TiVo (TIVO) Incurs Loss in Q4, Misses Revenue Estimates

TiVo CorporationTIVO reported fourth-quarter 2018 loss of $2.33 per share against year-ago quarter's earnings of 15 cents.

The company's non-GAAP earnings per share came in at 21 cents compared with 48 cents a year ago.

TiVo's revenues decreased 21% year over year to $168.5 million. The top line also missed the Zacks Consensus Estimate of $174 million.

The company's core revenues (excludes revenues from Legacy TiVo Solutions IP Licenses, Hardware and Other Products) were $160.98 million, a decline of 11% from the year-ago quarter.

Moreover, the company could not provide any update on its ongoing strategic review process.

Quarter in Detail

Hardware division's revenues declined to $3.8 million from $7.7 million recorded in the year-ago quarter. Sales of Other Products, primarily legacy analog ACP product, were $3.7 million. The company realized no revenues from the Legacy TiVo Time Warp deals as agreements with Time Warp expired last July.

In terms of business segments, Product revenues were down 4% to $96.5 million. Revenues from Platform Solutions decreased 8% to $74.5 million. Software and Services declined 5% to $18.3 million. However, Other category grew from $689K to $3.7 million.

Core Product revenues (excludes revenues from Hardware and Other Products) declined 3% to $89 million owing to the company's shift to ASC 606 revenue standard, which per management, resulted in a $1.3 million decline in the top line. Increase in revenues from TiVo MSO customers was a positive.

IP Licensing revenues declined approximately 37% year over year to $71.99 million as it included no Time Warp revenues. In comparison, the company recognized $25.8 million of Time Warp revenues in the year-ago quarter. Further, fall in revenues from an out-of-license Consumer Electronics Manufacturers was an overhang.

Under the IP Licensing segment, on a year-over-year basis, revenues from the U.S. Pay TV Providers declined 49% to $42.3 million. New Media, International Pay TV Providers and Other grew 21% to $20.7 million. Consumer Electronics Manufacturers decreased 31% to $8.9 million due to expiration of license with a customer.

Core IP Licensing revenues (excludes revenues from Legacy TiVo Solutions IP Licenses) declined 18% year over year, primarily due to a $12.3 million decrease in revenues from catch-up payments.

TiVo's unique voice users grew 54% sequentially to 3.7 million unique users at the end of fourth quarter. Additionally, quarterly queries grew 93% on a sequential basis to 238 million.

The company's total cost and expenses decreased 9.6% year over year to $126.3 million on the back of reduced hardware sales and the company's ongoing cost-reduction efforts.

Adjusted EBITDA declined 43.5% from year-ago quarter to $42.1 million due to lower revenues.

Non-GAAP pre-tax income was $30.2 million compared with $60.3 million a year ago.

TiVo exited the reported quarter with cash, cash equivalents and short-term marketable securities of $320.9 million compared with $311.8 million at the end of the previous quarter.

Zacks Rank & Stocks to Consider

TiVo currently has a Zacks Rank #3 (Hold). A few better-ranked stocks in the broader technology sector are CommVault Systems, Inc. CVLT , MeetMe, Inc. MEET and Fortinet Inc. FTNT , each 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 CommVault, MeetME and Fortinet is projected at 15.8%, 20% and 16.8%, respectively.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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