TiVo 2006 Annual Report Download - page 45

Table of Contents
Three Months Ended
Jan 31,
2007
Oct 31,
2006
Jul 31,
2006
Apr 30,
2006
Jan 31,
2006
Oct 31,
2005
Jul 31,
2005
Apr 30,
2005
(unaudited, in thousands except per share data)
Revenues
Service revenues $ 53,543 $ 49,000 $49,430 $ 46,951 $ 46,305 $ 42,296 $40,249 $38,344
Technology revenues 3,837 3,616 3,450 8,158 663 901 425 1,676
Hardware revenues 35,074 27,978 16,235 9,453 32,266 24,652 4,649 10,526
Rebates, revenue share, and other payments to channel* (15,204) (14,934) (9,948) (8,050) (19,167) (18,234) (5,988) (3,638)
Net revenues 77,250 65,660 59,167 56,512 60,067 49,615 39,335 46,908
Cost of revenues
Cost of service revenues 12,445 10,820 9,628 10,435 10,250 8,431 6,859 8,639
Cost of technology revenues 3,476 3,006 3,001 7,366 (121) 77 599 227
Cost of hardware revenues 43,534 31,925 21,607 15,146 38,811 24,667 7,697 15,642
Total cost of revenues 59,455 45,751 34,236 32,947 48,940 33,175 15,155 24,508
Gross margin 17,795 19,909 24,931 23,565 11,127 16,440 24,180 22,400
Operating expenses
Research and development 12,755 12,221 12,891 12,861 10,693 9,712 9,778 10,904
Sales and marketing* 17,099 10,123 8,344 7,389 10,637 10,006 7,574 6,830
General and administrative 8,852 9,811 11,091 15,059 11,769 11,702 8,409 6,138
Loss from operations (20,911) (12,246) (7,395) (11,744) (21,972) (14,980) (1,581) (1,472)
Interest income 1,426 1,291 988 1,062 900 826 734 624
Interest expense and other (8) (133) (29) (3) (1) (10) (2) (1)
Loss before income taxes (19,493) (11,088) (6,436) (10,685) (21,073) (14,164) (849) (849)
Provision for income taxes (17) (4) (12) (19) (13) — (43) (8)
Net loss $(19,510) $(11,092) $ (6,448) $(10,704) $(21,086) $(14,164) $ (892) $ (857)
Net loss per common share basic and diluted $ (0.20) $ (0.12) $ (0.07) $ (0.13) $ (0.25) $ (0.17) $ (0.01) $ (0.01)
Weighted average common shares used to calculate basic net loss per share 96,415 91,930 85,978 85,134 84,643 84,201 83,506 82,381
* Changes to Previously Announced Fourth Quarter and Fiscal Year Ended January 31, 2007 Results
We have made adjustments to our previously announced results for the fourth quarter and fiscal year ended January 31, 2007, announced on
March 7, 2007. During the course of preparation of our annual report on Form 10-K, we determined we had understated revenue share and sales and
marketing expenses by a total of $802,000 resulting in an increase in net loss per share of $0.01 for the fiscal year and fourth quarter ended January 31, 2007.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
You should read the following discussion and analysis in conjunction with the consolidated financial statements and the notes included elsewhere in
this annual report and the section "Risk Factors" in Item 1A, as well as other cautionary statements and risks described elsewhere in this report, before
deciding to purchase, sell or hold our common stock.
Company Overview
We are a leading provider of technology and services for digital video recorders. The subscription-based TiVo service redefines home
entertainment by providing consumers with an easy way to record, watch, and control television and receive videos, pictures, and movies from cable,
broadcast, and broadband sources. We offer such features as Season Pass recordings, WishList® searches, TiVoToGo transfers, TiVoCast content (which
includes premium content delivered from Amazon Unbox), TiVo KidZone, TiVo Online Scheduling, and TiVo Product Watch. As of January 31, 2007, there
were approximately 4.4 million subscriptions to the TiVo service. We distribute the TiVo service through consumer electronics retailers and through our on-
line store at TiVo.com. Additionally, we provide the TiVo service through agreements with leading television service providers such as satellite television
providers, including currently DIRECTV and in the future cable television operators, such as Comcast and Cox, and digital subscriber line, DSL, providers
such as BellSouth and Earthlink. We also provide innovative marketing solutions for the television industry, including a unique platform for advertisers and
audience research measurement.
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