TIBCO Software Inc. Q2 2010 Earnings Call Transcript - TheStreet

TIBCO Software Inc. Q2 2010 Earnings Call Transcript

TIBCO Software Inc. Q2 2010 Earnings Call Transcript
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TIBCO Software Inc. (TIBX)

Q2 2010 Earnings Call

June 24, 2010 4:30 PM ET

Executives

Vivek Ranadive – Chairman and CEO

Murray Rode – Chief Operating Officer

Sydney Carey – Chief Financial Officer.

Analysts

Nabil Elsheshai – Pacific Crest Securities

Brad Zelnick – Macquarie Securities

John DiFucci – J.P. Morgan

Mark Murphy – Piper Jaffray

Geo John – Goldman Sachs

Yun Kim – Gleacher & Company

Tim Klassell – Thomas Weisel Partners

Brent Williams – Benchmark

Presentation

Operator

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Good afternoon, ladies and gentlemen. I am [Lusatia]. Welcome to TIBCO’s Second 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 on 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 78422894.

The following conference call includes forward-looking statements, which represent TIBCO Software outlook and guidance only as of today, and 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.

The 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 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

Thank you, Lusatia, and hello everyone for joining us today. I’ll begin with summary remarks on our second quarter performance, comment upon the state of our business half way through our year and then I’ll turn it over to Murray and Sydney to discuss the details.

We had another good quarter in Q2 extending our strength of outperformance to eight consecutive quarters and delivering accelerated growth in total revenue, licensed revenue and operating profit. Highlights include, total revenue grew by 21% over the second quarter of 2009 for a Q2 record of $173.3 million. License revenue grew by 23% to $62.1 million.

Non-GAAP operating margins came in at 22.4%, an expansion of 340 basis points over last year and non-GAAP EPS at $0.15 grew by $0.04 over the second quarter of last year.

We also saw the greatest product refresh in our history this quarter, demonstrating more returns from our steady R&D investment and showing once again, why TIBCO is the innovation leader in infrastructure software.

Finally, we continued to judiciously compliment this innovation by acquiring Kabira Technologies, a provider of in-memory transaction processing software and earlier this week, we announced our intention to acquire Proginet, a leader in the Managed File Transfer market. Murray will comment further on these various product initiatives shortly.

But what I really found interesting about this quarter and what a growing body of evidence suggests is that we have hit the tipping point in our business. In fact, the tipping point may have been hit as much as a year ago.

Consider the diversity of customers across industries and across companies big and small that are seeking our solutions, buying into our vision of the event driven enterprise and using our products to solve 21st century problems.

Our competitive position has never been stronger. Our differentiation is recognized, our brand has never carried more weight and we continue to show pricing power. The market is coming to us.

There is an intense level of interest in our newer solutions such as TIBCO Silver. Our silver data program had over 400 requests to participant whereas TIBCO Beta’s in the past have seen maybe a dozen or so inquiries.

Our partner support has strengthened and become universal as evidence by the range of partners supporting our message, including Accenture, HCL, HP, Intel to name just a few and as some of you experienced firsthand, there is a great energy being generated at our marketing events such as this year’s TUCON, our Annual User Conference where over 1300 attendees and 70 partners were present. This was the largest gathering ever of the TIBCO community.

And let’s not forget that invitation is the greatest form of flattery. The number of other software companies trying to jump on the event driven bandwagon continues to grow. In fact, IBM, which in truth has been on the bandwagon for sometime, is doing successful over its Smarter Planet ad campaign, for it is building awareness for the importance of technologies in which we are best in class.

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