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TiVo (TIVO) Q4 Loss Narrows Y/Y, Revenues Beat Estimates

Zacks Equity Research

TiVo Corporation’s TIVO fourth-quarter 2019 loss of $1.75 per share narrowed from the year-ago quarter’s loss of $2.33.

On a non-GAAP basis, earnings per share came in at 33 cents, compared with 22 cents in the year-ago quarter.

TiVo’s revenues of $175 million surpassed the Zacks Consensus Estimate of $169 million and improved 4% year over year. Increase in IP licensing revenue driven by new deals signed in New Media, International Pay TV was a key driver.

The company’s core revenues (excluding revenues from Legacy TiVo Solutions IP Licenses, Hardware and Other Products) of $171 million (97.7% of total) reflected a 6.3% decrease from the year-ago quarter.

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Further, the company mentioned that the separation of its product division from its intellectual property (IP) licensing unit is on track and the split-up is likely to be completed in April 2020.

At the same time, management sounded very optimistic about its agreement to combine in an all-stock transaction with Xperi. The company believes that combining the respective product and IP business to operate as separate business units will put them in a stronger operating and competitive position.

Quarter in Detail

In terms of business segments, Product Revenues were down 5% to $91.7 million. This decline was primarily due to a decrease in consumer revenues attributed to an increase in the amortization period for product lifetime subscriptions and lower hardware sales. Lower Platform Solutions revenue from pay TV customers was also a downside.

Revenues from Platform Solutions decreased 8% to $68.6 million.

Additionally, revenues from Other products, primarily legacy analog ACP product, plunged 57% to $1.7 million. However, Software and Services improved 18% to $19.8 million, aided by new TV Viewership Data deals.

Core Product revenues (excluding revenues from Hardware and Other Products) fell 2% to $87.6 million.

IP Licensing Revenues increased 16% year over year to $83.5 million. Revenues from US Pay TV Providers, CE Manufacturers, and New Media, International Pay TV Providers and Other grew 11%, 19% and 24% to $47.2 million, $10.6 million and 425.7 million, respectively.

Adjusted EBITDA was up 45% from the year-ago quarter to $61.2 million due to higher IP licensing revenues and the company’s cost-saving initiatives.

TiVo exited the reported quarter with cash, cash equivalents and short-term marketable securities of $425 million compared with $276.7 million at the end of the previous quarter.

TiVo Corporation Price, Consensus and EPS Surprise

TiVo Corporation Price, Consensus and EPS Surprise
TiVo Corporation Price, Consensus and EPS Surprise

TiVo Corporation price-consensus-eps-surprise-chart | TiVo Corporation Quote

2019 Highlights

TiVo reported revenues of $668.1 million in 2019, down 4% year over year.

Licensing, services and software accounted for 98.6% of TiVo’s 2019 total revenues while Hardware contributed 1.4%.

Guidance

For 2020, TiVo expects revenues in the range of $650-$690 million. Adjusted EBITDA is anticipated between $230 million and $260 million.

Zacks Rank and Stocks to Consider

TiVo currently carries a Zacks Rank #3 (Hold).

A few better-ranked stocks in the broader technology sector are CEVA, Inc. CEVA, SYNNEX SNX and Silicon Motion Technology Corporation SIMO, all sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for CEVA, SYNNEX and Silicon Motion is currently pegged at 20%, 10.37% and 7%, respectively.

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TiVo Corporation (TIVO) : Free Stock Analysis Report
 
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