Rovi's TiVo Buy Going 'as Planned,' TiVo CEO Says During First Joint Earnings Call
TiVo shares closed 10 percent higher Thursday at $21 after better-than-expected Q4 results and continued expectations of $100 million in cost synergies from Rovi’s $1.1 billion buy of TiVo in September (see 1609080007). TiVo CEO Tom Carson said Rovi's TiVo buy (after which Rovi adopted the TiVo name) is “proceeding as planned” and the combined companies expect 2017 revenue of more than $800 million.
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Revenue for Q4 was $252.3 million, with $125.8 million coming from TiVo Solutions, the company reported. Q4 receipts included revenue from a license agreement with Samsung that included catch-up payments, it said. Net income in Q4 was $9.8 million, and TiVo initiated a quarterly cash dividend of 18 cents per share.
Hardware, part of the Platform Solutions segment, generated about $17.5 million revenue in the quarter, about $10 million from service providers and the rest consumer, said Chief Financial Officer Peter Halt. Company midyear guidance calls for $30 million in “low to negative margin" hardware sales, with two-thirds of revenue from the consumer side, he said.
In highlights of the combined companies’ first full quarter, Carson cited TiVo intellectual property licensing deals with HBO, Netflix and Samsung. Samsung’s license under TiVo patent portfolios extends to Samsung’s mobile, CE and set-top box businesses; Netflix licensed TiVo’s patent portfolios and Intellectual Ventures patent portfolios for over-the-top offerings; and the Netflix agreement is one of the first licenses granted under an exclusive partnership with Intellectual Ventures announced last year, said the company. HBO signed a long-term IP license, it said.
In Q&A, Samir Armaly, executive vice president-intellectual property and licensing, said TiVo hopes the Samsung mobile deal creates an opportunity to grow the licensing business with other handset makers. Rovi historically had an agreement with Apple on certain products, he noted.
Carson also noted Virgin Media’s launch of a 4K Ultra HD set-top box with VOD functionality, using TiVo software. In addition, a “large international service provider will deploy the next-generation TiVo user experience,” said to deliver content more quickly and with less effort, early this year, Carson said.
In other Q4 highlights, Panasonic signed a multiyear extension for the Japan market for guide software, and Canadian service provider Rogers deployed the Passport 7 guide. An unidentified broadband provider plans to launch TiVo’s software that enables a low-cost set-top to be deployed either as a stand-alone cable box, a client to an in-home DVR or as a full IPTV client, it said. Also during the quarter, a smart TV app developer licensed TiVo metadata for smartphones and tablets, it said.