SANTA CLARA, Calif. - Citrix Systems, Inc. (NASDAQ:CTXS) today reported financial results for the third quarter ended September 30, 2010.

FINANCIAL RESULTS
In the third quarter of fiscal 2010, Citrix achieved revenue of $472 million, compared to $401 million in the third quarter of fiscal 2009, representing 18 percent revenue growth.

GAAP Results
Net income for the third quarter of fiscal 2010 was $88 million, or $0.46 per diluted share, compared to $53 million, or $0.29 per diluted share, for the third quarter of 2009.  Net income for the third quarter of fiscal 2010 includes net tax benefits of approximately $18 million or $0.10 per diluted share.

Non-GAAP Results
Non-GAAP net income in the third quarter of fiscal 2010 was $118 million, or $0.62 per diluted share, compared to $80 million, or $0.43 per diluted share, in the comparable period last year. This includes net tax benefits of approximately $18 million recognized in the quarter, or $0.10 per diluted share.  Non-GAAP net income 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 proud of our Q3 performance, and the excellent strategic, operating and financial results we’ve delivered this year,” said Mark Templeton, president and chief executive officer for Citrix.

“It is clear we are at the intersection of three powerful market forces - the transformation of IT to an on-demand service; the consumerization of IT in the enterprise; and, the promise of cloud services.  These trends are driving a need for virtual computing, making Citrix and our platform more relevant and strategic.”

Q3 Financial Summary
In reviewing the third quarter results of 2010, compared to the third quarter of 2009:

• Product license revenue increased 18 percent;
• Revenue from license updates grew 15 percent;
• Online services revenue grew 16 percent;
• Technical services revenue, which is comprised of consulting, education and technical support, grew 30 percent;
• Revenue increased in the America’s region by 22 percent; increased in the Pacific region by 27 percent; and increased in the EMEA region by 9 percent;
• GAAP operating margin was 17 percent for the quarter and non-GAAP operating margin was 27 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 2009 restructuring program;
• Cash flow from operations was a record $190 million, compared with $134 million in the third quarter of 2009;
• Deferred revenue totaled $680 million, compared to $556 million on September 30, 2009; and
• The company repurchased a total value of $125 million or 1.9 million shares at an average price of $59.43.

Financial Outlook for Fourth Quarter 2010
Citrix management expects to achieve the following results during its fourth fiscal quarter of 2010 ending December 31, 2010:

• Net revenue is expected to be in the range of $500 million to $510 million;
• Interest income is expected to be in the range of $3 million to $4 million; and
• GAAP diluted earnings per share is expected to be in the range of $0.47 to $0.49. Non-GAAP diluted earnings per share is expected to be in the range of $0.59 to $0.60, excluding $0.08 related to the effects of amortization of intangible assets primarily related to business combinations, $0.10 related to the effects of stock-based compensation expenses, certain charges recorded in conjunction with the company’s 2009 restructuring program, and $(0.05) to $(0.08) for the tax effects related to these items and the effect of the differential between GAAP and non-GAAP tax rates.

Preliminary Financial Outlook for Fiscal Year 2011
The company’s preliminary financial outlook for the full fiscal year 2011 is for net revenue to be in the range of $2.04 billion to $2.07 billion, and for continued operational leverage to drive 50 basis point expansion in non-GAAP operating margin over the full fiscal year 2010. Non-GAAP operating margin excludes the effects of amortization of intangible assets primarily related to business combinations, and stock-based compensation expense. In addition, certain adjustments recorded in conjunction with the company’s 2009 restructuring program, if any, would also be excluded.

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 2010, Citrix announced:

• A new release of Citrix® XenDesktop® that includes two new technologies, Citrix XenClient™ and Citrix XenVault™, which make it easy for IT to incorporate mobile laptop users into a unified enterprise desktop virtualization strategy with unparalleled security and simplicity – including corporate-owned laptops managed by IT as well as user-owned devices used by contractors or employees in a BYOC (bring your own computer) program.
• Citrix has partnered with Cisco to provide the new Cisco Desktop Virtualization Solution with Citrix XenDesktop to deliver a cost-effective, scalable and high-performance solution for hosting, securing and optimizing the delivery of virtual desktops and applications.
• Citrix and Microsoft introduced V-Alliance, an expanded global partnership with Microsoft that gives Citrix and Microsoft partners access to special sales and marketing tools, as well as content, demo resources, promotions and training to address customers’ desktop and server virtualization needs.
• Acquired VMLogix, a leading provider of virtualization management for private and public clouds, and enhancements to its Citrix OpenCloud infrastructure platform that extend the company’s leadership position as the most widely deployed provider of virtualization and networking solutions for the open cloud.
• Frost & Sullivan recognized Citrix Online as the number two provider in revenue market share in the worldwide web conferencing market and the fastest growing provider among all top SaaS web conferencing brands in 2009. (Frost & Sullivan, “World Web Conferencing Hosted Services Market,” Roopam Jain, August 2010.)

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 15 days by dialing (800) 642-1687 or (706) 645-9291 (passcode required: 16880191).  

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 Fourth Quarter 2010, Preliminary Financial Outlook for Fiscal Year 2011 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; the company’s product concentration and its ability to develop and commercialize new products and services, including XenDesktop 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, system integrators, 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; the recruitment and retention of qualified employees, including those of acquired companies; disruptions due to changes in key personnel and succession risks; 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 or alleging the infringement of the intellectual property rights of third parties; changes in the company’s pricing and licensing models, promotional programs and product mix, all of which may impact Citrix’s revenue recognition, including with respect to XenDesktop 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 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 statements 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®, XenClient™, XenVault™, and OpenCloud 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.