Tibco Software Looks Like a Great Buy
So it came as no surprise that Tibco Software
While the macro environment has certainly taken a toll on Oracle, Tibco's struggles span a much longer period. Although an argument can be made that the stock's recent decline has placed Tibco shares in value territory, I do wonder how long investors are willing to wait for management's turnaround vision to be realized.
It's tough for me to blame those who bailed on the stock after these latest results, but I also think it was premature to have done so.
As noted, not much was expected ahead of Tibco's report. The company posted revenue of $246 million, down 1% year over year and up just 3% sequentially. Again, given the soft patch that others including Red Hat
License revenue wasn't extraordinary, but licenses did grow 5% sequentially to $82 million. Service revenue was a bit more pedestrian, growing just 2.5% sequentially to $164 million. But the company is doing well in maintenance revenue, which continues to grow at a better-than-expected rate, up 6% year over year and 3% sequentially.
It certainly seems as if management's efforts to reorganize infrastructure sales is moving along pretty well. Remarkably, there is now light at the end of the tunnel -- even amid prolonged weakness in Europe and government spending. Profitability, particularly the company's margins, was the biggest question mark heading into the quarter.