TiVo clips losses with gains in Q3
Also gives thumbs up to deal with Cablevision MexicoTiVo Inc. reported a narrower quarterly loss Wednesday and said it intends to beef up its international presence, beginning by adding Cablevision Mexico as a distributor next year.
"You should begin to define the relevant market for TiVo as being well beyond the U.S. alone," TiVo CEO Tom Rogers said.
Cablevision Mexico, owned by Grupo Televisa, has about 500,000 subscribers and will deploy the first TiVos with a Spanish-language interface.
TiVo said it lost $11.1 million in its fiscal third quarter, down from a loss of $14.2 million in the same quarter a year ago. Revenue rose from $49.6 million to $65.7 million.
Service and technology revenue, which strips out hardware sales that are largely rebated, came in at $52.6 million, up from $43.2 million though falling short of analysts' expectations of about $58.7 million.
TiVo also offered current-quarter guidance that seemed to spook investors, who knocked the stock down as much as 5.5% in after-hours trading Wednesday. TiVo shares closed fractionally higher to $6.29.
The company said service and technology revenue will come in at about $55 million in the current quarter, while analysts were looking for about $61 million. TiVo also said its losses could swell to as much as $38 million as it makes a big marketing push, including hefty rebates, into the holiday gift-giving season.
TiVo's new advertising campaign is designed to educate consumers about the difference between TiVo and other DVRs. Studies have shown that DVR subscribers often describe themselves as TiVo users even when they use a generic DVR provided by the cable or satellite TV carrier.
The new promotional campaign includes the catchphrase "It's not a TiVo unless it's a TiVo."
The company added just 10% to its subscriber ranks in the past year, to total 4.4 million, grappling with the decision by DirecTV Group Inc. to move away from distributing TiVos in favor of hawking DVRs from NDS Corp. DirecTV and NDS are controlled by News Corp.
The company has 1.6 million TiVo-owned subs, up from 1.3 million a year ago, and 2.8 million DirecTV subs, up from 2.7 million.
Rogers said some substantial news is that for the first quarter in six gross subscription addition growth was positive on a year-over-year basis. The company added 101,000 TiVo-owned subscriptions, compared with 92,000 in the same quarter last year.
The company also has focused on raising the quality of its subscribers, and Rogers said that the average new sub now pays about $13 per month, up from $9.