TiVo Inc. (TIVO) reported loss of 13 cents per share, wider than the Zacks Consensus Estimate of a loss of 12 cents. Results declined significantly from earnings of 6 cents in the year-ago quarter and were flat on a sequential basis.
Revenues
Revenues surged 33.7% from the year-ago quarter and 8.3% from the previous quarter to $88.9 million and was ahead of the Zacks Consensus Estimate of $84.0 million.
The strong growth was primarily driven by higher service and technology revenues (74% of total revenue), which jumped 31.3% year over year and 7.8% sequentially to $65.7 million and exceeded management’s guided range of $63.0 million to $65.0 million.
Moreover, hardware revenues (26.0% of total revenue) jumped 40.8% year over year and 9.8% quarter over quarter to $23.1 million in the last quarter.
Net addition to total subscriptions during the quarter was 209K, slightly lower than 234K in the year-ago quarter and 225K in the previous quarter. Churn rate per month was a negative 1.5% compared with negative 1.7% in the year-ago quarter and negative 1.4% in the previous quarter.
TiVo’s total subscriber base jumped 38.2% from the year-ago quarter and 7.1% from the previous quarter to 3.15 million. Subscription acquisition costs (“SAC”) decreased to $228.0 from $234.0 in the year-ago quarter due to lower hardware subsidy. Sequentially, SAC increased substantially from $171.0.
Margins
Gross margin expanded 460 basis points (“bps”) from the year-ago quarter and 340 bps from the previous quarter to 54.1% in the reported quarter, primarily due to higher revenue base. Adjusted earnings before interest, taxes, depreciation and amortization (:EBITDA) excluding litigation expenses and proceeds were $7.76 million compared with a loss of $6.7 million in the year-ago quarter and profit of $2.97 million in the previous quarter.
Operating results were primarily driven by lower research & development (“R&D) expense and general & administrative (G&A) expense. R&D declined 10.8% year over year and 5.9% sequentially to $26.6 million. G&A plunged 37.9% year over year but increased 8.9% sequentially to $23.7 million.
Operating expenses declined 17.2% year over year but increased 5.3% sequentially to $62.7 million in the last quarter. This led TiVo to report an operating loss of $14.6 million, which was significantly better than the loss of $42.8 million in the year-ago quarter and $18.0 million in the previous quarter. TiVo reported net loss of $15.8 million in the reported quarter.
Balance Sheet
TiVo exited the reported quarter with cash, cash equivalents and short-term investments of $627.2 million versus $623.6 million in the previous quarter.