If enterprise software were songs, this company would start beat-boxing any minute now.
Business-management software maker TIBCO Software (Nasdaq: TIBX ) just delivered a pretty good quarter in a seasonally weak period. Management doesn't really do quarterly guidance anymore, focusing instead on full-year performance, but it said that the results matched internal expectations on every level.
TIBCO delivers a service-oriented architecture (SOA) -- think modular, on-demand, Web-based software -- that helps other companies run their businesses more efficiently. It's a recognized leader in its niche, winning industry awards for years and beating the likes of BEA Systems (Nasdaq: BEAS ) , IBM (NYSE: IBM ) , and Oracle (Nasdaq: ORCL ) whenever it signs a new customer.
In last night's earnings call, CEO Vivek Ranadive said that he's seeing increased demand for virtualization of services, networks, and data. Businesses are looking for ways to tie a patchwork of management tools -- a mix of in-house tools and third-party software growing haphazardly over the years -- into a coherent suite with unified controls. That's precisely what TIBCO does best.
Ranadive thinks we're at the start of a strong product cycle. The whole SOA concept is still new and unfamiliar to many CIOs, but if you can't tell by the blue-chip service providers that have jumped onto the bandwagon, I'll just come out and say that it's the wave of the future.
The market seems disappointed today, as TIBCO's share price is down about 5% as of this writing on a generally buoyant day for the overall market. I think that's a shortsighted reaction to a really very nice result. Management is selling itself a bit short by leaning on non-GAAP earnings figures. On that basis, growth looks anemic, but GAAP earnings improved by 67% year over year, and cash flows easily outran the revenue uptick, as well.
In many ways, TIBCO is like that hip, beat-boxing kid on American Idol. The whole package is there, but it's hard to see that because of the high gloss on the surface. Let your hair down and belt one out, TIBCO. You'll look so much better if you stop pooh-poohing your stock-based compensation and whatnot.
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