TiVo Reports Results for the Second Quarter Fiscal Year 2009 Ended July 31, 2008

Wednesday, August 27th, 2008
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  • Adjusted EBITDA for the second quarter was $10.6 million compared to a loss of $(11.2) million in the year-ago quarter, exceeding guidance
  • Net Income for the second quarter was $2.9 million compared to a loss of $(17.7) million in the year-ago quarter
  • TiVo service on Comcast now available in Connecticut; Comcast will also continue to fund development work for the TiVo product to expand the feature set and add support for the Tru2way infrastructure
  • TiVo and Entertainment Weekly join forces to connect TV viewers with their favorite shows on an automatic basis
  • TiVo successfully launched in Australia by Seven Networks
  • YouTube videos now available on the TiVo service; TiVo now provides access to more television and broadband content choices than any other offering in the world
  • TiVo’s recent research deal with media marketing research firm TRA ties anonymous viewing behavior to product purchases in millions of homes; Significantly changing the quality of information available to marketers

ALVISO, Calif. — 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, 2008.

For the second quarter, service and technology revenues were $53.5 million, compared with $56.5 million for the same period last year. Adjusted EBITDA was $10.6 million, compared to guidance of $3 million to $5 million and an Adjusted EBITDA loss of $(11.2) million in the year-ago period. The better than guidance net income and Adjusted EBITDA were driven by better than expected hardware margin and lower than anticipated operating expenses, primarily from less marketing expenditures. TiVo reported net income of $2.9 million, compared to guidance of a net loss of $(2) to $(4) million and a net loss of $(17.7) million in the second quarter of last year. Net income per share was $0.03, compared to a loss of $(0.18) per share for the second quarter of last year. Note that last year’s second quarter net loss and Adjusted EBTIDA results were impacted by an $11.2 million inventory reserve related to standard definition product, and this quarter we benefitted from the utilization of $1.4 million of that inventory reserve.

TiVo-Owned subscription gross additions for the second quarter were approximately 36,000, compared to 41,000 gross additions for the year-ago period. The TiVo-Owned monthly churn rate was 1.5%, up from 1.3% in the prior quarter and equivalent to the rate in the fourth quarter of fiscal 2008. Overall, TiVo-Owned subscriptions ended the quarter at approximately 1.7 million. As expected, TiVo reported a net decline in MSOs/Broadcaster subscriptions during the period as DIRECTV is no longer deploying new TiVo boxes and other mass distribution deals are still in the early phases of deployment. Cumulative total subscriptions as of July 31, 2008 were 3.6 million.

Subscriptions:

                                              Three Months Ended July 31,
                                              ---------------------------
  (Subscriptions in thousands)                   2008              2007
                                                ------            ------
TiVo-Owned Subscription Gross Additions            36                41
Subscription Net Additions/(Losses):
 TiVo-Owned                                       (42)              (19)
 MSOs/Broadcasters                               (136)             (126)
    Total Subscription Net Additions/(Losses)    (178)             (145)
Cumulative Subscriptions:
 TiVo-Owned                                     1,686             1,708
 MSOs/Broadcasters                              1,937             2,489
    Total Cumulative Subscriptions              3,623             4,197
 % of TiVo-Owned Cumulative
  Subscriptions paying recurring fees              60%               59%

Included in the 1,686,000 TiVo-Owned subscriptions are approximately 194,000 lifetime subscriptions that have reached the end of the period TiVo uses to recognize lifetime subscription revenue. These lifetime subscriptions no longer generate subscription revenue.

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