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Rovi Corporation (ROVI)
Q4 2013 Earnings Conference Call
February 12, 2014 5:00 p.m. ET
Lori Barker - Vice President, Investor Relations
Peter Halt - Chief Financial Officer and Chief Accounting Officer
Thomas Carson - Chief Executive Officer, President and Director
John Bright - Avondale Partners
Shateel Alam - Goldman Sachs
Ralph Schackart - William Blair
Todd Mitchell - Brean Capital
Andy Hargreaves - Pacific Crest Securities
James Goss - Barrington Research
James Medvedeff - Cowen and Company
Eric Wold - B. Riley
Previous Statements by ROVI
» Rovi Corporation Discusses Q4 2013 Results (Webcast)
» Rovi Management Discusses Q3 2013 Results - Earnings Call Transcript
» Rovi Management Discusses Q2 2013 Results - Earnings Call Transcript
» Rovi Corporation (ROVI) Management Discusses Q2 2013 Results (Webcast)
I'd now like to turn the call over to Ms. Lori Barker, Vice President of Investor Relations.
Good afternoon, and thank you for joining us today. I'm joined by Tom Carson, our President and CEO; and Peter Halt, our Chief Financial Officer.
Before we discuss our fourth quarter results, which were released earlier today, I would like to start with some housekeeping items.
First, during our conference call, we will be making forward-looking statements, including statements regarding Rovi's forecast of future revenues, expenses and earnings, share buybacks as well as possible outcomes and timing of contract negotiations, litigation, the future sale of DivX and MainConcept businesses, business strategy, deployment plans and product plans.
These forward-looking statements are subject to risks and uncertainties that may cause actual results to vary materially from today's forward-looking statements. Factors that could cause actual results to differ materially from these forward-looking statements are described in our Form 10-K for the year ended December 31, 2013, and other SEC reports and filings made from time to time. And we encourage you to review the discussion of those factors in those reports and filings.
All of our statements are made as of today, February 12, 2014, based on information available to us today, and except as required by law, we assume no obligation to update any such statements.
Second, this presentation includes non-GAAP financial measures. This presentation is not intended to be a substitute for our financial results presented in conformity with Generally Accepted Accounting Principles in the United States, and investors and potential investors are encouraged to review the reconciliation of adjusted pro forma financial measures included in our earnings release.
The most directly comparable GAAP information and reconciliation between the non-GAAP and GAAP figures are included in our Q4 2013 earnings press release, which has been furnished to the SEC in Form 8-K and is available on the Investor Relations section of our web page at www.rovicorp.com.
Finally, the live webcast of this conference call is available in the Investor Relations section of our web page, and a replay of the audio webcast will be available on the website shortly after this webcast ends, and will remain on the website until our next quarterly earnings call.
Now I would like to turn the call over to Peter.
Thank you, Lori. Good afternoon, everyone, and thanks for joining our call. Hopefully, everyone has had a chance to see the earnings release we issued today with our results for the fourth quarter and full year 2013.
On today's call, I'll give you our financial highlights, some context around our results and our 2014 financial expectation. Then, Tom will discuss some of the key events in the quarter, as well as his outlook on 2014. Tom will also speak in some detail about our product business.
Before we get into the specifics for the quarter, I'd like to remind everyone that we're actively engaged in the process of selling DivX and MainConcept businesses. As such, they are not classified into continuing operations and are not included in the adjusted pro-forma or APF results, we'll discuss today.
As I mentioned in our investor meeting at CES in January, we expect to complete the sale of these businesses by no later than the end of the second quarter. As a result of selling of these businesses, we have adjusted the revenue verticals that we reported. We're no longer reporting a CE delivery and display vertical. ACP sales with CE companies, which have previously been included with DivX and our CE delivery and display vertical are now reported along with ACP entertainment revenues and the other vertical.
Additionally, we're now reporting all data sales to service providers and virtual service providers in our service provider vertical. Previously, data sales to virtual service providers were included in the other vertical.
We believe with these reclassifications, reported revenue more meaningfully aligned with our sales verticals that will provide investors greater insight to the headwinds from ACP and other (subset) product.
Turning to our results, the fourth quarter benefited from new IP deals with Samsung and Google for the second-screen, and a substantial new product arrangement with America Movil. These three agreements were also notable as this means we successfully closed each of the deals that slipped out of Q3.
We also closed several renewals, including a couple of earlier renewals, which help position us well for the upcoming year. As a result, fourth quarter revenues were $152.4 million or up $19.8 million or 15% from the fourth quarter of 2012.
Closing these deals allowed us to come at the high-end of the expectations we provided on our third quarter earnings call as adjusted to exclude discontinued operation. For the full year, revenues were $538.1 million, up $12 million (from 2012).