TiVo
The DVR pioneer is proud to post its highest fiscal first-quarter revenue in three years, but let's hit the pause button long enough to dissect that claim. TiVo's gain results entirely a significant boost in hardware revenue, partly thanks to the new Premiere boxes that launched midway through the quarter.
This may not seem like a bad thing, but TiVo's hardware gross margins have been historically negative. There's a reason why TiVo backs out the hardware contribution, providing the more telling service and technology revenue on a quarterly basis. How is TiVo faring on that front? Not so hot. Service and technology revenue of $43.2 million is both a sequential and year-over-year decline, as TiVo continues to shed subscribers.
TiVo has been eating through subs faster than Jared from Subway. It closed out the quarter with 2.5 million subscribers, far less than the 3.2 million on its rolls a year earlier. TiVo-owned subs -- the number of accounts that deal directly with TiVo -- are down to a mere 1.4 million TiVoheads. In short, a hardware surge isn't translating into a larger user base.
TiVo also posted a wider deficit for the period, losing $0.13 a share for the quarter. After a brief profitable stint, the company has posted five consecutive quarterly losses.
TiVo continues to shake its patents, despite the recent setback in its seemingly victorious case against EchoStar
There is also a fair amount of excitement over its marketing alliance with Best Buy
At least four analysts questioned TiVo executives about Google's
TiVo isn't toast. It maintains a cash-rich, debt-free balance sheet. A favorable resolution in its DISH and EchoStar litigation would make it rain even more money. However, TiVo needs to grow its subscriber base, return to profitability, and increase its service and technology revenue to matter again outside of the courtroom.
The company's 0-for-3 on those fronts at the moment. TiVo shareholders had better hope that the pause button isn't sticky.