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TiVo Adds Record Number of Subs

3/05/2004 11:43:00 AM Eastern

San Jose, Calif. — TiVo, the television services provider for digital video recorders, nearly doubled net revenue in its fiscal fourth quarter, climbing 85 percent, to $42.6 million, from $23 million in the year-ago period.

At the same time, TiVo added a record 330,000 subscriptions in the fourth quarter, ended Jan. 31, nearly triple the 115,000 added in the same three months a year earlier. The company’s total subscription base for the fiscal year more than doubled, and hit 1.3 million, up from 624,000 year-on-year.

Net loss for the fourth quarter reached $12.4 million, but down from a loss of $32.5 million in the fourth quarter of the previous year. Excluding a non-cash item of $4.5 million, TiVo’s fourth quarter loss was reduced to $7.9 million, an improvement over the same three months last year, when the company’s loss reached $14.7 million, excluding a non-cash item of $17.9 million.

Operating loss in the fourth quarter was reduced to $6.5 million, down from $11.5 million in the same three months a year ago. For the 12 months, operating loss was paired down to $22.5 million, from $57.1 million year-on-year. Operating loss for the first quarter of the current fiscal year is expected at between $13 million and $15 million, with $75 million to $90 million anticipated for the 12 months.

For the 12 months, net revenue hit $141.1 million, compared with $96 million a year earlier. Net loss for the year came in at $32 million, compared with a loss of $82.3 million year-over-year.

TiVo reported its first full year of positive adjusted earnings before interest, taxes, depreciation and amortization (EBITDA). This figure hit $2.7 million for the fiscal 12 months, compared with a loss of $20.4 million a year ago.

Of the 330,000 new subscriptions added in the fourth quarter, about 200,000 resulted from TiVo’s relationship with DirecTV. The sub number was five times the 40,000 new DirecTV subscriptions added in the same three months a year earlier. The remaining 130,000 net new subscription additions represented a sharp increase over the 75,000 TiVo service subs experienced year-on-year.

Looking to drive sustainable profitability by the end of fiscal year 2005, TiVo plans to invest $50 million during its current fiscal 12 months in order to ramp up subscription acquisitions.

In the first quarter, ending in April, TiVo anticipates cumulative subscriptions totaling about 1.5 million, with total subscription net additions of 180,000 to 200,000.

For the 12 months of the current fiscal 2005, the company expects 1.5 million to 1.6 million subscription additions, with 1 million coming from DirecTV and 500,000 to 600,000 from new TiVo service sub additions. The result would be an installed base nearing 3 million subs by the end of January 2005.