On Tuesday, GigaMedia Limited, which is the exclusive provider of software to online poker room Everest Poker, reported a 24% growth in consolidated net income to $12 million during the third quarter of 2008. The figure was up from $9.7 million during the same period in 2007.
Revenues jumped 16% to $45.7 million. In the third quarter of 2007, revenues were $39.3 million. However, despite the year over year increase, revenues fell by 7% in comparison to the second quarter of 2008. GAAP consolidated income from operations dropped 42% from the third quarter of 2007 and fell 50% compared to the second quarter of 2008. Non-GAAP consolidated net income was $10.7 million, a gain of 22% over 2007 and a drop of 10% from Q2 2008. These figures appeared in a press release distributed by GigaMedia on PRNewswire.
In the same press release, GigaMedia President Thomas Hui stated, “GigaMedia performed well in the third quarter despite the normal summer slowdown and the negative affects of the Olympics on player activity. We look forward to continued growth in our core businesses driven by a strong lineup of new games and sponsorships.” CEO Arthur Wang added, “The financial turmoil has created many concerns [and] many fears. Nevertheless, the fact is we continue to run a high-growth business generating high levels of free cash flow and look to an even better 2009 supported by a strong balance sheet and cash position with no net debt.”
The company carried cash and cash equivalents of $103.7 million, which was over $20 million more than the amount of cash it had on hand at the end of the second quarter of 2008. The company credits Everest Poker’s presence in the marketplace with part of its viability during the third quarter. Everest was the on-felt sponsor of the 2008 World Series of Poker. Its logo also appeared throughout the Amazon Room at the Rio All-Suites Hotel and Casino in Las Vegas, the site of poker’s biggest tournament. GigaMedia expects Everest to add sports betting shortly as well.
According to its financial figures, GigaMedia’s revenue “from the gaming software business derived from providing poker and casino software and services to its master licensee were $16.4 million during the third quarter of 2008.”
GigaMedia is traded on the NASDAQ Stock Exchange under the symbol “GIGM.” At the time of writing, it was trading at $3.82, down $0.41 on the day. Over the past 52 weeks, the stock has traded as high as $22.42 and as low as $4.08, meaning if the current price were to hold, it would set a year low. In mid-September, the stock sunk along with the rest of the worldwide financial markets, passing through $10 per share. This week, GIGM broke $5 per share. Its market cap is currently $217.8 million and its one year target estimate, according to Yahoo Finance, is $12.70.
In September, the company sold its Internet Service Provider, or ISP, business, which was part of the reason for its increase in cash on hand. GigaMedia explained that the sale of the business was “consistent with GigaMedia’s focus on the high-margin, high-growth online entertainment sector.” In November, the company introduced games for Everest that centered on Marvel characters Hulk, Spider-Man, and X-Men. It expects 40 new games to be introduced “in the coming months.” GigaMedia Limited is headquartered in Taipei.
