Apr 212010 |
Citrix Reports First Quarter Financial ResultsQuarterly revenue of $414 million GAAP diluted earnings per share of $0.25 Non-GAAP diluted earnings per share of $0.40 Board authorizes $400m increase to share repurchase program |
SANTA CLARA, Calif. - Citrix Systems, Inc. (NASDAQ:CTXS) today reported financial results for the first quarter of fiscal 2010 ended March 31, 2010.
FINANCIAL RESULTS
In the first quarter of fiscal 2010, Citrix achieved revenue of $414 million, compared to $369 million in the first quarter of fiscal 2009, representing 12 percent revenue growth.
GAAP Results
Net income for the first quarter of fiscal 2010 was $47 million, or $0.25 per diluted share, compared to $7 million, or $0.04 per diluted share, for the first quarter of 2009.
Non-GAAP Results
Non-GAAP net income in the first quarter of fiscal 2010 was $75 million, or $0.40 per diluted share, compared to $59 million, or $0.32 per diluted share, in the comparable period last year. Non-GAAP net income for both periods excludes the effects of amortization of intangible assets primarily related to business combinations, stock-based compensation expenses and 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 results for the first quarter,” said Mark Templeton, president and chief executive officer for Citrix. “We saw strong traction across our strategic markets - virtualization, networking and collaboration - and showed good discipline in our operations, leading to solid increases in revenue and profitability. As the IT world moves away from distributed computing into the virtual computing era, Citrix is becoming more strategic with customers everyday.”
In addition to quarterly financial results, Citrix also announced that its board of directors has authorized it to repurchase up to an additional $400 million of its common stock. As of March 31, 2010, approximately $58 million remained in authority from previous approvals.
Q1 Financial Summary
In reviewing the first quarter results of 2010, compared to the first quarter of 2009:
- In reviewing the first quarter results of 2010, compared to the first quarter of 2009:
- Product license revenue increased 10 percent;
- Revenue from license updates grew 10 percent;
- Online services revenue grew 18 percent;
- Technical services revenue, which is comprised of consulting, education and technical support, grew 18 percent;
- Revenue increased in the America’s region by 14 percent; increased in the EMEA region by 6 percent; and increased in the Pacific region by 13 percent;
- Deferred revenue totaled $636 million, compared to $535 million on March 31, 2009;
- GAAP operating margin was 13 percent for the quarter, compared to one percent in the first quarter of 2009, and non-GAAP operating margin was 23 percent for the quarter, compared to 19 percent in the first quarter of 2009, excluding the effects of amortization of intangible assets primarily related to business combinations, stock-based compensation expense and costs associated with the 2009 restructuring program;
- Cash flow from operations was $144 million, compared with $82 million in the first quarter of 2009; and
- The company repurchased 2.3 million shares at an average price of $43.71.
Financial Outlook for Second Quarter 2010
Citrix management expects to achieve the following results during its second fiscal quarter of 2010 ending June 30, 2010:
- Net revenue is expected to be in the range of $430 million to $440 million;
- Interest income is expected to be $3 million to $4 million;
- Weighted average shares outstanding is expected to be in the range of 190 million to 192 million shares; and
- GAAP diluted earnings per share is expected to be in the range of $0.28 to $0.29. Non-GAAP diluted earnings per share is expected to be in the range of $0.44 to $0.45, excluding $0.08 related to the effects of amortization of intangible assets primarily related to business combinations, $0.14 related to the effects of stock-based compensation expenses, certain charges recorded in conjunction with the company’s 2009 restructuring program, if any, and, $(0.05) to $(0.07) for the effect of the differential between the GAAP and non-GAAP tax rates and tax effects related to these items.
The above statements are based on current expectations. These statements are forward-looking, and actual results may differ materially.
Financial Outlook for Fiscal Year 2010
Citrix management expects to achieve the following results during its fiscal year 2010 ending December 31, 2010:
- Net revenue is expected to be in the range of $1.765 billion to $1.78 billion;
- Non-GAAP operating margin is expected to increase by 100 basis points compared to fiscal year 2009, excluding the effects of amortization of intangible assets primarily related to business combinations and stock-based compensation expense, and certain charges recorded in conjunction with the company’s 2009 restructuring program;
- Interest income is expected to be $16 million to $19 million; and
- GAAP diluted earnings per share is expected to be in the range of $1.29 to $1.34. Non-GAAP diluted earnings per share is expected to be in the range of $1.88 to $1.91, excluding $0.33 related to the effects of amortization of intangible assets primarily related to business combinations, $0.52 related to the effects of stock-based compensation expenses, certain charges recorded in conjunction with the company’s 2009 restructuring program and $(0.23) to $(0.30) for the effect of the differential between the GAAP and non-GAAP tax rates and tax effects related to these items.
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 first quarter of 2010, Citrix announced:
- The Feature Pack 1 release of Citrix® XenDesktop® 4, which sets new scalability records, simplifies management, and lets end user access virtual desktops up to five times faster - all in order to accelerate the adoption of desktop virtualization.
- Citrix XenDesktop 4 was honored as an InfoWorld 2010 Technology of the Year Award winner, selected by editors and reviewers as one of the best and most innovative products on the IT landscape.
- The release of Citrix® XenApp® 6, with major enhancements to the de facto standard for on-demand application delivery that simplifies management, enhances scalability, and expands high-definition support and self-service access to apps from any device, including PCs, Macs, laptops and smart phones.
- A new high-performance appliance in its Citrix® NetScaler® MPX™ family of application networking systems to round out a comprehensive and cost-effective product line that spans small, single application virtual appliances to massive, high-end systems designed to power the world’s busiest websites with unmatched scalability.
- A joint collaboration agreement with Microsoft to accelerate virtual desktop adoption. The agreement includes the “VDI Kick Start” promotion, which offers new customers a more than 50 percent discount off the estimated retail price and the “Rescue for VMware VDI” promotion, which allows VMware customers to trade in up to 500 View licenses at no additional cost in order to “jump start” a complete VDI solution. Additionally, the companies will work together to enable the high-definition HDX technology in Citrix XenDesktop to enhance and extend the capabilities of the Microsoft RemoteFX platform, ensuring that virtual desktops are a rich, high-definition experience for all users, regardless of their device, location or role.
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 30 days by dialing (800) 642-1687 or (706) 645-9291 (passcode required: 66478600).
About Citrix
Citrix Systems, Inc. (NASDAQ:CTXS) is a leading provider of virtual computing solutions that help companies deliver IT as an on-demand service. Founded in 1989, Citrix combines virtualization, networking, and cloud computing technologies into a full portfolio of products that enable virtual workstyles for users and virtual datacenters for IT. More than 230,000 organizations worldwide rely on Citrix to help them build simpler and more cost-effective IT environments. Citrix partners with over 10,000 companies in more than 100 countries. Annual revenue in 2009 was $1.61 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 Second Quarter 2010 and Fiscal Year 2010 sections, 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 as the enterprise software landscape evolves; 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; 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, packaging and licensing models which may impact Citrix’s revenue recognition, including with respect to XenDesktop 4 and SaaS business models, 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 the company’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®, XenDesktop®, XenApp® NetScaler®, MPX™ 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.
