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TIBCO Software (NASDAQ:TIBX)

Q4 2011 Earnings Call

December 21, 2011 4:30 pm ET

Executives

Sydney L. Carey - Chief Financial Officer and Executive Vice President

Vivek Y. Ranadivé - Chairman, Chief Executive Officer and President

Murray Rode - Chief Operating Officer and Executive Vice President

Analysts

Brent Thill - UBS Investment Bank, Research Division

James Derrick Wood - Susquehanna Financial Group, LLLP, Research Division

Mark R. Murphy - Piper Jaffray Companies, Research Division

Nabil Elsheshai - Pacific Crest Securities, Inc., Research Division

Tim Klasell - Stifel, Nicolaus & Co., Inc., Research Division

Karl Keirstead - BMO Capital Markets U.S.

Kash G. Rangan - BofA Merrill Lynch, Research Division

John S. DiFucci - JP Morgan Chase & Co, Research Division

Brad A. Zelnick - Macquarie Research

Raimo Lenschow - Barclays Capital, Research Division

Operator

Good afternoon, ladies and gentlemen. I'm Ashley. Welcome to TIBCO's Fourth Quarter 2011 Conference Call. [Operator Instructions] Today's call is being recorded and will be available for playback from TIBCO Software's website at www.tibco.com. In addition, replay will be available through InterCall for one month following today's call by dialing (800) 585-8367 or (404) 537-3406. The passcode for both the call and the replay is 33209720.

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. The 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 the GAAP and a reconciliation of the differences between the non-GAAP and GAAP financial information, please see our website at www.tibco.com.

The participants on the call are Vivek Ranadivé, 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 Y. Ranadivé

Thank you. Thanks for joining us. On today's call, I'll briefly review our Q4 and 2011 highlights. I'll provide some remarks on the broader market environment, and then I'll turn it over to Murray and Sydney.

We delivered another strong quarter and finish to the year in Q4. For the quarter ended November 30, total revenue grew by 20% over Q4 of 2010 and came in at $290 million. License revenue grew by 17% and came in at $135 million. Non-GAAP operating margins were 34.5%, and non-GAAP EPS was $0.42.

For the full year 2011, total revenue grew 22% to $920 million. License revenue grew 25% to $378 million. Non-GAAP operating profit grew 31% to $249 million for an operating margin of 27%. And non-GAAP EPS for the year came in at $1.01, a full 33% higher than last year.

It was a very good year. Once again, we accelerated our total revenue and license revenue growth over the previous year's performance. Once again, we delivered growth with leverage. Remember that when we started the year, I believe it's fair to say that most investors still thought of TIBCO as primarily an SOA and messaging company. But now I believe we have clearly demonstrated that we offer a complete platform for the enterprise, one that extends into analytics, master data management, social media and the cloud.

2011 will stand out most as the year that TIBCO went mainstream. Consider in just this past year, we saw demand simply explode across these newer product areas.

Our business optimization category, which includes both BusinessEvents and Spotfire, grew over 50% in license revenue for the year and has doubled in the past 2 years. MDM has taken off like a rocket, almost tripling in license revenue on the year. With our multi-domain offering, we now have a seat at the table for this expansive problem space. Similarly, our cloud middleware and hosted offerings have gone from projects and pilots to being drivers of 7-figure deals. And tibbr grew most notably of all. It took us 6 months to get to approximately 60 accounts. It's taken us just 6 days to get another 600 to trial our service on the new public instance that we launched last week.

And the beauty of our platform is that the value of the whole is greater than the sum of the parts. TIBCO has the only integrated event-driven platform architected and proven for our real-time world. What's more, we saw continued diversification in the industries we serve with both record-setting demand from our traditional markets as well as material contributions from new markets. For the year, we saw 7 separate verticals with growth over 35%, including logistics, government, health care and energy, life sciences, retail and communications. Overall, the demand from the marketplace for our offerings is massive, and our competitive differentiation could not be more clear.

I want to leave you with a final thought. In the last decade, there was a rush to put all of your transactions into a database and then analyze information after the fact. In the coming years, there's going to be a rush to get that information out or never put it in, in the first place and to put it on a bus so you can use it in real time. No matter who you are or what industry you operate in, you need to be event driven. You need the 2-second advantage.

In closing, I want to thank our almost 3,000 employees for their unwavering commitment to our customer success and for all of the hard work they do. Thank you for a job well done in 2011.

Now I'll turn it over to Murray.

Murray Rode

Thanks, Vivek. I'll provide some additional detail on our business for the quarter and the year and then turn it over to Sydney. I'll start with our products.

The breakdown of license revenue among our major product families in Q4 was as follows: SOA, 53%; business optimization, 34%; and BPM, 12%. Business optimization was the clear growth driver this quarter, up 45% over last Q4. Both Spotfire and BusinessEvents, which make up this category, showed tremendous growth, and each had its largest quarter ever. BusinessEvents is also playing a larger and larger role in our platform sales, and therefore making up a larger and larger percentage of revenue on many deals. Also this quarter, our BPM and SOA product categories grew 12% and 6%, respectively, with outstanding growth from our MDM offering, from tibbr and from Silver Fabric, our cloud middleware. In addition, we added Nimbus last quarter which gives us new process, discovery and collaboration abilities, and we're starting to see some great opportunities to leverage that product across our portfolio.

As Vivek highlighted, we once again delivered a balanced performance across vertical markets.

Total revenue in Q4 was as follows: financial services, 23%; communications, 15%; life sciences 9%; government, 9%; energy, 8%; manufacturing, 8%; and logistics, 6%. For the quarter, both communications and manufacturing grew over 50%. Life sciences more than doubled. Government, logistics, insurance all grew greater than 30%.

In terms of geographic mix, total revenue was as follows: Americas, 56%; Europe, Middle East, Africa, 35%; and Asia Pacific, 9%. For the quarter, Americas grew 20%, Europe grew 17% and Asia Pacific grew 36%. For the year in total, Americas was up 24%, Europe grew 19% and Asia Pacific grew 25%.

Partners continue to be a growing part of our business as well, with approximately 30% of our business in the quarter influenced or sold through partners. For the year, it was approximately 28% of our revenue versus about 22% for last year.

From our direct sales, we had 28 deals over $1 million in license versus 25 a year ago. We had 181 deals over $100,000 in license versus 164 a year ago. The average deal size for transactions over $100,000 in license was $687,000.

With regards to quota-carrying heads, we ended the quarter up 14 reps, bringing our total quota-carrying headcount to 234. From a broader organizational perspective, we had several years of significant organizational growth, both organically and through acquisitions. So we undertook a small restructuring in Q4 to eliminate some redundancies in personnel and facilities. There has been some recent incorrect speculation about significant departures in our sales organization. In reality, we had no significant undesired attrition. We had some departures from restructuring-created terminations, but even these were minor. So overall, we feel the organization is well positioned for growth in 2012.

So looking ahead to next year, our key areas of focus will be: one, top line revenue growth by expanding our direct sales capacity while continuing to develop partners; two, continuing to build and buy to evolve our event-driven middleware platform; three, cultivating our brand and viral adoption of our technologies, especially through our cloud offerings; and four, managing operations for EPS growth.

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

Sydney L. Carey

Thank you, Murray. I will break my comments into 3 parts: first, I will provide additional details on our financial performance in Q4; next, I will provide full year details on 2011; and then I will provide comments on our financial outlook. I'll review our financials on both a GAAP and non-GAAP basis. A full reconciliation was included with our press release, along with an explanation of our non-GAAP measures.

The year finished with a strong fourth quarter, and some key performance data are as follows: total revenue was $289.5 million, up 20% year-over-year or approximately the same on a constant currency basis; license revenue was $134.7 million, up 17% year-over-year or 18% on a constant currency basis; service revenue was $154.8 million, up 22% from last year or approximately the same on a constant currency basis. We again had a strong quarter from professional services, which grew by 30% from last year and represented 40% of the reported services revenue.

Also this quarter, non-GAAP gross margin was 78%, roughly in line with Q4 of last year. Non-GAAP operating income was $99.8 million, up 31% from the same period a year ago. This resulted in an operating margin of 34.5%, up almost 300 basis points versus a year ago. Q4 cash flow from operations totaled $64 million. Non-GAAP EPS was $0.42 versus $0.31 a year ago.

For 2011, we once again delivered growth with leverage. Some highlights include: total revenue came in at $920.2 million, up 22% year-over-year; license revenue came in at $377.6 million, up 25% year-over-year; we generated cash flow from operations for the year of $208 million. Non-GAAP operating profit for the year was $248.7 million, 31% higher than in 2010. This resulted in an operating margin of 27%, implying margin expansion of 180 basis points over 2010. Non-GAAP EPS was $1.01, 33% higher than the $0.76 last year, and GAAP EPS was $0.65 as compared to $0.46 last year.

Turning to our balance sheet. We ended the quarter with approximately $308 million in cash and short-term investments. Deferred revenue, including both long- and short-term components, came in strong at $225.1 million, up 14% from Q4 of last year. DSOs in the quarter came in at 61 days compared to 69 days in Q4 of last year. We repurchased approximately 1.9 million shares at an average price of $25.91. Earlier this week, we entered into a new 5-year $250 million revolving credit agreement, which replaced our 2009 $150 million credit line. We intend to use this new facility for stock repurchases and acquisitions.

Looking forward, as we enter 2012, we see many positive signs for our business with multiple drivers for growth and a broad range of opportunity. We're going to make investments in building our business for continued growth in both revenue and EPS.

For Q1 2012, our guidance is as follows: we expect total revenue to be in the range of $220 million to $225 million; we expect license revenue to range between $78 million and $82 million; the non-GAAP operating margin is expected to be between 20% and 21%; we expect non-GAAP EPS for the quarter to come in between $0.18 and $0.19 with an assumed tax rate of 29%; GAAP EPS should range from $0.09 to $0.10 with an assumed tax rate of 30%. We also reiterate our previously committed to -- 15% to 20% non-GAAP EPS growth for the year. With that, we'll be happy to take your questions.

Question-and-Answer Session

Operator

[Operator Instructions] Our first question comes from Brent Thill with UBS.

Brent Thill - UBS Investment Bank, Research Division

If you can maybe just walk through the license revenue in Q4. I think we've grown to know TIBCO beating the license. You came inside the range. Is that just a sign of the macro? Or is it perhaps something that's going on? Or you were able to push some of these contracts off into Q1? Can you just give us your view on the dynamic of the license number for the fourth quarter?

Vivek Y. Ranadivé

Yes, we think we had a good license number. The company is really expanding in terms of its capacity, its sales force, its enablement, training and so on. And so I think that we need to just keep expanding the number of people so it's easier to have significant outperformance on smaller quarters. And when you get to the bigger quarters, the fourth quarter, then we will architect it to be a $1 billion company and now we have to expand the size of the pipe so we can be a $2 billion company. So the demand is very strong. We just have to keep hiring people to meet it.

Brent Thill - UBS Investment Bank, Research Division

And just one quick follow-up, just as it relates to some of the deal sizes you're seeing. It didn't seem like it showed up in the deals overall, $1 million. You were up -- nice sequential in year-on-year, but Oracle did mention that they're seeing some deals getting carved up into smaller bite-size chunks. Just curious in terms of if you're seeing that same phenomenon.

Vivek Y. Ranadivé

Oh, no, we're actually seeing our -- the deals getting bigger from our end. I just think that people aren't buying the big data based big-iron solutions, and they're buying more kind of the cell phone versus the landline analogy.

Operator

Our next question comes from John DiFucci with JPMorgan.

John S. DiFucci - JP Morgan Chase & Co, Research Division

Given the macro backdrop here, guys, you're really an outlier here so -- putting up numbers like this. So congrats to your team. But looking out to the guidance, too, the guidance looks good, too. And you guys typically are pretty good about giving guidance. And I mean listen, we all assume that everybody sees when macro slows down, so you guys are likely seeing some of it, too. But I guess what do you -- what's going on here? What -- it's a good thing, right?

Vivek Y. Ranadivé

John, maybe you'll start believing me. I've been telling you the secret [indiscernible]. Okay? They don't need to stuff things in a phone that doesn't ring; that's called a database. They need to put it on a bus. They need to become event driven. I've been saying that for the last 2 years, and maybe you guys will start believing me.

John S. DiFucci - JP Morgan Chase & Co, Research Division

And I think people do believe you, Vivek. But I just want, I guess, get a little bit of, I mean, a little bit more color around the guidance. Like how much confidence do you have, given your pipeline, relative to what you'd normally look at? Because obviously we saw today's market, and even the day before as the Oracle and Red Hat this week, where things look a little funky out there. And you guys are a much broader company than you've ever been, and you have a much broader reach. So you probably see some of it, too. But for whatever reason, you tend to beat -- you're doing better than others. And I'm just curious. In your guidance, I just want to know, like are you -- is it the same kind of level of conservatism that you normally give?

Vivek Y. Ranadivé

Yes, yes. We're consistent with what we did a year ago. So we're just staying steady, and we're not -- we're seeing very, very strong demand. We're not seeing a change in that. And in some ways, if in fact -- we're not seeing that softness that everyone is talking about, but in some ways that actually ends up helping us. Because again, people would rather put in our bus and our BPM and our business eventing, again putting a big iron, big database, big ERP solution. And you saw that a couple of years ago, that if in fact the environment is softening, that actually plays in our favor, because we are not seeing that. I'm not seeing pricing power erode. We're not seeing people delaying their deals. We're not seeing that.

John S. DiFucci - JP Morgan Chase & Co, Research Division

Okay. Okay, great. If I could, just a follow-up for Sydney. Sydney, you said deferred revenue was strong, and it was year-over-year. But it was a sequential decline, which you don't, I don't think, normally see in this quarter. And if you could just comment on that. Is there anything in there? It sounds like -- you told us how much of services is professional services. So the rest is maintenance. So maintenance sounds strong, too. But is there any -- can you comment on that at all?

Sydney L. Carey

A couple of things. Coming out of last quarter, I did say that we had the second part of that government deal in deferred would be coming out of deferred.

John S. DiFucci - JP Morgan Chase & Co, Research Division

That's right.

Sydney L. Carey

So we were in fact seeing deferred to be sequentially flat to maybe even down, and we did see it down some. We also did get hit in Q4 on FX on deferred now that we have the BB [ph] entity for international business, and that was about a 3% hit to deferred.

Operator

Our next question comes from the line of Kash Rangan with Bank of America Merrill Lynch.

Kash G. Rangan - BofA Merrill Lynch, Research Division

Vivek, I believe you, too. My question is on the revenue growth. The upcoming quarter, you're guiding to about 20%, which is quite healthy. But this quarter, you have licenses that are quite healthy, but nonetheless a deceleration versus what you've been printing the first 3 quarters. Are we at a point where the first 3 quarters of this past year were held by sales force hiring, improved productivity? And have we reached a plateau point then subsequently that you started to rehire back again in the last few quarters? And therefore, should we think about this license revenue growth rate in Q4 as sort of a low point in an otherwise very strong trajectory and that these folks, once they start to get productive in the next few quarters, you should be operating at a faster growth rate for licenses? That's one thing and I have a follow-up.

Vivek Y. Ranadivé

Yes. So I think, Kash, what you're -- it's kind of the explanation that I'd like to give earlier, that when you have -- when you hit a capacity limitation, it shows up in the fourth quarter, right, with the sales force because the earlier quarter are the smaller quarters. And so you have more capacity in your pipes. And so because Q4 is so big, that's when the capacity limitation shows. So you're absolutely right. We just need to keep hiring and training and hiring and training so that -- we have been architected to be a $1 billion company, and now we need to start architecting it for being a $2 billion company. And that's why we're investing heavily in capacity right now.

Kash G. Rangan - BofA Merrill Lynch, Research Division

Got it. So the growth versus margin trade-off, it looks like 20% growth guidance for the upcoming quarter, and you talk 15% to 20% non-GAAP EPS growth for the next year. Should we think about margin profile as being somewhat flattish and that you're going to be really investing for revenue growth versus margin expansion?

Sydney L. Carey

Well, if you look at the Q1 guidance, we're guiding operating margins of 20% to 21%. So that would suggest that we're investing for growth. So we will be disciplined financially like we have been in the past, and we'll look to grow with leverage

Kash G. Rangan - BofA Merrill Lynch, Research Division

Got it. So going for growth. That's good. And a third and final question. Financial services, a topic on many people's minds, it looks like, by my calculations, our team's calculation, is down about -- down a few percentage points. Any insights into what's going on there? Any change? Is that a vertical that's breakaway in terms of its behavior relative to seeing the other very healthy verticals? Like comms, I think up huge. Life sciences, up huge. Is there a -- there's a problem vertical or 2. But you have a diverse portfolio, so you're doing fine. But any color you can provide on financials, that'd be great.

Vivek Y. Ranadivé

Yes, I think it's kind of like the Mitt Romney thing. We're at 23% no matter what happens on that vertical. So we're not seeing -- I think this was our second largest quarter in finance that we've ever had. So I don't think that it gets much better or get much worse. It just stays kind of at that, in the low 20s. That's what we're seeing. We just closed a multimillion-dollar deal with a financial institution just in the last few days. So we're not seeing a substantial change in that. I don't -- Murray, do you want to add anything to it or...

Murray Rode

I think that's exactly it, is that we still see that as a pretty strong vertical for us. Obviously, there's probably aspects of the market that are weaker and stronger, but we still see a lot of strength in the retail side. And a related vertical, insurance, was really, really strong for us in the quarter and really was all year.

Operator

Our next question comes from the line of Nabil Elsheshai with Pacific Crest Securities.

Nabil Elsheshai - Pacific Crest Securities, Inc., Research Division

Just real quick, Sydney. I was -- I don't -- if you have it handy. And when you look at the guide, how much currency impact year-over-year? Do you have that in terms of what that would be on growth compared to the what...

Sydney L. Carey

Yes, on a year-over-year basis, we're kind of modeling it to be somewhat neutral. So it's not having, at least at this point on our guidance, it's not a big impact.

Nabil Elsheshai - Pacific Crest Securities, Inc., Research Division

Okay, great. And then I guess a little update on some of the smaller product lines versus SOA. You mentioned Spotfire optimization. Those are phenomenal growth rates. When you look forward, what -- is there any commentary you can give on the sustainability of that and what you're seeing in the market in terms of expansion of adoption?

Vivek Y. Ranadivé

Yes, we're doubling down on those markets. And so everybody is moving to the visual analytics, and everybody is moving into an eventing engine. And some people -- we have clients that are actually replacing app servers with event servers. And so we see that as a -- just a massive, massive opportunity, and that plays out over the next few years. Things like MDM, MDM is absolutely explosive or us, and we're killing everyone in the market with our MDM, our multi-domain MDM. tibbr we continue to be very, very excited about. It took us -- we did really well. We did millions of dollars in business in tibbr. But we had kind of the enterprise sales process. We had 50 clients, big clients that we signed on over the last 6 months. And then a few days ago, we put up the public instance, and we were blown away. We had 10 times as many. So we had over 600 downloads and people have 600 networks up and running now for evaluation. So we're very, very excited about where that goes. And what we see happening is that things like tibbr and some of the associated applets with tibbr, they're starting to eat through the old ERP, even CRM-like applications. And people are moving to this kind of notion of software as a self-service. So we're continuing to put a lot of weight behind all these new, emerging areas.

Nabil Elsheshai - Pacific Crest Securities, Inc., Research Division

Okay, great. And then I know this is the boring old messaging stuff. So you have a new messaging platform that's out a few months now. Just any -- is there a chance that you could see a product cycle or product re-fresh as we go into next year with that product?

Vivek Y. Ranadivé

Yes, we just closed a multimillion-dollar deal with a financial institution with that. And the -- it's -- this is kind of one of the most intense, low-latency environments on the planet, and we hope to make our official announcement about it soon. But it's kind of like we won the gold medal with this thing, with this win. And everybody else, we believe, will follow. And everybody who deals with this institution will also have to adopt it. So yes, we're very excited about what that holds.

Operator

The next question comes from the line of Derrick Wood with Susquehanna International.

James Derrick Wood - Susquehanna Financial Group, LLLP, Research Division

Really good partner leverage. I think probably a record high for the quarter of 30%, or for the company, 30% in the quarter. And you've also had very good consulting growth. So what's really driving that interest from the partner channel and that demand for services? If you could talk about what kind of projects are really pulling that type of consulting through.

Vivek Y. Ranadivé

We -- we've become kind of the go-to company for everybody because we have both. We have the winning combination of -- we're the only ones who have this eventing technology, and then we're the only neutral player. So we're kind of a natural partner for everybody out there. And that's been backed up by their investments. So they have 10x as many people trained now than they did not that long ago so. So -- and we're participating in -- like, I was the keynote speaker for one of our partners' conference a few weeks ago, and I'm getting invited to participate in that on an ongoing basis. But Murray, do you want to comment on that some more?

Murray Rode

Well, I think it's -- at a high level, it's a reflection of Vivek's point about mainstreaming. I think the technology is relevant to so many different scenarios and across so many industries that, that naturally attracts more partners. And then more people want to develop skills in the platform, and so it starts to snowball to some extent.

Vivek Y. Ranadivé

Yes. And when we had our user conference, we had -- we raised -- we had an amazing amount of support from partners on that. I think it was almost double what we had before.

Murray Rode

Our largest support.

Vivek Y. Ranadivé

Yes. I think it was -- yes, by -- almost by almost 100% factor. And so we think that, that will continue. So we'll continue cultivating that. On the consulting services side, there's just huge, huge demand for that, and we just have to start filling it. We've been behind the 8 ball and a little cautious about letting my people hire, but we started getting a little more aggressive about it. And so the good news is there's lots of good people out there that we can hire. And so we need to train them and get them productive quickly.

James Derrick Wood - Susquehanna Financial Group, LLLP, Research Division

Do you view the consulting business as a leading or a lagging indicator?

Vivek Y. Ranadivé

Well, it's usually a leading indicator. Because oftentimes, people will do some kind of a services thing, and then that will lead to the next thing. And so we've seen it to be somewhat of a leading indicator for us.

James Derrick Wood - Susquehanna Financial Group, LLLP, Research Division

Okay. And then it sounds like -- I think, Murray, you made a comment about event processing. I think more traction into the core SOA base. And it sounds like there's more bundled deals going on whether it's SOA and BPM or SOA and events -- event processing or analytics. Is that happening? And as there's kind of more cross-sell opportunity around that, anything you need to do to change up your sales structure or your go-to-market and how you're penetrating that account?

Vivek Y. Ranadivé

Yes, I think that's a good question, Derrick. So that is actually our biggest weakness and our biggest opportunity at the same time in that people are now looking for the full eventing platform. And so whether you're a retailer or an airline or a health care provider, everybody wants to tie the master data to the whole backbone all the way into the consumer. And so it's becoming more of a platform sale. They want the whole bundle. And so we just held our sales kickoff in San Diego a couple of weeks ago, and we made a massive investment where we brought everybody together from all over the world. And it was a substantial investment we made. And really, the goal was to train them so they can do that up-sell and cross-sell and they can sell the entire stack. And they can actually sell some of these products that -- in some regions where they train, we're having absolutely stunning results with it. And so the areas where we invest in the training, those guys are selling the whole stack routinely and with great success. And so now we just need to extend that to the rest of the organization.

Operator

Our next question comes from Brad Zelnick with Macquarie.

Brad A. Zelnick - Macquarie Research

And I'd like to echo my compliments on a great quarter, especially in the environment, as others have. If I could start, Vivek, I'm always interested to hear about the more interesting deals and use cases that you come across, especially seeing how strong business optimization was in the quarter. It seems like the world is moving more and more to intelligent systems and driving intelligent outcomes in various verticals. Can you maybe speak to some of the more interesting and new types of use cases that you've seen this quarter?

Vivek Y. Ranadivé

We're seeing that in retail it's becoming a must-have. And so everybody wants to completely go to the eventing platform if you're a retailer. And that's almost become -- or it's not even that interesting anymore because everybody is doing it. So that's going to be a huge growth area. So everyone wants multi-domain MDM. Everybody wants to be able to go all the way down to the consumer. They want to be able to make you the offer before you leave the aisle, not 6 months after you leave the store. And if you look at our customers, you can almost trace who's having good results to who's early TIBCO adopter. And so Macy's was an early TIBCO adopter to go to this eventing platform. And I think their results have shown it. We're seeing things -- we're seeing tibbr have all kinds of interesting use cases. And so we are having an airline with tibbr in all their gates so that they can change the whole passenger experience and provide just dramatic differences in service and also save money as a result of doing that. One of the use cases we're very excited about is for cybersecurity where people are now trying to look at events and anticipate that there might be trouble. And the -- what we did in the government is now all of a sudden of interest everywhere. And in addition to our technology now being built into the smart grid, they're using the cybersecurity component because once you have a smart grid, it can be hacked and that's not so good. So we have some fantastic use cases around that. We have it. And like, I mean, I don't want to -- I could go on all day. We have it in virtually every industry, in every geography and every vertical market. Murray, would you want to add anything or...

Murray Rode

I think I'd just reinforce the -- how across industry it is and how there's no shop [ph] of the eventing platform replacing other means of building these applications. So it becomes an application development and deployment environment for a lot of solutions.

Brad A. Zelnick - Macquarie Research

If I could follow up with Sydney. Sydney, cash flow growth for the full year exceeded net income growth, which is always good to see. As we put together our models for 2012, is there anything that you can tell us around what we should expect for cash flow and net income?

Sydney L. Carey

Well, our collections in the Q4 period were very strong at 51 days DSO. I would expect DSO to range kind of somewhat higher than that, 65- to 70-day range. So cash flow should track more closely to income growth.

Brad A. Zelnick - Macquarie Research

And just real quick for Murray. Any large deals similar to what you did with DOH last quarter, mega-type deals that perhaps ended up with a lot of deferred license that we should know about or think about as we enter into Q1?

Murray Rode

No, no similar deals from -- similar to the government deal.

Operator

Our next question comes from Karl Keirstead with BMO Capital Markets.

Karl Keirstead - BMO Capital Markets U.S.

I've got 2 questions. First, it -- given your numbers, it feels like the SOA business license growth slowed to about mid-single digits. I'm wondering if you can comment on that. That's a bit of a slowdown from the last couple of quarters. I know it's lumpy, but maybe there's a story there. And then secondly, could you offer a little more color around that $9 million restructuring charge? I'm not exactly clear on what part of TIBCO that relates to you that you might have downsized.

Murray Rode

So just kind of taking it in reverse order on the restructuring, that was really a little bit across the board from various parts of the organizations. Just as I said my prepared remarks, we've been growing the company pretty rapidly for a number of years and adding acquisitions. Quite a number last year in particular. And so it was just time to tighten things up a bit, eliminate some redundancies both in terms of people and facilities really around the globe. And it was relatively -- ultimately, in the grand scheme of things, relatively minor. On the SOA question, I think if you look at the way the SOA category tends to bounce around quarter-to-quarter, if you look at last year, we did see a single-digit growth quarter last year as well. And then that can be followed by a big-growth quarter. So I don't think we're seeing any particular pattern there. It's a big category. It includes a lot of products. So it can move around a lot quarter-to-quarter. And again, we sort of come back to the fact that there's a lot of platforms sales that go on today. And in those platforms sales, obviously the bigger drivers in the deal will end taking more of the revenue. And that's really been around business events in many cases.

Operator

Our next question comes from the line of Raimo Lenschow with Barclays Capital.

Raimo Lenschow - Barclays Capital, Research Division

Vivek, I saw you presenting a few days ago at the -- oh, I'm sorry, via video at the SAP influencer conference, and I saw the interest in there. You closed that for Spotfire, that you're working more closely with SAP. Can you talk a little bit about how that close partnership now kind of validates your strong position in the data discovery visualization space? And what does it mean for the company?

Vivek Y. Ranadivé

Yes, so from our perspective, the more data sources we have access to, the better it is for our customers. And so it just opens up the entire SAP client base for us to have staked [ph] both Spotfire and tibbr on. And I'm delighted that those guys are finally coming around to our way of thinking in terms of in-memory real time. And we will take HANA and we already work with Exodata [ph] and we'll connect to everything. But the end of the day, Spotfire and tibbr are places that we want to suck information from everywhere possible. And they had approached us and we said sure, we'd to love work closely on that.

Operator

Our next question comes from the line of Mark Murphy with Piper Jaffray.

Mark R. Murphy - Piper Jaffray Companies, Research Division

Sydney, I was wondering if you could ballpark the revenue contribution from Nimbus in the quarter. I guess presumably that was a pretty small number.

Sydney L. Carey

It was. It was a very small contributor in the period but again seeing good, good traction as we look forward with that across the broader product portfolio.

Vivek Y. Ranadivé

Yes. And also one of things, and we'll sketch this out further as the year progresses, we're very excited around what Nimbus means for tibbr. And those 2 will play very well together. And it will also obviously play well with our BPM offerings. And we think it could -- actually, it might not drive license revenue, but it'll actually drive a lot of services revenue for us. And then also, it will help with getting tibbr on even more desktops.

Mark R. Murphy - Piper Jaffray Companies, Research Division

Vivek, I also wanted to ask you. Do you suspect that MDM will continue as a pretty hot space next year for the companies with the strongest products? And from a technical perspective and a business strategy perspective, what do you think is going to determine the winners and the losers in that market?

Vivek Y. Ranadivé

Yes, so MDM -- so we believe that our approach is unique. The whole approach of trying to build the mother of all databases, that's something people have been trying for the last few years, and it's been very costly and they haven't succeeded. And so that's not a good approach. So we take more of a metadata approach. We also are the first company that actually put a stake on the ground a few years ago, saying we have a multi-domain offering. And other people were more oriented, like I think Informatica was oriented around products. And we always had this multi-domain. And every one of our customers wants that. They want store data, shelf data, customer data, product data and so on. So that's important. The other thing is we really are able to operate in real time. So you want to connect everything up in real time. You want to be able to know what's available. Just being able to give -- we just did a deal with a store in the -- store chain on the East Coast, and they need to be able to figure out what they have across multiple stores. And so that's important. And then finally, connecting to the rest of the stack in terms of BPM and so on. That's important. So we think that we're actually in a unique position. We don't feel that -- we -- I don't know who else is good. We believe we're doing very well against all of them. We're crushing them.

Mark R. Murphy - Piper Jaffray Companies, Research Division

And one last one. Sydney, you've done a tremendous job with guidance for TIBCO and a real consistent job for several years. And we certainly appreciate that. The -- I guess I wanted to drill in a little bit on the license revenue growth which -- it had been running close to 30% for several quarters in a row. This quarter, it's dropped to 17%. The guidance, I believe, is adjusting another downtick. And so it's still a good growth rate. Well, it is coming down. I'm wondering if you recognized the incremental $8 million or $9 million on a deferred basis from that, from the Government deal that I think closed in June. And then also, just do you have any thoughts on where license growth could settle out for Fiscal '12 as you try to build out those models?

Sydney L. Carey

Well again, we characterize ourself as a growth company. Our guidance, we haven't changed our approach for Q1. It suggests 11% to 17% growth in the period. So we feel good about our guidance.

Vivek Y. Ranadivé

It's consistent with what we did last year. And also, I think we made this point before, that we have hit capacity limitations and we just need to -- and those limitations don't show in earlier quarters because they're smaller quarters. And so as we expand our sales force, we'll be able to have an expanded Q4.

Sydney L. Carey

And specific to Q4 guidance, at the time I gave guidance, we did get some currency headwind as we performed through the quarter as well.

Operator

And our next question comes from the line of Tim Klasell with Stifel, Nicolaus.

Tim Klasell - Stifel, Nicolaus & Co., Inc., Research Division

Vivek, you made some comments about capacity constraints. How are you thinking about growing your sales force this year? I think you've -- often sort of state some goals of where you would like to bring it to. Where do you want to take it? And how fast will you ramp it up?

Vivek Y. Ranadivé

Look, I've been always wrong on this, and I've been holding my guys back. So I'll let Sydney answer the question.

Sydney L. Carey

So we are making investments in the direct sales organization. And in the first half of the year, we're targeting to be at about 275 quota heads by midyear. And we'll be also hiring supporting functions for those quota heads as well.

Tim Klasell - Stifel, Nicolaus & Co., Inc., Research Division

Okay, great, great. And then obviously, the partner channel is kicking in here. Are there particular products that go well through the channel? Maybe can you give us sort of an idea of where we should we be hearing success with that channel?

Murray Rode

I think there's really pretty good traction across a variety of products with the channel. Clearly, some things are doing well. Some of our core SOA technologies, the things like Silver Fabric and the cloud space, tibbr, Spotfire all are doing well.

Vivek Y. Ranadivé

I think the one thing that we have, we think, new types of partners out there. So in addition to the conventional partners, we're seeing a lot of interest from lower-end partners and -- particularly for Spotfire and tibbr. And so I think we're cautiously optimistic that, that could be a whole new channel for us that could surprise us in a nice way.

Tim Klasell - Stifel, Nicolaus & Co., Inc., Research Division

That would be a -- definitely an expansion for TIBCO. On the product set, business optimization obviously did very well. But can you give us a little bit of color of what the split of revenues or maybe growth is from Spotfire versus the BusinessEvents line?

Murray Rode

Well, they've both been really strong in the year, and they both had really good years. In Q4, they've kind of gone back and forth over the course of the year in terms of which were stronger in a given quarter. It just so happens Q4 was a little stronger for Spotfire than BusinessEvents. But again, both had a strong quarter and a very strong year.

Vivek Y. Ranadivé

Yes. So again -- and we're doubling down on these areas. And so we're -- we just have to keep training our people to be able to sell them. And in 2012, it'll be the first year that we actually are going to have more of our salespeople sell and be trained in selling everything.

Tim Klasell - Stifel, Nicolaus & Co., Inc., Research Division

Great, great. And just...

Vivek Y. Ranadivé

Okay, well -- I'm sorry, go ahead.

Tim Klasell - Stifel, Nicolaus & Co., Inc., Research Division

I had one quick question. Linear in the quarter. DSOs came down nicely. Was that just good collections? Or was the quarter a little more linear?

Sydney L. Carey

We had a typical Q4 with the quarter as it is. We do a lot of business in the second and third month. But it was a typical quarter for us.

Murray Rode

With very strong collections.

Sydney L. Carey

With very strong collections.

Vivek Y. Ranadivé

Okay. Well, I think we're going to conclude this call. It's been a while. So thank you all for joining us and happy holidays.

Operator

Thank you for joining us. We will now conclude TIBCO's Q4 2011 Earnings Call.

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