Document and Entity Information
Document and Entity Information | ||
3 Months Ended
Apr. 30, 2010 | May. 28, 2010
| |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | 2010-04-30 | |
Document Fiscal Year Focus | 2,011 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | TIVO | |
Entity Registrant Name | TIVO INC | |
Entity Central Index Key | 0001088825 | |
Current Fiscal Year End Date | --01-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 115,481,611 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | ||
In Thousands | 3 Months Ended
Apr. 30, 2010 | 12 Months Ended
Jan. 31, 2010 |
CURRENT ASSETS | ||
Cash and cash equivalents | $68,121 | $70,891 |
Short-term investments | 187,355 | 173,691 |
Accounts receivable, net of allowance for doubtful accounts of $342 and $409 | 19,683 | 16,996 |
Inventories | 12,368 | 12,110 |
Prepaid expenses and other, current (see Note 1) | 9,529 | 8,686 |
Total current assets | 297,056 | 282,374 |
LONG-TERM ASSETS | ||
Property and equipment, net of accumulated depreciation of $42,503 and $40,934, respectively | 11,238 | 10,098 |
Purchased technology, capitalized software, and intangible assets, net of accumulated amortization of $13,153 and $12,501, respectively | 8,913 | 9,565 |
Prepaid expenses and other, long-term | 1,281 | 1,263 |
Long-term investments | 7,548 | 7,512 |
Total long-term assets | 28,980 | 28,438 |
Total assets | 326,036 | 310,812 |
CURRENT LIABILITIES | ||
Accounts payable | 21,715 | 20,712 |
Accrued liabilities | 24,654 | 24,786 |
Deferred revenue, current | 35,283 | 38,952 |
Total current liabilities | 81,652 | 84,450 |
LONG-TERM LIABILITIES | ||
Deferred revenue, long-term | 30,819 | 28,990 |
Deferred rent and other long-term liabilities | 255 | 231 |
Total long-term liabilities | 31,074 | 29,221 |
Total liabilities | 112,726 | 113,671 |
COMMITMENTS AND CONTINGENCIES (see Note 6) | ||
STOCKHOLDERS' EQUITY | ||
Preferred stock, par value $0.001: Authorized shares are 10,000,000; Issued and outstanding shares - none | 0 | 0 |
Common stock, par value $0.001: Authorized shares are 275,000,000; Issued shares are 116,294,027 and 110,434,022, respectively and outstanding shares are 115,411,307 and 109,869,062, respectively | 116 | 110 |
Additional paid-in capital | 930,926 | 896,695 |
Treasury stock, at cost - 882,720 shares and 564,960 shares, respectively | (8,117) | (4,325) |
Accumulated deficit (see Note 1) | (708,913) | (694,713) |
Accumulated other comprehensive loss | (702) | (626) |
Total stockholders' equity | 213,310 | 197,141 |
Total liabilities and stockholders' equity | $326,036 | $310,812 |
1_CONDENSED CONSOLIDATED BALANC
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | ||
In Thousands, except Share data | Apr. 30, 2010
| Jan. 31, 2010
|
Accounts receivable, allowance for doubtful accounts | $342 | $409 |
Property and equipment, accumulated depreciation | 42,503 | 40,934 |
Purchased technology, capitalized software, and intangible assets, accumulated amortization | $13,153 | $12,501 |
Preferred stock, par value | 0.001 | 0.001 |
Preferred stock, Authorized shares | 10,000,000 | 10,000,000 |
Preferred stock, Issued shares | 0 | 0 |
Preferred stock, outstanding shares | 0 | 0 |
Common stock, par value | 0.001 | 0.001 |
Common stock, Authorized shares | 275,000,000 | 275,000,000 |
Common stock, Issued shares | 116,294,027 | 110,434,022 |
Common stock, outstanding shares | 115,411,307 | 109,869,062 |
Treasury stock, shares | 882,720 | 564,960 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | |||||||||||||||||||
In Thousands, except Share data | 3 Months Ended
Apr. 30, 2010 | 3 Months Ended
Apr. 30, 2009 | |||||||||||||||||
Revenues | |||||||||||||||||||
Service revenues | $36,244 | $42,129 | |||||||||||||||||
Technology revenues | 6,973 | 6,386 | |||||||||||||||||
Hardware revenues (see Note 1) | 18,169 | 6,606 | |||||||||||||||||
Net revenues | 61,386 | 55,121 | |||||||||||||||||
Cost of revenues | |||||||||||||||||||
Cost of service revenues | 10,403 | [1] | 10,150 | [1] | |||||||||||||||
Cost of technology revenues | 5,021 | [1] | 4,483 | [1] | |||||||||||||||
Cost of hardware revenues | 19,219 | 10,576 | |||||||||||||||||
Total cost of revenues | 34,643 | 25,209 | |||||||||||||||||
Gross margin | 26,743 | 29,912 | |||||||||||||||||
Research and development | 18,628 | [1] | 15,066 | [1] | |||||||||||||||
Sales and marketing | 7,760 | [1] | 5,695 | [1] | |||||||||||||||
Sales and marketing, subscription acquisition costs | 3,191 | 982 | |||||||||||||||||
General and administrative | 11,697 | [1] | 12,242 | [1] | |||||||||||||||
Total operating expenses | 41,276 | 33,985 | |||||||||||||||||
Loss from operations | (14,533) | (4,073) | |||||||||||||||||
Interest income | 369 | 190 | |||||||||||||||||
Interest expense and other | (2) | 0 | |||||||||||||||||
Loss before income taxes | (14,166) | (3,883) | |||||||||||||||||
Provision for income taxes | (34) | (16) | |||||||||||||||||
Net loss | ($14,200) | ($3,899) | |||||||||||||||||
Net loss per common share - basic and diluted | -0.13 | -0.04 | |||||||||||||||||
Weighted average common shares used to calculate basic and diluted net loss per share | 111,490,152 | 102,278,944 | |||||||||||||||||
[1]Includes stock-based compensation expense as follows : Cost of service revenues $ 132 $ 263 Cost of technology revenues 484 557 Research and development 1,786 2,491 Sales and marketing 817 685 General and administrative 2,367 3,074 |
2_CONDENSED CONSOLIDATED STATEM
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) (USD $) | ||
In Thousands | 3 Months Ended
Apr. 30, 2010 | 3 Months Ended
Apr. 30, 2009 |
Cost of service revenues, stock-based compensation | $132 | $263 |
Cost of technology revenues, stock-based compensation | 484 | 557 |
Research and development, stock-based compensation | 1,786 | 2,491 |
Sales and marketing, stock-based compensation | 817 | 685 |
General and administrative, stock-based compensation | $2,367 | $3,074 |
3_CONDENSED CONSOLIDATED STATEM
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | ||
In Thousands | 3 Months Ended
Apr. 30, 2010 | 3 Months Ended
Apr. 30, 2009 |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | ($14,200) | ($3,899) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation and amortization of property and equipment and intangibles | 2,221 | 2,310 |
Loss on disposal of fixed assets | 42 | 0 |
Stock-based compensation expense | 5,586 | 7,070 |
Utilization of trade credits | 19 | 11 |
Allowance for doubtful accounts | 32 | 97 |
Changes in assets and liabilities: | ||
Accounts receivable | (2,719) | 2,541 |
Inventories | (258) | 6,101 |
Prepaid expenses and other | (880) | 831 |
Accounts payable | (567) | (1,160) |
Accrued liabilities | (132) | (3,588) |
Deferred revenue | (1,840) | (4,852) |
Deferred rent and other long-term liabilities | 24 | 0 |
Net cash provided by (used in) operating activities | (12,672) | 5,462 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchases of short-term investments | (45,775) | (99,936) |
Sales or maturities of short-term investments | 31,999 | 79,927 |
Acquisition of property and equipment | (1,181) | (2,022) |
Acquisition of capitalized software and intangibles | 0 | (1,532) |
Net cash used in investing activities | (14,957) | (23,563) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from issuance of common stock related to exercise of common stock options | 28,651 | 7,957 |
Treasury Stock - repurchase of stock for tax withholding | (3,792) | (2,007) |
Payment under capital lease obligation | 0 | (19) |
Net cash provided by financing activities | 24,859 | 5,931 |
NET DECREASE IN CASH AND CASH EQUIVALENTS | (2,770) | (12,170) |
CASH AND CASH EQUIVALENTS: | ||
Balance at beginning of period | 70,891 | 162,337 |
Balance at end of period | $68,121 | $150,167 |
BASIS OF PRESENTATION AND SUMMA
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
3 Months Ended
Apr. 30, 2010 | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES TiVo Inc. (together with its subsidiaries the Company or TiVo) was incorporated in August 1997 as a Delaware corporation and is located in Alviso, California. The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All inter-company accounts and transactions have been eliminated in consolidation. The Company conducts its operations through one reportable segment. The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with: generally accepted accounting principles (GAAP) for interim financial information, the instructions toForm10-Q and Article 10 of Regulation S-X. Accordingly, the unaudited interim condensed consolidated financial statements do not contain all of the information and footnotes required by generally accepted accounting principles for complete audited annual financial statements. In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments necessary for the fair presentation of the Companys financial position as of April30, 2010 and January31, 2010 and the results of operations for the three month periods ended April30, 2010 and 2009 and condensed consolidated statements of cash flows for the three month periods ended April30, 2010 and 2009 consisting of normal recurring adjustments. These unaudited condensed consolidated financial statements should be read in conjunction with the Companys audited consolidated financial statements, including the notes thereto, included in the Companys annual report on Form 10-K for the fiscal year ended January31, 2010. Operating results for the three month period ended April30, 2010 are not necessarily indicative of results that may be expected for this fiscal year ending January31, 2011. In connection with the preparation of its Quarterly Report on Form 10-Q for the quarter ended April30, 2010, the Company determined that it had been overpaying revenue share to its partners in fiscal years 2009 and 2010 as a result of an error identified in reports used to calculate the revenue share amounts. The impact of the adjustment in the previous periods has resulted in an increase in hardware revenue with a corresponding increase in prepaid expenses for estimated amounts that the Company ultimately expects to be able to recover from its partners. As future events and their effects cannot be determined with precision, actual recoveries could differ from this estimate. The Company has also corrected an immaterial error in its statement of cash flows for the quarter ended April 30, 2009 whereby the change in accounts payable related to acquisition of property and equipment was incorrectly classified in the cash flows from operating activities and investing activities for each of the quarters in the year ended January 31, 2010. Management concluded that these errors were immaterial to the fiscal years 2009 and 2010 consolidated financial statements, but that its correction in the current year would be significant. Accordingly, pursuant t |
CASH AND INVESTMENTS
CASH AND INVESTMENTS | |
3 Months Ended
Apr. 30, 2010 | |
CASH AND INVESTMENTS | 2. CASH AND INVESTMENTS Cash, cash equivalents, short-term investments, and long-term investments consisted of the following: As of April30, 2010 As of January31, 2010 (in thousands) Cash and cash equivalents: Cash $ 4,621 $ 4,111 Cash equivalents: Commercial paper 21,493 14,994 Money market funds 42,007 51,786 Total cash and cash equivalents 68,121 70,891 Marketable securities: Certificate of deposit 11,400 16,401 Commercial paper 32,946 39,559 Corporate debt securities 63,400 49,833 US agency securities 33,976 26,998 US Treasury securities 20,100 15,113 Foreign government securities 25,533 25,787 Current marketable securities 187,355 173,691 Auction rate securities (1) 4,148 4,112 Non-current marketable securities 4,148 4,112 Total marketable securities 191,503 177,803 Other investment securities: Other investment securities - cost method 3,400 3,400 Total other investment securities (1) 3,400 3,400 Total cash, cash equivalents, marketable securities and other investment securities $ 263,024 $ 252,094 (1) Auction rate securities and other investment securities are included in Long-term investments on the Companys condensed consolidated balance sheets. Marketable Securities The Companys investment securities portfolio consists of various debt instruments, including corporate and government bonds, and foreign corporate and government securities, all of which are classified as available-for-sale. Approximately $4.0 million of the corporate bonds are guaranteed by the full faith and credit of the United States government under the Federal Deposit Insurance Corporations Temporary Liquidity Guarantee program (TLGP). Other Investment Securities TiVo has an investment in a private company where the Companys ownership is less than 20% and TiVo does not have significant influence. The investment is accounted for under the cost method. Contractual Maturity Date The following table summarized the estimated fair value of the Companys debt investments, designated as available-for-sale classified by the contractual maturity date of the security: April30, 2010 January31, 2010 (inthousands) (inthousands) Due within 1 year $ 153,404 $ 141,857 Due within 1 year through 5 years 33,951 31,834 Due within 5 years through 10 years 0 0 Due after 10 years 4,148 4,112 Total $ 191,503 $ 177,803 Unrealized Gains (Losses) on Marketable Investment Securities The following table summarizes unrealized gains and losses related to the Companys investments in marketable securities designated as available-for-sale: As of April30, 2010 Adjusted Cost Gross Unrealized Gains Gros |
FAIR VALUE
FAIR VALUE | |
3 Months Ended
Apr. 30, 2010 | |
FAIR VALUE | 3. FAIR VALUE Fair value is defined as the exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. The Companys financial instruments are measured and recorded at fair value, except for its cost method investment. The three-tier fair value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value is: Level1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level2 - Include other inputs that are directly or indirectly observable in the marketplace. Level3 - Unobservable inputs which are supported by little or no market activity. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The Companys cash equivalents and marketable securities are classified within Level 1 or Level 2, with the exception of the investments in auction rate securities. Some of the Companys cash equivalents and marketable securities are classified as Level 2 because these securities are valued using a standard pricing methodology that utilizes observable market data for all inputs. The Companys investments in auction rate securities are classified within Level 3 because they are valued using a discounted cash flow model. Some of the inputs to this model are unobservable in the market and are significant. AssetsandLiabilitiesMeasuredatFairValueona RecurringBasis Total QuotedPrices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) (in thousands) Assets: Cash equivalents: Commercial paper $ 21,493 $ 0 $ 21,493 $ 0 Money market funds 42,007 42,007 0 0 Short-term investments: Certificate of deposit 11,400 11,400 0 0 Commercial paper 32,946 0 32,946 0 Corporate debt securities 63,400 0 63,400 0 US agency securities 33,976 0 33,976 0 US Treasury securities 20,100 20,100 0 0 Foreign government securities 25,533 0 25,533 0 Long-term investments: Auction rate securities 4,148 0 0 4,148 $ 255,003 $ 73,507 $ 177,348 $ 4,148 The following table is a reconciliation of financial assets measured at fair value using significant unobservable inputs (Level 3) during the three months ended April30, 2010 (in thousands): AuctionRateSecurities (ThreeMonthsApril30,2010) Balance, January31, 2010 $ 4,112 Transfer into Level 3 0 Total unrealized gains included in accumulated other comprehensive loss 36 |
INDEMNIFICATION ARRANGEMENTS AN
INDEMNIFICATION ARRANGEMENTS AND GUARANTEES | |
3 Months Ended
Apr. 30, 2010 | |
INDEMNIFICATION ARRANGEMENTS AND GUARANTEES | 4. INDEMNIFICATION ARRANGEMENTS AND GUARANTEES Product Warranties The Companys standard manufacturers warranty period to consumers for TiVo-enabled DVRs is 90 days for parts and labor from the date of consumer purchase, and from 91-365 days for parts only, also known as the Limited Warranty. Within the limited warranty period, consumers are offered a no-charge exchange for TiVo-enabled DVRs returned due to product defect, within 90 days from the date of consumer purchase. Thereafter, consumers may exchange a TiVo-enabled DVR with a product defect for a charge. As of April30, 2010 and January31, 2010, the accrued warranty reserve was $328,000 and $233,000, respectively. The Companys accrued warranty reserve is included in accrued liabilities in the accompanying condensed consolidated balance sheets. The Company also offers customers separately priced optional 2-year and 3-year extended warranties. The Company defers and amortizes cost and revenue associated with the sales of the extended warranties over the warranty period or until a warranty is redeemed. As of April30, 2010, the extended warranty deferred revenue and cost was $451,000 and $135,000, respectively. As of January31, 2010, the extended warranty deferred revenue and cost was $234,000 and $70,000, respectively. Indemnification Arrangements The Company undertakes indemnification obligations in its ordinary course of business.For instance, the Company has undertaken to indemnify its underwriters and certain investors in connection with the issuance and sale of its securities.The Company has also undertaken to indemnify certain customers and business partners for, among other things, the licensing of its products, the sale of its DVRs, and the provision of engineering and consulting services. Pursuant to these agreements, the Company may indemnify the other party for certain losses suffered or incurred by the indemnified party in connection with various types of claims, which may include, without limitation, intellectual property infringement, advertising and consumer disclosure laws, certain tax liabilities, negligence and intentional acts in the performance of services and violations of laws, including certain violations of securities laws with respect to underwriters and investors. The term of these indemnification obligations is generally perpetual. The Companys obligation to provide indemnification would arise in the event that a third-party filed a claim against one of the parties that was covered by the Companys indemnification obligation. As an example, if a third-party sued a customer for intellectual property infringement and the Company agreed to indemnify that customer against such claims, its obligation would be triggered. The Company is unable to estimate with any reasonable accuracy the liability that may be incurred pursuant to its indemnification obligations, if any. A few of the variables affecting any such assessment include but are not limited to: the nature of the claim asserted; the relative merits of the claim; the financial ability of the party suing the indemnified party to engage in protracted litigation; the number of parties seeking indem |
NET INCOME
NET INCOME (LOSS) PER COMMON SHARE | |
3 Months Ended
Apr. 30, 2010 | |
NET INCOME (LOSS) PER COMMON SHARE | 5. NET INCOME (LOSS) PER COMMON SHARE Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares outstanding, excluding unvested restricted stock. The following table sets forth the computation of basic and diluted earnings per common share: ThreeMonthsEndedApril30, 2010 2009 (Inthousands,exceptpershareamounts) Numerator: Net income (loss) $ (14,200 ) $ (3,899 ) Denominator: Weighted average shares outstanding, excluding unvested restricted stock 111,490 102,279 Weighted average effect of dilutive securities: Stock options and restricted stock 0 0 Denominator for diluted net income (loss) per common share 111,490 102,279 Basic net income (loss) per common share $ (0.13 ) $ (0.04 ) Diluted net income (loss) per common share $ (0.13 ) $ (0.04 ) The weighted average number of shares outstanding used in the computation of basic and diluted net loss per share does not include the effect of the following potentially outstanding common stock. The effects of these potentially outstanding shares were not included in the calculation of diluted net loss per share because the effect would have been anti-dilutive: As of April30, 2010 2009 Unvested restricted stock 4,900,518 4,327,653 Options to purchase common stock 10,978,706 19,627,872 Potential shares to be issued from ESPP 3,425,866 4,088,993 Total 19,305,090 28,044,518 |
COMMITMENT AND CONTINGENCIES
COMMITMENT AND CONTINGENCIES | |
3 Months Ended
Apr. 30, 2010 | |
COMMITMENT AND CONTINGENCIES | 6. COMMITMENT AND CONTINGENCIES Legal Matters Intellectual Property Litigation. On January5, 2004, TiVo filed a complaint against EchoStar Communications Corporation and EchoStar DBS Corporation in the U.S. District Court for the Eastern District of Texas alleging willful and deliberate infringement of U.S. Patent No.6,233,389, entitled Multimedia Time Warping System. The Company subsequently amended its complaint to add related entities (collectively EchoStar). The Company alleges that it is the owner of this patent, and further alleges that the defendants have willfully and deliberately infringed this patent by making, selling, offering to sell and/or selling digital video recording devices, digital video recording device software, and/or personal television services in the United States. On April13, 2006, the jury rendered a verdict in favor of the Company in the amount of approximately $74.0 million dollars. The jury ruled that the Companys patent is valid and that all nine of the asserted claims in the Companys patent are infringed by each of the accused EchoStar products. The jury also ruled that the defendants willfully infringed the patent. On September8, 2006 the district court issued an Amended Final and Permanent injunction that prohibited the defendants from making, using, offering for sale or selling in the United States the following EchoStar DVRs: DP-501, DP-508, DP-510, DP-721, DP-921, DP-522, DP-625, DP-942, and all EchoStar Communications Corporation DVRs that are not more than colorably different from any of these products. On October3, 2006, the United States Court of Appeals for Federal Circuit stayed the district courts injunction pending appeal. On January31, 2008, the U.S. Court of Appeals for the Federal Circuit in Washington, D.C. unanimously ruled in favor of the Company in connection with EchoStars appeal of the district court judgment of patent infringement against EchoStar with respect to Claims 31 and 61 of the patent (the so called software claims) of the patent, upholding the full award of damages from the district court, and ordering that the stay of the district courts injunction against EchoStars infringing digital video recorders that was issued pending appeal will dissolve when the appeal becomes final. The district courts judgment of infringement by EchoStar of certain other claims of the patent (the so called hardware claims) were reversed and remanded for further proceedings. On October6, 2008, the Supreme Court denied EchoStars writ of certiorari. On October8, 2008, the Company received $104.6 million from EchoStar of which approximately $87.8 million represents damages through September8, 2006 and was recorded as litigation proceeds within the operating expense section of TiVos statement of operations. The remaining approximately $16.8 million was recorded as interest income and represented pre- and post-judgment interest through October8, 2008. With respect to the district courts injunction and damages after September8, 2006, the district court held a hearing on EchoStars alleged work around of the Companys patent on February17, 2009. On June2, 2009, the district court found EchoStar in cont |
COMCAST AGREEMENT
COMCAST AGREEMENT | |
3 Months Ended
Apr. 30, 2010 | |
COMCAST AGREEMENT | 7. COMCAST AGREEMENT On March15, 2005, the Company entered into a non-exclusive licensing and marketing agreement with Comcast STB Software DVR, LLC (Comcast STB), a wholly-owned subsidiary of Comcast Corporation, and Comcast Corporation, as guarantor of Comcast STBs obligations under the agreement. The agreement was subsequently amended several times, most recently on March27, 2008. The Company agreed to develop a TiVo service software solution for deployment on Comcasts DVR platforms. In addition, the Company agreed to develop a TiVo Interactive Advertising Management System for deployment on Comcast platforms to enable the provision of local and national advertising to Comcast subscribers. Acceptance of the delivery of the TiVo service software solution by Comcast occurred on June27, 2007 and the TiVo service has launched in its initial market. Comcast accepted the TiVo advertising management system on March31, 2008. Our statements of work with Comcast provide for continued funding for engineering services for the development of additional releases of the TiVo-branded, TiVo-service enabling software for the Comcast DVR platforms and to enable such software on other Comcast DVR platforms. Revenue from this additional engineering work is recognized using the percentage-of-completion method. During the three months ended April30, 2010 and 2009, the Company recognized $3.3 million and $4.8 million, respectively in technology revenues and $1.7 million and $3.3 million, respectively in cost of technology revenues. |
DEVELOPMENT AGREEMENT AND SERVI
DEVELOPMENT AGREEMENT AND SERVICES AGREEMENT WITH DIRECTV, INC. | |
3 Months Ended
Apr. 30, 2010 | |
DEVELOPMENT AGREEMENT AND SERVICES AGREEMENT WITH DIRECTV, INC. | 8. DEVELOPMENT AGREEMENT AND SERVICES AGREEMENT WITH DIRECTV, INC. On September3, 2008, the Company extended its current agreement with DIRECTV for the development, marketing, and distribution of a new HD DIRECTV DVR featuring the TiVo service. Under the terms of this non-exclusive arrangement, TiVo is developing a version of the TiVo service for DIRECTVs broadband-enabled HD DVR. TiVo is working with DIRECTV with the intention to deploy this product to consumers later this year. DIRECTV also has certain additional annual obligations to market and promote the new HD DIRECTV DVR featuring the TiVo Service once it has launched. DIRECTV, upon the deployment of high definition DIRECTV DVRs with TiVo service, is entitled to recoup, over time, a portion of certain development fees through a reduction in certain subscription fees. The new agreement also extends the mutual covenant not to sue with respect to each companys products and services throughout the term of the new agreement. Under this new agreement, DIRECTV will pay a substantially higher monthly fee for households using the new high definition DIRECTV DVRs with TiVo (when and if the new version of the TiVo service is deployed) than the fees for previously deployed DIRECTV DVRs with TiVo service. DIRECTV will continue to pay the current monthly fee for all households using only the previously deployed DIRECTV DVRs with TiVo service. The fees paid by DIRECTV are subject to monthly minimum payments that escalate during the term of the agreement starting in 2010 and those minimum payments are substantially higher thanin the prior agreement. Due to uncertainties over the ultimate profit margin on the development work, the Company recognizes revenues and costs for the development of the TiVo service for DIRECTVs broadband-enabled HD DVR based on a zero profit model, which results in the recognition of equal amounts of revenues and costs. During the three months ended April30, 2010 and 2009, the Company recognized $2.5 million and $1.0 million in technology revenues and $2.5 million and $1.0 million in cost of technology revenues, respectively related to the development of the TiVo service for DIRECTVs broadband-enabled HD DVR. |
COMPREHENSIVE INCOME
COMPREHENSIVE INCOME (LOSS) | |
3 Months Ended
Apr. 30, 2010 | |
COMPREHENSIVE INCOME (LOSS) | 9. COMPREHENSIVE INCOME (LOSS) The components of comprehensive income (loss) are as follows: ThreeMonthsEndedApril30, 2010 2009 (In thousands) Net income (loss) $ (14,200 ) $ (3,899 ) Other comprehensive income (loss): Unrealized gain (loss) on marketable securities (76 ) (250 ) Comprehensive income (loss) $ (14,276 ) $ (4,149 ) |