TiVo has reported financial results for the second quarter ended July 31, 2011. Tom Rogers, President and CEO, said, “This was another milestone quarter for TiVo, highlighted by our successful execution on key strategic growth initiatives. On the heels of our historic settlement with DISH Network, in the second quarter we delivered better than anticipated revenue, Adjusted EBITDA and net income, exceeding our guidance.”
“Further, the deals we have signed over the past years as a source of growth are now delivering a substantial number of subscribers, and we believe this trend should accelerate with more deployments later this year. Finally, we added yet another distribution relationship in the US, this time with Grande Communications. This agreement leverages our R&D investment from existing distribution relationships, highlighting our ability to provide a quick and cost effective advanced television solution for operators globally.”
For the second quarter, service and technology revenues were $49.6 million, compared to our guidance of $46 million to $48 million and up 18 per cent compared to $42.1 million for the same period last year and $38.8 million in the fiscal first quarter 2012. TiVo reported a net loss of ($19.6) million, compared to guidance of a net loss of ($25) million to ($27) million and a net loss of ($15.3) million in the year ago quarter. Additionally, Adjusted EBITDA was a loss of ($9.2) million, compared to Adjusted EBITDA guidance of a loss of ($14) million to ($16) million, and to an Adjusted EBITDA loss of ($6.5) million in the same period a year ago.
TiVo ended the second quarter with approximately $628 million in cash and short-term investments, up significantly from the prior quarter due to the receipt of the first DISH Network settlement payment of $300 million.
Rogers continued, “We recently announced that our Board has authorized a $100 million share repurchase plan. Both TiVo management and our Board concluded, at the time, that with our shares trading at unusually depressed levels which reflected little value beyond our cash and NOLs, a $100 million repurchase authorization could be a highly compelling investment relative to other uses of cash while also not limiting our ability to consider other strategic opportunities.
“Our mass distribution efforts are now showing tangible results through subscription growth. We are seeing subscription growth from partners such as RCN, Suddenlink, and Virgin Media, while Charter, DIRECTV, and ONO are progressing towards launch, which we believe should provide further momentum.
“Virgin Media is a perfect example of how we are executing with operators. As part of its second quarter earnings results, Virgin Media said that it had approximately 50,000 TiVo subscribers live at the end of July. This is a very strong indication of consumer demand in what are only the early stages of this deployment, and we are seeing this demand only accelerate in the third quarter. We are thrilled that Virgin Media has embraced our offering in such a meaningful way.’
“In addition, the success we’re seeing in our current deployments along with the fact that we are the only mass distributed advanced television solution deployed to date, has led to additional operators taking notice. To that end, we announced earlier today a distribution agreement with Grande Communications, a broadband communications company based in the Southwest U.S. with about 150,000 video subscribers. Going forward, TiVo will be the exclusive provider of DVRs and whole home solutions for Grande. We expect Grande’s initial launch to begin in October. It’s worth noting that the speed with which we are able to launch with Grande is a great example of how our recent R&D investments enable us to bring on new customers with limited incremental cost to TiVo and the operator and then to move with great speed.
“On the retail side of the business, Best Buy launched Insignia Connected TVs with a TiVo designed user experience. This is the first time TiVo has been available directly on a television as its primary user interface and highlights another way TiVo touches the consumer as well as represents another device in Best Buy stores with the TiVo experience. While we continue to be cautious with our investments in the retail business, we are confident that our retail offerings will benefit from having the TiVo Designed Insignia televisions at Best Buy. More importantly, by leveraging the R&D elements of our retail business into our operator business, TiVo is the only vendor that is in the unique position of having an array of operator products that benefit from more than ten years of direct interaction with retail subscribers and households. And by being in retail we continue to believe we are able to control our own destiny, innovate, and deliver the best product with a well recognized brand. That pedigree of innovation is one of the things operators find extremely valuable.