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TiVo Q2 Earnings

tivo stockUsually when a company’s name or product becomes a verb, or otherwise enters the vocabulary of pop culture lexicon, it means the company created something pioneering (and usually lucrative) or utterly atrocious.  For Tivo (Nasdaq:TIVO), the pioneering title is an unquestionable fit but the moniker of lucrative is more elusive.  People may be "Tivo-ing" shows but TiVo isn’t making a lot of money. Wednesday after the close of Market, Tivo reported earnings for their second fiscal quarter.  The numbers were uninspired.

For the quarter ended July 31st, Tivo posted a net loss of $17.7m (18c a share) versus a loss of $6.5m (7c a share) for the same period last year. This years loss included a substantial unexpected inventory write down loss of $11.2m. Consensus analyst expectations were for a much narrower loss of 5c a share.

Revenue numbers were somewhat positive, up just under 6% to $62.7m. Service and Technology Revenue (which is revenue minus income from hardware sales) was $56.5m (up 7%). Unfortunately, important subscriber numbers were less impressive. Total subscriber count for the quarter was 4.2m, down from 4.3m last quarter. The monthly churn rate (or rate of customer loss) was up to 1.2% from 1.1% last quarter. Tivo attributed part of these change to a shift at retailers to focus on high definition products. The company noted that TiVo-owned subscriptions were actually up 136k on the the quarter versus a year ago.

Looking forward, Tivo expressed optimism about the rest of the year. Financially, the company still expects to break even on an adjusted basis (EBIDTA) for the fiscal year. In other initiatives, their Audience Research and Measurement business is growing. Their Amazon video-on-demand partnership is expanding and now can bypass the PC alltogether. Additionally, with Liberty Media about to take control of satellite TV provider DirecTV, there is hope that TiVo’s prior relationship with DirecTV may somehow be rejuvenated. (DirecTV currently doesn’t market TiVo hardware though they once did).

CEO Tom Rogers chose to characterize the state of affairs by telling analysts in a conference call that "[the] business is now entering a new phase."

Looking to the third quarter in forward guidance, TiVo expects to post a net loss of $14 million to $17 million with Service and Technology revenue of $56 million to $57 million

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

Yahoo Finance
Google Finance
Tivo Earnings Press Release

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