Jan 262011 |
Citrix Reports 2010 Fourth Quarter and Fiscal Year Financial ResultsQuarterly revenue of $530 million Quarterly deferred revenue increases $99 million sequentially Fourth quarter GAAP diluted earnings per share of $0.49 Fourth quarter non-GAAP diluted earnings per share of $0.65 |
SANTA CLARA, Calif. - Citrix Systems, Inc. (NASDAQ:CTXS) today reported financial results for the fourth quarter and fiscal year ended December 31, 2010.
FINANCIAL RESULTS
In the fourth quarter of fiscal 2010, Citrix achieved revenue of $530 million, compared to $451 million in the fourth quarter of fiscal 2009, representing 17 percent revenue growth. For the fiscal year 2010, Citrix reported annual revenues of $1.87 billion, compared to $1.61 billion in the previous year, a 16 percent increase.
GAAP Results
Net income for the fourth quarter of fiscal 2010 was $94 million, or $0.49 per diluted share, compared to $88 million, or $0.47 per diluted share, for the fourth quarter of 2009. Annual net income for 2010 was $277 million, or $1.46 per diluted share, compared to $191 million, or $1.03 per diluted share in fiscal 2009.
Non-GAAP Results
Non-GAAP net income in the fourth quarter of fiscal 2010 was $125 million, or $0.65 per diluted share, compared to $123 million, or $0.66 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.
Annual non-GAAP net income for 2010 was $396 million, or $2.08 per diluted share, compared to $334 million, or $1.81 per diluted share, in 2009. 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.
“In 2010, we achieved stronger market leadership positions in Desktop Virtualization, Web Collaboration and App Networking. Citrix gained significant strategic visibility in the IT executive suite, and we delivered solid operating leverage in our financial model,” said Mark Templeton, president and chief executive officer for Citrix.
“I’m very pleased with our results - a fantastic year.
“Our customers are telling us they want to simplify enterprise computing, they want to embrace IT consumerization, and they are ready to adopt more cloud services - all to transform IT to an on-demand service. These three powerful market forces are driving a need for Citrix virtual infrastructure and making our platform more relevant and strategic.
“We will focus in 2011 on further leveraging our unique market opportunity by broadening the reach of web collaboration, by enabling public and private clouds, and driving mainstream adoption of desktop virtualization.”
Q4 Financial Summary
In reviewing the fourth quarter results of 2010, compared to the fourth quarter of 2009:
- Product license revenue increased 17 percent;
- Revenue from license updates grew 13 percent;
- Online services revenue grew 16 percent;
- Technical services revenue, which is comprised of consulting, education and technical support, grew 40 percent;
- Revenue increased in the Americas’ region by 27 percent, the EMEA region by 7 percent and the Pacific region by 15 percent;
- Deferred revenue totaled $779 million, compared to $619 million on December 31, 2009;
- GAAP operating margin was 21 percent for the quarter, and non-GAAP operating margin was 28 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 $179 million, compared with $178 million in the fourth quarter of 2009; and
- The company repurchased 1.9 million shares at an average price of $65.90.
Annual Financial Summary
In reviewing 2010 results compared to 2009 results:
- Product license revenue grew 15 percent;
- License updates revenue grew 13 percent;
- Online services revenue grew 17 percent;
- Technical services revenue, which is comprised of consulting, education and technical support, grew 31 percent;
- Revenue increased in the Americas’ region by 20 percent, the EMEA region by 8 percent, and the Pacific region by 21 percent;
- GAAP operating margin was 17 percent for fiscal 2010, and non-GAAP operating margin was 26 percent, 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 $616 million for fiscal 2010 compared with $484 million last year; and
- During fiscal 2010, the company repurchased 8.3 million shares at an average price of $53.14.
Financial Outlook for Fiscal Year 2011
Citrix management expects to achieve the following results during its fiscal year 2011 ending December 31, 2011:
- Net revenue is expected to be in the range of $2.10 billion to $2.14 billion;
- GAAP diluted earnings per share is expected to be in the range of $1.78 to $1.84. Non-GAAP diluted earnings per share is expected to be in the range of $2.29 to $2.33, excluding $0.34 related to the effects of amortization of intangible assets primarily related to business combinations, $0.45 related to the effects of stock-based compensation expenses, charges recorded in conjunction with the company’s 2009 restructuring program, if any, and $(0.24) to $(0.34) 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 First Quarter 2011
Citrix management expects to achieve the following results during its first fiscal quarter of 2011 ending March 31, 2011:
- Net revenue is expected to be in the range of $470 million to $475 million; and
- GAAP diluted earnings per share is expected to be in the range of $0.27 to $0.28. Non-GAAP diluted earnings per share is expected to be in the range of $0.40 to $0.41, excluding $0.08 related to the effects of amortization of intangible assets primarily related to business combinations, $0.11 related to the effects of stock-based compensation expenses, 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.
- Non-GAAP tax rate, which excludes the effects of amortization of intangible assets primarily related to business combinations, stock-based compensation expense and charges recorded in conjunction with the company’s 2009 restructuring program, if any, is expected to be in the range of 22% to 23%.
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 fourth quarter of 2010, Citrix announced:
- Entered into a definitive agreement to acquire Netviewer AG, a privately held European software-as-a-service (SaaS) vendor in collaboration and IT services. Citrix currently expects this acquisition to close in the first quarter of 2011.
- The worldwide availability of Citrix® XenDesktop® 5, which supports a wide range of new consumer devices, thousands of new third-party products and an entirely new generation of web and SaaS applications. Citrix also announced a new Desktop Transformation Model, which includes a variety of technical services to accelerate desktop virtualization implementations.
- Citrix Receiver™ for Chrome Notebooks, which will allow Google customers to run their existing Windows business applications directly on the new web-based Chrome notebooks with a native user experience, fast performance and full enterprise security.
- A new version of Citrix XenServer® with significant new storage and networking innovations.
- Two additions to the Citrix OpenCloud platform, Access and Bridge, that extend the trust, performance and security of the enterprise datacenter to any internal or external cloud environment, regardless of hypervisor, network or application type.
- A major release of Citrix Receiver that adds extensive user experience enhancements to the company’s universal software client for accessing any existing business application, desktop or document on any device. Enhancements include the ability to touch-enable existing Windows applications on any touchscreen tablet and smartphone as well as support for a broad range of new devices, such as the BlackBerry PlayBook, Cisco Cius, Dell Streak and the Samsung Galaxy offerings.
- New Citrix NetScaler® VPX™ web application delivery software certified to integrate with HP’s high-performance 5400zl and 8200zl switch series to converge datacenter switching and load balancing into a single device to lower operational costs, increase application availability and speed-up performance.
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 2010 was $1.87 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 First Quarter 2011 and 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; disruptions due to changes in key personnel and succession risks; seasonal fluctuations in the company’s business; 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; the possibility that the proposed acquisition of Netviewer will not close, that the closing may be delayed or that the companies may be required to modify aspects of the acquisition to close the acquisition; 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, including the acquisition of Netviewer; the management of anticipated future growth; the recruitment and retention of qualified employees, including those of acquired companies; 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, international market readiness and execution 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®, XenDesktop®, Receiver™, XenServer®, OpenCloud, NetScaler®, and VPX™ are trademarks or registered 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.
