Investor Day 2015 - Corporate Profile

Transcription

Investor Day 2015
January 7, 2015
1
Safe Harbor Statement
All statements contained herein, as well as oral statements that may be made by the Company or by officers, directors or employees of the Company
acting on the Company’s behalf, that are not statements of historical fact, including but not limited to any description of the Company’s or its
management’s future plans, objectives, or goals, constitute “forward-looking statements” and are made pursuant to the Safe-Harbor provisions of the
Private Securities Litigation Reform Act of 1995.
Such forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause the actual results of the Company to
be materially different from the historical results and/or from any future results or outcomes expressed or implied by such forward-looking statements.
Such factors include, among others, the Company’s estimates of future revenues, earnings, costs, investments and growth rates, business strategies,
the Company’s plans to deliver its new products with the anticipated functionality and the Company’s assumptions and estimates relating to the
discovery and monetization areas, the Company’s ability to pay down its debt, whether markets materialize as anticipated and customer demand for the
Company’s technologies and integrated offerings. The statements made by the Company in this document are based upon current expectations and are
subject to certain risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Such
factors are addressed in the Company’s Report on Form 10-Q for the period ended September 30, 2014 and other documents as are filed with the
Securities and Exchange Commission from time to time (available at www.sec.gov). The Company assumes no obligation, except as required by law, to
update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this presentation.
2
Non-GAAP Information
Rovi Corporation provides non-GAAP financial information to assist investors in assessing its current and future operations in the way that its management
evaluates those operations. Non-GAAP COGS, Non-GAAP OpEx, Non- GAAP Total GOGS and OpEx, Adjusted EBITDA, Non-GAAP Operating Income, NonGAAP Net Income and Non-GAAP EPS are supplemental measures of the Company’s performance that are not required by, and are not presented in
accordance with, GAAP. Non-GAAP information is not a substitute for any performance measure derived in accordance with GAAP.
Non-GAAP COGS is defined as GAAP cost of revenues excluding equity-based compensation and transition and integration expenses.
Non-GAAP Total OpEx is defined as the sum of GAAP research and development and selling, general and administrative expenses, depreciation and gain on
sale of patents excluding equity based compensation and transaction, transition and integration expenses.
Non-GAAP Total COGS and OpEx is defined as GAAP Total Operating costs and expenses, excluding equity-based compensation, amortization of intangible
assets, restructuring and asset impairment charges and transaction, transition and integration expenses.
Adjusted EBITDA (or Adjusted EBITDA Margin) is defined as GAAP operating income from continuing operations adding back non-cash items (such as equitybased compensation, amortization of intangibles, depreciation and asset impairment charges) and items required to be recorded under GAAP that impact
comparability, but that the Company believes are not indicative of its core operating results (such as transaction, transition, integration and restructuring costs).
Non-GAAP Operating Income (or Non-GAAP Operating Margin) is defined as GAAP operating income from continuing operations adding back non-cash items
other than depreciation (such as equity-based compensation, amortization of intangibles, and asset impairment charges) and items required to be recorded
under GAAP that impact comparability, but that the Company believes are not indicative of its core operating results (such as transaction, transition, integration
and restructuring costs). While depreciation expense is a non-cash item, it is included in Non-GAAP Operating Income as management considers it a proxy for
capital expenditures.
Non-GAAP Net Income is defined as GAAP income from continuing operations, net of tax, adding back all of the adjustments used in calculating Non-GAAP
Operating Income and further adding back non-cash items (such as the amortization or write-off of debt issuance costs, non-cash interest expense recorded on
convertible debt under ASC 470-20, mark-to-market fair value adjustments for interest rate swaps, caps and foreign currency collars and discrete tax items
including reserves, and gains from the release of Sonic payroll tax withholding liabilities related to a stock option review) and items required to be recorded
under GAAP which impact comparability, but that the Company believes are not indicative of its core operating results (such as payments to note holders and
for expenses in connection with the early redemption or modification of debt, and gains on sales of strategic investments.)
Non-GAAP EPS is calculated using Non-GAAP Net Income.
3
2014 | High-Level View
2014
ESTIMATES1
REVENUE
$538M – $542M
Non-GAAP EPS
$1.69 – $1.73
•  Results exceed mid-point of original 2014 estimates, as adjusted for Veveo acquisition
–  Service Provider (SP) revenues up 6%
–  Product revenues up year-on-year for first time since 2010-11
•  Continued focus on trimming costs for mature products and overhead, while investing in
growth products
•  Continued focus on prudent allocation of capital
–  Repurchased 8.3 million shares
–  Acquired advanced search (Veveo) and connected guide (Fan TV) talent and technologies
–  Acquired additional patents to grow IP portfolio
1
4
Non-GAAP estimate range as provided by management on January 7, 2015.
2015 | High-Level View
2015
ESTIMATES1
REVENUE
$535M – $565M
Non-GAAP EPS
$1.55 – $1.85
•  Maintaining a prudent approach to estimates
-  Visibility to over 87% of revenue at mid-range of estimates (compared to historical approach of 75%)
-  Management’s bonus targets tied to high end of estimates
•  Year-on-year Revenues up slightly
-  Service Provider revenues estimated to grow 5% at mid-point
-  Intellectual Property revenues estimated to grow 5% at mid-point
-  Growth in product revenues tempered by continuing ACP decline
•  Investing in growth products and IP to drive revenue growth in 2016 and beyond
1
5
Non-GAAP estimate range as provided by management on January 7, 2015.
2015 | Strategic Overview
•  Enormous near- and long-term opportunities to grow IP and Product businesses
- 
2015 includes investments to increase market penetration and diversify our portfolio
•  Product
-  Developing additional growth drivers
-  Tremendous long-term opportunities require investment today to exploit window of opportunity
-  Investment in Growth Products largely funded by cost reduction efforts
-  Reducing investment in mature products while protecting the transition of our base business
•  Intellectual Property
- 
Near-term opportunity to grow revenue via Tier 1 renewals
- 
Longer term opportunity to increase ARPU on rising second-screen/mobile use case
- 
Expanding IP Assertion team to extend IP rights to new technologies and territories outside of North America
•  Headwinds from the continued decline in ACP revenues impacts the Company’s overall margin
- 
6
Margins anticipated to go back up in 2016 and beyond
Increasing Investment in IP and Growth Products
Driving Growth Beyond U.S. Tier 1 Pay-TV Renewals
• 
Keeping Corporate costs basically flat
• 
Reducing spend on Mature Products, including set top box guides
• 
Funding IP and Growth Products such as FanTV, Cloud Platform, Search & Recommendations, Metadata and Analytics
Costs1
$400M
$310M 2
$298M
$300M
$309M $298M $112M
$58M
$60M
$74M
$60M $74M $61M $54M
-‐
$54M $51M 2013A
2013ACorporate
Corporate
7
Mature Products
IP
$66M $55M $52M
$54M 2014E
IP
Growth
2015E Products
Growth Products
1 Cost includes Non-GAAP Total COGS & Operating Expenses excluding depreciation
2 Midpoint of estimate range of Non-GAAP EPS as provided by management on January 7, 2015
• 
Growth Products
include Fan TV,
Cloud Platform, S&R,
Metadata and
Analytics
• 
Mature Products
include STB guides
$66M
$61M
Mature
Products
2014E
2
$155M $137M $58M $100M
$155M
$137M
$112M $200M
$330M $330M
$55M
$54M
2015E
Today’s Speakers and Topics
8
• 
Company & Strategic Overview
Tom Carson, President & Chief Executive Officer
• 
Products & Services
John Burke, EVP & Chief Operating Officer
-  Discovery Business
Omar Javaid, SVP & GM Discovery
-  Analytics
John Hoctor, VP & GM Analytics
• 
Intellectual Property
Samir Armaly, EVP Intellectual Property & Licensing
• 
Financials
Peter Halt, Chief Financial Officer
Company and Strategic Overview
Tom Carson, President & Chief Executive Officer
9
2014 Key Accomplishments
Moving Forward With Focused Execution
Realigned product portfolio around a focused vision and mission
Reduced costs and restructured the organization to drive efficiencies
Completed debt restructuring reinforcing cash and capital base
Enhanced management team in selected investment areas
Improved business performance, making financial estimates and
delivering cash flow to invest in the business and repurchase stock
Acquired Veveo and Fan TV to bolster cloud discovery capabilities
Product investment realigned toward accelerating growth segments
10
Executive Leadership Team
John Burke
EVP and Chief
Operating Officer
Peter Halt
Chief Financial Officer
Pamela Sergeeff
EVP General Counsel
and Corporate Secretary
Thomas Carson
President and CEO
Samir Armaly
EVP Intellectual Property
and Licensing
11
Bill Corry
EVP WW Operations
and Services
Dustin Finer
EVP Human
Resources
Sean Matthews
EVP Strategy and
Corporate Development
Organized for Business Execution
Business Groups
Discovery
Metadata
Analytics
Unified Global Sales
Americas
EMEA
APAC
Tier 1
North America
Service Provider
Corporate Functions
Finance
12
Marketing
Strategy
Infrastructure
& Operations
Human
Resources
Legal
Competitive Landscape in Media & Entertainment is Changing
Driving Key Shifts in the Value Chain
Internet Protocol is redefining network boundaries
Devices have ubiquitous connectivity
Media consumption is changing
The Internet is driving rapid innovation
Monetization models changing
Cloud services enabling new entrants
Intellectual property key influencer
13
Rovi’s Mission is Built on an IP Foundation and Core Pillars
MISSION:
Power content discovery and
personalization through Rovi technology
and IP, using data and analytics to monetize
interactions across all entertainment platforms
14
Large and Growing Market Opportunity
NA
•  6.6B video-enabled devices used
worldwide growing at 11.4%
Phone
•  10 devices per HH in NA growing
to 12 by 2018
Notebook
•  ROW has 3 devices per
HH growing to 4 by 2018
LTAM
EMEA
APAC
2014 Global Subscribers
---------------------------------2014 – 2018 Projected CAGR
S-Phone
107M
44M
174M
385M
0.5%
8.0%
5.3%
9.1%
1.3B
2.5B
0.7%
2.4%
Digital Video
Subs
Tablet
412M 441M
•  Global Pay-TV
market projected
growth at 4.8%
CAGR
1.9%
TV
1.6%
Mobile
Subs
Set-Top
•  Global OTT &
TVE markets
projected
growth at
14.9% CAGR
Console
OTT
Subs
47M
3M
18M
15M
7.3%
36.5%
26.1%
25.6%
Blu-ray
Sources: IHS: a)TV Technology Intelligence, Q3-‐2014, b)TV Systems Intelligence, Q4-‐2014,c) Broadband Technology Intelligence Q4-‐2014, d)Mobile Media Intelligence, Q4-‐2014, e)Broadband Media Intelligence, Q4-‐2014 ; Strategy AnalyFcs: a)Global Tablet Install Base Report, Q3-‐2014, b)Global Smartphone Install Base Report, Q3-‐2014; MRG /SNL Kagan, WW Connected Devices Report, Q2-‐2014; Dataxis, Q4-‐2014. Viewership per Nielsen Cross PlaVorm Study September 2014 DMA
15
A Synergistic Portfolio
Targeting Leadership on the Evolving Cross-Platform Marketplace
Guides
Metadata
S&R
Be the global leader in personalized discovery
solutions for entertainment to maximize
engagement with content
Search & Rec
Analytics
Discovery
Guides
Intellectual
Property
Metadata
16
Analytics
Intellectual
Property
Be an industry innovator and leader in crossplatform analytics, targeting and measurement of
media audiences
Be the recognized source for licensable inventions
in Media & Entertainment discovery
Investing to Secure Sustainable Near-Term and Long-Term Growth
• 
Nurture our core foundational businesses to keep them
healthy and contributing strong cash flows
• 
Evolve discovery products into modern, cloud-enabled,
industry leading products
• 
Successful conclusion of all Big 4 IP renewals at an optimal
level reflective value realized by Service Providers
• 
Invest to take a leadership position in the massive
entertainment and Internet analytics marketplace
CLOUD DISCOVERY
CORE INTELLECTUAL
PROPERTY BUSINESS
ADVERTISING
TRADITIONAL
GUIDES
DATA & ANALYTICS
EXPANDED POSITION
THROUGH CROSS
PLATFORM
MEASUREMENT &
MONETIZATION
BIG 4
INTELLECTUAL
PROPERTY
RENEWALS
ADVANCED S&R
METADATA
17
Note: Pillars are illustrative of opportunity for growth, but not directly to scale
Rovi’s Objectives Beyond 2015
Undisputed
Leadership
in Providing
Licensable
Invest in
Products to Achieve
Sustainable, DoubleDigit Revenue
Growth
18
Demonstrated
Industry Leadership
in Each Product
Category in Which
We Compete
Continue to Diversify
Rovi by Establishing
Leading Data &
Analytics Business
Maintain Top-Tier
EBITDA Margin
for Balanced IP and
Product Businesses
Products & Services
John Burke, EVP & Chief Operating Officer
19
MISSION:
20
2014 Key Product Accomplishments
•  Product Businesses: Reorganized product lines into discrete businesses, enabling better
management of overall performance
•  Business Integration: Veveo and Fan TV acquisitions have been integrated, showing positive
signs in solution development and customer adoption
•  Tier 1 Product Traction: Key product categories are seeing traction with Tier 1 service providers
–  Notable interest in new Knowledge Graph services and advanced S&R
•  Operational Efficiency: Significant improvements in resourcing, operation and systems established
in metadata business enabling reinvestment
•  Analytics Product Traction: High profile analytics customers in multiple segments have engaged
in paid pilots
–  Cable operators, cable networks, media agencies
21
Strengthened the Organization and Leadership in 2014
Omar Javaid
SVP, GM Discovery
HP, Motorola Mobility,
Qualcomm
22
Kathy Weidman
John Hoctor
SVP, GM Data
VP, GM Analytics
Redbee/Ericsson,
Technicolor, Avid,
Peel
Microsoft, Navic
Networks
Bob Ivins
SVP, Business
Development
Mindshare,
Comcast,
comScore,
Yahoo!, Nielsen
How Rovi is Positioned to Win in the Media & Entertainment Paradigm Shifts
Traditional M&E
Paradigms
Next-Generation
M&E Paradigms
How Rovi Wins
•  Advanced S&R, Conversational Interfaces capabilities
•  Upgrading Classic Guides
•  Upgrading next-gen guides and Fan TV
•  Knowledge Graph, dynamic and contextual metadata
•  Service provider and third-party data analytics
•  Data warehouse and data marts
•  Hyper-personalized S&R, guidance
•  Analytics-driven audience targeting – Ad Optimizer; Promo
Optimizer; Operator Insights
•  Predictive analytics in S&R and monetization products
•  Return-path data from Rovi guides’ footprint
23
Product Evolution Driving Cross-Platform Consumer Engagement
DISCOVERY ANALYTICS
Personalized Experiences Enabling Distributors to Monetize Consumer Interactions
Return-Path Data
Analytics
Phone
•  Audience-Based Media Plans
•  Actionable Business Insights
Notebook
Classic Guides
DTA Guides
Mobile Guides
Rovi Cloud
•  Connected Discovery
•  Fan TV Content Engagement
Tablet
•  Conversational Interfaces
•  API Driven Data Solutions
DATA
TV
Metadata
•  Dynamic Metadata
Knowledge Graph
Set-Top
2013
24
2014
2015
MISSION:
25
Discovery Product Highlights
Omar Javaid, SVP & GM Discovery
26
Discovery
Advanced Content Access and Unified Discovery Across Multiple Screens
Goal
Provide the most efficient, end-toend modular solutions to aid
elegant, advanced content discovery
experiences on multiple screens
Execution
Optimize
•  Enhance and manage embedded
guides (new HD user experience,
S&R and data collection)
27
Invest
Grow
•  Integrate Rovi Cloud with Rovi S&R,
conversational interfaces and Fan
TV into a set of harmonized
offerings
•  Expand to international markets
with cloud discovery solutions
Classic Guides
Market Leadership in Embedded Guides
~19M
Reported Households Use Rovi’s Cable Guide Products in North & South America
Goal
Maintain or increase Rovi market
penetration and upgrade to support
a unique return-path data footprint
for Analytics
20:00
85%
Minutes/Day Engagement
Weekly Household Usage
*Source: Rovi Ad Insights, 3Q14 IPG Usage
*Source: Rovi Ad Insights, 3Q14 IPG Usage
CLOUD-BASED UPGRADES
Second-Screen
Applications
•  Continue DTA expansion in
Americas
•  América Móvil deployments
and expansion
28
& Recommendations
Advertising
Monetization
Execution
Optimize
Advanced Search
Invest
Grow
•  Upgrade guides to collect data
•  New UI to extend lifecycle
•  Existing footprint upgrades
•  LTAM market penetration
Cloud Platform & Guides
Cloud-Based Discovery Built on Metadata and Classic Guides Leadership
CLOUD-BASED
Goal
PLATFORM
Lead the way for modular and
flexible cloud-based services
and discovery for both end-toend and point solutions
Second-Screen
Applications
Multi-Screen
Integration
TV Everywhere
Linear, VOD, OTT,
Web Content
Cross-Platform
Content
Advertising
Monetization
Execution
Optimize
•  DIY guide development with
partners on modular platform
•  Fan TV cross-platform, end-to-end
video discovery platform
29
Invest
•  Scalable platform – modular and end
to end, including Fan TV
•  Knowledge Graph, advanced S&R,
conversational interfaces modular
deployment options
Grow
•  Fast go-to-market expansion
•  Global expansion across CE, SPs,
OTT
•  Accelerate operator migration to
multi-platform content delivery &
non-truck roll, self-install Internet
Protocol STBs with Fan TV
Fan TV Demo
30
Conversational Interfaces
Advanced, Industry Leading Intelligent Voice-Based User-Interfaces
o
Goal
Be the market leader of voice-based
user-interface solutions across the
entertainment ecosystem
Execution
Optimize
•  Modular API implementations
for natural language
processing
31
Invest
•  Multiple technology relationships in
automatic speech recognition,
devices, remote controls
Grow
•  International language support
•  Expand to adjacent markets –
home automation
Dish
32
Conversation Services on Traditional Platforms
33
MISSION:
34
Data Services
Exhaustive International Entertainment Metadata, Dynamic Metadata,
o
Search & Recommendations Services
Goal
Power entertainment discovery with advanced
metadata and next-generation semantic search
and personalized recommendations delivered
via flexible, scalable and modular cloud-based
API solutions for any screen
Execution
Optimize
•  Execute on insertion strategies
for Tier 1 customers
•  Complete operational
optimization and improvement
efforts
35
Invest
•  API support to scale for multiple
devices and business models
•  Language support for international
markets
Grow
•  Accelerate replacement and
upgrade cycles with Knowledge
Graph features
•  Localized solutions for global
penetration
Comcast
36
Pandora
37
MISSION:
38
Analytics - Applying Big Data to TV
John Hoctor, VP & GM Analytics
39
Analytics
Big Data and Predictive Analytics Solutions for the Media Industry
TV
Laptop
TV Shows
Sports
Goal
Enable media companies to leverage
massive datasets and predictive analytics
to understand, analyze and monetize their
cross-platform audiences.
STB Guides
Live
Recorded
S&R
AUDIENCE MEASUREMENT & ANALYTICS
Data
Movies
•  Convert existing pilot customers to
term agreements
40
Music
Tablet
Execution
Optimize
Search & Rec
Invest
•  Deliver subscriber analytics solution and
other new solutions
•  Expand data collection from Rovi guides
deployed footprint
Phone
Grow
•  Expand offerings to include cross-platform
media consumption and matched data.
•  Execute on targeted geographic
expansion opportunities and additional
market segments
Analytics
Applying Big Data to TV
ANALYTICS
ANALYTICS
ANALYTICS
SUBSCRIBER
SUBSCRIBER ANALYTICS
ANALYTICS
SUBSCRIBER ANALYTICS PROMO
PROMO OPTIMIZER
OPTIMIZER
PROMO
OPTIMIZER AD
AD OPTIMIZER
OPTIMIZER
AD OPTIMIZER
ANALYTICSOPERATOR
OPERATOR
INSIGHTS
INSIGHTS
OPERATOR
SUBSCRIBER
INSIGHTS
ANALYTICS
Subscriber
Promo
Ad
Operator
Optimizer
Optimizer
AUDIENCE-BASED MEDIA PLANS
Rovi
Metadata
What is on TV?
What is being watched?
Rovi
STB Guides
Analytics
BUSINESS INSIGHTS
Rovi
Analytics
Engine
VIEWING
DATA
VIEWERSHIP DATA
41
Insights
RICH SEGMENT DATA
PROM
Audience-Optimized Solutions – Rovi Ad Optimizer
Traditional Media Plan
?
Audience-Targeted Media Plan
New
truck
prospects
M18-49
ANALYTICS
Total Audience
M18-49
42
Efficient Media Plan
SUBSCRIBER
ANALYTICS
ANALYTICS
Domestic
vehicle
owners
SUBSCRIBER
PROMO OPTIMIZER
ANALYTICS
AD OPTIMIZER
PROMO OPTIMIZER
OPERATOR
AD
INSIGHTS
OPTIMIZER
Analytics
What is Next?
ANALYTICS
Promo
Optimizer
Ad
Optimizer
Operator
Insights
Analytics
S&R
Rovi
Metadata
What is on TV?
What is being watched?
Rovi
STB Guides
Rovi
Analytics
Engine
VIEWING
DATA
VIEWERSHIP DATA
43
Cross-Platform
Integration
ANALYTICSSUBSCRIBER
ANALYTICS
ANALYTICS
SUBSCRIBER ANALYTICS
SUBSCRIBER
PROMO
ANALYTICS
OPTIMIZER
PROMO OPTIMIZER
PROMO
AD OPTIMIZER
OPTIMIZERAD
ANALYTICS
OPTIMIZER
OPERATOR
AD OPTIMIZER
INSIGHTS
SUBSCRIBER
OPERATOR
ANALYTICS
INSIGHTS
OPERATOR INSIGHTS PROMO OPTIMIZER
Subscriber
RICH SEGMENT DATA
Horizon
44
MISSION:
45
Summary
Capitalizing on
Legacy Business
Footprint for
Synergies in New
Businesses
Organization,
Leadership and
Teams in Place
46
Acquisitions
Integrated and
Executing to
Roadmaps
Defensible
Advantages in
Growing Categories
Strongly Positioned
for Emerging High
Growth
Opportunities
MISSION:
47
IP Licensing
Samir Armaly, EVP, Intellectual Property
48
Leading Media & Entertainment Discovery Patent Portfolio
•  One of the largest media & entertainment patent portfolios
STATUS
–  5,000+ issued patents and pending applications worldwide
•  Commercially valuable patents
Pending
28%
–  Built from 25+ years of continuous innovation in media & entertainment
–  Early, broad and fundamental
Issued
72%
–  Platform independent (STB, TV, Second-screen, etc.)
–  Technology independent (Linear, DVR, VOD, TVE, OTT, etc.)
–  Integrated portfolio, not reliant on one or a few key patents
–  Long-term protection
GEOGRAPHY
APAC
25%
US
31%
–  Ongoing innovation fuels continued growth
–  Supplemented with selective and strategic acquisitions of third-party patents
•  Relevance and value recognized by leading companies worldwide
•  Foundation for significant revenue generation and strategic value
49
EMEA
34%
Other
Americas
10%
Strong Portfolio Drives Successful Licensing Business
Successfully Licensed Many Of The Leading Companies Worldwide
•  Traditional Platforms
-  US & Canada: 14 of the Top 15 Service Providers
-  Rest of World: #1 and/or #2 Service Providers in
Australia, France, Germany, Italy, Japan, Korea, Portugal, Switzerland,
United Kingdom
-  Consumer Electronics: 9 of Top 10 WW CE Manufacturers
•  Newer Platforms - Mobile, OTT, TVE
-  US & Canada: 9 of Top 15 Service Providers
-  Many of the leading OTT providers including
Apple, Google and Hulu
•  Representative New Deals Concluded in 2014
Bell
Canada
Service Provider information is based on estimates provided by Data Axis and IHS in December 2014. CE Manufacturer information is based on estimates provided by Display Search in December 2014. Excludes Chinese manufacturers.
50
Well Positioned For Large U.S. Big 4 Pay-TV Opportunity
Rovi’s Patent Portfolio Is Critical To Today’s Pay-TV Experience
•  Four largest U.S. Pay-TV operators have ~70M subscribers
•  Rovi presently recognizes revenue from less than 50% of these subscribers
•  Current agreements were negotiated 10+ years ago
•  Pay-TV business has expanded significantly over that period
–  Digital subscribers, ARPU, DVR penetration, VOD usage, second-screen availability
•  Extensive preparations and investments made by Rovi over the past several years
–  Active discussions and ongoing engagement well in advance of upcoming expirations
with key business and IP representatives from Big 4 Pay-TV providers
51
Big 4 U.S. Pay-TV Renewal Opportunity
Changes Over The Past Decade Since Original License Agreements
US Big 4 Pay-TV
Operators
2004
2014
Growth
US Digital Subscribers (’000s)
38,306
65,633
71%
STBs/HH
1.8
3.0
67%
DVR Subscribers (’000s)
4,784
40,338
743%
DVR Penetration
12.5%
61.5%
392%
DVR Revenues ($M)
$415
$7,487
1,705%
VOD Penetration
22.9%
65.3%
185%
Second Screen
No
Yes
--
Monthly ARPU
$54.63
$88.85
63%
Big 4 Pay TV Operators consist of Comcast, DirecTV, DISH, and Time Warner Cable. Information on subscribers (each of US Digital and DVR) and STBs/HHs provided by IHS, 2014. DVR and VOD Penetration rates calculated based upon aggregate
of DVR subscribers or Big 4 VOD enabled homes over aggregated digital subscribers, as applicable. DVR Revenue estimate based on DVR list price for each Big 4provider multiplied by DVR subscribers reported by IHS. Monthly ARPU is subscriberweighted average of monthly digital ARPU reported for each Big 4 as provided by IHS, 2014.
52
Advanced
Services
US Big 4 Pay-TV
Operators
2004
2014
Growth
38,306
65,633
71%
STBs/HH
1.8
3.0
67%
4,784
40,338
743%
DVR Penetration
12.5%
61.5%
392%
DVR Revenues ($M)
$415
$7,487
1,705%
VOD Penetration
22.9%
65.3%
185%
Second Screen
No
Yes
--
Monthly ARPU
$54.63
$88.85
63%
53
US Big 4 Pay-TV
Operators
2004
2014
Growth
38,306
65,633
71%
STBs/HH
1.8
3.0
67%
4,784
40,338
743%
DVR Penetration
12.5%
61.5%
392%
DVR Revenues ($M)
$415
$7,487
1,705%
VOD Penetration
22.9%
65.3%
185%
Second Screen
No
Yes
--
Monthly ARPU
$54.63
$88.85
63%
54
Rovi U.S. Discovery Patent Portfolio
Significant Growth Over the Past Decade That Accelerated In 2014
• 
• 
1800
2+x growth in patent portfolio
3+x growth in issued patents
1600
1400
1200
1000
800
600
• 
• 
400
1.5x growth in patent portfolio
~2x growth in issued patents
200
0
2004
2013
• 
55
2014
1.5+x growth issued patents
Rovi U.S. Discovery Patent Portfolio
Extensive Coverage for Key Aspects of Leading Discovery Solutions
REMINDERS
LINEAR
RECORDING
POPULARITY
DATA
DISCOVERY
VOD
PREVIEWS CHANNEL
LIST
OPTIONS
METADATA
MULTI-SOURCE
TVE
PLACESHIFTING
ANALYTICS
MULTI-SCREEN
SOCIAL
TARGETED
NETWORK
ADS
STORAGE
STREAMING
INTERACTIVE APPLICATIONS
DVR
REMOTE
GUIDE
DIRECTORY
LOOKBACK
REAL-TIME
DOWNLOAD
GUIDANCE
LIVE
SEARCH & RECOMMENDATIONS
VIDEO
USER
TRANSFER APPLICATIONS
ORDERING
SECOND-SCREEN
OVERLAYS
RESOLUTION
WHOLE-HOME
MEDIA
56
PROMOTIONS
BROWSE
COMMERCE
FAVORITES
PLAYLISTS
CATEGORY
EPISODES
PARENTAL CONTROLS
PERSONALIZED
CLOUD
SERIES
PURCHASE
VOICE
PROFILES
BUFFER
CONFLICTS
RENT
UI
CONTEXTUAL
VIEWING HISTORY
MULTI-TUNER
SUBSCRIPTION
Examples From Rovi Patent Portfolio
Newly Issued Patents in 2014
Newly Launched Features in 2014 Covered By Existing Rovi Patents
57
Rovi’s Approach To Patent Litigation
Vast Majority Of Agreements Concluded Without Litigation
•  Some litigation necessary in any licensing program; we are selective
and strategic
•  Litigation is not without risks, but has been an important component
of Rovi’s business from early 2000s
-  20+ licenses successfully concluded against a backdrop of litigation over
the past decade or more
•  Licensing program continues to grow despite the pending litigation
•  Confident in our ability to ultimately succeed in currently pending litigation
•  Will continue to litigate when necessary to defend intellectual property
58
Summary
Rovi’s IP Portfolio is a Unique Asset With Significant Revenue & Strategic Value
Leading Media
and Entertainment
Discovery Patent
Portfolio
Extensive Patent
Coverage for
Television
Experience of
Today and in the
Future
59
Continued Growth
From Ongoing
Innovation and
Strategic
Acquisitions of IP
Extremely Well
Positioned for
Success With
Upcoming U.S. Big
4 Pay-TV Renewals
Provides Long-term
Foundation for
Rovi’s Significant IP
Licensing Business
Financial Expectations
Peter Halt, Chief Financial Officer
60
FY 2014 and 2015 Expectations
2014
ESTIMATES1
2015
ESTIMATES1
1 Non-GAAP estimate range as provided by management on January 7, 2015
61
REVENUE
$538M – $542M
Adjusted EBITDA $228M – $232M
Non-GAAP EPS
$1.69 – $1.73
REVENUE
$535M – $565M
Adjusted EBITDA
$205M – $235M
Non-GAAP EPS
$1.55 – $1.85
Revenues by Sales Vertical
$537M
$540M
Other $30M
Other $29M
$550M
2
Other $16M
CE
$113M
CE
$128M
CE
$111M
Service Provider
$379M
Service Provider
$400M
Service Provider
$421M
2013 Actual
2014 Est.
2015 Est.
1 Midpoint of estimate range of $538M to $542M in Revenue as provided by management on January 7, 2015
62
1
Revenues by Segment
1
2
$537M
$540M
Licensing
$293M
Licensing
$285M
Licensing
$299M
Product
$255M
Product
$251M
Product
$244M
3
2013 Actual
3
2014 Est.
3 Product includes ACP and other Analog product revenue of $30M in 2013 Actual, $29M in 2014 Estimate and $16M in 2015 Estimate
63
$550M
3
2015 Est.
Product Revenues – Core Business vs. Analog
$244M
$255M
(3)
$251M
2
(3)
(3)
Analog $29M
Analog $16M
Core $214M
Core $226M
Core $235M
2013 Actual
2014 Est.
2015 Est.
Analog $30M
64
1
Visibility – New & One-time, Renewal & Existing Business
$600
$537M
New & One-Time $73M
$500
Renewal $32M
2
$540M
$550M
New & One-Time $43M
New & One-Time $72M
1
Renewal $71M
$400
New and one-time
revenue assumption
increases YoY due to
growing expectations for
product revenues
• 
Existing/Renewal down
YoY largely due to
possible licensing scenario
involving Comcast’s
acquisition of TWC and
need for new licenses for
divested HHs
Renewal $92M
$300
$200
• 
Existing
$432M
Existing
$426M
Existing
$386M
2013 Actual
2014 Est.
2015 Est.
$100
-
• 
• 
• 
Existing business is revenue from customers under current contracts
New revenue is new business not currently under contract that is expected to deliver recurring revenues
One-time revenue represents catch-up payments, compliance audits and perpetual licenses
65
Expected Revenue Bridge 2014 – 2015 by Customer Type
$540M
1
Other $29M
Consumer
Electronics
$111M
Service Provider
$400M
2014 Est.
$550M
Other $16M
Consumer
Electronics
$113M
Service Provider
$421M
2015 Est.
66
2
($13M) decline in Analog Products
$2M increase in Consumer
Electronics growth from new
Licensing deals, partially offset by
lower CE guides development
$21M increase in Service
Provider growth from new
Licensing deals, Analytics,
Search and Recommendations
and Platform and Services
Expected Revenue Bridge 2014 – 2015 by Segment
$540M
$550M
1
Licensing
$285M
Product
$255M
3
2014 Est.
3 Product includes ACP and other Analog product revenue of $29M in 2014 Estimate and $16M in 2015 Estimate
67
2
Licensing
$299M
Product
$251M
3
2015 Est.
$14M increase in Licensing
revenues from new
licensees
($13M) decline in
Analog Products partly
offset by $9M growth
in New Products
Actively Managing Costs, While Investing Strategically
Eliminating non-core
businesses
& reducing spend . . .
. . . While investing in core strategic areas of focus
$22M
$38M
$102M
$75M
$330M
$297M
2011 Spend1
Savings Initiatives Discovery, Data
and Analytics
Licensing
Infrastructure
1 Includes Non-GAAP cost of good sold, research and development and selling, general and administrative expenses of the Company’s continuing operations.
Amount excludes $55m of equity based compensation expense and $22 million of transition and integration expenses, which are recorded in accordance with GAAP.
68
2015 Est. Spend
Acquired Businesses and Growth Investments Impact Costs
2013
Non-‐GAAP (in millions)
Actual 1
2014
Non-‐GAAP
2015 Non-‐GAAP Estimate 2 Y/Y Δ Y/Y % Δ
Estimate 2
Y/Y Δ
Y/Y % Δ
Cost of Goods Sold (COGS)
88.8
97.0 8.2
9%
103.0 6.0
6%
Total Operating Costs (OpEx) 3
226.4
230.5 4.1
2%
246.5 16.0
7%
Total COGS & OpEx
315.2
327.5 12.3
4%
349.5 22.0
7%
Less: Depreciation
(16.8)
(17.5) (0.7)
4%
(19.5) (2.0)
11%
Total COGS & OpEx excluding Depreciation
298.4
310.0 11.6
4%
330.0 20.0
6%
Additional costs in 2015 relate to (a) Veveo acquisition, (b) FanTV acquisition, plus additional investment in (c) Tier
1 renewals, (d) cloud platform, (e) search and recommendation, (f) continued expansion of data offerings, and (g)
analytics.
1 2013 Non-GAAP COGS excludes approximately $3.9 million in stock compensation expense and transition costs, which are included in GAAP COGS. 2013 Non-GAAP Total OpEx excludes approximately $53.0 million in stock compensation
expense and transition costs, respectively, which are included in GAAP research and development and selling, general and administrative expenses.
2 Estimates for 2014 and 2015 are based upon the midpoint of the Company’s Non-GAAP EPS estimates.
3 2013, 2014, and 2015 Operating Costs include $16.8 million, $17.5 million and $19.5 million depreciation, respectively.
69
Revenue by Segment, Cost by Segment and Adjusted EBITDA
1
Temporary Drop in Adjusted EBITDA Margin in 2015, Expected to Increase in 2016
2014 Est.
$540M
2015 Est.
2
$550M
Licensing
$60M
Licensing
$285M
Licensing
$66M
Licensing
$299M
Product
$198M
Corporate $52M
70
Product
$210M
Corporate $54M
Product
$255M
Adjusted
EBITDA
$230M
Revenue by Segment
Cost and Adjusted EBITDA
1 Cost includes Non-GAAP Total COGS & Operating Expenses excluding depreciation.
3
43%
Product
$251M
Adjusted
EBITDA
$220M
Revenue by Segment
Cost and Adjusted EBITDA
40%
Increasingly Profitable Long-Term Target Model
Long-Term Revenue Growth and Operating Margin Expansion
• 
• 
• 
• 
Significant growth opportunity in FY 2016 around key renewals
Long-term growth driven by industry trends, new licenses and Discovery, Data and Analytics products
High operating margins, minimal variable costs and non-capital intensive business model
Long technology lifecycles/high ROI
Non-GAAP
2013A
2014E
2015E
% of Revenue
Growth
Revenue
100%
100%
100%
100%
10%+
Total COGS & Opex
56%
56%-58%
59%-61%
50%-54%
3%
3%
3%
3%
Depreciation
Operating Margin
71
Long-Term Targets
41%
39%-41%
36%-38%
43%-47%
15%-20%
Actively Managing Debt Position
No Concerns With Leverage Ratio or Debt Repayment Schedules
Debt 1
Net Scheduled Debt Payments
1,600.0
1,400.0
5 .5
5.0x
$1,205M
1,200.0
4.9x
$1,113M
5 .0
$655M
4 .5
4 .0
1,000.0
3 .5
800.0
3 .0
6 00.0
$282M
2.5
4 00.0
2.0
200.0
1.5
-‐
1.0
2013A
2040 Convert
Term L oan A a nd B
2014E
$129M
2015
$13M
$13M
2016
2017
2018
Convert (a) (c)
Debt t o A djusted E BITDA Ratio
Significant free cash flow means no issues with
scheduled repayments, including $291M in converts if
put back to Company in 2015
$13M
a) 
b) 
c) 
Term Loan A (b)
$7M
2019
Term Loan B (b)
2020
Revolver (c)
Assumes 2040 Convertible Notes are put back to the Company in 2015 by the noteholders.
Does not include any Excess Cash Flow payments which may be required under the Term
Loan agreement.
Revolver balance at 12/31/14 is zero. Assumes the revolver is drawn in 2015 to pay-off the
2040 Convertible Notes.
1 Debt is shown at par. ASC Topic 470 requires the liability and equity component of the Company’s convertible debt to be separated. Debt has been grossed up to reflect the equity component of the convertible debt.
72
2021
Continuing History of Share Buybacks
(Shares in Millions)
2.3
8.4
3.5
9.1
2.3
8.3
109.5
1.5
103.4
97.8
5.0
91.8
2011A
FY'12
Employee
Related
FY'12
Repurchase
2012A
FY'13
Employee
Related
FY'13
Repurchase
2013A
FY'14 Est.
Employee
Related
FY'14
Repurchase
2014E
88.3
FY'15 Est.
Employee
Related
FY'15 Est.
Repurchase
2015E
Reduced Shares Outstanding by over 6% in 2014. Planning to repurchase 5M shares in 2015. Further
repurchases may be considered based upon share performance and other investment opportunities.
Restricted stock awards are considered outstanding at the time of grant, as the stockholders have voting rights. In 2015, the Company will begin granting restricted stock units (in place of restricted stock awards), which will become common stock
outstanding when they vest. If the Company granted restricted stock awards in 2015 based on 2014 activity, the FY’15 Est. Employee Related amount in the above would be 2.5M.
73
CAPEX 2012 - 2015
CAPEX (in millions)
$30M
$25M
$20M
$4M
$8M
$15M
$10M
$5M
$15M
$19M
$18M
$18M
2013A
2014E
2015E
$0M
2012A
Actual & Lo w-end of 2014 and 201 5 Estimates
74
High-end of 2014 and 2015 Estimates
Capital Allocation Strategy
Balancing Organic and Inorganic Growth Opportunities With Share Repurchases
Commitment to long-term revenue growth with high operating margins
•  2014 was a transition year
•  Maintaining high operating margins and significant free cash flow
Investing in organic initiatives and strategic M&A
•  Must support strategy and meet IRR hurdle rates
•  Acquired Integral Reach ($10M) in 2013, Veveo ($60.7M), and Fan TV ($12M) and an IP portfolio of
approximately 500 issued and pending patents ($28M) in 2014
Opportunistic share buy backs
•  Remaining authorization of $125M
•  FY14 – Repurchased 8.3M shares
•  FY15 – Planning to repurchase a minimum of 5M shares
75
Rovi – 2015 and Beyond
Significant Revenue
Opportunities
Near- and long-term
for IP and Product
businesses
Product Portfolio
Investing
today to build
additional growth
drivers
during window of
opportunity
76
IP Licensing
Expecting near-term
growth from U.S.
Tier-1 renewals;
expecting long-term
growth from secondscreen and mobile
use cases
Analog Headwinds
Continued decline in
Analog Copy
Protection impacts
Revenues, margins
and EPS in 2015
2016 and Beyond
Expecting double-digit
revenue growth and
expanding margins
Q&A
77
Appendix
78
Reconciliation of GAAP to Non-GAAP Financial Information
Rovi Corporation
Year ended December 31, 2013
(in thousands)
Twelve Months Ended
December 31, 2013
GAAP Cost of revenues
Equity based compensation
Transition and integration costs
Non-GAAP COGS
$
$
92,661
(3,514)
(351)
88,796
Twelve Months Ended
December 31, 2013
GAAP Research and development, Selling, general and administrative, and
depreciation
Non-GAAP Operating Expenses
79
$
279,345
$
(51,147)
(1,809)
226,389
Rovi Corporation
(in thousands)
Twelve Months Ended
December 31, 2013
GAAP Total operating costs and expenses
Amortization of intangible assets
Restructuring and asset impairment charges
Non-GAAP Total COGS and OpEx
Less: Depreciation
Non-GAAP Total COGS and OpEx excluding Depreciation
80
$
$
454,057
(54,661)
(2,160)
(74,413)
(7,638)
315,185
(16,775)
298,410
Rovi Corporation
(in thousands)
Twelve Months Ended
December 31, 2013
GAAP (Loss) income from continuing operations, net of tax
Interest (expense)
Interest income and other, net
Loss on debt redemption
Debt modification expense
(Loss) gain on interest rate swaps and caps, net
Depreciation
Income tax expense
Adjusted EBITDA
$
$
21,335
54,661
2,160
62,019
(2,775)
2,761
1,351
(2,898)
16,775
74,413
7,638
1,540
238,980
Twelve Months Ended
December 31, 2013
GAAP Operating income from continuing operations
Non-GAAP Operating income
81
$
$
83,333
54,661
2,160
74,413
7,638
222,205
Thank You!
rovicorp.com
82

Investor Day 2015 - Corporate Profile

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