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TiVo Revenue Climbs 59%, Loss Narrows

5/27/2005 08:22:00 AM Eastern

Alviso, Calif. — The addition of new subscribers and increasing control of costs helped television recording technology developer TiVo post higher fiscal first-quarter revenue and a significantly lower three-month loss.

Service and technology revenue for the first quarter soared 59 percent to $40 million, up from a year-ago $25.2 million.

TiVo’s net loss reached $857,000 in the three months, down from a net loss of $9.1 million in the same quarter in 2004.

The company, which offers a digital video recording service that allows users to pause live TV, skip commercials and save programming, reported that total cumulative subscriptions reached more than 3.3 million in the quarter, ended April 30, up from total cumulative subscriptions of 1.6 million at the end of the same three months last year.

“This quarter’s combination of solid revenue growth and gross margin improvement is driving the company towards our goal of profitability,” said Mike Ramsay, chairman/CEO. “We are pleased to see last year’s focus and investment in subscription growth continue to pay off, resulting in revenue growth now coming through to the bottom line,” he said.

The installed base of DirecTV subscriptions hit 2.1 million in the first quarter, with the addition of 247,000 net new additions, compared with 872,000 DirecTV subs last year and 196,000 net new additions.

The installed base of TiVo-owned subscriptions grew to over 1.2 million in the first quarter, with the addition of 72,000 net new subscriptions, compared with 724,000 TiVo-owned subs year-on-year and 68,000 net new additions.

Subscription acquisition costs for the quarter dropped to $150 per sub, down from a year-on-year $160.

Average revenue per month for a TiVo-owned subscription, however, dipped to $8.83 in the first quarter, compared with a year-earlier $8.85. Average revenue per month for a DirecTV subscription came in at $1.19 for the quarter, compared with $1.65 in the same period last year.

TiVo-owned churn rate in the three months moved up to -0.9 percent, from the previous year’s -0.7 percent.

While TiVo said it had reduced costs of making set-top boxes by $1.2 million in the quarter, down to $15.6 million from a year-ago $$16.8 million, sales and marketing expenses climbed to $6.8 million for the period, up from a year-earlier $5.6 million.

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