EX-99.2 3 dex992.htm FY08 Q2 KEY FINANCIAL METRIC TREND SHEETS AND RECONCILIATIONS AND RELATED NOTES FY08 Q2 Key Financial Metric Trend Sheets and Reconciliations and Related Notes

Exhibit 99.2

Trend Sheet for GAAP Statement of Operations

(unaudited, in thousands, except per share data)

 

     Three Months Ended  
     July 31,     April 30,     Jan 31,     Oct 31,     July 31,     Apr 30,     Jan 31,     Oct 31,  
     2007     2007     2007     2006     2006     2006     2006     2005  

Income Statement

                

Net revenues

   $ 62,659     $ 60,380     $ 76,850     $ 66,003     $ 59,315     $ 56,753     $ 60,768     $ 49,529  

Hardware revenues

     6,199       2,293       19,890       13,476       6,503       1,719       14,135       6,616  

Cost of hardware revenues

     28,271       10,648       43,534       31,925       21,607       15,146       38,811       24,667  

Service and Technology revenues

   $ 56,460     $ 58,087     $ 56,960     $ 52,527     $ 52,812     $ 55,034     $ 46,633     $ 42,913  

Service revenues

     53,376       54,155       53,543       49,000       49,430       46,951       46,305       42,296  

Technology revenues

     3,084       3,932       3,417       3,527       3,382       8,083       328       617  

Cost of service & technology revenues

   $ 13,760     $ 13,662     $ 15,921     $ 13,826     $ 12,629     $ 17,801     $ 10,129     $ 8,508  

Cost of service revenues

     10,064       10,155       12,445       10,820       9,628       10,435       10,250       8,431  

Cost of technology revenues

     3,696       3,507       3,476       3,006       3,001       7,366       (121 )     77  

Gross margin of service & technology revenues

   $ 42,700     $ 44,425     $ 41,039     $ 38,701     $ 40,183     $ 37,233     $ 36,504     $ 34,405  

Operating expenses

                

Research and development

   $ 15,070     $ 14,245     $ 12,755     $ 12,221     $ 12,891     $ 12,861     $ 10,693     $ 9,712  

Sales and marketing

   $ 5,381       5,303       6,784       5,450       5,439       4,847       5,387       4,448  

Sales and marketing, subscription acquisition costs

   $ 9,015       5,790       9,915       5,016       3,053       2,783       5,951       5,472  

General and administrative

   $ 10,392       11,222       8,852       9,811       11,091       15,059       11,769       11,702  

Stock-based compensation

   $ 5,242     $ 4,640     $ 3,979     $ 4,083     $ 3,563     $ 3,087     $ 337     $ 165  

Cost of services revenues

     178       157       117       129       130       94       —         —    

Cost of technology revenues

     504       463       338       236       243       203       —         —    

Research and development

     1,967       1,628       1,419       1,608       1,451       1,118       46       (6 )

Sales and marketing

     332       476       385       474       450       340       75       20  

General and administrative

     2,261       1,916       1,720       1,636       1,289       1,332       216       151  

Interest and other income (expense)

   $ 1,540     $ 1,333     $ 1,418     $ 1,158     $ 959     $ 1,059     $ 899     $ 816  

Provision for income tax

     —         (8 )     (17 )     (4 )     (12 )     (19 )     (13 )     —    

Net income (loss)

     (17,690 )     835       (19,510 )     (11,092 )     (6,448 )     (10,704 )     (21,086 )     (14,164 )

Net income (loss) per basic and diluted common share

   $ (0.18 )   $ 0.01     $ (0.20 )   $ (0.12 )   $ (0.07 )   $ (0.13 )   $ (0.25 )   $ (0.17 )

Weighted average common shares outstanding—basic

     97,084       96,829       96,415       91,930       85,978       85,134       84,643       84,201  

Weighted average common shares outstanding—diluted

     97,084       98,047       96,415       91,930       85,978       85,134       84,643       84,201  

Balance Sheet & Cash Flow

                

Cash & cash equivalents, and short-term investments

   $ 97,629     $ 101,784     $ 128,765     $ 106,965     $ 75,118     $ 92,351     $ 104,213     $ 90,456  

Net cash provided by (used in) operating activities (YTD)

     (29,906 )     (26,213 )     (33,507 )     (55,212 )     (32,796 )     (14,150 )     3,425       (12,262 )


Trend Sheet for Non-GAAP Statement of Operations

(including Non-GAAP Net loss per share) excluding stock based compensation (1)

(unaudited, in thousands, except per share data)

 

     Three Months Ended  
    

July 31,

2007

   

April 30,

2007

   

Jan 31,

2007

   

Oct 31,

2006

   

July 31,

2006

   

Apr 30,

2006

   

Jan 31,

2006

   

Oct 31,

2005

 

Income Statement

                

Net revenues

   $ 62,659     $ 60,380     $ 76,850     $ 66,003     $ 59,315     $ 56,753     $ 60,768     $ 49,529  

Hardware revenues

     6,199       2,293       19,890       13,476       6,503       1,719       14,135       6,616  

Cost of hardware revenues

     28,271       10,648       43,534       31,925       21,607       15,146       38,811       24,667  

Service and Technology revenues

   $ 56,460     $ 58,087     $ 56,960     $ 52,527     $ 52,812     $ 55,034     $ 46,633     $ 42,913  

Service revenues

     53,376       54,155       53,543       49,000       49,430       46,951       46,305       42,296  

Technology revenues

     3,084       3,932       3,417       3,527       3,382       8,083       328       617  

Cost of service & technology revenues *

   $ 13,078     $ 13,042     $ 15,466     $ 13,461     $ 12,256     $ 17,504     $ 10,129     $ 8,508  

Cost of service revenues *

     9,886       9,998       12,328       10,691       9,498       10,341       10,250       8,431  

Cost of technology revenues *

     3,192       3,044       3,138       2,770       2,758       7,163       (121 )     77  

Gross margin of service & technology revenues *

   $ 43,382     $ 45,045     $ 41,494     $ 39,066     $ 40,556     $ 37,530     $ 36,504     $ 34,405  

Operating expenses

                

Research and development *

   $ 13,103     $ 12,617     $ 11,336     $ 10,613     $ 11,440     $ 11,743     $ 10,647     $ 9,718  

Sales and marketing *

     5,049       4,827       6,399       4,976       4,989       4,507       5,312       4,428  

Sales and marketing, subscription acquisition costs

     9,015       5,790       9,915       5,016       3,053       2,783       5,951       5,472  

General and administrative *

     8,131       9,306       7,132       8,175       9,802       13,727       11,553       11,551  

Stock-based compensation

   $ 5,242     $ 4,640     $ 3,979     $ 4,083     $ 3,563     $ 3,087     $ 337     $ 165  

Cost of services revenues

     178       157       117       129       130       94       —         —    

Cost of technology revenues

     504       463       338       236       243       203       —         —    

Research and development

     1,967       1,628       1,419       1,608       1,451       1,118       46       (6 )

Sales and marketing

     332       476       385       474       450       340       75       20  

General and administrative

     2,261       1,916       1,720       1,636       1,289       1,332       216       151  

Interest and other income (expense)

   $ 1,540     $ 1,333     $ 1,418     $ 1,158     $ 959     $ 1,059     $ 899     $ 816  

Provision for income tax

     —         (8 )     (17 )     (4 )     (12 )     (19 )     (13 )     —    

Net income (loss)

     (12,448 )     5,475       (15,531 )     (7,009 )     (2,885 )     (7,617 )     (20,749 )     (13,999 )

Net income (loss) per basic and diluted common share

   $ (0.13 )   $ 0.06     $ (0.16 )   $ (0.08 )   $ (0.03 )   $ (0.09 )   $ (0.25 )   $ (0.17 )

Weighted average common shares outstanding—basic

     97,084       96,829       96,415       91,930       85,978       85,134       84,643       84,201  

Weighted average common shares outstanding—diluted

     97,084       98,047       96,415       91,930       85,978       85,134       84,643       84,201  

* Excludes stock-based compensation.

(1)

This presentation is not prepared under a comprehensive set of accounting rules or principles such as GAAP. See attached reconciliation of Non-GAAP Statement of Operations excluding stock based compensation and related note for further explanation of this non-GAAP financial measure presented herein.


TiVo Inc.

Reconciliation of Non-GAAP Statement of Operations (including Non-GAAP Net Loss and Non-GAAP Net Loss Per Share)

of TiVo Inc. to GAAP Statement of Operations (including GAAP Net Loss and GAAP Net Loss Per Share) of TiVo Inc.

FY 2008 Q1-Q2.

excluding Stock-Based Compensation Expense (1)

(unaudited, in thousands except per share data)

 

     FY 2008 Reconciliation by Quarter  
    

Q2’08

GAAP

    Non-GAAP
Adjustments
    Q2’08
Non-GAAP
    Q1’08
GAAP
    Non-GAAP
Adjustments
    Q1’08
Non-GAAP
 

Revenues

            

Service revenues

   $ 53,376     $ —       $ 53,376     $ 54,155     $ —       $ 54,155  

Technology revenues

     3,084       —         3,084       3,932       —         3,932  

Hardware revenues

     6,199       —         6,199       2,293       —         2,293  
                                                

Net revenues

     62,659       —         62,659       60,380       —         60,380  

Cost of revenues

            

Cost of service revenues

     10,064       (178 )     9,886       10,155       (157 )     9,998  

Cost of technology revenues

     3,696       (504 )     3,192       3,507       (463 )     3,044  

Cost of hardware revenues

     28,271       —         28,271       10,648       —         10,648  
                                                

Total cost of revenues

     42,031       (682 )     41,349       24,310       (620 )     23,690  
                                                

Gross margin

     20,628       682       21,310       36,070       620       36,690  

Operating Expenses

            

Research and development

     15,070       (1,967 )     13,103       14,245       (1,628 )     12,617  

Sales and marketing

     5,381       (332 )     5,049       5,303       (476 )     4,827  

Sales and marketing, subscription acquisition costs

     9,015       —         9,015       5,790       —         5,790  

General and administrative

     10,392       (2,261 )     8,131       11,222       (1,916 )     9,306  
                                                

Income (loss) from operations

     (19,230 )     5,242       (13,988 )     (490 )     4,640       4,150  

Interest income

     1,331       —         1,331       1,416       —         1,416  

Interest expense and other

     209       —         209       (83 )     —         (83 )
                                                

Income before income taxes

     (17,690 )     5,242       (12,448 )     843       4,640       5,483  

Provision for income taxes

     —         —         —         (8 )     —         (8 )
                                                

Net income

   $ (17,690 )   $ 5,242     $ (12,448 )   $ 835     $ 4,640     $ 5,475  
                                                

Net income per common share basic and diluted

   $ (0.18 )   $ —       $ (0.13 )   $ 0.01     $ —       $ 0.06  
                                                

Weighted average common shares used to calculate basic net income (loss) per share

     97,084,184       —         97,084,184       96,829       —         96,829  
                                                

Weighted average common shares used to calculate diluted net income (loss) per share

     97,084,184       —         97,084,184       98,047       —         98,047  
                                                

(1)

See related note attached hereto for further information on this Non-GAAP reconciliation.


TiVo Inc.

Reconciliation of Non-GAAP Statement of Operations (including Non-GAAP Net Loss and Non-GAAP Net Loss Per Share) of TiVo Inc. to

GAAP Statement of Operations (including GAAP Net Loss and GAAP Net Loss Per Share) of TiVo Inc.

FY 2007 Q1 through Q4

excluding Stock-Based Compensation Expense (1)

(unaudited, in thousands except per share data)

 

    FY 2007 Reconciliation by Quarter  
    Q4’07
GAAP
    Non-GAAP
Adjustments
    Q4’07
Non-GAAP
    Q3’07
GAAP
    Non-GAAP
Adjustments
    Q3’07
Non-GAAP
    Q2’07
GAAP
    Non-GAAP
Adjustments
    Q2’07
Non-GAAP
    Q1’07
GAAP
    Non-GAAP
Adjustments
    Q1’07
Non-GAAP
 
                      (unaudited, in thousands except per share data)  

Revenues

                       

Service revenues

  $ 53,543     $ —       $ 53,543     $ 49,000     $ —       $ 49,000     $ 49,430     $ —       $ 49,430     $ 46,951     $ —       $ 46,951  

Technology revenues

    3,417       —         3,417       3,527       —         3,527       3,382       —         3,382       8,083       —         8,083  

Hardware revenues

    19,890       —         19,890       13,476       —         13,476       6,503       —         6,503       1,719       —         1,719  
                                                                                               

Net revenues

    76,850       —         76,850       66,003       —         66,003       59,315       —         59,315       56,753       —         56,753  
                                                                                               

Cost of revenues

                       

Cost of service revenues

    12,445       (117 )     12,328       10,820       (129 )     10,691       9,628       (130 )     9,498       10,435       (94 )     10,341  

Cost of technology revenues

    3,476       (338 )     3,138       3,006       (236 )     2,770       3,001       (243 )     2,758       7,366       (203 )     7,163  

Cost of hardware revenues

    43,534       —         43,534       31,925       —         31,925       21,607       —         21,607       15,146       —         15,146  
                                                                                               

Total cost of revenues

    59,455       (455 )     59,000       45,751       (365 )     45,386       34,236       (373 )     33,863       32,947       (297 )     32,650  
                                                                                               

Gross margin

    17,395       455       17,850       20,252       365       20,617       25,079       373       25,452       23,806       297       24,103  

Operating Expenses

                       

Research and development

    12,755       (1,419 )     11,336       12,221       (1,608 )     10,613       12,891       (1,451 )     11,440       12,861       (1,118 )     11,743  

Sales and marketing

    6,784       (385 )     6,399       5,450       (474 )     4,976       5,439       (450 )     4,989       4,847       (340 )     4,507  

Sales and marketing, subscription acquisition costs

    9,915       —         9,915       5,016       —         5,016       3,053       —         3,053       2,783       —         2,783  

General and administrative

    8,852       (1,720 )     7,132       9,811       (1,636 )     8,175       11,091       (1,289 )     9,802       15,059       (1,332 )     13,727  
                                                                                               

Loss from operations

    (20,911 )     3,979       (16,932 )     (12,246 )     4,083       (8,163 )     (7,395 )     3,563       (3,832 )     (11,744 )     3,087       (8,657 )

Interest income

    1,426       —         1,426       1,291       —         1,291       988       —         988       1,062       —         1,062  

Interest expense and other

    (8 )     —         (8 )     (133 )     —         (133 )     (29 )     —         (29 )     (3 )     —         (3 )
                                                                                               

Loss before income taxes

    (19,493 )     3,979       (15,514 )     (11,088 )     4,083       (7,005 )     (6,436 )     3,563       (2,873 )     (10,685 )     3,087       (7,598 )

Provision for income taxes

    (17 )     —         (17 )     (4 )     —         (4 )     (12 )     —         (12 )     (19 )     —         (19 )
                                                                                               

Net Loss

  $ (19,510 )   $ 3,979     $ (15,531 )   $ (11,092 )   $ 4,083     $ (7,009 )   $ (6,448 )   $ 3,563     $ (2,885 )   $ (10,704 )   $ 3,087     $ (7,617 )
                                                                                               

Net loss per common share basic and diluted

  $ (0.20 )   $ —       $ (0.16 )   $ (0.12 )   $ —       $ (0.08 )   $ (0.07 )   $ —       $ (0.03 )   $ (0.13 )   $ —       $ (0.09 )
                                                                                               

Weighted average common shares used to calculate basic and diluted net loss per share

    96,415       —         96,415       91,930       —         91,930       85,978       —         85,978       85,134       —         85,134  
                                                                                               

(1)

See related note attached hereto for further information on this Non-GAAP reconciliation.


TiVo Inc.

Reconciliation of Non-GAAP Statement of Operations (including Non-GAAP Net Loss and Non-GAAP Net Loss Per Share)

of TiVo Inc. to GAAP Statement of Operations (including GAAP Net Loss and GAAP Net Loss Per Share) of TiVo Inc.

FY 2006 Q3 through Q4

excluding Stock-Based Compensation Expense (1)

(unaudited, in thousands except per share data)

 

     FY 2006 Reconciliation by Quarter  
     Q4’06
GAAP
    Non-GAAP
Adjustments
    Q4’06
Non-GAAP
    Q3’06
GAAP
    Non-GAAP
Adjustments
    Q3’06
Non-GAAP
 
     Adjusted                                
     (unaudited, in thousands except per share data)  

Revenues

            

Service revenues

   $ 46,305     $ —       $ 46,305     $ 42,296     $ —       $ 42,296  

Technology revenues

     328       —         328       617       —         617  

Hardware revenues

     14,135       —         14,135       6,616       —         6,616  
                                                

Net revenues

     60,768       —         60,768       49,529       —         49,529  

Cost of revenues

            

Cost of service revenues

     10,250       —         10,250       8,431       —         8,431  

Cost of technology revenues

     (121 )     —         (121 )     77       —         77  

Cost of hardware revenues

     38,811       —         38,811       24,667       —         24,667  
                                                

Total cost of revenues

     48,940       —         48,940       33,175       —         33,175  
                                                

Gross margin

     11,828       —         11,828       16,354       —         16,354  

Operating Expenses

            

Research and development

     10,693       (46 )     10,647       9,712       6       9,718  

Sales and marketing

     5,387       (75 )     5,312       4,448       (20 )     4,428  

Sales and marketing, subscription acquisition costs

     5,951       —         5,951       5,472       —         5,472  

General and administrative

     11,769       (216 )     11,553       11,702       (151 )     11,551  
                                                

Loss from operations

     (21,972 )     337       (21,635 )     (14,980 )     165       (14,815 )

Interest income

     900       —         900       826       —         826  

Interest expense and other

     (1 )     —         (1 )     (10 )     —         (10 )
                                                

Loss before income taxes

     (21,073 )     337       (20,736 )     (14,164 )     165       (13,999 )

Provision for income taxes

     (13 )     —         (13 )     —         —         —    
                                                

Net Loss

   $ (21,086 )   $ 337     $ (20,749 )   $ (14,164 )   $ 165     $ (13,999 )
                                                

Net loss per common share basic and diluted

   $ (0.25 )   $ —       $ (0.25 )   $ (0.17 )   $ —       $ (0.17 )
                                                

Weighted average common shares used to calculate basic and diluted net loss per share

     84,643       —         84,643       84,201       —         84,201  
                                                

(1)

See related note attached hereto for further information on this Non-GAAP reconciliation.


Note to Trended Non-GAAP Statement of Operations Excluding Stock-Based Compensation Expense.

These FY08 Q2 Key Financial Metric Trend Sheets include the Non-GAAP Statement of Operations adjusted to exclude stock-based compensation expense from the related GAAP line items, including non-GAAP loss from operations. We use these non-GAAP financial measures for internal managerial purposes and to facilitate period-to-period comparisons. These non-GAAP financial measures are used in addition to and in conjunction with our results presented in accordance with GAAP. These non-GAAP financial measures reflect an additional way of viewing aspects of our operations that, when viewed with our GAAP results and the accompanying reconciliations to the corresponding GAAP financial measures, provide a more complete understanding of factors and trends affecting our business. These non-GAAP measures should be considered as a supplement to, and not as a substitute for, or superior to loss from operations, and net loss and net loss per share calculated in accordance with generally accepted accounting principles.

In addition, because of the variety of equity awards used by companies, the varying methodologies for determining stock-based compensation expense, and the subjective assumptions involved in those determinations, we believe excluding stock-based compensation enhances the ability of management and investors to compare our core operating results over multiple periods. We do not use stock-based compensation expense in our internal measures. A limitation associated with these non-GAAP measures is that they do not include any stock-based compensation expense related to hiring, retaining, and incentivizing the Company’s workforce.


Trend Sheet for Non-GAAP Key Financial Metrics(1)

(unaudited, in thousands except per share data)

 

     Three Months Ended  
     July 31,
2007
    Apr 30,
2007
    Jan 31,
2007
    Oct 31,
2006
    July 31,
2006
    Apr 30,
2006
    Jan 31,
2006
    Oct 31,
2005
 
Reconciliation to EBITDA and Adjusted EBIDTA                 

Net income (loss)

   $ (17,690 )   $ 835     $ (19,510 )   $ (11,092 )   $ (6,448 )   $ (10,704 )   $ (21,086 )   $ (14,164 )

Add back:

                

Depreciation & amortization

     2,586       2,620       1,944       2,217       1,868       1,730       1,757       1,609  

Interest income & expense

     (1,324 )     (1,400 )     (1,423 )     (1,246 )     (988 )     (1,060 )     (898 )     (816 )

Provision for income tax

     —         8       17       4       12       19       13       —    

EBITDA

   $ (16,428 )   $ 2,063     $ (18,972 )   $ (10,117 )   $ (5,556 )   $ (10,015 )   $ (20,214 )   $ (13,371 )

Stock-based compensation

     5,242       4,640       3,979       4,083       3,563       3,087       337       165  

Adjusted EBITDA

   $ (11,186 )   $ 6,703     $ (14,993 )   $ (6,034 )   $ (1,993 )   $ (6,928 )   $ (19,877 )   $ (13,206 )
Subscription Metrics                 

TiVo-Owned subscription gross additions

     41       57       163       101       74       91       221       92  

TiVo-Owned subscription cancellations

     (60 )     (56 )     (62 )     (48 )     (44 )     (40 )     (38 )     (37 )

TiVo-Owned churn rate per month

     -1.2 %     -1.1 %     -1.2 %     -1.0 %     -0.9 %     -0.9 %     -0.9 %     -1.0 %

TiVo-Owned net additions (losses)

     (19 )     1       101       53       30       51       183       55  

TiVo-Owned cumulative subscriptions

     1,708       1,727       1,726       1,625       1,572       1,542       1,491       1,308  

% of TiVo-Owned cumulative subscriptions paying recurring fees

     59 %     59 %     58 %     55 %     53 %     52 %     51 %     51 %

Fully Amortized Active Lifetime Subscriptions

     180       179       165       138       129       122       100       89  

DIRECTV Net additions (losses)

     (126 )     (103 )     (91 )     (37 )     (29 )     2       173       379  

Total subscription net additions (losses)

     (145 )     (102 )     10       16       1       53       356       434  

Total cumulative subscriptions

     4,197       4,342       4,444       4,434       4,418       4,417       4,364       4,008  

TiVo-Owned ARPU & Subscription Acquisition Costs

                

TiVo-Owned-related service revenues

     46,823       46,995       45,091       41,427       41,234       38,942       36,703       33,659  

TiVo-Owned average subscriptions

     1,719       1,729       1,673       1,596       1,559       1,520       1,388       1,275  

TiVo-Owned ARPU per month

   $ 9.08     $ 9.06     $ 8.98     $ 8.65     $ 8.82     $ 8.54     $ 8.81     $ 8.80  

TiVo-Owned total acquisition costs

     31,087       14,145       33,559       23,465       18,157       16,210       30,627       23,523  

TiVo-Owned subscription gross additions

     41       57       163       101       74       91       221       92  

TiVo-Owned subscription acquisition costs

     758       248       206       232       245       178       139       256  

DIRECTV ARPU

                

DIRECTV-related service revenues

     6,553       7,160       8,452       7,573       8,196       8,009       9,602       8,637  

DIRECTV average subscriptions

     2,554       2,668       2,767       2,837       2,858       2,881       2,818       2,505  

DIRECTV ARPU per month

   $ 0.86     $ 0.89     $ 1.02     $ 0.89     $ 0.96     $ 0.93     $ 1.14     $ 1.15  

(1)

This presentation is not prepared under a comprehensive set of accounting rules or principles such as GAAP. See attached reconciliation of Non-GAAP Statement of Operations excluding stock based compensation and related note for further explanation of this non-GAAP financial measure presented herein.

EBITDA and Adjusted EBITDA Results. TiVo’s “EBITDA” means income before interest income and expense, provision for income taxes and depreciation and amortization. TiVo’s “Adjusted EBITDA” is EBITDA less expense for stock-based compensation. EBITDA and


Adjusted EBITDA are not measures of financial performance under generally accepted accounting principles, which we refer to as GAAP. TiVo’s EBITDA and Adjusted EBITDA results are calculated by adjusting GAAP net income to exclude the effects of items that management believes are not directly related to the underlying performance of TiVo’s core business operations. A table reconciling TiVo’s EBITDA and Adjusted EBITDA to GAAP net income is included with the condensed consolidated financial statements attached to this release. We have presented EBITDA and Adjusted EBITDA solely as supplemental disclosure because we believe they allow for a more complete analysis of our results of operations and we believe that EBITDA and Adjusted EBITDA are useful to investors because EBITDA and Adjusted EBITDA are commonly used to analyze companies on the basis of operating performance. In addition, because of the variety of equity awards used by companies, the varying methodologies for determining stock-based compensation expense, and the subjective assumptions involved in those determinations, we believe excluding stock-based compensation enhances the ability of management and investors to compare our core operating results over multiple periods. We do not use stock-based compensation expense in our internal measures. A limitation associated with these non-GAAP measures is that they do not include any stock-based compensation expense related to hiring, retaining, and incentivizing the Company’s workforce. EBITDA and Adjusted EBITDA are not intended to represent, and should not be considered more meaningful than, or as an alternative to, measures of operating performance as determined in accordance with GAAP.

 

     Three Months Ended  

(Subscriptions in thousands)

   July 31,
2007
    April 30,
2007
    Jan 31,
2006
    Oct 31,
2006
    July 31,
2006
    April 30,
2006
    Jan 31,
2005
    Oct 31,
2005
 

TiVo-Owned Subscription Gross Additions:

   41     57     163     101     74     91     221     92  

Subscription Net Additions/(Losses):

                

TiVo-Owned

   (19 )   1     101     53     30     51     183     55  

DIRECTV

   (126 )   (103 )   (91 )   (37 )   (29 )   2     173     379  
                                                

Total Subscription Net Additions

   (145 )   (102 )   10     16     1     53     356     434  

Cumulative Subscriptions:

                

TiVo-Owned

   1,708     1,727     1,726     1,625     1,572     1,542     1,491     1,308  

DIRECTV

   2,489     2,615     2,718     2,809     2,846     2,875     2,873     2,700  
                                                

Total Cumulative Subscriptions

   4,197     4,342     4,444     4,434     4,418     4,417     4,364     4,008  

Fully Amortized Active Lifetime Subscriptions

   180     179     165     138     129     122     100     89  

% of TiVo-Owned Cumulative Subscriptions paying recurring fees

   59 %   59 %   58 %   55 %   53 %   52 %   51 %   51 %


     Three Months Ended  

(Subscriptions in thousands)

   July 31,
2007
    April 30,
2007
    Jan 31,
2006
    Oct 31,
2006
    July 31,
2006
    April 30,
2006
    Jan 31,
2005
    Oct 31,
2005
 

Average TiVo-Owned subscriptions

   1,719     1,729     1,672     1,596     1,559     1,520     1,388     1,275  

TiVo-Owned subscription cancellations

   (60 )   (56 )   (62 )   (48 )   (44 )   (40 )   (38 )   (37 )
                                                

TiVo-Owned Churn Rate per month

   -1.2 %   -1.1 %   -1.2 %   -1.0 %   -0.9 %   -0.9 %   -0.9 %   -1.0 %
                                                

TiVo-Owned Churn Rate per Month. Management reviews this metric, and believes it may be useful to investors, in order to evaluate our ability to retain existing TiVo-Owned subscriptions (including both monthly and product lifetime subscriptions) by providing services that are competitive in the market. Management believes factors such as service enhancements, service commitments, higher customer satisfaction, and improved customer support may improve this metric. Conversely, management believes factors such as increased competition, lack of competitive service features such as high definition television recording capabilities for our low cost product offerings, and increased price sensitivity may cause our TiVo-Owned Churn Rate per month to increase.

We define the TiVo-Owned Churn Rate per month as the total TiVo-Owned subscription cancellations in the period divided by the Average TiVo-Owned subscriptions for the period (including both monthly and product lifetime subscriptions), which then is divided by the number of months in the period. We calculate Average TiVo-Owned subscriptions for the period by adding the average TiVo-Owned subscriptions for each month and dividing by the number of months in the period. We calculate the average TiVo-Owned subscriptions for each month by adding the beginning and ending subscriptions for the month and dividing by two. We are not aware of any uniform standards for calculating churn and caution that our presentation may not be consistent with that of other companies.


     Three Months Ended  

Subscription Acquisition Costs

   July 31,
2007
    April 30,
2007
    Jan 31,
2006
    Oct 31,
2006
    Jul 31,
2006
    April 30,
2006
    Jan 31,
2005
    Oct 31,
2005
 
     (In thousands, except SAC)  

Sales and marketing, subscription acquisition costs

   $ 9,015     $ 5,790     $ 9,915     $ 5,016     $ 3,053     $ 2,783     $ 5,951     $ 5,472  

Hardware revenues

     (6,199 )     (2,293 )     (19,890 )     (13,476 )     (6,503 )     (1,719 )     (14,135 )     (6,616 )

Cost of hardware revenues

     28,271       10,648       43,534       31,925       21,607       15,146       38,811       24,667  
                                                                

Total Acquisition Costs

     31,087       14,145       33,559       23,465       18,157       16,210       30,627       23,523  
                                                                

TiVo-Owned Subscription Gross Additions

     41       57       163       101       74       91       221       92  

Subscription Acquisition Costs (SAC)

   $ 758     $ 248     $ 206     $ 232     $ 245     $ 178     $ 139     $ 256  
                                                                

Subscription Acquisition Cost or SAC. Management reviews this metric, and believes it may be useful to investors, in order to evaluate trends in the efficiency of our marketing programs and subscription acquisition strategies. We define SAC as our total acquisition costs for a given period divided by TiVo-Owned subscription gross additions for the same period. In the first fiscal quarter of 2008, we revised our definition of total acquisition costs. We now define total acquisition costs as sales and marketing, subscription acquisition costs less net hardware revenues (defined as gross hardware revenues less rebates, revenue share and market development funds paid to retailers) plus cost of hardware revenues. The sales and marketing, subscription acquisition costs line item includes advertising expenses and promotion-related expenses directly related to subscription acquisition activities, but does not include expenses related to advertising sales. We do not include third parties subscription gross additions, such as DIRECTV gross additions with TiVo subscriptions, in our calculation of SAC because we incur limited or no acquisition costs for these new subscriptions. We are not aware of any uniform standards for calculating total acquisition costs or SAC and caution that our presentation may not be consistent with that of other companies.


     Three Months Ended  

TiVo-Owned Average Revenue per Subscription

   July 31,
2007
    April 30,
2007
    Jan 31,
2006
    Oct 31,
2006
    July 31,
2006
    April 30,
2006
    Jan 31,
2005
    Oct 31,
2005
 
     (In thousands, except ARPU)  

Total Service revenues

     53,376       54,155       53,543       49,000       49,430       46,951       46,305       42,296  

Less: DIRECTV-related service revenues

     (6,553 )     (7,160 )     (8,452 )     (7,573 )     (8,196 )     (8,009 )     (9,602 )     (8,637 )
                                                                

TiVo-Ow ned-related service revenues

     46,823       46,995       45,091       41,427       41,234       38,942       36,703       33,659  

Average TiVo-Ow ned revenues per month

     15,608       15,665       15,030       13,809       13,745       12,981       12,234       11,220  

Average TiVo-Ow ned per month subscriptions

     1,719       1,729       1,673       1,596       1,559       1,520       1,388       1,275  
                                                                

TiVo-Ow ned ARPU per month

   $ 9.08     $ 9.06     $ 8.98     $ 8.65     $ 8.82     $ 8.54     $ 8.81     $ 8.80  
                                                                
     Three Months Ended  

DIRECTV Average Revenue per Subscription

   July 31,
2007
    April 30,
2007
    Jan 31,
2006
    Oct 31,
2006
    July 31,
2006
    April 30,
2006
    Jan 31,
2005
    Oct 31,
2005
 
     (In thousands, except ARPU)  

Total Service revenues

     53,376       54,155       53,543       49,000       49,430       46,951       46,305       42,296  

Less: TiVo-Ow ned-related service revenues

     (46,823 )     (46,995 )     (45,091 )     (41,427 )     (41,234 )     (38,942 )     (36,703 )     (33,659 )
                                                                

DIRECTV-related service revenues

     6,553       7,160       8,452       7,573       8,196       8,009       9,602       8,637  

Average DIRECTV revenues per month

     2,184       2,387       2,817       2,524       2,732       2,670       3,201       2,879  

Average DIRECTV per month subscriptions

     2,554       2,668       2,767       2,837       2,858       2,881       2,818       2,505  
                                                                

DIRECTV ARPU per month

   $ 0.86     $ 0.89     $ 1.02     $ 0.89     $ 0.96     $ 0.93     $ 1.14     $ 1.15  
                                                                

Average Revenue Per Subscription or ARPU. Management reviews this metric, and believes it may be useful to investors, in order to evaluate the potential of our subscription base to generate revenues from a variety of sources, including subscription fees, advertising, and audience research measurement. ARPU does not include rebates, revenue share and other payments to channel that reduce our GAAP revenues. As a result, you should not use ARPU as a substitute for measures of financial performance calculated in accordance with GAAP. Management believes it is useful to consider this metric excluding the costs associated with rebates, revenue share and other payments to channel because of the discretionary and varying nature of these expenses and because management believes these expenses, which are included in hardware revenues, net, are more appropriately monitored as part of SAC. We are not aware of any uniform standards for calculating ARPU and caution that our presentation may not be consistent with that of other companies.


We calculate ARPU per month for TiVo-Owned subscriptions by subtracting DIRECTV-related service revenues (which includes DIRECTV subscription service revenues and DIRECTV-related advertising revenues) from our total reported net service revenues and dividing the result by the number of months in the period. We then divide by Average TiVo-Owned subscriptions for the period, calculated as described above for churn rate. The above table shows this calculation.

We calculate ARPU per month for DIRECTV subscriptions by first subtracting TiVo-Owned-related service revenues (which includes TiVo-Owned subscription service revenues and TiVo-Owned related advertising revenues) from our total reported service revenues. Then we divide average revenues per month for DIRECTV-related service revenues by average subscriptions for the period. The above table shows this calculation.

Beginning in February 2006, pursuant to the most recent amendment of our agreement with DIRECTV, TiVo defers a portion of the DIRECTV subscription fees equal to the fair value of the undelivered development services. Additionally, beginning in February 2007, DIRECTV began paying us a monthly fee for all DIRECTV households with DIRECTV receivers with TiVo service similar to the lower amount paid by DIRECTV for households with DIRECTV receivers with TiVo service deployed since March 15, 2002, subject to a monthly minimum payment by DIRECTV.