(Reuters) - Tibco Software Inc TIBX.O said its contract pipeline for the next year was robust as customers become more willing to spend on large deals, and the business software maker added that its Americas business was “back to strength”.
Shares of the company, which also reported better-than-expected quarterly results, rose 8 percent in extended trading.
“The big deal pipeline is very strong, not just for Q4 but Q4 and beyond,” Chief Executive Vivek Ranadive said on a conference call with analysts.
A combination of a more stable management team, as well as the improving spending environment, is responsible for the Tibco’s strong deal pipeline, FBN Securities analyst Shebly Seyrafi said.
Average deal size also improved during the latest reported quarter.
Average size for deals worth $100,000 or greater was $692,000, an amount not seen in over six quarters, Chief Operating Officer Murray Rode said on the call.
The company said it had resolved execution challenges in its dominant Americas business.
“We said it would take three to six months to make it (changes) stick... I think we are at the tail end of that,” Ranadive said.
The company began restructuring its underperforming Americas business in June last year and removed its U.S. head of sales.
Tibco forecast adjusted earnings of 38-40 cents per share on revenue of $307 million to $315 million for the fourth quarter.
Analysts on average were expecting earnings of 40 cents per share on revenue of $311 million, according to Thomson Reuters I/B/E/S.
License revenue rose 6 percent to $105.2 million in the third quarter. Tibco gets half of its license revenue from sales of its service-oriented architecture and core infrastructure business.
“We saw further signs of operational improvement this quarter, as our focus on execution generated renewed growth in our infrastructure business,” Ranadive said in a statement.
The company had forecast license revenue of $85 million to $95 million in June.
Net income fell to $21.3 million, or 13 cents per share, in the third quarter, from $26.1 million, or 15 cents per share, a year earlier.
Excluding items, the company earned 28 cents per share.
Revenue rose 6 percent to $270.9 million.
Analysts on average had expected earnings of 22 cents per share on revenue of $258.3 million.
Shares of the company closed at $25.25 on the Nasdaq on Thursday.
Reporting by Sruthi Ramakrishnan in Bangalore; Editing by Sriraj Kalluvila