• by Steve McClellan  @mp_mcclellan, August 29, 2012

TiVo reported a 7% gain in revenue for the second quarter to nearly $65.3 million. But its net loss widened to $27 million compared to $19 million for the same period a year ago.

The company reported first-half revenues of $133 million up 24%, with a net loss of $48 million compared to net income of $119 million a year ago.

Litigation costs contributed to the losses. The company is preparing for trial in October against Verizon, which TiVo has charged with patent infringement. The company also has lawsuits pending against Motorola, Cisco and Time Warner Cable.

In early 2012, TiVo acquired TRA, which itself is embroiled in litigation against WPP’s Kantar. TRA claims that Kantar violated patents related to a research offering that links shopper purchases to TV viewing.

“While our significant investment in these cases is impacting our expense base in the near-term, we believe it is vital to protect our innovation, and we are confident that the return on investment will continue to be substantial over time,” TiVo CEO Tom Rogers said of the litigation expense.

It has paid off in the past. Dish Network agreed to pay $500 million to settle a patent dispute with TiVo last year. Early this year, AT&T agreed to pay more than $200 million to settle a similar dispute.

The company continues to build its subscriber base for its advanced TV systems, working with cable MSOs and other pay-television providers. TiVo said subscriptions worldwide grew 41% in the quarter, highlighted by growth at Virgin Media, the UK cable service provider, where TiVo subs recently passed the 1 million mark.

TiVo also said it was working with digital transactions facilitator Paypal to provide its subscribers with a quick way to pay for products they link to and purchase via interactive TV ads seen via TiVo.

The company said it expects losses in the third quarter to remain steep -- approaching $30 million -- given the ongoing litigation.

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