TIBCO Software (TIBX)

Q4 2011 Earnings Call

December 21, 2011 4:30 pm ET


Sydney L. Carey - Chief Financial Officer and Executive Vice President

Vivek Y. Ranadivé - Chairman, Chief Executive Officer and President

Murray Rode - Chief Operating Officer and Executive Vice President


Brent Thill - UBS Investment Bank, Research Division

James Derrick Wood - Susquehanna Financial Group, LLLP, Research Division

Mark R. Murphy - Piper Jaffray Companies, Research Division

Nabil Elsheshai - Pacific Crest Securities, Inc., Research Division

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

Karl Keirstead - BMO Capital Markets U.S.

Kash G. Rangan - BofA Merrill Lynch, Research Division

John S. DiFucci - JP Morgan Chase & Co, Research Division

Brad A. Zelnick - Macquarie Research

Raimo Lenschow - Barclays Capital, Research Division



Good afternoon, ladies and gentlemen. I'm Ashley. Welcome to TIBCO's Fourth Quarter 2011 Conference Call. [Operator Instructions] 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) 585-8367 or (404) 537-3406. The passcode for both the call and the replay is 33209720.

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. Additional 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. 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 the GAAP and a reconciliation of the differences between the non-GAAP and GAAP financial information, please see our website at www.tibco.com.

The participants 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 Y. Ranadivé

Thank you. Thanks for joining us. On today's call, I'll briefly review our Q4 and 2011 highlights. I'll provide some remarks on the broader market environment, and then I'll turn it over to Murray and Sydney.

We delivered another strong quarter and finish to the year in Q4. For the quarter ended November 30, total revenue grew by 20% over Q4 of 2010 and came in at $290 million. License revenue grew by 17% and came in at $135 million. Non-GAAP operating margins were 34.5%, and non-GAAP EPS was $0.42.

For the full year 2011, total revenue grew 22% to $920 million. License revenue grew 25% to $378 million. Non-GAAP operating profit grew 31% to $249 million for an operating margin of 27%. And non-GAAP EPS for the year came in at $1.01, a full 33% higher than last year.

It was a very good year. Once again, we accelerated our total revenue and license revenue growth over the previous year's performance. Once again, we delivered growth with leverage. Remember that when we started the year, I believe it's fair to say that most investors still thought of TIBCO as primarily an SOA and messaging company. But now I believe we have clearly demonstrated that we offer a complete platform for the enterprise, one that extends into analytics, master data management, social media and the cloud.

2011 will stand out most as the year that TIBCO went mainstream. Consider in just this past year, we saw demand simply explode across these newer product areas.

Our business optimization category, which includes both BusinessEvents and Spotfire, grew over 50% in license revenue for the year and has doubled in the past 2 years. MDM has taken off like a rocket, almost tripling in license revenue on the year. With our multi-domain offering, we now have a seat at the table for this expansive problem space. Similarly, our cloud middleware and hosted offerings have gone from projects and pilots to being drivers of 7-figure deals. And tibbr grew most notably of all. It took us 6 months to get to approximately 60 accounts. It's taken us just 6 days to get another 600 to trial our service on the new public instance that we launched last week.

And the beauty of our platform is that the value of the whole is greater than the sum of the parts. TIBCO has the only integrated event-driven platform architected and proven for our real-time world. What's more, we saw continued diversification in the industries we serve with both record-setting demand from our traditional markets as well as material contributions from new markets. For the year, we saw 7 separate verticals with growth over 35%, including logistics, government, health care and energy, life sciences, retail and communications. Overall, the demand from the marketplace for our offerings is massive, and our competitive differentiation could not be more clear.

I want to leave you with a final thought. In the last decade, there was a rush to put all of your transactions into a database and then analyze information after the fact. In the coming years, there's going to be a rush to get that information out or never put it in, in the first place and to put it on a bus so you can use it in real time. No matter who you are or what industry you operate in, you need to be event driven. You need the 2-second advantage.

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