GigaMedia Announces Third-Quarter 2023 Financial Results

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

• 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 [email protected], 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)

SOURCE GigaMedia