TiVo 2003 Annual Report Download - page 44

Table of Contents
cease to beneficially own any common shares) of our common stock. The rights are not exercisable as of April 1, 2004. We will be entitled to redeem the
rights at $0.01 per right at any time prior to the time that a person or group becomes an acquiring person.
These provisions of Delaware law, our Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws and our Rights
Agreement could make it more difficult for us to be acquired by another company, even if our acquisition is in the best interests of our stockholders. Any
delay or prevention of a change of control or change in management could cause the market price of our common stock to decline.
In the future, our revenues and operating results may fluctuate significantly, which may adversely affect the market price of our common
stock.
We expect our revenues and operating results to fluctuate significantly due to a number of factors, many of which are outside of our control. Therefore,
you should not rely on period-to-period comparisons of results of operations as an indication of our future performance. It is possible that in some periods our
operating results may fall below the expectations of market analysts and investors. In this event, the market price of our common stock would likely fall.
Factors that may affect our quarterly operating results include:
• demand for TiVo-enabled DVRs and the TiVo service;
• the timing and introduction of new services and features on the TiVo service;
• seasonality and other consumer and advertising trends;
• changes in revenue sharing arrangements with our strategic relationships;
• entering into new or terminating existing strategic partnerships;
• changes in the subsidy payments we make to certain strategic relationships;
• changes in our pricing policies, the pricing policies of our competitors and general pricing trends in the consumer electronics market;
• timing of revenue recognition under our licensing agreements;
• loss of subscriptions to the TiVo service; and
• general economic conditions.
Because our expenses precede associated revenues, unanticipated shortfalls in revenues could adversely affect our results of operations for any given
period and cause the market price of our common stock to fall.
Seasonal trends may cause our quarterly operating results to fluctuate and our inability to forecast these trends may adversely affect the
market price of our common stock.
Consumer electronic product sales have traditionally been much higher during the holiday shopping season than during other times of the year.
Although predicting consumer demand for our products is very difficult, we have experienced that sales of DVRs and new subscriptions to the TiVo service
have been disproportionately high during the holiday shopping season when compared to other times of the year. If we are unable to accurately forecast and
respond to consumer demand for our products, our reputation and brand will suffer and the market price of our common stock would likely fall.
We expect that a portion of our future revenues will come from targeted commercials and other forms of television advertising enabled by the TiVo
service. Expenditures by advertisers tend to be seasonal and cyclical, reflecting overall economic conditions as well as budgeting and buying patterns. A
decline in the economic prospects of advertisers or the economy in general could alter current or prospective advertisers' spending priorities or increase the
time it takes to close a sale with our advertisers, which could cause our revenues from advertisements to decline significantly in any given period.
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