- Published: 25 June 2010
- Written by Editor
TIBCO Software Grows License Revenue by 23% and Total Revenue by 21% Over Q2 2009
TIBCO Software Inc. (NASDAQ:TIBX) today announced results for its second quarter, which ended on May 30, 2010
Total revenue for the second quarter of fiscal 2010 was $173.3 million and net income was $12.8 million, or $0.08 per diluted share. This compares to total revenue of $142.7 million and net income of $10.1 million, or $0.06 per diluted share, as reported for the second quarter of fiscal 2009.
On a non-GAAP basis, net income for the second quarter of fiscal 2010 was $26.2 million or $0.15 per diluted share, compared with $19.0 million or $0.11 per diluted share for the second quarter of fiscal 2009.
Non-GAAP operating income for the second quarter of fiscal 2010 was $38.8 million, an increase of 43% over non-GAAP operating income of $27.1 million in Q2 2009. This implies an expansion of non-GAAP operating margins of 340 basis points, from 19.0% in Q2 2009 to 22.4% in Q2 2010. Non-GAAP results exclude stock-based compensation expense, amortization of acquired intangible assets, restructuring expenses, and acquisition related and other expenses and assume non-GAAP effective tax rates of 31% and 32% for the second fiscal quarters of 2010 and 2009, respectively.
"Our business continued its strong momentum in Q2, delivering accelerated growth in license revenue, total revenue, and operating profits," said Vivek Ranadivé, TIBCO's chairman and chief executive officer. "Our core SOA business grew 34% over last year, our BPM business delivered a major new product release, and our Business Optimization technologies continue to drive deals for us. Customers from all industries are embracing our event-driven and in-memory products to help achieve their Two-Second Advantage™, and we have the products, solutions and expertise to help them get there."
Second Quarter Fiscal 2010 Highlights
-- Total revenue increased 21% year over year to $173.3 million;
-- License revenue increased 23% year over year to $62.1 million;
-- Non-GAAP operating margin was 22.4%;
-- Cash flow from operations was $41.0 million;
-- Repurchased 3.4 million shares;
-- Diverse mix of business across major industries including Financial
Services, Telecommunications, Energy, Government, Life Sciences, and
Insurance;
-- TIBCO closed 85 deals over $100k and had 12 deals over $1 million; and
-- TIBCO expanded its business with leading companies and agencies in the
second quarter such as The City of Anaheim, Corinthian Colleges, Sydney
Water Corporation, TeliaSonera, Telkom, Telstra, Total Systems
Services, and Vodafone.
Conference Call Details
TIBCO has scheduled a conference call for 4:30 pm ET / 1:30 pm PT today to discuss its second quarter results. The conference call will be hosted by InterCall and may be accessed over the Internet at www.tibco.com or via dial-in at (877) 293-9114 or (706) 758-2055. Please join the conference call at least 10 minutes early to register. A replay of the conference call will be available until midnight on July 24, 2010 at www.tibco.com or via dial-in at (800) 642-1687 or (706) 645-9291. The pass code for both the call and the replay is 78422894.
About TIBCO
TIBCO's technology digitized Wall Street in the '80s with event-driven "Information Bus" software, which helped make real-time business a strategic differentiator in the '90s. Today, TIBCO's infrastructure software gives customers the ability to constantly innovate by connecting applications and data in a service-oriented architecture, streamlining activities through business process management, and giving people the information and intelligence tools they need to make faster and smarter decisions, what we call The Power of Now®. TIBCO serves more than 3,000 customers around the world with offices in more than 20 countries and an ecosystem of over 200 partners. Learn more at www.tibco.com.
TIBCO, The Power of Now and TIBCO Software are trademarks or registered trademarks of TIBCO Software Inc. in the United States and/or other countries. All other product and company names and marks mentioned in this document are the property of their respective owners and are mentioned for identification purposes only.
About Non-GAAP Financial Information
This press release includes non-GAAP financial measures. For a description of these non-GAAP financial measures, including the reasons management uses each measure, and reconciliations of these non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with Generally Accepted Accounting Principles in the United States of America ("GAAP"), please see the section entitled "About Non-GAAP Financial Measures" and the accompanying table entitled "Reconciliation of GAAP to Non-GAAP Measures."
Legal Notice Regarding Forward-Looking Statements
This release contains forward-looking statements within the meaning of the "safe harbor" provisions of the federal securities laws. The final financial results for second quarter of fiscal year 2010 may differ materially from the preliminary results presented in this release due to factors that include, but are not limited to, risks associated with the final review of the results and preparation of financial statements. In addition, forward-looking statements such as statements regarding our Business Optimization technologies continuing to drive deals, the continued ability of our products to help customers achieve their Two-Second Advantage, and our ability to provide goods and expertise to help our customers achieve their Two-Second Advantage are subject to risks and uncertainties that could cause actual results to differ materially from such forward-looking statements. These risks include but are not limited to: our ability to differentiate our solutions from those of our competitors, our ability to compete effectively against alternative business models, and our ability to execute successfully on our product plans. Additional information regarding potential risks is provided in TIBCO's filings with the SEC, including its most recent Annual Report on Form 10-K for the year ended November 30, 2009 and Quarterly Report on Form 10-Q for the quarter ended February 28, 2010. TIBCO assumes no obligation to update the forward-looking statements included in this release.
TIBCO Software Inc.
Condensed Consolidated Balance Sheets
(unaudited)
(in thousands)
May 30, November 30,
2010 2009 (1)
------------ ------------
ASSETS
Current assets:
Cash and cash equivalents $ 277,058 $ 292,529
Short-term investments 208 307
Accounts receivable, net 114,894 154,744
Prepaid expenses and other current assets 50,242 52,657
------------ ------------
Total current assets 442,402 500,237
Property and equipment, net 90,645 94,631
Goodwill 376,475 374,285
Acquired intangible assets, net 97,405 83,060
Long-term deferred income tax assets 75,780 70,057
Other assets 44,800 44,069
------------ ------------
Total assets $ 1,127,507 $ 1,166,339
============ ============
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable $ 14,491 $ 18,350
Accrued liabilities 71,294 96,595
Accrued excess facilities costs 8,056 5,848
Deferred revenue 178,844 159,241
Current portion of long-term debt 2,207 2,148
------------ ------------
Total current liabilities 274,892 282,182
Accrued excess facilities costs, less current
portion 833 1,083
Long-term deferred revenue 15,311 15,353
Long-term deferred income tax liabilities 9,133 9,257
Long-term income tax liabilities 14,041 17,045
Long-term debt, less current portion 39,258 40,377
Other long-term liabilities 3,106 3,561
------------ ------------
Total long-term liabilities 81,682 86,676
------------ ------------
Total liabilities 356,574 368,858
------------ ------------
Total equity 770,933 797,481
------------ ------------
Total liabilities and equity $ 1,127,507 $ 1,166,339
============ ============
(1) On December 1, 2009, TIBCO adopted a new accounting standard related to
the presentation of noncontrolling interest. Prior period results have
been adjusted to conform with this new accounting standard.
TIBCO Software Inc.
Condensed Consolidated Statements of Operations
(unaudited)
(in thousands, except net income per share)
Six Months Ended
Three Months Ended November 30,
-------------------- --------------------
May 30, May 31, May 30, May 31,
2010 2009 (1) 2010 2009 (1)
--------- --------- --------- ---------
Revenue:
License $ 62,096 $ 50,457 $ 116,270 $ 95,306
Service and maintenance 111,174 92,213 212,044 180,260
--------- --------- --------- ---------
Total revenue 173,270 142,670 328,314 275,566
--------- --------- --------- ---------
Cost of revenue:
License 8,199 7,493 15,595 14,303
Service and maintenance 39,128 32,404 74,332 63,649
--------- --------- --------- ---------
Total cost of revenue 47,327 39,897 89,927 77,952
--------- --------- --------- ---------
Gross profit 125,943 102,773 238,387 197,614
--------- --------- --------- ---------
Operating expenses:
Research and development 30,127 26,260 58,201 51,394
Sales and marketing 56,846 47,445 109,549 93,571
General and administrative 11,907 11,317 23,253 21,945
Amortization of acquired
intangible assets 3,976 3,736 7,684 7,452
Acquisition related and other(2) 589 - 1,634 -
Restructuring 6,271 - 6,271 -
--------- --------- --------- ---------
Total operating
expenses 109,716 88,758 206,592 174,362
--------- --------- --------- ---------
Income from operations 16,227 14,015 31,795 23,252
Interest income 224 757 428 1,834
Interest expense (980) (793) (1,965) (1,539)
Other income (expense), net 142 1,042 (87) 1,201
--------- --------- --------- ---------
Income before provision for
income taxes and noncontrolling
interest 15,613 15,021 30,171 24,748
Provision for income taxes 2,682 4,828 6,800 8,950
Net income 12,931 10,193 23,371 15,798
Less: Net income attributable
to noncontrolling interest 117 116 132 95
--------- --------- --------- ---------
Net income attributable to
TIBCO Software Inc. $ 12,814 $ 10,077 $ 23,239 $ 15,703
========= ========= ========= =========
Net income per share attributable
to TIBCO Software Inc.:
Basic $ 0.08 $ 0.06 $ 0.14 $ 0.09
========= ========= ========= =========
Diluted $ 0.08 $ 0.06 $ 0.14 $ 0.09
========= ========= ========= =========
Shares used to compute net
income per share attributable
to TIBCO Software Inc.:
Basic 160,992 171,635 161,793 171,460
========= ========= ========= =========
Diluted 169,975 173,134 169,861 172,614
========= ========= ========= =========
(1) On December 1, 2009, TIBCO adopted a new accounting standard related to
the presentation of noncontrolling interest. Prior period results have
been adjusted to conform with this new accounting standard.
(2) Prior to the adoption of new amended guidance for business combinations
effective December 1, 2009, the majority of acquisition related and
other expenses were capitalized.
TIBCO Software Inc.
Condensed Consolidated Statements of Cash Flows
(unaudited)
(in thousands)
Six Months Ended
------------------------
May 30, May 31,
2010 2009 (1)
----------- -----------
Cash flows from operating activities:
Net income $ 23,371 $ 15,798
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation of property and equipment 6,606 7,477
Amortization of acquired intangible assets 15,218 14,587
Stock-based compensation 14,224 11,180
Deferred income tax (5,263) (4,216)
Tax benefits related to stock benefit plans 13,683 5,615
Excess tax benefits from stock-based
compensation (8,889) (3,558)
Other non-cash adjustments, net 50 942
Changes in assets and liabilities:
Accounts receivable 40,579 33,344
Prepaid expenses and other assets 4,482 9,367
Accounts payable (5,388) 745
Accrued liabilities and excess facilities
costs (29,769) (21,200)
Deferred revenue 12,601 1,507
----------- -----------
Net cash provided by operating activities 81,505 71,588
----------- -----------
Cash flows from investing activities:
Maturities and sales of short-term investments 157 10,586
Acquisitions, net of cash acquired (42,626) (163)
Proceeds from private equity investments 32 -
Purchases of property and equipment (2,458) (3,255)
Restricted cash pledged as security (1,880) (3,241)
----------- -----------
Net cash provided by (used in) investing
activities (46,775) 3,927
----------- -----------
Cash flows from financing activities:
Proceeds from issuance of common stock 16,422 2,094
Repurchases of the Company's common stock (67,482) (14,791)
Excess tax benefits from stock-based
compensation 8,889 3,558
Principal payments on long-term debt (2,404) (1,002)
----------- -----------
Net cash used in financing activities (44,575) (10,141)
----------- -----------
Effect of foreign exchange rate changes on cash
and cash equivalents (5,626) 7,717
----------- -----------
Net change in cash and cash equivalents (15,471) 73,091
Cash and cash equivalents at beginning of period 292,529 254,400
----------- -----------
Cash and cash equivalents at end of period $ 277,058 $ 327,491
=========== ===========
(1) On December 1, 2009, TIBCO adopted a new accounting standard related to
the presentation of noncontrolling interest. Prior period results have
been adjusted to conform with this new accounting standard.
About Non-GAAP Financial Measures
TIBCO provides non-GAAP measures for operating income, net income and net income per share data as supplemental information regarding TIBCO's business performance. TIBCO believes that these non-GAAP financial measures are useful to investors because they exclude non-operating charges. TIBCO's management excludes these non-operating charges when it internally evaluates the performance of TIBCO's business and makes operating decisions, including internal budgeting, performance measurement and the calculation of bonuses and discretionary compensation, because these measures provide a consistent method of comparison to historical periods. Moreover, management believes these non-GAAP measures reflect the essential revenue generation activities of TIBCO. Accordingly, management excludes stock-based compensation related to employee stock options, amortization of acquired intangible assets, costs related to formal restructuring activities, acquisition-related and other expenses, gains and losses on equity investments, and the income tax effects of the foregoing, as well as adjustments for the impact of changes in the valuation allowance recorded against TIBCO's deferred tax assets when making operational decisions.
TIBCO believes that providing the non-GAAP measures that management uses to its investors is useful to investors for a number of reasons. The non-GAAP measures provide a consistent basis for investors to understand TIBCO's financial performance on a trended basis across historical periods. In addition, it allows investors to evaluate TIBCO's performance using the same methodology and information as that used by TIBCO's management.
Non-GAAP measures are subject to material limitations as these measures are not in accordance with, or a substitute for, GAAP and thus TIBCO's definition may be different from similar non-GAAP measures used by other companies and/or analysts. However, TIBCO's management compensates for these limitations by providing the relevant disclosure of the items excluded in the calculation of non-GAAP operating income, non-GAAP net income and non-GAAP net income per share. In addition, some items such as restructuring charges that are excluded from non-GAAP net income and non-GAAP earnings per share can have a material impact on cash flows and stock compensation charges can have a significant impact on earnings. Management compensates for these limitations by evaluating the non-GAAP measure together with the most directly comparable GAAP measure. TIBCO has historically provided non-GAAP measures to the investment community as a supplement to its GAAP results, to enable investors to evaluate TIBCO's business performance in the way that management does.
The non-GAAP adjustments, and the basis for excluding them, are outlined below:
Amortization of Intangible Assets
TIBCO has incurred amortization of intangible assets, included in its GAAP financial statements, related to various acquisitions TIBCO has made. Management excludes these items, for the purposes of calculating non-GAAP operating income, non-GAAP net income and non-GAAP net income per share. TIBCO believes that eliminating this expense from its non-GAAP measures is useful to investors, because the amortization of intangible assets can be inconsistent in amount and frequency and is significantly impacted by the timing and magnitude of TIBCO's acquisition transactions, which also vary substantially in frequency from period to period.
Stock-based Compensation
TIBCO incurs stock-based compensation expense. TIBCO excludes this item for the purposes of calculating non-GAAP operating income, non-GAAP net income and non-GAAP net income per share because it is a non-cash expense that TIBCO believes is not reflective of its business performance. The nature of the stock-based compensation expense also makes it very difficult to estimate prospectively, since the expense will vary with changes in the stock price and market conditions at the time of new grants, varying valuation methodologies, subjective assumptions and different award types, making the comparison of current results with forward-looking guidance potentially difficult for investors to interpret. The tax effects of stock-based compensation expenses may also vary significantly from period to period, without any change in underlying operational performance, thereby obscuring the underlying profitability of operations relative to prior periods. Finally, TIBCO believes that non-GAAP measures of profitability that exclude stock-based compensation are widely used by analysts and investors in the software industry.
Acquisition-related and Other Expenses
TIBCO has incurred acquisition-related and other expenses which consist of costs incurred after the issuance of a definitive term sheet for a particular transaction (whether or not such transaction is ultimately completed, remains in process or is not completed) and include legal, banker, accounting and other advisory fees of third parties and severance costs for employees of the acquired company that are terminated within 90 days of the acquisition date. Management excludes these items, for the purposes of calculating non-GAAP operating income, non-GAAP net income and non-GAAP net income per share. TIBCO believes that eliminating these expenses from its non-GAAP measures is useful to investors, because it generally would not have otherwise incurred such expenses in the periods presented as part of its continuing operations. The acquisition-related and other expenses are not recurring with respect to past transactions, can be inconsistent in amount and frequency from period to period and are significantly impacted by the timing and magnitude of TIBCO's acquisitions. While these expenses are not recurring with respect to past transactions, TIBCO generally will incur these expenses in connection with any future acquisitions.
Restructuring Activities
TIBCO has incurred restructuring expenses, included in its GAAP presentation of operating expense, primarily due to workforce related charges such as payments for severance and benefits and estimated costs of exiting and terminating facility lease commitments related to a formal restructuring plan. TIBCO excludes these items, for the purposes of calculating non-GAAP operating income, non-GAAP net income and non-GAAP net income per share, when it evaluates the continuing business performance of TIBCO. TIBCO believes that these items are not consistently recurring and do not necessarily reflect expected future operating expense, nor does TIBCO believe that they provide a meaningful evaluation of current versus past business results or the expense levels required to support TIBCO's operating plan.
TIBCO Software Inc.
Reconciliation of GAAP to Non-GAAP Measures
(unaudited)
(in thousands, except net income per share)
Three Months Ended
---------------------------------------------------
May 30, 2010 May 31, 2009
------------------------- -------------------------
Net income Net income
attributable attributable
to TIBCO to TIBCO
Operating Software Operating Software
Income Inc. Income Inc.
------------ ----------- ------------ -----------
GAAP $ 16,227 $ 12,814 $ 14,015 $ 10,077
Amortization of
intangible assets -
cost of revenue 3,920 3,920 3,572 3,572
Amortization of
intangible assets -
operating expense 3,976 3,976 3,736 3,736
Stock-based
compensation - cost
of revenue 681 681 632 632
Stock-based
compensation - R&D
expense 2,020 2,020 1,531 1,531
Stock-based
compensation - S&M
expense 2,571 2,571 1,706 1,706
Stock-based
compensation - G&A
expense 2,516 2,516 1,949 1,949
Acquisition related
and other 589 589 - -
Restructuring 6,271 6,271 - -
Income tax adjustment
for non-GAAP (1) - (9,147) - (4,179)
------------ ----------- ------------ -----------
Non-GAAP $ 38,771 $ 26,211 $ 27,141 $ 19,024
============ =========== ============ ===========
Diluted net income per
share attributable to
TIBCO Software Inc.:
GAAP $ 0.08 $ 0.06
=========== ===========
Non-GAAP $ 0.15 $ 0.11
=========== ===========
Shares used to compute
diluted net income per
share attributable to
TIBCO Software Inc.: 169,975 173,134
=========== ===========
Six Months Ended
---------------------------------------------------
May 30, 2010 May 31, 2009
------------------------- -------------------------
Net income Net income
attributable attributable
to TIBCO to TIBCO
Operating Software Operating Software
Income Inc. Income Inc.
------------ ----------- ------------ -----------
GAAP $ 31,795 $ 23,239 $ 23,252 $ 15,703
Amortization of
intangible assets -
cost of revenue 7,534 7,534 7,135 7,135
Amortization of
intangible assets -
operating expense 7,684 7,684 7,452 7,452
Stock-based
compensation - cost
of revenue 1,323 1,323 1,242 1,242
Stock-based
compensation - R&D
expense 3,540 3,540 2,654 2,654
Stock-based
compensation - S&M
expense 4,826 4,826 3,412 3,412
Stock-based
compensation - G&A
expense 4,535 4,535 3,872 3,872
Acquisition related
and other 1,634 1,634 - -
Restructuring 6,271 6,271 - -
Income tax adjustment
for non-GAAP (1) - (14,425) - (7,215)
------------ ----------- ------------ -----------
Non-GAAP $ 69,142 $ 46,161 $ 49,019 $ 34,255
============ =========== ============ ===========
Diluted net income per
share attributable to
TIBCO Software Inc.:
GAAP $ 0.14 $ 0.09
=========== ===========
Non-GAAP $ 0.27 $ 0.20
=========== ===========
Shares used to compute
diluted net income per
share attributable to
TIBCO Software Inc.: 169,861 172,614
=========== ===========
(1) The estimated non-GAAP effective tax rate was 31% and 32% for fiscal
2010 and 2009, respectively, and has been used to adjust the provision
for income taxes for non-GAAP purposes.
Contact:
Media Relations Contact:
Holly Burkhart
TIBCO Software Inc.
(650) 846-5624
Email Contact
Investor Relations Contact:
Matthew Langdon
TIBCO Software Inc.
(650) 846-5747
Email Contact
