TiVo Subscriptions Continue to Rise; Maker of Set-Top Boxes Increases Quarterly Revenue
November 27, 2013 Leave a comment
TiVo Subscriptions Continue to Rise
Maker of Set-Top Boxes Increases Quarterly Revenue
IAN SHERR
Nov. 26, 2013 6:19 p.m. ET
TiVo Inc. TIVO +0.15% showed no signs of slowing growth in the third quarter, reporting a big jump in subscriptions despite an increasing list of competitors. The San Jose, Calif., company said its list of subscribers hit 3.9 million in the period ended Oct. 31, up 32% from the year-earlier quarter. Its subscriber count has risen for nine straight quarters.Tom Rogers, TiVo’s chief executive, said his company’s relationships with media delivery operators such as cable companies had helped drive the gains, as well as launches of new technology. One new feature he said customers particularly liked is the ability to send images form a TiVo device outside a person’s home, so they can watch television with a mobile device while on the road.
He also said the company’s newest set-top box, Roamio, was well received by customers. Even people who don’t pay for a cable or satellite connection are increasingly using TiVo boxes to record terrestrial broadcasts, as well as to access streaming video services such as Netflix NFLX +1.42% and Hulu, Mr. Rogers said.
“It’s a minority of customers, but relative to what it used to be, it’s become meaningful,” he said. “Clearly there are people who understand that they don’t need a cable subscription to enjoy TiVo.”
New competitors have been joining the market, however. Microsoft Corp. MSFT -0.77% ‘s Xbox One console, which is aimed at entertainment functions in addition to videogames, was released on Nov. 22 to long lines and sold out of initial supplies of more than one million units.
“We like the fact that Xbox, when it comes to being a video reception appliance, it didn’t get stellar reviews,” Mr. Rogers said. “It’s a way to get video, but it isn’t an optimal way to have a television experience.”
For the third quarter, TiVo said it earned a profit of $12.5 million, or 10 cents a share, down significantly from $59 million, or 44 cents a share. In the same period last year, TiVo saw litigation proceeds of $78.4 million relating to a patent settlement with Verizon Communications Inc. VZ +0.08% with a total value of at least $250.4 million.
The company said it recorded $117.3 million in sales, up nearly 43% from the $82 million it reported last year. Service-and-technology revenue, a metric watched closely by investors that disregards hardware sales, jumped 33% to $81.7 million.
Looking ahead, TiVo projected fiscal fourth-quarter net income of $2 million to $5 million and service-and-technology revenue of $83 million to $85 million. Analysts surveyed by Thomson Reuters most recently forecast $84 million in comparable revenue.
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