TiVo Reports Lower Revenues, Swings to a Loss
--Says Comcast Will Make TiVo "Primary DVR Option" in One of its tru2way Markets
DVR vendor/service provider, TiVo, on Wednesday released financial results for its fiscal first quarter, ended April 30th:
- Service and technology revenues totaled $48.5 million, compared to $54.9 million for the year-ago quarter.
- Adjusted EBITDA totaled $5.1 million, compared to $11.1 million for the year ago period (and compared to the company's previously issued guidance that EBITDA would range between breakeven and $2 million). The company attributed the decline to longer amortization of product lifetime revenues, increased legal expenses and lower revenue, "as well as less of a benefit from inventory reserve utilization."
- Net losses totaled $4.1 million, or $0.04 per share, compared to profits of $3.6 million, or $0.04 per share, for the year-ago quarter (and compared to previously issued guidance that net losses would range between $6 million and $8 million). The company said it exceeded its guidance on EBITDA and net losses "due to lower-than-anticipated expenses from reduced discretionary spending, given the uncertain economic environment."
- TiVo-owned gross subscription additions (i.e. new, direct subscriptions, rather than through a pay-TV operator) totaled 37,000, compared to 48,000 for the year-ago quarter.
- At the end of the quarter, TiVo-owned subscriptions totaled 1.6 million and cumulative subscriptions totaled 3.2 million.
The company, which says it has cash reserves of over $200 million and no debt, also provided guidance for the current quarter: it says it anticipates service and technology revenues to range between $47 million and $49 million, net losses to range between $6 million and $8 million, and adjusted EBITDA to range between breakeven and $2 million.
In a prepared statement issued with TiVo's earnings release, the company's president and CEO, Tom Rogers, stated that Comcast, which is offering TiVo service in New England, plans to "offer TiVo as the primary DVR option going forward in a yet-to-be announced tru2way market." In a post-earnings conference call with financial analysts, Rogers added that TiVo is currently working with Comcast to develop a TiVo application that is compatible with the MSO's tru2way stack, and, in answer to a question, stated that the Comcast tru2way market where TiVo would be the primary DVR option would not be Chicago. Rogers also said in the prepared statement that Comcast is "enthusiastic about the TiVo results so far in New England"; is "looking forward to launching TiVo soon in Chicago"; is planning, this summer in New England, to "launch a new feature called TiVo Online Scheduler that will let customers with the Comcast DVR with TiVo service and Comcast's high-speed Internet service manage and schedule recordings from anywhere they have Internet access"; and "will soon present its customers with the option to use the TiVo HD retail box as an alternative to a digital adapter provided by Comcast, with details to be announced soon."
Rogers also stated that TiVo's recently announced partnership with VOD technology provider, SeaChange--which he billed as allowing "small and medium-sized cable operators to quickly deploy our
industry-leading DVR while avoiding middleware investments such as tru2way implementation" and as enabling those operators to "offer a seamless experience that fully integrates the operator's VOD service
with a complete array of TiVo-delivered broadband content, thereby creating an entertainment package that goes well beyond what any of their competitors are able to offer"--is generating significant interest in its products on the part of small and mid-sized operators, and that the company therefore recently signed a deal with Evolution Broadband, a reseller of digital equipment to independent cable operators. Rogers added that "Evolution has already begun selling our product to its first TiVo customer, Comporium, an independent cable provider in metro Charlotte."
Rogers also stated that nearly 20% of Amazon Video On Demand downloads on its platform are now of HD titles, and that TiVo is receiving "tremendous feedback from the industry about this summer's upcoming launch of StopWatch Local Markets enabling us to provide local broadcast networks with accurate, statistically relevant ratings data they can't get from other sources and simply can no longer afford to do without."