Citrix Reports First Quarter 2018 Financial Results
Quarterly revenue of $697 million up 5% year-over-year. Quarterly GAAP diluted EPS of $0.99; non-GAAP diluted EPS of $1.29. Quarterly GAAP operating margin of 24 percent; non-GAAP operating margin of 32 percent. Record cash flow from operations of $358 million. Repurchased 8.4 million shares in first quarter
FORT LAUDERDALE, Fla. - April 25, 2018 - Citrix Systems, Inc. (NASDAQ:CTXS) today reported financial results for the first quarter of fiscal year 2018 ended March 31, 2018.
For the first quarter of fiscal year 2018, Citrix achieved revenue of $697 million, compared to $663 million in the first quarter of fiscal year 2017, representing 5 percent revenue growth.
Net income for the first quarter of fiscal year 2018 was $144 million, or $0.99 per diluted share, compared to $70 million, or $0.44 per diluted share, for the first quarter of fiscal year 2017. Net income for the first quarter of fiscal year 2018 and 2017 includes restructuring charges of $6 million and $8 million, respectively, for severance and facility closing costs. Additionally, net income for the first quarter of fiscal year 2017 includes $46 million in charges related to changes in the company’s expectations of the realizability of certain state R&D tax credits resulting from the separation of the GoTo business, partially offset by a tax benefit of approximately $18 million from the adoption of Accounting Standard Update 2016-09 in the first quarter of fiscal year 2017.
Non-GAAP net income for the first quarter of fiscal year 2018 was $184 million, or $1.29 per diluted share, compared to $152 million, or $0.97 per diluted share for the first quarter of fiscal year 2017. Non-GAAP net income for the first quarter of fiscal years 2018 and 2017 excludes the effects of stock-based compensation expense, amortization of acquired intangible assets, amortization of debt discount, restructuring charges, and the tax effects related to these items. Non-GAAP net income for the first quarter of fiscal year 2017 also excludes separation costs and the tax effect related to this item and charges related to changes in the company’s expectations of the realizability of certain state R&D tax credits resulting from the separation of the GoTo business. Non-GAAP net income per diluted share for the first quarter of fiscal years 2018 and 2017 also reflects the anti-dilutive impact of the company’s convertible note hedges.
“This quarter, we delivered strong financial results while at the same time accelerating innovation across our portfolio. Our subscription-based revenue accelerated for the fifth quarter in a row as we are seeing the benefit of transitioning our business model,” said David Henshall, president and CEO of Citrix. “Our focus on integrating the portfolio, with investments in analytics and cloud, position us nicely for the rest of the year.”
Q1 Financial Summary
The results for the first quarter of fiscal year 2018 compared to the first quarter of fiscal year 2017 are as follows:
During the first quarter of fiscal year 2018:
All results above reflect continuing operations.
Financial Outlook for Second Quarter 2018
Citrix management expects to achieve the following results for the second quarter of fiscal year 2018:
Financial Outlook for Fiscal Year 2018
Citrix management expects to achieve the following results for the fiscal year ending December 31, 2018:
The above statements are based on current targets. These statements are forward-looking, and actual results may differ materially.
First Quarter Earnings Conference Call
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 for approximately 30 days on the Investor Relations section of the Citrix corporate website at http://www.citrix.com/investors.
Full Financial Report
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Citrix (NASDAQ:CTXS) aims to power a world where people, organizations and things are securely connected and accessible to make the extraordinary possible. We help customers reimagine the future of work by providing the most comprehensive secure digital workspace that unifies the apps, data and services people need to be productive, and simplifies IT’s ability to adopt and manage complex cloud environments. Citrix solutions are in use by more than 400,000 organizations including 99 percent of the Fortune 100 and 98 percent of the Fortune 500.
For Citrix Investors
This release contains forward-looking statements that 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 CEO and president, statements contained in the Financial Outlook 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, risks associated with the success and growth of the company's product lines, including competition, demand and pricing dynamics and the impact of our transition to new business models, including a subscription model; the impact of U.S. tax reform, including unanticipated transition taxes, changes in valuation of tax assets and liabilities, non-renewal of tax credits or exposure to additional tax liabilities; the impact of the global economy, volatility in global stock markets, foreign exchange rate volatility and uncertainty in the IT spending environment; the risks associated with maintaining the security of our products, services, and networks, including securing customer data stored by our services; changes in Citrix’s pricing and licensing models, promotional programs and product mix, all of which may impact Citrix's revenue recognition; increased competition in markets for Citrix's virtualization and networking products and secure data services and the introduction of new products by competitors or the entry of new competitors into these markets; the concentration of customers in Citrix’s networking business; the company's ability to develop, maintain a high level of quality and commercialize new products and services while growing its established virtualization and networking products and services; changes in our revenue mix towards products and services with lower gross margins; 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, service providers and strategic partners and the company's reliance on 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 large enterprise accounts and reliance on large service provider customers; 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; the recruitment and retention of qualified employees; transitions in key personnel and succession risk, including transitions in the company's executive leadership; risks in effectively controlling operating expenses; ability to effectively manage our capital structure and the impact of related changes on our operating results and financial condition; the effect of new accounting pronouncements on revenue and expense recognition; the ability of Citrix to make suitable acquisitions on favorable terms in the future; risks associated with Citrix's acquisitions and divestitures, including failure to further develop and successfully market the technology and products of acquired companies, failure to achieve or maintain anticipated revenues and operating performance contributions from acquisitions, which could dilute earnings, the retention of key employees from acquired companies, difficulties and delays integrating personnel, operations, technologies and products, disruption to our ongoing business and diversion of management's attention from our ongoing business, and failure to realize expected benefits or synergies from divestitures; failure to comply with federal, state and international regulations; litigation and disputes, including challenges to our intellectual property rights or allegations of infringement of the intellectual property rights of others; the inability to further innovate our technology or enter into new businesses due to the intellectual property rights of others; the ability to maintain and protect our collection of brands; charges in the event of a write-off or impairment of acquired assets, underperforming businesses, investments or licenses; international market readiness, execution and other risks associated with the markets for Citrix's products and services; risks related to servicing our debt; risks of political uncertainty and social turmoil; and other risks detailed in Citrix'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.
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