TiVo (TIVO)

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TiVo Reports Higher Subscriptions, Profits -- Update

5:13 PM ET 3/3/15 | Dow Jones

By Maria Armental

TiVo Inc. said its profit surged in the fourth quarter as the pioneering TV-recording company continued to expand its customer base through more distribution deals with cable and satellite companies.

Total subscriptions reached more than 5.5 million as of Jan. 31, as TiVo added 340,000 subscriptions in the latest period. TiVo's paid-subscriber churn rate, or the percentage of people that terminated its service, was 1.5%, unchanged from the year-ago period.

Results topped the company's projection and the Wall Street consensus, sending shares up more than 6% to $11.93 in recent after-hours trading.

For the current quarter, TiVo projected net income of $5 million to $8 million and $90 million to $92 million in service and technology revenue, compared with the consensus of $10.1 million in net income and $92.3 million, according to analysts surveyed by Thomson Reuters.

Increasing competition from pay-TV carriers' on-demand services as well as video-streaming services, like Netflix Inc., have pressured the company's customer base.

The San Jose, Calif., company, which last month bought defunct TV-streaming service Aereo Inc.'s trademark and customer lists at bankruptcy auction, responded by reaching distribution agreements with some of those providers, expanding its customer base, and adding products like cloud-based media services and an over-the-air recording service.

On Tuesday, TiVo announced a distribution agreement with Frontier Communications, its first foray into the telecom industry. Under the agreement, Frontier would offer TiVo over-the-air DVR services to broadband customers, with an initial rollout expected in midyear. Frontier last month announced plans to buy Verizon Communications Inc.'s landline customers in Florida, California and Texas.

For the three months ended Jan. 31, TiVo reported a profit of $7.1 million, or seven cents a share, up from $710,000, or a penny a share, a year earlier.

Net revenue rose 7% to $114.1 million, while services and technology revenue, a closely watched metric that excludes hardware sales, increased 9% to $91.7 million.

TiVo had projected a profit of $2 million to $5 million and service-and-technology revenue of $87 million to $90 million.

Gross margin narrowed to 58% from 59.3% a year earlier.

Through Tuesday's close, the company's stock had fallen 16% over the past 12 months.

Write to Maria Armental at [e-mail]

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> Dow Jones Newswires

March 03, 2015 17:13 ET (22:13 GMT)

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