TiVo reported record net income and adjusted earnings in the first quarter of its fiscal year 2009 (ending April 30, 2008).
The company produced net income of $3.6 million (4 cents per share), compared to net income of $0.8 million (1 cent per share) in the first quarter of last year.
Lower-than-expected operating expenses in marketing and research and development spending led to the record results. The improvements came despite a drop in service and technology revenues to $54.9 million (compared to $58.1 million in the first quarter of fiscal 2008). Adjusted EBITDA was $11.1 million, compared to $6.7 million in the year-ago period and to earlier guidance from the company predicting EBIDTA of $5 million to $7 million.
The company is also upbeat about its ongoing patent infringement litigation with EchoStar, following a favorable Jan. 31 ruling by the Federal Court of Appeals for the Federal Circuit and the denial of an EchoStar petition for a rehearing before the full court.
EchoStar has said it will appeal to the U.S. Supreme Court, while TiVo CEO Tom Rogers said that EchoStar’s modified software still violates TiVo’s patents.
Rogers said TiVo service on Cox cable, currently in trials, is on track for a launch in the New England market later this year. TiVo service has been available on some Comcast systems in New England since earlier this year,
TiVo is now available in Canada, Mexico, and Taiwan, with a rollout in Australia expected in time for the Summer Olympics.
The company is also continuing its work with the cable industry on switched digital video technology, which promises broader channel selection for consumers.
“We have worked very closely with Time Warner, Cox, Comcast, CableLabs, and the NCTA on this process and recently Cisco and Motorola displayed switched digital tuning adapters at the NCTA Cable Show,” Rogers said. “These adapters, which are currently undergoing verification testing with CableLabs are near completion and will soon be available in the small number of areas, where limited numbers of lightly watched program channels are provided now on a switched digital basis.”
TiVo-owned subscription gross additions for the first quarter were approximately 48,000, compared to 57,000 gross additions for the year-ago period. This is the lowest year over year quarterly decline since the third quarter of fiscal 2007. Overall, TiVo-owned subscriptions ended the quarter at 1.7 million. As expected, TiVo reported a net decline in MSO and broadcaster subscriptions during the period as DirecTV is no longer deploying new TiVo boxes and other mass distribution deals are still in early phases of deployment, the company said.
On the content front, TiVo recently announced content deals with Disney and YouTube (expected to be become available in the next few months) to build on TiVo’s existing arsenal of 30,000 movies and television shows from Amazon and 4 million songs from Rhapsody.
Earlier this week, TiVo also announced a partnership with the Chicago Tribune to let TiVo subscribers download the recommendations of the newspaper’s TV critic directly to their televisions so these recommendations are waiting there when the TV set is turned on.
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