(StartName) – Digital video recorder maker TiVo Inc reported better-than-expected quarterly profit and revenue due to strong growth in subscribers through cable TV partners such as Virgin Media in the UK, ONO in Spain and Com Hem AB in Sweden.
TiVo’s subscriptions rose by a third to 4.8 million in the second quarter ended July 31.
Demand for the company’s set-top boxes is high from cable TV customers as these devices allow access to online video services such as Hulu, Netflix Inc’s Netflix and Google Inc’s YouTube.
TiVo, whose clients include DirecTV, is trying to partner with more cable TV operators to grow its business.
TiVo sells subscriptions directly to consumers with its video recorders and also licenses its technology to cable TV operators that rent recorders to subscribers.
The company partnered with Canadian telecom company Cogeco Cable Inc in July and extended its contract with DirecTV in August.
TiVo also launched on Monday a video recorder with an antenna that allows users without cable or satellite TV subscription to record shows from over-the-air TV channels and video streaming services for $14.99 per month.
The company’s net profit fell to $9.3 million, or 8 cents per share, in the second quarter from $268.9 million, or $1.96 per share, a year earlier, when it had a gain of $276 million related to settlement of lawsuits with Cisco Systems Inc and Motorola Mobility.
Revenue rose 11.8 percent to $111.9 million.
Analysts on average had expected a profit of 7 cents per share and revenue of $87.7 million, according to Thomson StartName I/B/E/S.
TiVo’s service and technology revenue rose 13 percent to $86.6 million. The company’s net subscriber additions increased to 263,000 from 212,000, a year earlier.
TiVo forecast a profit of $6 million-$9 million and service and technology revenue of $86 million-$89 million for the third quarter ending October.
Analysts on average were expecting earnings of $9 million.
The company also said it would buy back shares worth up to $350 million by Jan. 31, 2017. Of this, it will buy back shares worth up to $100 million this year.
TiVo’s shares closed at $13.90 on the Nasdaq on Tuesday. Up to Tuesday’s close, the stock had gained about 6 percent this year.
(Reporting by Soham Chatterjee in Bangalore; Editing by Kirti Pandey)