TiVo Reports Financial Results for the First Quarter Ended April 0, 06

SAN JOSE, CA--(Marketwired - May 31, 2016) - TiVo Inc. (NASDAQ: TIVO)

Q1 Highlights

Total TiVo subscriptions now over 7 million, up 24% versus last year; includes 312,000 MSO and 3,000 TiVo-Owned net additions in the first quarter

First quarter Service and Software & Technology revenue of $99.7 million, an increase of 8% year-over-year

Operator-related service and software revenue increased 44% year-over-year

First quarter net income was $4.2 million; includes $5.2 million in Rovi transaction costs and $3.7 million in restructuring expenses partially offset by a $3.2 million tax benefit from those items

First quarter Adjusted EBITDA was $32.1 million

Entered into agreement to be acquired by Rovi at 40% premium to TiVos unaffected closing price on March 23rd; Creates $3 billion software, services, and data provider for the evolving entertainment ecosystem.

TiVo Inc. (NASDAQ: TIVO), a leader in entertainment software and technology, today reported financial results for the first quarter ended April 30, 2016.

Interim CEO Naveen Chopra commented, We are very pleased with our solid execution this quarter which continues to position us for a successful combination with Rovi. Rapid change in the video landscape continues to underscore the value of companies that can bring simple, distinctive, and comprehensive navigation to an increasingly fragmented world of video content and consumption. Together, TiVo and Rovi have the user interface, metadata, analytics, personalization technologies, and monetization capabilities to fulfill this vision. During Q1, we continued to deliver significant growth in our Service Provider business while also implementing a combination of previously announced restructuring efforts and new product development initiatives. All in all, it was a strong quarter which positioned us well to continue our mission as part of Rovi.

Transaction with Rovi

The transaction with Rovi, announced on April 29, continues to move forward as planned. Pending required approvals, the transaction is expected to close in the third calendar quarter of this year. As discussed in the transaction announcement, the combination with Rovi offers a sound strategic rationale, including:

The creation of the markets largest entertainment software provider with over 500 operator, consumer electronic, and content owner relationships;

Clear opportunities to combine product offerings and create end-to-end solutions for service provider partners, which will integrate and bundle software, cloud services, metadata, advertising, and analytics;

Significantly enhanced R&D capabilities, leveraging TiVos consumer DNA across an even broader group of products and customers;

Highly meaningful financial benefits including a $100M+ in annual cost synergies and calendar year 2016 Pro forma revenue of $780M to $830M with 40% Adjusted EBITDA margins1.

Revenue

Service and software & technology revenue for the First Quarter of Fiscal Year 2017 was $99.7 million, an 8% increase from $92.4 million in the First Quarter of 2016. This growth was driven by a year-over-year increase of 44% in our Operator-related service and software revenue and strong double-digit growth in our data and analytics business, which had record revenue. This growth was offset in part by lower year-over-year TiVo-Owned and IP revenues.

Net Income

For the First Quarter of 2017, GAAP Net Income was $4.2 million and included non-recurring restructuring costs of $3.7 million and Rovi transaction expenses of $5.2 million offset by a $3.2 million tax benefit from restructuring and Rovi transaction costs. This compared to GAAP Net Income of $9.1 million in the year-ago quarter.

Non-GAAP Net Income grew 33% to $12.1 million compared to $9.1 million in the year-ago quarter. Non-GAAP Net Income excludes restructuring costs, Rovi transaction expenses as well as amortization and earn-outs related to the Cubiware acquisition.

Adjusted EBITDA

For the First Quarter of Fiscal Year 2017, TiVo reported Adjusted EBITDA of $32.1 million compared to $29.1 million in the First Quarter of Fiscal Year 2016. First quarter of Fiscal Year 2017 Adjusted EBITDA included a partial quarter of benefit from the previously announced restructuring as well as elevated R&D spend relating to near-term product deliverables for several operator partners. TiVo expects to benefit next quarter from the full impact of the restructuring, meaningfully lower R&D spend and from growth in its Operator-related businesses as well as its data and analytics businesses.

Subscriptions and Other Operational Highlights

TiVo increased its total subscriptions by 315 thousand to over 7.1 million. MSO subscriptions increased 28% year-over-year to 6.1 million. This included 312 thousand first quarter net additions, which were driven by strong contributions from both international and domestic operators. TiVo-Owned subscriptions increased slightly to 974 thousand and gross additions increased by 8% year-over-year despite a 19% year-over-year reduction in total acquisition spend. Further, TiVo-Owned churn was 1.3%, the lowest quarterly churn rate in seven years.

During the quarter, TiVo delivered several product enhancements, including a significant update to its mobile applications which now offer enhanced personalization and integration of TiVos cloud-based search and discovery service on Android devices. In addition, we recently reached new distribution agreements with emerging market operators covering Africa, Asia, and Latin America. Finally, progress continues towards launching a new next-generation retail product.

Cash/Balance Sheet

TiVos cash and cash equivalents and short-term investments balance was $503 million as of April 30, 2016, as compared to $646 million as of January 31, 2016. The reduced cash and cash equivalents reflects repayment of our March 2016 convertibl

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