FY08 Q4 Key Financial Metric Trend Sheets

EX-99.2 3 dex992.htm FY08 Q4 KEY FINANCIAL METRIC TREND SHEETS FY08 Q4 Key Financial Metric Trend Sheets

Exhibit 99.2

Trend Sheet for GAAP Statement of Operations

(unaudited, in thousands, except per share data)


	Three Months Ended
	Jan 31, 2008			Oct 31, 2007			July 31, 2007			April 30, 2007			Jan 31, 2007			Oct 31, 2006			July 31, 2006			Apr 30, 2006
Income Statement
Net revenues	$	74,118		$	75,519		$	62,659		$	60,380		$	76,850		$	66,003		$	59,315		$	56,753
Hardware revenues		16,066			17,240			6,199			2,293			19,890			13,476			6,503			1,719
Cost of hardware revenues		23,885			29,114			28,271			10,648			43,534			31,925			21,607			15,146
Service and Technology revenues	$	58,052		$	58,279		$	56,460		$	58,087		$	56,960		$	52,527		$	52,812		$	55,034
Service revenues		51,025			52,940			53,376			54,155			53,543			49,000			49,430			46,951
Technology revenues		7,027			5,339			3,084			3,932			3,417			3,527			3,382			8,083
Cost of service & technology revenues	$	17,271		$	15,650		$	13,760		$	13,662		$	15,921		$	13,826		$	12,629		$	17,801
Cost of service revenues ⁽¹⁾		12,019			10,738			10,064			10,155			12,445			10,820			9,628			10,435
Cost of technology revenues ⁽¹⁾		5,252			4,912			3,696			3,507			3,476			3,006			3,001			7,366
Gross margin of service & technology revenues	$	40,781		$	42,629		$	42,700		$	44,425		$	41,039		$	38,701		$	40,183		$	37,233
Operating expenses
Research and development ⁽¹⁾	$	15,416		$	14,049		$	15,070		$	14,245		$	12,755		$	12,221		$	12,891		$	12,861
Sales and marketing ⁽¹⁾		7,336			5,967			5,381			5,303			6,784			5,450			5,439			4,847
Sales and marketing, subscription acquisition costs		7,195			9,050			9,015			5,790			9,915			5,016			3,053			2,783
General and administrative ⁽¹⁾		10,234			11,106			10,392			11,222			8,852			9,811			11,091			15,059
Interest and other income (expense)	$	883		$	1,173		$	1,540		$	1,333		$	1,418		$	1,158		$	959		$	1,059
Provision for income tax		(22	)		—			—			(8	)		(17	)		(4	)		(12	)		(19	)
Net income (loss)		(6,358	)		(8,244	)		(17,690	)		835			(19,510	)		(11,092	)		(6,448	)		(10,704	)
Net income (loss) per basic and diluted common share	$	(0.06	)	$	(0.08	)	$	(0.18	)	$	0.01		$	(0.20	)	$	(0.12	)	$	(0.07	)	$	(0.13	)
Weighted average common shares outstanding - basic		98,518			97,611			97,084			96,829			96,415			91,930			85,978			85,134
Weighted average common shares outstanding - diluted		98,518			97,611			97,084			98,047			96,415			91,930			85,978			85,134
Balance Sheet & Cash Flow
Cash & cash equivalents, and short-term investments	$	99,106		$	82,458		$	97,629		$	101,784		$	128,765		$	106,965		$	75,118		$	92,351
Net cash provided by (used in) operating activities (YTD)		32,090			(44,523	)		(29,906	)		(26,213	)		(33,507	)		(55,212	)		(32,796	)		(14,150	)

⁽¹⁾ Includes Stock-based compensation expenses as follows:	$	5,697		$	7,260		$	5,242		$	4,640		$	3,979		$	4,083		$	3,563		$	3,087
Cost of services revenues		216			178			178			157			117			129			130			94
Cost of technology revenues		729			726			504			463			338			236			243			203
Research and development		1,934			1,797			1,967			1,628			1,419			1,608			1,451			1,118
Sales and marketing		737			660			332			476			385			474			450			340
General and administrative		2,081			3,899			2,261			1,916			1,720			1,636			1,289			1,332

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

(unaudited, in thousands except per share data)


	Three Months Ended
	Jan 31, 2008			Oct 31, 2007			July 31, 2007			Apr 30, 2007			Jan 31, 2007			Oct 31, 2006			July 31, 2006			Apr 30, 2006
Reconciliation to EBITDA and Adjusted EBIDTA
Net income (loss)	$	(6,358	)	$	(8,244	)	$	(17,690	)	$	835		$	(19,510	)	$	(11,092	)	$	(6,448	)	$	(10,704	)
Add back:
Depreciation & amortization		2,675			2,445			2,586			2,620			1,944			2,217			1,868			1,730
Interest income & expense		(1,050	)		(1,201	)		(1,324	)		(1,400	)		(1,423	)		(1,246	)		(988	)		(1,060	)
Provision for income tax		22			—			—			8			17			4			12			19
EBITDA	$	(4,711	)	$	(7,000	)	$	(16,428	)	$	2,063		$	(18,972	)	$	(10,117	)	$	(5,556	)	$	(10,015	)
Stock-based compensation		5,697			7,260			5,242			4,640			3,979			4,083			3,563			3,087
Adjusted EBITDA	$	986		$	260		$	(11,186	)	$	6,703		$	(14,993	)	$	(6,034	)	$	(1,993	)	$	(6,928	)
Subscription Metrics
TiVo-Owned subscription gross additions		109			69			41			57			163			101			74			91
TiVo-Owned subscription cancellations		(76	)		(65	)		(60	)		(56	)		(62	)		(48	)		(44	)		(40	)
TiVo-Owned churn rate per month		-1.5	%		-1.3	%		-1.2	%		-1.1	%		-1.2	%		-1.0	%		-0.9	%		-0.9	%
TiVo-Owned net additions (losses)		33			4			(19	)		1			101			53			30			51
TiVo-Owned cumulative subscriptions		1,745			1,712			1,708			1,727			1,726			1,625			1,572			1,542
% of TiVo-Owned cumulative subscriptions paying recurring fees		61	%		60	%		59	%		59	%		58	%		55	%		53	%		52	%
Fully Amortized Active Lifetime Subscriptions		175			190			180			179			165			138			129			122
MSOs/Broadcasters’ Net additions (losses)		(155	)		(134	)		(126	)		(103	)		(91	)		(37	)		(29	)		2
Total subscription net additions (losses)		(122	)		(130	)		(145	)		(102	)		10			16			1			53
Total cumulative subscriptions		3,946			4,067			4,197			4,342			4,444			4,434			4,418			4,417
TiVo-Owned ARPU & Subscription Acquisition Costs
TiVo-Owned-related service revenues		43,892			46,341			46,823			46,995			45,091			41,427			41,234			38,942
TiVo-Owned average subscriptions		1,727			1,708			1,719			1,729			1,673			1,596			1,559			1,520
TiVo-Owned ARPU per month	$	8.47		$	9.04		$	9.08		$	9.06		$	8.98		$	8.65		$	8.82		$	8.54
TiVo-Owned total acquisition costs (Quarterly)		15,014			20,924			31,087			14,145			33,559			23,465			18,157			16,210
TiVo-Owned subscription gross additions (Quarterly)		109			69			41			57			163			101			74			91
TiVo-Owned subscription acquisition costs (Quarterly)		138			303			758			248			206			232			245			178
TiVo-Owned total acquisition costs ( 12 months ended)		81,170			99,715			102,256			89,326			91,391			88,459			88,517			82,451
TiVo-Owned subscription gross additions (12 months ended)		276			330			362			395			429			487			478			481
TiVo-Owned subscription acquisition costs (12 months ended)		294			302			282			226			213			182			185			171
MSOs/Broadcasters’ ARPU
MSOs/Broadcasters’-related service revenues		7,133			6,599			6,553			7,160			8,452			7,573			8,196			8,009
MSOs/Broadcasters’ average subscriptions		2,279			2,422			2,554			2,668			2,767			2,837			2,858			2,881
MSOs/Broadcasters’ ARPU per month	$	1.04		$	0.91		$	0.86		$	0.89		$	1.02		$	0.89		$	0.96		$	0.93

⁽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. 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 evaluate our operating performance over multiple periods. Management does not use EBITDA or AEBITDA as a measure of liquidity because, among other things, they do not exclude the impact of deferred revenues associated with the amortization of product lifetime subscriptions. 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)	Jan 31, 2008		Oct 31, 2007		July 31, 2007		April 30, 2007		Jan 31, 2007		Oct 31, 2006		July 31, 2006		April 30, 2006
TiVo-Owned Subscription Gross Additions:	109		69		41		57		163		101		74		91
Subscription Net Additions/(Losses):
TiVo-Owned	33		4		(19	)	1		101		53		30		51
MSOs/Broadcasters	(155	)	(134	)	(126	)	(103	)	(91	)	(37	)	(29	)	2

Total Subscription Net Additions/(Losses)	(122	)	(130	)	(145	)	(102	)	10		16		1		53
Cumulative Subscriptions:
TiVo-Owned	1,745		1,712		1,708		1,727		1,726		1,625		1,572		1,542
MSOs/Broadcasters	2,201		2,355		2,489		2,615		2,718		2,809		2,846		2,875

Total Cumulative Subscriptions	3,946		4,067		4,197		4,342		4,444		4,434		4,418		4,417
Fully Amortized Active Lifetime Subscriptions	175		190		180		179		165		138		129		122
% of TiVo-Owned Cumulative Subscriptions paying recurring fees	61	%	60	%	59	%	59	%	58	%	55	%	53	%	52	%

Subscriptions. Management reviews this metric, and believes it may be useful to investors, in order to evaluate our relative position in the marketplace and to forecast future potential service revenues. The TiVo-Owned lines refer to subscriptions sold directly or indirectly by TiVo to consumers who have TiVo-enabled DVRs and for which TiVo incurs acquisition costs. The MSO’s/Broadcasters lines refer to subscriptions sold to consumers by MSOs/Broadcasters such as DIRECTV, Cablevision Mexico, and Comcast and in the future Cox and Seven and for which TiVo expects to incur little or no acquisition costs. Additionally, we provide a breakdown of the percent of TiVo-Owned subscriptions for which consumers pay recurring fees, including on a monthly and a prepaid one, two, or three year basis, as opposed to a one-time prepaid product lifetime fee.

We define a “subscription” as a contract referencing a TiVo-enabled DVR for which (i) a consumer has committed to pay for the TiVo service and (ii) service is not canceled. We have from time-to-time offered a product lifetime subscription for general sale, under which consumers could purchase a subscription that is valid for the lifetime of a particular DVR. We count these as subscriptions until both of the following conditions are met: (i) the period we use to recognize lifetime subscription revenues ends; and (ii) the related DVR has not made contact to the TiVo service within the prior six-month period. Lifetime subscriptions past this period which have not called into the TiVo service for six months are not counted in this total. During the quarter ended April 30, 2006, we discontinued general sale of the product lifetime service option. During the quarter ended January 31, 2008, we began offering product lifetime service subscriptions only to existing customers. Additionally, we have extended the period we use to recognize product lifetime subscription revenues from 48 months to 54 months for lifetime subscriptions acquired on or before October 31, 2007. Additionally, we also increased the amortization period to 60 months for new product lifetime subscriptions acquired on or after November 1, 2007 which are offered on a limited basis and primarily related to the TiVo HD DVR. We are not aware of any uniform standards for defining subscriptions and caution that our presentation may not be consistent with that of other companies. Additionally, the subscription fees that some of our MSO/Broadcasters pay us may be based upon a specific contractual definition of a subscriber or subscription which may not be consistent with how we define subscription for our reporting purposes.


	Three Months Ended
(Subscriptions in thousands)	Jan 31, 2008		Oct 31, 2007		July 31, 2007		April 30, 2007		Jan 31, 2007		Oct 31, 2006		July 31, 2006		April 30, 2006
Average TiVo-Owned subscriptions	1,727		1,708		1,719		1,729		1,672		1,596		1,559		1,520
TiVo-Owned subscription cancellations	(76	)	(65	)	(60	)	(56	)	(62	)	(48	)	(44	)	(40	)

TiVo-Owned Churn Rate per month	-1.5	%	-1.3	%	-1.2	%	-1.1	%	-1.2	%	-1.0	%	-0.9	%	-0.9	%

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
	Jan 31, 2008			Oct 31, 2007			Jul 31, 2007			Apr 30, 2007			Jan 31, 2007			Oct 31, 2006			Jul 31, 2006			Apr 30, 2006
	(In thousands, except SAC)
Subscription Acquisition Costs
Sales and marketing, subscription acquisition costs	$	7,195		$	9,050		$	9,015		$	5,790		$	9,915		$	5,016		$	3,053		$	2,783
Hardware revenues		(16,066	)		(17,240	)		(6,199	)		(2,293	)		(19,890	)		(13,476	)		(6,503	)		(1,719	)
Cost of hardware revenues		23,885			29,114			28,271			10,648			43,534			31,925			21,607			15,146

Total Acquisition Costs		15,014			20,924			31,087			14,145			33,559			23,465			18,157			16,210

TiVo-Owned Subscription Gross Additions		109			69			41			57			163			101			74			91
Subscription Acquisition Costs (SAC)	$	138		$	303		$	758		$	248		$	206		$	232		$	245		$	178



	Twelve Months Ended
	Jan 31, 2008			Oct 31, 2007			July 31, 2007			April 30, 2007			Jan 31, 2007			Oct 31, 2006			Jul 31, 2006			April 30, 2006
	(In thousands, except SAC)
Subscription Acquisition Costs
Sales and marketing, subscription acquisition costs	$	31,050		$	33,770		$	29,736		$	23,774		$	20,767		$	16,803		$	17,259		$	18,081
Hardware revenues		(41,798	)		(45,622	)	$	(41,858	)		(42,162	)		(41,588	)		(35,833	)		(28,973	)		(21,951	)
Cost of hardware revenues		91,918			111,567		$	114,378			107,714			112,212			107,489			100,231			86,321

Total Acquisition Costs		81,170			99,715			102,256			89,326			91,391			88,459			88,517			82,451

TiVo-Owned Subscription Gross Additions		276			330			362			395			429			487			478			481
Subscription Acquisition Costs (SAC)	$	294		$	302		$	282		$	226		$	213		$	182		$	185		$	171

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 MSOs/Broadcasters’ 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	Jan 31, 2008			Oct 31, 2007			July 31, 2007			April 30, 2007			Jan 31, 2007			Oct 31, 2006			July 31, 2006			April 30, 2006
	(In thousands, except ARPU)
Total Service revenues		51,025			52,940			53,376			54,155			53,543			49,000			49,430			46,951
Less: MSOs/Broadcasters-related service revenues		(7,133	)		(6,599	)		(6,553	)		(7,160	)		(8,452	)		(7,573	)		(8,196	)		(8,009	)

TiVo-Owned-related service revenues		43,892			46,341			46,823			46,995			45,091			41,427			41,234			38,942
Average TiVo-Owned revenues per month		14,631			15,447			15,608			15,665			15,030			13,809			13,745			12,981
Average TiVo-Owned per month subscriptions		1,727			1,708			1,719			1,729			1,673			1,596			1,559			1,520

TiVo-Owned ARPU per month	$	8.47		$	9.04		$	9.08		$	9.06		$	8.98		$	8.65		$	8.82		$	8.54


	Three Months Ended
MSOs/Broadcasters Average Revenue per Subscription	Jan 31, 2008			Oct 31, 2007			July 31, 2007			April 30, 2007			Jan 31, 2007			Oct 31, 2006			July 31, 2006			April 30, 2006
	(In thousands, except ARPU)
Total Service revenues		51,025			52,940			53,376			54,155			53,543			49,000			49,430			46,951
Less: TiVo-Owned-related service revenues		(43,892	)		(46,341	)		(46,823	)		(46,995	)		(45,091	)		(41,427	)		(41,234	)		(38,942	)

MSOs/Broadcasters-related service revenues		7,133			6,599			6,553			7,160			8,452			7,573			8,196			8,009
Average MSOs/Broadcasters revenues per month		2,378			2,200			2,184			2,387			2,817			2,524			2,732			2,670
Average MSOs/Broadcasters per month subscriptions		2,279			2,422			2,554			2,668			2,767			2,837			2,858			2,881

MSOs/Broadcasters ARPU per month	$	1.04		$	0.91		$	0.86		$	0.89		$	1.02		$	0.89		$	0.96		$	0.93

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 MSOs/Broadcaster-related service revenues (which includes MSOs/Broadcasters’ subscription service revenues and MSOs/Broadcasters’-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. The decrease in ARPU per month for TiVo-Owned subscriptions during the fourth quarter ended January 31, 2008 as compared to the prior year period was the result of the recent change in amortization period for product lifetime subscriptions.

We calculate ARPU per month for MSOs/Broadcasters’ 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 MSOs/Broadcasters’-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.