TiVo 2006 Annual Report Download - page 55

Table of Contents
Of the total service revenues and technology revenues for the fiscal year ended January 31, 2005, $6.8 million was generated from related parties. No
revenues were generated from related parties in the fiscal years ended January 31, 2006 or 2007.
• Service Revenues. Service revenues for the fiscal year ended January 31, 2007 increased 19% or $31.7 million over the service revenues for the
fiscal year ended January 31, 2006. This increase was primarily due to the year over year growth in our TiVo-Owned subscription base. During
the fiscal year ended January 31, 2007 we added 235,000 net TiVo-Owned subscriptions bringing the total installed base to over 4.4 million as of
January 31, 2007. Service revenues for the year ended January 31, 2006 were $167.2 million, 56% higher than the service revenues for the year
ended January 31, 2005. During the fiscal year ended January 31, 2006, we added 1.4 million net subscriptions to the TiVo service.
Consumer demand for TiVo-enabled DVR and DVD products was driven by broad availability and strong support in the retail channel, consumer
rebate programs, and increased consumer awareness of the TiVo service. We intend to generate continued TiVo-Owned subscription growth by
managing our relationships with leading retailers such as Best Buy, Circuit City, Radio Shack, and others and by launching advertising
campaigns directed at growing our subscription base. We anticipate fiscal year 2008 will have continued service revenue growth as our TiVo-
Owned subscription installed base increases and our advertising sales business grows; however, we expect to see a decrease in DIRECTV-related
service revenues in fiscal year 2008 as compared to fiscal year 2007.
• Technology Revenues. In the fiscal year ended January 31, 2007, we derived 7% of our net revenues, or $19.1 million, from licensing and
engineering services compared to 2% of our net revenues, or $3.7 million, in the prior fiscal year. Technology revenues for the fiscal year ended
January 31, 2007 were 420%, or $15.4 million higher than the prior fiscal year end largely due to revenues of $16.2 million in revenues
recognized from engineering services related to our agreement with Comcast, of which $4.6 million is related to services performed in fiscal year
2006, and was offset by an equal amount of development expense recognized as cost of technology revenues. Technology revenues for fiscal year
2006 were 56% lower than the fiscal year 2005 as engineering services for existing contracts were completed and engineering services related to
our agreements with Comcast had not yet begun. Additionally, in fiscal year 2006, we determined that we needed to incur $1.0 million of
development costs related to a loss contract deemed substantially complete in fiscal year 2005. As a result, we recorded a total charge of $1.0
million to the statement of operations in the three months ended July 31, 2005 of which $435,000 was a reduction in technology revenues and
$598,000 was an increase in costs of technology revenues. Technology revenues for the twelve months ended January 31, 2006 were largely a
result of amortization of deferred revenue on existing license contracts.
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