Q4 2011 Earnings Call Transcript
Transcript Call Date 12/21/2011

Operator: Good afternoon, ladies and gentlemen. I am Ashlee. Welcome to TIBCO's Fourth Quarter 2011 Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. You can also listen to this call via the Internet at www.tibco.com.

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 pass code 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.

This 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 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 Ranadive, TIBCO's Chairman and CEO; Murray Rode, Chief Operating Officer; and Sydney Carey, Chief Financial Officer.

I would now like to turn the call over to Vivek.

Vivek Ranadive - Chairman and CEO: 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 finished 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 a 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 business events and Spotfire grew over 50% in license revenue for the year and has doubled in the past two 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 of the table for this expensive problem space. Similarly, our cloud middleware and hosted offerings have gone from projects and pilots to being drivers of seven figure deals, and tibbr grew most notably of all.

It took us six months to get to approximately 60 accounts. It's taken us just six days to get another 600 to (trial large) services on the new public instance that we launched last week. 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 served, with both record setting demand from our traditional markets as well as material contributions from new markets.

For the year we saw seven separate verticals with growth over 35%, including logistics, government, healthcare, 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 is 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 two 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 - COO: 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 business events, which make up this category showed tremendous growth and each had its largest quarter ever. Business events, is also playing a larger and larger role in our platform sales and therefore, are making on the 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 revenues in Q4 were 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 continued 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 per transaction over $100,000 in license was 687,000.

With regards to quarter carrying heads, we ended the quarter up 14 reps, bringing our total quarter 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's 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 career determinations, 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 even driven middleware platforms; three, cultivating our brand and viral adoption of technology especially through our cloud offerings; and four, managing operations for EPS growth.

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

Sydney Carey - EVP and CFO: Thank you, Murray. I will break my comments into three parts. First, I'll provide additional details on our financial performance in Q4, next, I'll provide full year details on 2011 and then I'll 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% as 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 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 a $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've repurchased approximately 1.9 million shares at an average price of $25.91. Earlier this week we entered into a new five-year $250 million revolving credit agreement, which replaced our 2009 $115 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 of business, with multiple drivers for growth and a broad range of opportunities. 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.

Transcript Call Date 12/21/2011

Operator: Brent Thill, UBS.

Brent Thill - UBS: If you can maybe just walk through the license revenue in Q4, I think we've grown to know TIBCO of weaving the license, you came inside the range, is that just a sign of the macro or is it perhaps something that's going on where you were able to push some of these contracts off into Q1. Can you just give us your view on the dynamics of the license number for the fourth quarter?

Vivek Ranadive - Chairman and CEO: We think we had a good license number. The Company is really expanding in terms of its capacity and sales force enablement, training and so on. 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 bigger quarters the fourth quarter; then, we were architected 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: Just one quick follow-up, just as it relates to some of the deal sizes, you are seeing, it didn’t seem like it showed up in the deals overall. 1 million, you were up there nice sequential in year-on-year, but Oracle did mention that they are seeing some deals getting carved up into smaller bite-size chunks. Just curious in terms of, if you are seeing same phenomenon?

Vivek Ranadive - Chairman and CEO: No, we’re actually seeing the deals getting bigger from our end. I just think that people aren’t buying the big data base big high end solutions and they are buying more kind of the cell phone versus the landline analogy.

Operator: John Difucci, JPMorgan.

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

Vivek Ranadive - Chairman and CEO: John, maybe you start believing me I've been telling you that people don't need databases, okay. They don't need to stop things in the phone that doesn't ring, that's called the database. They need to put it on a bus. They need to become event driven. I've been saying that for a last two years, I mean you guys will start believing me.

John Difucci - JPMorgan: I think people do believe that. But just want to I guess get a little bit more color around the guidance like how much confidence do you have given your pipeline relative to what you normally look at, because obviously we saw today's market and even the day before, as Oracle and Red Hat this week where things look a little funky out there. 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 be -- you're doing better than others. 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 Ranadive - Chairman and CEO: 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. 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 then within a big eye on 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 Difucci - JPMorgan: 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. 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 I don't know is there any -- can you comment on that at all?

Sydney Carey - EVP and CFO: Couple of things coming out of last quarter, I did say that we had the second part of that government deal and deferred will be coming out of deferred?

John Difucci - JPMorgan: That's right.

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

Operator: Kash Rangan, Bank of America-Merrill Lynch.

Kash Rangan - Bank of America-Merrill Lynch: 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 at this quarter you have licenses that are quite healthy, but nonetheless a deceleration versus what you've been printing the first three quarter. So are we at the point where the first three quarters of this past year were held by sales force hiring, improved productivity and that we've reached a plateau point of then subsequently that you started to rehire back again in the last few quarters. Therefore, should we think about this license revenue growth rate in Q4 as sort of a low point and otherwise very strong trajectory and that these folks once they start to get product within 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 Ranadive - Chairman and CEO: So, I think, Kash what you are, it's kind of the explanation that I tried to give earlier that when you have, when you hit a capacity limitation it shows up in the fourth quarter with the sales plus because the earlier quarter the smaller quarters and so you have more capacity in your pipes. So, because Q4 is so big, that's when the capacity limitation shows. So you are absolutely right. We just need to keep hiring and training and hiring and training. So that, we have been architected to be $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 Rangan - Bank of America-Merrill Lynch: So the growth versus margin trade-off, it looks like 20% growth guidance for the upcoming quarter and you are talking 15% to 20% non-GAAP EPS growth the next year. Should we think about margin profile as being somewhat flattish and that you are going to be really investing for revenue growth versus margin expansion?

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

Kash Rangan - Bank of America-Merrill Lynch: So, going for growth, that's good. Thirds and final question, financial services the topic on many people's minds. It looks like my calculations or teams calculations down about a few percentage points. Any insights into what's going on there. Any change, is that a vertical that's breaking way in terms of its behavior relative to some of the other very healthy verticals like comps, I think up huge, life science are up huge, is there some problem, vertical or two, you have a diversified portfolio, so you are doing fine. But any color you can provide on financials that would be great? That's it from me.

Vivek Ranadive - Chairman and CEO: I think it's kind of like the mid (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 it gets much worse. It just stays kind of at that in that low 20s, that's what we are seeing. We just closed a multi-million dollar deal with a financial institution just in the last few days. So, we're not seeing a substantial change in that. Murray, do you want to add anything to it?

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

Operator: Nabil Elsheshai, Pacific Crest Securities.

Nabil Elsheshai - Pacific Crest Securities: Just real quick Sydney, if you had 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...

Sydney Carey - EVP and CFO: On a year-for-year basis, we’re kind of modeling it to be somewhat neutral. So it’s not having at least at this point not on our guide, not a big impact.

Nabil Elsheshai - Pacific Crest Securities: Then I guess a little update on some of the smaller products lines versus SOA, you have mentioned Spotfire and optimization, those are phenomenal growth rates. When you look forward, is there any commentary you can give on the sustainability of that and what you are seeing in the market in terms of expansion of adoption?

Vivek Ranadive - Chairman and CEO: Yeah, we're doubling down on those markets and so everybody is moving to the visual (LAN) and everybody is moving to an eventing engine and some people we have clients that are actually replacing app servers with the event servers and so we see that as just a massive, massive opportunity as that plays out over the next few years. Things like MDM, MDM is absolutely explosive for 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 the enterprise sales process. We had 60 big clients that we signed on over the last six 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. What we see happening is that like things like tibbr and some of the associated applets with tibbr, it's starting to eat through the old ERP, even CRM like applications and people are moving to this kind of notion of software-as-a-sales-service. So, we're continuing to put a lot of wood behind all these new emerging areas.

Nabil Elsheshai - Pacific Crest Securities: Then I know this is the boring old messaging stuff that you have a new messaging platform that's out few months now. Is there a chance that you could see a product cycle or product refresh as we go into next year with that product?

Vivek Ranadive - Chairman and CEO: Yeah, we just closed a multi-million dollar deal with the financial institution with that and it's – this is kind of one of the most intense low latency environments on the planet and we hope to make an 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, yeah, we're very excited about what that holds.

Operator: Derrick Wood, Susquehanna International.

Derrick Wood - Susquehanna International: Congratulations on the great quarter. Really good partner leverage, I think probably a record high for the Company 30% in the quarter and you've also had very good consulting growth. So, what's really driving that, that interest on the partner channel on that demand for services? If you could talk about what kind of projects are really pulling that type of consulting growth?

Vivek Ranadive - Chairman and CEO: 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 -- investment. So, they have ten times as many people trained now than they did not that long ago. So, we're participating and I was a key note speaker for one of our partner's 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 - COO: Well, I think it's at a high level it's a reflection of (that) point about mainstreaming. I think the technology is relevant to so many different scenarios and across so many industries that, that math really attracts more partners, and then more people want to develop skills in the platform and so it starts to snowball to some extent.

Vivek Ranadive - Chairman and CEO: Yeah. 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 - COO: Our largest…

Vivek Ranadive - Chairman and CEO: Almost by 100% in fact and so we think that that will continue. So we'll continue cultivating that. On the consulting services side, there is just huge demand for that and we just have to demand for that. We just have to start filling it. We have been behind the eight ball. I have been a little cautious about letting my people higher, but we started getting a little more aggressive about it. So the good news is that there are lots of good people out there that we can hire and so we need to train them and get them productive quickly.

Derrick Wood - Susquehanna International: Do you view the consultant business as a leading or a lagging indicator?

Vivek Ranadive - Chairman and CEO: We'll it's usually a leading indicator, because often times people will do some kind of a services thing and that will lead to the next thing. So we have seen it to be somewhat of a leading indicator for us.

Derrick Wood - Susquehanna International: Then it sounds like I think Murray you made a comment about event processing I think more traction into the Core SOA rates. It sounds like there is more buckle deals going on, whether it's SOA and BPM or SOA when processing or analytics. Is that happening in as there is 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 are penetrating in accounts?

Murray Rode - COO: 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 are a retailer of an airline or a healthcare provider, everybody wants to tie the master data through the whole backbone all the way into the consumer, and so, it’s becoming more of a platform sale. They want to the whole bundle, and so we just held our sales kick-off 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. Really the goal was to train them, so they can do that up-sell, cross-sell and they can sell the entire stack and they can actually sell some of these products that in some regions where they are trained. We're having absolutely stunning results with it, and so the areas where we’ve invested in the training, those guys are selling the whole stack routinely and with great success. So, now we just need to extend that to the rest of the organization.

Operator: Brad Zelnick, Macquarie Securities.

Brad Zelnick - Macquarie Securities: I'd like to echo my compliments on the great quarter especially in the environment as others have. If I could start from Vivek, I am always interested to hear about the more interesting deals and used 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 used cases that you've seen this quarter?

Vivek Ranadive - Chairman and CEO: We’re seeing that in retail, it's becoming a must have. So everybody want to completely go to the eventing platform, if you are a retailer, and that's almost become – it’s not even that interesting anymore because everybody is doing it. So, that's going to be a huge growth area. So, everybody 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 it the offer before you leave the aisle, not six months after you leave the store, and if you look at our customers, you can almost trace who's having good results to who was early TIBCO adopter. So, Macy's was an only TIBCO adopter to go through this eventing platform, and I think their results have shown that. We're seeing thing, we're seeing tibbr have all kinds of interesting used cases. So, we are having an airline put tibbr in all that 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 used cases we're very excited about is for cyber security, where people are now trying to look at events and anticipate that there might be trouble and there -- what we did in the government is now all of a sudden of interest everywhere. In addition to our technology now being built into the smart grid, they're using the cyber security component because once you have a smart grid, it can be hacked and that's not so good. So, we have some fantastic used cases around that. We have it in, I don't want to, I could go on all day but we have it in virtually every industry and every geography in every vertical market. Murray did you want to add anything on?

Murray Rode - COO: I think I'd just reinforce the how across industry it is and how this notion of the eventing platform replacing other means of building these application. So, it becomes an application development deployment environment for all our solutions.

Brad Zelnick - Macquarie Securities: If I can 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 Carey - EVP and CFO: Well, our collections in the Q4 period were very strong at 61 days DSO. I would expect DSO to range somewhat higher than that in a 65 to 70 day range. So, cash flow should attract more closely to income growth.

Brad Zelnick - Macquarie Securities: Just real quick for Murray, any large deal 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 and think about as we enter into Q1?

Murray Rode - COO: No, no, no similar deals from the -- similar to the government deal.

Operator: Karl Keirstead, BMO Capital Markets.

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

Vivek Ranadive - Chairman and CEO: So, kind of taking in then reverse order on the restructuring that was really a little bit across the board various part to the organization, just as I said in my prepared remarks, we've been growing the Company pretty rapidly for a number of years and adding acquisitions quite a number of last year in particular. 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 SOA, the SOA category tends to bounce around quarter-to-quarter. If you look at last year we did see our 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. Again we'd sort of comeback to the fact that that there is a lot of platform sales that go on today and in those platform sales, obviously, the bigger drivers in the deal will end up taking more of the revenue and that's really been around business events in many cases.

Operator: (Remo Renshaw), Barclays Capital.

Remo Renshaw - Barclays Capital: Vivek I saw you presenting a few days ago with the -- or not via video at the (SAP Influenza) Conference and I saw the interesting deal you closed there for Spotfire, to work more closely with SAP. Can you talk a little bit about how that closer partnership now kind of validates your strong position in the data discovery of utilization space and what does it mean for the Company?

Vivek Ranadive - Chairman and CEO: So, from our perspective the more data sources we have access to the better it is for our customers. So it just opens up the entire SAP client base for us to have stick both Spotfire and tibbr on. I'm delighted that those guys are finally coming around to our way of thinking in terms of in memory real-time. We'll take Hanan and we already work with Exadata, and we'll connect to everything. But at the end of the day Spotfire and tibbr are bases that we want to suck information from everywhere possible. They had approached us and we said sure, we'd love to work closely on that.

Operator: Mark Murphy, Piper Jaffray.

Mark Murphy - Piper Jaffray: Sydney, I was wondering if you could ballpark the revenue contribution from Nimbus in the quarter, I guess presumably that's a pretty small number?

Sydney Carey - EVP and CFO: It was a very small contributor in the period, but again seeing a good traction as we look forward with that across the broader product portfolio.

Vivek Ranadive - Chairman and CEO: Also, one of the things that we will sketch this out further as the year progresses, but we're very excited about what Nimbus means for tibbr, and those two 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 will actually drive a lot of services revenue for us and then also it will help with getting tibbr on even more desktops.

Mark Murphy - Piper Jaffray: 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 stronger products, and from a technical perspective and a business strategy perspective, what do you think is going to determine the winners and losers in that market?

Vivek Ranadive - Chairman and CEO: So, MDMs we believe that our approach is unique. The whole approach of trying to build a 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 in the ground a few years ago saying we'd 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 everyone of our customers wants that. They want to 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 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. 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 -- I don't know who else is good. We believe we are doing very well against all of them, we're crushing them.

Mark Murphy - Piper Jaffray: 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. 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 suggesting another downtick, and so, it's still good growth rate while it is coming down. I'm wondering if you recognize the incremental $8 million or $9 million on a deferred basis from that from the government deal that I think closed in June. Then also just do you have any thought on where license growth could settle out for fiscal '12 as we try to build out those models?

Sydney Carey - EVP and CFO: Well again, we characterized ourselves as a growth Company. Our guidance -- and 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 Ranadive - Chairman and CEO: That's consistent with what we did last year. 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. So, as we expand our sales force, we'll be able to have an expanded Q4.

Sydney Carey - EVP and CFO: Specific to Q4 guidance, at the time I gave guidance, we did get some currency headwinds as we performed through the quarter as well.

Operator: Tim Klasell, Stifel Nicolaus.

Tim Klasell - Stifel Nicolaus: 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 stated some goals of where you would like to bring it? Where do you want to take it and how fast will you ramp it up?

Vivek Ranadive - Chairman and CEO: I've been always wrong on this and I've been holding my guys back. So, I'll let Sydney answer the question.

Sydney Carey - EVP and CFO: 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 quarter heads by mid-year and we will be also hiring sporting functions for those quarter heads as well.

Tim Klasell - Stifel Nicolaus: Then obviously the partners' channels kicking in here. Are there particular products that go well through the channel maybe you could give us sort of an idea of where we should be hearing success with that channel?

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

Tim Klasell - Stifel Nicolaus: That would be defiantly an expansion for TIBCO. On the product set business optimization obviously did very well. Can you give us a little bit of color of that the split of revenues or maybe growth is from Spotfire versus the business events line?

Murray Rode - COO: Well they have both been really strong in the year and they both had really good years. In Q4 they have kind of gone back and forth over the course of the year in terms of which was stronger in a give quarter. It just so happens, Q4 was a little stronger for Spotfire than business events, but again both had a strong quarter and very strong year.

Vivek Ranadive - Chairman and CEO: So again and we are doubling down on these areas and so we are, we just have to keep training our people to be able to sell them. In 2012 it will be the first year that we actually are going to have more of our sales people sell and be trained in selling everything.

Tim Klasell - Stifel Nicolaus: I had one quick question. Linear in the quarter the SOA's came down nicely. Was that just good collections or was it quarter go more linear?

Sydney Carey - EVP and CFO: We had a typical Q4. It has been a quarter as it is. We do a lot of business in the second and third months, but it was a typical quarter for us. With very strong collections.

Vivek Ranadive - Chairman and CEO: I think we'll 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.