Tivo Profits From Settlement With Google, Cisco

TiVo (NASDAQ: TIVO  ) interrupted a multiyear string of losses yesterday by posting a profit for its second quarter. A recent settlement with technology heavyweights Google and Cisco Systems helped boost the company's quarterly results.

Google and Cisco agreed to pay TiVo $490 million in June to settle claims they had copied TiVo's digital video recording technology. While this amount won't have a material impact on either Google or Cisco, it means the difference between a profit and a loss for TiVo. As part of the deal, TiVo gets to collect licensing fees from both companies. Moreover, TiVo CEO Tom Rogers was quoted as saying he believes this significant increase in licensing revenue from its latest litigation settlement will translate into long-term profitability for the company.

For its second quarter, TiVo reported its highest net income in the company's history, with a profit of $268.9 million, or $1.96 per share. Service and Technology revenues rose 42% year over year to $77 million in the quarter, of which the Cisco-Google settlement contributed $6.1 million. Meanwhile, net revenue increased to $100 million in the period. Additionally, TiVo grew its subscriber base to 3.6 million, which is a 33% increase from a year ago.

TiVo has a strong cash position thanks to past litigation wins with companies such as AT&T, DISH Network, and Verizon Communications. However, TiVo's latest victory over Google and Cisco brings its total winnings to around $1.6 billion. Looking ahead, TiVo forecasts third-quarter net income of between $6 million and $8 million, helped by increased licensing revenues and significantly lower litigation expenses.


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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On August 28, 2013, at 2:00 PM, GreggBaron wrote:

    Wow, a neutral article about TiVo coming from the Motley Fool? Where's all the negativity we've grown to love?

    How about this:

    1) Change the title to: "TiVo continues to surprise by beating the street once again"

    2) TiVo just released it's latest "All-in-one" set-top box "Roamio" to accolades across the industry, to include winning their 4th Emmy!

    3) TiVo continues to grow it's subscriber base at an incredible rate and TiVo CEO Tom Rogers stated, "TiVo has now reached a very important milestone. After making significant progress over the last several years, amid scrutiny for not being net income profitable, we believe TiVo has now achieved the milestone of sustained net income profitability."

    Now that's truth and unbiased journalism!

  • Report this Comment On August 29, 2013, at 12:35 AM, SuperDave8 wrote:

    Ditto on all three points. I just got their new Roamio and it's absolutely fantastic. I have to wonder why Apple hasn't bought out TiVo. I can't imagine AppleTV even coming close to what TiVo's Roamio does.

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