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Table of Contents
guidance and includes some enhanced disclosure requirements. The most significant change in disclosures is an expansion of the information required for
Level 3 measurements based on unobservable inputs. The standard is effective for fiscal years beginning after December 15, 2011. We will adopt this
standard in the first quarter of fiscal year 2013 and the adoption will not have a material impact on our financial statements and disclosures.
Results of Operations
Net Revenues.
Our net revenues for the fiscal years ended January 31, 2012, 2011, and 2010 as a percentage of total net revenues were as follows:
Fiscal Year Ended January 31,
2012 2011 2010
(In thousands, except percentages)
Service revenues $ 131,341 55% $ 140,649 64% $ 159,772 67%
Technology revenues $ 58,945 25% $ 27,341 12% $ 29,907 13%
Hardware revenues $ 47,893 20% $ 51,618 24% $ 48,787 20%
Net revenues $ 238,179 100% $ 219,608 100% $ 238,466 100%
Change from same prior year period 8% (8)% (5)%
Service Revenues. The decrease in service revenues of $9.3 million for the fiscal year ended January 31, 2012, as compared to the same prior year period
was primarily due to a lower cumulative subscription base (including both TiVo-Owned and MSO subscriptions) slightly offset by an increase in MSO
service revenues of $1.0 million primarily due to revenues from new deployments.
The decrease in service revenues of $19.1 million in the fiscal year ended January 31, 2011, as compared to the same prior year period was due to a
lower cumulative subscription base combined with an increased number of fully-amortized product lifetime subscriptions which no longer generated
subscription revenues. The decrease in TiVo-Owned Service revenues in the fiscal year ended January 31, 2011 as compared to the same prior year period
was slightly offset by an increase in MSOs service revenues of $608,000 primarily due to DIRECTV monthly minimum payments.
Technology Revenues. Technology revenues for the fiscal year ended January 31, 2012 increased by $31.6 million, as compared to the same prior year
periods primarily due to our agreement with DISH Network, which generates $11.1 million in revenue per quarter (Refer to Note 18. "DISH Network
Corporation" of notes to consolidated financial statements included in Part II. Item 8. of this report). We expect our Technology revenues in our fiscal year
ending January 31, 2013 to further benefit from licensing revenue we will receive due to our agreement with AT&T entered into in the fourth quarter ended
January 31, 2012.
Technology revenues for the fiscal year ended January 31, 2011 decreased by 9%, or $2.6 million as compared to the prior fiscal year primarily due to
the fact that some of our newer deployment arrangements such as Virgin provide for lower or later funding of the development effort and we recognize
revenue in these arrangements only after we have the contractual right to invoice the customer. Also, the amounts paid by DIRECTV and attributable to
development efforts were lower in fiscal year 2011 compared to the same prior year periods.
Hardware Revenues. Hardware revenues, net of allowance for sales returns and net of revenue shares and marketing development fund payments for the
fiscal year ended January 31, 2012 decreased by $3.7 million as compared to the same prior year period. The decrease in net hardware revenues for the fiscal
year ended January 31, 2012 is largely related to the decrease in the number of hardware units sold, as compared to the same prior year period when we
launched our TiVo Premiere boxes. Also contributing to the decrease is the continuation of our lower hardware pricing and higher subscription pricing (which
allow consumers to pay lower upfront costs for the TiVo box with higher monthly subscription fees) for TiVo-Owned subscriptions, offset by an increase in
revenues from MSOs.
Hardware revenues, net of allowance for sales returns and net of revenue share and marketing development fund payments for the twelve months ended
January 31, 2011, increased by $2.8 million, as compared to the same prior year period. The increase in net hardware revenues for the fiscal year ended
January 31, 2011 is largely related to the increase in the number of units sold during the period as compared to the same prior year period, as
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