TIBCO closed out Q1 2014 shading analyst expectations but with surprisingly spotty results among the divisions with analytics - which is basically Spotfire - down seven percent quarter over quarter.
By the numbers and from the blurbs:
- Total revenue of $252.9 million; (+6%)
- License revenue of $83.0 million; (+6%)
- Non-GAAP operating margin of 18.7%;
- Non-GAAP EPS of $0.19;
- Cash flow from operations of $51.8 million;
- Broad mix of business across major industries including Financial Services, Telecommunications, Energy, Transportation & Logistics, Manufacturing, Government, Retail, and Insurance;
- TIBCO closed 126 deals over $100k and had 18 deals over $1 million.
Anticipating that the analyst community would home in on the weakness in analytics, CEO Vivek Ranadivé met the gorilla in the room head on:
"We have never made excuses...with Spotfire, most experts will tell you TIBCO has the best product in the market, here, we're making the adjustments necessary to get the business back on track,"
In follow up questions on analytics and without naming a specific competitor, Randadivé said:
"Just as we did with QlikTech, we'll crush the other competition."
In terms of addressing the market, Ranadivé noted that while the company does well at the top end of the market, it needs to get better at approaching other segments.
"At the bottom of the market, we need to make our product much easier to consume, we need to invest in inside sales to go with it...It is possible that ease of use can trump [better engineering.]"
Although the company didn't break out cloud related sales, TIBCO noted a 4x sales performance improvement albeit from a low base. And while they didn't specify, TIBCO anticipates providing additional color on those numbers once sales reach the $10-15 million per quarter mark.
Interestingly and long term, the company believes that what Ranadivé buckets as 'time based sales' including maintenance, cloud and other services will account for something like 75% of the company's revenue in '2-3 years time' rising to 90% in less than 10 years.
- Analytics revenue going against the more general market trend is a concern even though it was compensated for by infrastructure market revenue. Spotfire has been a leading solution and a bright spot in an otherwise dull last few years.
- The company says it is confident that there will be a turnaround in analytics as it assembles packages for the lower end of the market. That will take three to six months.
- While the company made the point that current changes in technology direction creates opportunities for integration, it doesn't sound like the market is yet minded to understand the need for integration in a mixed cloud/on-premise world.
- However, the momentum is elsewhere right now and TIBCO has to do a lot more to get itself visible in an already noisy market where those with the loudest voices are getting heard more clearly than others.
- TIBCO has some great marketing assets but I sometimes wonder if it really understands how to reach the market compared to others. We will have to wait and see.
- Interestingly, TIBCO made no predictions or statements about the remainder of the year. That must mean they have less confidence in putting a stake in the ground than is usually the case in these calls.
- An acknowledgment that user experience trumps engineering must be a bitter pill to swallow but TIBCO has been nothing but honest and upfront about where it lacks strength. The market may not always like it but I for one find it refreshing.