GigaMedia Announces First-Quarter 2024 Financial Results

TAIPEI, May 3, 2024 /PRNewswire/ — GigaMedia Limited (NASDAQ: GIGM) today announced its first quarter 2024 unaudited financial results.

Comments from Management

For the first quarter of 2024, GigaMedia reported revenues of $0.73 million with a gross profit of $0.35 million, an operating loss of $1.11 million and the net loss of $0.90 million.

If compared to the previous quarter, the revenues decreased by 16.7%. In this quarter, we continued scaling back and consolidating resources from underperforming products, and certain disruptive factors in our sales channel were gradually remediated. While the turnaround of financial performance may not be immediate, after the optimizing measures we are encouraged to see gamers’ traffic is stabilizing in our higher margin legacy casual games.

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 from $0.65 million last quarter, net loss of $0.90 million represented a decrease of loss from net loss of $2.02 million last quarter, mainly due to certain year-end evaluation in the previous quarter for our investments.

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 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 U.S. generally accepted accounting principles (“GAAP”). (See, “Use of Non-GAAP Measures,” for more details.)

First-Quarter Financial Results

  • Consolidated revenues for the first quarter of 2024 decreased by 16.7% quarter-on-quarter to $0.73 million, from $0.87 million in the fourth quarter of 2023, and by 45.3% year-over-year from $1.32 million in the first quarter of 2023.
  • Consolidated gross profit decreased to $0.35 million from $0.50 million in last quarter and decreased by 56.3% from $0.79 million in the same quarter last year.
  • Consolidated operating expenses were $1.46 million in the first quarter of 2024, approximately increased by 27.1% when compared to prior quarter.
  • Net loss for the first quarter of 2024 was $0.90 million, which was a decrease of loss from $2.02 million net loss last quarter.
  • Cash, cash equivalents and restricted cash at the first quarter-end of 2024 amounted to $36.82 million, decreased by approximately $1.96 million from $38.78 million at the fourth quarter-end of 2023.

Financial Position

GigaMedia maintained its solid financial position, with cash, cash equivalents and restricted cash amounting to $36.82 million, or approximately $3.33 per share as of March 31, 2024.

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 U.S. Securities and Exchange Commission as referenced below, actual results may differ materially.

“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 U.S. 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 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 Taipei, Taiwan, GigaMedia Limited (Singapore registration number: 199905474H) is a diversified provider of digital entertainment services. GigaMedia’s digital entertainment service business develops and operates a suite of digital entertainments in Taiwan and Hong Kong, with focus on browser/mobile games and casual games. More information on GigaMedia can be obtained from www.gigamedia.com.

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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