These are the days when TiVo (NASDAQ:TIVO) shareholders will want to rewind and play over again and again. The stock shot up last night after the company posted a quarterly report that featured a much smaller loss than Wall Street was expecting on a much stronger top-line showing.

TiVo's transformation from a clunky hardware provider to a dominant entertainment software licensing company continues. Service and subscription revenues soared by 59% to $40 million, while hardware sales fell to the point where they are now making up less than 15% of the company's net revenues.

Yes, selling fewer boxes is a good thing now that companies like Comcast (NASDAQ:CMCSA) and DirecTV (NYSE:DTV) are looking to pay TiVo royalties for providing its software functionality on third-party digital video recorder boxes. The shift in the revenue mix is the reason that gross margins have more than doubled over the past year. The stock? Well, it has also more than doubled since bottoming out in February.

Perhaps that's why I'm feeling pretty good these days. After all, I did catch a decent amount of flak back in January, when I predicted that TiVo was going to bounce back in 2005. It has.

That's good news to subscribers of our Motley Fool Stock Advisor newsletter service, which recommended TiVo stock a while back. Between the software deals and the recent moves indicating that the company may become the Google (NASDAQ:GOOG) or Yahoo! (NASDAQ:YHOO) of the television space by selling targeted ads on playbacks, could it get any better for TiVo these days?

Sure. It could be profitable. And that is exactly what the company is expecting by this fiscal year's fourth quarter. With so much going right for the company these days, the turnaround is here. Now the question to ask is, how high can TiVo go? We'll have to see how successful the company will be in licensing its functionality, and how the market will welcome ads on TiVo -- because, after all, a lot of folks buy a TiVo to blaze past the sponsored spots. Once we see how those things pan out, we'll be able to more accurately gauge the company's worth.

Some recent TiVo tidbits:

Longtime Fool contributor Rick Munarriz does have a TiVo, but he does not own shares in the company. The Fool has a disclosure policy. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.