TIVO's FQ2 service & technology revenue totaled $86.6M (+13% Y/Y), in-line with guidance of $86M-$88M but slightly below an $87.7M consensus. FQ3 service/tech revenue is expected to be in a range of $86M-$89M, below an $89.5M consensus.
Net income guidance is at $6M-$9M, which compares with FQ2 net income of $9.3M ($0.08/share).
Along with its FQ2 results, TiVo has announced a $350M buyback, good for repurchasing over 1/5 of shares at current levels. TiVo plans to use $100M of the buyback during FY15 (ends Jan. '15), and the remainder during the next two fiscal years. TiVo had $782M in cash/short-term investments at the end of July.
263K subscribers were added in FQ2, up from 255K in FQ1 and raising the total to 4.8M (+33% Y/Y). 283K MSO subs were added, and 20K TiVo-owned subs lost.
MSO-related service revenue rose 36% to $10.3M, and TiVo-owned service revenue fell 7% to $22.4M. Other services revenue rose 29% to $4.2M.
GAAP R&D spend fell 5% Y/Y to $25.1M, and sales/marketing spend rose 13% to $10.3M.
Ahead of Tuesday's FQ2 report, Brean's Todd Mitchell predicts TiVo (TIVO +1.5%) will continue seeing positive trends "through the remainder of fiscal 2015, as TiVo's value proposition is resonating with its core customer base who are facing an increasingly challenging competitive dynamic and accelerating investment in their service profile."
Mitchell also sees the Digitalsmiths acquisition laying the foundation for a healthy cloud services businesses. He cautions TiVo will ultimately need new distributions deals with major MSOs to "generate upside to the company's current valuation," but also notes such a deal (with a European MSO) has been rumored to be in the pipeline.
Back in July, Mitchell declared (following an agreement with Canada's Cogeco) new deals with tier-2 U.S. cable companies were likely. Shares are close to their 52-week high of $14.25.
Canadian MSO Cogeco Cable is abandoning an in-house IPTV project and will instead roll out a multi-screen TiVo (TIVO +3.4%) DVR/video-streaming solution to its 800K video subs. The rollout is expected to start by March '15.
The deal is TiVo's first with a Canadian pay-TV provider. Last year, Cogeco's Atlantic Broadband unit began offering a TiVo-powered service.
Brean and Piper are out with bullish notes predicting additional deals. Brean's Todd Mitchell expects TiVo to "announce further deals with tier-2 U.S. cable companies where it is becoming the de facto standard for TV Everywhere," and also thinks "a more comprehensive deal with a large European cable company" is possible by September.
TiVo added 341K MSO subs in the April quarter, and closed it with 4.54M total subs (3.58M MSO, 957K TiVo-owned). Virgin Media accounts for 2.1M of the MSO subs.
Thanks to strong MSO-related subscriber growth, TiVo's (TIVO +2.7%) subscriber base has now surpassed its Dec. '06 record of 4.45M.
The DVR maker had 4.2M subs (+34% Y/Y) at the end of its January quarter. 313K MSO subs were added during the quarter, along with 6K TiVo-owned subs. The company's ARPU for MSO subs ($1.26) remains well below its ARPU for TiVo-owned subs ($8.56).
TiVo's (TIVO +6.6%) FQ4 results were mixed, and ifs FQ1 revenue guidance ($85M-$87M) is below an $87.6M consensus. But the company added 313K MSO subs during the quarter, up from 295K in FQ3, and saw its total sub base rise 34% Y/Y to 4.2M.
TiVo has also added $100M to its buyback, raising its total authorization to $186M. $20M was spent on buybacks in FQ4.
TiVo-owned subs grew by 6K after declining by 21K in FQ4. TiVo-owned churn fell to 1.5% from FQ3's 1.8%. TiVo-owned monthly ARPU rose a penny Q/Q to $8.56, MSO ARPU rose $0.23 to $1.26.
Virgin Media's U.K. ops accounts for over 2M of TiVo's 3.2M MSO subs, but the company's efforts to diversify are bearing fruit. Spanish cable provider ONO added 65K TiVo subs in FQ4, and Sweden's Com Hem has added 38K within three months of its TiVo launch.
TiVo stated on its CC (transcript) it expects recently-acquired Digitalsmiths to post double-digit growth for the next several years.
$TIVO stock fell down like a raindrop after the 'good profit new's, thought it would be a good time to step inside, but i was clearly wrong
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Tivo, Inc. develops and provides software, technology, in-home, and outside-of-the-home cloud-based video solutions for DVRs, non-DVR set-top boxes, tablets, smartphones, and other consumer electronics.