GigaMedia Q2 Revenues Up 31%

GigaMedia Limited (Nasdaq: GIGM) announced today strong second-quarter results with revenues rising 31 percent to $52.5 million, and operating income growing 18 percent to $11.9 million, both in comparison to second quarter 2007, driven by sharply increased contributions from its online games business in China and continued solid growth in its poker software business in continental Europe.

Net income was US$11.2 million, up 11 percent year-over-year and down 7 percent sequentially over the first quarter of 2008 on seasonality. Second- quarter 2008 non-GAAP basic and diluted earnings per share were $0.22 and $0.20, respectively, which exclude non-cash share-based compensation expenses.

Second-quarter revenues in the Asian online games business increased 67 percent to $12.0 million from $7.2 million a year ago and decreased 7 percent from a record $12.9 million in the previous quarter. Solid organic growth in FunTown in Taiwan and Hong Kong and consolidation of T2CN in China drove the year-over-year improvement. The quarter-over-quarter revenue variation reflected comparison with exceptionally strong results in the first quarter in both FunTown and T2CN, which benefited from surges in player activity related to product promotions and winter storms around the Chinese New Year holiday. Second-quarter revenues from FunTown grew 10 percent to $6.6 million from $6.0 million in 2007 and decreased 6 percent from $7.0 million in the previous quarter.

Year-over-year growth reflected strong contributions from its play- for-fun MahJong and casual games offerings, and appreciation of the New Taiwan dollar against the U.S. dollar. Quarter-over-quarter, revenues were down on lower revenues per customer in the second quarter of 2008 following strong promotions in the first quarter. Average monthly active paying accounts were approximately 116,000 during the second quarter, up 5 percent from the first quarter, and average monthly revenue per active paying account was $19.02 during the period, down 10 percent quarter-over-quarter. Peak concurrent users were approximately 44,000, a 2 percent increase from the first quarter.

Total revenues for T2CN in the period were $5.4 million, representing a 361 percent increase from $1.2 million in 2007 and an 8 percent decrease from $5.9 million in the first quarter. Strong revenue growth in the year period was attributable to increased revenue from FreeStyle driven by new game patches, and the effect of three full months of consolidation of T2CN in 2008, versus one month in the second quarter last year. Appreciation of the renminbi against the U.S. dollar also contributed to the increase.

Revenues were down quarter-over-quarter on lower revenues from FreeStyle following strong promotions in the first quarter. T2CN's average monthly active paying accounts were approximately 447,000 during the second quarter, down 13 percent from the first quarter, and average monthly revenue per active paying account was $3.97 during the period, up 3 percent quarter-over-quarter. Peak concurrent users of FreeStyle were approximately 139,000, a decrease of 25 percent from the first quarter.