TiVo’s quarterly earnings were boosted by the $105 million payment from EchoStar related to its patent-infringement litigation, but the DVR company otherwise would have posted a net loss as it put up the seventh straight quarter of net subscriber losses.
Excluding items related to the EchoStar litigation, TiVo would have posted a net loss of $0.9 million, compared with the company’s guidance of a net loss of $7 million to $9 million for the third quarter. Net revenue was $64.5 million, down 14.7% from $75.5 million in the year-ago quarter.
TiVo had a net loss of 163,000 subscribers for the three months ended Oct. 31, including 135,000 subscribers through partners including DirecTV and 28,000 TiVo-owned subscriptions. Cumulative total subscriptions at the end of the period were 3.46 million, down 15% from 4.07 million a year earlier.
The company touted progress with Comcast—which is planning to broaden deployment of TiVo service in the first quarter of next year, most likely in Chicago—and a new deal with DirecTV to distribute HD DVRs starting in the second half of next year.
But TiVo conceded that “many of our mass distribution deals are still in early phases of deployment and/or development.”
"Though we are pleased with our results this quarter, we recognize that no business is immune to the challenges of the current economic climate, which we expect will impact overall consumer electronics sales during the holiday season,” TiVo president and CEO Tom Rogers said in announcing the results.
TiVo announced last week it laid off an unspecified number of employees, and would incur a charge of approximately $1 million related to the headcount reduction in the current quarter.
TiVo is still awaiting a decision on its motion to find EchoStar in contempt for not disabling Dish Network receivers' DVR functionality as ordered under a Texas federal court's permanent injunction, after EchoStar lost the patent-infringement suit filed by TiVo. Judge David Folsom of the U.S. District Court for the Eastern District of Texas has scheduled a bench trial for Feb. 17 and 18, 2009.
For the fourth quarter of fiscal 2009, TiVo anticipates service and technology revenues in the range of $47 million to $49 million, and a net loss in the range of $10 million to $12 million. TiVo said it anticipates “substantially increased legal costs” in the quarter due to the accelerated discovery and bench trial scheduled for Feb. 17 relating to EchoStar's purported workaround.
Earlier Tuesday, TiVo announced the launch of a mobile site to let subscribers with broadband-connected Series2 or Series3 DVRs schedule recordings. The site, m.tivo.com, is also available to anyone to browse and search television shows.