In Wednesday night's earnings report and the following conference call, TiVo
Over the last three months, TiVo has launched new, more user-friendly hardware, renewed a fraying relationship with longtime partner DirecTV
Revenues were up 20% year over year -- on increased subscription and licensing revenues, not expensive hardware sales. The $56.5 million in net sales handily beat analyst expectations of about $50.6 million, and the net loss of $0.13 per diluted share wasn't as bad as the negative-$0.19-per-share forecast.
Litigation costs associated with the EchoStar lawsuit factor into these numbers, but they were not broken out separately, making it a bit harder to get a fair picture of the quarter. Depending on the outcome of the lengthy and far-from-concluded appeals process, some or all of that burden may be reimbursed in the end.
But let's go back to the future. In light of the promising court results, the company can now get excited about TiVo knockoffs from competing manufacturers like Cisco
It's a beautiful plan. Someone else gets to worry about manufacturing and the thin-to-negative margins of selling hardware, while customers still get the full TiVo experience and the company itself rakes in patent-backed licensing revenue. Customer acquisition costs fall through the floor, margins go through the roof, and both revenue and profits should grow in between.
Look for TiVo to forge new partnerships across the television market as it tries to make this vision a reality. Negotiations are already under way with Comcast
Fast-forward to further Foolishness:
- What's EchoStar up to, anyway?
- Two Fools duke it out over TiVo
- Why hasn't Google bought the company yet?
- You bought what?
TiVo is a Motley Fool Stock Advisor selection. To see why David Gardner likes it, sign up for a free 30-day trial.
Fool contributor Anders Bylund wants a pause button on his remote control for life, but he doesn't own any of the stocks discussed here. Fool disclosure rules are always presented in high definition.