- Adjusted EBITDA for the second quarter was $5.2 million, the eighth straight quarter of Adjusted EBITDA profitability; exceeding guidance

- Net loss for the second quarter was ($2.9) million; ahead of guidance

- Cash, cash equivalents and short-term investments increased to $238 million and Cash Flow From Operating Activities was approximately $5 million in the second quarter

- TiVo files complaints for patent infringement against AT&T and Verizon

- RCN chooses TiVo as its primary DVR offering, providing customers with an entertainment package that far exceeds other cable and satellite offers

- Teams with Best Buy to drive greater distribution of TiVo products and to provides Best Buy with a digital platform to further build its digital home presence starting in early 2010

- Audience measurement data generated from local markets and a partnership with Quantcast provides key data previously unavailable to the television marketplace

ALVISO, Calif., Aug. 26 /PRNewswire-FirstCall/ -- TiVo Inc. (Nasdaq: TIVO), the creator of and a leader in television services for digital video recorders (DVRs), today reported financial results for the second quarter ended July 31, 2009.

"This was a solid quarter for TiVo as we posted our eighth straight quarter of Adjusted EBITDA profitability, exceeding guidance," said Tom Rogers, President and CEO of TiVo. "We made significant progress on developing partnerships that enable us to access previously untapped distribution opportunities, announcing important deals with RCN and Best Buy. Our audience research and measurement business continues to prove why it will be a model that supports the future of the television advertising world as we launched local markets ratings and announced an important partnership with Quantcast, providing the first combined view of television and web viewing in the home. Finally, our intellectual property was validated yet again as EchoStar was found to be in contempt in the United States District Court, Eastern District of Texas."

For the second quarter, service and technology revenues were $48.8 million, compared with $53.5 million for the same period last year and $48.5 million in the prior period. Adjusted EBITDA was $5.2 million, compared to guidance of breakeven to $2 million, $10.6 million in the year-ago period, and $5.1 million in the prior quarter. As expected, Adjusted EBITDA was down compared to the same quarter last year as a result of lower service and technology revenues, the longer amortization of product lifetime revenues, increased legal expenses, and less of a benefit from inventory reserve utilization. TiVo reported a net loss of ($2.9) million, compared to guidance of a net loss of ($6) to ($8) million and a net income of $2.9 million in the second quarter of last year. Net loss per share was ($0.03), compared to net income of $0.03 per share for the second quarter of last year. Finally, cash, cash equivalents and short-term investments increased to $238 million and Cash Flow From Operating Activities was approximately $5 million in the second quarter.

"On the mass distribution front, in addition to our ongoing efforts with large multichannel operators, one of our key strategies has been to focus on small and medium sized cable operators that cannot make the significant investments in new technologies necessary to compete. To that end, we recently announced that RCN has chosen TiVo as its primary DVR offering. This will be the first time any cable provider is utilizing both TiVo's hardware and software platforms, helping RCN provide its customers a seamless experience that fully integrates RCN's linear and VOD service with a complete array of TiVo delivered broadband content, thereby creating an entertainment package via TiVo's user interface and easy-to-use remote that goes well beyond what other cable and satellite providers can currently offer. The TiVo/RCN DVR will be based on our existing standalone platform and does not require working through the middleware and infrastructure complexities that other mass distribution deployments do. As such, a roll out is only months away and will provide RCN customers with the retail product's latest features."

Updating the progress of Comcast roll-out, Mark Hess, Comcast Senior Vice President of Video Products, said, "As anticipated, TiVo On-line Scheduler has started its early roll-out in our Boston market. We're also excited about launching the Comcast-TiVo product beyond our Boston market and are now in the initial preparation phases for taking it to an additional yet-to-be announced market as well as for our previously announced plans to offer it as the primary DVR option in another yet-to-be named market."

Lastly, the new DIRECTV TiVo HD DVR remains on track for its rollout and, as we stated previously, once launched, it will be immediately accessible to DIRECTV's entire national customer base.

"In terms of our work to distribute TiVo internationally, we continue to build our global footprint through strategic alliances with international broadcasters. We have now come upon the one-year anniversary of our successful launch with Australia's Seven Network subsidiary, Hybrid Television Services. Earlier this year, TV New Zealand, New Zealand's largest free to air and national broadcaster, took an equity stake in Hybrid Television Services paving the way for the promotion and distribution TiVo in New Zealand by the end of 2009. We continue to focus on international players that allow for near-term implementation. We are looking to avoid international deals that would have potentially lengthy, drawn-out rollouts involving cumbersome middleware, steering clear, as much as possible, of the issues we have encountered with the domestic cable industry."

Mr. Rogers continued, "Turning to the TiVo-Owned side of the business, this quarter we announced a significant strategic alliance with Best Buy, which we believe has the potential to meaningfully increase standalone sales. The alliance seeks to drive greater distribution of TiVo products and its user experience, and to provide Best Buy with a digital platform in the home to expand its customer relationships beyond the store cash register - a major step intended to accelerate Best Buy's evolution in digital media and better serve the needs of its customers. Best Buy believes that TiVo is a superior digital solution which enables consumers to maximize enjoyment and entertainment value from their high definition television sets by enabling them to easily navigate and experience the vast array of content options available. Additionally, Best Buy is making a commitment to TiVo to substantially increase the levels of marketing and merchandising of retail TiVo DVR devices, as well as other devices that may feature the TiVo user interface and platform in the future starting in 2010.

"As part of this deal, TiVo and Best Buy are working towards the development of new user interface features for TiVo DVRs sold by Best Buy, which will build upon TiVo's seamless integration of broadcast, cable and broadband content on the television set. Additionally, we are working with Best Buy to integrate our user interface, search, and other unique features into their exclusive brands of televisions, assuring that they remain at the forefront of new digital home entertainment offerings. Beginning early next year, Best Buy will be putting substantial marketing muscle behind this relationship as newly innovative features are rolled out."

"This past quarter we also announced the addition of hundreds of new free Web videos available directly to many TiVo subscribers, as well as the ability for any video podcast provider to publish video content to TiVo DVRs using industry-standard Really Simple Syndication (RSS) and H.264 video. This new feature provides a way for branded channels on the Web to be brought to the television set with the look and feel of television. Already hundreds of new channels are being added to TiVo's current suite of free Web videos, including mainstream outlets such as CBS, FOX, and Oprah," Rogers stated.

TiVo-Owned subscription gross additions for the second quarter were approximately 31,000, compared to 36,000 gross additions for the year-ago period. The TiVo-Owned monthly churn rate was 1.5%. Overall, TiVo-Owned subscriptions ended the quarter at 1.6 million. Cumulative total subscriptions as of July 31, 2009 were approximately 3.0 million.

"On the intellectual property front, we scored a significant victory this quarter when EchoStar was found to be in contempt in the United States District Court, Eastern District of Texas. EchoStar is currently appealing the contempt order. The Court of Appeals stayed the injunction while it considers the appeal. We expect that there will be a hearing on this matter in the November timeframe. Additionally, along with the contempt order TiVo was also awarded $103 million in damages covering the original appeal stay period. The United States District Court, Eastern District of Texas is currently assessing the appropriate sanctions for the contempt period. Despite EchoStar's efforts to delay the hearing on these sanctions, the Court held the hearing and indicated it would rule in the relative near future. We remain confident in our position and look forward to getting resolution both on EchoStar's appeal and on the contempt sanctions."

Additionally, today we filed complaints in the United States District Court, Eastern District of Texas against AT&T Inc. and Verizon Communications, Inc. for infringement of three TiVo patents, including the Time Warp patent. The complaints seek damages for past infringement and a permanent injunction, similar to the one issued by the United States District Court, Eastern District of Texas against DISH/EchoStar. "We will continue to pursue enforcement where necessary to stop infringement of our intellectual property," Rogers stated.

Rogers continued, "In terms of our advertising and audience research business, our role in a constantly changing world of television consumption is to offer solutions that can help develop a business model that works with the television industry. This past quarter, we announced a deal with Quantcast, a pioneering Web-based audience insights service focused on enabling addressable advertising, that provide for the very first time advertisers and media companies with the ability to measure all the television and online video consumption from a single household. Importantly, through this data, we will be able to answer whether online video consumption and television viewing are complementary, or if one adversely affects the other.

"In addition, we also launched in the quarter our Stop||Watch(TM) Local Markets ratings service, which we first announced in April, is now collecting anonymous TiVo subscriber viewing habits in three key local markets: San Francisco, Orlando, and Tucson. For over 75% percent of television markets there is a total lack of available electronic data on local viewing, and now TiVo has the ability to provide critical information, not to mention substantially improve measurement accuracy. Also, during the quarter we increased the size of the audience sample from 100,000 to 250,000 on its way to 300,000, which will make TiVo's sample size 75 times greater than the most widely used audience sample and provides the basis for being able to deliver large sample size local ratings. With these two products, we now provide five distinctive audience research products that fill voids with data that was otherwise unavailable to the market. The Quantcast and local data sample now join Stop||Watch, PowerWatch, and TRA purchase decision offerings."

Rogers concluded, "We made significant progress during the second quarter and are beginning to see our long-term initiatives bear fruit. We have a strategic relationship with the largest electronics retailer, Best Buy, the largest cable operator, Comcast, and the largest satellite provider, DIRECTV. We are continuing to lead innovation of television viewing, advertising and measurement, which we fully expect will help to drive further the distribution of TiVo products and services as well as to define the standards for all television consumption. We have made good strides in protecting our intellectual property. And very importantly, we have built a strong financial foundation, which provides us with the runway to pursue several catalysts that will provide substantial momentum for TiVo going forward."

Management Provides Financial Guidance

For the third quarter of fiscal 2010, TiVo anticipates service and technology revenues in the range of $46 million to $48 million, a net loss in the range of ($10) million to ($8) million, and Adjusted EBITDA in the range of ($2) million to breakeven.

This financial guidance is based on information available to management as of August 26(th), 2009. TiVo expressly disclaims any duty to update this guidance.

Management's guidance includes Adjusted EBITDA, a non-GAAP financial measure as defined in Regulation G. TiVo has provided a reconciliation of EBITDA and Adjusted EBITDA to net income (loss) in the attached schedules solely for the purpose of complying with Regulation G and not as an indication that EBITDA or Adjusted EBITDA is a substitute measure for net income (loss).

Conference Call and Webcast

TiVo will host a conference call and Webcast to discuss the second quarter financial and operating results and guidance outlook at 2:00 pm PT (5:00 pm ET), today, August 26, 2009. To listen to the discussion, please visit http://www.tivo.com/ir and click on the link provided for the Webcast or dial (888) 801-6419 (no password required). The Webcast will be archived and available through September 2, 2009 at http://www.tivo.com/ir or by calling (719) 457-0820 and entering the conference ID number 794216.

About TiVo Inc.

Founded in 1997, TiVo Inc. (Nasdaq: TIVO - News) developed the first commercially available digital video recorder (DVR). TiVo offers the TiVo service and TiVo DVRs directly to consumers online at www.tivo.com and through third-party retailers. TiVo also distributes its technology and services through solutions tailored for cable, satellite, and broadcasting companies. Since its founding, TiVo has evolved into a premier single solution media center by combining its patented DVR technologies and universal cable box capabilities with the ability to aggregate, search, and deliver millions of pieces of broadband, cable, and broadcast content directly to the television. An economical, one-stop-shop for in-home entertainment, TiVo's intuitive functionality and ease of use puts viewers in control by enabling them to effortlessly navigate the best digital entertainment content available through one box, with one remote, and one user interface, delivering the most dynamic user experience on the market today. TiVo also continues to weave itself into the fabric of the media industry by providing interactive advertising solutions and audience research and measurement ratings services to the television industry.