UPDATE, 3:10 PM: TiVo told analysts in a conference call that litigation expenses will grow as the company gears up for battles to defend its DVR patents. The U.S. International Trade Commission holds a hearing in December. In January TiVo’s case against AT&T goes to trial in Texas; there are other court actions involving Verizon and Microsoft. The judge in the Texas case — who also oversaw TiVo’s successful suits against Dish Network — is due to retire in March. “Obviously there’ll be some delay,” TiVo General Counsel Matthew Zinn says. Research and development costs also will rise as TiVo tweaks its software to work with DVRs used by its growing number of partners including DirecTV, Comcast, RCN, Virgin Media, and Spanish broadband company ONO. “We’re investing substantially additional dollars this year to build a common code base” that would work on multiple platforms, CEO Tom Rogers says. He adds that TiVo is developing a product that integrates Comcast’s Xfinity broadband service. Consumers will buy it as a retail product. “We think that’s an attractive model” for cable operators that want to offer advanced services without spending a lot on equipment, Rogers says. He wouldn’t disclose how much TiVo collects from the customers who go through cable and satellite services, but noted that they “contribute in a significant way (to earnings) once we get past the R&D costs.”
TiVo says it still has an ample supply of hard drives despite the floods in Thailand this month that crippled companies that manufacture parts for the digital storage devices. But CFO Anna Brunelle warned that the situation is “evolving.” At the end of conference call with analysts TiVo shares were up 6% in after market trading from today’s $9.57 closing price.
PREVIOUS, 1:34 PM: Shares of the DVR pioneer are up 4.6% in post market trading after the company reported that it exceeded its own guidance, and analyst expectations, for the quarter that ended in October. TiVo posted a net loss of $24.5M, vs its $20.6M loss in the period a year ago, on revenues of $64.8M, up 27.4%. The revenue figure blew away the Street’s $50.6M forecast. And the net loss of 21 cents a share was slightly better than the expected 23 cent loss. Just as significant: TiVo said that its total subscriptions improved 6.1% since July, ending at 2.05M. That’s the first quarter-over-quarter increase TiVo has seen since early 2007. The improvement is largely due to Virgin Media’s roll out of TiVo-equipped DVRs to its UK customers. The more lucrative customer base of people buying TiVo service directly from the company declined 2.6% to 1.14M. CEO Tom Rogers says that “DirecTV intends to launch its TiVo offering in select markets in December with a nationwide rollout to follow early next year. All of this is a testament to our leadership in advanced television and our ability to drive meaningful solutions to market.”