TIBCO Software (TIBX)

Q2 2011 Earnings Call

June 23, 2011 4:30 pm ET


Sydney Carey - Chief Financial Officer and Executive Vice President

Murray Rode - Chief Operating Officer and Executive Vice President

Vivek Ranadivé - Chairman, Chief Executive Officer and President


Yun Kim - Gleacher & Company, Inc.

John DiFucci - JP Morgan Chase & Co

James Wood - Susquehanna Financial Group, LLLP

Tim Klasell - Stifel, Nicolaus & Co., Inc.

Nabil Elsheshai - Pacific Crest Securities, Inc.

Steven Koenig - Longbow Research LLC

Kash Rangan - BofA Merrill Lynch



Good afternoon, ladies and gentlemen. I'm Shanelle. Welcome to TIBCO's Second Quarter 2011 Conference Call. [Operator Instructions] 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's 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 72367850.

The following conference call includes forward-looking statements which represent TIBCO Software's 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. Additionally, information regarding the factors that could cause actual results to differ materially are discussed in the Risk Factors 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 Ranadivé, 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 Ranadivé

Thanks, Shanelle, and thank you all for joining us today. I'll begin the call with summary remarks on our second quarter performance before commenting on some of the trends we are seeing in our business, then I'll turn it over to Murray and Sydney to discuss further details.

Our business performance was very strong in Q2 and once again, we showed accelerating growth. For the second quarter, our total revenue grew by 25% over 2010 and came in at $216 million. License revenues grew by 32% to $82 million, the fastest growth we've seen in a very long time for Q2. Non-GAAP operating profit grew by 31% and operating margins expanded to 23.5%, and non-GAAP EPS, at $0.21, grew by 40% over the second quarter of last year.

The evidence that our business has hit the tipping point continues to mount, whether it is the accelerating pace of demand for our products and services, the broadening mix of business across industries and geographies, the leverage that our model has consistently shown, or the qualitative feedback I consistently hear from prospects, customers and partners. TIBCO has never been in a stronger position. The threats and opportunities of the 21st century require a software platform that is engineered from the ground up to operate in real time and to handle events, not just transactions. This after all is TIBCO's DNA. It has always been our DNA.

What good is it to find out you lost a customer after they've already left your store or to detect a security breach after personal data records are already gone, or to determine there's a power outage when your city is already in darkness? An effective systems platform for the 21st century enterprise has 5 key elements: one, it must detect relevant patterns and correlations amidst the torrent of big data and events that surround any business today, so that you can interpret what is happening at a point of sale, an instance of risk, or what I generally call the moment of truth; second, such a platform must provide powerful analytic capabilities so that anyone can interpret what is happening at that moment of truth and immediately understand the implications; three, the platform should have the muscle or automation to initiate corrective action based on recognized patterns, as well as the flexibility to compose and assemble new lightweight applications on the fly as needed; fourth, the platform should scale elastically across both on premise and cloud environments; and finally, the platform should provide a natural environment for collaboration, one that marries systems and people into a single unified desktop. Only TIBCO has a complete and integrated platform to detect, harness and make sense of the threats and opportunities that lie in events.

We are the innovator and leader in each of the major areas in which we play, across service-oriented architecture, business process management, master data management, event-driven architectures, analytic applications and social collaboration. Just as Oracle was a platform for transactions, TIBCO is the platform for events.

We're still in the very early innings of what I believe is the greatest opportunity in enterprise software. Now I'll turn it over to Murray, but before I do, I want to draw your attention to our upcoming launch party for our tibbr 3.0 release. It will be held live on Facebook at tibbr.com. We have a raft of exciting new announcements and I very much encourage you to tune in. Murray?

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