TiVo's (Nasdaq: TIVO) stock hit fast-forward today after it narrowed its quarterly loss, reported rockin' subscriber numbers, and outlined an aggressive plan to capture more of the budding digital video recorder (DVR) market. Investors bid the stock higher, banking on this pivotal time as increased competition shows just how much DVRs are catching on.
Net loss in TiVo's fourth quarter was $12.4 million, or $0.18 per share, compared to a loss of $32.5 million, or $0.56 per share, in the same quarter last year. Without one-time items, that loss would have been $7.9 million, or $0.12 per share. Revenues, clearly benefiting from a holiday season when TiVo was clearly at the top of many lists, revved up 85% to $42.6 million. In the quarter, the company added 330,000 subscriptions.
Perhaps most encouraging is that TiVo's subscriber base now stands at 1.3 million, more than double that of last year.
A Motley Fool Stock Advisor pick, TiVo shook things up recently when it announced its voyeuristic, though anonymous, tendencies -- then announced a deal with Nielsen to track TV watching habits. In the company's conference call (transcript courtesy of CCBN StreetEvents), management said it continues to grow its advertising business, signing on heavyweights like Coca-Cola (NYSE: KO).
TiVo said it plans $50 million in subscription acquisition spending over the next year, aiming to more than double subs to 3 million by the end of the fiscal year. It aims to reach sustained profitability by the end of next year. In addition, it boasted $143 million in cash, its highest amount in three years.
While there is a lot to be excited about, this just may be the proving ground. The economy seems to be improving, and many consumers are ready to have some fun again. Services like TiVo, XM Satellite Radio (Nasdaq: XMSR) and Sirius (Nasdaq: SIRI), and Netflix (Nasdaq: NFLX) are gaining traction as more people sign on and spread the word.
However, cable operators have certainly seen the future in DVRs, and companies like Comcast (Nasdaq: CMCSA) offer similar services, hoping to capture people through convenience and ignorance to the TiVo brand.
TiVo's least expensive model is now available for $149 (including a $50 rebate), another aggressive move to bring more curious consumers into the fold. And TiVo plans for a return to television advertising have hit the news, what many people consider a key move in getting the brand into living rooms.
As much as certain threats still loom -- whether the company can withstand competition and ramp up more widespread adoption, and how privacy concerns stack up -- TiVo's making the right moves at a crucial time.
If TiVo's a pioneer, is it about to achieve frontier dominance? Or is competition too steep? Make your opinion known and talk TiVo on the TiVo discussion board.
Alyce Lomax does not own shares of any of the companies mentioned.
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