GigaMedia Reports Decrease in Revenues

GigaMedia (NASDAQ:GIGM) announced its unaudited financial results for the 2019 first quarter with the company reporting an 8.4 percent decrease in revenues.

Crucially, the company said that the operating loss for the quarter remained at US$0.9 million which was comparable to its previous quarter.

As quoted in the release:

“The strategy we have adopted since 2018,” said Giga GigaMedia CEO James Huang, “is making a difference. By trimming off or terminating underperforming products or services and selectively introducing new ones, an improved allocation of resources now delivers a more solid productivity and opens up possibilities for exploring a long-term growth path.”

We prepared for in the first quarter, and launched in early the second quarter of 2019, Senran Kagura: New Link, a licensed card battle game. It is one of the popular Senran Kagura series that is developed by a subsidiary of Marvelous Inc., a Japanese game developer. By targeting a niche audience that loves the series, this game is well received. While we have just launched it and are still fine-tuning the operations, based on the initial results, we are very optimistic about its contribution to our following quarters.

Meanwhile, we were also making progress in renovating and developing our offerings, as well as building up an advanced framework for promoting customer relationships. We believe the cultivation of a loyal customer base on our own offerings will eventually further boost customer value and create revenues and profits.

First-Quarter Financial Results

• Consolidated revenues for the first quarter of 2019 decreased by 8.4% quarter-on-quarter to $1.5 million, from $1.6 million in the fourth quarter of 2018, or by 31.3% year-over-year from $2.2 million in the first quarter of 2018.
• Consolidated gross profit decreased to $0.7 million from $0.9 million in last quarter and from $1.2 million the same quarter last year.
• Consolidated operating expenses were $1.7 million in the first quarter of 2019, representing a decrease by $0.2 million quarter-on-quarter, or a decrease by $0.5 million from $2.2 million year-over-year. The year-over-year and quarter-on-quarter change were due to reduced marketing expenses.
• Loss from operation of the first quarter of 2019 was a loss of $0.9 million, approximately comparable to a loss of $1.0 million last quarter and approximately the same as in the first quarter of 2018.
• Net loss of the first quarter of 2019 was a net loss of $0.5 million, approximately comparable to a loss of $0.5 million in the fourth quarter of 2018, and improved by $0.3 million when compared from the same quarter last year.
• Cash, restricted cash and cash equivalents at the first quarter-end of 2019 accounted for $58.5 million, decreased by $1.3 million from the end of 2018.

Business Outlook

The following forward-looking statements reflect GigaMedia’s expectations as of May 2, 2019. 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 2018 Annual Report on Form 20-F filed with the U.S. Securities and Exchange Commission as referenced below, actual results may differ materially.

“While we feel quite positive about the new licensed game we just launched in early April 2019,” said CEO James Huang, “we believe the strategy of in-house developing own offerings and creating customer value is of vital importance for GigaMedia’s future.”

“At the same time, we keep seeking strategic investment targets with expertise of AI or big data,” said CEO James Huang. “These technologies are changing the world with enormous potentials of enhancing efficiencies, unlocking hidden values, or even creating new businesses. With such a strategic investment, we can exploit our techniques of data analytics at exploring applications of these technologies. Such an investment also presents synergies for elevating our customer experiences and extracting value from our vast database.”

Click here for the full release.