While many patrons are still anticipating something new from TiVo — finally enabling the second one processor core on Premieres this weekend is a pleasing step, but how about more HD menus? — said company has found growth for the primary time in four years by turning to a more traditional strategy to sell set-top boxes within the US. Yes, the expansion is generally due to six months of success with Virgin Media and other provider deals just like the one with RCN . TiVo netted an extra 117,000 this quarter, bringing the entire to simply over 2 million or even more growth is expect inside the coming months — despite the continual drop in retail subscribers — due to the predicted limited release of the DirecTiVo in December, with a more widespread release next year. This helped TiVo realize a 25 percent year-over-year growth in revenues, but still wasn’t enough to hang off a net loss, which came in at a groovy 24.5 million for the quarter. You might want to stop taking place before you’re able to go up, but more TiVos in additional homes is a superb thing for almost everyone involved.
TiVo Reports Results for the Third Quarter Ended October 31, 2011– Total net subscription additions of roughly 117,000, accelerating significantly in comparison to net subscription losses of 33,000 inside the prior quarter; First increase in total subscriptions in four years
ALVISO, CA — (Marketwire) — 11/22/2011 — TiVo Inc. (NASDAQ: TIVO), a pace-setter in advanced television services, including digital video recorders (DVRs), for consumers, television service providers, and consumer electronics manufacturers, today reported financial results for the third quarter ended October 31, 2011.
Tom Rogers, President and CEO of TiVo, said, “This was a fine quarter and represented a major step in our growth strategy. Our efforts to get TiVo in additional homes globally continues to accelerate as we drove approximately 117,000 net subscription additions and returned to total positive net subscription growth for the primary time in four years. We also exceeded our quarterly guidance on service and technology revenues, Adjusted EBITDA and net income. Within the U.K., Virgin Media has now deployed its TiVo offering to greater than 220,000 subscribers as of the top of October, and RCN recently expanded its TiVo product offering during the deployment of an entire-home solution. Both ONO and Grande deployments are actually live, and we think Charter Communications to start initial deployments shortly. Additionally, DirecTV intends to launch its TiVo offering in select markets in December with a nationwide rollout to follow early next year. All of this can be a testament to our leadership in advanced television and our ability to drive meaningful solutions to market.”
For the third quarter, service and technology revenues were $51.8 million, growing 25% year-over-year. This in comparison to our guidance of $49 million to $51 million, $41.3 million for a similar quarter last year and $49.6 million within the prior quarter. TiVo reported a net lack of ($24.5) million, in comparison with guidance of a net lack of ($27) million to ($29) million and a net lack of ($20.6) million inside the same quarter last year. Net loss per share this quarter on a basic share basis was ($0.21). Additionally, Adjusted EBITDA was a lack of ($13.9) million, in comparison to Adjusted EBITDA guidance of a lack of ($17) million to ($19) million, and to an Adjusted EBITDA lack of ($12.2) million within the same quarter last year. TiVo ended the quarter with 2.04M total subscriptions, up 117,000.
Rogers continued, “Our mass deployment efforts are proving successful and gaining momentum with Pay-TV operators worldwide. These operators recognize the necessity to retain their position because the key providers of a video experience for consumers. They’re increasingly turning to TiVo as a result of TiVo’s proven advanced television solution that allows them to extract more value out of the tv experience by joining traditional linear TV channels with broadband delivered content while vastly upgrading the user interface.
“Demand for Virgin Media’s TiVo offering is instantly growing in the course of the U.K. Just six months after launch, Virgin Media said that it had greater than 220,000 TiVo subscribers live, up from the 50,000 just three months prior. Much more impressive is that 40% of those TiVo subscribers are new to Virgin Media. Virgin Media has also seen an important increase in its customer satisfaction metrics, and CEO Neil Burkett best summed up what TiVo has done for Virgin Media when he said at the company’s newest earnings call, ‘So how are our customers finding it? Well, firstly, they adore it. Our net promoter score or customer satisfactions is way higher for TiVo than our legacy TV product. Actually, TiVo customers are twice as more likely to recommend Virgin Media to their friends, telling their friends and their family in regards to the game-changing technology, concerning the content discovery, and about their control. TiVo is facilitating a personalization that consumers want. It’s liberating them and putting them answerable for their very own viewing. 80% said that TiVo gives them more freedom to observe TV once they want it. 50% are watching more catch-up TV.”
Rogers continued, “Moving to RCN within the Country, in a quick time period we’ve had an even reception for TiVo Premiere from RCN, and RCN was a key contributor to our turnaround in subscription growth. More importantly, RCN has experienced higher customer satisfaction, lower churn and increased Video On Demand (VOD) usage in homes with TiVo. As a result, we’re pleased that RCN is now expanding its suite of TiVo offerings to become the primary Pay-TV operator to deploy what cable operators had been seeking for a very long time, that’s the way to get the TiVo user interface distributed more broadly within the kind of a non-DVR set-top box. That’s a sign of ways operators wish to use TiVo as an interface for a whole whole-home experience.
“We believe the success we have seen with these two operators at the side of our on-going deployment with Suddenlink, our recent launches with Grande and ONO and our planned upcoming launch with Charter puts us in a high-quality position to continue our upward trajectory as these operators represent greater than 10 million homes that we’ve got the power to succeed in as an exclusive or primary product offering. Additionally, DirecTV has informed us that they intend to initiate the launch of the TiVo-DIRECTV product in select markets in December with a nationwide rollout to follow early next year. Finally, we believe the tangible success current Pay-TV partners are seeing with our product will cause further distribution opportunities both domestically and abroad.
“We believe that penetration within our current distribution deals and potential new deployment deals in addition to stabilizing our TiVo-Owned business, where churn has slowed and new subscriptions have are available at much higher subscription fees, is setting the root for the long-term growth of TiVo. Further, we believe our upcoming integration of Comcast VOD with our retail product, that’s now currently in field trial, may be the first retail set-top box to mix traditional cable and cable video on demand with all the great services the Tivo Premier DVR enables, can be a chance to drive incremental TiVo-Owned subscriptions.
“Turning to our advertising and audience research and measurement business, TiVo’s advertising solutions stay the most important offering for brands, advertisers and networks seeking to grab the notice of the timeshifting viewer in a nonintrusive way. In this year, we have got delivered 1.95 billion interactive ad impressions so far for our advertising clients which compares very favorably to many large cable operators’ interactive advertising offerings. This number is derived from just our current base while we continue to target creating opportunities for advertising growth off of our operator deployments.
“Finally, we continue to believe there’s tremendous value in defending our innovation and intellectual property. We’re happy with how our case against AT&T and Microsoft inside the United states of america District Court for the Eastern District of Texas is progressing after receiving what we believe is a good claim construction and with trial currently scheduled to start in January.”
Rogers concluded, “It’s a thrilling time for TiVo as we head down a path toward sustained growth, marked this quarter by returning our total subscription base to positive growth and exceeding guidance in our financial results. Looking on the fourth quarter and into our next fiscal year, we’re taken with improving Adjusted EBITDA and achieving success in four key areas: executing on current distribution deals now we have in place; signing new distribution deals; reducing R&D and litigation spend over the years; and protecting our intellectual property. As these four key areas play out, TiVo is definitely positioned to create shareholder value.”
Management Provides Financial Guidance
For the fourth quarter of fiscal 2012, TiVo anticipates service and technology revenues inside the range of $48 million to $50 million. TiVo anticipates net loss to be within the range of ($31) million to ($33) million, and an Adjusted EBITDA loss to be within the range of ($21) million to ($23) million. Included within the fourth guidance is higher expected litigation expense regarding AT&T/Microsoft cases where significant activity is scheduled in December and January and the predicted impact of flooding in Thailand on our hard disk costs which we believe should be lower than $1 million within the fourth quarter. Further, we anticipate litigation expense to be lower in both the primary quarter and the entire-year fiscal 2013.
This financial guidance is predicated on information available to management as of November 22, 2011. TiVo expressly disclaims any duty to update this guidance.
Management’s guidance includes Adjusted EBITDA, a non-GAAP financial measure as defined in Regulation G. TiVo has provided a reconciliation of EBITDA and changed EBITDA to net income (loss) inside the attached schedules solely for the point of complying with Regulation G and never as a sign that EBITDA or Adjusted EBITDA is a substitute measure for net income (loss).
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