Seeking Alpha
We cover over 5K calls/quarter
Profile| Send Message|
( followers)  

TIBCO Software, Inc. (NASDAQ:TIBX)

F3Q09 Earnings Call

September 24, 2009 4:30 pm ET

Executives

Vivek Ranadive - Chief Executive Officer

Murray Rode - Chief Operating Officer

Sydney Carey - Chief Financial Officer

Analysts

John DiFucci – JP Morgan

Mark Murphy - Piper Jaffray

Brad Zelnick - Macquarie Securities

Nabil Elsheshai - Pacific Crest Securities

Yun Kim - Broadpoint Amtech

Jeeju John for Derek Bingham - Goldman Sachs

Tim Klasell - Thomas Weisel Partners.

Kash Rangan - Banc of America/Merrill Lynch

David Hilal - Friedman, Billings, Ramsey

Brent Williams - The Benchmark Company

Operator

Good afternoon ladies and gentlemen. Welcome to TIBCO’s third quarter 2009 conference call. (Operator Instructions)

Today’s call is being recorded and will be available for playback from TIBCO Software’s Web site at www.tibco.com. In addition, a replay will be available through Premier Global Services for one month following today’s call by dialing 888-203-1112 from the U.S. or 719-457-0820 internationally. The confirmation code is 6409040.

The following conference call includes forward-looking statements, which represent TIBCO Software’s outlook and guidance only as of today and which are subject to risks and uncertainties. These forward-looking statements include, but are not limited to, forecasts of revenues, operating margins, operating expenses, outstanding shares, and earnings per share for future periods. Our actual results could differ materially from those projected in such forward-looking statements. Additional information regarding the factors that could cause actual results to differ materially are discussed in the Risk Factors section of TIBCO’s most recent reports on Forms 10-K and 10-Q filed with the Securities and Exchange Commission. TIBCO assumes no obligation to update the forward-looking statements included in this call whether as a result of new developments or otherwise.

This conference call also includes certain financial information that has not been prepared in accordance with generally accepted accounting principles, as we believe that such information is useful for understanding our financial condition and results of operations. For a presentation of the most directly comparable financial measures calculated in accordance with GAAP and a reconciliation of the differences between non-GAAP and GAAP financial information, please see our Web site at www.tibco.com.

The participants on the call are: Vivek Ranadive, TIBCO’s Chairman and CEO; Murray Rode, Chief Operating Officer; and Sydney Carey, Chief Financial Officer. I’d now like to turn the call over to Vivek.

Vivek Ranadive

Thank you all for joining us today. Once again, I will open with summary remarks on our performance and then I will turn it over to Murray and Sydney to discuss the details.

Q2 was another good quarter for us. We exceeded our guidance ranges for revenue and profitability and we continue to demonstrate strong operating leverage in our business model.

For the fifth quarter in a row, we exceeded Street consensus as to non-GAAP EPS. Other highlights include total revenue for Q3 was $150.3 million, license revenue was $57.3 million, non-GAAP operating margin was 22% versus 18% a year ago, and fully taxed, non-GAAP earnings per share for the quarter were $0.13 versus $0.11 a year ago.

Year-to-date non-GAAP earnings per share were $0.33. This is $0.08 higher than through the first three quarters of 2008 and reflects growth of more than 30% year-over-year.

Also this quarter we repurchased $50.0 million worth of stock and acquired Data Synapse, a leader in the grid computing and cloud infrastructure space.

While the general spending environment remains tight, we grew our license revenue 13% sequentially from Q2. Our results year-to-date are, on a relative basis, stronger than many software companies, including our larger competitors. I believe one reason for this is the accelerating shift away from database-centric architectures and monolithic applications, or what I characterize as Enterprise 2.0, a shift I've been talking about for some time.

The new architectures for enterprise applications, or what I refer to as Enterprise 3.0, are increasingly based on in-memory data management and component-based systems and they are designed to support event-driven scenarios.

The challenge for business today is how to make sense of, and capitalize on, the whole range of events that influence performance, not just the basic transactions that represent orders processed. In today's hyper-competitive, cost-obsessed world every event representing a customer interaction, movement of product, or change in process is an opportunity to generate revenue, maximize profit, or manage risk. The importance of detecting good and bad trends early has never been higher.

All of this only amplifies the importance of our leadership and proven innovation in an enterprise software market that is largely homogeneous, bland, and unresponsive to current business needs.

Now I will turn it over to Murray.

Murray Rode

With my comments, I will focus on some of our key operating metrics and our recent Data Synapse transaction.

On a year-over-year basis, revenue for Q3 declined by 7% but only 4% when factoring in currency effects versus the same period last year.

Relative to profitability, we added almost 400 basis points to our non-GAAP operating margin year-over-year, increasing it from 17.7% to 21.6%, with no effect from currency movements.

In terms of deal activity, we had 17 deals over $1.0 million in license revenue versus 14 a year ago and 85 deals over $100,000 in license revenue versus 101 a year ago.

New license customers numbered 86 in the quarter versus 48 for Q3 of last year and 50 for Q2 of this year.

The average deal size for transactions over $100,000 in license was $591,000, in line with historical ranges and up from last quarter.

In terms of geographic mix, total revenue broke down as follows: Americas, 55%; Europe, Middle East, Africa, 38%; and Asia Pacific 7%.

Americas was the primary sequential growth contributor, rising almost 10% over Q2 with Europe being slightly up and Asia Pacific slightly down.

From a vertical market perspective, total revenue was as follows: financial services, 25%; telecommunications, 12%; energy, 10%; government, 9%; manufacturing, 7%; transportation and logistics, 5%; and insurance 5%, while no other vertical was 5% or greater, although life sciences was very close at just under 5%. Overall we continue to show diversified and balanced performance across a range of vertical markets.

From a product perspective, the breakdown of license revenue among our major product families was as follows: SOA, 69%; business optimization, 22%; and VPM, 9%. The one notable aspect of our product family breakdown was the strength of SOA, up over 35% sequentially.

Also notable was our acquisition late this past quarter of Data Synapse, a leader in grid computing and cloud infrastructure. Data Synapse complements our existing business in two ways. First, its grid computing technology extends our current expertise in high-performance solutions with a platform to support compute-intensive applications. And second, Data Synapse offers server virtualization technology that rounds out our cloud strategy, especially as it relates to enabling private clouds.

Data Synapse will operate as a distinct product group under the continued leadership of its two co-founders, but we also see some exciting possibilities for integrating and bundling Data Synapse technologies in the coming year, including combinations with our active matrix products and our recently announced TIBCO Silver Cloud offering.

With that, I'll turn it over to Sydney.

Sydney Carey

First I will provide additional details on our financial performance in Q3 and then I will provide comments on our financial outlook for Q4. I will review our financials on both a GAAP and a non-GAAP basis. A full reconciliation was included with our press release, along with an explanation of our non-GAAP measures.

Some key performance data on our third quarter results are as follows:

Total revenue was $150.3 million, down 7% year-over-year, or 4% on a constant currency basis. License revenue was $57.3 million, down 15% year-over-year, or 11% on a constant currency basis. Services revenue was $93.0 million, down 2% from last year but on a constant currency basis, increased by 2%. Maintenance revenue remained strong in the period and we continue to see renewal rates in the range of 90% to 95%.

Non-GAAP gross margin for Q3 was 77%, up from 75% last year. Non-GAAP operating income was $32.5 million, up $3.8 million, or 13% from the same period a year ago, and 20% sequentially. This resulted in an operating margin of 22% versus 18% a year ago and 19% last quarter.

Q3 cash flow from operations totaled $13.7 million. Non-GAAP EPS was $0.13 versus $0.11 a year ago. On a constant currency basis, earnings for Q3 were impacted by less than 1% as compared to the prior-year period.

As these results show, we continue to carefully manage our expenses and profitability, again delivering EPS ahead of guidance and consensus estimates.

Turning to our balance sheet, we ended the quarter with approximately $287.0 million in cash and short-term investments. Deferred revenue, including both long-term and short-term components, totaled $157.0 million, up by more than $15.0 million from Q3 of last year.

Cash collections for the quarter were strong, with DSOs at 60 days compared to 61 days in Q3 of last year. Also during the quarter, we repurchased approximately 6.3 million shares at an average price of $7.92.

Now turning to our outlook for the business. Although we have seen a strengthening in our pipeline as compared to last year, we continue to take a conservative posture on the broader macro environment and its impact on the timing of when deals get approved and closed.

For Q4 2009, our outlook is as follows:

We expect total revenue to be in the range of $176.0 million to $184.0 million. We expect license revenue to range between $80.0 million and $87.0 million. The non-GAAP operating margin is expected to be between 27% and 29%. Non-GAAP EPS for the quarter should range between $0.19 and $0.21 with an assumed tax rate of 32%. Keep in mind that for comparison purposes, we had approximately a $0.02 benefit last Q4 due to a lower actual tax rate.

GAAP EPS should range from $0.14 to $0.16 with an assumed tax rate of 30%. A primary focus of mine continues to be EPS and EPS growth.

We expect cash flow from operations to range from $20.0 million to $30.0 million.

With that, we will be happy to take your questions.

Question-and-Answer Session

Operator

(Operator Instructions) Your first question comes from John DiFucci – JP Morgan.

John DiFucci – JP Morgan

I don't want to pick on anything because the results look really good here, but I do want to better understand a couple of things, especially due to the out-performance, and those two things are the cash flow, which we always focus on here. And it was within your guidance, but given the out-performance on the income statement, I just wanted to know if you could address that. Because you have actually been putting out good cash flow numbers, too. I realize there is a lot going on this quarter.

And also, on the deferred revenue side, it did actually decline on the balance sheet but I assume much of the increase—I mean, it went up on the balance sheet sequentially but I assume that's because of the Data Synapse acquisition, and it does look like a decline on the cash flow statement.

I was wondering if you can comment on both of those things, the second one especially, given that it's sort of an indication of the future.

Sydney Carey

Sure. Yes, cash flow did come in within the guidance range at $13.7 million. There was nothing unusual in the period, other than just kind of normal course of business. We did see an increase in our deferred tax asset, which negatively impacted the cash flow, and then just the timing of AP payments and our accruals—a decrease in some of our accruals. So really nothing unusual there.

We did have a good cash flow in Q2 and did beat guidance there. And so again, I think if you look at the two quarters, we're trending in the right direction.

As far as deferred, we did get a benefit of about $6.5 million in our deferred from the Data Synapse acquisition. However, even excluding Data Synapse, total deferred on a year-over-year basis is up from $140.0 million to $150.0 million, so we're still seeing a positive trend there. We also—our historical pattern has been deferred decreases in the Q2/Q3 time frame and then we see it build back up typically in Q4 and Q1.

John DiFucci – JP Morgan

On those accruals, will we see an impact in the next quarter also?

Sydney Carey

Not anticipated anything out of the ordinary, no.

John DiFucci – JP Morgan

It sounds like the environment is improving for you and I guess that's the question. Does it look like it's broadly improving for everyone a bit? You had large deals, 17 of them this quarter versus 14 a year ago. Some out-performance here looks pretty good, but as you pointed out, Vivek, some of your larger competitors didn't fare so well. And we're just trying to get a feel out there, or get a sense, as to it seems that people—you know, we'd all like to see the environment improve but don't really want to jump the gun here.

Vivek Ranadive

I can't speak for the other guys. I see people down 40% in license and Oracle was down 20% and I think what you're seeing is more fundamental. What you're seeing is that in some ways this environment has helped us because people are more focused on value than brand. And they are willing to move to this lower cost infrastructure that we offer. So we think that—we don't know the environment for other people has improved; it appears not. We think that there's a real shift to this Enterprise 3.0 that I keep talking about. And when we talk about events and cloud, people are very responsive to that.

Operator

Your next question comes from Mark Murphy - Piper Jaffray.

Mark Murphy - Piper Jaffray

Was Q3 the biggest financial services quarter that you've had in a while, just in terms of the mix at 25%?

Murray Rode

It was bigger than we've seen for a while. Yes. In actual dollars, I think you have to go back to Q4 of last year.

Mark Murphy - Piper Jaffray

And so on that basis, do you detect an inflection point occurring there? Was it something broad-based going on with the financial services vertical or were there one or two one-off large deals? Any color you can provide on that?

Vivek Ranadive

What we are starting to see is that people have held up investment for awhile and they have come to—you know, they just have to start opening their wallets again. So they have run to the end of the LAs. We are seeing new opportunities at some places.

So we think that, with regard to the banks, the worst is behind us. And we think there's going to be more investment over the next 12 to 18 months.

Mark Murphy - Piper Jaffray

As a follow-up, Vivek, in your discussions with customers, do you have any preliminary thoughts on year end budget flush environment? I guess I'm wondering what your assumption is, baked into your guidance. Do you think we're going to see something less than normal, just due to the general economic climate, or do you think it could be better than usual because there is some pent-up demand and maybe customers were spending less than usual earlier in the year?

Vivek Ranadive

We're not making any assumptions. We're being conservative in terms of what we're planning on.

Operator

Your next question comes from Brad Zelnick - Macquarie Securities.

Brad Zelnick - Macquarie Securities

As I look at some of the numbers, and just to follow up to John DiFucci's question, if I look at deferred revenue on the balance sheet, it looks like current deferred went down, although long-term deferred went up. And I know we talked about the contribution from Data Synapse, but then I also mapped that against what seems to be a weighting towards large deals in the quarter. And I guess the question would be, if we were to look at the change in deferred and we back out Data Synapse, is there anything going on as it relates to large deal activity, driven by duration, rather than current in-period demand.

And to follow-up on that also, although Data Synapse closed very late in the quarter, was there any contribution at all to the license revenue?

Sydney Carey

In regard to deferred, we did see our long-term deferred go up to about $15.0 million and that was just customers—we had a handful of customers that purchased multi-year maintenance and some services contracts, so that was a contributor there.

If you look at short-term deferred, though, even on a year-over-year basis, it is up, if you exclude out Data Synapse. So we do feel that deferred has grown there.

In regards to the contribution from Data Synapse on the period, they was just not a significant contributor to revenue or to profitability.

Murray Rode

The other thing about Data Synapse is it as very, very late in the quarter. I think as I said in my comments, too, it was right at the very end of the quarter, so as you can imagine, it just wasn't a material contributor to revenue or expense.

Brad Zelnick - Macquarie Securities

Vivek, can you give us any update on Silver, the beta, how is it going? And just longer term, when and to what degree do you expect to see a contribution to the financials?

Vivek Ranadive

We have about 20 customers, so we're actually—I'm personally very pleased with the reception that we're getting, and I am really, really pleased because recently as couple of days ago Larry Ellison said that he thought that it was our water vapor, I think is what he called the Cloud. So you know, the lines are drawn clearly. We believe in the Cloud. Not just a database cloud, but an in-memory cloud.

And we also think that with Data Synapse we add significantly to our clients' ability to create what we call an enterprise of a private cloud.

So we are very pleased with 20 customers. For me, that's exciting.

Operator

Your next question comes from Nabil Elsheshai - Pacific Crest Securities.

Nabil Elsheshai - Pacific Crest Securities

I just wanted to a) get the breakdown on product lines and then b) maybe get a little more granularity, you talked about the strong growth in SOA, where there are specific products that were driving them upside.

Murray Rode

Sure. Just to repeat the product breakdown in the quarter of license revenue was 69% for SOA, 22% for business optimization, and 9% for BPM. So the big sequential increase there was really SOA. And it was kind of across the board. The active matrix product had a particularly good quarter, as did actually messaging.

Nabil Elsheshai - Pacific Crest Securities

In the customer count, you had nice growth there. Did that include any of the Data Synapse customers?

Murray Rode

No. I think that was just a big new logo quarter.

Nabil Elsheshai - Pacific Crest Securities

Obviously, you had a good large-deal quarter, less kind of mid-size numbers. I would think those guys would tend to come on though, with medium-sized deals. Is that not the right way to think about it? Or are the new logos coming on with smaller types of transactions, and then is that something you think you can build from?

Murray Rode

It's true. A lot of kind of medium-sized deals from those new customers. You can imagine across a population like that there is a bit of a spread. There is some grouping of smaller deals, and a few more significant ones, too.

I think in general we've just been very happy with the new logo acquisition in the quarter.

Nabil Elsheshai - Pacific Crest Securities

On the margin side, you have basically guided in line with what you did on the margins last year, despite so far this year being significantly above last year's pace. So are you ramping up investments or how should we reconcile that guidance on the margins for Q4?

Sydney Carey

Well, we are guiding at the high end of our range, more to the margins we did in Q4 of 2008. We do have cost increasing due to the Data Synapse cost coming into the period as well as variable costs related to sales performance.

Additionally, we were focused on cost reductions back in Q4 so we did see benefit in that quarter from controlling costs. So our Q4 guidance does imply a 300 to 350 point expansion over last year in margins so we feel pretty good about that.

Operator

Your next question comes from Yun Kim - Broadpoint Amtech.

Yun Kim - Broadpoint Amtech

Can you give us a quick financial overview of the acquisition, especially the annual revenue run rate?

Murray Rode

Sure. As we announced, it was a relatively small transaction, around $28.0 million, and the business itself was really on a run rate of around $15.0 million to $20.0 million. It was a business that had been focused on the financial services market so I think was hit a little disproportionately hard by the downturn there, and certainly has a lot of future potential, I think, as the market stabilizes.

Yun Kim - Broadpoint Amtech

Can you describe the overall environment out there around the deal revenue. Obviously good performance on the [inaudible] deals this quarter. Any trends around pricing, size, and length, especially what the overall environment seems to be including out there?

Vivek Ranadive

I think what we're finding, and again, it's reflected in the strong revenue on the maintenance, but our software is very, very sticky, not just with regard to maintenance, but also with regard to deal revenues. And about a year ago we said that we were going to show great pricing discipline and we felt that we had more pricing power than we ever had. And we continue to feel that way. So we just are not discounting the way we used to when we had smaller competitors two or three years ago. So our pricing power is, I would say, the strongest it's been in the last ten years.

Yun Kim - Broadpoint Amtech

Do you sense that there may be a somewhat of a pent-up demand around deal revenues where some customers did not renew per se from over the past year due to the environment.

Vivek Ranadive

I think that will be reflected over the next year to 18 months, but we're not making any assumptions on that for Q4.

Yun Kim - Broadpoint Amtech

Obviously you have done pretty well with large integrators like EDS, especially in Accenture. Do you have any meaningful ISV or EOM partnership or non-recurring type of relationship out there? If not whether this is an area of opportunity going forward?

Vivek Ranadive

You're right, we've actually done a decent job where our partner-attached revenue has steadily grown. And even this quarter we added on the OEM side six new logos. But we think there's still lots of opportunities for us on that front.

Operator

Your next question comes from Jeeju John for Derek Bingham - Goldman Sachs.

Jeeju John for Derek Bingham - Goldman Sachs

A couple of questions. First of all, going back to the cost side, heading into the second half, you're seeing a good demand and seeing demand return back. How much of the cost have to come back and how much of the costs have been [inaudible], just to get a sense of how costs will trend in the coming quarter and into 2010.

Vivek Ranadive

I think one of the things that we're very proud of is that we've been able to really continue to invest in the two areas of R&D and Sales, so we've done all this without cutting back on our ability to touch customers.

Sydney Carey

I think what we're going to see is that costs—you know, variable costs that are related to selling will increase but that the rest of the cost structure and cost base, I don't anticipate is going to inflate.

Jeeju John for Derek Bingham - Goldman Sachs

By variable you mean commissions?

Sydney Carey

Commissions and bonus and things like that. So, I think we have gotten our cost structure at a point where we like it and we want to continue to expand margins.

Vivek Ranadive

And I think with this cost structure we can still have more capacity.

Jeeju John for Derek Bingham - Goldman Sachs

Have you assumed any FX impact in your guidance for the fourth quarter?

Sydney Carey

It's minimal on the period.

Jeeju John for Derek Bingham - Goldman Sachs

Could you also comment on buy-backs? You did $50.0 million this quarter. How do you think it will be going forward?

Sydney Carey

We did do $50.0 million this quarter and it was, as we look at the year, it was a little bit of a catch-up for us in the period. We will evaluate buy-backs in the period. Right now we have about $130.0 million remaining on the approved buy-back so we do have some room to do more if we choose to.

Operator

Your next question comes from Tim Klasell - Thomas Weisel Partners.

Tim Klasell - Thomas Weisel Partners.

First just a quick housekeeping on the Data Synapse acquisition. How much did that effect receivables and DSO?

Sydney Carey

Again, with not having much impact on the revenue line, it had no impact, really, on the DSO and the receivables. We did put on the balance sheet a couple of million of receivable on with them as pre-acquisition but that's about it.

Tim Klasell - Thomas Weisel Partners.

And then if I think about Data Synapse, they were used, like I think you said on the call here, in very highly compute-intensive environments. And I think of you guys as being a little bit more in maybe process-intensive environments. How often did you actually see other, maybe jointly, in projects? Was there a ton of overlap or were they being sold into different projects in different parts of the enterprises?

Vivek Ranadive

We have some mutual customers but I think the good news is that the buyer is the same buyer, so we think that our sales force over time will be quite effective in being able to sell some of these products.

We actually didn't have that much overlap, as far as I know.

Murray Rode

We will really know—I guess it depends a little bit on how one interprets the word overlap, but from our perspective, much more the point here is the complement. And I think we did have several key customers that we share have told us over time that this would be a good combination because it broadens the kind of thing we do. And I think it's true to say we operate in process-intensive environments, but in many cases compute-intensive and process-intensive kind of go together, I think particularly in places like financial services and telecommunications.

Vivek Ranadive

And also I wouldn't underestimate the virtualization cloud opportunity as well. So in addition to the one that you mentioned. And we are very excited. We think that our customers are going to get a lot of benefit from this. And we believe that the size and stability of Data Synapse had held them back and now we are starting to see situations where customers are actually very delighted that the product [inaudible].

Tim Klasell - Thomas Weisel Partners.

How many sales people did that bring on board and how does that change your thinking around your—you had a goal of 170 to 180 for the end of the year.

Murray Rode

It's really a very small number of sales people that they add, so it doesn't really change our target to try and finish this year around 180 sales people.

Operator

Your next question comes from Kash Rangan - Banc of America/Merrill Lynch.

Kash Rangan - Banc of America/Merrill Lynch

One of the stats that you mentioned when reporting the quarter that caught my attention—I don't know if I misheard it—was the SOA percentage of total revenue either went up, I heard the stat 35%. I was wondering if you could elaborate on that, because we were writing about you guys and the SOA team a few years back and then we stopped hearing much about SOA. And some of the private companies are starting to see renewed customer interest in SOA and here you guys are talking about SOA as a driver to your business.

If this is worth exploring at all, can you talk a little bit more about is this a thing that is starting to come back? Could this be a more enduring driver of business? What are customers doing with SOA these days as it relates to TIBCO?

Vivek Ranadive

I don't think that it ever went away and we had really a solid performance, we had 35% uptick. But people don't even necessarily call it SOA. So they just are moving to this lower-cost bus event-driven infrastructure. And it's not even a trend any more, it's just a fact.

And so I was with the TEO of a major teleco and he said, look, I have to move to this infrastructure. Can't afford the big database infrastructure anymore. So this we think is a fact. I think every company is moving to this and you guys at BOA/Merrill, you're moving in that direction. So I feel it's a big deal. I think that everyone is going to move to it and they might not actually even call it SOA, but it's happening.

Kash Rangan - Banc of America/Merrill Lynch

And is the selling knowledge getting more institutionalized within the TIBCO sales force to handle this if this becomes even more pervasive?

Vivek Ranadive

I think so. I think we've obviously been doing it for longer and then we also have some of the killer apps around it, whether it's VE or its business optimization to these events, BPM types of things or MDM. And you really can't handle high volumes of events. And I think the basic thing is that Enterprise 2.0 was architected for transactions, for transactions and agreement between parties. And much of life is now revolving around events, even before you get to the transaction. And there's no other way to handle it.

And so we think that this is something that every company is going to do, and is doing.

Operator

Your next question comes from David Hilal - Friedman, Billings, Ramsey.

David Hilal - Friedman, Billings, Ramsey

On the deals over a million, were there any deals that were in that $5.0+ million range and of the large deals, were there any verticals that maybe disproportionately represented those large deals?

Murray Rode

This quarter we did have one that was a bit over $5.0 million. Otherwise, the distribution was pretty typical among the large deals. I don't think we had any real disproportionate representation when you look across all the big deals. It was, again, pretty diverse.

We did, if you think about just the vertical market breakdown, have—and I think someone asked earlier in the call, we had a particularly good financial services quarter relative to the last few, but we were still pretty broadly spread across the whole range of industries.

David Hilal - Friedman, Billings, Ramsey

And headcount-wise, where are you in terms of ramping headcount, when you think over the next six months, what would you guesstimate your headcount to be versus where it is today?

Murray Rode

Short of acquisitions, our headcount has been very stable, very flat, around the 2,000 people mark, and quite frankly, I'm not sure we're expecting that to really change a whole lot in the short term.

Operator

Your next question comes from Brent Williams - The Benchmark Company.

Brent Williams - The Benchmark Company

As I mull it over, I really like the name, Silver Cloud, for distributed computing. It sort of sounds elegant, high-performance, reliable, and well-designed, like that legendary, classic Rolls Royce.

On Data Synapse did you talk about the number of sales guys you picked off and also how many engineers did you get with that acquisition?

Murray Rode

In total there are about 70 people that were added through the acquisition and roughly half of those are related to the engineering. Again, very small sales force that was added. And the majority, really, of the staff that they had at the time of the acquisition have been carried over as part of TIBCO.

Vivek Ranadive

Brent, we like the name, too. It's better than Microsoft's name, Azure. I'm not sure why you'd want to call something blue sky, but that's what their name is, Azure.

Brent Williams - The Benchmark Company

I think it's more artistic than smoke and mirrors, which is the same thing.

And was there any international presence there for Data Synapse?

Murray Rode

Some, and it was really focused in Europe, primarily in the U.K.

Brent Williams - The Benchmark Company

If I look at what some people are saying, particularly like the VM wares and citrixes of the world, that they've been getting hammered by the fact that a lot of their software is really glued into a purchase order for a piece of hardware, is there still some of that out there that is impacting you? Not necessarily comes on the same purchase order exactly, but it's essentially part of the same project. Or are people able to be more flexible and reuse exiting hardware, get some better utilization out of it. In other words, has that been a barrier?

Vivek Ranadive

No, it's actually the reverse. We're able to get more leverage out of the hardware that you have. So our sales are not tied to hardware sales. If anything, we allow people to get more juice from what they have.

Operator

Your next question is a follow-up from Yun Kim - Broadpoint Amtech.

Yun Kim - Broadpoint Amtech

One quick housekeeping question. What was the revenue contribution of your top 10 deals in the quarter?

Sydney Carey

It was 22% on the period.

Operator

This concludes the Question & Answer segment.

Vivek Ranadive

Thanks everyone. We'll conclude this call. Thank you.

Operator

This concludes today’s conference call.

Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!

Source: TIBCO Software, Inc. F3Q09 (Qtr End 08/30/09) Earnings Call Transcript
This Transcript
All Transcripts