TIBCO Software Reports Third Quarter Results

TIBCO Software Inc. (NASDAQ: TIBX) today announced results for its fiscal third quarter, which ended on August 31, 2014.

On a GAAP basis, total revenue for the third quarter of fiscal 2014 was $255.6 million, compared with $270.9 million for the third quarter of fiscal year 2013, and software revenue was $85.9 million, compared with $108.0 million. Within software revenue, license revenue was $76.7 million, compared with $105.1 million, while subscription revenue was $9.2 million, compared with $2.9 million. Net income was $2.6 million, or $0.02 per diluted share, compared to $21.3 million, or $0.13 per diluted share, in the third quarter of fiscal 2013.

On a non-GAAP basis, total revenue for the third quarter of fiscal 2014 was $259.6 million, compared with $270.9 million for the third quarter of fiscal year 2013, and software revenue was $89.9 million, compared with $108.0 million. Non-GAAP subscription revenue within software revenue more than quadrupled to $13.2 million from last year and includes $4.0 million for the acquisition-related accounting effects on deferred revenue. Non-GAAP operating income for the third quarter of fiscal 2014 was $40.7 million, resulting in a non-GAAP operating margin of 15.7% compared to $64.2 million, or a margin of 23.7% in the third quarter of fiscal 2013. Non-GAAP net income was $23.3 million or $0.14 per diluted share, compared with $46.3 million or $0.28 per diluted share for the third quarter of fiscal 2013, which assumes non-GAAP effective tax rates of 36% and 23% for the third quarters of fiscal 2014 and 2013, respectively. Non-GAAP results exclude acquisition-related accounting effects on deferred revenue, amortization of acquired intangible assets, stock-based compensation expense, acquisition and other related expenses, restructuring activities, and non-cash interest expense related to convertible debt, net of tax effects.

"This quarter, we accelerated a number of strategic and operational changes that resulted in strong growth of subscription sales and a solid sequential improvement in our Spotfire business,” said Vivek Ranadivé, TIBCO's chairman and chief executive officer. "The migration of perpetual to subscription-based licensing, together with less-than-expected revenue in Europe, had an impact on our overall software revenue results this quarter. We continue to believe, however, that reaching a broader base of customers through subscription pricing and building a solid base of recurring revenue is the right long-term strategy for TIBCO."

Third Quarter Fiscal 2014 Highlights

• Total non-GAAP revenue of $259.6 million; comprised of software revenue of $89.9 million, and services and maintenance revenue of $169.7 million;
• Non-GAAP operating margin of 15.7%;
• Non-GAAP EPS of $0.14;
• Non-GAAP subscription revenue of $13.2 million was up 76% sequentially from the second quarter of fiscal year 2014, driven by the addition of Jaspersoft® and the growth of other hosted offerings;
• Signed over 100 customers to new Analytics subscription contracts;
• Non-GAAP subscription revenue represented 15% of software revenue; non-GAAP recurring revenue, including subscription and maintenance revenue, represented 47% of total revenue;
• Closed 110 deals over $100k and had 14 deals over $1 million in license revenue;
• Launched TIBCO Engage™, a new technology platform that leverages both TIBCO's Fast Data platform and integration technology to harness the opportunities within customer experience management;
• TIBCO Spotfire®, TIBCO StreamBase® and TIBCO ActiveMatrix BusinessWorks™ all named leaders in Forrester and Gartner Inc. product reviews;
• Broad mix of business across major industries including financial services, telecommunications, energy, transportation & logistics, manufacturing, government, retail, and insurance.

Conference Call Details

TIBCO has scheduled a conference call for 4:30 pm ET / 1:30 pm PT today to discuss its third 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 706-679-0841. Please join the conference call at least 10 minutes early to register. A replay of the conference call will be available until midnight ET on October 18, 2014 at www.tibco.com or via dial-in at 855-859-2056 or 404-537-3406. The passcode for both the call and the replay is 96108737.