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

TiVo Corporation (NASDAQ:TIVO) 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.

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 (NASDAQ:CDNS) , ACI Worldwide, Inc. (NASDAQ:ACIW) and Avid Technology, Inc. (NASDAQ:AVID) , 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.

Biggest Tech Breakthrough in a Generation

Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.

A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft (NASDAQ:MSFT) in the 1990s. Zacks’ just-released special report reveals 7 stocks to watch. The report is only available for a limited time.

See 7 breakthrough stocks now>>