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TiVo Reports Record Subs Added

5/26/2004 09:53:00 AM Eastern

San Jose, Calif. — Digital video recording provider TiVo reported a record 264,000 subscriptions added in its fiscal first quarter, more than three times the 79,000 added in the year-ago period.

Total cumulative subscriptions grew to 1.6 million in the first three months, more than double the subscription base of 703,000 recorded in the same quarter a year ago.

Net revenue in the first quarter, ended April 30, climbed to $34.5 million, up from $28.5 million year-on-year. Service revenue hit $22.2 million, a 74 percent spurt over the $12.7 million reached in the same three months in 2003.

TiVo, the creator of TV services for the digital video recorder (DVR), widened its net loss for the first quarter to $9.1 million, up from $7.9 in the same three months a year earlier. The company also widened its operating loss for the period to $8.7 million from $6.7 million year-over-year.

Of the 264,000 new subscriptions in the first quarter, about 196,000 were the result of TiVo’s relationship with DirecTV. This figure was nearly five times the 42,000 DirecTV subscriptions added in the first quarter of last year.

New TiVo service subscriptions added in the first three months hit 68,000, an 84 percent increase over the 37,000 recorded in the year-ago period.

The record number of DirecTV-influenced subs in the first quarter was driven by increased product availability, a $99 price point and a variety of promotional programs directed at the DirecTV subscriber base, said TiVo.

With nearly 900,000 subscribers with TiVo, DirecTV today continues to aggressively market the TiVo service as a key differentiation geared toward subscriber retention and revenue growth, reported TiVo. In addition, DirecTV has begun shipping its new high-definition DVR with TiVo.

TiVo, which expects record growth in the number of new subs in its current fiscal year, plans to double its subscription base to nearly 3 million, positioning the company for sustainable profitability by the end of the next fiscal year in January 2005.

For the second fiscal quarter, ending in July, TiVo anticipates 265,000 to 300,000 total subscriptions net additions, ending the period with about 1.9 million subs.

TiVo expects 65,000 to 75,000 TiVo service sub net additions for the second quarter. Also, the company anticipates 200,000 to 225,000 DirecTV subscriptions net additions for this three-month period.

Service revenue in the second quarter is expected at $23 million to $23.7 million, while the operating loss should rise to $19 million to $21 million, due to an increase in the cost of rebates, revenue sharing and other payments, as well as lower technology revenue.

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