Business News

Citrix Reports Third Quarter Financial Results

Friday 22. October 2010 - Citrix Systems, Inc. (NASDAQ:CTXS) today reported financial results for the third quarter ended September 30, 2010.

Quarterly revenue of $472 million
GAAP diluted earnings per share of $0.46
Non-GAAP diluted earnings per share of $0.62
GAAP operating margin of 17 percent
Non-GAAP operating margin of 27 percent
Download
Citrix Reports Third Quarter Financial Results
Citrix Q3 2010 Earnings Release
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.
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 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.)