared in accordance with GAAP. A limitation of using EBITDA is that it does not include all items that impact the company's net income for the period. Reconciliations to the GAAP equivalents of the non-GAAP financial measures are provided on the attached unaudited financial statements.

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 U.S. GAAP, unless otherwise noted as "non-GAAP," and are presented in U.S. dollars.

Q&A

For Q&A regarding the third quarter 2023 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 Taipei, Taiwan, GigaMedia Limited (Singapore registration number: 199905474H) is a diversified provider of digital entertainment services in Taiwan and Hong Kong. GigaMedia's digital entertainment service business is an innovative leader in Asia with growing capabilities of development, distribution and operation of digital entertainments, as well as platform services for games with a focus on mobile games and casual games. More information on GigaMedia can be obtained from www.gigamedia.com.tw.

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 2023 and its other filings with the United States Securities and Exchange Commission.

(Tables to follow)

GIGAMEDIA LIMITED
CONSOLIDATED STATEMENTS OF OPERATIONS
		Three months ended									Nine months ended
		09/30/2023			06/30/2023			09/30/2022			09/30/2023			09/30/2022
		unaudited			unaudited			unaudited			unaudited			unaudited
		USD			USD			USD			USD			USD
Operating revenues
Digital entertainment service revenues			1,071,363			1,025,056			1,574,971			3,421,771			4,483,833
			1,071,363			1,025,056			1,574,971			3,421,771			4,483,833
Operating costs
Cost of Digital entertainment service revenues			488,665			458,667			625,992			1,480,467			1,859,268
			488,665			458,667			625,992			1,480,467			1,859,268
Gross profit			582,698			566,389			948,979			1,941,304			2,624,565
Operating expenses
Product development and engineering expenses			183,682			188,457			303,838			550,331			947,241
Selling and marketing expenses			440,845			406,876			425,498			1,278,811			1,237,602
General and administrative expenses and others			845,761			890,636			892,368			2,616,052			2,783,658
Other			5,774			(101)			820			6,755			1,758
			1,476,062			1,485,868			1,622,524			4,451,949			4,970,259
Loss from operations			(893,364)			(919,479)			(673,545)			(2,510,645)			(2,345,694)
Non-operating income (expense)
Interest income			453,205			435,038			245,113			1,292,793			374,523
Foreign exchange loss - net			(236,221)			(135,898)			(635,103)			(372,946)			(1,354,774)
Gain on disposal of investments			76,885			—			—			76,885			—
Changes in the fair value of an instrument recognized at fair value			86,123			52,092			170,010			119,486			181,148
Other - net			6,336			6,659			24,785			13,103			46,056
			386,328			357,891			(195,195)			1,129,321			(753,047)
Loss from continuing operations before income taxes			(507,036)			(561,588)			(868,740)			(1,381,324)			(3,098,741)
Income tax expense			—			—			—			—			—
Net loss attributable to shareholders of GigaMedia			(507,036)			(561,588)			(868,740)			(1,381,324)			(3,098,741)
Loss per share attributable to GigaMedia
Basic:			(0.05)			(0.05)			(0.08)			(0.12)			(0.28)
Diluted:			(0.05)			(0.05)			(0.08)			(0.12)			(0.28)
Weighted average shares outstanding:
Basic			11,052,235			11,052,235			11,052,235			11,052,235			11,052,235
Diluted			11,052,235			11,052,235			11,052,235			11,052,235			11,052,235

 

GIGAMEDIA LIMITED
CONSOLIDATED BALANCE SHEETS
		09/30/2023				06/30/2023				09/30/2022
		unaudited				unaudited				unaudited
		USD				USD				USD
Assets
Current assets
Cash and cash equivalents			38,510,253				37,462,050				39,243,562
Marketable securities-current			—				7,950,000				8,132,000
Accounts receivable - net			252,757				187,385				193,988
Prepaid expenses			122,981				225,334				479,308
Restricted cash			312,777				312,762				312,737
Other receivables			364,671				765,741				397,454
Other current assets			144,963				118,950				142,483
Total current assets			39,708,402				47,022,222				48,901,532
Marketable securities - noncurrent			9,432,596				2,371,000				2,190,000
Property, plant & equipment - net			116,433				131,758				69,648
Intangible assets - net			9,849				13,188				4,313
Prepaid licensing and royalty fees			64,788				101,919				214,820
Other assets			1,347,570				1,510,307				1,638,755
Total assets			50,679,638				51,150,394				53,019,068
Liabilities and equity
Accounts payable			29,348				28,747				39,304
Accrued compensation			320,722				230,931				327,625
Accrued expenses			1,005,141				855,201				1,269,049
Unearned revenue			812,083				847,887				864,491
Other current liabilities			720,223				718,266				785,621
Total current liabilities			2,887,517				2,681,032				3,286,090
Other liabilities			562,396				714,650				857,277
Total liabilities			3,449,913				3,395,682				4,143,367
Total equity			47,229,725				47,754,712				48,875,701
Total liabilities and equity			50,679,638				51,150,394				53,019,068

 

GIGAMEDIA LIMITED
RECONCILIATIONS OF NON-GAAP RESULTS OF OPERATIONS
		Three months ended												Nine months ended
		09/30/2023				06/30/2023				09/30/2022				09/30/2023				09/30/2022
		unaudited				unaudited				unaudited				unaudited				unaudited
		USD				USD				USD				USD				USD
Reconciliation of Net Income (Loss) to EBITDA
Net income (loss) attributable to GigaMedia			(507,036)				(561,588)				(868,740)				(1,381,324)				(3,098,741)
Depreciation			10,894				11,259				5,681				32,479				16,917
Amortization			2,924				3,024				2,055				9,003				6,419
Interest income			(453,205)				(435,038)				(245,113)				(1,292,793)				(374,522)
Interest expense			—				—				—				—				—
Income tax (benefit) expense			—				—				—				—				—
EBITDA			(946,423)				(982,343)				(1,106,117)				(2,632,635)				(3,449,927)

 

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SOURCE GigaMedia

FAQ

What were GigaMedia's third-quarter revenues?

GigaMedia's third-quarter revenues were $1.07 million.

What was GigaMedia's gross profit for the third quarter?

GigaMedia's gross profit for the third quarter was $0.58 million.

What was GigaMedia's net loss for the third quarter?

GigaMedia's net loss for the third quarter was $0.51 million.

What was the net asset value per share for GigaMedia?

The net asset value per share for GigaMedia was $4.27.

What is GigaMedia's business focus?

GigaMedia's digital entertainment service business, FunTown, focuses on mobile games and casual games in Taiwan and Hong Kong.