Prospectus Summary
You should read the following summary together with the more detailed information regarding our company and the common stock being sold and our financial statements and notes to those statements appearing elsewhere in this prospectus. Except as otherwise specified, all information in this prospectus (1) does not take into account the possible issuance of up to 750,000 additional shares of common stock in the underwritten offering upon the exercise of the underwriters' right to purchase such shares and (2) reflects a 3-for-1 split of our outstanding capital stock effected on February 18, 2000.
Our Business
We are a leading provider of eBusiness infrastructure software products that enable business-to-business, business-to-consumer and business-to-employee solutions. Our software products allow businesses to integrate internal operations, business partners and customer channels in real-time. Through our products and services, we enable computer applications and systems to communicate efficiently across the Internet and intranets to conduct electronic business, or eBusiness.
Our TIB products facilitate the distribution of information and integration of business processes by connecting applications and data sources through a technology called The Information Bus, or the TIB. This technology uses a publish/subscribe model, in which a user specifies the type of information desired only once, and the specified information is then delivered to the user automatically each time it becomes available. The TIB technology allows multiple applications, web sites, databases and other content sources to be integrated and managed in real-time within a common framework. The TIB products also enable enterprises to extend their information technology infrastructures and business processes across the Internet. Our products are employed in high- performance environments and provide enterprises with a comprehensive and scalable method of conducting eBusiness.
Our products are currently in use by over 300 companies in diverse markets such as telecommunications, manufacturing, energy, financial services and Internet portals. Current users of our TIB products include 3Com, Adidas, AltaVista, Banque Nationale de Paris, Bechtel, BellSouth, Cedel Global Services, Chevron, Cisco Systems, Compaq, Dalkia, Delta Air Lines, Digital Impact, Ericsson, Fidelity, Financial Times, First National Bank of South Africa, Gateway, Goldman Sachs, Hyundai, Intel, Intuit, Level 3, Lucent Technologies, Marubeni, Mobil, Motorola, The Nasdaq Stock Market, National Westminster Bank, NEC Electronics, Pacific Power, PageNet, Philips Medical, Procter & Gamble, SAP, Seagate, Telia, Taiwan Semiconductor Manufacturing Company, United Microelectronics Corp., Unibank and Yahoo!. Each of these companies, other than financial services companies, accounted for at least $500,000 of our revenue over the period from January 1997 through November 30, 1999. Each of the financial services companies accounted for at least $200,000 of our revenue during that period.
In fiscal 1997, 1998 and 1999, we had revenue of $35.3 million, $52.8 million and $96.4 million. During those periods, we incurred net losses of $4.7 million, $13.0 million and $19.5 million. As of November 30, 1999, we had an accumulated deficit of approximately $37.1 million.
Our Market Opportunity As the range of computing environments and software applications used across the typical business grows, creating a real-time eBusiness enterprise is becoming vastly more complex. In today's increasingly global and competitive environment, applications must be tightly integrated within and between enterprises in order to effectively manage, grow and extend the business. Enabling real-time transactions and information exchange among suppliers, customers and partners can enhance management and employee productivity, create manufacturing efficiencies and improve customer service. We believe that many application integration and niche eBusiness connectivity solutions have failed to address all of today's eBusiness needs because they lack comprehensiveness or flexibility, or use network resources inefficiently.
Our Strategy
Our objective is to establish the TIB technology as the leading software solution for eBusiness infrastructure. The core elements of our strategy include:
. Promote the widespread adoption of our technology. We seek to establish our technology and products as the industry standard by embedding our technology in leading vendors' products and further extending the functionality of our solution.
. Enhance our position as a provider of portal infrastructure. We plan to leverage our technology to offer solutions that enable companies to build robust eBusiness portals.
. Focus on licensing our products. We plan to focus on licensing our products. To support this strategy, we plan to expand our relationships with systems integrators and professional services firms.
. Leverage our expertise in specific markets. We plan to expand our presence in markets such as telecommunications, manufacturing, energy and Internet portals and capitalize on the presence of Reuters, the global news and information group, in the financial services sector.
. Expand our international market presence. We intend to continue building the strength of our international presence in regions such as Europe and Asia.
Company Background
We are the successor to a portion of the business of Teknekron Software Systems, Inc., a leading innovator in the development of software infrastructure for the integration and delivery of market data, such as stock quotes, news and other financial information, in trading rooms of large banks and financial services institutions. Teknekron was acquired by Reuters in March 1994. In January 1997, we were established as a separate entity to focus on creating and marketing software solutions for use in the integration of business information, processes and applications in diverse industries outside the financial services market.
Reuters holds a majority equity interest in our company, but has agreed to limit its voting rights. Nevertheless, Reuters has significant influence over our company. See "Relationship with Reuters and Certain Transactions-- Stockholders Agreement" beginning on page 57 for a description of arrangements that enables Reuters to exercise influence over our company. We license the technology underlying some of our TIB products from Reuters, and Reuters is our preferred distributor in the financial services market. When we refer to Reuters in this prospectus, we include Reuters Group PLC and its consolidated subsidiaries, including TFT, but excluding our company, TIBCO Software.
Recent Developments
In February 2000, our board of directors increased its size by one seat and nominated Matthew J. Szulik to serve as a director. Mr. Szulik has served as Chief Executive Officer of Red Hat, Inc. since November 1999, as its President since November 1998 and as a director of Red Hat since April 1999. Prior to that, he served as Red Hat's Chief Operating Officer from November 1998 to April 1999. Our stockholders will vote on the election of Mr. Szulik to our board of directors at our 2000 Annual Meeting of Stockholders, which is scheduled to occur on April 12, 2000.
The Offering
Shares offered by TIBCO Software.............. 4,000,000 shares Shares offered by the selling stockholders.... 1,000,000 shares Shares to be outstanding after the offering .. 185,215,000 shares (1) Use of proceeds............................... For general corporate purposes, principally working capital and capital expenditures, and investments in, or acquisitions of, complementary technologies or products. No such investments or acquisitions have been specifically identified. Nasdaq National Market symbol................. TIBX (1)Based on 181,215,000 shares outstanding as of November 30, 1999.
Summary Financial Information (in thousands, except per share data) The "As Adjusted" column under Balance Sheet Data gives effect to the sale of 4,000,000 shares in this offering and our application of the net proceeds therefrom.
Eleven Year Ended
Months Ended November 30,
November 30, ---------------------
1997 1998 1999
Statement of Operations Data:
Revenue: License................................... $ 6,219 $ 17,495 $ 56,916 Service and maintenance................... 29,055 35,262 39,524 Total revenue............................ 35,274 52,757 96,440 Gross profit............................... 19,427 25,075 59,828 Loss from operations....................... (5,203) (14,043) (21,582) Net loss................................... (4,663) (12,951) (19,481) Net loss per share-basic and diluted....... $ (0.08) $ (0.22) $ (0.19) Weighted average common shares outstanding........................ 57,606 60,033 104,112
November 30, 1999 November 30, --------------------- 1998 Actual As Adjusted Balance Sheet Data:
Cash, cash equivalents, deposits held by Reuters and short-term investments........ $ 15,970 $ 89,807 $ Working capital............................ 18,301 95,603 Total assets............................... 36,289 179,638 Accumulated deficit........................ (17,614) (37,095) (37,095) Stockholders' equity....................... 21,704 137,918