TiVo reported higher sales and a lower net loss in its fiscal third quarter and signed an agreement with Nero to integrate TiVo's television technology with Nero's next-generation of PC software.
On the financial side, TiVo posted a net loss of $8.2 million, an improvement from the $11.1 million loss in the previous year's third quarter.
For the third quarter, service and technology revenues were $58.3 million, compared with $52.5 million for the same period last year. Adjusted EBITDA was $300,000, compared with a loss of $6 million in the year-ago period.
Tom Rogers, CEO, noted that on the stand-alone side of its business, "This quarter was about making clear that this part of the business can be developed without undermining the ability of the emerging businesses to grow. For example, the more popularly priced TiVo HD is now fully available to consumers and is offered at new retail outlets such as Costco and Sears. Additionally, we made substantial progress in solidifying our relationships with the cable industry, ensuring easier installation of our CableCARD products and underscoring the cable industry's recognition of TiVo's importance to their subscribers. Finally, we have added even more differentiated features that are all coming together to prove that TiVo is not only a digital video recorder, but a digital video receiver, highlighted by this quarter's announcement with Rhapsody, which delivers over 4 million songs to the home."
TiVo-owned subscription gross additions for the third quarter were 69,000, compared with 101,000 gross additions for the year-ago period. Overall, TiVo-owned subscriptions increased slightly to 1.7 million from 1.6 million in the year ago-period. As expected, TiVo reported a net decline in DirecTV TiVo subscriptions during the period as DirecTV is no longer deploying new TiVo boxes. Cumulative total subscriptions as of Oct. 31, were 4.1 million. Additionally, the monthly churn rate was 1.3 percent compared with 1.0 percent in the year-ago period and 1.2 percent in the second quarter.
In a joint press release on the TiVo/Nero agreement, Richard Lesser, CEO of Nero AG, said, "The partnership with TiVo extends the TV experience for the connected digital home, enabling easy access anytime, anywhere to the most extensive TV content. Our core technology enables the creation of new categories in consumer electronics, changing the way that users interact with both hardware and software. Our proven technology adds media functionality to the world's leading consumer electronics, personal computing and software products."
Under the agreement, Nero will develop a software solution that will bring TiVo features to the personal computer. Capitalizing on the growing PC TV tuner market, it will answer the consumer demand for a trusted PC-based DVR experience for use with the estimated 50.8 million PC TV tuners that will be sold worldwide by 2011, according to an In-Stat research report published in April 2007.
"This agreement provides TiVo with an opportunity to deliver its interface and differentiated feature set globally via the PC, enabling TiVo to use all avenues of mass distribution," Rogers said in a prepared statement.