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Citrix Reports Third Quarter Financial Results
Quarterly Revenue of $401 million
GAAP Diluted Earnings Per Share of $0.29
Non-GAAP Diluted Earnings Per Share of $0.43
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- Citrix Reports Third Quarter Financial Results
Citrix Q3 2009 Earnings Release
- Citrix Reports Third Quarter Financial Results
FORT LAUDERDALE, Fla. » 10/21/2009 » Citrix Systems, Inc. (Nasdaq:CTXS) today reported financial results for the third quarter of fiscal 2009 ended September 30, 2009.
FINANCIAL RESULTS
In the third quarter of fiscal 2009, Citrix achieved revenue of $401 million, compared to $399 million in the third quarter of fiscal 2008.
GAAP Results
Net income for the third quarter of fiscal 2009 was $53 million, or $0.29 per diluted share, compared to $49 million, or $0.26 per diluted share, for the third quarter of 2008.
Non-GAAP Results
Non-GAAP net income in the third quarter of fiscal 2009 and 2008 was $80 million, or $0.43 per diluted share. Non-GAAP net income for both periods excludes the effects of amortization of intangible assets primarily related to business combinations and stock-based compensation expense and the tax effects related to those items. In addition, non-GAAP net income for the third quarter of 2009 excludes charges recorded in connection with the restructuring program that the company implemented in January 2009, and the tax effects related to those items.
“I’m pleased with our solid third quarter results,” said Mark Templeton, president and chief executive officer for Citrix. “Our sales, product and operational teams executed very well in a tough economic climate to not only post good results, but to strengthen Citrix leadership in the web collaboration, desktop virtualization and datacenter transformation markets.”
Q3 Financial Summary
In reviewing the third quarter results of 2009, compared to the third quarter of 2008:
- Product license revenue decreased 18 percent;
- Revenue from license updates grew 7 percent;
- Online services revenue grew 21 percent;
- Technical services revenue, which is comprised of consulting, education and technical support, grew 20 percent;
- Revenue decreased in the EMEA region by 15 percent; decreased in the Pacific region by 5 percent; and increased in the America’s region by 5 percent;
- Deferred revenue grew to $556 million, compared to $481 million on September 30, 2008;
- GAAP operating margin was 14 percent for the quarter and non-GAAP operating margin was 25 percent for the quarter, excluding the effects of amortization of intangible assets primarily related to business combinations, stock-based compensation expense and costs associated with the restructuring program;
- Cash flow from operations was $134 million; and
- The company repurchased 2.1 million shares at an average price of $35.56.
Financial Outlook
Due to the volatility of market conditions in the foreseeable future, it is more likely that the company’s actual results could differ materially from expectations. Similar to the financial outlook we have provided for the last two fiscal quarters, Citrix is continuing to provide less quantitative guidance than it has historically.
Financial Outlook for Fourth Quarter 2009
Citrix management expects to achieve the following results during its fourth fiscal quarter 2009 ending December 31, 2009:
- Net revenue is expected to increase three to four percent compared to the fourth quarter of 2008; and
- Non-GAAP operating margin is expected to increase 50 to 100 basis points compared to the fourth quarter 2008, excluding the effects of amortization of intangible assets primarily related to business combinations, stock-based compensation expense, and restructuring charges as well as prior year exclusions of in-process research and development related to business combinations.
- Interest income is expected to be $5 million.
The above statements are based on current expectations. These statements are forward-looking, and actual results may differ materially.
Financial Outlook for Fiscal Year 2009
The company’s financial outlook for the full fiscal year 2009 for both net revenue and non-GAAP operating margin remains unchanged.
- The company expects net revenue to increase modestly as compared to 2008; and
- Non-GAAP operating margin is expected to increase by as much as 100 basis points compared to non-GAAP operating margin from the prior year, excluding the effects of amortization of intangible assets primarily related to business combinations, stock-based compensation expense, and restructuring charges, as well as prior year exclusions of in process research and development related to business combinations.
The above statements are based on current expectations. These statements are forward-looking, and actual results may differ materially.
Preliminary Financial Outlook for Fiscal Year 2010
The company’s preliminary financial outlook for the full fiscal year 2010 is for net revenue to increase between eight and nine percent over full fiscal year 2009, and to continue operational leverage to drive a 75 to 100 basis point expansion in non-GAAP operating margin over the full fiscal year 2009. Non-GAAP operating margin excludes the effects of amortization of intangible assets primarily related to business combinations, stock-based compensation expense, and restructuring charges.
The above statements are based on current expectations. These statements are forward-looking, and actual results may differ materially.
Company, Product and Alliance Highlights
During the third quarter of 2009, Citrix announced:
- Availability of enhancements to Citrix® XenApp™ 5 including the ability to deliver on-demand applications from virtual machines (VMs) for 100 percent application compatibility, as well as new HDX™ 3D technology, also available in Citrix® XenDesktop®, that provides a high-definition experience for even the most intensive multimedia applications.
- Availability of the Citrix® NetScaler® VPX™ virtual appliance as well as a new Citrix Ready™ Open Networking Program to support it.
- Two new midrange appliances to the Citrix® NetScaler® MPX™ family of application networking systems that offer full enterprise functionality at a lower cost and half the power consumption of competing solutions.
- Xen.org introduced the Xen® Cloud Platform (XCP) initiative to accelerate the adoption of open source, enterprise-class cloud computing infrastructures.
- Downloads and activations of the free Citrix® XenServer™ virtualization platform surged this quarter, now totaling more than 150,000 users for the year – including 20 percent of Fortune 500 companies – in over 50 countries.
Conference Call Information
Citrix will host a conference call today at 4:45 p.m. ET to discuss its financial results, quarterly highlights and business outlook. The call will include a slide presentation, and participants are encouraged to listen to and view the presentation via webcast at http://www.citrix.com/investors.
The conference call may also be accessed by dialing: (888) 799-0519 or (706) 634-0155, using passcode: CITRIX. A replay of the webcast can be viewed by visiting the Investor Relations section of the Citrix corporate website at http://www.citrix.com/investors for approximately 30 days. In addition, an audio replay of the conference call will be available for approximately fifteen days by dialing (800) 642-1687 or (706) 645-9291 (passcode required: 35203404).
About Citrix
Citrix Systems, Inc. (NASDAQ:CTXS) is a leading provider of virtualization, networking and cloud computing solutions for more than 230,000 organizations worldwide. Its Citrix Delivery Center™, Citrix Cloud Center™ (C3) and Citrix Online product families radically simplify computing for millions of users, delivering desktops and applications as an on-demand service to any user, in any location on any device. Citrix customers include the world’s largest Internet companies, 99 percent of Fortune Global 500 enterprises, and hundreds of thousands of small businesses and prosumers worldwide. Citrix partners with over 10,000 companies worldwide in more than 100 countries. Founded in 1989, annual revenue in 2008 was $1.6 billion.
For Citrix Investors
This release contains forward-looking statements which are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933 and of Section 21E of the Securities Exchange Act of 1934. The forward-looking statements in this release do not constitute guarantees of future performance. Investors are cautioned that statements in this press release, which are not strictly historical statements, including, without limitation, statements by Citrix’s president and chief executive officer, statements contained in the Financial Outlook for Fourth Quarter 2009, Fiscal Year 2009 and Fiscal Year 2010 sections and under the Non-GAAP Financial Measures Reconciliation section, and statements regarding management’s plans, objectives and strategies, constitute forward-looking statements. Such forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those anticipated by the forward-looking statements, including, without limitation, the impact of the global economy and uncertainty in the IT spending environment, including Citrix’s European markets; the success and growth of the company’s product lines, including risks associated with successfully introducing new products into Citrix’s distribution channels, including XenDesktop 4; the company’s product concentration and its ability to develop and commercialize new products and services, including XenDesktop 4 and its other virtualization offerings, while maintaining growth in its core products, especially XenApp; failure to execute Citrix’s sales and marketing plans; failure to successfully partner with key distributors, resellers, OEM’s and strategic partners and the company’s reliance on and the success of those partners for the marketing and distribution of the company’s products; the company’s ability to maintain and expand its business in small sized and large enterprise accounts; the size, timing and recognition of revenue from significant orders; the success of investments in its product groups, foreign operations and vertical and geographic markets; Citrix’s ability to develop server, application and desktop virtualization products, and jointly market those products with Microsoft; the introduction of new products by competitors or the entry of new competitors into the markets for Citrix’s products; failure to further develop and successfully market the technology and products of acquired companies, including the possible failure to achieve or maintain anticipated revenues and profits from acquisitions; the management of anticipated future growth and the recruitment and retention of qualified employees, including those of acquired companies, and any disruptions due to changes in key personnel; risks in effectively controlling operating expenses, including failure to manage unexpected expenses and to achieve anticipated cost savings from Citrix’s cost reduction initiatives; impairment of the value of the company’s investments; the effect of new accounting pronouncements on revenue and expense recognition; litigation, including litigation challenging our intellectual property rights; changes in the company’s pricing and licensing models, including with respect to XenDesktop 4, or policies or those of its competitors; charges in the event of the impairment of assets acquired through business combinations and licenses; competition and other risks associated with the markets for Citrix’s Web-based access, collaboration and customer assistance services and for our Web application delivery appliances; unanticipated changes in tax rates or exposure to additional tax liabilities; risks of political and social turmoil; and other risks detailed in the company’s filings with the Securities and Exchange Commission. Citrix assumes no obligation to update any forward-looking information contained in this press release or with respect to the announcements described herein.
Use of Non-GAAP Financial Measures
In Citrix’s earnings release, conference call, slide presentation or webcast, Citrix may use or discuss non-GAAP financial measures as defined by SEC Regulation G. The GAAP financial measure most directly comparable to each non-GAAP financial measure used or discussed and a reconciliation of the differences between each non-GAAP financial measure and the comparable GAAP financial measure are included in this press release after the condensed consolidated financial statement or can be found on the Investor Relations page of the Citrix corporate Web site at http://www.citrix.com/investors.
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Citrix®, XenApp™, XenServer™, XenDesktop®, NetScaler®, MPX™, HDX™, Citrix Essentials™, Citrix Cloud Center™, Citrix Delivery Center™, and Citrix Ready™ are trademarks of Citrix Systems, Inc. and/or one or more of its subsidiaries, and may be registered in the U.S. Patent and Trademark Office and in other countries. All other trademarks and registered trademarks are property of their respective owners.
