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TIBCO Software Reports Q1 Results

Company Continues to Diversify Across Vertical Markets and Expand Margins

PALO ALTO, CA -- (Marketwire) -- 03/26/09 -- TIBCO Software Inc. (NASDAQ: TIBX) today announced results for its fiscal first quarter, which ended on March 1, 2009.

Total revenue for the first quarter of fiscal 2009 was $132.9 million and net income was $5.6 million, or $0.03 per diluted share. This compares to total revenue of $146.6 million and net income of $5.5 million, or $0.03 per diluted share, as reported for the first quarter of fiscal 2008.

On a non-GAAP basis, net income for the first quarter of fiscal 2009 was $15.2 million or $0.09 per diluted share, compared with $14.1 million or $0.07 per diluted share for the first quarter of fiscal 2008. Non-GAAP operating income for the first quarter of fiscal 2009 was $21.9 million, resulting in non-GAAP operating margins of 16%. This compares to non-GAAP operating income of $18.9 million, or 13% non-GAAP operating margins in the first quarter of fiscal 2008. Non-GAAP results exclude stock-based compensation expense, amortization of acquired intangible assets, and assume a non-GAAP effective tax rate of 32% and 34% for the first quarters of fiscal 2009 and 2008, respectively.

"Despite macroeconomic headwinds and typical Q1 seasonality, we delivered strong operating profits and EPS this quarter," said Vivek Ranadivé, TIBCO's chairman and chief executive officer. "We continue to see opportunity ahead as companies look increasingly towards infrastructure software to drive greater IT efficiency, but we are also managing our business carefully so as to protect margins and returns to shareholders. Our world-class products, strong market position and disciplined operations will position us well for growth as the environment improves."

First Quarter Fiscal 2009 Highlights

--  Total revenue was $132.9 million;
--  License revenue was $44.8 million;
--  Strong mix of business across major industries including Financial
    Services, Telecommunications, Government, Transportation & Logistics, and
--  TIBCO closed 66 deals over $100k and had 11 deals over $1 million;
--  TIBCO expanded its business with leading companies in Q1 such as Abu
    Dhabi Commercial Bank, Guitar Center, HT - Hrvatske Telekomunikacije, The
    Nielsen Company, State Compensation Insurance Fund of California, UBS,
    United Airlines, and Wyndham Hotels and Resorts.

Conference Call Details

TIBCO has scheduled a conference call for 4:30 pm ET / 1:30 pm PT today to discuss its first quarter results. The conference call will be hosted by Thomson Financial and may be accessed over the Internet at www.tibco.com or via dial-in at (888) 397-5352 or (719) 325-2159. Please join the conference call at least 10 minutes early to register. A replay of the conference call will be available until midnight on April 26, 2009 at www.tibco.com or via dial-in at (888) 203-1112 or (719) 457-0820. The pass code for both the call and the replay is 2014411.


TIBCO's technology digitized Wall Street in the '80s with event-driven "Information Bus" software, which helped make real-time business a strategic differentiator in the '90s. Today, TIBCO's infrastructure software gives customers the ability to constantly innovate by connecting applications and data in a service-oriented architecture, streamlining activities through business process management, and giving people the information and intelligence tools they need to make faster and smarter decisions, what we call The Power of Now®. TIBCO serves more than 3,000 customers around the world with offices in more than 20 countries and an ecosystem of over 200 partners. Learn more at www.tibco.com.

TIBCO, The Power of Now 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 the first quarter of fiscal year 2009 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 future demand for infrastructure software, our ability to manage our business to protect margins in the future and our ability to grow the business when the economic environment improves 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: the current uncertainty in global economic conditions and its effect on the demand for enterprise software and services; and competitive factors, including but not limited to competition from alternative business models, industry consolidation and new product introductions. Additional information regarding potential risks is provided in our filings with the SEC, including our most recent Annual Report on Form 10-K for the year ended November 30, 2008. TIBCO assumes no obligation to update the forward-looking statements included in this release.

                            TIBCO Software Inc.
                  Condensed Consolidated Balance Sheets
                              (in thousands)

                                                 March 1,     November 30,
                                               -------------  -------------
                                                   2009           2008
                                               -------------  -------------

Current assets:
  Cash and cash equivalents                    $     285,723  $     254,400
  Short-term investments                               7,626         13,073
  Accounts receivable, net                           106,486        133,191
  Prepaid expenses and other current assets           47,948         49,994
                                               -------------  -------------
    Total current assets                             447,783        450,658

Property and equipment, net                          100,796        103,531
Goodwill                                             327,447        343,942
Acquired intangible assets, net                       68,744         80,437
Long-term deferred income tax assets                  70,335         70,135
Other assets                                          41,245         39,865
                                               -------------  -------------
    Total assets                               $   1,056,350  $   1,088,568
                                               =============  =============


Current liabilities:
  Accounts payable                             $      14,387  $      15,030
  Accrued liabilities                                 66,689         90,980
  Accrued excess facilities costs                      6,466          6,572
  Deferred revenue                                   147,047        140,221
  Current portion of long-term debt                    2,061          2,033
                                               -------------  -------------
    Total current liabilities                        236,650        254,836

Accrued excess facilities costs, less current
 portion                                               4,246          5,594
Long-term deferred revenue                            10,832         12,007
Long-term deferred income tax liabilities              8,314         15,329
Long-term income tax liabilities                      12,202         12,439
Long-term debt, less current portion                  41,999         42,525
Other long-term liabilities                            4,018          3,837
                                               -------------  -------------
    Total long-term liabilities                       81,611         91,731
                                               -------------  -------------
    Total liabilities                                318,261        346,567
                                               -------------  -------------

Minority interest                                        333            358

Total stockholders' equity                           737,756        741,643
                                               -------------  -------------
    Total liabilities and stockholders' equity $   1,056,350  $   1,088,568
                                               =============  =============

                            TIBCO Software Inc.
              Condensed Consolidated Statements of Operations
                (in thousands, except net income per share)

                                                   Three Months Ended
                                                 March 1,       March 2,
                                                   2009           2008
                                               ------------   ------------
 License                                       $     44,849   $     57,753
 Service and maintenance                             88,047         88,825
                                               ------------   ------------
         Total revenue                              132,896        146,578
                                               ------------   ------------

Cost of revenue:
   License                                            6,810          7,280
   Service and maintenance                           31,245         35,770
                                               ------------   ------------
         Total cost of revenue                       38,055         43,050
                                               ------------   ------------
Gross profit                                         94,841        103,528
                                               ------------   ------------

Operating expenses:
   Research and development                          25,134         25,454
   Sales and marketing                               46,126         54,388
   General and administrative                        10,628         13,798
   Amortization of acquired intangible assets         3,716          4,140
                                               ------------   ------------
         Total operating expenses                    85,604         97,780
                                               ------------   ------------
Income from operations                                9,237          5,748

 Interest income                                      1,077          3,258
 Interest expense                                      (746)          (842)
 Other income, net                                      159            238
                                               ------------   ------------
Income before provision for income taxes and
 minority interest                                    9,727          8,402
Provision for income taxes                            4,122          2,833
Minority interest, net of tax                           (21)            55
                                               ------------   ------------
Net income                                     $      5,626   $      5,514
                                               ============   ============

Net income per share:
 Basic                                         $       0.03   $       0.03
                                               ============   ============
 Diluted                                       $       0.03   $       0.03
                                               ============   ============
Shares used to compute net income per share:
 Basic                                              171,284        186,315
                                               ============   ============
 Diluted                                            172,092        190,064
                                               ============   ============

                            TIBCO Software Inc.
              Condensed Consolidated Statements of Cash Flows
                              (in thousands)

                                                   Three Months Ended
                                                 March 1,       March 2,
                                                   2009           2008
                                               ------------   ------------
Cash flows from operating activities:
  Net income                                   $      5,626   $      5,514
  Adjustments to reconcile net income to net
   cash provided by operating activities:
     Depreciation of property and equipment           3,820          4,015
     Amortization of acquired intangible
      assets                                          7,279          7,957
     Stock-based compensation                         5,361          5,150
     Deferred income tax                             (2,397)        (5,368)
     Tax benefits related to stock benefit
      plans                                           2,711          3,887
     Excess tax benefits from stock-based
      compensation                                   (2,318)        (3,801)
     Minority interest, net of tax                      (21)            55
     Other non-cash adjustments, net                    493             67
  Changes in assets and liabilities:
     Accounts receivable                             24,710         47,491
     Prepaid expenses and other assets                2,928          1,096
     Accounts payable                                  (598)        (3,778)
     Accrued liabilities and excess facilities
      costs                                         (23,931)        (9,776)
     Deferred revenue                                 5,650          7,666
                                               ------------   ------------
       Net cash provided by operating
        activities                                   29,313         60,175
                                               ------------   ------------

Cash flows from investing activities:
   Purchases of short-term investments                    -        (34,999)
   Maturities and sales of short-term
    investments                                       5,174         48,264
   Acquisitions, net of cash acquired                  (163)             -
   Purchases of private equity investments                -             (9)
   Proceeds from private equity investments               -            222
   Purchases of property and equipment               (1,318)        (2,256)
   Restricted cash pledged as security               (2,315)          (124)
                                               ------------   ------------
       Net cash provided by investing
        activities                                    1,378         11,098
                                               ------------   ------------

Cash flows from financing activities:
   Proceeds from issuance of common stock             2,127          3,464
   Repurchases of the Company's common stock              -        (45,271)
   Excess tax benefits from stock-based
    compensation                                      2,318          3,801
   Principal payments on long-term debt                (498)          (471)
                                               ------------   ------------
       Net cash provided by (used in)
        financing activities                          3,947        (38,477)
                                               ------------   ------------

Effect of foreign exchange rate changes on
 cash and cash equivalents                           (3,315)           209
                                               ------------   ------------

Net change in cash and cash equivalents              31,323         33,005

Cash and cash equivalents at beginning of
 period                                             254,400        170,237

                                               ------------   ------------
Cash and cash equivalents at end of period     $    285,723   $    203,242
                                               ============   ============

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 TIBCO's business performance. TIBCO believes that these non-GAAP financial measures are useful to investors because they exclude non-operating charges. TIBCO's management excludes these non-operating charges when it internally evaluates the performance of TIBCO's 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, charges for acquired in-process research and development, costs related to formal restructuring activities, 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 TIBCO's 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 TIBCO's financial performance on a trended basis across historical periods. In addition, it allows investors to evaluate TIBCO's performance using the same methodology and information as that used by TIBCO's management.

Non-GAAP measures are subject to material limitations as these measures are not in accordance with, or a substitute for, GAAP and thus TIBCO's definition may be different from similar non-GAAP measures used by other companies and/or analysts. However, TIBCO's 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 TIBCO's business performance in the way that management does.

The non-GAAP adjustments, and the basis for excluding them, are outlined below:

Stock-based Compensation

TIBCO incurs stock-based compensation expense under SFAS 123(R). 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 (including prior periods following the adoption of SFAS 123(R)). The exclusion of stock-based compensation from the non-GAAP measures also allows a consistent comparison of TIBCO's relative historical financial performance, since the method for accounting for stock-based compensation changed at the beginning of fiscal 2006 when TIBCO adopted SFAS 123(R). 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.

Amortization of Acquired 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 TIBCO's acquisition transactions, which also vary substantially in frequency from period to period.

                            TIBCO Software Inc.
                Reconciliation of GAAP to Non-GAAP Measures
                (in thousands, except net income per share)

                                              Three Months Ended
                                       March 1, 2009       March 2, 2008
                                    ------------------- -------------------
                                    Operating   Net     Operating   Net
                                     Income    Income    Income    Income
                                    --------- --------  --------- --------

GAAP                                $   9,237 $  5,626  $   5,748 $  5,514

  Amortization of intangible assets
   - cost of revenue                    3,563    3,563      3,817    3,817
  Amortization of intangible assets
   - operating expense                  3,716    3,716      4,140    4,140
  Stock-based compensation - cost of
   revenue                                610      610        595      595
  Stock-based compensation - R&D
   expense                              1,123    1,123      1,019    1,019
  Stock-based compensation - S&M
   expense                              1,706    1,706      1,730    1,730
  Stock-based compensation - G&A
   expense                              1,923    1,923      1,806    1,806
  Income tax adjustment for
   non-GAAP (1)                             -   (3,036)         -   (4,480)

                                    --------- --------  --------- --------
Non-GAAP                            $  21,878 $ 15,231  $  18,855 $ 14,141
                                    ========= ========  ========= ========

Diluted net income per share:
  GAAP                                        $   0.03            $   0.03
                                              ========            ========
  Non-GAAP                                    $   0.09            $   0.07
                                              ========            ========

Shares used to compute diluted net
 income per share                              172,092             190,064
                                              ========            ========

(1) The estimated non-GAAP effective tax rate was 32% and 34% for the
    first quarter of fiscal 2009 and 2008, respectively, and has been used
    to adjust the provision for income taxes for non-GAAP purposes.

Media Relations Contact:
Phillip Tree
TIBCO Software Inc.
(650) 846-8529
Email Contact

Investor Relations Contact:
Matthew Langdon
TIBCO Software Inc.
(650) 846-5747
Email Contact

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