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TiVo (TIVO) Q4 Loss Narrows Y/Y, Revenues Beat Estimates

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TiVo Corporation’s fourth-quarter 2019 loss of $1.75 per share narrowed from the year-ago quarter’s loss of $2.33.

On a non-GAAP basis, earnings per share came in at 33 cents, compared with 22 cents in the year-ago quarter.

TiVo’s revenues of $175 million surpassed the Zacks Consensus Estimate of $169 million and improved 4% year over year. Increase in IP licensing revenue driven by new deals signed in New Media, International Pay TV was a key driver.

The company’s core revenues (excluding revenues from Legacy TiVo Solutions IP Licenses, Hardware and Other Products) of $171 million (97.7% of total) reflected a 6.3% decrease from the year-ago quarter.

Further, the company mentioned that the separation of its product division from its intellectual property (IP) licensing unit is on track and the split-up is likely to be completed in April 2020.

At the same time, management sounded very optimistic about its agreement to combine in an all-stock transaction with Xperi. The company believes that combining the respective product and IP business to operate as separate business units will put them in a stronger operating and competitive position.

Quarter in Detail

In terms of business segments, Product Revenues were down 5% to $91.7 million. This decline was primarily due to a decrease in consumer revenues attributed to an increase in the amortization period for product lifetime subscriptions and lower hardware sales. Lower Platform Solutions revenue from pay TV customers was also a downside.

Revenues from Platform Solutions decreased 8% to $68.6 million.

Additionally, revenues from Other products, primarily legacy analog ACP product, plunged 57% to $1.7 million. However, Software and Services improved 18% to $19.8 million, aided by new TV Viewership Data deals.

Core Product revenues (excluding revenues from Hardware and Other Products) fell 2% to $87.6 million.

IP Licensing Revenues increased 16% year over year to $83.5 million. Revenues from US Pay TV Providers, CE Manufacturers, and New Media, International Pay TV Providers and Other grew 11%, 19% and 24% to $47.2 million, $10.6 million and 425.7 million, respectively.

Adjusted EBITDA was up 45% from the year-ago quarter to $61.2 million due to higher IP licensing revenues and the company’s cost-saving initiatives.

TiVo exited the reported quarter with cash, cash equivalents and short-term marketable securities of $425 million compared with $276.7 million at the end of the previous quarter.

TiVo Corporation Price, Consensus and EPS Surprise

TiVo Corporation Price, Consensus and EPS Surprise

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

2019 Highlights

TiVo reported revenues of $668.1 million in 2019, down 4% year over year.

Licensing, services and software accounted for 98.6% of TiVo’s 2019 total revenues while Hardware contributed 1.4%.

Guidance

For 2020, TiVo expects revenues in the range of $650-$690 million. Adjusted EBITDA is anticipated between $230 million and $260 million.

Zacks Rank and Stocks to Consider

TiVo currently carries a Zacks Rank #3 (Hold).

A few better-ranked stocks in the broader technology sector are CEVA, Inc. (CEVA - Free Report) , SYNNEX (SNX - Free Report) and Silicon Motion Technology Corporation (SIMO - Free Report) , all sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for CEVA, SYNNEX and Silicon Motion is currently pegged at 20%, 10.37% and 7%, respectively.

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