Tivo (TIVO) reports smaller than expected loss

Tivo Inc. (ticker: TIVO) reported results on May 26, 2005 for the second quarter 2005.  Below are some highlights.

Results 1Q05 vs. 1Q04:

• EPS: $-0.01 vs. $-0.11 (-91%)
• Consensus EPS was $-0.11
• Revenue: $46.91B vs. $34.52B (+36%)
• Consensus revenue was $37.20B
• Gross profit: $22.40B vs. $10.12B (+121%)
• Gross margin: 47.8% vs. 29.3% (+1,850bps)
• Operating income: $-1.47B vs. $-8.72B (-83%)
• Operating margin: -3.1% vs. -25.3%
• Net income: $-0.9M vs. $-9.1M (-91%)
• Net margin: -1.8% vs. -26.3%
• Cash (vs. 4Q04): $105.49B vs. $106.35B (-1%)
• Debt (vs. 4Q04): $6.00B vs. $4.50B (+33%)
• Free cash flow: $-4.8M vs. $-7.1M (-32%)

Revenue breakdown 1Q05 vs. 1Q04:

• Service: $38.3M vs. $22.2M (+73%)
• Technology: $1.7M vs. $3.0M (-44%)
• Hardware: $10.5M vs. $14.3M (-27%)
• Rebates and other: $-3.6M vs. $-5.0M (-27%)

Subscriber net additions 1Q05 vs. 1Q04:

• TIVO-owned: 72,000 vs. 68,000 (+6%)
• DirecTV: 247,000 vs. 196,000 (+26%)
• Total: 319,000 vs. 264,000 (+21%)

Cumulative subscriptions 1Q05 vs. 1Q04:

• TIVO-owned: 1,213,000 vs. 724,000 (+68%)
• DirecTV: 2,107,000 vs. 872,000 (+142%)
• Total: 3,320,000 vs. 1,596,000 (+108%)

Other operating data 1Q05 vs. 1Q04:

• Tivo-owned churn per month: -9% vs. -7% (-200bps)
• Subscriber Acquisition Cost (SAC): $150 vs. $160 (-6%)
• Tivo-owned Avg. revenue per user (ARPU): $8.83 vs. $8.85 (0%)
• DirecTV Avg. revenue per user (ARPU): $1.19 vs. $1.65 (-28%)

2Q05 Guidance:

• Revenues: $39.8M - $40.6M; consensus was $39M
• Net income: $(4.0M) - $(6.0M)
• Subscriber additions: 200,000 - 260,000
• DirecTV subscriber additions: 160,000 - 200,000

2005 Guidance:

• Revenues: $155M - $165M
• Net income: $(10.0M) - $(20.0M); previous range was $(10.0M) - $(25.0M)
• Reach profitability by Q4