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TiVo Q4 Earnings: Still Losing But Beating the Street

tivo earnsAfter another quarter, profitability still remains elusive for TiVo but extending a trend the Digital Video Recorder (DVR) pioneer inched ever so slightly closer to the black.  Wednesday the Alviso based company reported a net loss better than expectations.

For the 4th quarter ended January 31st, TiVo reported a loss of $6.34m, or 6 cents a share.  The result generously beat consensus analyst expectations (via Thomson Financial) of a loss of 11cents a share.  The loss was a significant improvement over a loss of $19.5m, or 20cents a share for the same period last year.  The result was also an improvement over the company’s own November guidance (which called for a net loss of $9m to $12m). Adjusted EBITDA was $1.0 million, compared to an Adjusted EBITDA loss of ($15.0) million in the year-ago period.

In total revenue, TiVo reported $74.1m.   While down from $76.9m a year ago, the number was well ahead of Wall Street’s expectations of $59.1m.  Service and Technology Revenue represented $58.1 million, compared with $57.0 million for the same period last year.  Both the total and Service and Technology revenue carry a $2.5m downward adjustment to account for changes in how the company recognizes revenue over lifetime subscriptions.

Much of the 4th Quarter’s positive result owes to TiVo’s move toward emphasizing software licensing to cable and satellite operators instead of pushing hardware sales.  That was evidenced by a decline in the cost of hardware revenue of 45%.  Subscriber acquisition costs also decreased (from $9.9m last year to $7.2m).  At about $138 a person, they are the lowest in two years.

In addition to hardware/distribution related revenue, TiVo is also working hard to develop alternate revenue from their audience measurement and ratings business.   This new channel, the company hopes, will yield significant business.

In a statement about that, CEO Tom Rogers said, "On the advertising front, DVR viewing is becoming a more significant part of the advertising buying equation every day, and most industry experts expect DVR penetration to grow from 20 percent today to 35 percent in the next 18 months.”  He further added “it will be critical for advertisers to become experts in consumption patterns in DVR homes and we are the only player out there providing them with both new forms of inventory as well as measurement and accountability tools that enable them to better assess how to reach the television audience increasingly looking to avoid commercials.”

 TiVo, he believes, is ideally positioned.  He cited relationships or discussions with NBC,  CBS and six of the world’s largest advertising companies including WPP, IPG, Publicis, Havas, Carat, a unit of Aegis Group, OMG, along with advertisers like  American Express, , Honda, IBM,  and Sony Pictures as evidence of progress.  (Omnicom’s (OMG’s )subscription to the Stop Watch ratings service was announced today).

For the full fiscal year 2008, TiVo reported service and technology revenues of $230.9 million, compared with $217.3 million for the same period last year. The company’s net loss was $31.5million, or $0.32 a share.  That compares to a net loss of $47.8 million, or $0.53 per share, for the last year.

Looking forward to the first quarter, TiVo is forecasting a net loss of between $1m and $3 million on service and technology revenue of up to $55m. 


More detailed press coverage on Tivo’s finances can be found at:

Yahoo Finance
Google Finance


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