TIBCO reported Q4 earnings a tad ahead of market expectations, rounding out a year that is a 'story of two halves' as CEO Vivek Ranadivé said during prepared remarks on the earnings call.
From the blurbs:
Fourth Quarter Fiscal 2013 Highlights
▪ Record total revenue of $315.5 million;
▪ Record license revenue of $139.7 million;
▪ Non-GAAP operating margin of 30.2%;
▪ Non-GAAP EPS of $0.42;
▪ Cash flow from operations of $59.6 million;
▪ Broad mix of business across major industries including Financial Services, Telecommunications, Energy, Transportation & Logistics, Retail, Life Sciences, and Manufacturing; and
▪ TIBCO closed 193 deals over $100k and had 31 deals over $1 million in license revenue.
Full Year Fiscal 2013 Highlights
▪ Record total revenue of $1,070.0 million;
▪ License revenue of $405.5 million;
▪ Non-GAAP operating margin of 23.3%;
▪ Non-GAAP EPS of $1.06;
▪ Cash flow from operations of $206.0 million; and
▪ Repurchased 6 million shares.
A bullish Ranadivé claimed that the company is set to have a record 2014, putting it on track to become a $2 billion business.
While the company did better than expected, growth in the quarter was lumpy with the best growth seen in the Americas and South East Asia while Europe declined slightly.
Reflecting strength we've seen in other segments of the business software market, the company reported:
...year-over-year growth rates were highest in retail and in transportation and logistics at 43% and 110%, respectively...Retail's 3-year CAGR is 45%, while transportation and logistics is 28%.
We have said for several quarters that a stronger Americas would positively impact the core infrastructure category, and it did. The resurgence of event processing also reinforces our view of the importance of this technology as a very interesting growth opportunity in a variety of areas, including machine data analysis, behavioral modeling, high throughput transactional systems and as a general complement to analytics and big data solutions.
TIBCO is yet another vendor that is shifting its model towards subscription and cloud services. The company believes it has the combination of products and go to market capability to concentrate on cloud based growth but that means it is forecasting forward lighter than the market expected. Ranadivé set the stage:
We are shifting -- my own focus is starting to be more and more on the top line number and then the profit number, because we just want to have our software be consumable in whatever fashion customers want to consume it. So whether it's in the cloud, whether it's through a subscription. And so as that starts happening more and more and we start pivoting more and more to the cloud, then the seasonality will start going down slowly.
The company has yet to split out cloud based revenue but says that growth is north of 30%. We don't know the base figure for this assertion but my guess is that cloud sales represent less than $50 million for the year, based on the likelihood that TIBCO would need to report separately once the number exceeds five percent of revenue.
Bullish though Ranadivé may be, 2014 will be an interesting year for TIBCO.
Many colleagues believe we'll start to see breakout growth in areas that touch operational analytics. TIBCO plays in that space with Spotfire but had a tougher year than expected with strong competition from Tableau and QlikView. There are plenty of others in this space vying for attention. Spotfire has been one of TIBCOs starring products and while the company acknowledged poorer than expected sales execution, it still has to differentiate in what is becoming a crowded market.
Elsewhere, it is yet to be seen whether the oft claimed market shift towards best in class solutions provide TIBCO with the kind of integration opportunity for which it should be well placed or whether businesses will continue to cobble cloud solutions with minimal process integration.