This is a summary of the second quarter fiscal 2008 earnings conference call conducted by TIBCO Software Inc. (TIBX: chart) on June 26, 2008.
Management:
Chairman and CEO: Vivek Ranadivé
Executive VP and CFO: Murray Rode
Key Investor Issues:
Second Quarter Highlights
- Total revenues were $150 million, resulting in year-over-year growth of 15%.
- License revenues were $57.7 million, up 5% on a year-over-year basis and fully-taxed non-GAAP earnings per share for the quarter were $0.07 versus $0.07 a year ago.
- Services and maintenance revenue was $92.3 million, up 22% year-over-year.
- Year-to-date cash flow from operations exceeds $92 million.
- TIBCO completed 91 deals of $100,000 or greater in license versus 73 a year ago.
Positive developments this quarter included the continued traction and ability to close significant deals in core vertical markets such as financial services, insurance, life sciences, and telecom, and a strong performance from the European division where total revenues rose 24% year-over-year.
TIBCO fell short of its goals this quarter primarily due to underperformance in the Americas.
This shortfall was largely attributable to a handful of deals failing to materialize during the last week of our quarter. Upon review, these deal slips were mostly caused by factors specific to each situation versus a single overriding trend. In all cases, competition was not a factor.
- Non-GAAP gross margin was 73%, roughly in line with last year.
- Non-GAAP operating income was $17.5 million resulting in an operating margin of approximately 12%, versus 14% a year ago.
- Non-GAAP EPS was $0.07 versus $0.07 a year ago.
- Non-GAAP tax rate for the quarter was 33%, 1% below the first quarter and a proforma rate the company expects to maintain for the remainder of the year.
Deferred revenue was $154 million, including both long and short-term components.
- This is up about 43% from a year ago.
- DSOs came in at 68 days, down sequentially and down 11 days year-over-year.
- Cash flow from operations was approximately $32.1 million, which compares with $10.6 million a year ago. This brings year-to-date cash flow to $92.3 million versus $52.6 million for the year-ago period.
- TIBCO ended the quarter with $278 million in cash and short-term investments despite having repurchased 5.2 million shares at an average price of $7.78 per share.
The geographic breakdown of revenue was as follows:
- the U.S. represented 47% of total revenue;
- Europe 43% of total revenue;
- Asia-Pacific 10%.
Total revenue by vertical was as follows:
- financial services 22%;
- telecommunications 16%;
- insurance 9%;
- energy 9%;
- government 7%;
- life sciences 6%.
The approximate breakout of license revenue by product family was as follows:
- SOA product family 51%;
- Business Optimization 31%;
- BPM 18%.
The top ten customers represented 24% of revenue versus 25% a year ago.
- The company had 7 deals over $1 million in license.
- License deals over $100,000 rose to 91, versus 73 in the year-ago period.
- For license deals over $100,000, the average deal size was approximately $583,000 versus $684,000 a year ago and $602,000 in the first quarter.
- The company added 46 new license customers in the quarter versus 18 in the year-ago period.
