starbuxsux
8 years ago
TiVo Reports Record Third Quarter Service and Software & Technology Revenue Up 17% Driven by 26% Growth in Total Subscriptions and 60% Increase in MSO Service Revenue
4:01 PM ET 11/24/15 | Marketwired
TiVo Inc. (NASDAQ: TIVO)
View data
-- Record Service and Software & Technology revenue of $102.8 million, an increase of 17% year-over-year; top-end of guidance range -- Highest quarterly net subscription additions in ten years -- MSO service revenue growth accelerated, up approximately 60% year-over-year; driven by highest ever third quarter MSO net subscription additions of 418,000 -- Adjusted EBITDA was $29.3 million -- GAAP Net Income was $5.3 million; Non-GAAP Net Income grew 39% year-over-year to $9.9 million -- Launched TiVo BOLT(TM) to overwhelming accolades -- TiVo-Owned gross additions of 52,000 were up 44% year-over-year; ninth straight quarter of double-digit growth -- Total TiVo subscriptions now approximately 6.5 million, up 26% versus a year-ago -- Signed new international distribution, including a deal with Millicom in Latin America -- Announced Tom Rogers to relinquish CEO position at TiVo; will become Chairman of the Board
TiVo Inc. (NASDAQ: TIVO), a leader in the advanced television entertainment market, today reported financial results for the third quarter ended October 31, 2015.
Tom Rogers, President and CEO of TiVo, said, "This was a strong quarter of execution and growth. We posted record Service and Software & Technology revenue. Our continued innovation is leading to new distribution deals as well as a strengthening in our existing operator relationships. This drove an acceleration in the growth of MSO service revenue in the third quarter, which was up 60% year-over-year. In addition, the turnaround in the TiVo-Owned business continues as we launched the innovative TiVo BOLT and gross additions were up 44% year-over-year, our ninth straight quarter of double-digit growth. Our business trends are improving, and as we move forward, we believe we are well positioned to deliver strong results for the full fiscal year and beyond."
Third Quarter Financial Overview
For the third quarter, service and software & technology revenues were $102.8 million. This compared to guidance in the range of $100 million to $103 million, and $88.1 million for the same quarter last year. TiVo reported Adjusted EBITDA of $29.3 million compared to $27.7 million in the same quarter last year. GAAP Net Income was $5.3 million; Non-GAAP Net Income grew 39% to $9.9 million compared to the year ago quarter. Non-GAAP net income excluded $1.9 million relating to amortization & earn-outs from Cubiware, $1.9 million of interest expense on the 2021 convertible notes, and $0.9 million loss on the repurchase of 2016 convertible notes, all net of tax. Additionally, the company repurchased $40 million of its 4% convertible notes, representing 3.6 million shares during the third quarter based on the conversion price of 4% convertible notes.
MSO Business
Rogers continued, "Our relationships with more than 70 global operator partners through our traditional TiVo solution, Digitalsmiths and Cubiware (all coming together in a next-generation solution -- TiVo Lite) products continue to strengthen and we are seeing significant interest from new operators across all offerings. We now stand at over 5.5 million MSO subscriptions for the traditional TiVo offering, and experienced the strongest growth in 10 years, with net additions of 418,000, up 47% sequentially, and 24% year-over-year.
"On the international MSO front, we reached over four million subscriptions, driven by strong results from Vodafone Spain and Virgin Media. We also reached a new deal with Millicom, a global provider of wireless and wireline communication services to over 50 million subscribers, including to 6 million wireline homes passed in Latin America, to provide our products in various countries across its Latin American footprint. In addition, we made strong progress with Cubiware, announcing new relationships with Supercanal, Argentina's leading MSO and MultiMedia Polska, Poland's leading cable operator.
"In North America, we had another strong quarter with MSO cable subscription net additions growing 44% year-over-year as we are now deploying the TiVo experience across more than 15 mid-sized operators. This is in addition to the seven out of the top-ten operators, such as Charter, Time Warner Cable and Dish Network, we serve through Digitalsmiths, which posted double-digit year-over-year revenue growth.
TiVo Retail Business
"Our TiVo-Owned business showed an improving trajectory, highlighted by an increase of 44% year-over-year in gross additions, an acceleration over last quarter and the ninth straight quarter of year-over-year double-digit growth. And we grew our overall sub base with the strongest third quarter net additions in 9 years. This success was driven by the continued strength of TiVo Roamio, our whole home offering, as well as the launch of TiVo BOLT, the newest TiVo innovation. Additionally, we launched a marketing campaign around TiVo BOLT at the end of third quarter that will continue through the holiday season, and while this discretionary spend impacts Adjusted EBITDA, we believe it is an investment in future growth for our TiVo-Owned business.
"BOLT was hailed as breakthrough by many in the tech space, including from The Verge's Walt Mossberg, who wrote that 'Now, with the Bolt, TiVo is ready to proclaim itself the One Box To Rule Them All.' Yahoo! Tech's David Pogue wrote that BOLT's ... 'speed, its software layout, its consolidation of both cable and Web services, its playback stunts, its ad skipping, its ability to set your recordings free from the box in the living room...Now more than ever, TiVo is the closest thing we'll get to a time machine.' BOLT is a significant step forward and it should have a meaningful role in advancing our TiVo-Owned efforts."
Data Analytics Business
"Turning to our research efforts, we are starting to see traction from our efforts to utilize our unique data for targeted and programmatic television advertising, highlighted by double-digit year-over-year revenue growth and our announcement of a partnership with Viacom. Further, we announced several weeks ago that early next year we'll be providing free TV-ratings data. This is meant to highlight that ratings aren't what is ultimately valuable, but rather answering the question of how to target viewers more efficiently, at a time when all networks are facing ratings declines. This is what the TiVo data analytics business is focused on and we have had meaningful interest since that announcement."
Further Remarks
Rogers concluded, "TiVo is a great company today and I have thoroughly enjoyed the challenge of turning it around and building it from its DVR roots into a leader in providing next-generation TV in the United States and around the world. Today, TiVo now works with over 70 global operators, our MSO business is exhibiting significant growth and our TiVo-Owned retail business is showing an improving trajectory. When combined with the progress we are making in our research business as well as the potential for further value creation from our strong intellectual property position I am confident that TiVo is well positioned for continued growth and I look forward to being part of TiVo's continued ascension in my role as Chairman of the Board."
Management Provides Financial Guidance
For the fourth quarter of Fiscal Year 2016, TiVo anticipates service and software & technology revenues in the range of $101 million to $104 million.
TiVo expects Adjusted EBITDA excluding litigation expense and costs related to its CEO's transition to be in the range of $25 million to $28 million. As previously disclosed, we estimate these excluded transition costs to be in the range of $11 million to $12 million based on TiVo's stock price on November 17, 2015. Net income (loss), which includes these transition costs, to be in the range of $(8) million to $(5) million with net income (loss) before these transition costs expected to be $4 million to $6 million.
Included in the fourth quarter financial guidance is continued service revenue growth driven by our operator focused efforts. This will be slightly offset by anticipated lower technology revenue. Additionally, included is approximately $2 to $3 million of increased TiVo-Owned subscription acquisition spend versus the third quarter from our expanded marketing campaign around TiVo Bolt, and $2 million of lower MSO hardware margin as we anticipate selling fewer hardware units to MSOs during the fourth quarter as compared to the third quarter.
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).
Conference Call and Webcast
TiVo will host a conference call and Webcast to discuss the third quarter ended October 31, 2015 financial and operating results as well as guidance outlook for the fourth quarter at 2:00 pm PT (5:00 pm ET), today, November 24, 2015. To listen to the discussion, please visit http://www.tivo.com/ir and click on the link provided for the Webcast or dial (877) 618-4505 (conference ID number is 75200025). The Webcast will be archived and available through December 1, 2015 at http://www.tivo.com/ir or by calling (404) 537-3406; and entering the conference ID number 75200025.
About TiVo Inc.
TiVo Inc. (NASDAQ: TIVO) is a global leader in next-generation television services. With global headquarters in San Jose, CA and offices in New York, NY, Boston, MA, Durham, NC, and Warsaw, Poland, TiVo's innovative cloud-based Software-as-a-Service solutions enable viewers to consume content across multiple screens in and out-of-the home. The TiVo solution provides an all-in-one approach for navigating the 'content chaos' by seamlessly combining live, recorded, on-demand and over-the-top television into one intuitive user interface. The TiVo experience provides TV viewers with simple universal search, discovery, viewing and recording from a variety of devices, creating the ultimate viewing experience. TiVo products and services are available at retail or through a growing number of pay-TV operators world-wide. TiVo's multiple subsidiary companies provide the broader television industry and consumer electronics manufacturers with cloud-based video discovery and recommendation options, interactive advertising solutions and audience research and measurement services. More information at: www.TiVo.com.
TiVo, TiVo Bolt and the TiVo logo are trademarks or registered trademarks of TiVo Inc. or its subsidiaries worldwide.
This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to, among other things, TiVo's future business and growth strategies including future distribution agreements as well as revenue and subscription growth from MSO customers (both domestically and internationally), future product developments, financial guidance for TiVo's fourth quarter and full fiscal year ending January 31, 2016, future growth in TiVo's overall subscription base including both TiVo-Owned and MSO subscriptions, future growth and improving trajectory of TiVo's retail business, future revenues, growth, and product adoption by customers of TiVo's data analytics business, and future expansion of TiVo's products to emerging markets through Cubiware. Forward-looking statements generally can be identified by the use of forward-looking terminology such as, "believe," "expect," "may," "will," "intend," "estimate," "continue," or similar expressions or the negative of those terms or expressions. Such statements involve risks and uncertainties, which could cause actual results to vary materially from those expressed in or indicated by the forward-looking statements. Factors that may cause actual results to differ materially include delays in development, competitive service offerings and lack of market acceptance, as well as the other potential factors described under "Risk Factors" in the Company's public reports filed with the Securities and Exchange, including the Company's Annual Report on Form 10-K for the fiscal year ended January 31, 2015 and Quarterly Reports on From 10-Q for the quarter ended April 30, 2015 and July 31, 2015 and Current Reports on Form 8-K. The Company cautions you not to place undue reliance on forward-looking statements, which reflect an analysis only and speak only as of the date hereof. TiVo disclaims any obligation to update these forward-looking statements.
View data
TIVO INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share and share amounts) (unaudited) Three Months Ended Nine Months Ended October October 31, 31, ------------------------- ------------------------- 2015 2014 2015 2014 ----------- ------------ ----------- ------------ Revenues Service and software revenues 44,674 36,705 127,621 109,509 Technology revenues 58,135 51,359 166,704 151,182 Hardware revenues 29,506 30,366 72,178 76,656 ----------- ------------ ----------- ------------ Net revenues 132,315 118,430 366,503 337,347 Cost of revenues Cost of service and software revenues 17,766 14,970 48,376 42,570 Cost of technology revenues 10,404 6,567 25,250 16,780 Cost of hardware revenues 30,837 28,176 73,593 70,464 ----------- ------------ ----------- ------------ Total cost of revenues 59,007 49,713 147,219 129,814 Gross margin 73,308 68,717 219,284 207,533 ----------- ------------ ----------- ------------ Research and development 28,027 25,546 79,350 76,944 Sales and marketing 12,172 10,544 35,043 31,143 Sales and marketing, subscription acquisition costs 3,612 2,734 6,420 5,451 General and administrative 13,461 14,292 44,163 45,406 ----------- ------------ ----------- ------------ Total operating expenses 57,272 53,116 164,976 158,944 Income from operations 16,036 15,601 54,308 48,589 ----------- ------------ ----------- ------------ Interest income 1,067 1,070 2,905 3,178 Interest expense and other expense, net (6,040) (3,197) (15,918) (7,139) ----------- ------------ ----------- ------------ Income before income taxes 11,063 13,474 41,295 44,628 Provision for income taxes (5,783) (7,129) (19,797) (20,852) ----------- ------------ ----------- ------------ Net income $ 5,280 $ 6,345 $ 21,498 $ 23,776 =========== ============ =========== ============ Net income per common share Basic $ 0.06 $ 0.06 $ 0.23 $ 0.22 Diluted $ 0.06 $ 0.06 $ 0.22 $ 0.21 Income for purposes of computing net income per share: Basic $ 5,280 $ 6,345 $ 21,498 $ 23,776 Diluted $ 5,280 $ 6,345 $ 21,498 $ 27,530 Weighted average common and common equivalent shares: Basic 92,759,485 107,497,734 92,346,466 110,303,789 Diluted 95,188,262 111,870,407 96,082,128 130,728,425 TIVO INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except per share and share amounts) (unaudited) October 31, January 31, 2015 2015 ------------- ------------- ASSETS CURRENT ASSETS Cash and cash equivalents $ 140,895 $ 178,217 Short-term investments 530,004 564,744 Accounts receivable, net of allowance for doubtful accounts of $685 and $647, respectively 54,653 40,184 Inventories 20,507 20,341 Deferred cost of technology revenues, current 4,082 5,076 Deferred tax asset, current 36,403 55,787 Prepaid expenses and other, current 13,356 13,851 ------------- ------------- Total current assets 799,900 878,200 LONG-TERM ASSETS Property and equipment, net of accumulated depreciation of $54,521 and $52,021, respectively 12,521 11,854 Intangible assets, net of accumulated amortization of $38,811 and $31,277, respectively 61,053 51,810 Deferred cost of technology revenues, long- term 12,753 15,016 Goodwill 109,213 99,364 Deferred tax asset, long-term 114,486 114,486 Prepaid expenses and other, long-term 10,573 6,791 ------------- ------------- Total long-term assets 320,599 299,321 ------------- ------------- Total assets $ 1,120,499 $ 1,177,521 ============= ============= LIABILITIES AND STOCKHOLDERS' EQUITY LIABILITIES CURRENT LIABILITIES Accounts payable $ 33,435 $ 29,359 Accrued liabilities 46,076 54,431 Deferred revenue, current 172,657 175,503 Convertible senior notes, current 132,500 -- ------------- ------------- Total current liabilities 384,668 259,293 LONG-TERM LIABILITIES Deferred revenue, long-term 207,519 255,816 Convertible senior notes, long-term 184,749 352,562 Deferred tax liability, long-term 2,791 -- Other long-term liabilities 10,490 537 ------------- ------------- Total long-term liabilities 405,549 608,915 ------------- ------------- Total liabilities 790,217 868,208 COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY Preferred stock, par value $0.001: Authorized shares are 10,000,000; Issued and outstanding shares - none -- -- Common stock, par value $0.001: Authorized shares are 275,000,000; Issued shares are 143,100,868 and 138,577,153, respectively, and outstanding shares are 97,887,202 and 96,221,867, respectively 142 138 Treasury stock, at cost: 45,213,666 and 42,355,286 shares, respectively (545,278) (514,853) Additional paid-in capital 1,235,420 1,203,722 Accumulated deficit (358,182) (379,680) Accumulated other comprehensive income (loss) (1,820) (14) ------------- ------------- Total stockholders' equity 330,282 309,313 ------------- ------------- Total liabilities and stockholders' equity $ 1,120,499 $ 1,177,521 ============= ============= TIVO INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (unaudited) Nine Months Ended October 31, ------------------------ 2015 2014 ----------- ----------- CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 21,498 $ 23,776 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization of property and equipment and intangibles 12,755 10,270 Stock-based compensation expense 21,694 25,577 Amortization of discounts and premiums on investments 4,763 8,204 Change in fair value of contingent purchase consideration 603 -- Deferred income taxes 18,348 (2,131) Amortization of debt issuance costs and debt discount 5,915 1,439 Loss on repurchase of notes payable 1,141 -- Excess tax benefits from employee stock-based compensation -- (12,289) Allowance for doubtful accounts (2) 183 Changes in assets and liabilities: Accounts receivable (12,840) (4,128) Inventories (166) 5,438 Deferred cost of technology revenues 2,895 5,975 Prepaid expenses and other 1,709 (761) Accounts payable 4,008 3,604 Accrued liabilities (7,845) 2,994 Deferred revenue (51,142) (50,914) Other long-term liabilities (181) (239) ----------- ----------- Net cash provided by operating activities $ 23,153 $ 16,998 ----------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES Purchases of short-term investments (420,291) (608,052) Sales or maturities of short-term investments 448,470 639,635 Purchase of long-term investment (2,420) -- Acquisition of business, net of cash acquired (16,616) (128,387) Acquisition of property and equipment and other long-term assets (8,163) (4,668) Acquisition of intangible assets (1,000) -- ----------- ----------- Net cash used in investing activities $ (20) $ (101,472) ----------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issuance of common stock related to exercise of common stock options 7,632 4,886 Proceeds from issuance of common stock related to employee stock purchase plan 3,823 3,649 Excess tax benefits from employee stock-based compensation -- 12,289 Proceeds from issuance of convertible senior notes, net of issuance costs -- 224,537 Proceeds from issuance of common stock warrants -- 30,167 Purchase of convertible note hedges -- (54,018) Repurchase of notes payable (41,040) -- Treasury stock - repurchase of stock (30,425) (242,541) ----------- ----------- Net cash used in financing activities $ (60,010) $ (21,031) ----------- ----------- EFFECT OF EXCHANGE RATE CHANGES ON CASH $ (445) $ -- ----------- ----------- NET DECREASE IN CASH AND CASH EQUIVALENTS $ (37,322) $ (105,505) ----------- ----------- CASH AND CASH EQUIVALENTS: Balance at beginning of period 178,217 253,713 ----------- ----------- Balance at end of period $ 140,895 $ 148,208 =========== ===========
View data
TIVO INC. OTHER DATA Guidance Three Months Ended Reconciliation --------------- Three Months October 31, Ending --------------------- January 31, 2015 2014 2016 --------- ---------- --------------- (In thousands) (In millions) Net Income $ 5,280 $ 6,345 $(8) - $(5) Add back: Depreciation & amortization 4,624 3,532 $4 - $5 Interest income & expense, other 3,672 2,113 $3 - $4 Provision (Benefit) for income tax 5,783 7,129 $3 - $5 --------- ---------- --------------- EBITDA 19,359 19,119 $5 - $8 Earn-outs and changes in fair value of earn-outs 1,306 0 $1 - $2 Loss on repurchase of notes payable 1,141 0 $0 Stock-based compensation 7,488 8,549 $7 - $8 CEO transition charge, pre-tax 0 0 $11 - $12 --------- ---------- --------------- Adjusted EBITDA $ 29,294 $ 27,668 $24 - $27 Litigation expenses (947) 1,247 $1 - $2 Litigation proceeds (past damage awards) 0 0 $0 --------- ---------- --------------- Adjusted EBITDA excluding litigation expense and litigation proceeds (past damage awards) $ 28,347 $ 28,915 $25 - $28 ========= ========== ===============
EBITDA and Adjusted EBITDA Results. TiVo's "EBITDA" means income before interest income and expense, provision for income taxes and depreciation and amortization. TiVo's "Adjusted EBITDA" is EBITDA adjusted for acquisition related charges for retention earn-outs payable to former shareholders of the business we acquired and changes in fair value of acquired business' performance related earn-outs, CEO transition charge, pre-tax, and stock-based compensation. TiVo's "Adjusted EBITDA excluding litigation expenses and proceeds (past damage awards)" is Adjusted EBITDA less litigation related expenses and litigation proceeds attributable to past damage awards, but includes litigation proceeds recognized as technology licensing revenue. EBITDA and Adjusted EBITDA are not measures of financial performance under generally accepted accounting principles, which we refer to as GAAP. We have presented EBITDA and Adjusted EBITDA solely as supplemental disclosure because we believe they allow for a more complete analysis of our results of operations and we believe that EBITDA and Adjusted EBITDA are useful to investors because EBITDA and Adjusted EBITDA are commonly used to analyze companies on the basis of operating performance. In addition, because of the variety of equity awards used by companies, the varying methodologies for determining stock-based compensation expense, and the subjective assumptions involved in those determinations, we believe excluding stock-based compensation enhances the ability of management and investors to evaluate our operating performance over multiple periods. Management does not use EBITDA or Adjusted EBITDA as a measure of liquidity because, among other things, they do not exclude the impact of deferred revenue from IP settlements nor the impact of deferred revenues associated with the amortization of product lifetime subscriptions. We do not use stock-based compensation expense in our internal measures. A limitation associated with these non-GAAP measures is that they do not include any stock-based compensation expense related to hiring, retaining, and incentivizing the Company's workforce. EBITDA and Adjusted EBITDA are not intended to represent, and should not be considered more meaningful than, or as an alternative to, measures of operating performance as determined in accordance with GAAP.
View data
TIVO INC. NON-GAAP NET INCOME RECONCILIATION Three Months Ended October 31, --------------------- 2015 2014 ---------- ---------- (In thousands) Net Income $ 5,280 $ 6,345 Add back: Cubiware related depreciation & amortization, net of tax 546 0 Earn-outs and changes in fair value of earn-outs 1,306 0 Interest expense on 2021 convertible notes, net of tax 1,857 777 Loss on repurchase of 4.0% Notes due 2016, net of tax 887 0 ---------- ---------- Non-GAAP Net Income $ 9,876 $ 7,122 ========== ==========
Non-GAAP Net Income. TiVo's "Non-GAAP Net Income" means Net Income plus Cubiware related depreciation & amortization, net of tax, Cubiware related transfer taxes, net of tax, earn-outs and changes in the fair value of earn-outs associated with the Cubiware acquisition, loss on repurchase of our convertible notes due 2016, and interest expense on our convertible notes due 2021. We have excluded the Cubiware related depreciation & amortization, transfer taxes and earn-outs and the loss on repurchase of our convertible notes due 2016 because none of these were present in the three months ended October 31, 2014. Non-GAAP Net Income is not a measure of financial performance under GAAP. We have presented Non-GAAP Net Income solely as supplemental disclosure because we believe some investors will find it useful to compare the operating performance of the business over the two periods without these expenses. A limitation associated with this non-GAAP measure is that it does not include the interest expense associated with our recent convertible notes financing or any Cubiware related depreciation & amortization, transfer taxes and earn-outs associated with our acquisition of Cubiware, but does include the revenue related to Cubiware. Non-GAAP Net Income is not intended to represent, and should not be considered more meaningful than, or as an alternative to, measures of operating performance as determined in accordance with GAAP.
View data
Three Months Ended ------------------------ Oct 31, Oct 31, (Subscriptions and Households in thousands) 2015 2014 ----------- ----------- TiVo-Owned Gross Additions: 52 36 Net Additions/(Losses): TiVo-Owned 11 (9) MSOs 418 337 ----------- ----------- Total Net Additions/(Losses) 429 328 Cumulative Subscriptions: TiVo-Owned 952 928 MSOs 5,515 4,204 ----------- ----------- Total Cumulative Subscriptions 6,467 5,132 ----------- ----------- Average Subscriptions: ----------- ----------- TiVo-Owned Average Subscriptions 947 930 ----------- ----------- MSO Average Subscriptions 5,294 4,035 ----------- ----------- Total Average Subscriptions: 6,241 4,965 ----------- ----------- Total MSO Households 4,605 3,651 MSO Average Households 4,435 3,521 ----------- ----------- TiVo-Owned Fully Amortized Active Product Lifetime Subscriptions 153 152 % of TiVo-Owned Cumulative Subscriptions paying recurring fees 43% 48%
Subscriptions and Households. Management reviews the number of subscriptions and households, and believes they may be useful to investors, in order to evaluate our relative position in the marketplace and to forecast future potential service revenues. Above is a table that details the change in our TiVo-Owned and MSO Subscription and MSO Household bases as of October 31, 2015 compared to October 31, 2014. The TiVo-Owned Subscription lines refer to subscriptions sold directly or indirectly by TiVo to consumers who have TiVo-enabled devices (such as a DVR or TiVo Mini) and for which TiVo incurs acquisition costs. The MSO Subscription lines refer to subscriptions sold to consumers by MSOs such as Cogeco, Com Hem, Mediacom, Vodafone Spain (ONO), RCN, Suddenlink, and Virgin, among others, and for which TiVo expects to incur little or no acquisition costs. Additionally, we provide a breakdown of the average monthly subscriptions for the quarter, the total MSO households and the MSO average households for the quarter, the number of fully amortized active product lifetime subscriptions, and percent of TiVo-Owned Subscriptions for which consumers pay recurring fees as opposed to a one-time prepaid product lifetime fee.
We define a "subscription" as a contract referencing a TiVo-enabled device such as a DVR or a non-DVR device such as a TiVo Mini for which (i) a consumer has paid or committed to pay for the TiVo service and (ii) service is not canceled. Each TiVo-Owned Subscription represents a single TiVo-enabled device (as defined above) and therefore one or more TiVo-Owned Subscriptions may be present in a single household. MSO Subscriptions are a count of the number of devices that connect to the TiVo service and one or more devices may be present in a single MSO Household. TiVo-Owned Subscriptions currently pay for the TiVo service on a recurring payment plan (such as a monthly or annual payment plan) or on a one-time basis for the life of TiVo-enabled device (referred to as product lifetime subscriptions here and sold commercially as All-in subscriptions). Beginning in October 2014, each TiVo Mini device sale includes a product lifetime subscription for that TiVo Mini device, which have much lower average revenues than DVRs. Sales of the TiVo Mini device began in March 2013. TiVo Mini represented 13% and 6% of cumulative TiVo-Owned Subscriptions as of October 31, 2015 and 2014, respectively. Increasing sales of TiVo Minis have helped slow, and in some quarters, led to increases in our cumulative TiVo-Owned Subscriptions as well as increased the number of subscriptions (devices) per TiVo-Owned household. This trend has resulted in a slower rate of decline in the total number of TiVo-Owned households. The 44% increase in gross additions of TiVo-Owned Subscriptions in the quarter compared to the year ago quarter led to a net addition of TiVo-Owned Subscriptions, which was driven primarily on changes in our whole-home pricing, including the bundling of product lifetime subscriptions with each TiVo Mini device, sales of our TiVo OTA (over-the-air) product, and the launch of our latest innovation the TiVo Bolt(TM) product. Subscriptions do not include soft-clients (i.e. iPad application or web portal) or digital tuning adapter users. We count product lifetime subscriptions in our subscription base until both of the following conditions are met: (i) the period we use to recognize product lifetime subscription revenues ends; and (ii) the related TiVo-enabled device has not made contact with the TiVo service within the prior six month period. Product lifetime subscriptions past this period which have not called into the TiVo service for six months are not counted in this total.
We define a "household" as one or more devices associated with the same contract or customer number. We currently do not report TiVo-Owned households as we currently receive incremental revenue for each new TiVo-Owned Subscription in the TiVo-Owned business whereas, in some cases, our MSO customers pay us on a per household basis. MSO Subscriptions are a count of the number of devices that connect to the TiVo service and one or more devices may be present in a single MSO Household.
We calculate average subscriptions for the period by adding the average subscriptions for each month and dividing by the number of months in the period. We calculate the average subscriptions for each month by adding the beginning and ending subscriptions for the month and dividing by two. We calculate Average MSO Households for the period by adding the average households for each month and dividing by the number of months in the period. We calculate the average households for each month by adding the beginning and ending households for the month and dividing by two. We are not aware of any uniform standards for defining subscriptions or households and caution that our presentation may not be consistent with that of other companies. Additionally, the fees that our MSOs pay us are typically based upon a specific contractual definition of a subscriber, subscription, household or a TiVo-enabled device which may not be consistent with how we define a subscription or household for our reporting purposes nor be representative of how such fees are calculated and paid to us by our MSOs. Our MSO Subscription and MSO Household data is dependent in part on reporting from our third-party MSO partners.
View data
TIVO INC. OTHER DATA - KEY BUSINESS METRICS Three Months Ended October 31, ------------------------------- TiVo-Owned Churn Rate 2015 2014 -------------- -------------- (In thousands, except churn rate per month) ------------------------------- Average TiVo-Owned Subscriptions 947 930 TiVo-Owned Subscription cancellations (41) (45) -------------- -------------- TiVo-Owned Churn Rate per month (1.4)% (1.6)% -------------- --------------
TiVo-Owned Churn Rate per Month. Management reviews this metric, and believes it may be useful to investors, in order to evaluate our ability to retain existing TiVo-Owned Subscriptions (including both monthly and product lifetime subscriptions) by providing services that are competitive in the market. Management believes factors such as service enhancements, service commitments, higher customer satisfaction, and improved customer support may improve this metric. Conversely, management believes factors such as increased competition, lack of competitive service features such as high definition television recording capabilities in our older model DVRs or access to certain digital television channels or MSO Video On Demand services, as well as increased price sensitivity, CableCARD(TM) installation issues, and CableCARD(TM) technology limitations, may cause our TiVo-Owned Churn Rate per month to increase.
We define the TiVo-Owned Churn Rate per month as the total TiVo-Owned Subscription cancellations in the period divided by the Average TiVo-Owned Subscriptions for the period (including both monthly and product lifetime subscriptions), which then is divided by the number of months in the period. We calculate Average TiVo-Owned Subscriptions for the period by adding the average TiVo-Owned Subscriptions for each month and dividing by the number of months in the period. We calculate the average TiVo-Owned Subscriptions for each month by adding the beginning and ending subscriptions for the month and dividing by two. We are not aware of any uniform standards for calculating churn and caution that our presentation may not be consistent with that of other companies.
View data
Three Months Ended Twelve Months October 31, Ended October 31, ------------------ ------------------ 2015 2014 2015 2014 -------- -------- -------- -------- Subscription Acquisition Costs (In thousands, except SAC) Sales and marketing, subscription acquisition costs $ 3,612 $ 2,734 $ 9,875 $ 11,489 Hardware revenues (29,506) (30,366) (94,641) (98,957) Less: MSOs'-related hardware revenues 23,909 23,997 72,945 72,761 Cost of hardware revenues 30,837 28,176 98,634 93,627 Less: MSOs'-related cost of hardware revenues (19,355) (18,973) (58,167) (55,389) -------- -------- -------- -------- Total Acquisition Costs 9,497 5,568 28,646 23,531 ======== ======== ======== ======== TiVo-Owned Subscription Gross Additions 52 36 187 144 Subscription Acquisition Costs (SAC) $ 183 $ 155 $ 153 $ 163 ======== ======== ======== ========
Subscription Acquisition Cost or SAC. Management reviews this metric, and believes it may be useful to investors, in order to evaluate trends in the efficiency of our marketing programs and subscription acquisition strategies. We define SAC as our total TiVo-Owned acquisition costs for a given period divided by TiVo-Owned Subscription gross additions for the same period. We define total acquisition costs as sales and marketing, subscription acquisition costs less net TiVo-Owned related hardware revenues (defined as TiVo-Owned related gross hardware revenues less rebates, revenue share and market development funds paid to retailers) plus TiVo-Owned related cost of hardware revenues. The sales and marketing, subscription acquisition costs line item includes advertising expenses and promotion-related expenses directly related to subscription acquisition activities, but does not include expenses related to advertising sales. We do not include third-parties' subscription gross additions, such as MSOs' gross additions with TiVo subscriptions, in our calculation of SAC because we typically incur limited or no acquisition costs for these new subscriptions, and so we also do not include MSOs' sales and marketing, subscription acquisition costs, hardware revenues, or cost of hardware revenues in our calculation of TiVo-Owned SAC. We are not aware of any uniform standards for calculating total acquisition costs or SAC and caution that our presentation may not be consistent with that of other companies.
TiVo-Owned Average Revenue Per Subscription or ARPU. Management reviews this metric, and believes it may be useful to investors in order to evaluate the potential of our subscription base to generate service revenues. Investors should not use ARPU as a substitute for measures of financial performance calculated in accordance with GAAP. Management believes it is useful to consider this metric excluding the costs associated with rebates, revenue share, and other payments to channel because of the discretionary and varying nature of these expenses and because management believes these expenses, which are included in hardware revenues, net, are more appropriately monitored as part of SAC. We are not aware of any uniform standards for calculating ARPU and caution that our presentation may not be consistent with that of other companies.
We calculate TiVo-Owned service revenues by subtracting MSOs'-related service revenues and Media services and other service revenues (includes Advertising, Research, Cubiware revenues, and Digitalsmiths' revenues), from our total reported net Service and Software revenues. The table below provides a more detailed breakdown of our Service and Software revenues, and reconciles to our total Service and Software revenues in our Statement of Operations as reported (or previously reported):
View data
Three Months Ended October 31, ------------------------- Service and Software Revenues 2015 2014 ------------------------- (In thousands) ------------------------- TiVo-Owned-related service revenues $ 20,508 $ 21,810 MSOs'-related service revenues 16,942 10,563 Media services and other service and software revenues 7,224 4,332 ------------------------- Total Service and Software Revenues $ 44,674 $ 36,705
We calculate ARPU per month for TiVo-Owned Subscriptions by taking total reported net TiVo-Owned service revenues and dividing the result by the number of months in the period. We then divide the resulting average service revenue by Average TiVo-Owned Subscriptions for the period, calculated as described above for churn rate. The following table shows this calculation:
View data
Three Months Ended October 31, ------------------------- TiVo-Owned Average Revenue per Subscription 2015 2014 ------------------------- (In thousands, except ARPU) ------------------------- TiVo-Owned-related service revenues 20,508 21,810 Average TiVo-Owned revenues per month 6,836 7,270 Average TiVo-Owned Subscriptions per month 947 930 ------------------------- TiVo-Owned ARPU per month $ 7.22 $ 7.82 =========================
Technology Revenues. Revenue and cash from the contractual minimums (i.e. the following amounts do not include any additional revenues from our AT&T agreement) under our licensing agreements with EchoStar, AT&T, Verizon, and Cisco and Google/Motorola Mobility through October 31, 2015 have been:
View data
Technology Cash Revenues Receipts ---------------------------------------------------------------------------- Fiscal Year Ended January 31, (In thousands) ------------------------- 2012 35,275 117,679 2013 76,841 86,356 2014 136,532 464,725 2015 169,641 83,579 Nine month period from February 1, 2015 to October 31, 2015 128,572 71,017 ------------------------- Total $ 546,861 $ 823,356 =========================
Based on current GAAP, revenue and cash from the contractual minimums under all our licensing agreements with EchoStar, AT&T, Verizon, and Cisco and Google/Motorola Mobility is expected to be recognized (revenues) and received (cash) for the remainder of the fiscal year 2016 and on an annual basis for the fiscal years thereafter as follows:
View data
Technology Cash Revenues Receipts ---------------------------------------------------------------------------- (In thousands) ------------------------- Three month period from November 1, 2015 - January 31, 2016 42,990 12,562 Fiscal Year Ending January 31, 2017 173,129 83,579 2018 174,411 83,579 2019 88,629 31,139 2020 1,855 0 2021-2024 6,388 0 ------------------------- Total $ 487,402 $ 210,859 =========================
SOURCE: TiVo Inc.
starbuxsux
9 years ago
TiVo Reports Results for the Third Quarter Ended October 31, 2014
Total TiVo Subscriptions Jump Past 5 Million; Up 32%
SAN JOSE, CA--(Marketwired - Nov 25, 2014) - TiVo Inc. (NASDAQ: TIVO)
-- Service & Technology revenue of $88.1 million
-- Net revenue of $118.4 million; a record for the Company
-- Adjusted EBITDA of $27.7 million, up 16% year-over-year
-- Net income of $6.3 million, which included $0.8 million of after-tax
incremental interest expense associated with the Company's recent
convertible debt offering
-- MSO service revenue grew 37% year-over-year; on track to almost double
Fiscal 2013
-- Added 328,000 TiVo subscriptions, bringing total subscriptions to over
5.1 million, a 32% year-over-year increase
-- Cogeco launched a TiVo platform in Canada in a little over three months
after a partnership announced
-- TiVo-Owned gross additions were up 9% year-over-year in third quarter and
net additions were positive in October
-- Broadening TiVo's retail product line, introduced TiVo(R) Roamio OTA as
an Over-the-Air (OTA) solution and TiVo Mega for the high end home
installation market
-- Launched Amazon Instant Video, including Prime Instant Video, Vudu, and
Home Shopping Network applications on our TiVo Roamio platform
-- Repurchased $128 million or 9.9 million shares in the quarter; over $400
million worth of stock remaining to be repurchased under current
authorization
TiVo Inc. (NASDAQ: TIVO), a leader in the advanced television entertainment market, today reported financial results for the third quarter ended October 31, 2014.
Tom Rogers, President and CEO of TiVo, said, "This was a strong quarter for TiVo, highlighted by continued organic growth as well as significant progress establishing a more efficient capital structure. Adjusted EBITDA increased 16% over last year, and our growing relationships with operator partners led to the net addition of 328,000 total TiVo subscriptions, bringing total subscriptions to over 5.1 million, and 37% year-over-year growth in MSO revenue. Further, we repurchased $128 million or 9.9 million shares in the quarter and issued a new convertible debt offering with the intention to use the proceeds to repurchase the shares underlying our existing convertible security in order to reduce the dilution related to our existing convertible debt. We believe that our operational progress and our improving capital structure should translate into increased shareholder value."
For the third quarter, service and technology revenues were $88.1 million. This compared to guidance in the range of $86 million to $89 million, and $81.7 million for the same quarter last year. TiVo reported Adjusted EBITDA of $27.7 million, compared to Adjusted EBITDA guidance of $25 million to $28 million, and compared to Adjusted EBITDA of $23.8 million in the same quarter last year. Net income was $6.3 million, compared to guidance of $6 million to $9 million. Impacting net income was $ 0.8 million of incremental interest expense associated with the Company's recent convertible debt offering and a slightly higher than anticipated tax expense during the quarter. Year-ago net income was $12.5 million and included a GAAP tax benefit of $2 million versus a tax expense of $7.1 million this past quarter.
Rogers continued, "The 337,000 MSO subscription additions in the quarter are on top of the approximately 624,000 we added during the first two quarters of the fiscal year. We have now reached over four million total MSO subscriptions, proof that our operator relationships are thriving. The 37% increase in MSO revenue in the third quarter sets us on a course to almost double our MSO service revenue in Fiscal 2015 compared to where we were just two years ago. We expect that this positive momentum will continue as existing relationships scale, many of which are still in the early phases of deployment, and as we anticipate forming new distribution relationships.
"In terms of existing distribution relationships, this quarter we showed how quickly TiVo can be deployed to an operator's customer base. In just a little more than three months after announcing our agreement, Cogeco Cable Canada began the rollout of TiVo to its customers in Canada. This is in addition to Wave and Blue Ridge which both launched TiVo during the third quarter.
"In our Digitalsmiths business, we drove 21% sequential quarter-over-quarter revenue growth as we continued to roll out our industry leading video discovery platform to current operator partners. We expect this growth to continue as we drive further penetration within existing distribution partners, sign additional distribution deals in the future, both in emerging lower ARPU international markets and with consumer electronics manufacturers, and through new Digitalsmiths' products which we expect to launch over the course of the next year.
"On the TiVo-Owned front, TiVo Roamio continues to receive strong critical acclaim from both consumers and industry experts. In the quarter, we delivered a 9% year-over-year increase in TiVo-Owned gross additions and were net positive in October, the first time in seven years, which we believe is an indication of the improving dynamics in our retail business. Further, our focus on addressing additional market segments such as the 15 million home Over-the-Air (OTA) market through TiVo Roamio OTA, and the high end home installation market through TiVo Mega, should help drive incremental improvements in our TiVo-Owned business. To this point, we're seeing positive initial interest for the TiVo OTA offering and are hopeful that this will meaningfully contribute to our fourth quarter gross subscription additions.
"Additionally, we recently announced the new Amazon Instant Video app to give subscribers access to Amazon's entire Prime Instant Video library. That was in addition to the launch of Vudu, Walmart's subscription-free, video-on-demand movie service, which is now available on TiVo devices. And we announced that TiVo subscribers can now use the Home Shopping Network: Shop by Remote application to purchase products using their TiVo remotes.
"In addition to the improving trends in our operating business, we're highly focused on driving value through capital allocation. In August, we announced our intention to repurchase $350 million of stock over a two and half year timeframe. Following that announcement, in September, we issued $230 million of new convertible debt, which included the use of convertible note hedge and warrant transactions. The strike price on the warrant transaction related to the notes is initially $24.00 per share, which is 75% above the closing price of TiVo's stock on September 16, 2014. We intend to use these proceeds to repurchase the shares underlying our existing convertible security at prices much lower than the effective conversion premium connected with our new convertible debt issuance. Between the previously announced share repurchase plan and the new repurchases related to the convertible debt, we have committed to repurchase $550 million of stock, which equates to approximately a third of our current weighted average common diluted shares outstanding based on our current stock price. Further, we repurchased $128 million or 9.9 million shares during the quarter."
Rogers concluded, "This was a solid quarter with improving financial results, strong operator growth, and continued innovation. We are pleased with where the business currently stands, and believe strongly in the prospects for growth in the coming quarters through incremental MSO distribution deals, continued improvements in our retail business supported by our best-in-class retail product offerings, and continued strategic allocations of capital to drive further meaningful value for shareholders."
Management Provides Financial Guidance
For the fourth quarter of Fiscal Year 2015, TiVo anticipates service and technology revenues in the range of $87 million to $90 million.
TiVo expects Adjusted EBITDA to be in the range of $21 million to $24 million and net income to be in the range of $2 million to $5 million.
Included in the fourth quarter financial guidance is an expected increase in TiVo-Owned acquisition/marketing expenditure compared to the third quarter, relating to the typical seasonal efforts to drive subscriptions during the holiday season. This increased expenditure is expected to yield additional gross subscription additions. Additionally, TiVo anticipates lower hardware revenue and absolute margin compared to the third quarter due to the continuing trend of MSO partners opting for the TiVo Service on third-party hardware.
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).
Conference Call and Webcast
TiVo will host a conference call and Webcast to discuss the third quarter ended October 31, 2014 financial and operating results as well as guidance outlook for the fourth quarter at 2:00 pm PT (5:00 pm ET), today, November 25, 2014. To listen to the discussion, please visit http://www.tivo.com/ir and click on the link provided for the Webcast or dial (877) 618-4505 (conference ID number is 34313303). The Webcast will be archived and available through December 10, 2014 at http://www.tivo.com/ir or by calling (404) 537-3406; and entering the conference ID number 34313303.
About TiVo Inc.
TiVo Inc. (NASDAQ: TIVO) is a global leader in next-generation television services. TiVo's innovative cloud-based Software-as-a-Service solutions enable viewers to consume content across all screens in and out-of-the home, providing an all-in-one approach for navigating the 'content chaos' by seamlessly combining live, recorded, on-demand and over-the-top television into one intuitive user interface. The TiVo experience provides TV viewers with simple universal search, discovery, viewing and recording from any device, creating the ultimate viewing experience. TiVo products and services are available at retail or through a growing number of Pay TV operators world-wide. TiVo's multiple subsidiary companies provide the broader television industry and consumer electronics manufacturers, cloud-based video discovery and recommendation options, interactive advertising solutions and audience research and measurement services. More information at: www.TiVo.com.
TiVo, the TiVo logo, WishList, Season Pass, Roamio, Media TRAnalytics and The Right Audience are trademarks or registered trademarks of TiVo Inc. or its subsidiaries. All other trademarks are the property of their respective owners.
This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to, among other things, TiVo's future business and growth strategies including future distribution agreements as well as revenue and subscription growth from MSO customers (both domestically and internationally), financial guidance for TiVo's fourth quarter and full fiscal year ending January 31, 2015, future growth in TiVo's overall subscription base including both TiVo-Owned and MSO subscriptions, future improvements in TiVo's retail business from TiVo Roamio and TiVo Roamio OTA products, future revenues, products, and distribution deals from Digitalsmiths, and future capital allocation initiatives including the amount, timing and sufficient availability of shares in the marketplace for future share repurchases. Forward-looking statements generally can be identified by the use of forward-looking terminology such as, "believe," "expect," "may," "will," "intend," "estimate," "continue," or similar expressions or the negative of those terms or expressions. Such statements involve risks and uncertainties, which could cause actual results to vary materially from those expressed in or indicated by the forward-looking statements. Factors that may cause actual results to differ materially include delays in development, competitive service offerings and lack of market acceptance, as well as the other potential factors described under "Risk Factors" in the Company's public reports filed with the Securities and Exchange, including the Company's Annual Report on Form 10-K for the fiscal year ended January 31, 2014, our Quarterly Reports on Form 10-Q for the periods ended April 30, 2014 and July 31, 2014, and Current Reports on Form 8-K. The Company cautions you not to place undue reliance on forward-looking statements, which reflect an analysis only and speak only as of the date hereof. TiVo disclaims any obligation to update these forward-looking statements.
TIVO INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share and share amounts)
(unaudited)
Three Months Ended October Nine Months Ended October
31, 31,
--------------------------- ---------------------------
2014 2013 2014 2013
------------ ------------ ------------ ------------
Revenues
Service revenues 36,705 33,526 109,509 102,518
Technology
revenues 51,359 48,133 151,182 117,914
Hardware revenues 30,366 35,597 76,656 79,487
----------- ----------- ----------- -----------
Net revenues 118,430 117,256 337,347 299,919
Cost of revenues
Cost of service
revenues 14,970 11,233 42,570 33,446
Cost of technology
revenues 6,567 5,612 16,780 21,190
Cost of hardware
revenues 28,176 33,017 70,464 73,470
----------- ----------- ----------- -----------
Total cost of
revenues 49,713 49,862 129,814 128,106
Gross margin 68,717 67,394 207,533 171,813
----------- ----------- ----------- -----------
Research and
development 25,546 27,242 76,944 80,009
Sales and
marketing 10,544 10,189 31,143 27,765
Sales and
marketing,
subscription
acquisition
costs 2,734 2,628 5,451 6,483
General and
administrative 14,292 15,839 45,406 60,850
Litigation
proceeds -- -- -- (108,102)
----------- ----------- ----------- -----------
Total operating
expenses 53,116 55,898 158,944 67,005
Income from
operations 15,601 11,496 48,589 104,808
----------- ----------- ----------- -----------
Interest income 1,070 1,133 3,178 3,455
Interest expense
and other
expense, net (3,197) (2,165) (7,139) (6,104)
----------- ----------- ----------- -----------
Income before
income taxes 13,474 10,464 44,628 102,159
Benefit
(provision) for
income taxes (7,129) 2,023 (20,852) 168,947
----------- ----------- ----------- -----------
Net income $ 6,345 $ 12,487 $ 23,776 $ 271,106
=========== =========== =========== ===========
Net income per
common share
Basic $ 0.06 $ 0.11 $ 0.22 $ 2.28
Diluted $ 0.06 $ 0.10 $ 0.21 $ 1.98
Income for
purposes of
computing net
income per share:
Basic $ 6,345 $ 12,487 $ 23,776 $ 271,106
Diluted $ 6,345 $ 13,739 $ 27,530 $ 274,863
Weighted average
common and common
equivalent
shares:
Basic 107,497,734 116,760,061 110,303,789 118,913,986
Diluted 111,870,407 136,736,001 130,278,425 139,124,386
TIVO INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share and share amounts)
(unaudited)
October 31, 2014 January 31, 2014
----------------- -----------------
ASSETS
CURRENT ASSETS
Cash and cash
equivalents $ 148,208 $ 253,713
Short-term investments 707,166 748,759
Accounts receivable,
net of allowance for
doubtful accounts of
$464 and $429,
respectively 42,339 35,151
Inventories 16,878 22,316
Deferred cost of
technology revenues,
current 4,777 9,103
Deferred tax asset,
current 122,993 113,621
Prepaid expenses and
other, current 14,698 10,922
------------- -------------
Total current assets 1,057,059 1,193,585
LONG-TERM ASSETS
Property and
equipment, net of
accumulated
depreciation of
$50,547 and $52,819,
respectively 11,116 10,687
Developed technology
and intangible
assets, net of
accumulated
amortization of
$29,166 and $23,059,
respectively 53,921 7,328
Deferred cost of
technology revenues,
long-term 16,144 18,108
Deferred tax asset,
long-term 48,189 57,492
Goodwill 99,364 12,266
Prepaid expenses and
other, long-term 7,837 2,325
------------- -------------
Total long-term
assets 236,571 108,206
------------- -------------
Total assets $ 1,293,630 $ 1,301,791
============= =============
LIABILITIES AND
STOCKHOLDERS' EQUITY
LIABILITIES
CURRENT LIABILITIES
Accounts payable $ 27,804 $ 22,918
Accrued liabilities 46,935 50,204
Deferred revenue,
current 173,845 174,739
------------- -------------
Total current
liabilities 248,584 247,861
LONG-TERM
LIABILITIES
Deferred revenue,
long-term 282,484 331,534
Convertible senior
notes 351,035 172,500
Other long-term
liabilities 4,994 811
------------- -------------
Total long-term
liabilities 638,513 504,845
------------- -------------
Total liabilities 887,097 752,706
COMMITMENTS AND
CONTINGENCIES
STOCKHOLDERS' EQUITY
Preferred stock, par
value $0.001:
Authorized shares
are 10,000,000;
Issued and
outstanding shares -
none -- --
Common stock, par
value $0.001:
Authorized shares
are 275,000,000;
Issued shares are
138,010,253 and
134,588,456,
respectively, and
outstanding shares
are 105,410,103 and
120,617,939,
respectively 138 134
Treasury stock, at
cost: 32,600,150
and 13,970,517
shares,
respectively (397,311) (154,071)
Additional paid-in
capital 1,190,483 1,112,957
Accumulated deficit (386,736) (410,512)
Accumulated other
comprehensive
income (loss) (41) 577
------------- -------------
Total stockholders'
equity 406,533 549,085
------------- -------------
Total liabilities
and stockholders'
equity $ 1,293,630 $ 1,301,791
============= =============
TIVO INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(unaudited)
Nine Months Ended October 31,
---------------------------------
2014 2013
----------------- -------------
CASH FLOWS FROM OPERATING
ACTIVITIES
Net income $ 23,776 $ 271,106
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Depreciation and
amortization of
property and equipment
and intangibles 10,270 7,778
Stock-based
compensation expense 25,577 27,453
Amortization of
discounts and premiums
on investments 8,204 5,591
Deferred income taxes (2,131) (171,764)
Amortization of debt
issuance costs and
debt discount 1,439 721
Excess tax benefits
from employee
stock-based
compensation (12,289) (515)
Allowance for doubtful
accounts 183 199
Changes in assets and
liabilities:
Accounts receivable (4,128) 1,965
Inventories 5,438 (4,014)
Deferred cost of
technology revenues 5,975 1,499
Prepaid expenses and
other (761) (3,049)
Accounts payable 3,604 8,961
Accrued liabilities 2,994 (2,307)
Deferred revenue (50,914) 354,577
Other long-term
liabilities (239) (121)
------------- ------------
Net cash provided by
operating activities $ 16,998 $ 498,080
------------- ------------
CASH FLOWS FROM INVESTING
ACTIVITIES
Purchases of short-term
investments (608,052) (747,404)
Sales or maturities of
short-term investments 639,635 378,095
Acquisition of business,
net of cash acquired (128,387) --
Acquisition of property
and equipment (4,668) (5,406)
------------- ------------
Net cash used in
investing activities $ (101,472) $ (374,715)
------------- ------------
CASH FLOWS FROM FINANCING
ACTIVITIES
Proceeds from issuance
of common stock related
to exercise of common
stock options 4,886 6,783
Proceeds from issuance
of common stock related
to employee stock
purchase plan 3,649 3,791
Excess tax benefits from
employee stock-based
compensation 12,289 515
Proceeds from issuance
of convertible senior
notes, net of issuance
costs 224,537 --
Proceeds from issuance
of common stock
warrants 30,167 --
Purchase of convertible
note hedges (54,018) --
Treasury stock -
repurchase of stock (242,541) (95,299)
------------- ------------
Net cash used in
financing activities $ (21,031) $ (84,210)
------------- ------------
NET INCREASE (DECREASE)
IN CASH AND CASH
EQUIVALENTS $ (105,505) $ 39,155
------------- ------------
CASH AND CASH
EQUIVALENTS:
Balance at beginning of
period 253,713 157,104
------------- ------------
Balance at end of period $ 148,208 $ 196,259
============= ============
TIVO INC.
OTHER DATA
Guidance
Three Months Ended Reconciliation
----------------
Three Months
Oct 31, Ending
2014 2013 January 31, 2015
--------- -------- ----------------
(In thousands) (In millions)
Net Income $ 6,345 $ 12,487 $2 - $5
Add back:
Depreciation &
amortization 3,532 2,459 $4 - $5
Interest income &
expense, other 2,113 1,032 $4
Provision (Benefit)
for income tax 7,129 (2,023) $2 - $3
--------- -------- ----------------
EBITDA 19,119 13,955 $12 - $17
Stock-based
compensation 8,549 9,843 $8 - $9
--------- -------- ----------------
Adjusted EBITDA $ 27,668 $ 23,798 $21 - $24
Litigation expenses 1,247 1,408 $1 - $2
Litigation proceeds
(past damage awards) -- -- --
--------- -------- ----------------
Adjusted EBITDA
excluding litigation
expense and
litigation proceeds
(past damage awards) $ 28,915 $ 25,206 $22 - $26
========= ======== ================
EBITDA and Adjusted EBITDA Results. TiVo's "EBITDA" means income before interest income and expense, provision for income taxes and depreciation and amortization. TiVo's "Adjusted EBITDA" is EBITDA less expense for stock-based compensation and TiVo's "Adjusted EBITDA excluding litigation expenses and proceeds (past damage awards)" is Adjusted EBITDA less litigation related expenses and litigation proceeds attributable to past damage awards, but includes litigation proceeds recognized as technology licensing revenue. EBITDA and Adjusted EBITDA are not measures of financial performance under generally accepted accounting principles, which we refer to as GAAP. We have presented EBITDA and Adjusted EBITDA solely as supplemental disclosure because we believe they allow for a more complete analysis of our results of operations and we believe that EBITDA and Adjusted EBITDA are useful to investors because EBITDA and Adjusted EBITDA are commonly used to analyze companies on the basis of operating performance. In addition, because of the variety of equity awards used by companies, the varying methodologies for determining stock-based compensation expense, and the subjective assumptions involved in those determinations, we believe excluding stock-based compensation enhances the ability of management and investors to evaluate our operating performance over multiple periods. Management does not use EBITDA or Adjusted EBITDA as a measure of liquidity because, among other things, they do not exclude the impact of deferred revenue from IP settlements nor the impact of deferred revenues associated with the amortization of product lifetime subscriptions. We do not use stock-based compensation expense in our internal measures. A limitation associated with these non-GAAP measures is that they do not include any stock-based compensation expense related to hiring, retaining, and incentivizing the Company's workforce. EBITDA and Adjusted EBITDA are not intended to represent, and should not be considered more meaningful than, or as an alternative to, measures of operating performance as determined in accordance with GAAP.
Three Months Ended
----------------------
Oct 31, Oct 31,
(Subscriptions and Households in thousands) 2014 2013
-------- -------
TiVo-Owned Gross Additions: 36 33
Net Additions/(Losses):
TiVo-Owned (9) (21)
MSOs 337 295
-------- -------
Total Net Additions/(Losses) 328 274
======== =======
Cumulative Subscriptions:
TiVo-Owned 928 960
MSOs 4,204 2,930
-------- -------
Total Cumulative Subscriptions 5,132 3,890
======== =======
Average Subscriptions:
TiVo-Owned Average Subscriptions 930 974
MSO Average Subscriptions 4,035 2,775
-------- -------
Total Average Subscriptions: 4,965 3,749
======== =======
Total MSO Households 3,651 2,664
MSO Average Households 3,521 2,535
TiVo-Owned Fully Amortized Active Product
Lifetime Subscriptions 152 169
% of TiVo-Owned Cumulative Subscriptions
paying recurring fees 48% 51%
Subscriptions and Households. Management reviews these metrics, and believes they may be useful to investors, in order to evaluate our relative position in the marketplace and to forecast future potential service revenues. Above is a table that details the change in our TiVo-Owned and MSO Subscription and MSO Household bases as of October 31, 2014 compared to October 31, 2013. The TiVo-Owned Subscription lines refer to subscriptions sold directly or indirectly by TiVo to consumers who have TiVo-enabled devices (such as a DVR or TiVo Mini) and for which TiVo incurs acquisition costs. The MSO Subscription lines refer to subscriptions sold to consumers by MSOs such as Virgin, ONO, RCN, Com Hem, and Suddenlink, among others, and for which TiVo expects to incur little or no acquisition costs. Additionally, we provide a breakdown of the average monthly subscriptions for the quarter, the total MSO households and the MSO average households for the quarter, the number of fully amortized active product lifetime subscriptions, and percent of TiVo-Owned Subscriptions for which consumers pay recurring fees as opposed to a one-time prepaid product lifetime fee.
We define a "subscription" as a contract referencing a TiVo-enabled device such as a DVR or TiVo Mini for which (i) a consumer has paid or committed to pay for the TiVo service and (ii) service is not canceled. Each TiVo-Owned Subscription represents a single TiVo-enabled device (as defined above) and therefore one or more TiVo-Owned subscriptions may be present in a single household. MSO Subscriptions are a count of the number of devices that connect to the TiVo service and one or more devices may be present in a single MSO Household. TiVo-Owned subscriptions currently pay for the TiVo service on a recurring payment plan (such as a monthly or annual payment plan) or on a one-time basis for the life of TiVo-enabled device (product lifetime subscriptions). Beginning in October 2014, each TiVo Mini sale includes a product lifetime subscription for that TiVo Mini device. Subscriptions do not include soft-clients (i.e. iPad application or web portal) or digital tuning adapter users. We count product lifetime subscriptions in our subscription base until both of the following conditions are met: (i) the period we use to recognize product lifetime subscription revenues ends; and (ii) the related TiVo-enabled device has not made contact to the TiVo service within the prior six month period. Product lifetime subscriptions past this period which have not called into the TiVo service for six months are not counted in this total.
We define a "household" as one or more devices associated with the same contract or customer number. We currently do not report TiVo-Owned households as we currently receive incremental revenue for each new TiVo-Owned Subscription in the TiVo-Owned business whereas, in some cases, our MSO customers pay us on a per household basis.
We calculate average subscriptions for the period by adding the average subscriptions for each month and dividing by the number of months in the period. We calculate the average subscriptions for each month by adding the beginning and ending subscriptions for the month and dividing by two. We calculate Average MSO Households for the period by adding the average households for each month and dividing by the number of months in the period. We calculate the average households for each month by adding the beginning and ending households for the month and dividing by two. We are not aware of any uniform standards for defining subscriptions or households and caution that our presentation may not be consistent with that of other companies. Additionally, the subscription fees that our MSOs pay us are typically based upon a specific contractual definition of a subscriber, subscription, household or a TiVo-enabled device which may not be consistent with how we define a subscription or household for our reporting purposes nor be representative of how such subscription fees are calculated and paid to us by our MSOs. Our MSO Subscription and MSO Household data is dependent in part on reporting from our third-party MSO partners.
TIVO INC.
OTHER DATA - KEY BUSINESS METRICS
Three Months Ended October 31,
----------------------------------------------
TiVo-Owned Churn
Rate 2014 2013
----------------- -------- -----------------
(In thousands, except churn rate per month)
----------------------------------------------
Average TiVo-Owned
subscriptions 930 974
TiVo-Owned
subscription
cancellations (45) (54)
----------------- -----------------
TiVo-Owned Churn
Rate per month (1.6)% (1.8)%
----------------- -----------------
TiVo-Owned Churn Rate per Month. Management reviews this metric, and believes it may be useful to investors, in order to evaluate our ability to retain existing TiVo-Owned Subscriptions (including both monthly and product lifetime subscriptions) by providing services that are competitive in the market. Management believes factors such as service enhancements, service commitments, higher customer satisfaction, and improved customer support may improve this metric. Conversely, management believes factors such as increased competition, lack of competitive service features such as high definition television recording capabilities in our older model DVRs or access to certain digital television channels or MSO Video On Demand services, as well as increased price sensitivity, CableCARD(TM) installation issues, and CableCARD(TM) technology limitations, may cause our TiVo-Owned Churn Rate per month to increase.
We define the TiVo-Owned Churn Rate per month as the total TiVo-Owned Subscription cancellations in the period divided by the Average TiVo-Owned Subscriptions for the period (including both monthly and product lifetime subscriptions), which then is divided by the number of months in the period. We calculate Average TiVo-Owned Subscriptions for the period by adding the average TiVo-Owned Subscriptions for each month and dividing by the number of months in the period. We calculate the average TiVo-Owned Subscriptions for each month by adding the beginning and ending subscriptions for the month and dividing by two. We are not aware of any uniform standards for calculating churn and caution that our presentation may not be consistent with that of other companies.
Three Months Ended Twelve Months Ended
Oct 31, Oct 31,
------------------- ====================
2014 2013 2014 2013
======== ======== ======== =========
Subscription
Acquisition
Costs (In thousands, except SAC)
Sales and
marketing,
subscription
acquisition
costs $ 2,734 $ 2,628 $ 11,489 $ 9,954
Hardware
revenues (30,366) (35,597) (98,957) (102,616)
Less:
MSOs'-related
hardware
revenues 23,997 25,759 72,761 78,698
Cost of
hardware
revenues 28,176 33,017 93,627 95,317
Less:
MSOs'-related
cost of
hardware
revenues (18,973) (20,530) (55,389) (58,029)
------- ------- ------- --------
Total
Acquisition
Costs 5,568 5,277 23,531 23,324
======= ======= ======= ========
TiVo-Owned
Subscription
Gross
Additions 36 33 144 112
Subscription
Acquisition
Costs (SAC) $ 155 $ 160 $ 163 $ 208
======= ======= ======= ========
Subscription Acquisition Cost or SAC. Management reviews this metric, and believes it may be useful to investors, in order to evaluate trends in the efficiency of our marketing programs and subscription acquisition strategies. We define SAC as our total TiVo-Owned acquisition costs for a given period divided by TiVo-Owned Subscription gross additions for the same period. We define total acquisition costs as sales and marketing, subscription acquisition costs less net TiVo-Owned related hardware revenues (defined as TiVo-Owned related gross hardware revenues less rebates, revenue share and market development funds paid to retailers) plus TiVo-Owned related cost of hardware revenues. The sales and marketing, subscription acquisition costs line item includes advertising expenses and promotion-related expenses directly related to subscription acquisition activities, but does not include expenses related to advertising sales. We do not include third-parties' subscription gross additions, such as MSOs' gross additions with TiVo subscriptions, in our calculation of SAC because we typically incur limited or no acquisition costs for these new subscriptions, and so we also do not include MSOs' sales and marketing, subscription acquisition costs, hardware revenues, or cost of hardware revenues in our calculation of TiVo-Owned SAC. We are not aware of any uniform standards for calculating total acquisition costs or SAC and caution that our presentation may not be consistent with that of other companies.
TiVo-Owned Average Revenue Per Subscription or ARPU. Management reviews this metric, and believes it may be useful to investors in order to evaluate the potential of our subscription base to generate revenues. Investors should not use ARPU as a substitute for measures of financial performance calculated in accordance with GAAP. Management believes it is useful to consider this metric excluding the costs associated with rebates, revenue share, and other payments to channel because of the discretionary and varying nature of these expenses and because management believes these expenses, which are included in hardware revenues, net, are more appropriately monitored as part of SAC. We are not aware of any uniform standards for calculating ARPU and caution that our presentation may not be consistent with that of other companies.
We calculate TiVo-Owned service revenues by subtracting MSOs'-related service revenues and Media services and other service revenues (includes Advertising, Research, and Digitalsmiths revenues), from our total reported net Service revenues. The table below provides a more detailed breakdown of our Service revenues, and reconciles to our total Service revenues in our Statement of Operations as reported (or previously reported):
Three Months Ended
----------------------
Oct 31, Oct 31,
Service Revenues 2014 2013
------------ --------
(In thousands)
----------------------
TiVo-Owned-related service revenues $ 21,810 $ 23,462
MSOs'-related service revenues 10,563 7,734
Media services and other service revenues 4,332 2,330
-------- -------
Total Service Revenues $ 36,705 $ 33,526
======== =======
We calculate ARPU per month for TiVo-Owned Subscriptions by taking total reported net TiVo-Owned service revenues and dividing the result by the number of months in the period. We then divide the resulting average service revenue by Average TiVo-Owned Subscriptions for the period, calculated as described above for churn rate. The following table shows this calculation:
Three Months Ended
---------------------------------
TiVo-Owned Average Revenue per Oct 31, Oct 31,
Subscription 2014 2013
---------------- ---------------
(In thousands, except ARPU)
---------------------------------
TiVo-Owned-related service revenues 21,810 23,462
Average TiVo-Owned revenues per month 7,270 7,821
Average TiVo-Owned subscriptions per
month 930 974
------------ -----------
TiVo-Owned ARPU per month $ 7.82 $ 8.03
============ ===========
Technology Revenues. Revenue and cash from the contractual minimums (i.e., the following amounts do not include any additional revenues from our AT&T agreement) under our licensing agreements with EchoStar, AT&T, Verizon, and Cisco and Google/Motorola Mobility through October 31, 2014 have been:
Technology Revenues Cash Receipts
--------------------- ---------------
Fiscal Year Ended January 31, (In thousands)
2012 $ 35,275 $ 117,679
2013 76,841 86,356
2014 136,532 464,725
Nine month period from February 1,
2014 to October 31, 2014 127,109 71,017
--- ---------------- -----------
Total $ 375,757 $ 739,777
=== ================ ===========
Based on current GAAP, revenue and cash from the contractual minimums under all our licensing agreements with EchoStar, AT&T, Verizon, and Cisco and Motorola is expected to be recognized (revenues) and received (cash) for the remainder of the fiscal year 2015 and on an annual basis for the fiscal years thereafter as follows:
Technology Revenues Cash Receipts
--------------------- ---------------
(In thousands)
Three month period from November
1, 2014 to January 31, 2015 $ 42,532 $ 12,562
Fiscal Year Ending January 31,
--- ---------------- -----------
2016 171,563 83,579
2017 173,129 83,579
2018 174,411 83,579
2019 88,629 31,139
2020 - 2024 8,193 --
--- ---------------- -----------
Total $ 658,457 $ 294,438
=== ================ ===========
Contacts:
Investor Relations
Derrick Nueman
408-519-9677
dnueman@tivo.com
Media Relations
Joe McGurk
Sloane & Company
212-446-1874
jmcgurk@sloanepr.com
(MORE TO FOLLOW) Dow Jones Newswires
November 25, 2014 16:01 ET (21:01 GMT)
starbuxsux
10 years ago
TiVo Reports Results for the Second Quarter Ended July 31, 2014
4:17 PM ET 8/26/14 | Marketwire
TiVo Inc. (NASDAQ: TIVO)
-- Adjusted EBITDA of $29.9 million; Excluding the impact of the significant litigation proceeds and related expense from last year's Cisco/Motorola settlement, Adjusted EBITDA increased 73% -- Net income of $9.3 million. Year-ago period included $276 million in net income relating to the Cisco/Motorola litigation settlement -- Service & Technology revenue of $86.6 million, an increase of 13% year-over-year -- TiVo subscriptions now total 4.8 million, a 33% year-over-year increase -- Comcast and TiVo reach significant agreement to continue support for CableCARDs, to increase ease of installation, and to work together on a future non-CableCARD solution -- MSO service revenue grew 37% year-over-year -- Cogeco Cable Canada selected TiVo as solution for advanced multi-screen viewing experience -- Announced a new $350 million stock repurchase program, with the intention to repurchase the first $100 million of stock during current fiscal year
TiVo Inc. (NASDAQ: TIVO), a leader in the advanced television entertainment market, today reported financial results for the second quarter ended July 31, 2014.
Tom Rogers, President and CEO of TiVo, said, "This was another solid quarter of execution and growth for TiVo. Adjusted EBITDA was $29.9 million, however excluding the impact of the litigation expense and proceeds it grew 73% year-over-year, and we delivered a 13% year-over-year increase in service and technology revenue. Our strong profitability this quarter was helped by the continued global adoption of TiVo's offerings, combined with our focus on driving an efficient cost structure and further reductions in R&D. Our unique product offerings and our leadership role in the advanced television marketplace continues to drive success as we increased our total subscriptions by 33% to 4.8 million. This subscription growth led to MSO service revenue increasing by 37% from a year ago."
For the second quarter, service and technology revenues were $86.6 million. This compared to guidance in the range of $86 million to $88 million, and $77.0 million for the same quarter last year. TiVo reported Adjusted EBITDA of $29.9 million, compared to Adjusted EBITDA guidance of $27 million to $30 million, and compared to Adjusted EBITDA of $115.4 million in the same quarter last year. Net income was $9.3 million, compared to guidance of $6 million to $9 million, and $268.9 million in the same quarter last year. In the second quarter of last year, both net income and Adjusted EBITDA included $108.1 million relating to past damages and $10.7 million of litigation expense. Additionally net income in the second quarter of last year included $752,000 in interest relating to past damages and $167.0 million from the recognition of deferred tax assets. Excluding the impact of litigation proceeds and expense, TiVo's Adjusted EBITDA grew 73% year-over-year.
Rogers continued, "We continue to increase our operator distribution reach, recently announcing deals with Cogeco and EnTouch, and believe we have a robust pipeline of future distribution opportunities.
"Cogeco, which chose TiVo over the prior IPTV solution that was in development, has over 800,000 television customers in Canada and over one million television customers when including Cogeco's U.S. subsidiary, Atlantic Broadband. Deployment is expected to begin early next year. The strong reception that TiVo continues to see with Atlantic Broadband led to the deal, and as a matter of fact, Atlantic Broadband's success with TiVo was recently highlighted in Cablefax Magazine, which recognized the deployment of Netflix via TiVo as the 'MSO Technology Launch of the Year.'
"In discussing the rearrangement of their strategy during a recent earnings call, Louis Audet, Cogeco's President and CEO, said '[TiVo is] really a world-leading force in bringing futuristic television viewing options to cable customers and allowing content to be viewed, whether it's linear content, on-demand content, whether it's over-the-top content, can now be viewed on television, on the iPad, on the smartphone, and they have developed a platform that allows us to do that seamlessly.'
"Beyond new deals, growth from our existing operator relationships is helping to drive our increasingly strong financial profile. We delivered 283,000 cable MSO subscription additions in the second quarter, which was about 20% better than the year ago quarter, in what is a typically seasonally slow period.
"In Sweden, TiVo powered Com Hem to positive subscriber additions for the first time in two years, and they've reached 17% TiVo penetration in only nine months of deployment. Anders Nilsson, Chief Executive Officer of Com Hem, said during a recent earnings call that 'this very fast pickup is attributable to the fact that TiVo is the only true next-generation media service in the country with the widest TV channel offering and incorporating OTT services and on-demand products, making it the only one-stop shop for video entertainment in Sweden.'
"We also continue to build out integration for operators of traditional video and next generation video into what is the only true advanced television bundle of all content from all sources. For example, Netflix continues to be integrated into the TiVo cable set-top box experience with U.S. operators, which now include Atlantic Broadband, Cable One, Grande Communications, Suddenlink Communications, RCN Corp., Midcontinent Communications, and GCI in addition to European operators Virgin and Com Hem.
"In terms of Digitalsmiths, the search, discovery, and recommendation platform we acquired earlier this year aimed at improving the experience of non-TiVo user interfaces, existing deployments continue to scale both in the number of households where the company's core product, Seamless Discovery, is live as well as the number of transactions it processes. Additionally, DigitalSmiths continues to be recognized for its technology, and this January during the International Consumer Electronics Show will receive an Emmy in the Technology & Engineering category for their work in personalized recommendation engines for video discovery for multichannel video programming distributors.
"On the TiVo-Owned front, in the second quarter we saw a 35% year-over-year increase in TiVo-Owned gross additions, with an approximate 30% decrease in total acquisition costs compared to the prior year. We believe our success is the direct result of our innovation and best-in-class product, a notion that continues to be reinforced by industry pundits. PC Magazine writer Sascha Segan in a June article wrote, 'the best DVR out there is the TiVo Roamio ... not only excellent reliability and a near-perfect program guide, but the holy trinity of Netflix, Hulu, and Amazon to make your viewing complete.'
"Also on the TiVo-Owned front, Xfinity On Demand from Comcast for TiVo Premiere and TiVo Roamio retail customers is now available in all Comcast markets and we are generally seeing stronger sales in those markets. Further, building on our relationship with Comcast, we recently reached a significant agreement whereby Comcast will ensure that our CableCARD-enabled devices will continue to have access to all linear channels and Xfinity On Demand in all digital Comcast markets and that Comcast will work with TiVo on a future two-way non-CableCARD security solution that will enable TiVo retail devices to access the full-Comcast lineup of linear and VOD programming. We anticipate that, at some point, Comcast will transition its delivery of cable signals to IP and this agreement assures that future TiVo devices will be able to receive all cable channels when that IP transition occurs. We believe this agreement improves our position in the retail market going forward and increases potential upside.
"We are confident that both our MSO and TiVo-Owned offerings will only get stronger as we continue to innovate, putting the pieces together to achieve the ultimate experience for the TV viewer. Our focus on mobilization, personalization, and organization is working as TiVo customers have more programming choices customized according to their user-defined preferences and accessible from the cloud across different devices regardless of location. In the next 12 months, we will show the fruits of our labor when we roll out some exciting product enhancements. In the meantime, this quarter, we made progress developing these innovative solutions, including implementing Haxe, the multiplatform programming language, which increased performance on our TiVo Premiere boxes by over 30% and should enable us to implement future multi-device innovations more easily. And we are doing all of this while reducing our R&D spend by 5% compared to last quarter's levels.
"We also continue to build out our data capabilities to provide advertisers with unique ways to manage their television buying efforts. An example is our recent partnership with Datalogix, a company that helps online and digital advertiser's measure offline sales, where TiVo Research uses Datalogix's capabilities to bolster its television purchase data. This relationship as well as many of our other data efforts highlight the value of set-top data, especially in the fast-developing programmatic buying area where we are finding the role of advanced analytics to be critical to the way advertisers are navigating this fast-developing area of advertising.
"On the capital allocation front, we have made meaningful progress in our efforts to deploy our significant cash resources to drive value. We are taking another step forward by announcing a new $350 million stock repurchase program over the next 2.5 years, with the intention to repurchase the first $100 million of stock during our current fiscal year. This new $350 million stock repurchase program will replace TiVo's prior authorization. This decision was a product of our thorough assessment of numerous capital deployment opportunities and the continued view that our business has significant upside potential as we continue to innovate and drive subscription growth. The new repurchase program upon completion is expected to bring our total repurchases to well over half a billion dollars and is expected to significantly reduced our shares outstanding. In parallel with this buyback plan, we will continue to evaluate additional ways to deploy cash to drive growth and value for shareholders, including continuing to explore smart M&A opportunities and to invest organically where appropriate."
Rogers concluded, "This was another solid quarter for TiVo. We had strong execution, delivered improved financial results, and advanced our product offering, all of which is supported by the traction we're seeing from operators both domestically and internationally. With a robust pipeline of international and domestic opportunities, a continued push to drive innovation, further improve the efficiency of our cost structure, and smartly deploy our cash, we are confident TiVo will deliver strong future financial and operating performances in the quarters and years to come."
Management Provides Financial Guidance
For the third quarter of Fiscal Year 2015, TiVo anticipates service and technology revenues in the range of $86 million to $89 million.
TiVo expects Adjusted EBITDA to be in the range of $25 million to $28 million and net income to be in the range of $6 million to $9 million.
Included in the third quarter financial guidance is an expected increase in TiVo-Owned acquisition/marketing expenditure compared to the second quarter, when spend was limited due to seasonality. This increased expenditure is expected to yield additional gross subscriptions additions. Additionally, TiVo anticipates lower absolute hardware margin compared to the second quarter driven by volume constraints on MSO hardware sales and larger TiVo-Owned hardware margin loss.
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).
Conference Call and Webcast
TiVo will host a conference call and Webcast to discuss the second quarter and fiscal year ended July 31, 2014 financial and operating results as well as guidance outlook for the third quarter at 2:00 pm PT (5:00 pm ET), today, August 26, 2014. To listen to the discussion, please visit http://www.tivo.com/ir and click on the link provided for the Webcast or dial (877) 618-4505 (conference ID number is 88224661). The Webcast will be archived and available through September 10, 2014 at http://www.tivo.com/ir or by calling (404) 537-3406; and entering the conference ID number 88224661.
About TiVo Inc.
TiVo Inc. (NASDAQ: TIVO) is a global leader in next-generation television services. TiVo's innovative cloud-based Software-as-a-Service solutions enable viewers to consume content across all screens in and out-of-the home, providing an all-in-one approach for navigating the 'content chaos' by seamlessly combining live, recorded, on-demand and over-the-top television into one intuitive user interface. The TiVo experience provides TV viewers with simple universal search, discovery, viewing and recording from any device, creating the ultimate viewing experience. TiVo products and services are available at retail or through a growing number of pay-TV operators world-wide. TiVo's multiple subsidiary companies provide the broader television industry and consumer electronics manufacturers, cloud-based video discovery and recommendation options, interactive advertising solutions and audience research and measurement services. More information at: www.TiVo.com.
TiVo and the TiVo Logo are trademarks or registered trademarks of TiVo Inc. or its subsidiaries worldwide. Copyright 2014 TiVo Inc. All rights reserved. All other trademarks are the property of their respective owners.
This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to, among other things, TiVo's future business and growth strategies including future distribution agreements as well as revenue and subscription growth from MSO customers (both domestically and internationally), timing of future deployment of TiVo products and services with Cogeco, future additional deployments of Netflix integration with additional U.S. and international cable operators, future growth in new and existing Digitalsmiths customer deployments, future growth and customer demand for Xfinity On Demand from Comcast from TiVo retail customers, future ability of TiVo devices to be able to receive all cable channels if and when Comcast transitions to IP video delivery, future availability of product enhancements and innovations in the next year and beyond, TiVo's future data analytics and advertising services capabilities, and future capital allocation initiatives including the announced $350 million repurchase (including the repurchase of the first $100 million of stock during the current fiscal year) to be completed over the next two and a half years, sufficient availability of shares in the marketplace for future share repurchases, future reduction in the number of TiVo shares outstanding, potential acquisitions and investments in future product and operation initiatives, as well as the amount of securities purchased in the future pursuant to the new repurchase program may be impacted by the volume and price per share of our stock, and future alternative uses of our capital. Forward-looking statements generally can be identified by the use of forward-looking terminology such as, "believe," "expect," "may," "will," "intend," "estimate," "continue," or similar expressions or the negative of those terms or expressions. Such statements involve risks and uncertainties, which could cause actual results to vary materially from those expressed in or indicated by the forward-looking statements. Factors that may cause actual results to differ materially include delays in development, competitive service offerings and lack of market acceptance, as well as the other potential factors described under "Risk Factors" in the Company's public reports filed with the Securities and Exchange, including the Company's Annual Report on Form 10-K for the fiscal year ended January 31, 2014, our Quarterly Report on Form 10-Q for the period ended April 30, 2014 and Current Reports on Form 8-K. The Company cautions you not to place undue reliance on forward-looking statements, which reflect an analysis only and speak only as of the date hereof. TiVo disclaims any obligation to update these forward-looking statements.
View data
TIVO INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share and share amounts) (unaudited) Three Months Ended Six Months Ended July 31, July 31, -------------------------- -------------------------- 2014 2013 2014 2013 ------------ ------------ ------------ ------------ Revenues Service revenues 36,909 34,930 72,804 68,992 Technology revenues 49,717 42,056 99,823 69,781 Hardware revenues 25,232 23,104 46,290 43,890 ------------ ------------ ------------ ------------ Net revenues 111,858 100,090 218,917 182,663 Cost of revenues Cost of service revenues 13,750 11,408 27,600 22,213 Cost of technology revenues 5,669 11,867 10,213 15,578 Cost of hardware revenues 22,524 21,957 42,288 40,453 ------------ ------------ ------------ ------------ Total cost of revenues 41,943 45,232 80,101 78,244 Gross margin 69,915 54,858 138,816 104,419 ------------ ------------ ------------ ------------ Research and development 25,051 26,305 51,398 52,767 Sales and marketing 10,284 9,069 20,599 17,576 Sales and marketing, subscription acquisition costs 1,212 1,996 2,717 3,855 General and administrative 15,760 23,225 31,114 45,011 Litigation proceeds -- (108,102) -- (108,102) ------------ ------------ ------------ ------------ Total operating expenses 52,307 (47,507) 105,828 11,107 Income from operations 17,608 102,365 32,988 93,312 ------------ ------------ ------------ ------------ Interest income 964 1,499 2,108 2,322 Interest expense and other expense, net (1,966) (1,965) (3,942) (3,939) ------------ ------------ ------------ ------------ Income before income taxes 16,606 101,899 31,154 91,695 Benefit (provision) for income taxes (7,299) 167,039 (13,723) 166,924 ------------ ------------ ------------ ------------ Net income $ 9,307 $ 268,938 $ 17,431 $ 258,619 ============ ============ ============ ============ Net income per common share Basic $ 0.08 $ 2.27 $ 0.16 $ 2.16 Diluted $ 0.08 $ 1.96 $ 0.15 $ 1.86 Income for purposes of computing net income per share: Basic $ 9,307 $ 268,938 $ 17,431 $ 258,619 Diluted $ 10,545 $ 270,190 $ 19,907 $ 261,123 Weighted average common and common equivalent shares: Basic 110,036,235 118,601,346 111,708,956 119,990,949 Diluted 129,249,175 137,992,699 131,533,268 140,043,209 TIVO INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except per share and share amounts) (unaudited) July 31, January 31, 2014 2014 ------------ ------------ ASSETS CURRENT ASSETS Cash and cash equivalents $ 113,627 $ 253,713 Short-term investments 669,016 748,759 Accounts receivable, net of allowance for doubtful accounts of $465 and $429, respectively 35,307 35,151 Inventories 16,515 22,316 Deferred cost of technology revenues, current 6,134 9,103 Deferred tax asset, current 120,862 113,621 Prepaid expenses and other, current 13,519 10,922 ------------ ------------ Total current assets 974,980 1,193,585 LONG-TERM ASSETS Property and equipment, net of accumulated depreciation of $49,160 and $52,819, respectively 10,956 10,687 Developed technology and intangible assets, net of accumulated amortization of $27,043 and $23,059, respectively 56,044 7,328 Deferred cost of technology revenues, long- term 16,510 18,108 Deferred tax asset, long-term 47,507 57,492 Goodwill 99,340 12,266 Prepaid expenses and other, long-term 3,735 2,325 ------------ ------------ Total long-term assets 234,092 108,206 ------------ ------------ Total assets $ 1,209,072 $ 1,301,791 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY LIABILITIES CURRENT LIABILITIES Accounts payable $ 19,913 $ 22,918 Accrued liabilities 39,888 50,204 Deferred revenue, current 174,530 174,739 ------------ ------------ Total current liabilities 234,331 247,861 LONG-TERM LIABILITIES Deferred revenue, long-term 309,089 331,534 Convertible senior notes 172,500 172,500 Other long-term liabilities 3,934 811 ------------ ------------ Total long-term liabilities 485,523 504,845 ------------ ------------ Total liabilities 719,854 752,706 COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY Preferred stock, par value $0.001: Authorized shares are 10,000,000; Issued and outstanding shares - none -- -- Common stock, par value $0.001: Authorized shares are 275,000,000; Issued shares are 137,794,278 and 134,588,456, respectively, and outstanding shares are 115,407,011 and 120,617,939, respectively 138 134 Treasury stock, at cost: 22,387,267 and 13,970,517 shares, respectively (264,821) (154,071) Additional paid-in capital 1,146,817 1,112,957 Accumulated deficit (393,081) (410,512) Accumulated other comprehensive income 165 577 ------------ ------------ Total stockholders' equity 489,218 549,085 ------------ ------------ Total liabilities and stockholders' equity $ 1,209,072 $ 1,301,791 ============ ============ TIVO INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (unaudited) Six Months Ended July 31, -------------------------- 2014 2013 ------------ ------------ CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 17,431 $ 258,619 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization of property and equipment and intangibles 6,760 5,320 Stock-based compensation expense 17,029 17,610 Amortization of discounts and premiums on investments 5,903 2,766 Deferred income taxes (1,189) (169,364) Amortization of deferred debt issuance costs 480 480 Excess tax benefits from employee stock- based compensation (7,468) (498) Allowance for doubtful accounts 131 88 Changes in assets and liabilities: Accounts receivable 2,956 1,962 Inventories 5,801 1,851 Deferred cost of technology revenues 4,299 230 Prepaid expenses and other (631) (1,584) Accounts payable (4,654) 2,685 Accrued liabilities (9,014) (5,805) Deferred revenue (23,624) 382,218 Other long-term liabilities (110) (116) ------------ ------------ Net cash provided by operating activities $ 14,100 $ 496,462 ------------ ------------ CASH FLOWS FROM INVESTING ACTIVITIES Purchases of short-term investments (348,720) (381,162) Sales or maturities of short-term investments 421,493 264,852 Acquisition of business, net of cash acquired (128,387) -- Acquisition of property and equipment (2,519) (3,069) ------------ ------------ Net cash used in investing activities $ (58,133) $ (119,379) ------------ ------------ CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issuance of common stock related to exercise of common stock options 3,580 3,997 Proceeds from issuance of common stock related to employee stock purchase plan 3,649 3,791 Excess tax benefits from employee stock-based compensation 7,468 498 Treasury stock - repurchase of stock (110,750) (91,059) ------------ ------------ Net cash used in financing activities $ (96,053) $ (82,773) ------------ ------------ NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS $ (140,086) $ 294,310 ------------ ------------ CASH AND CASH EQUIVALENTS: Balance at beginning of period 253,713 157,104 ------------ ------------ Balance at end of period $ 113,627 $ 451,414 ============ ============ TIVO INC. OTHER DATA Guidance Three Months Ended Reconciliation ------------------ Three Months July 31, Ending ------------------------- 2014 2013 October 31, 2014 ------------ ------------ ------------------ (In thousands) (In millions) Net Income $ 9,307 $ 268,938 $6 - $9 Add back: Depreciation & amortization 3,540 2,611 $4 - $5 Interest income & expense, other 1,001 466 $1 Benefit (Provision) for income tax 7,299 (167,039) $6 - $7 ------------ ------------ ------------------ EBITDA 21,147 104,976 $16 - $20 Stock-based compensation 8,722 10,464 $8 - $ 9 ------------ ------------ ------------------ Adjusted EBITDA $ 29,869 $ 115,440 $25 - $28 Litigation expenses 1,235 10,667 $1 - $2 Litigation proceeds (past damage awards) -- (108,102) -- ------------ ------------ ------------------ Adjusted EBITDA excluding litigation expense and litigation proceeds (past damage awards) $ 31,104 $ 18,005 $27 - $30 ============ ============ ==================
EBITDA and Adjusted EBITDA Results. TiVo's "EBITDA" means income before interest income and expense, provision for income taxes and depreciation and amortization. TiVo's "Adjusted EBITDA" is EBITDA less expense for stock-based compensation. EBITDA and Adjusted EBITDA are not measures of financial performance under generally accepted accounting principles, which we refer to as GAAP. We have presented EBITDA and Adjusted EBITDA solely as supplemental disclosure because we believe they allow for a more complete analysis of our results of operations and we believe that EBITDA and Adjusted EBITDA are useful to investors because EBITDA and Adjusted EBITDA are commonly used to analyze companies on the basis of operating performance. In addition, because of the variety of equity awards used by companies, the varying methodologies for determining stock-based compensation expense, and the subjective assumptions involved in those determinations, we believe excluding stock-based compensation enhances the ability of management and investors to evaluate our operating performance over multiple periods. Management does not use EBITDA or Adjusted EBITDA as a measure of liquidity because, among other things, they do not exclude the impact of deferred revenue from IP settlements nor the impact of deferred revenues associated with the amortization of product lifetime subscriptions. We do not use stock-based compensation expense in our internal measures. A limitation associated with these non-GAAP measures is that they do not include any stock-based compensation expense related to hiring, retaining, and incentivizing the Company's workforce. EBITDA and Adjusted EBITDA are not intended to represent, and should not be considered more meaningful than, or as an alternative to, measures of operating performance as determined in accordance with GAAP.
View data
Three Months Ended ------------------------ Jul 31, Jul 31, (Subscriptions and Households in thousands) 2014 2013 ----------- ----------- TiVo-Owned Gross Additions: 27 20 Net Additions/(Losses): TiVo-Owned (20) (26) MSOs 283 238 ----------- ----------- Total Net Additions/(Losses) 263 212 =========== =========== Cumulative Subscriptions: TiVo-Owned 937 981 MSOs 3,867 2,635 ----------- ----------- Total Cumulative Subscriptions 4,804 3,616 =========== =========== Average Subscriptions: TiVo-Owned Average Subscriptions 946 994 MSO Average Subscriptions 3,727 2,514 ----------- ----------- Total Average Subscriptions: 4,673 3,508 =========== =========== Total MSO Households 3,391 2,410 MSO Average Households 3,283 2,318 TiVo-Owned Fully Amortized Active Lifetime Subscriptions 159 176 % of TiVo-Owned Cumulative Subscriptions paying recurring fees 49% 52%
Subscriptions and Households. Management reviews these metrics, and believes they may be useful to investors, in order to evaluate our relative position in the marketplace and to forecast future potential service revenues. Above is a table that details the change in our TiVo-Owned and MSO subscription and MSO Household bases as of July 31, 2014 compared to July 31, 2013. The TiVo-Owned Subscription lines refer to subscriptions sold directly or indirectly by TiVo to consumers who have TiVo-enabled devices (such as a DVR or TiVo Mini) and for which TiVo incurs acquisition costs. The MSO Subscription lines refer to subscriptions sold to consumers by MSOs such as Virgin, ONO, RCN, Grande, GCI, and Suddenlink, among others, and for which TiVo expects to incur little or no acquisition costs. Additionally, we provide a breakdown of the average monthly subscriptions for the quarter, the total MSO households and the MSO average households for the quarter, the number of fully amortized active lifetime subscriptions, and percent of TiVo-Owned Subscriptions for which consumers pay recurring fees as opposed to a one-time prepaid product lifetime fee.
We define a "subscription" as a contract referencing a TiVo-enabled device such as a DVR or TiVo Mini for which (i) a consumer has committed to pay for the TiVo service and (ii) service is not canceled. Each TiVo-Owned Subscription represents a single TiVo-enabled device (as defined above) and therefore one or more TiVo-Owned subscriptions may be present in a single household. MSO Subscriptions are a count of the number of devices that connect to the the TiVo service and one or more devices may be present in a single MSO Household. Subscriptions do not include soft-clients (i.e. iPad application or web portal) or digital tuning adapter users. We count product lifetime subscriptions in our subscription base until both of the following conditions are met: (i) the period we use to recognize product lifetime subscription revenues ends; and (ii) the related TiVo-enabled device has not made contact to the TiVo service within the prior six month period. Product lifetime subscriptions past this period which have not called into the TiVo service for six months are not counted in this total.
We define a "household" as one or more devices associated with the same contract or customer number. We currently do not report TiVo-Owned households as we currently receive incremental revenue for each new TiVo-Owned Subscription in the TiVo-Owned business whereas, in some cases, our MSO customers pay us on a per household basis.
We calculate average subscriptions for the period by adding the average subscriptions for each month and dividing by the number of months in the period. We calculate the average subscriptions for each month by adding the beginning and ending subscriptions for the month and dividing by two. We calculate Average MSO Households for the period by adding the average households for each month and dividing by the number of months in the period. We calculate the average households for each month by adding the beginning and ending households for the month and dividing by two. We are not aware of any uniform standards for defining subscriptions or households and caution that our presentation may not be consistent with that of other companies. Additionally, the subscription fees that our MSOs pay us are typically based upon a specific contractual definition of a subscriber, subscription, household or a TiVo-enabled device which may not be consistent with how we define a subscription or household for our reporting purposes nor be representative of how such subscription fees are calculated and paid to us by our MSOs. Our MSO Subscription and MSO Household data is dependent in part on reporting from our third-party MSO partners.
View data
TIVO INC. OTHER DATA - KEY BUSINESS METRICS Three Months Ended July 31, --------------------------- TiVo-Owned Churn Rate 2014 2013 ------------ ------------ (In thousands, except churn rate per month) Average TiVo-Owned subscriptions 946 994 TiVo-Owned subscription cancellations (47) (46) ------------ ------------ TiVo-Owned Churn Rate per month (1.6)% (1.5)% ------------ ------------
TiVo-Owned Churn Rate per Month. Management reviews this metric, and believes it may be useful to investors, in order to evaluate our ability to retain existing TiVo-Owned Subscriptions (including both monthly and product lifetime subscriptions) by providing services that are competitive in the market. Management believes factors such as service enhancements, service commitments, higher customer satisfaction, and improved customer support may improve this metric. Conversely, management believes factors such as increased competition, lack of competitive service features such as high definition television recording capabilities in our older model DVRs or access to certain digital television channels or MSO Video On Demand services, as well as increased price sensitivity, CableCARD(TM) installation issues, and CableCARD(TM) technology limitations, may cause our TiVo-Owned Churn Rate per month to increase.
We define the TiVo-Owned Churn Rate per month as the total TiVo-Owned Subscription cancellations in the period divided by the Average TiVo-Owned Subscriptions for the period (including both monthly and product lifetime subscriptions), which then is divided by the number of months in the period. We calculate Average TiVo-Owned subscriptions for the period by adding the average TiVo-Owned Subscriptions for each month and dividing by the number of months in the period. We calculate the average TiVo-Owned Subscriptions for each month by adding the beginning and ending subscriptions for the month and dividing by two. We are not aware of any uniform standards for calculating churn and caution that our presentation may not be consistent with that of other companies.
View data
Three Months Ended Twelve Months Ended July 31, July 31, -------------------- -------------------- 2014 2013 2014 2013 --------- --------- --------- --------- Subscription Acquisition Costs (In thousands, except SAC) Sales and marketing, subscription acquisition costs $ 1,212 $ 1,996 $ 11,383 $ 8,886 Hardware revenues (25,232) (23,104) (104,188) (88,091) Less: MSOs'-related hardware revenues 20,234 20,103 74,523 65,990 Cost of hardware revenues 22,524 21,957 98,468 85,734 Less: MSOs'-related cost of hardware revenues (14,805) (15,384) (56,946) (49,340) --------- --------- --------- --------- Total Acquisition Costs 3,933 5,568 23,240 23,179 ========= ========= ========= ========= TiVo-Owned Subscription Gross Additions 27 20 141 109 Subscription Acquisition Costs (SAC) $ 146 $ 278 $ 165 $ 213 ========= ========= ========= =========
Subscription Acquisition Cost or SAC. Management reviews this metric, and believes it may be useful to investors, in order to evaluate trends in the efficiency of our marketing programs and subscription acquisition strategies. We define SAC as our total TiVo-Owned acquisition costs for a given period divided by TiVo-Owned subscription gross additions for the same period. We define total acquisition costs as sales and marketing, subscription acquisition costs less net TiVo-Owned related hardware revenues (defined as TiVo-Owned related gross hardware revenues less rebates, revenue share and market development funds paid to retailers) plus TiVo-Owned related cost of hardware revenues. The sales and marketing, subscription acquisition costs line item includes advertising expenses and promotion-related expenses directly related to subscription acquisition activities, but does not include expenses related to advertising sales. We do not include third-parties' subscription gross additions, such as MSOs' gross additions with TiVo subscriptions, in our calculation of SAC because we typically incur limited or no acquisition costs for these new subscriptions, and so we also do not include MSOs' sales and marketing, subscription acquisition costs, hardware revenues, or cost of hardware revenues in our calculation of TiVo-Owned SAC. We are not aware of any uniform standards for calculating total acquisition costs or SAC and caution that our presentation may not be consistent with that of other companies.
TiVo-Owned Average Revenue Per Subscription or ARPU. Management reviews this metric, and believes it may be useful to investors in order to evaluate the potential of our subscription base to generate revenues. Investors should not use ARPU as a substitute for measures of financial performance calculated in accordance with GAAP. Management believes it is useful to consider this metric excluding the costs associated with rebates, revenue share, and other payments to channel because of the discretionary and varying nature of these expenses and because management believes these expenses, which are included in hardware revenues, net, are more appropriately monitored as part of SAC. We are not aware of any uniform standards for calculating ARPU and caution that our presentation may not be consistent with that of other companies.
We calculate TiVo-Owned service revenues by subtracting MSOs'-related service revenues and Media services and other service revenues (includes Advertising, Research, and Digitalsmiths revenues), from our total reported net Service revenues. The table below provides a more detailed breakdown of our Service revenues, and reconciles to our total Service revenues in our Statement of Operations as reported (or previously reported):
View data
Three Months Ended --------------------------------- Service Revenues Jul 31, Jul 31, 2014 2013 ---------------- ---------------- (in thousands) --------------------------------- TiVo-Owned-related service revenues $ 22,388 $ 24,120 MSOs'-related service revenues 10,328 7,555 Media services and other service revenues 4,193 3,255 ---------------- ---------------- Total Service Revenues $ 36,909 $ 34,930 ================ ================
We calculate ARPU per month for TiVo-Owned Subscriptions by taking total reported net TiVo-Owned service revenues and dividing the result by the number of months in the period. We then divide the resulting average service revenue by Average TiVo-Owned subscriptions for the period, calculated as described above for churn rate. The following table shows this calculation:
View data
Three Months Ended --------------------------------- TiVo-Owned Average Revenue per Jul 31, Jul 31, Subscription 2014 2013 ---------------- ---------------- (In thousands, except ARPU) --------------------------------- TiVo-Owned-related service revenues $ 22,388 $ 24,120 Average TiVo-Owned revenues per month 7,463 8,040 Average TiVo-Owned subscriptions per month 946 994 ---------------- ---------------- TiVo-Owned ARPU per month $ 7.89 $ 8.09 ================ ================
Technology Revenues. Revenue and cash from the contractual minimums under our licensing agreements with EchoStar, AT&T, Verizon, and Cisco and Google/Motorola Mobility through July 31, 2014 have been:
View data
Technology Revenues Cash Receipts ---------------- ---------------- Fiscal Year Ended January 31, (in thousands) 2012 $ 35,275 $ 117,679 2013 76,841 86,356 2014 136,532 464,725 Six month period from February 1, 2014 to July 31, 2014 84,740 58,456 ---------------- ---------------- Total $ 333,388 $ 727,216 ================ ================
Based on current GAAP, revenue and cash from the contractual minimums under all our licensing agreements with EchoStar, AT&T, Verizon, and Cisco and Motorola is expected to be recognized (revenues) and received (cash) for the remainder of the fiscal year 2015 and on an annual basis for the fiscal years thereafter as follows:
View data
Technology Revenues Cash Receipts ---------------- ---------------- (in thousands) Six month period from August 1, 2014 to January 31, 2015 $ 84,902 $ 25,123 Fiscal Year Ending January 31, ------------------------------------------ ---------------- ---------------- 2016 171,563 83,579 2017 173,129 83,579 2018 174,411 83,579 2019 88,629 31,139 2020 - 2024 8,193 -- ---------------- ---------------- Total $ 700,827 $ 306,999 ================ ================
Contacts:
Investor Relations
Derrick Nueman
408-519-9677
dnueman@tivo.com
Media Relations
Joe McGurk
Sloane & Company
212-446-1874
jmcgurk@sloanepr.com
SOURCE: TiVo Inc.
Register for Free to get streaming real-time quotes, interactive charts, live options flow, and more.
whytestocks
4 years ago
eldeva
5 years ago
Pierrocks
6 years ago
stocktrademan
8 years ago
Ichauway
8 years ago
Liquid1974
8 years ago
DMRX
8 years ago
Warchest
8 years ago
Hot Features
Premium
