TiVo Reports Results for the Second Quarter Ended July , 0

SAN JOSE, CA--(Marketwired - Aug 27, 2013) - TiVo Inc. (NASDAQ: TIVO)

TiVo reaches sustained net income profitability

Highest quarterly net income in Companys history of $268.9 million

Adjusted EBITDA of $115.4 million; exceeding guidance range even before including the Cisco and Motorola settlement

Service & Technology revenues of $77.0 million in the second quarter, an increase of 42% year-over-year; the highest ever and exceeds guidance range even before including the Cisco and Motorola settlement

Launched new TiVo Roamio DVR to highly positive acclaim -- ...the Holy Grail of set-top boxes

The National Academy of Television Arts & Sciences awarded TiVo its 4th Emmy Award

Total TiVo subscriptions now at 3.6 million, up 33% year-over-year as MSO deployments continue to drive growth

TiVos first IPTV deployment, Com Hem, launch underway

Settled Cisco and Motorola litigation for $490 million; total litigation success has achieved approximately $1.6 billion in damages and consideration

Cash & short-term investments increased to more than $1 billion, even after stock repurchases of $60 million during the quarter

TiVo Inc. (NASDAQ: TIVO), a leader in the advanced television entertainment market, today reported financial results for the second quarter ended July 31, 2013.

Tom Rogers, President and CEO of TiVo, said, TiVo has now reached a very important milestone. After making significant progress over the last several years, amid scrutiny for not being net income profitable, we believe TiVo has now achieved the milestone of sustained net income profitability. As a result of the latest litigation settlements, which will produce significantly increased licensing revenue well into the future and which have substantially increased our cash resources, along with our continued focus on innovation as demonstrated by the highly acclaimed Roamio launch, and the expected continued growth of our MSO subscription base, TiVo has reached a brand new chapter in its financial performance that puts the Company on an entirely new trajectory.

This was a very strong quarter for our business. We recorded the highest revenue and highest profit ever, continued positive momentum in our operator business, launched the new TiVo Roamio, which includes significant product enhancements that benefit both our retail and operator businesses, and we brought our pending litigation with Cisco and Motorola to an end, significantly strengthening our financial profile. All of this we believe positions us well to achieve significant Adjusted EBITDA growth in Fiscal Year 2014, and as we have previously indicated, should drive us to Adjusted EBITDA profitability even when excluding the impact of our most recent litigation settlement.

Our solid operational execution, combined with the successful outcome of our litigation with Cisco and Motorola led to a 42% increase in service and technology revenues, $115.4 million in Adjusted EBITDA, and record net income of $268.9 million in the second quarter. In addition, our advanced television solutions continue to gain global traction as we increased our MSO service revenue 58% and total subscriptions now stand at 3.6 million, a 33% improvement over last year. We believe the combination of our ability to provide viewers with the ultimate television experience, expected subscription growth in the future, projected double-digit EBITDA margins, and our very strong cash position of approximately $1 billion, positions us well to drive additional shareholder value.

For the second quarter, service and technology revenues were $77.0 million. This compared to guidance of $68 million to $70 million and $54.1 million for the same quarter last year. TiVo reported net income of $268.9 million, compared to guidance of a net loss of $(13) million to $(16) million. This compared to a net loss of $(27.7) million in the same quarter last year. Adjusted EBITDA was $115.4 million, compared to guidance of $1 million to a loss of $(2) million and a loss of $(15.8) million for the same quarter last year. The Cisco /Motorola settlement contributed $6.1 million to service and technology revenues, and both net income and Adjusted EBITDA included $108.1 million relating to past damages and $10.7 million of litigation expense. Additionally, net income included $752,000 in interest relating to past damages and $167.0 million from the recognition of deferred tax assets. Even before the incorporation of the Cisco and Motorola settlement, Service & Technology revenue and Adjusted EBITDA exceeded their respective guidance ranges, and net income would have been at the high-end of its guidance range.

Service & Technology Revenues Adjusted EBITDA Net Income

(in thousands)

FY14 Q2 Results (As Reported) $ 76,986 $ 115,440 $ 268,938

Less: Cisco/Motorola Technology Revenue 6,099 6,099 6,099

Less: Cisco/Motorola Litigation Proceeds (Past Damages) 0 108,102 108,102

Less: Cisco/Motorola Interest 0 0 752

Less: Tax Benefit (from release of valuation allowance on deferred tax assets) 0 0 167,039

Total Adjustments 6,099 114,201 281,992

FY14 Q2 Results Excluding Impact of Cisco/Motorola Settlement $ 70,887 $ 1,239 $ (13,054 )

Rogers continued, On the innovation front, we just launched the new TiVo Roamio to enormous critical acclaim. This product clearly demonstrates TiVos continued ability to innovate ahead of the pack and the reviews clearly underscore that TiVo is the only set-top box that will provide consumers with traditional television channels, over-the-top content, a unified search and user experience, whole home capability, TV Everywhere functionality, combined with what is still the best DVR. Walt Mossberg of the Wall Street Journal stated, While streaming is the big news here, its worth pointing out that, even without it, the TiVo could be consi

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