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TiVo's Cable Operator Revenue Jumps in Q4

TiVo’s revenue from cable operator customers increased by 83% for the quarter that ended Jan. 31, 2013 -- although the $8.2 million in subscription revenue generated from MSOs in the period represented just 9% of its total sales, and the company posted a net loss.

The DVR company added 222,000 net new customers through cable partners during the period, its fourth quarter of fiscal 2013, to reach 2.12 million. It lost 13,000 TiVo-owned subs to stand at 1.03 million.

"We are very excited about the growing distribution of TiVo and about the deepening relationships we have with operators around the globe,” TiVo president and CEO Tom Rogers said in announcing the results Tuesday.

MSO-related hardware revenue climbed 45% in Q4, to $16.8 million, which represented 73% of TiVo's total hardware sales.

TiVo’s biggest MSO customer by far is Virgin Media in the U.K., which added nearly 900,000 net TiVo subs in 2012 to reach 1.3 million total, or 35% of its video-subscriber base. (For the 12 months ended Jan. 31, TiVo added a net 950,000 subs through all operators.) In the U.S., service provider customers include Suddenlink Communications, Mediacom Communications, RCN and GCI.

ONO in Spain and Suddenlink had "their strongest quarters to date with TiVo deployments, and we find that the more experience that an MSO has with our product over time, the greater the acceleration in terms of sub deployment by them," Rogers said on a conference call with analysts.

TiVo generated an average of $1.36 per MSO subscriber per month for the most recent quarter, compared with an average $8.82 per TiVo-owned subscriber.

Comcast continues to roll out VOD support for TiVo retail DVRs in markets, and in those markets retail sales outperform the rest of the U.S., Rogers said. He added that "we continue to talk to Comcast about... how we can strengthen it as an alternative in their overall mix." TiVo continues to work with Charter Communications "both with respect to their plans for how to deal with legacy boxes and for their future plans on cloud-based future implementations," Rogers said on the call.

Asked about Liberty Global's bid to acquire Virgin Media, announced earlier this month, Rogers said, "Liberty, as I've made clear, is well aware of the success that Virgin has had with TiVo... and we look forward to continuing to work with Liberty to drive further Virgin's success. We also look at it as a way to have developing relationship with Liberty Global, that we will look for opportunities where we may be able to work with them more broadly beyond Virgin."

TiVo also is on track to launch a TV Everywhere portal with its first MSO customer that will let subscribers watch video content on a variety of devices including tablets, Rogers said.

Overall, TiVo posted revenue of $88.9 million, up 34% from $66.5 million in fiscal Q4 2012. TiVo reported a net loss of $15.8 million versus net income of $7.2 million in the year-earlier quarter, which included payments from the patent-litigation settlement with AT&T.

TiVo’s Q4 service and technology revenue was $65.7 million, the highest in the company’s history, up 31% from $50 million in the same quarter a year prior.

On the litigation front, TiVo’s case against Motorola Mobility -- which is in the midst of being acquired by Arris Group -- is nearing trial, Rogers said.

The DVR company also has litigation pending against Cisco Systems and Time Warner Cable. TiVo has settled patent lawsuits with Dish Network, AT&T and Verizon Communications for more than $1 billion.

TiVo’s retail marketing efforts, which included some “modest” TV advertising featuring pro quarterback Tim Tebow, “have been successful in driving increased brand awareness of TiVo, something we hope will drive even better results going forward,” Rogers said.

For the first quarter of fiscal 2014, TiVo anticipates service and technology revenues in the range of $60 million to $62 million, with lower technology revenue in the quarter as “revenue recognition from key MSO projects is expected to occur in the second quarter as opposed to first quarter,” the company said. TiVo anticipates net loss of $16 million to $19 million for Q1.