Though Tibco's (TIBX) FQ4 revenue beat consensus by $3M, the company's license revenue (+2% Y/Y to $139.7M) was only in-line with a guidance range of $136M-$144M.
Tibco's license revenue performance has been closely watched, both due to its role in driving service/maintenance revenue (+10% in FQ4 to $175.7M) down the line, and because growth was negative earlier this year. Tibco blamed sales execution, but analysts raised questions about middleware price competition from IBM/Oracle.
193 $100K+ deals and 31 $1M+ deals were closed in FQ4, compared with 195 and 25 a year ago. Opex rose 12% Y/Y, thanks largely to a 16% increase in sales/marketing spend.
Three months after announcing a deal to sell back 40M shares to Yahoo (YHOO) and thereby bring its total stake in the company down to 20M, Dan Loeb's Third Point LLC discloses it owned 16M Yahoo shares at the end of Q3. That translates into a 1.6% stake in the company whose shares have soared over the last 12 months thanks to Alibaba IPO hopes. (13F)
Third Point's Nokia (NOK) stake only amounted to 2M shares (current value of $15.8M) at quarter's end. Nokia rallied on Oct. 22 after Loeb disclosed he had taken a position, and provided his reasons.
The firm's position in Tibco (TIBX) was pared to 4.425M shares (2.7% stake) from a prior 5M. There's ongoing speculation Loeb will make Tibco an activist target.
A new 2.6M-share position was taken in Activision (ATVI), which just finished a massive leveraged recap deal with Vivendi.
Big data/analytics plays Teradata (TDC -2.7%), Tableau (DATA -0.8%), Splunk (SPLK -2.6%), and Tibco (TIBX -2.7%) are trading lower after Qlik (QLIK -18.4%) and Informatica (INFA -3.8%) posted Q3 results and Q4 guidance yesterday afternoon. While Qlik fell sharply immediately after releasing its numbers, Informatica opened higher before gradually selling off today.
Much like Tibco earlier in 2013, Qlik is blaming its weaker-than-expected top-line results and guidance on sales execution. The business intelligence/analytics software firm stated on its CC (transcript) its needs to adjust sales processes and "improve operational discipline."
Some analysts questioned Qlik about the performance of its European ops (responsible for half of revenue). While Americas sales rose 35% Y/Y in Q3, European sales only rose 13% (9% exc. forex). Qlik suggests its problems on the continent are due to both macro and sales execution.
Informatica's top-line guidance was strong, but its EPS guidance was more subdued due to the impact of major sales/R&D investments. Headcount rose by 98 people Q/Q and 364 Y/Y in Q3 to 3,178.
Informatica mentioned on its CC (transcript) it booked 23 $1M+ deals and 87 $300K+ deals in Q3, up from 13 and 75 a year ago. Subscription sales rose 48% Y/Y, and now make up 12% of software revenue.
Qlik (QLIK +4.8%), Teradata (TDC +3.2%), Tableau (DATA +1.1%) and Splunk (SPLK +1.2%) are all moving higher after Tibco (TIBX +3.4%) beat FQ3 estimates on the back of stronger-than-expected license growth and $1M+ deal activity and Susquehanna upgraded both Tibco and data warehousing software vendor Informatica (INFA +3.7%).
The sell-side is generally pleased with Tibco's report. FBN likes the fact Tibco's BusinessEvents event-processing software (a key part of its business optimization unit, along with the Spotfire analytics platform) saw rebounding demand, and Pac Crest is encouraged by "commentary indicating a potential return to a more robust large-deal environment."
Jefferies thinks Tibco ""provided some of the more constructive macro / demand commentary in the sector," and can further improve sales productivity." Stifel notes federal and core middleware sales remain soft, but also asserts Tibco's "superior product stack is levered to a number of secular trends (analytics, big data, social, cloud, real-time) that solve real-world problems across verticals."
Separately, Cantor has started coverage on Splunk with a Buy and $70 PT as part of a broader enterprise IT launch. The firm thinks Splunk's machine data analytics platform "could be a disruptive force across the IT landscape as new users are brought onto the platform and new use cases are uncovered."
A recent survey of Fortune 1000 execs found 68% stating their firms plan to spend $1M+ on big data projects this year, up from a little over 1/3 a year ago. 19% expect to spend $10M+ this year, and 50% expect to do so by 2016. 70% of investing firms said they're putting money into analytics projects.
Facebook (FB +0.7%) has been upgraded to Outperform by Cowen. The upgrade comes with shares having risen 73% since the Q2 report.
Tibco (TIBX +4.6%) and Informatica (INFA +4.3%), two companies frequently hyped as big data/analytics plays, have been upgraded to Positive by Susquehanna. Tibco delivered an FQ3 beat and provided in-line FQ4 guidance yesterday afternoon.
SunEdison (SUNE +2.5%) has been upgraded to Outperform by RBC.
Portugal Telecom (PT +4.8%) has been upgraded to Outperform by Bernstein.
Synaptics (SYNA +2.1%) has been upgraded to Outperform by Oppenheimer.
NetApp (NTAP -1%) has been cut to Underperform by William Blair.
SolarWinds (SWI -4.4%) has been cut to Sell by Goldman.
Ericsson (ERIC -2.1%) has been cut to Hold by DNB.
Level 3 (LVLT -1.9%) has been cut to Equal Weight by Morgan Stanley.
ExOne (XONE -0.3%) has been started at Outperform by FBR.
Tibco (TIBX) guides on its FQ3 CC (webcast) for FQ4 revenue of $307M-$315M and EPS of $0.38-$0.40 vs. a consensus of $311M and $0.40. License revenue is expected to be in a range of $136M-$144M, which compares with $136.3M in the year-ago period.
Tibco's SOA and core infrastructure (middleware) license revenue fell 3% Y/Y (better than recent quarters), and made up 43% of total license revenue. Business optimization licenses rose 12% Y/Y, and made up 46% of license revenue.
SA contributor Akram's Razor recently argued Tibco should do a spin off/IPO for its business optimization unit.
License revenue for Tibco's closely-watched Spotfire analytics platform (included in business optimization), while up sharply Q/Q, was flat Y/Y, something Tibco attributes to tough comps. Spotfire made up roughly 1/3 of total license revenue
After posting an 11% Y/Y license revenue drop in FQ2, Tibco (TIBX) saw its license revenue grow 6% Y/Y in FQ3 to $105.2M. One key reason: Tibco closed 18 $1M+ deals in the quarter, up from 12 in the prior two quarters. $100K+ deals totaled 140 vs. 147 in FQ2 and 104 in FQ1.
CEO Vivek Ranadive, who more than once blamed sales execution for Tibco's early-2013 license declines, says his company "saw further signs of operational improvement" in FQ3.
Services/maintenance revenue (stems from existing license deals) rose 6% Y/Y to $165.7M, matching FQ2's growth rate.
Opex +11% Y/Y, exceeding rev. growth of 6% thanks to solid increases in both R&D and sales/marketing spend.
In an SA Pro article (embargoed until 11:15AM ET Wednesday), contributor Akram's Razor raises the possibility Dan Loeb will push Tibco (TIBX +3.6%) to do a spinoff/IPO for its fast-growing Business Optimization unit. Loeb disclosed a 5M-share (3%+) stake in Tibco in his Q2 13F.
The author observes that while revenue for Tibco's mainstay SOA and Core Infrastructure (middleware) unit fell 21% Y/Y in 1H, the Business Optimization unit, which includes Tibco's popular Spotfire analytics/data visualization platform, posted 23% rev. growth. Spotfire sales rose 30% in the June quarter.
He also points out Tibco is trading at a major discount to richly-valued analytics software rivals Qlik and Tableau thanks to its middleware weakness. "What you get is this nice core cash cow business burying the multiple of the whole company."
Tibco has asserted there are synergies between its middleware ops and Spotfire. However, Akram's Razor sees no reason "separating out the BO division in ... an EMC/VMW manner would hurt application integration sales." He estimates a 10% equity carve-out would deliver "25%-40% upside."
TIBCO Software Inc. provides infrastructure and business intelligence software. Its software platform enables customers to create flexible, event-driven applications and deliver real-time, actionable insights.