This summary is based on the fourth quarter fiscal 2008 earnings call conducted by TIBCO Software Inc. (TIBX) on December 22, 2008.
Management:
Chairman and CEO: Vivek Ranadive
EVP and CFO: Murray Rode
Key Investor Issues:
- Quarter-to-quarter gross profit increased from $140 million to $141.5 million.
- Full year GAAP EPS were 29 cents versus 25 cents in 2007.
Full Year 2008 Highlights:
- Total revenue rose 12% to $644 million.
- License revenue grew 5% to $272 million.
- The company posted record operating profit of $119 million, an increase of 19% from 2007.
- Full year cash flow from operations was $152 million, 49% higher than last year.
- Non-GAAP EPS were 47 cents versus 38 cents last year.
Fourth Quarter Financial Highlights:
The company continued to expand its relationship with industry leaders.
- These included BNP Paribas, CIBC World Markets, CareFirst BlueCross, Grupo Santander, Harvard Pilgrimand Merck.
- Other key partnerships were with Microsoft, Northrop Grumman, Scripps Network, CNet, Society General, Swisscom, UNUM and the Vodafone Group.
Going forward, the management is mindful of key operational parameters.
- The world is getting more competitive as opposed to be being less competitive.
- More concerted efforts will be required in 2009 in servicing existing clients and winning new ones.
- There is greater requirement for flexible business models and improved accountability in the form of cost savings and ROI.
- There is a shift away from the old request-reply database architectures towards new event driven solutions built on in-memory data management systems.
- These represent the only way to compete in the 21st century and TIBCO offers the gold standard products in this area.
The management returned $150 million to shareholders during the year.
- This was achieved through share buybacks.
- The company maintained a cash balance position of approximately $270 million.
- The cash balance position was achieved amidst increases in sales force and new product development.
- New products included Business Events 3.0, Active Matrix 2.1, Service Performance Manager, TIBCO’s Spotfire S+ and TIBCO Messaging Appliance.
Fourth quarter total revenue was $185.5 million, essentially flat with last year.
- License revenue was $90.4 million, down 9% year-over-year.
- The non-GAAP gross margins were 79%, an increase from 78% last year.
- The management reported non-GAAP operating income of $54 million, a year-over-year by almost 8%.
- This resulted in an operating margin of approximately 29% versus 27% a year ago.
Q4 non-GAAP EPS was 23 cents versus 18 cents a year ago.
- The increase was partly due to the non-GAAP effective tax rate for the quarter of 27% versus 35% a year ago.
- The company recorded a low tax rate in the quarter due primarily to the reinstatement of the R&D tax credit and the mix of foreign and domestic income.
- Applying a more normalized rate of 33% results in non-GAAP EPS of 21 cents or a 3 cents increase over last year.
- GAAP EPS for the quarter was 18 cents versus 14 cents for Q4 a year ago.
The company announced that quarterly profitability was clearly a result of careful management of expenses.
- This included efforts on salary related costs, restricted hiring, travel, meeting and marketing program.
- The company also closely managed Q4 CapEx.
- The management anticipates continued focus on these areas in the next year.
