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TIBCO Software Inc. (TIBX)

F4Q09 Earnings Call

December 22, 2009 4:30 pm ET

Executives

Vivek Y. Ranadive– Chairman of the Board & Chief Executive Officer

Murray D. Rode – Chief Operating Officer

Sydney L. Carey – Chief Financial Officer & Executive Vice President

Analysts

Tim Klasell – Thomas Weisel Partners

John Difucci – J. P. Morgan

Nabil Elsheshai – Pacific Crest Securities

Analyst for Brad Zelnick – Macquarie Research Equities

Derek Bingham – Goldman Sachs

Yun Kim – Broadpoint Capital

Analyst for David Hilal – FBR Capital Markets

Presentation

Operator

Welcome to TIBCO’s fourth quarter 2009 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’s website at www.TIBCO.com. In addition, replay will be available through Premier Global Services for one month following today’s call by dialing 888-203-1112 from the United States or 719-457-0820 internationally. The confirmation code is 4047790.

The following conference call includes forward-looking statements which represent TIBCO’s 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 these project 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 10K and 10Q filed with the Securities & Exchange Commission. TIBCO assumes no obligations 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 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 participants on the call are Vivek Ranadive, TIBCO’s Chairman and CEO; Murray Rode, Chief Operating Officer; and Sydney Carey, Chief Financial Officer. I’ll now turn the call over to Vivek.

Vivek Y. Ranadive

On today’s call I’ll break my comments in to three parts: first, I’ll briefly review our Q4 and 2009 highlights; second, I will explain why we believe we are in a very strong position in the market; and third, I will share some thoughts on where our focus lies as we enter the new year. I will then turn it over to Murray and Sydney to discuss the details.

Q4 was another strong quarter, a record quarter and it provided a strong finish to the year for TIBCO. During Q4 we exceeded our guidance ranges for revenue and delivered our best quarter ever with $196 million in total revenue. License revenue came in at $95 million. Also this quarter we exceeded our profit targets with non-GAAP operating margins coming in at 30% and for the sixth quarter in a row we beat Street estimate consensus for non-GAAP EPS at $0.23.

For the full year 2009 highlights include total revenue of $621 million, license revenue of $247 million, record non-GAAP operating profit of $140 million for a full year operating margin of 23%, non-GAAP EPS was $0.55 17% higher than last year. Cash flows from operations was $115 million and we spent $106 million this year repurchasing 12.9 million of our shares. All-in-all it was a good year.

While others claim innovation in enterprise software is dead and focus on buying out maintenance, TIBCO continues to expand its business by bringing new and innovative products to market. Consider in the past year alone we released TIBCO ActiveSpaces, a distributed peer-to-peer in memory data grid that provides a form of virtual shared memory. We released TIBCO Silver, the industry’s first application delivery platform for enterprise cloud computing. We released tibbr, the first enterprise social networking tool that allows you to follow not just people but subjects and machines as well. And, we issued significant new releases to our world class offerings in service oriented architecture business process management and business optimization.

Whereas databases relay on architectures designed for transactions, the opportunities in today’s world depend on detecting and harnessing events. Our bus based, event driven and in memory technologies allow customers to solve a whole class of problems and pursue new opportunities that old database centric architectures simply cannot. We’re not just talking about trading floors here, these technologies have now become mainstream and TIBCO has a terrifically compelling set of offerings.

Consider a few real world examples, a western states utility is using our events and predictive software to detect transformer outages before they happen and avoid blackouts such as we experienced a few short years ago in the US northeast. A major Asian bank turned away from their existing CRM vendor and adopted our SOA and events technologies to individualize marketing campaigns and push targeted offerings via SMS. In doing so they transformed what was a largely ineffective outbound marketing effort in to a highly individualized, event driven inbound marketing machine.

A major Indian mobile carrier is using our events and BPM technology to detect customer churn before it happens and push additional account credits to subscribers after a certain number of dropped calls. Finally, a major airline is using our technology for disruption management to avoid customer service issues stemming from unscheduled events such as storms, broken equipment and flight delays. None of these would be possible with transactional architectures.

Read the rest of this transcript for free on seekingalpha.com