TiVo Inc. on Wednesday reported a smaller-than-expected loss for the first quarter, even as revenue fell by nearly 10 percent and higher operating costs cut into its bottom line.
The maker of digital video recorders that let viewers watch their favorite TV shows at their convenience posted a loss of $4.1 million, or 4 cents per share, in the quarter ended April 30. That's down from a profit of $3.6 million, or 4 cents per share, in the year-ago period.
Total revenue slipped to $54.9 million from $60.8 million, as service and technology revenue declined to $48.5 million from $54.9 million in the year-earlier period.
Analysts polled by Thomson Reuters had expected a slightly larger loss of 5 cents per share and service and technology revenue of $48.6 million.
Adjusted earnings before interest, taxes, depreciation and amortization was $5.1 million, down from $11.1 million last year. Operating expenses rose by 5.6 percent.
Alviso, Calif.-based TiVo added 37,000 new subscribers in the quarter, before cancellations, down from 48,000 a year ago. Churn, or customer turnover, was 1.4 percent compared with 1.3 percent last year. The company has 1.6 million customers who own TiVo DVRs and subscribe to its service.
TiVo also sells its technology through cable and satellite TV providers. Including these subscribers, TiVo has 3.2 million overall.
"In a tough quarter, our churn was basically flat," said TiVo CEO Tom Rogers in an interview with The Associated Press. "That's against the backdrop of people pulling back on all sorts of subscription services."
He said he expects several catalysts to boost business in coming months. For one, Comcast Corp. is planning to introduce the TiVo interface on its DVRs in Chicago soon, following a successful run in New England.
This summer, Comcast's New England customers will get a TiVo online scheduler to program their DVRs online to record and manage shows. The service is for Comcast cable TV and Internet customers who use its TiVo-enabled DVRs.
Rogers said Comcast also plans to use the TiVo interface on DVRs that use the tru2way technology. Tru2way is a software platform that major cable operators are adopting so their systems can operate on the same standard.
Over the next few months, TiVo is set to offer movies and TV shows from Blockbuster Inc. as part of a distribution deal announced in March (story here). Blockbuster will also sell TiVo's DVRs at its stores and online.
Rogers said the TiVo-powered DirecTV DVR will be out sometime early next year.
Looking ahead, TiVo said it expects service and technology revenue of $47 million to $49 million in the second quarter. Analysts are looking for revenue of $47.4 million. The company sees a second-quarter loss of $6 million to $8 million.
Shares of TiVo were down 30 cents, or 4 percent, to $6.98 on Wednesday. The stock lost 3 cents to $6.95 in after-hours trading.