Oracle, Red Hat, and Tibco Report

Oracle Corp., Red Hat Inc., and Tibco Software Inc. announced their quarterly financial results. The results were positive.

Focal Points:

• Oracle stated its third quarter revenues were $5.35 billion, an increase of 21 percent year-over-year. New software license revenues were $1.62 billion, a 16 percent increase from the previous year's quarter, while software license product update and support revenues were $2.62 billion, a gain of 25 percent year-over-year. Services revenues grew 21 percent to $1.11 billion. On a generally accepted accounting principal basis (GAAP) quarterly net income was $1.3 billion, up 30 percent from in the third quarter of the previous year. Database and middleware new license revenues increased 20 percent while applications new license revenues grew only seven percent. While the results looked good, Wall Street analysts were disappointed that sales of new licenses were at the low end of expectations.
• Red Hat reported its fourth quarter and fiscal 2008 yearly results. Total revenue for the quarter was $141.5 million, an increase of 27 percent from the year ago quarter while subscription revenue was $121.9 million, up 27 percent year-over-year. On a GAAP basis net income for the quarter was $22.0 million compared with $20.5 million in the year ago quarter. For the full year, total revenue was $523.0 million, a growth of 31 percent over fiscal 2007 revenue, and subscription revenue was $449.8 million, up 32 percent from the prior year. For the full year, net income was $76.7 million, a 28 percent increase from the $59.9 million earned in the prior year.
• Tibco's first quarter total revenues were $146.6 million, a year-over-year growth of 17 percent. License revenues were $57.8 million, an increase of 11 percent on a year-over-year basis while its services and maintenance revenue reached $88.8 million, up 21 percent year-over-year. On a GAAP basis net income was $5.5 million, a drop from the 2007 net income of $10.4 million. Included in the quarters' results are the Spotfire revenues and expenses, which impacted margins, according to company officials. Spotfire, a business intelligence software firm was acquired by Tibco in June, 2007.

Experton Group believes executives are still investing in software, even in an economic downturn, as they recognize that the proper investments can reduce their per unit sales, general, and administrative (SG&A) costs.  While the IT industry is not immune to economic conditions, company executives recognize they can make improvements in their bottom lines through productivity gains – and business software is one such solution – even if top line growth is stagnant or down. IT executives should be looking for software applications and/or tools that can be rapidly deployed into production within their fiscal year and yield gains that more than offset the costs of acquiring and implementing the new software solution.