Q3 2012- Roll on Q3 and a disappointing set of numbers, but that didn’t stop Tibco Software Inc. (NASDAQ:TIBX) from guiding towards some pretty good license sales growth in Q4. Indeed, Ranadive told analysts that the company was sitting on a $500 million pipeline. Deals were seen across all geographies and industries. Surely TIBCO would bounce back?
Q4 2012- I recall this conference call very well because I’ve rarely heard such a candid assessment of a company’s performance. Time and time again TIBCO pointed out that the problem wasn’t macro or product. It was execution, specifically with the US. The relatively better performance in Europe was cited to back this view up.
The pipeline previously discussed did not close as expected, and ’10 to 20’ deals slipped. Naturally Ranadive & co were grilled over the issue. He argued that some deals were lost thanks to ‘sloppiness’ and the deals that slipped were not lost but rather delayed. IBM was cited as its biggest competitor, but the problem was ‘absolutely an execution related’ issue in the US.
Raj Verma was appointed to oversee a turnaround in the US; he was supposed to bring an attention to detail and overall scrutiny that might help turn things around for TIBCO.
Q1 2013- Fast forward to the recent results and Europe is now weak, the US problems are ongoing, the guidance is horrible, and now there is a problem with the UK operations! TIBCO has had more execution problems than Robespierre, and I will leave the reader to look at the charts above to see how poor the guidance is for the next quarter.
Where Next for Tibco Software Inc. (NASDAQ:TIBX)?
Who knows? Overall the big data sector has done well this year with the only weakness being seen in something like Teradata Corporation (NYSE:TDC). Okay, Oracle reported some weak numbers recently, but then it had had a particularly strong quarter previously. Meanwhile, IBM’s last quarter was good and corporations (particularly US) don’t appear to have made significant cutbacks lately.
So if it isn’t macro then what is it? Everything that management is pointing at indicates that it’s internal execution, but this has been going on for nearly a year now and it seems to be infectious with Europe now catching a cold and the UK catching a fever. It’s hard not to conclude that this isn’t at least partly an erosion of competitive positioning–the suspect will be IBM.
In conclusion Tibco Software Inc. (NASDAQ:TIBX) has much to do to regain investor’s confidence. It is no doubt an attractive recovery proposition right now, but it is certainly not a stock for those of a nervous disposition or for those who only buy stocks where the management has got its guidance accurate in recent quarters. Perhaps TIBCO should use some of its own big data analytics on itself when it sets guidance?
The article A Look Back at TIBCO ‘s Guidance to Investors originally appeared on Fool.com and is written by Lee Samaha.
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