TiVo, which has mostly posted losses since the second half of 2009, has seen intellectual-property battles and heavy litigation costs impact its bottom-line results in recent periods. However, the company has also seen good returns for its legal spending, reaching settlements with EchoStar Corp. (SATS), Dish Network Corp. (DISH) and Verizon Communications Inc. (VZ). The year-ago period included $54.4 million of litigation proceeds from the AT&T settlement.
Though the settlements have helped TiVo's results, the company is still embroiled in other lawsuits, including one against the Motorola set-top box unit. Tom Rogers, TiVo's chief executive, said in an interview that costs from that lawsuit were larger than expected during the quarter due to a lengthy discovery process.
"Had it been where we expected, we would have blown out the quarter," he said.
TiVo has also been placing less emphasis on the set-top boxes it sells at retail and more on distributing its offerings through operators' set-top boxes or through TVs alone, helping to drive net subscription growth recently.
The company has now recorded subscriber increases for six consecutive quarters, following a four-year streak of declining subscriber numbers. TiVo has noted that companies such as Comcast Corp. (CMCSA) have expanded the markets offering TiVo boxes, giving it momentum to grow its business and prepare for new competitors.
Mr. Rogers played down his reliance on operators for the company's growth, however. He said TiVo continues to build technology that will allow its software to run in other devices, including televisions. That is notable following LG Electronics Inc.'s (066570.SE) decision to buy and begin using Hewlett-Packard Co.'s (HPQ) WebOS software in its televisions.
"We will deliver all flavors," he said.
In the latest quarter, TiVo added a net 209,000 subscribers, compared with the 234,000 subscribers it gained a year earlier.
