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8-K - FORM 8-K - TIBCO SOFTWARE INC | d235084d8k.htm |
Exhibit 99.1
Media Relations Contact: | Investor Relations Contact: | |
Holly Gilthorpe TIBCO Software Inc. (650) 846-5624 hgilthorpe@tibco.com |
Matthew Langdon TIBCO Software Inc. (650) 846-5747 mlangdon@tibco.com |
TIBCO SOFTWARE GROWS LICENSE REVENUE BY 29%
AND TOTAL REVENUE BY 24% OVER Q3 2010
Non-GAAP EPS Increases to $0.23
PALO ALTO, Calif., September 22, 2011 TIBCO Software Inc. (Nasdaq: TIBX) today announced results for its third fiscal quarter, which ended on August 28, 2011.
Total revenue for the third quarter of fiscal 2011 was $229.0 million and net income was $23.5 million, or $0.14 per diluted share. This compares to total revenue of $184.5 million and net income of $17.4 million, or $0.10 per diluted share, as reported for the third quarter of fiscal 2010.
On a non-GAAP basis, net income for the third quarter of fiscal 2011 was $39.4 million or $0.23 per diluted share, compared with $29.8 million or $0.17 per diluted share for the third quarter of fiscal 2010. Non-GAAP operating income for the third quarter of fiscal 2011 was $57.6 million, an increase of 28% over non-GAAP operating income of $45.0 million in the third quarter of fiscal 2010. Non-GAAP results exclude amortization of acquired intangible assets, stock-based compensation expense, acquisition related and other expenses and restructuring activities and assume a non-GAAP effective tax rate of 30% and 31% for the third quarter of fiscal years 2011 and 2010, respectively.
Once again, we delivered strong growth in revenue and profitability this quarter, as we continue to see broad-based demand for TIBCOs event-driven platform. In Q3, total revenue grew 24%, license revenue grew 29%, and non-GAAP operating profits grew 28% over the same period a year ago, said Vivek Ranadivé, TIBCOs chairman and CEO. Through the ups and downs of the broader market, it is more clear than ever that even a little bit of the right information, delivered to the right place, at the right time, and with context, is far more valuable than all of the information in the world delivered too late. We call this vision The Two Second Advantage, and it helps explain why customers across an expanding set of industries and geographies are turning to TIBCO to address the threats and opportunities of our time and to compete and win in the 21st century.
Third Quarter Fiscal 2011 Highlights
| Record Q3 total revenue was $229.0 million; |
| Record Q3 license revenue was $90.9 million; |
| Non-GAAP operating margin was 25%; |
| Repurchased 2.6 million shares; |
| Strong mix of business across major industries including Financial Services, Telecommunications, Government, Energy, Manufacturing, Life Sciences, and Retail; |
| TIBCO closed 126 deals over $100k and had 21 deals over $1 million; and |
| TIBCO expanded its business with leading companies and agencies in the third quarter such as Banco Bilbao Vizcaya Argentaria, Geisinger System Services, Hyundai Information Services North America, Infineon Technologies, Manulife John Hancock Financial Services, Swisscom, U.S. Foodservice, Inc., Vodafone Ireland, and Whataburger Restaurants. |
Conference Call Details
TIBCO has scheduled a conference call for 4:30 pm ET / 1:30 pm PT today to discuss its third quarter results. The conference call will be hosted by InterCall and may be accessed over the internet at www.tibco.com or via dial-in at 877-293-9114 or 706-758-2055. Please join the conference call at least 10 minutes early to register. A replay of the conference call will be available until midnight PT on October 22, 2011 at www.tibco.com or via dial-in at 800-642-1687 or 706-645-9291. The pass code for both the call and the replay is 96124467.
About TIBCO
TIBCO Software Inc. (NASDAQ: TIBX) is a provider of infrastructure software for companies to use on-premise or as part of cloud computing environments. Whether its optimizing claims, processing trades, cross-selling products based on real-time customer behavior, or averting a crisis before it happens, TIBCO provides companies the two-second advantageTM the ability to capture the right information at the right time and act on it preemptively for a competitive advantage. More than 4,000 customers worldwide rely on TIBCO to manage information, decisions, processes and applications in real time. Learn more at www.tibco.com.
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TIBCO, The Power of Now, two-second advantage, and TIBCO Software are trademarks or registered trademarks of TIBCO Software Inc. in the United States and/or other countries. All other product and company names and marks mentioned in this document are the property of their respective owners and are mentioned for identification purposes only.
About Non-GAAP Financial Information
This press release includes non-GAAP financial measures. For a description of these non-GAAP financial measures, including the reasons management uses each measure, and reconciliations of these non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with Generally Accepted Accounting Principles (GAAP), please see the section entitled About Non-GAAP Financial Measures and the accompanying table entitled Reconciliation of GAAP to Non-GAAP Measures.
Legal Notice Regarding Forward-Looking Statements
This release contains forward-looking statements within the meaning of the safe harbor provisions of the federal securities laws. The final financial results for third quarter of fiscal year 2011 may differ materially from the preliminary results presented in this release due to factors that include, but are not limited to, risks associated with the final review of the results and preparation of financial statements. In addition, forward-looking statements such as statements regarding the ability of TIBCOs platform to help customers address the threats and opportunities of our time and to compete and win in the 21st century are subject to risks and uncertainties that could cause actual results to differ materially from such forward-looking statements. These risks include but are not limited to: TIBCOs ability to develop products that address changing market demands, the impact of competition from alternative business models and new product introductions, and the impact of competition from companies that are larger or have greater resources than TIBCO. Additional information regarding potential risks is provided in TIBCOs filings with the SEC, including its most recent Annual Report on Form 10-K for the year ended November 30, 2010 and Quarterly Report on Form 10-Q for the quarter ended May 29, 2011. TIBCO assumes no obligation to update the forward-looking statements included in this release.
TIBCO Software Inc.
Condensed Consolidated Balance Sheets
(unaudited)
(in thousands)
August 28, 2011 |
November 30, 2010 |
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ASSETS | ||||||||
Current assets: |
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Cash and cash equivalents |
$ | 272,215 | $ | 243,989 | ||||
Short-term investments |
239 | 1,504 | ||||||
Accounts receivable, net |
171,820 | 185,740 | ||||||
Prepaid expenses and other current assets |
64,400 | 57,889 | ||||||
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Total current assets |
508,674 | 489,122 | ||||||
Property and equipment, net |
87,096 | 88,523 | ||||||
Goodwill |
439,121 | 409,545 | ||||||
Acquired intangible assets, net |
87,176 | 104,818 | ||||||
Long-term deferred income tax assets |
75,635 | 66,671 | ||||||
Other assets |
49,850 | 46,320 | ||||||
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Total assets |
$ | 1,247,552 | $ | 1,204,999 | ||||
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LIABILITIES AND EQUITY | ||||||||
Current liabilities: |
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Accounts payable |
$ | 23,825 | $ | 23,815 | ||||
Accrued liabilities |
109,213 | 108,576 | ||||||
Deferred revenue |
218,340 | 182,895 | ||||||
Current portion of long-term debt |
2,364 | 2,269 | ||||||
Accrued restructuring costs |
1,223 | 2,714 | ||||||
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Total current liabilities |
354,965 | 320,269 | ||||||
Long-term deferred revenue |
13,026 | 15,212 | ||||||
Long-term deferred income tax liabilities |
6,314 | 4,257 | ||||||
Long-term income tax liabilities |
16,550 | 14,044 | ||||||
Long-term debt, less current portion |
36,323 | 38,108 | ||||||
Accrued restructuring costs, less current portion |
181 | 513 | ||||||
Other long-term liabilities |
2,688 | 2,865 | ||||||
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Total long-term liabilities |
75,082 | 74,999 | ||||||
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Total liabilities |
430,047 | 395,268 | ||||||
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Total equity |
817,505 | 809,731 | ||||||
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Total liabilities and equity |
$ | 1,247,552 | $ | 1,204,999 | ||||
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TIBCO Software Inc.
Condensed Consolidated Statements of Operations
(unaudited)
(in thousands, except net income per share)
Three Months Ended | Nine Months Ended | |||||||||||||||
August 28, 2011 |
August 29, 2010 |
August 28, 2011 |
August 29, 2010 |
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Revenue: |
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License |
$ | 90,853 | $ | 70,567 | $ | 242,912 | $ | 186,837 | ||||||||
Service and maintenance |
138,120 | 113,909 | 387,823 | 325,953 | ||||||||||||
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Total revenue |
228,973 | 184,476 | 630,735 | 512,790 | ||||||||||||
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Cost of revenue: |
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License |
6,929 | 8,992 | 25,566 | 24,587 | ||||||||||||
Service and maintenance |
56,425 | 41,057 | 152,462 | 115,389 | ||||||||||||
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Total cost of revenue |
63,354 | 50,049 | 178,028 | 139,976 | ||||||||||||
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Gross profit |
165,619 | 134,427 | 452,707 | 372,814 | ||||||||||||
Operating expenses: |
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Research and development |
36,041 | 30,773 | 104,902 | 88,974 | ||||||||||||
Sales and marketing |
72,182 | 59,072 | 203,614 | 168,621 | ||||||||||||
General and administrative |
15,170 | 12,390 | 43,660 | 35,643 | ||||||||||||
Amortization of acquired intangible assets |
4,632 | 4,106 | 14,553 | 11,790 | ||||||||||||
Acquisition related and other |
863 | 906 | 1,686 | 2,540 | ||||||||||||
Restructuring |
143 | 561 | 110 | 6,832 | ||||||||||||
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Total operating expenses |
129,031 | 107,808 | 368,525 | 314,400 | ||||||||||||
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Income from operations |
36,588 | 26,619 | 84,182 | 58,414 | ||||||||||||
Interest income |
246 | 398 | 1,176 | 826 | ||||||||||||
Interest expense |
(940 | ) | (1,138 | ) | (2,937 | ) | (3,103 | ) | ||||||||
Other income (expense), net |
(503 | ) | (879 | ) | (1,929 | ) | (966 | ) | ||||||||
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Income before provision for income taxes and noncontrolling interest |
35,391 | 25,000 | 80,492 | 55,171 | ||||||||||||
Provision for income taxes |
11,800 | 7,536 | 19,796 | 14,336 | ||||||||||||
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Net income |
23,591 | 17,464 | 60,696 | 40,835 | ||||||||||||
Less: Net income attributable to noncontrolling interest |
62 | 109 | 168 | 241 | ||||||||||||
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Net income attributable to TIBCO Software Inc. |
$ | 23,529 | $ | 17,355 | $ | 60,528 | $ | 40,594 | ||||||||
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Net income per share attributable to TIBCO Software Inc.: |
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Basic |
$ | 0.15 | $ | 0.11 | $ | 0.37 | $ | 0.25 | ||||||||
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Diluted |
$ | 0.14 | $ | 0.10 | $ | 0.35 | $ | 0.24 | ||||||||
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Shares used to compute net income per share attributable to TIBCO Software Inc.: |
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Basic |
161,876 | 160,238 | 161,430 | 161,274 | ||||||||||||
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Diluted |
172,957 | 171,192 | 173,703 | 170,305 | ||||||||||||
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TIBCO Software Inc.
Condensed Consolidated Statements of Cash Flows
(unaudited)
(in thousands)
Nine Months Ended | ||||||||
August 28, 2011 |
August 29, 2010 |
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Cash flows from operating activities: |
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Net income |
$ | 60,696 | $ | 40,835 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: |
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Depreciation of property and equipment |
9,801 | 10,020 | ||||||
Amortization of acquired intangible assets |
26,788 | 23,235 | ||||||
Stock-based compensation |
36,186 | 23,093 | ||||||
Deferred income tax |
3,406 | (11,282 | ) | |||||
Tax benefits related to stock benefit plans |
11,773 | 18,502 | ||||||
Excess tax benefits from stock-based compensation |
(31,506 | ) | (11,729 | ) | ||||
Other non-cash adjustments, net |
85 | 39 | ||||||
Changes in assets and liabilities: |
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Accounts receivable |
15,887 | 32,903 | ||||||
Prepaid expenses and other assets |
(8,383 | ) | 3,315 | |||||
Accounts payable |
(492 | ) | (3,354 | ) | ||||
Accrued liabilities and restructuring costs |
(8,380 | ) | (19,546 | ) | ||||
Deferred revenue |
28,273 | 7,378 | ||||||
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Net cash provided by operating activities |
144,134 | 113,409 | ||||||
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Cash flows from investing activities: |
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Purchases of short-term investments |
(76 | ) | | |||||
Maturities and sales of short-term investments |
1,441 | 169 | ||||||
Acquisitions, net of cash acquired |
(22,579 | ) | (42,578 | ) | ||||
Proceeds from private equity investments |
| 32 | ||||||
Purchases of property and equipment |
(7,458 | ) | (4,319 | ) | ||||
Restricted cash pledged as security |
(3,978 | ) | (3,669 | ) | ||||
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Net cash used in investing activities |
(32,650 | ) | (50,365 | ) | ||||
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Cash flows from financing activities: |
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Proceeds from issuance of common stock |
42,402 | 34,794 | ||||||
Repurchases of the Companys common stock |
(145,216 | ) | (101,538 | ) | ||||
Witholding taxes related to restricted stock net share settlement |
(17,472 | ) | (6,035 | ) | ||||
Excess tax benefits from stock-based compensation |
31,506 | 11,729 | ||||||
Principal payments on long-term debt |
(1,690 | ) | (2,944 | ) | ||||
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Net cash used in financing activities |
(90,470 | ) | (63,994 | ) | ||||
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Effect of foreign exchange rate changes on cash and cash equivalents |
7,212 | (2,748 | ) | |||||
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Net change in cash and cash equivalents |
28,226 | (3,698 | ) | |||||
Cash and cash equivalents at beginning of period |
243,989 | 292,529 | ||||||
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Cash and cash equivalents at end of period |
$ | 272,215 | $ | 288,831 | ||||
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About Non-GAAP Financial Measures
TIBCO provides non-GAAP measures for operating income, net income and net income per share data as supplemental information regarding TIBCOs business performance. TIBCO believes that these non-GAAP financial measures are useful to investors because they exclude non-operating charges. TIBCOs management excludes these non-operating charges when it internally evaluates the performance of TIBCOs business and makes operating decisions, including internal budgeting, performance measurement and the calculation of bonuses and discretionary compensation, because these measures provide a consistent method of comparison to historical periods. Moreover, management believes these non-GAAP measures reflect the essential revenue generation activities of TIBCO. Accordingly, management excludes stock-based compensation related to employee stock options, amortization of acquired intangible assets, costs related to formal restructuring activities, acquisition-related and other expenses, gains and losses on equity investments, and the income tax effects of the foregoing, as well as adjustments for the impact of changes in the valuation allowance recorded against TIBCOs deferred tax assets when making operational decisions.
TIBCO believes that providing the non-GAAP measures that management uses to its investors is useful to investors for a number of reasons. The non-GAAP measures provide a consistent basis for investors to understand TIBCOs financial performance on a trended basis across historical periods. In addition, it allows investors to evaluate TIBCOs performance using the same methodology and information as that used by TIBCOs management.
Non-GAAP measures are subject to material limitations as these measures are not in accordance with, or a substitute for, GAAP and thus TIBCOs definition may be different from similar non-GAAP measures used by other companies and/or analysts. However, TIBCOs management compensates for these limitations by providing the relevant disclosure of the items excluded in the calculation of non-GAAP operating income, non- GAAP net income and non-GAAP net income per share. In addition, some items such as restructuring charges that are excluded from non-GAAP net income and non-GAAP earnings per share can have a material impact on cash flows and stock compensation charges can have a significant impact on earnings. Management compensates for these limitations by evaluating the non-GAAP measure together with the most directly comparable GAAP measure. TIBCO has historically provided non-GAAP measures to the investment community as a supplement to its GAAP results, to enable investors to evaluate TIBCOs business performance in the way that management does.
The non-GAAP adjustments, and the basis for excluding them, are outlined below:
Amortization of Intangible Assets
TIBCO has incurred amortization of intangible assets, included in its GAAP financial statements, related to various acquisitions TIBCO has made. Management excludes these items, for the purposes of calculating non-GAAP operating income, non-GAAP net income and non-GAAP net income per share. TIBCO believes that eliminating this expense from its non-GAAP measures is useful to investors, because the amortization of intangible assets can be inconsistent in amount and frequency and is significantly impacted by the timing and magnitude of TIBCOs acquisition transactions, which also vary substantially in frequency from period to period.
Stock-based Compensation
TIBCO incurs stock-based compensation expense. TIBCO excludes this item for the purposes of calculating non-GAAP operating income, non-GAAP net income and non-GAAP net income per share because it is a non-cash expense that TIBCO believes is not reflective of its business performance. The nature of the stock-based compensation expense also makes it very difficult to estimate prospectively, since the expense will vary with changes in the stock price and market conditions at the time of new grants, varying valuation methodologies, subjective assumptions and different award types, making the comparison of current results with forward-looking guidance potentially difficult for investors to interpret. The tax effects of stock-based compensation expenses may also vary significantly from period to period, without any change in underlying operational performance, thereby obscuring the underlying profitability of operations relative to prior periods. Finally,
TIBCO believes that non-GAAP measures of profitability that exclude stock-based compensation are widely used by analysts and investors in the software industry.
Acquisition-related and Other Expenses
TIBCO has incurred acquisition-related and other expenses which consist of costs incurred after the issuance of a definitive term sheet for a particular transaction (whether or not such transaction is ultimately completed, remains in process or is not completed) and include legal, banker, accounting and other advisory fees of third parties and severance costs for employees of the acquired company that are terminated within 90 days of the acquisition date. Management excludes these items, for the purposes of calculating non-GAAP operating income, non-GAAP net income and non-GAAP net income per share. TIBCO believes that eliminating these expenses from its non-GAAP measures is useful to investors, because it generally would not have otherwise incurred such expenses in the periods presented as part of its continuing operations. The acquisition-related and other expenses are not recurring with respect to past transactions, can be inconsistent in amount and frequency from period to period and are significantly impacted by the timing and magnitude of TIBCOs acquisitions. While these expenses are not recurring with respect to past transactions, TIBCO generally will incur these expenses in connection with any future acquisitions.
Restructuring Activities
TIBCO has incurred restructuring expenses, included in its GAAP presentation of operating expense, primarily due to workforce related charges such as payments for severance and benefits and estimated costs of exiting and terminating facility lease commitments related to a formal restructuring plan. TIBCO excludes these items, for the purposes of calculating non-GAAP operating income, non-GAAP net income and non-GAAP net income per share, when it evaluates the continuing business performance of TIBCO. TIBCO believes that these items are not consistently recurring and do not necessarily reflect expected future operating expense, nor does TIBCO believe that they provide a meaningful evaluation of current versus past business results or the expense levels required to support TIBCOs operating plan.
TIBCO Software Inc.
Reconciliation of GAAP to Non-GAAP Measures
(unaudited)
(in thousands, except net income per share)
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||
August 28, 2011 | August 29, 2010 | August 28, 2011 | August 29, 2010 | |||||||||||||||||||||||||||||
Operating Income |
Net income attributable to TIBCO Software Inc. |
Operating Income |
Net income attributable to TIBCO Software Inc. |
Operating Income |
Net income attributable to TIBCO Software Inc. |
Operating Income |
Net income attributable to TIBCO Software Inc. |
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GAAP |
$ | 36,588 | $ | 23,529 | $ | 26,619 | $ | 17,355 | $ | 84,182 | $ | 60,528 | $ | 58,414 | $ | 40,594 | ||||||||||||||||
Amortization of intangible assets - cost of revenue |
2,492 | 2,492 | 3,911 | 3,911 | 12,235 | 12,235 | 11,445 | 11,445 | ||||||||||||||||||||||||
Amortization of intangible assets - operating expense |
4,632 | 4,632 | 4,106 | 4,106 | 14,553 | 14,553 | 11,790 | 11,790 | ||||||||||||||||||||||||
Stock-based compensation - cost of revenue |
1,717 | 1,717 | 786 | 786 | 3,548 | 3,548 | 2,109 | 2,109 | ||||||||||||||||||||||||
Stock-based compensation - R&D expense |
2,933 | 2,933 | 2,286 | 2,286 | 8,585 | 8,585 | 5,826 | 5,826 | ||||||||||||||||||||||||
Stock-based compensation - S&M expense |
4,566 | 4,566 | 3,154 | 3,154 | 12,856 | 12,856 | 7,980 | 7,980 | ||||||||||||||||||||||||
Stock-based compensation - G&A expense |
3,702 | 3,702 | 2,643 | 2,643 | 11,197 | 11,197 | 7,178 | 7,178 | ||||||||||||||||||||||||
Acquisition related and other |
863 | 863 | 906 | 906 | 1,686 | 1,686 | 2,540 | 2,540 | ||||||||||||||||||||||||
Restructuring |
143 | 143 | 561 | 561 | 110 | 110 | 6,832 | 6,832 | ||||||||||||||||||||||||
Income tax adjustment for non-GAAP |
| (5,132 | ) | | (5,903 | ) | | (22,215 | ) | | (20,328 | ) | ||||||||||||||||||||
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Non-GAAP |
$ | 57,636 | $ | 39,445 | $ | 44,972 | $ | 29,805 | $ | 148,952 | $ | 103,083 | $ | 114,114 | $ | 75,966 | ||||||||||||||||
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Diluted net income per share attributable to TIBCO Software Inc.: |
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GAAP |
$ | 0.14 | $ | 0.10 | $ | 0.35 | $ | 0.24 | ||||||||||||||||||||||||
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Non-GAAP |
$ | 0.23 | $ | 0.17 | $ | 0.59 | $ | 0.45 | ||||||||||||||||||||||||
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Shares used to compute diluted net income per share attributable to TIBCO Software Inc.: |
172,957 | 171,192 | 173,703 | 170,305 | ||||||||||||||||||||||||||||
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