TIBCO Software CEO Discusses F3Q2010 Results - Earnings Call Transcript

TIBCO Software CEO Discusses F3Q2010 Results - Earnings Call Transcript
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TIBCO Software Inc. (TIBX)

F3Q2010 Earnings Call Transcript

September 23, 2010 4:30 pm ET

Executives

Vivek Ranadive – Chairman and CEO

Murray Rode – COO

Sydney Carey – EVP and CFO

Analysts

Yun Kim – Gleacher & Company

Derek Bingham – Goldman Sachs

Giuseppe Incitti – JP Morgan

Nabil Elsheshai – Pacific Crest Securities

Tim Klasell – Stifel Nicolaus

Bob [ph] – Macquarie Securities

Presentation

Operator

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Good afternoon, ladies and gentlemen. I am Shannel; your conference operator. Welcome to TIBCO’s third quarter 2010 conference call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session. You can also listen to this call via the internet at www.tibco.com.

Today’s call is being recorded and will be available for playback from TIBCO Software website at www.tibco.com. In addition, replay will be available through Intercall for one month following today’s call by dialing 800-642-1687 from the U.S. or 706-645-9291 internationally. The confirmation code is 98141391.

The following conference call includes forward-looking statements, which represent TIBCO Software’s outlook and guidance only as of today, which are subject to risks and uncertainties. These forward-looking statements include, but are not limited to, forecasts of revenues, operating margins, operating expenses, outstanding shares, and earnings per share for future periods.

Our actual results could differ materially from those projected in such forward-looking statements. Additional information regarding the factors that could cause actual results to differ materially are discussed in the risk factor section of TIBCO’s most recent reports on Forms 10-K and 10-Q filed with the Securities and Exchange Commission. TIBCO assumes no obligation to update the forward-looking statements included in this call, whether as a result of new developments or otherwise.

This conference call also includes certain financial information that has not been prepared in accordance with Generally Accepted Accounting Principles, as we believe that such information is useful for understanding our financial condition and results of operations. For a presentation of the most directly comparable financial measures calculated in accordance with GAAP and a reconciliation of the differences between the non-GAAP and GAAP financial information, please see our website at www.tibco.com.

The presenters on the call are Vivek Ranadive, TIBCO’s Chairman and CEO; Murray Rode, Chief Operating Officer; and Sydney Carey, Chief Financial Officer.

I’d now like to turn the call over to Vivek.

Vivek Ranadive

Hello,

Shannel. Thank you all for joining us today. I’ll begin with summary remarks on our third quarter performance, comment generally upon the state of our business, and then turn it over to Murray and Sydney to discuss the details.

Q3 was another strong quarter for TIBCO. I have said before that we have hit the proverbial tipping point in our business, and the evidence and support of this fact continues to mount. We booked new quarterly records for a non-Q4 [ph] in license revenue, total revenue, operating profit, and EPS, while we once again broke new all time records in services revenue and maintenance and support revenue. We continue to see the mainstream appeal of our software platform with double-digit growth rates across each of our major regions in the Americas, Europe and Asia Pacific, Seven different verticals contributing 5% or more of our business and a healthy mix of deals this quarter, big and small.

Highlights for Q3 include total revenue grew by 23% over the third quarter of 2009 to $184.5 million, which represents the fourth quarter in a row of accelerating growth. License revenue grew by a healthy 23% to $70.6 million. Non-GAAP operating margins came in at 24.4% for an expansion of 280 basis points over last year, and non-GAAP EPS of $0.17, grew by $0.04 over the third quarter of last year.

Year-to-date and through three quarters, total revenue is up over 20%, license revenue is up over 22%, operating income is up over 40% and EPS is up over 36% versus the same period a year ago. In addition, we recently closed two small acquisitions in Proginet, which was previously announced; and OpenSpirit announced this afternoon. These deals fit into our acquisition strategy of buying good technologies in core or adjacent markets, and when possible deepening our presence in key verticals such as healthcare, telco, or energy.

For much of the last year, I have been talking about the Two-Second Advantage that TIBCO brings to its customers, and the related shift in the marketplace towards event-driven platforms and in-memory technology. The Two-Second Advantage is real, whether it is two seconds, two minutes or two hours it is far more worthwhile to have just a little bit of the right information in the right hands and in the right context ahead of time than all of the information in the world after the fact. After all what is the point of knowing that you have lost a customer after the customer has already gone.

What is the point of knowing that you have a power outage after the power fails. And if you are a retailer, how much money are you leaving on the table if you don’t know your customers and what they are shopping for at this exact moment in time. The indicators in support of this shift to event-driven systems continue to add up and TIBCO continues to be in pole position to go after this exciting opportunity.

We have pioneered the very concepts of real-time event-driven and in-memory architectures. With our years of focused cutting edge development we have done the hard part in building a stable of products and solutions for the 21st century. We have proven our mettle in the most demanding environments on earth, we have earned the trust of global leaders in business and government with building an ecosystem of partners who are rallying around this cause, and we are executing consistently and responsibly to capture the opportunity both for today and tomorrow.

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