INVESTOR PRESENTATION - MARCH 21, 2017 - TIVO
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Investor Presentation March 21, 2017 Company Overview
Safe Harbor Statement
This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to, among
other things, TiVo Corporation’s (“TiVo” or the “Company”) estimates of future financial performance, including future revenues, earnings and expenses, as well as
future business strategies and future product offerings, deployments and technology and intellectual property licenses with various named customers.
These forward-looking statements are based on TiVo’s current expectations, estimates and projections about its business and industry, management’s beliefs and
certain assumptions made by the company, all of which are subject to change. Forward-looking statements generally can be identified by the use of forward-looking
terminology such as, “future”, "believe," "expect," "may," "will," "intend," "estimate," "continue," or similar expressions or the negative of those terms or expressions. Such
statements involve risks and uncertainties, which could cause actual results to vary materially from those expressed in or indicated by the forward-looking statements.
Factors that may cause actual results to differ materially include delays in development, competitive service offerings and lack of market acceptance, as well as the
other potential factors described under "Risk Factors" included in TiVo’s most recent report on Form 10-K and other documents of TiVo Corporation on file with the
Securities and Exchange Commission (available at www.sec.gov). TiVo cautions you not to place undue reliance on forward-looking statements, which reflect an
analysis only and speak only as of the date hereof. TiVo assumes no obligation to update any forward-looking statements in order to reflect events or circumstances
that may arise after the date of this release, except as required by law.
Non-GAAP Information
Non-GAAP Total COGS and OpEx is defined as GAAP Total Operating costs and expenses, excluding amortization of intangible assets, restructuring and asset
impairment charges, equity-based compensation, transaction, transition and integration expenses, retention earn-outs payable to former shareholders of acquired
businesses, earn-out settlements, changes in the fair value of contingent consideration and changes in franchise tax reserves.
Adjusted EBITDA is defined as GAAP operating income excluding depreciation, amortization of intangible assets, restructuring and asset impairment charges, equity-
based compensation, transaction, transition and integration expenses, retention earn-outs payable to former shareholders of acquired businesses, earn-out settlements
changes in the fair value of contingent consideration and changes in franchise tax reserves.
Non-GAAP Pre-tax Income is defined as GAAP income (loss) from continuing operations before income taxes, as adjusted for the effects of items such as amortization of
intangible assets, equity-based compensation, accretion of contingent consideration, amortization or write-off of note issuance costs and discounts on convertible debt
and mark-to-market adjustments for interest rate swaps; as well as items which impact comparability that are required to be recorded under GAAP, but that the
Company believes are not indicative of its core operating results such as restructuring and asset impairment charges, transaction, transition and integration costs,
changes in the liability for dissenting shareholders, retention earn-outs payable to former shareholders of acquired businesses, earn-out settlements, changes in the fair
value of contingent consideration, payments to note holders and expenses in connection with the extinguishment or modification of debt, gains on sale of strategic
investments and changes in franchise tax reserves.
Cash taxes are defined as GAAP current income tax expense excluding changes in reserves for unrecognized tax benefits.
Non-GAAP Weighted Average Diluted Shares Outstanding is defined as GAAP weighted average diluted shares outstanding except for periods of a GAAP loss. In
periods of a GAAP loss, GAAP weighted average diluted shares outstanding are adjusted to include dilutive common share equivalents outstanding that were excluded
from GAAP weighted average diluted shares outstanding because the Company had a loss and therefore these shares would have been anti-dilutive.
2 © 2017 TiVo Corporation
Use and Limitations of Non-GAAP Information
The Company's management evaluates and makes decisions about its business operations primarily based on Non-GAAP financial information.
Management uses Non-GAAP financial measures as the basis for decision-making as they exclude items management does not consider to be
“core costs” or “core proceeds”. For each Non-GAAP financial measure, the adjustment provides management with information about the
Company's underlying operating performance that enables a more meaningful comparison to its historical and projected financial performance
in different reporting periods. For example, since the Company does not acquire businesses on a predictable cycle, management excludes the
amortization of intangible assets, transaction, transition and integration costs, retention earn-outs payable to former shareholders of acquired
businesses, changes in contingent consideration, and earn-out settlements from its Non-GAAP financial measures in order to make more consistent
and meaningful evaluations of the Company's operating expenses as these items may be significantly impacted by the timing and magnitude of
acquisitions. Management also excludes the effect of restructuring and asset impairment charges, expenses in connection with the extinguishment
or modification of debt and gains on sale of strategic investments. Management excludes the impact of equity-based compensation to provide
meaningful supplemental information that allows investors greater visibility to the underlying performance of our business operations, facilitates
comparison of our results with other periods, and may facilitate comparison with the results of other companies in our industry, as well as to provide
the Company’s management with an important tool for financial and operational decision making and for evaluating the Company’s
performance over different periods of time. Due to varying valuation techniques, reliance on subjective assumptions and the variety of award
types and features that may be in use, we believe that providing non-GAAP financial measures excluding equity-based compensation allows
investors to make more meaningful comparisons between our operating results and those of other companies. Management excludes the
amortization or write-off of note issuance costs and discounts on convertible debt, accretion of contingent consideration and mark-to-market
adjustments for interest rate swaps when management evaluates the Company's operating expenses.
Management reclassifies the current period benefit (cost) of the interest rate swaps from gain (loss) on interest rate swaps to interest expense in
order for Non-GAAP Interest Expense to reflect the effects of the interest rate swaps as these interest rate swaps were entered into to control the
effective interest rate the Company pays on its debt. Management uses these Non-GAAP financial measures to help it make decisions, including
decisions that affect operating expenses and operating margin. Management believes that making Non-GAAP financial information available to
investors, in addition to GAAP financial information, may facilitate more consistent comparisons between the Company's performance over time
with the performance of other companies in our industry, which may use similar financial measures to supplement their GAAP financial information.
Management recognizes that these Non-GAAP financial measures have limitations as analytical tools, including the fact that management must
exercise judgment in determining which types of items to exclude from the Non-GAAP financial information. In addition, as other companies,
including companies similar to TiVo Corporation, may calculate their non-GAAP financial measures differently than the Company calculates its
Non-GAAP financial measures, these Non-GAAP financial measures may have limited usefulness to investors when comparing financial
performance among companies. Management believes, however, that providing Non-GAAP financial information, in addition to GAAP financial
information, facilitates consistent comparison of the Company's financial performance over time. The Company provides Non-GAAP financial
information to the investment community, not as an alternative, but as an important supplement to GAAP financial information; to enable investors
to evaluate the Company's core operating performance in the same way that management does. Reconciliations for each Non-GAAP financial
measure to its most directly comparable GAAP financial measure are provided in the appendix.
3 © 2017 TiVo Corporation
Positioned at the intersection of critical industry megatrends
Formed by the Merger of Rovi and TiVo on September 7, 2016
NEW
Best-of-Breed Product Portfolio
Discovery & DVR
Branded Consumer service
Discovery
iGuide and Passport Cable & IPTV Network and OTA Pay-TV MSO DVR platform
DVR
Classic Guides Discovery, DVR Cloud DVR Cord-cutting Component Next-Gen UI (Hydra)
Fan TV Platform and OTT Solution Solution solution Platform Cloud & Network DVR
Cubiware Components
Cloud Platform & Metadata
Entertainment Metadata Digitalsmiths
Metadata
Entertainment
Search &
Search Entertainment & Conversation Seamless Discovery
Cloud
Search & Metadata &
Discovery API Services
Knowledge Graph Recommend Knowledge Seamless Insight
Platform (NLU)
Graph Scene level metadata
Conversation Services
Data & Analytics
Audience Segmentation
Analytics Tools
Analytics
Analytics
Audience Custom Reporting
Optimizer Viewership DVR & Guide
Guide Advertising Measurement
Tools Data Advertising DVR Advertising
Viewership Data Analytics
Viewership Data
Technology & Intellectual Property
800+ Patents
5100+ Patents
OTT & Media DVR & Media DVR, Time Shifting
Discovery, OTT Discovery Mobile
IP
IP
Streaming Shifting Discovery, Media,
Media, Advertising
Experience, Mobile
4 © 2017 TiVo CorporationGlobally Recognized Product & Technology Company
Innovating leading entertainment technology is our DNA
Mission
Deliver innovative products and IP to power
consumer entertainment experiences and increase
the value of our customers’ audience relationships
Platform Solutions
Solutions
Platform Solutions
We’re always inventing and investing to empower our
customers to deliver the ultimate entertainment
experience to ~23M HH around the globe
Software and Services
Our products touch practically every aspect of
consumers’ day-to-day interactions with media and Advanced Search
User and Entertainment Analytics and
entertainment across Pay TV, Media, OTT, Mobile and Experience Recommendations Metadata Advertising
CE companies
Leading Innovations
Our extensive IP portfolios, licensed into over 136M
Pay TV HHs, enable our customers to provide the most Innovation and IP
compelling entertainment experiences and have
generated over $3B* in combined license revenue
5 *Represents licensing revenues and past damages awards, recognized as a contra expense from both Rovi and TiVo Solutions Inc. © 2017 TiVo CorporationLong History of Key Industry Innovation
TiVo’s inventions have pioneered many of today’s media experiences and continue to shape the future.
First Brought TV Introduced First 4K
Universal listings to conversational UIs Gateway
Search mobile screens and dynamic
metadata
Invented 2010
2007 2014 Out-of-Home
the DVR First Hybrid Streaming
1998 Gateway
DIRECTV DVR
With TiVo Service True 2016
Whole Multi-Screen
Invented the 2000
Deployment Rovi
Home PVR
on-screen acquires
2008 First Netflix
program guide TiVo
Pay-TV
Solutions
Awarded our first Integration
Technology & Engineering
Emmy®
To date we have received
seven Emmy Awards
6 © 2017 TiVo CorporationMeeting Customer Needs with Multiple Licensing Options
Business Models 2016 Business Mix (M)
Fully-integrated UX Platforms
• Monthly per subscription license fees
• One-time term license fee for our
TiVo Service Platform $302, $347,
47% 53%
• Consumers can pay a monthly or
one-time all-in service fee
Software and Services
• Metadata provided on a monthly IP Licensing Revenue
or quarterly per subscriber fee Product & Service Revenue
• Search & Rec provided on a per Future Business Mix
subscriber or per device fee
• Other software application licenses
IP Licensing • TV Use case patents licensed on a
monthly per subscriber fee 51% 49%
• CE Use case patents licensed on
the number of units
• Online and OTT licensed on fixed
fees based on utilization
7 © 2017 TiVo CorporationGlobal Media & Entertainment Customers
CONSUMER MEDIA & INTERNET &
PAY-TV ELECTRONICS ADVERTISING STREAMING
500+ MSO Customers #1 Mobile Device Company Top 4 TV Networks #1 Internet Company
23M UX Households* #1 Smart TV Maker Top Advertising Agencies #1 Social Network
136M Licensed Households* Leading Set Top Box Makers Major Media Studios #1 Streaming Provider
NETFLIX
8 *Households delivering recurring revenue, as of December 31, 2016 © 2017 TiVo CorporationTiVo Investment Highlights
High visibility, high-margins, strong cash flows, cost synergies to increase Adj. EBITDA
Predictable business model
High revenue visibility from contracted revenues and high-probability renewals
Long-term visibility based on multi-year contracts with AT&T, DISH, and others
High profitability and strong cash flow
Margins ramping due to integration synergies
Expect non-GAAP operating income margin in the high 30’s when we provide 2018
expectations
Driving $100M+ of cost synergies, with 65%+ of those savings coming from actions taken by
Sept. 2017
Cost reductions are increasing Adj. EBITDA
Low effective cash tax rate due to $1B+ of NOL carryforwards
Stockholder-focused capital allocation and aligned management compensation
Dividend: $0.18/share declared in Q1 2017
Repurchase authorization: $150M
History of capital returns to stockholders
Management compensation tied to the high end of 2017 estimates
9 © 2017 TiVo CorporationMeeting Insatiable Demand for Media Entertainment
Studios are creating more Consumers can access more Consumers are watching more
# of US Original Scripted TV Series Video Viewing Minutes (Per Person Per Day)
250
267 343 409
211
Pay-TV
2009 2011 2013 2015
200
Skinny Bundles
Over the Top
NETFLIX 150
2005 2010 2015
Source: FX Networks Research 2016 Source: IHS 2016
10 © 2017 TiVo CorporationProducts: Platform Solutions
Integrated multiscreen media navigation platform for Pay-TV, Over-the-Top and Over-the-Air
Key Market Drivers Addressable Markets*
Integrated UX Platform
• Media services are fragmenting US Pay TV HH (M)
100
- Subscribers need cross-platform discovery
80
80 87
• Subscribers want to access content on a variety 60
of different devices 62 66
40
- Consumers need multi-screen experiences 20
• MVPDs need to deliver compelling experiences -
6.2M Households Licensed 2016 2019
to retain video customers 2016 Pay TV HD HH 2019
DVR HH
Classic Guide Platform - Upgrading to connected experiences
Int’l Connected STBs (M)
TiVo Growth Opportunities
25
500 APAC EMEA LATAM
• Upgrading ~17M Classic Guide installed base 135
400 13
- TiVo connected multiscreen guide drives 300
higher ARPU per household 200 103 365
100 180
16.8M Households Licensed • International Connected Guides 0
- MVPDs investing in connected experiences 2016 2019
Emerging Market Middleware
• Emerging market cost effective middleware US Non Pay TV Digital HHs (M)
40
- Video services are advancing rapidly 30
• OTA expected to grow as consumers look at 20
alternatives to the high cost of MVPD services 10 25
13
- Increasing use of OTA and OTT services 0
• TiVo Platform Targeted Advertising 2016 2019
4.7M Devices Licensed
11
* Source: TiVo Management estimates of Serviceable Addressable © 2017 TiVo Corporation
Market based on IHS market estimatesProducts: Software and Services
Component technologies for integration into third-party media navigation platforms
Key Market Drivers Addressable Markets*
Metadata Services
• Interactive user experiences require rich graphical Global Metadata SAM ($M)
and programing information
800
- Metadata services are a key enabler 600
• Fragmentation across services is driving demand 400 745
for advanced Search & Recommendations 200 492
- Consumers want personalized experiences 0
Available for 70 Countries 2016 2019
• Data and Analytics required to drive audience
Search & Recommendation engagement in the evolving digital ecosystem
- Service providers, media owners & advertisers Search & Rec SAM ($M)
TiVo Growth Opportunities 150
100
• TiVo provides metadata to 70 countries today 145
50 108
- $500M market* expected to grow 50% in 3 years 0
2016 2019
32M Addressable Households • TiVo cloud based S&R has potential to address
>75M potential users under existing contracts
Data & Analytics - Enablement of these users continues to grow Data & Analytics SAM ($M)
800
• Media engagement data & audience analytics is in 600
high demand for targeted advertising 400
- Large and growing viewership data access 600
200
through guide and S&R platforms 252
0
- Leading processor of viewership data today 2016 2019
* Source: TiVo Management estimates of Serviceable Addressable
12 © 2017 TiVo Corporation
Market based on IHS, Frost & Sullivan and Winterberry market estimatesProducts: 2016 Success Supports Future Growth
Delivering next gen media Launched their 4K service using the
platforms for global service advanced whole-home TiVo Platform
providers Deploying TiVo Next-Gen UI with nDVR
4K whole home DVR with 6 tuners and
Meeting consumer demands
as media experiences evolve 3TB of recording capacity to deliver the
ultimate entertainment experience
Addressing consumer NETFLIX TiVo’s platform provides access to a
demands for universal access broad array of OTT content integrated
across media service providers with linear programming
Powering advanced voice Launches voice remote using TiVo’s
control for integration with natural language user interface
existing TV platforms European operator deploying voice search solution
Enabling TV Big Data for the TiVo processes and analyzes millions of household
industry to better connect viewership data to drive broadcaster and agency
consumers and media insight into targeted advertising and user behavior
13 © 2017 TiVo CorporationIP Licensing Business
Building a long-term, predictable licensing business with meaningful growth opportunities across
the digital entertainment market
• 89M+ subscribers under IP or platform
licenses
• #1 or #2 Pay-TV operator licensed in
Australia, Brazil, Canada, Germany, Great
Britain, Italy, Japan, Korea, Portugal, and
the Netherlands
Expand Our Core • Coordinated GTM with TiVo platform
Geographically • Additional growth opportunities
International Pay-TV
Strengthen
Our Core
US Pay-TV
• Approx. 2/3rds of 2016 IP revenue
• 9 of top 10 US Pay-TV providers licensed • Mobile licensees include Apple,
Google and Samsung
• 7 renewals completed in last 2 years
• OTT licensees include Netflix, HBO, Hulu
• Long-term agreements
- Dish – 10 years, AT&T – 7 years
Drive Growth in Broader • CE licensees include LG, Panasonic,
Video Market Sony
• 70M subscribers under IP or platform licenses • Additional growth opportunities
Mobile, OTT, CE
• Synergy with platform, software and services
• Litigation ongoing with Comcast
14 © 2017 TiVo CorporationTiVo’s Commitment To Innovation Has Continuously
Renewed and Expanded Its Licensable Patent Portfolios
1500 TiVo also has exclusive rights to 3rd
party patent portfolios in selected
focus areas:
TiVo’s Issued US Discovery Patents • Exclusive partner to license
1000
Intellectual Ventures portfolio of
≈40K patent assets in the OTT field-
of-use to key customers
500 • Exclusive licensee in IPG field-of-use
of ≈100 US patents of Personalized
Media Communications that have
0 terms lasting until at least 2027
1995 2000 2005 2010 2015 2020 2025
• TiVo has continued to invest in innovation and its intellectual property
• US patent portfolios have grown more than 5x since original Tier-1 license agreements
• Portfolios continue to grow and remain relevant as a result of:
- 500+ already pending US patent applications
- 100+ new patent filings annually from new R&D from product teams that have delivered iconic innovations for the
video market over the past quarter-century
- Strategic acquisition of third-party rights
• Continuously renewed patent portfolios form the basis for long-term, repeatable IP license agreements
- (e.g. 10 year Dish agreement until 2026, 7 year AT&T agreement until 2022, numerous other agreements extending
into next decade)
• TiVo also has extensive international patent portfolios (more than 3,000 issued patents and 800 pending applications)*
15 * As of December 31, 2016 © 2017 TiVo CorporationIP Licensing: 2016 Success Supports Future Growth
TiVo renewing leading Pay-TV 9 out of top 10 US Pay-TV providers licensed;
service provider licenses 7 of those deals completed in last 2 years
Long-term value of TiVo’s IP
portfolios
1010
year license
years Into
Into nextdecade
next decade
Apply TiVo IP portfolio outside Entered into long-term license
its traditional DVR for mobile phone devices
Licensing TiVo IP portfolios to
the increasingly popular OTT
marketplace
NETFLIX
Innovating and growing TiVo’s
IP portfolios to drive long-term
value Record number of disclosures in 2016
16 © 2017 TiVo CorporationTiVo Value Proposition
Highly predictable cash flows, multi-year licensing visibility
Any settlement with Comcast is upside to current estimates
Driving $100M+ of cost synergies, with 65%+ of those savings coming from actions
taken by Sept. 2017
Disciplined capital allocation including significant return of capital to
stockholders and investments for growth only with high rates of return
• Dividend: $0.18/share declared in Q1 2017
17 © 2017 TiVo Corporation2017 Financial Estimates
As of Feb. 15, 2017
Revenue: $800-$835 million, including approximately $30 million of hardware revenue
Visibility*: Approximately 87% of revenue from contracted revenues and high-probability renewals
Timing: Approximately 46% in first half and 54% in the second half
GAAP loss before taxes: $55 million to $70 million
non-GAAP Pre-Tax Income: $200-$225 million
Cash Taxes: $23-24 million
GAAP weighted average diluted shares outstanding: Approximately 121 million
Non-GAAP Weighted Average Diluted Shares Outstanding: Approximately 122 million
As in prior years, we expect higher legal spending in Q1 and expect to exit 2017 with annualized Q4 non-
GAAP total COGS and OpEx cost of approximately $540 million, approximately $70 million less than the
comparable Q4 2016 annualized cost.
By the time we provide 2018 expectations, we expect non-GAAP operating income margin in the high 30s.
18 *At mid-point © 2017 TiVo CorporationAppendices
Non-GAAP Reconciliation
$ In millions
Non-GAAP Pre-tax Income 2017 Full Year Outlook*
Low High
GAAP (Loss) income before income taxes (1) $(70.0) $(55.0)
Amortization of intangible assets 166.0 166.0
Restructuring and asset impairment charges 6.0 8.0
Equity-based compensation 60.0 64.0
Transaction, transition and integration costs 19.0 22.0
Earnout amortization and settlement 4.0 4.0
Mark-to-market loss related to interest rate swaps - -
Amortization of note issuance costs and convertible debt discount 14.0 14.0
Other 1.0 2.0
Non-GAAP Pre-tax Income $200.0 $225.0
Cash taxes $23.0 $24.0
(1) Due to their nature, changes in the mark-to-market of interest rate swaps have only been included in the outlook to the
extent they have already occurred. Actual results may differ materially from the outlook.
20 *As of Feb. 15, 2017 © 2017 TiVo CorporationNon-GAAP Reconciliation
In millions
Non-GAAP Weighted Average Diluted Shares Outstanding 2017 Full Year Outlook*
GAAP Weighted average diluted shares outstanding 121.0
Dilutive effect of equity-based compensation awards 1.0
Non-GAAP Weighted Average Diluted Shares Outstanding 122.0
Non-GAAP Total Operating costs and expenses Q4 2016 Actual Q4 2017 Outlook*
GAAP Total Operating costs and expenses $232.4 $200.0
Amortization of intangible assets (41.9) (41.0)
Restructuring and asset impairment charges (2.7) (5.0)
Equity-based compensation (15.6) (16.0)
Transaction, transition and integration costs (19.9) (2.0)
Earnout amortization and settlement 0.7 (1.0)
Other -- --
Non-GAAP Total COGS and OpEx $153.0 $135.0
21 *As of Feb. 15, 2017 © 2017 TiVo CorporationThanks.
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