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TiVo's (TIVO) Q1 Suffers Loss, Revenues Meet Mark & Decline Y/Y

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TiVo Corporation (TIVO - Free Report) incurred first-quarter 2019 loss of 21 cents per share against the year-ago quarter’s earnings of 15 cents.

The company’s non-GAAP earnings per share came in at 16 cents compared with 31 cents a year ago.

TiVo’s revenues of $158.2 million, which matched the Zacks Consensus Estimate, declined 17% year over year.

The company’s core revenues (excludes revenues from Legacy TiVo Solutions IP Licenses, Hardware and Other Products) were $155.8 million (98.5% of total), representing a decline of 11% from the year-ago quarter.

The company also announced that it is separating its product division from its intellectual property (IP) licensing unit. The spin-off is likely to be completed in the first half of 2020.

TiVo Corporation Price, Consensus and EPS Surprise

TiVo Corporation Price, Consensus and EPS Surprise

TiVo Corporation price-consensus-eps-surprise-chart | TiVo Corporation Quote

Quarter in Detail

In terms of business segments, Product revenues (58% of total revenues) were down 22% to $91.3 million. Revenues from Platform Solution decreased 26% to $71 million. Revenues from Other products, primarily legacy analog ACP product, plunged 85% to $364K. However, Software and Services improved 8% to $19.9 million.

Core Product revenues (excludes revenues from Hardware and Other Products) dropped 20% to $88.9 million.

IP Licensing revenues (42%) fell approximately 8% year over year to $66.9 million due to expiration of the Legacy Time Warp agreements.

Under the IP Licensing segment, on a year-over-year basis, revenues from the U.S. Pay TV Providers declined 16% to $42 million. New Media, International Pay TV Providers and Other grew 15% to $16 million. Consumer Electronics Manufacturers dipped 4% to $8.6 million.

Core IP Licensing revenues (excludes revenues from Legacy TiVo Solutions IP Licenses) rose 4% year over year to $66.9 million owing to higher revenues from existing customers.

TiVo’s unique voice users surged 31% sequentially to 4.9 million unique users at the end of the first quarter. Additionally, quarterly queries increased 36% on a sequential basis to 324 million.

Adjusted EBITDA was down 36.5% from the year-ago quarter to $37.4 million due to lower revenues. However, the company’s cost-saving initiatives and its planned transition of its MSO partners and retail customers to deploy the TiVo service on third-party hardware are a positive.

TiVo exited the reported quarter with cash, cash equivalents and short-term marketable securities of $271.9 million compared with $320.9 million at the end of the previous reported quarter.

Guidance

For fiscal 2019, TiVo expects revenues in the range of $640-$654 million.

Adjusted EBITDA is anticipated between $172 million to $178 million.

Further, the company’s non-GAAP earnings are likely to be in the range of 72-76 cents per share in 2019.

Zacks Rank & Stocks to Consider

TiVo currently has a Zacks Rank #3 (Hold). A few better-ranked stocks in the broader Computer and Technology sector are Cadence Design Systems (CDNS - Free Report) , ACI Worldwide, Inc. (ACIW - Free Report) and Avid Technology, Inc. (AVID - Free Report) , all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for Cadence, ACI Worldwide and Avid is projected at 12%, 12% and 10%, respectively.

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