Continued expansion of TiVo Inc.'s customer base resulted in
revenue growth that topped projections, even as higher costs
lowered the company's profit, the pioneering TV-recording company
said Tuesday.
The San Jose, Calif., company added about 121,600 subscriptions
in the latest period, ending the quarter with more than 5.8
million, up 27% from the year-ago period, and said it is buying
Polish company Cubiware, which makes software for digital
television, in a deal that would expand TiVo's international
presence in 25 countries. Terms weren't disclosed.
The churn rate, or the percentage of subscribers who terminated
service, was 1.4%, unchanged from the year-ago period.
Shares, down 13% over the past 12 months, rose nearly 5% to
$10.83 in late hours.
For the current quarter, TiVo projected net income of $7 million
to $10 million and $94 million to $97 million in service and
technology revenue, compared with the consensus of $11 million in
net income and $93.6 million in revenue, according to Thomson
Reuters.
TiVo, which generates "a significant amount of revenue" from
patent settlement agreements due to expire starting in 2018, has
tried to increase business by adding products like cloud-based
media services and an over-the-air recording service and brokered
distribution agreements with some of its competing pay-TV carriers
and video-streaming services. For example, in February, it
announced a distribution agreement with Frontier Communications,
its first foray into the telecom industry.
As of January 31, the end of its fiscal year, it had an
accumulated deficit of $379.7 million, according to a regulatory
filing.
Overall, for the quarter ended April 30, TiVo reported a profit
of $7.9 million, or eight cents a share, down from $8.1 million, or
seven cents a share, a year earlier. This year's quarter had fewer
shares outstanding.
Net revenue rose 7% to $114.7 million. Services and technology
revenue, a closely watched metric that excludes hardware sales,
increased another 7% to $92.4, topping the company's guidance.
Gross margin narrowed to 61.5% from 64.4% a year earlier.
Write to Maria Armental at maria.armental@wsj.com
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