TiVo saw its MSO subscriber base grow by 312,000, or 24 percent, in the first quarter, but its revenue slid 6.5 percent to $107.3 million as the decline in its hardware business overshadowed growth in software and user interfaces.
TiVo had already announced a month ago that it has surpassed 7.1 million MSO subscribers. The man who heads TiVo's MSO business, Tom Elam, told FierceCable last month at INTX that only around 40 percent of TiVo's MSO subs use TiVo manufactured set-tops. None of its international MSO customers do.
TiVo is moving to a business model in which it supplies software and services that run on set-tops manufactured by third parties, including Evolution Digital.
"On the MSO partner side, we've generally been moving from having TiVo-manufactured hardware to third-party-manufactured hardware," Elam said.
Hardware sales declined by two-thirds year over year, to $7.5 million, with the company saying it continues to "transition" out of the set-top manufacturing business.
The decline in hardware sales obscured growth of 44 percent for software and service sales to cable operators.
TiVo reported net income of $4.2 million. This figure, the company said, includes $5.2 million in transaction costs related to its proposed $1.1 billion deal to be acquired by Rovi. Corp.
"We are very pleased with our solid execution this quarter which continues to position us for a successful combination with Rovi," Naveen Chopra, TiVo's interim CEO, said in a statement. "Rapid change in the video landscape continues to underscore the value of companies that can bring simple, distinctive, and comprehensive navigation to an increasingly fragmented world of video content and consumption"
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