Exhibit 99.1
Contacts: | ||
Investor Relations: | Press Relations: | |
Ed Lockwood (408) 519-9345 Email:ir@tivo.com | Kathryn Kelly (408) 519-9245 Email:kkelly@tivo.com |
TiVo Third Quarter Subscription Growth Doubles;
Expects Continued Growth Momentum this Holiday Season
• | TiVo subscription base reaches 2.3 million, twice the level of a year ago; |
• | Service revenues grew 73% over Q3 of last year; |
• | New DVD recorders, new service offerings, $99 offer, and advertising expected to drive record holiday demand |
SAN JOSE, Calif. – Nov. 22, 2004 – TiVo (NASDAQ: TIVO), the creator of and a leader in television services for digital video recorders (DVRs), reported today that it added approximately 419,000 total subscriptions in the third quarter, over twice the number it added in Q3 of last year. In the past twelve months, the Company’s total installed base has more than doubled to approximately 2.3 million.
Service revenues for the quarter were $27.7 million, a 73% increase over Q3 of last year. Net loss for the quarter was ($26.4) million, or ($0.33) per share, compared to a net loss of ($7.4) million, or ($0.11) per share, for the three months ended October 31, 2003. The increase in net loss and net loss per share for the quarter reflects the Company’s previously announced investment in subscription acquisition activities to accelerate subscription growth during fiscal year 2005.
Q3 Subscription Growth Fueled by TiVo’s Strong Brand Position in Retail
TiVo added approximately 419,000 total net new subscriptions in the quarter. Of this total, approximately 316,000 resulted from TiVo’s relationship with DIRECTV, growth of 111% compared to last year’s Q3. New TiVo-Owned subscription additions in Q3 were 103,000, representing an increase of 75% compared to Q3 of last year.
“The overall subscription growth demonstrates that the demand for TiVo is strong, and the combined retail channel is thriving,” commented Mike Ramsay, Chairman and CEO of TiVo. “Today, TiVo is available in over 4,000 retail stores, and features a broad selection of DVRs at attractive pricing, making TiVo the must-have gift for consumers this holiday season.”
Management Provides Guidance for Q4
Management also provided guidance for a record 575,000 to 700,000 net new subscriptions in the quarter ending January 31, 2005. This includes 200,000 to 275,000 TiVo-Owned net additions, and 375,000 to 425,000 DIRECTV net additions in the period. For the fiscal year, this would result in record growth in new TiVo subscriptions, more than doubling the Company’s subscription base, and ending the year with approximately 3.0 million subscriptions.
Fourth Quarter Management Guidance | Quarter ending January 31, 2005 | |
(in millions, except subscription numbers) | ||
Service Revenues | $32.5 -$33.3 | |
Technology Revenues | $0.3 - $0.5 | |
Service and Technology Revenues | $32.8 - $33.8 | |
Rebates, Revenue Share and Other Payments to Channel | $(26.0) - $(28.0) | |
Cost of Service and Technology Revenues | $10.6 - $11.2 | |
Hardware Gross Margin | $0.0 - $0.0 | |
Gross Margin | $(3.3) - $(5.9) | |
Operating Loss | $(33.0) - $(36.0) | |
TiVo-Owned Subscription Net Additions | 200,000 – 275,000 | |
DIRECTV Subscription Net Additions | 375,000 – 425,000 | |
Total Subscription Net Additions | 575,000 – 700,000 | |
Cumulative Subscriptions | Approx. 3.0 million |
Conference Call and Web Cast
TiVo will host a conference call to discuss third quarter financial and operating performance at 2:00 pm PT (5:00 pm ET), today, Nov. 22, 2004. To listen to the discussion, please visit www.tivo.com/ir and click on the link provided for the webcast conference call or dial (800) 565-5442 and use the conference ID number 976927. The webcast will be archived and available at www.tivo.com/ir or by dialing (888) 203-1112 and entering the conference ID number 976927.
About TiVo Inc.
Founded in 1997, TiVo (NASDAQ: TIVO), a pioneer in home entertainment, created a brand new category of products with the development of the first digital video recorder (DVR). Today, the Company continues to revolutionize the way consumers watch and access home entertainment by making TiVo the focal point of the digital living room, a center for sharing and experiencing television, music, photos and other content. TiVo connects consumers to the digital entertainment they want, where and when they want it. The Company is based in Alviso, Calif.
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, subscriptions, and future earnings and financial results. Forward-looking statements generally can be identified by the use of forward-looking terminology such as, “believe,”
“expect,” “may,” “will,” “intend,” “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 other potential factors described under “Factors That May Affect Future Operating Results” in the Company’s public reports filed with the Securities and Exchange Commission, including the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2004, as amended, and the Quarterly Reports on Form 10-Q for the quarters ended April 30, 2004 and July 31, 2004. 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 and the TiVo Logo are registered trademarks of TiVo Inc. in the United States and other jurisdictions. All rights reserved. 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 STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Three Months Ended | Nine Months Ended | |||||||||||||||
October 31, 2004 | October 31, 2003 | October 31, 2004 | October 31, 2003 | |||||||||||||
Service revenues | $ | 27,678 | $ | 16,018 | $ | 74,170 | $ | 42,477 | ||||||||
Technology revenues | 699 | 6,656 | 7,141 | 13,671 | ||||||||||||
Service and Technology revenues | 28,377 | 22,674 | 81,311 | 56,148 | ||||||||||||
Hardware sales | 27,894 | 24,479 | 60,823 | 47,345 | ||||||||||||
Rebates, rev share & other pmts to channel | (17,944 | ) | (3,897 | ) | (29,508 | ) | (5,045 | ) | ||||||||
Net revenues | 38,327 | 43,256 | 112,626 | 98,448 | ||||||||||||
Cost of service revenues | 6,505 | 4,370 | 18,934 | 12,453 | ||||||||||||
Cost of technology revenues | 1,465 | 4,464 | 6,135 | 11,113 | ||||||||||||
Cost of hardware sales | 28,486 | 25,413 | 68,056 | 48,149 | ||||||||||||
Gross margin | 1,871 | 9,009 | 19,501 | 26,733 | ||||||||||||
Research and development | 9,291 | 5,432 | 26,428 | 16,693 | ||||||||||||
Sales and marketing | 14,212 | 5,704 | 25,838 | 14,205 | ||||||||||||
General and administrative | 4,366 | 3,949 | 12,399 | 11,788 | ||||||||||||
Loss from operations | (25,998 | ) | (6,076 | ) | (45,164 | ) | (15,953 | ) | ||||||||
Interest and other income (expense), net | (274 | ) | (1,197 | ) | (905 | ) | (3,552 | ) | ||||||||
Provision for taxes | (78 | ) | (115 | ) | (108 | ) | (152 | ) | ||||||||
Net loss attributable to common stockholders | $ | (26,350 | ) | $ | (7,388 | ) | $ | (46,177 | ) | $ | (19,657 | ) | ||||
Net loss per common share - basic and diluted | $ | (0.33 | ) | $ | (0.11 | ) | $ | (0.58 | ) | $ | (0.30 | ) | ||||
Weighted average common shares used to calculate basic & diluted | 80,267 | 68,226 | 80,088 | 66,027 | ||||||||||||
TIVO INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
October 31, 2004 | January 31, 2004 | |||||
ASSETS | ||||||
Cash, cash equivalents and short-term investments | $ | 88,532 | $ | 143,235 | ||
Accounts receivable, net | 25,158 | 12,131 | ||||
Inventories | 36,434 | 8,566 | ||||
Prepaid expenses and other | 6,888 | 9,063 | ||||
Intangible, property and equipment, net | 10,733 | 10,896 | ||||
Total assets | $ | 167,745 | $ | 183,891 | ||
LIABILITIES & STOCKHOLDERS’ EQUITY | ||||||
Accounts payable and other liabilities | $ | 50,623 | $ | 31,967 | ||
Deferred revenue | 85,458 | 80,287 | ||||
Convertible notes payable, long term (Face Value $10,450) | 7,301 | 6,005 | ||||
Total stockholders’ equity | 24,363 | 65,632 | ||||
Liabilities & stockholders’ equity | $ | 167,745 | $ | 183,891 | ||
TIVO INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Nine Months Ended | ||||||||
October 31, 2004 | October 31, 2003 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net loss attributable to common stockholders | $ | (46,177 | ) | $ | (19,657 | ) | ||
Non-cash adjustments to reconcile net loss to net cash provided by operating activities: | 5,508 | 8,649 | ||||||
Changes in: | ||||||||
Working capital | (21,955 | ) | (12,857 | ) | ||||
Long-term prepaid assets and liabilities | 2,077 | (204 | ) | |||||
Deferred revenue | 5,171 | 3,271 | ||||||
Net cash used in operating activities | (55,376 | ) | (20,798 | ) | ||||
Net cash used in investing activities | (3,126 | ) | (1,637 | ) | ||||
Net cash provided by financing activities | 3,799 | 40,041 | ||||||
NET CHANGE IN CASH AND CASH EQUIVALENTS | ||||||||
Balance at beginning of period | 143,235 | 44,201 | ||||||
Balance at end of period | 88,532 | 61,807 | ||||||
Net increase (decrease) in cash | $ | (54,703 | ) | $ | 17,606 | |||
TIVO INC.
OTHER DATA
Subscriptions
Three Months Ended | Nine Months Ended | |||||||||||
(Subscriptions in thousands) | October 31, 2004 | October 31, 2003 | October 31, 2004 | October 31, 2003 | ||||||||
Subscription Net Additions | ||||||||||||
TiVo-Owned | 103 | 59 | 234 | 130 | ||||||||
DIRECTV | 316 | 150 | 737 | 248 | ||||||||
Total Subscription Net Additions | 419 | 209 | 971 | 378 | ||||||||
Cumulative Subscriptions | ||||||||||||
TiVo-Owned | 890 | 526 | 890 | 526 | ||||||||
DIRECTV | 1,413 | 476 | 1,413 | 476 | ||||||||
Total Cumulative Subscriptions | 2,303 | 1,002 | 2,303 | 1,002 | ||||||||
% of TiVo-Owned Cumulative Subscriptions paying recurring fees | 46 | % | 36 | % | 46 | % | 36 | % |
Included in the 2,303,000 subscriptions are approximately 40,000 product lifetime subscriptions that have reached the end of the 48-month period TiVo uses to recognize lifetime subscription revenue. These lifetime subscriptions no longer generate subscription revenue.