TiVo Swings to Profit, Adds Subscribers

By Tess Stynes 

TiVo Inc. swung to a profit as the maker of television set-top boxes continued to add subscribers.

The company also unveiled plans to repurchase an additional $100 million of its shares in the fiscal first quarter.

TiVo projected fiscal first-quarter net income of $5 million to $8 million and service-and-technology revenue of $85 million to $87 million. Analysts surveyed by Thomson Reuters expected $88 million in comparable revenue.

TiVo also has worked to broaden its services. In January, the company agreed to acquire cloud-based media services company Digitalsmiths for $135 million, aiming to strengthen its U.S. market share. Digitalsmiths provides personalized video search, recommendations and browsing, social trending and mood-based discovery for the pay-TV industry on many popular mobile platforms.

TiVo continued to add new subscribers in the fiscal fourth quarter despite an increasing list of competitors. Third-party vendors like cable companies--so-called MSOs, or multi-system operators--continued to play a big role in subscriber growth, contributing a net 313,000 in the latest quarter. Overall, TiVo added a net 319,000 subscribers, compared with the 209,000 gained a year earlier.

Total subscriptions reached 4.2 million, a 34% increase year-to-year.

For the period ended Jan. 31, TiVo reported a profit of $710,000, or a penny a share, compared with a year-earlier loss of $15.8 million, or 13 cents a share. Revenue increased 20% to $106.3 million. Service-and-technology revenue climbed 28% to $84 million.

TiVo had projected fiscal fourth-quarter net income of $2 million to $5 million and service-and-technology revenue of $83 million to $85 million.

Monthly churn, or the customer cancellation rate, was unchanged at 1.5% for TiVo-owned subscriptions.

TiVo has mostly posted losses since the second half of 2009, but has seen positive returns from its patent-litigation efforts, reaching settlements with companies including Google Inc.'s Motorola unit, Cisco Systems Inc., AT&T Inc., EchoStar Corp., Dish Network Corp. and Verizon Communications Inc.

Write to Tess Stynes at [e-mail]

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