TiVo Reports Results for the First Quarter Ended April 30, 2012
-- Grew total subscriptions year-over-year by 524,000 subscriptions; doubled year-over-year growth rate from the fourth quarter -- Service & Technology revenue was $54.5 million, up 40% year-over-year -- Posted Adjusted EBITDA loss of $10 million; significant improvement over last year when excluding the one time impact of the past damages from the DISH Network settlement -- Reported net loss of $20.8 million -- Comcast's XFINITY(R) On Demand through TiVo now available in the San Francisco Bay Area; additional markets to roll out this summer -- TiVo's TV Everywhere efforts take significant step forward through the upcoming launch of TiVo Stream and with TiVo's TV Everywhere web portal for operators expected to initially launch with RCN
ALVISO, CA, May 30, 2012 (MARKETWIRE via COMTEX) --TiVo Inc. (NASDAQ: TIVO), a leader in advanced television services, including digital video recorders (DVRs), for consumers, television service providers and consumer electronics manufacturers, today reported financial results for the first quarter fiscal 2013 ended April 30, 2012.
Tom Rogers, President and CEO of TiVo, said, "Our first quarter represented a solid start to the year for TiVo with our results in line with our financial outlook and as we continued to execute on our key objectives. Global adoption of TiVo progressed as we grew our subscription base 27% year-over-year, or by 524,000 subscriptions. Further, we delivered 40% year-over-year service and technology revenue growth, made considerable progress in our efforts to protect our intellectual property and continued to innovate announcing a number of products related to the TV Everywhere experience."
For the first quarter, service and technology revenues were $54.5 million, an increase of 40% year-over-year. This was in line with guidance and compared to $38.8 million for the same quarter in fiscal 2012. TiVo reported a net loss of $20.8 million, compared to net income of $139.0 million in the same quarter in fiscal 2012, which included one-time past damages from the DISH Network settlement of $175.7 million and related interest income. Net loss per share this quarter was $0.17. Additionally, Adjusted EBITDA loss was $10.0 million, and compared very favorably to first quarter fiscal 2012 Adjusted EBITDA loss excluding the $175.7 million in litigation proceeds from the DISH Network settlement that related to damages from prior periods. Total subscriptions grew by 524,000 or 27% year-over-year to approximately 2.5 million subscriptions and we currently expect subscription growth rates to accelerate as fiscal 2013 progresses.
Rogers continued, "We are experiencing these subscription increases because cable operators are demanding a product that can tame an increasingly chaotic array of content choices. We believe TiVo provides the best solution for searching and organizing this complex world of video content. And through our ability to seamlessly bring together live and recorded television, video on-demand, and over-the-top content via broadband and integrate all of it into a simple, easy-to-use approach is unmatched in the market today. Our elegant user interface brings that content to the consumer and increasingly across multiple screens, meeting a key need for consumers and the operator community that increasingly understand the importance of what we offer.
"Our differentiation and innovation have given us a leadership position in providing an advanced television solution to operators. We are constantly pushing ourselves to deliver the very best television experience, and this quarter we announced some critical additions to our growing suite of products.
"First, TiVo Stream, our latest offering will easily deliver all the content available on TiVo Premiere to second screens such as iPads and iPhones. This product fills a real hole in the marketplace. The best indication of which programs people most care about are those they record and yet to date the cable industry has had no way to get recorded programs to the tablet, which has become an increasingly important viewing device. TiVo now solves for that.
"Second, we announced a thin IP set-top box that helps cable operators make available the TiVo interface across all the televisions in a customer's home, and does so in a very cost-effective way that is highly responsive to a cable operator's desire to come up with advanced TV plans that involve lower capex investment. This new set-top box gives consumers access to live and recorded TV, operator VOD in most cases, plus broadband-delivered content on every TV in the house -- in the same way as with a set-top box with a hard drive.
"In addition, we will be launching our TV Everywhere web portal for operators in the near future, beginning with RCN, that will enable them to offer content both in and out of the home on the iPad, on a computer or connected device. This will allow the operator to make sure there is a common interface and thus a common experience across all the devices a consumer may want to use to access their TV content. In so doing, it makes television that much easier and simpler for the subscriber because there is no need to learn a new interface and customer experience every time you pick up a different device.
"This continued innovation has led to the recognition by many operators to view TiVo as the clear leader in this rapidly evolving television landscape. Operators are currently deploying the TiVo offering in aggregate to an increasing number of customers and seeing improving customer satisfaction and more video on-demand usage because of our advanced television solutions. As these relationships are still nascent in terms of the distribution, we are excited about the potential as they reach full distribution. While we have completed deals with operators that have a footprint of approximately 10 million subscribers, excluding DIRECTV and Comcast, the fact is we have less than 10% of this amount penetrated. We believe this provides tremendous opportunity in the coming quarters and years. This success is contributing to a strong level of discussions with operators who are looking to make decisions on deploying advanced television technology in the near term.
"Virgin Media continues to be a wonderful example of how strategically important our product has been in bolstering pay-TV offerings. Virgin Media recently reported it added another 242,000 TiVo subscribers, bringing the total to 677,000, or 18% of its entire base in just over a year's time. Virgin Media is growing its pay-TV subscriber base faster than its key competitors, which is a significant reversal in trends and remarkable given the tough economy in the United Kingdom. We believe this is evidence that TiVo is fueling a substantially improved competitive position for Virgin Media.
"Beyond Virgin Media, we continue to produce very good results from our other operator relationships. Both ONO and Grande doubled the number of TiVo subscribers since last quarter; RCN and Suddenlink continue to contribute to our momentum; and DIRECTV is now live nationwide. Additionally, we continue to work closely with Charter to get broader distribution of our product beyond the Dallas Forth Worth market as well as integration with future platforms.
"Our Comcast offering, which enables access to its XFINITY(R) On Demand content on TiVo Premiere, is now live in the San Francisco Bay Area with marketing just getting underway. This is the first and only offering in the country that brings together linear television, operator video on-demand and key over-the-top services, such as Netflix, Hulu, YouTube, and Amazon, in a one-stop-shop approach, using TiVo's user interface. We also expect to launch this product in additional markets this summer.
"Regarding our recent deal with Pace, last week at the Cable Show we unveiled our first offering that ports the TiVo user experience onto the Pace set-top box. The TiVo-Pace XG1 set-top box is a six-tuner gateway. Very importantly for operators, the features of the new TiVo-Pace XG1 will enable them to utilize TiVo's whole-home capabilities which include support for both traditional set-top as well as IP clients, while also embracing TiVo's mobile and tablet applications. We feel this will be a real potential accelerant for deployment of TiVo.
"On the intellectual property front, our efforts to protect our innovation continued with a favorable claim construction ruling in our Verizon litigation rendered in March, and the scheduling of a trial date in the fall. We also responded to the Motorola suit against TiVo by asserting three patents, including our Time Warp patent, in our amended counterclaims against Motorola. As part of this action we also asserted these same three patents against Time Warner Cable as a counterclaim defendant. It is estimated that Motorola has shipped well over 10 million DVRs to cable operators in North America to date, which we believe have been infringing our patents. We look forward to driving these cases towards resolution.
Rogers concluded, "We continue to build momentum in many elements of our business. Our current deals are leading to significant subscription growth, we continue to innovate in advanced television as highlighted by our recent product announcements, and our efforts to protect our intellectual property are progressing well. We believe this, along with our on-going efforts to drive more efficiencies in our operations, places TiVo in an enviable position with strong prospects as we aim to continue to grow our top line and drive towards Adjusted EBITDA profitability in the future."
Management Provides Financial Guidance
For the second quarter of fiscal 2013, TiVo anticipates service and technology revenues in the range of $53 million to $55 million. TiVo anticipates net loss to be in the range of $28 million to $30 million and an Adjusted EBITDA loss to be in the range of $16 million to $18 million. Substantial sequential percentage increases in litigation costs and larger sales & marketing spend to promote the Comcast offering in the San Francisco Bay Area and other markets are expected to impact net loss and Adjusted EBITDA loss in the second quarter.
Further, consistent with our view from the fourth quarter fiscal year 2012 earnings report, we still expect to significantly advance towards our aim of approaching breakeven Adjusted EBITDA excluding litigation spend for the full year fiscal 2013. We expect sequential quarterly increases in MSO revenue throughout the remainder of the year driven by successful deployments with our existing customers, and cost structure improvements, specifically around research & development, where we expect to spend $5 million to $10 million less in the back half the year as compared to the first half of the year due to the launch of several of our products including TiVo Stream and the TiVo IP set-top box and the completion of our common code base efforts, which is intended to make future deployments quicker and faster. Additionally, we anticipate increased legal spend in the back half of the year due to the Verizon trial and our recently instituted actions with Motorola and Time Warner. However, we still expect lower litigation spend in fiscal year 2013 versus the prior year.
This financial guidance is based on information available to management as of May 30, 2012. 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 Adjusted EBITDA to net income (loss) in the attached schedules solely for the purpose of complying with Regulation G and not as an indication that EBITDA or Adjusted EBITDA is a substitute measure for net income (loss).
TiVo and thePlatform Tapped by RCN for TV Everywhere Solution
RCN Households Will Have Access to RCN's Extensive TV Everywhere Content Offering on PC's, Tablets and Mobile Devices With Intuitive Industry-Leading User Experience From TiVo; RCN to Use thePlatform's Cloud-Based Video Publishing System for Centralized Video Management
ALVISO, CA and SEATTLE, WA and PRINCETON, NJ, May 30, 2012 (MARKETWIRE via COMTEX) --TiVo Inc. (NASDAQ: TIVO), the creator of and a leader in advanced television services, including digital video recorders (DVRs), for consumers, content distributors and consumer electronics manufacturers, and thePlatform, the leading white-label video publishing company, today announced that they have been selected by RCN Telecom Services, LLC, a leading provider of all-digital and high definition video, high-speed internet, and premium voice services, to create RCN's forthcoming TV Everywhere portal.
The new TV Everywhere portal will feature the ability to watch video over an Internet connection, plus seamless integration with RCN's linear television and On Demand offering, all accessible through the rich TiVo user experience. thePlatform's cloud-based, mpx management system will collect, protect, and publish online video to RCN's TV Everywhere portal across IP-connected devices. The new solution will ensure there is a common, simple user interface across all the devices that authenticated RCN subscribers use to access their TV content in and out of the home.
The new offering will enable RCN video households access to the renowned TiVo user experience, including universal search, browse, recommendations, personalization, playback and much more. The RCN TV Everywhere portal will go beyond traditional TV Everywhere offerings by unifying linear, operator VOD, and RCN TV Everywhere content. The seamless experience will include a single sign on, embedded playback, and integration with DVR features where a TiVo DVR is present including remote scheduling and set-top box management.
RCN plans to initially offer thousands of free on-demand titles including a broad range of movies and TV episodes and plans to rapidly scale the number of titles, and programs.
Jim Holanda, CEO of RCN, stated, "We've experienced tremendous success with the TiVo user experience with both our DVR and whole-home offerings, and are excited about extending that proposition to our entire video subscriber base. Coupled with thePlatform's back-end expertise, we're building a compelling new experience to extend the subscription value for our customers. With our new TV Everywhere offering RCN will continue to lead the industry with advanced television solutions and meet our subscriber demand for access to content anywhere, anytime at no additional cost."
David Sandford, Vice President and General Manager of TiVo's Service Provider Business, said, "RCN is one of our most innovative partners and we are excited to expand TiVo's current suite of services to now enable access to content across multiple screens both in and out of the home. This solution will provide unparalleled integration with TiVo's set-top box, tablet and smart-phone interfaces for those subscribers utilizing the RCN-TiVo whole-home solution, making the television viewing experience that much easier and enjoyable."
"RCN is a leader in providing advanced TV and communications services, and we're very proud that they have selected mpx to help extend their efforts online and beyond," said Ian Blaine, CEO of thePlatform. "We look forward to working with RCN and TiVo to deliver a compelling new class of video services to RCN's customers."
RCN's TV Everywhere portal will be deployed in phases beginning later this year. Additional details about the implementation or financial terms were not disclosed.