Shares of TIBCO Software (TIBX.DL) jumped as much as 9.5% overnight, driven by a great earnings report. The stock trades at prices not seen since last November, and opportunistic buyers are looking at greater than 40% returns on shares bought in April.
The company has been battling weak sales execution in the North American division since last fall. CEO Vivek Ranadive seemed to stop worrying about it in the second quarter's report and discussion, and this week's third-quarter report bears out that theory.
Source: S&P Capital IQ
Total sales jumped 6.2% year over year, led by surging demand for TIBCO's software licenses. Importantly, American sales grew 11% -- in line with the surging European market's 12% growth and, finally, a point of pride and strength again.
The key to TIBCO's strong American performance is an unblinking focus on proving the software's worth to customers. In the second quarter, Ranadive admitted losing sales to Oracle (ORCL 0.22%) and IBM (IBM 1.05%) because their products were cheaper -- and the larger companies managed to convince prospective clients that their solutions were "good enough." This quarter, Ranadive saw absolutely no such lost sales as his retrained sales force stepped in to prove that TIBCO's tools are better.
"We won every single deal" against the big IT shops, Ranadive said.
TIBCO's high-growth trajectory was derailed for a while last year, but the company is now back on track. The shares I bought last December, when the sales execution troubles first reared their ugly head, have now soared 27% higher. It's not too late to jump aboard this bandwagon either, because the need for hyper-efficient data analysis tools will only grow from here. TIBCO was, is, and will remain a leader in that crucial space, and I see a very long growth runway ahead.
