SAN JOSE, CA--(Marketwired - Feb 26, 2014) - TiVo Inc. (
- Record full year Service & Technology revenues, Net Income, and Adjusted AEBITDA in Fiscal Year 2014
- Continued acceleration in MSO additions; record 313,000 cable MSO subscriptions added in the fourth quarter
- Positive TiVo-Owned quarterly net additions for first time in six years; driven by 41% year-over-year growth in TiVo-Owned gross additions and lowest absolute churn in almost eight years
- Total TiVo subscriptions now at approximately 4.2 million, up 34% year-over-year
- Comcast plans to expand our successful integration of Xfinity On Demand to their entire footprint
- Record Service & Technology revenues of $84.0 million in the fourth quarter, an increase of 28% year over-year
- Fourth quarter Adjusted EBITDA was $19.6 million, exceeding guidance
- Fourth quarter Net Income was $710,000; which included a $4.8 million non-cash charge
- Acquired Digitalsmiths, further accelerating TiVo's evolution to a device and user interface independent cloud-based Software-as-a-Service, yielding a significant market opportunity for TiVo
- Announced increase of $100 million to stock repurchase authorization; Intent to repurchase $100 million in first quarter Fiscal Year 2015 in addition to the $20 million repurchased during the fourth quarter of Fiscal Year 2014
TiVo Inc. (
Tom Rogers, President and CEO of TiVo, said, "This was another solid quarter for TiVo and a very strong end to a year in which we delivered positive net income for the full Fiscal Year, robust Adjusted EBITDA growth over the course of the year, and the best year of subscription additions since Fiscal Year 2005 through new deals with major service providers across the globe. This rapid growth, combined with our exciting recent Digitalsmiths acquisition, the work we have done to innovate and create a product that embodies the future of television viewing, and a strategic approach to cash utilization all come together to set the stage for strong performance going forward."
For the fourth quarter, service and technology revenues were $84 million. This compared to guidance of $83 million to $85 million and $65.7 million for the same quarter last year. TiVo reported Adjusted EBITDA of $19.6 million, compared to Adjusted EBITDA guidance of $16 million to $19 million, and compared to an Adjusted EBITDA loss of $(2.6) million in the same quarter last year. Net income was $710,000, compared to guidance of $2 million to $5 million and a net loss of $(15.8) million in the same quarter last year. Net income during the fourth quarter of Fiscal Year 2014 included an unanticipated non-cash charge of $4.8 million relating to the TRA business.
Rogers continued, "We are continuing to see encouraging subscription growth. Our record 313,000 MSO cable subscription additions exceeded last quarter's strong results and underscores that the TiVo offering continues to be deployed aggressively by operators globally.
"More specifically, in Spain, we've seen significant success with our partner ONO, which recently announced that the TiVo product has now reached more than 323,000 active users, a growth of 65,000 subscribers in just the last quarter. Rosalia Portela, CEO of ONO, recently said the company is positioning TiVo as the Pay-TV market benchmark and the record numbers shown in the last quarter show customers recognize that it's an easy to use, highly advanced service that is superior to traditional offerings.
"In Sweden, Com Hem reported 38,000 TiVo subs, with the service already reaching 6% of their customers in just three months following launch, which was faster than the time it took Virgin and ONO to reach those same levels. Andrew Barron, Executive Chairman of Com Hem recently said, 'TiVo is important to Com Hem as it is the key to restoring growth in our DTV business. The combination of the powerful TiVo platform and our broad content offers provide the strongest TV product available in our market.'
"In the U.K., the two millionth Virgin Media TiVo customer has been connected since the service launched in December 2010. Commenting on the milestone, Scott Kewley, Virgin Media's director of digital entertainment, said, 'Virgin Media TiVo started a revolution in the way people watch and discover great TV and it's clear from our growth that our customers agree. By offering different ways to watch, with subscription and pay-per-view options, all integrated into a straightforward, intuitive experience, there's an unrivaled world of great entertainment at our customers' fingertips.'
"Additionally, we continue to add distribution partners, announcing this week that we have been selected by Vyve Broadband, a new MSO run by former Bresnan Communications executives through the acquisition of systems from Mediastream and Allegiance Telecom. This deal represents a new strategic initiative for TiVo, focused on bringing the key parts of the TiVo experience to low cost devices, beginning with digital terminal adapters also known as DTAs. DTAs are deployed in large volumes by many operators who aim to provide digital services with limited investment in customer premise equipment. Historically, DTAs have been devices with limited feature sets and user interfaces. We have been able to greatly improve the user experience of these products by connecting our TiVo cloud service feeds with third-party software to implement elements of the TiVo user experience. Under the terms of this deal, Vyve will be exclusively deploying TiVo-enabled DTAs going forward and we believe this could become an attractive product for other operators.
"Similarly, on the TiVo-Owned front, TiVo Roamio continues to be well received by consumers, where a 41% year-over-year increase in TiVo-Owned gross additions and our lowest absolute churn in almost eight years, led to positive net TiVo-Owned subscription additions in the fourth quarter for the first time in six years. In regions where we advertised, we saw higher gross additions than in the markets where we did not.
"Roamio also continues to receive rave critical acclaim, including from David Pogue, former tech columnist for the New York Times, who in one of his first posts in January on Yahoo Tech, said, 'TiVo's design is filled with smart, elegant grace notes that most cable-company boxes just don't have... TiVo cultists like me should prepare to rejoice.' He further added that with Roamio, 'you wind up with a single box that gracefully serves the functions of a cable box, Apple TV or Roku, and Slingbox -- and a single remote control at that. You wind up being able to search and watch cable shows and Internet shows identically. You wind up being able to watch its recordings anywhere in the house -- on another TiVo, on your iPhone/iPad or over the Internet.'
"Further, we are finding that TiVo Roamio's value proposition is being increasingly understood by our customer base with 78% of 'streaming-capable' TiVo subscribers using the in-home or out-of-home streaming features each month. Additionally, the average number of monthly streaming sessions grew over 50% in the second half of 2013 to about 16 sessions a month and the time spent on streaming sessions grew 20% per user on a monthly basis. This significant usage highlights the fact that Roamio is changing the way viewers consume television by helping deliver on the promise of any content, anywhere and on any device.
"We are also pleased that Comcast has committed to expanding our successful integration of Xfinity On Demand to their entire footprint. This integration on the Roamio and Premiere platforms has been an important one for us, as the robust Xfinity library, along-side traditional TV channels and web content delivers a one-stop shop for home entertainment. Market-by-market rollouts are occurring now, with full scale deployment in all U.S. markets -- including Chicago, Atlanta and Houston -- expected to be complete by June 30, 2014.
"We also recently announced a partnership with Control4 Corporation, a leading provider of automation and control solutions for the connected home, to make TiVo the first cable set-top box (with DVR, streaming services, and multi-screen capability) capable of being seamlessly integrated with comprehensive home automation solutions including lighting, home audio, climate control, or security. We believe that this integration will help further enhance TiVo Roamio's attractiveness in the home professional install channel, where there are significant opportunities.
"In addition to the progress we've made with our current distribution, we took a significant step to expand our distribution and ability to serve operators more broadly through our acquisition of Digitalsmiths, the Pay-TV industry's most broadly adopted cloud-based content discovery and recommendation service. Digitalsmiths currently works with 46 bluechip customers that consist of international Pay-TV operators, Content Providers, Consumer Electronic Manufacturers and seven of the top 10 U.S. Pay-TV operators. In the U.S. alone, Digitalsmiths customers cover approximately 64% of the country's Pay-TV households. Customers include Time Warner Cable, DirecTV and Dish, among others. Between the Digitalsmiths and TiVo products, we now have advanced television relationships with 18 of the top 25 U.S. operators and an expanded role with Tier-one U.S. Service Providers. As a result, we are now able to offer products not only to operators who want our branded-TiVo user interface but also those looking to build their own user interfaces but who need a strong content and discovery service to power it. The Digitalsmiths offering continues to be successful and well-received because of the ease with which it is integrated into Pay-TV operators' existing architecture.
"On the innovation front, at CES, we again demonstrated our Network DVR prototype for operators and revealed further plans to bring the TiVo experience to the cloud for operators. In addition to moving the TiVo experience to the cloud, powerful aspects of the TiVo nDVR capability will involve enabling operators to manage complex content rights, achieve far easier distribution, drive new and increased revenue streams, in addition to developing new consumer viewing features and capabilities. This dovetails very well with Digitalsmiths' cloud-based service that enables easy implementation of personalized metadata-related content search, browse, and discovery.
"In terms of our audience research and measurement business, TRA delivered improved revenues in the fourth quarter compared to the prior quarter, underscoring our recent efforts to secure and expand customer relationships such as with P&G. However, the pace of the transition from antiquated TV measurement to something more in line with online measurement has been slower than what we expected at the time we purchased TRA, resulting in the intangibles impairment we took this quarter. We continue to believe in the long-term potential of this business as the television industry continues to evolve.
"Regarding our capital allocation strategy, in addition to our Digitalsmiths acquisition, we announced that we are increasing our current stock repurchase authorization by an additional $100 million, giving us approximately $186 million of unused repurchase capacity beyond the $20 million of stock we repurchased during the fourth quarter of Fiscal Year 2014. In conjunction with this increased authorization, we intend to repurchase $100 million during the first quarter of Fiscal Year 2015. We believe that these actions underscore our commitment to utilize our significant capital resources in a thoughtful and deliberate manner to drive shareholder value, including aggressively returning capital to shareholders."
Rogers concluded, "This quarter marked the close of an important year for TiVo. We are seeing strong financial and operational results, significant overall subscription growth, and we continue to be a leader in innovation in the advanced television industry. In addition to our strategic acquisition that advances our cloud-based capabilities and places us front and center with a number of key operators, we are putting our significant cash resources to use through additional share repurchases. As we move through the first fiscal quarter of 2015, we believe that we are on track to exceed Adjusted EBITDA of $100 million this fiscal year, especially as we benefit from additional subscription gains. We are very excited about what the future holds for TiVo."
Management Provides Financial Guidance
For the first quarter of Fiscal Year 2015, TiVo anticipates service and technology revenues in the range of $85 million to $87 million, the midpoint of which is a 40% year-over-year increase from the $61.8 million TiVo reported in first quarter of Fiscal Year 2014.
TiVo expects Adjusted EBITDA to be in the range of $22 million to $25 million and net income to be in the range of $5 million to $8 million. The sequential increase from the fourth quarter of Fiscal Year 2014 is expected to come from both improvements to overall gross margin and lower operating expenses. Further, net income guidance reflects a full GAAP tax rate though TiVo expects to pay significantly lower cash taxes for the foreseeable future, and includes approximately $1 million to $2 million of quarterly amortization relating to the Digitalsmiths acquisition.
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 fourth quarter and fiscal year ended January 31, 2014 financial and operating results as well as guidance outlook for the first quarter at 2:00 pm PT (5:00 pm ET), today, February 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 22622601). The Webcast will be archived and available through March 5, 2014 at http://www.tivo.com/ir or by calling (404) 537-3406 ; and entering the conference ID number 22622601.
About TiVo Inc.
Founded in 1997, TiVo Inc. (
TiVo and the TiVo Logo are trademarks or registered trademarks of TiVo Inc. or its subsidiaries worldwide. © 2013 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), financial guidance for TiVo's first 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 revenues, benefits, and risks associated with the integration of TiVo's acquisition of Digitalsmiths, future TiVo product innovations, including the potential benefits of such innovations, such as a network DVR and integration with third party services and technologies such as Control4, future deployment of TiVo services on DTA devices with Vyve Broadband and other customers, future scope and timing of the roll-out of Xfinity Video On Demand access for TiVo retail devices across Comcast's entire U.S. footprint, future growth in TiVo's audience research and measurement business, future decreases in TiVo R&D spending, 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, 2013, our Quarterly Reports on Form 10-Q for the periods ended April 30, 2013, July 31, 2013, and October 31, 2013, 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.
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