After the quarter closed, the company announced intent to acquire Insightful Corporation, a Seattle-based provider of statistical data analysis and data mining solutions, in a transaction valued at approximately $25 million. The transaction is expected to close late in the third quarter.

Business Outlook

The management remains positive on its market position and long-term opportunities for growth. In light of the broader macro economic environment and the fact that TIBCO fell short of its targets in the second quarter, the company is taking a conservative approach on guidance.

The company will continue to pursue its target of 190 quota-carrying sales people by year end, but it will offset this cost with savings elsewhere.

Third Quarter Outlook

- Total revenues are expected to be between $151 and $157 million with license revenue in the range of $60 million to $65 million.
- The non-GAAP gross margin is expected to be just over 73%, with a non-GAAP operating margin between 13% and 14%.
- Non-GAAP EPS for the quarter should range between $0.07 and $0.08, with GAAP EPS ranging from $0.01 to $0.03.

Full Year 2008 Outlook

- For the full year the company is guiding to total revenue in a range of $650 million to $660 million.
- License revenue is expected to be between $280 million and $290 million.
- The non-GAAP gross margin should be about 75%, with a non-GAAP operating margin between 17.5% and 18.5%.

- Non-GAAP EPS are expected to range between $0.43 and $0.45, which maintains the company’s original EPS guidance for the year.
- GAAP EPS should range from $0.21 to $0.24.
- With this revenue and earnings guidance, total cash flow from operations for the year are expected to rise about 15% to 20%.

Key questions and answers from the second quarter fiscal 2008 earnings conference call conducted by TIBCO Software Inc. (TIBX: chart) on June 26, 2008.

John DiFucci (JP Morgan): Obviously it was a tough quarter but at the same time there was some strength, especially in the cash flow number, although you had a lot of comments that sounded pretty conservative. Could you give us a little more color around the conservatism that you actually put into the guidance?

Murray Rode: For starters, we did effectively lower annual guidance on a couple of dimensions, both total revenue and license, so that’s where some of the conservatism comes in. I think we have said all along, as we’ve entered the year, that we really didn’t feel that the guidance we were giving was that aggressive since it originally only assumed about 6%-9% growth in the core business and then had a full year of Spotfire in the numbers versus a half year. So we’ve backed off a notch from that with this guidance.

At the same time, we still remain pretty positive on the opportunity and I think the conservatism is really more a nod to take into account of a little bit more volatility perhaps, because of the macro environment. So a little bit more conservative on revenue and then because we do feel we are more conservative on our expenses we can still maintain the EPS guidance we have.

John DiFucci (JP Morgan): You’re still planning to hire more and keep your goals for sales people. What are the areas where you think maybe you’ll cut back a little bit?

Murray Rode: The sales organization is a pretty big organization and has a variety of different roles, not just quota-heads. So there are roles that we have already been streamlining to make room for more quota-heads and simplifying our sales organization. And that’s something we’ve done through the first half of the year. Secondly, we are making more room in the marketing budget and we’re being very careful as well with our G&A expense.

Tim Klasell (Thomas Weisel): Just a quick question around your services line, it was a little bit stronger than anticipated and margins also improved. Was that being driven by Spotfire or was there some extra maintenance or something on the core TIBCO side?

Murray Rode: It was really more driven by strong maintenance, the margin part was driven more by strong maintenance growth. Services did grow as well, and we did hit the margin targets we had for the quarter but the margin benefit was coming mostly from maintenance growth.

Tim Klasell (Thomas Weisel): Your guidance would indicate a real strong finish to the year, but what gives you the confidence in the pipeline that you can close than in the fourth quarter? Any metrics you can share with us?

Murray Rode: I think quantitatively, particularly coming of the second quarter, we are careful with the total level of coverage in the pipeline, and looking at the big deals that we have and how they might play out and scrubbing the forecast for some of those deals that seem more speculative. S so generally, at this point, we feel good about the pipeline in terms of the coverage that we have for guidance.

Tim Klasell (Thomas Weisel): And then with the Insightful acquisition, can you use the same channel with Spotfire you’re using right now or can you walk us through how that fits into your go-to-market strategy?