Exhibit 99.1
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Contacts: | ||
Investor Relations: Ed Lockwood | Public Relations: Scott Sutherland | |
(408) 519-9345 | (866) 262-7373 x101 | |
ir@tivo.com | scott@sutherlandgold.com |
TiVo Adds 90,000 Subscriptions in Record Second Quarter;
Raises Guidance on Stronger Than Expected Growth
Expects to Top 1 Million Subscriptions During the Holiday Season
· | Subscription growth doubled compared to last year; DIRECTV growth particularly strong |
· | Pioneer, Toshiba Introduce DVD Products With TiVo |
· | Ten TiVo Enabled Models on Retail Shelves This Holiday Season |
SAN JOSE, CA – August 21, 2003 – TiVo (NASDAQ: TIVO), the creator of television services for digital video recorders (DVRs), reported today it added a record 90,000 subscriptions in the second quarter, twice the number of subscriptions added in the same quarter of last year. Due to better than expected results in the first six months of the year, and an improved outlook for the second half, TiVo is raising its guidance for the remainder of the year.
“TiVo’s momentum is accelerating. Compared to last year, we just doubled sub growth in the first half, we’ll triple in the second half, and we expect to roll past 1 million subs during the holiday season,” said Mike Ramsay, CEO of TiVo. “Retailers are excited about current TiVo products, as well as the upcoming integrated DVD models from Toshiba and Pioneer.”
Net revenues for the second quarter were $26.7 million, including $17.4 million in Service and Technology revenue, and $8.1 million in hardware revenue. Gross Profit for the quarter was $11.2 million. Net loss for the quarter was $4.4 million, or $(0.07) per share.
Standalone Subscription Additions Grow 60 Percent in Second Quarter; Broad National Retail Distribution and Expanding Roster of TiVo-Enabled Models to Fuel Holiday Season
TiVo added 34,000 standalone subscriptions in the quarter, a growth of over 60% compared to the second quarter of last year.
Retailer demand for TiVo Series2, and the upcoming availability of new DVD/DVR integrated products, will increase consumer choice and solidify TiVo’s market position in this segment of the DVR category. Global consumer electronics leader Pioneer announced in the
quarter that it will introduce its first DVD recorder with the TiVo service in time for the holidays. The previously announced DVD player with TiVo from Toshiba is anticipated to arrive at retailers in September.
DIRECTV Subscription Additions Grow 167%
TiVo added 56,000 new subscriptions from DIRECTV in the quarter, over two-and-a-half times the result in the same period in the previous year.
“The DIRECTV TiVo combo box is accelerating deployment of the TiVo platform,” said Marty Yudkovitz, President of TiVo. “It is regarded as the best single-box DVR solution in the market. By delivering this exceptional customer experience, TiVo has helped DIRECTV achieve key business imperatives, including churn reduction, customer retention, and increased Average Revenue Per User.”
Raises Guidance
TiVo is increasing subscriber guidance for the year and now expects to add 550,000 to 650,000 new subscriptions for the year ending January 31, 2004. Based on this new subscription outlook, TiVo is narrowing guidance for service and technology revenues for the full year from a range of $62 million to $70 million, to a new range of $65 million to $70 million. TiVo is also tightening the range of operating loss guidance for the full year from a range of ($27) million to ($38) million to a range of ($27) million to ($35) million.
Below is detail of management’s guidance for the third quarter:
Third Quarter Management Guidance (in millions, except subscription numbers) | ||||||||||
Quarter ending October 31, 2003 | ||||||||||
Service Revenues | $ | 14.2 | – | $ | 14.9 | |||||
Technology Revenues | $ | 2.3 | – | $ | 2.6 | |||||
Service and Technology Revenues | $ | 16.5 | – | $ | 17.5 | |||||
Rebates, Revenue Share, and Other Payments to Channel | $ | (3.0 | ) | – | $ | (3.3 | ) | |||
Cost of service and technology revenues | $ | (6.6 | ) | – | $ | (7.1 | ) | |||
Hardware Gross Profit | $ | (1.2 | ) | – | $ | (1.7 | ) | |||
Gross Profit | $ | 5.0 | – | $ | 6.0 | |||||
Research and Development | $ | (7.6 | ) | – | $ | (7.9 | ) | |||
Sales and Marketing | $ | (5.2 | ) | – | $ | (5.5 | ) | |||
General and Administrative | $ | (4.3 | ) | – | $ | (4.5 | ) | |||
Operating Loss | $ | (9.0 | ) | – | $ | (11.0 | ) | |||
Net Activations (in thousands) | 130 | – | 160 | |||||||
Cumulative Subscriptions (in thousands) | 923 | – | 953 |
Conference Call and Web Cast
TiVo will host a conference call to discuss second quarter financial and operating performance at 2:00 pm PT (5:00 pm ET), today, August 21, 2003. To listen in, visitwww.tivo.com/ir and click on the link provided for the webcast conference call or dial (719) 457-2645 and use the password 782582. The web cast will be archived and available through August
28, 2003 atwww.tivo.com/ir or by calling (719) 457-0820 and entering conference ID number 78252.
About TiVo Inc.
Founded in 1997 with the mission to dramatically improve consumers’ television viewing experiences, TiVo is the creator of television services for digital video recorders (DVRs). TiVo’s leadership has defined and inspired the entire category, earning the company patents for pioneering inventions associated with DVR software and hardware design. TiVo was the first to deliver on the promise of consumer choice and control over TV viewing, building a loyal and passionate subscription base with over 97% of customers surveyed recommending TiVo to a friend. With a subscription base over 793,000, TiVo reported approximately $103 million in net revenues for the twelve months ending July 31, 2003. The company is headquartered in San Jose, CA. Additional information can be found atwww.tivo.com.
This release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to, among other things, TiVo’s business, services, business development, strategy, customers or other factors that may affect future earnings or financial results. Forward-looking statements generally can be identified by the use of forward-looking terminology such as, “believe,” “expect,” “may,” “will,” “intend,” “guidance,” “estimate,” “continue,” or similar expressions or the negative of those terms or expressions. Such statements involve risks and uncertainties, which could cause actual results to vary materially from those expressed in or indicated by the forward-looking statements. Factors that may cause actual results to differ materially include delays in development, competitive service offerings and lack of market acceptance, as well as the “Factors That May Affect Future Operating Results” and other risks detailed in our Annual Report on Form 10-K for the fiscal year ended January 31, 2003, and our Quarterly Report on Form 10-Q for the quarter ended April 30, 2003, filed with the Securities and Exchange Commission. We caution you not to place undue reliance on forward-looking statements, which reflect an analysis only and speak only as of the date hereof. TiVo disclaims any obligation to update these forward-looking statements.
TiVo is a registered trademark of TiVo Inc. in the United States and other jurisdictions. All other company or product names mentioned may be trademarks or registered trademarks of the respective companies with which they are associated.
TIVO INC.
CONDENSED CONSOLIDATED OF OPERATIONS
(In thousands, except per share data)
Three Months Ended July 31, 2003 | Three Months Ended July 31, 2002 | ||||||||||||||
Excluding Sony licensing/ services revenue & cost* | Items related to services | As reported | |||||||||||||
Service revenues | $ | 13,757 | $ | 9,510 | $ | 9,510 | |||||||||
Technology revenues | 3,649 | 2,621 | 11,723 | 14,344 | |||||||||||
Service and Technology revenues | 17,406 | 12,131 | 11,723 | 23,854 | |||||||||||
Hardware sales | 8,057 | 11,109 | 11,109 | ||||||||||||
Rebates, revenue share & other payments to channel | 1,209 | — | — | ||||||||||||
Net revenues | 26,672 | 23,240 | 11,723 | 34,963 | |||||||||||
Cost of service revenues | 3,909 | 4,387 | 4,387 | ||||||||||||
Cost of technology revenues | 3,020 | 1,978 | 1,211 | 3,189 | |||||||||||
Cost of hardware sales | 8,558 | 11,346 | 11,346 | ||||||||||||
Gross profit | 11,185 | 5,529 | 10,512 | 16,041 | |||||||||||
Research and development | 5,789 | 4,518 | 4,518 | ||||||||||||
Sales and marketing | 4,502 | 9,042 | 9,042 | ||||||||||||
General and administrative | 4,061 | 3,589 | 3,589 | ||||||||||||
Operating loss | (3,167 | ) | (11,620 | ) | 10,512 | (1,108 | ) | ||||||||
Interest and other income (expense), net | (1,195 | ) | (1,819 | ) | (1,819 | ) | |||||||||
Preferred stock dividend and accretion | — | — | — | ||||||||||||
Provision for taxes | (25 | ) | (111 | ) | (111 | ) | |||||||||
Net loss attributable to common stock | $ | (4,387 | ) | $ | (13,550 | ) | $ | 10,512 | $ | (3,038 | ) | ||||
Net loss per share – basic and diluted | $ | (0.07 | ) | $ | (0.28 | ) | $ | (0.06 | ) | ||||||
Shares used in per share computation | 65,834 | 47,994 | 47,994 | ||||||||||||
* In Q2 of last year, TiVo recognized licensing and professional services revenue from Sony which resulted from a source code licensing agreement signed in 2001. This represented several quarters worth of professional services work as well as a large license fee. Management believes that presenting last year’s results both with and without the effects of this recognition will facilitate investors’ comparison of last years results with this year’s results.
TIVO INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Six Months Ended July 31, 2003 | Six Months Ended July 31, 2002 | ||||||||||||||
Excluding Sony licensing/ professional services revenue & cost* | Items related to Sony licensing/ professional services revenue & cost* | As reported | |||||||||||||
Service revenues | 26,459 | $ | 17,726 | $ | 17,726 | ||||||||||
Technology revenues | 7,015 | 4,265 | 11,723 | 15,988 | |||||||||||
Service and Technology revenues | 33,474 | 21,991 | 11,723 | 33,714 | |||||||||||
Hardware sales | 22,866 | 14,889 | 14,889 | ||||||||||||
Rebates, revenue share & other payments to channel | (1,148 | ) | (600 | ) | (600 | ) | |||||||||
Net revenues | 55,192 | 36,280 | 11,723 | 48,003 | |||||||||||
Cost of service revenues | 8,083 | 8,548 | 8,548 | ||||||||||||
Cost of technology revenues | 6,649 | 3,270 | 1,211 | 4,481 | |||||||||||
Cost of hardware sales | 22,736 | 15,011 | 15,011 | ||||||||||||
Gross profit | 17,724 | 9,451 | 10,512 | 19,963 | |||||||||||
Research and development | 11,261 | 9,520 | 9,520 | ||||||||||||
Sales and marketing | 8,501 | 39,819 | 39,819 | ||||||||||||
General and administrative | 7,839 | 7,348 | 7,348 | ||||||||||||
Operating loss | (9,877 | ) | (47,236 | ) | 10,512 | (36,724 | ) | ||||||||
Interest and other income (expense), net | (2,355 | ) | 288 | 288 | |||||||||||
Preferred stock dividend and accretion | — | (1,665 | ) | (1,665 | ) | ||||||||||
Provision for taxes | (37 | ) | (111 | ) | (111 | ) | |||||||||
Net loss attributable to common stock | $ | (12,269 | ) | $ | (48,724 | ) | $ | 10,512 | $ | (38,212 | ) | ||||
Net loss per share – basic and diluted | $ | (0.19 | ) | $ | (1.02 | ) | $ | (0.80 | ) | ||||||
Shares used in per share computation | 64,928 | 47,669 | 47,669 | ||||||||||||
* In Q2 of last year, TiVo recognized licensing and professional services revenue from Sony which resulted from a source code licensing agreement signed in 2001. This represented several quarters worth of professional services work as well as a large license fee. Management believes that presenting last year’s results both with and without the effects of this recognition will facilitate investors’ comparison of last years results with this years results.
TIVO INC
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
July 31, 2003 | January 31, 2003 | |||||||
ASSETS | ||||||||
Cash, cash equivalents and short-term investments | $ | 62,815 | $ | 44,201 | ||||
Accounts receivable, net | 4,462 | 5,839 | ||||||
Accounts receivable – related parties | 1,120 | 1,271 | ||||||
Inventories | 6,642 | 7,273 | ||||||
Prepaid expenses and other | 3,055 | 3,768 | ||||||
Prepaid expenses and other – related parties | 7,474 | 7,825 | ||||||
Property and equipment, net | 10,069 | 12,143 | ||||||
Total assets | $ | 95,637 | $ | 82,320 | ||||
LIABILITIES & STOCKHOLDERS’ DEFICIT | ||||||||
Accounts payable and accrued liabilities | $ | 24,877 | $ | 33,023 | ||||
Accounts payable and accrued liabilities – related parties | 2,208 | 3,359 | ||||||
Deferred revenue | 57,438 | 56,373 | ||||||
Deferred revenue – related parties | 4,536 | 6,077 | ||||||
Convertible notes payable, long term (Face Value $10,450) | 5,133 | 4,265 | ||||||
Convertible notes payable – related parties, long term (Face | ||||||||
Value $10,000) | 4,753 | 3,920 | ||||||
Total stockholders’ deficit | (3,308 | ) | (24,697 | ) | ||||
Liabilities & stockholders’ deficit | $ | 95,637 | $ | 82,320 | ||||
Other Data
(Subscriptions in thousands)
Three Months Ended | Six Months Ended | |||||||||||
July 31, 2003 | July 31, 2002 | July 31, 2003 | July 31, 2002 | |||||||||
TiVo Service Subscriptions Net Additions | 34 | 21 | 71 | 45 | ||||||||
Service Provider Subscriptions Net Additions | 56 | 21 | 98 | 39 | ||||||||
Total Subscriptions Net Additions | 90 | 42 | 169 | 84 | ||||||||
TiVo Service Cumulative Subscriptions | 467 | 291 | 467 | 291 | ||||||||
Service Provider Cumulative Subscriptions | 326 | 173 | 326 | 173 | ||||||||
Total Cumulative Subscriptions | 793 | 464 | 793 | 464 | ||||||||
% of TiVo Service Cumulative Subscriptions paying recurring fees (excludes DIRECTV subscriptions) | 34 | % | 33 | % | 34 | % | 33 | % |