TIBCO reported solid Q2 results tonight after the close, further evidence that momentum behind SOA continues apace. I had planned on running through the numbers in some detail, but Dennis Howlett beat me to the punch, so I invite you to read his thoughts.
This is an interesting example of the madness of quarterly expectations. Several sell-side analysts "previewed" the TIBCO quarter and suggested the company would come in at the low end of guidance. That, combined with a weak tech tape over the last few weeks, contributed to TIBX trading down considerably since the end of the May (when its quarter ended). Lo and behold, tonight TIBCO reports and exceeds the high end of guidance on revenues, license revenues and earnings. I'll be curious to read the analysts' accounts tomorrow as they try to explain away their "data points" that suggested a less than robust quarter end.
Looking ahead, this company offered somewhat conservative guidance for Q3 but expressed confidence in the second half as a trio of drivers: SOA, BPM and "Business Optimization" are driving demand. As Dennis noted in his writeup, TIBCO is planning on 20 net adds (from 110 to 130) to the sales force in the second half. Hiring trends are often a good barometer of the demand environment; but the key is for TIBCO to remember that earnings growth and margin leverage are as critical to the investment thesis as topline growth. So far, so good.
Note: At the time of this writing I, and/or funds I maintain discretionary control over, maintained a long equity position in TIBX.
Comments