Citrix Reports First Quarter Financial Results
(ENP Newswire Via Acquire Media NewsEdge) ENP Newswire - 26 April 2012
Release date- 25042012 - SANTA CLARA, Calif. - Citrix Systems, Inc. (NASDAQ:CTXS) today reported financial results for the first quarter of fiscal 2012 ended March 31, 2012.
In the first quarter of fiscal 2012, Citrix achieved revenue of $589 million, compared to $491 million in the first quarter of fiscal 2011, representing 20 percent revenue growth.
Net income for the first quarter of fiscal 2012 was $68 million, or $0.36 per diluted share, compared to $74 million, or $0.38 per diluted share, for the first quarter of fiscal 2011.
Non-GAAP net income in the first quarter of fiscal 2012 was $111 million, or $0.59 per diluted share, compared to $97 million, or $0.50 per diluted share, in the first quarter of fiscal 2011. Non-GAAP net income excludes the effects of amortization of intangible assets primarily related to business combinations, stock-based compensation expenses and the tax effects related to those items. In addition non-GAAP net income for the first quarter of fiscal 2011 excludes amounts recorded in connection with the restructuring program that the company implemented in January 2009 and the related tax effect.
'I'm pleased with our strong start to 2012,' said Mark Templeton, president and chief executive officer for Citrix. 'We've made great strides in web collaboration, desktop virtualization and cloud networking, strengthening and solidifying our company and product leadership in these markets.
'We are expanding into fast growing, adjacent markets, all fueled by three powerful forces - the need for mobility, the enterprise cloud evolution, and the build-out of hosted cloud services.'
Q1 Financial Summary
In reviewing the first quarter results of 2012, compared to the first quarter of 2011:
Product and licenses revenue increased 19 percent;
Revenue from license updates and maintenance increased 19 percent;
Software as a Service revenue increased 21 percent;
Professional services revenue, which is comprised of consulting, product training and certification increased 33 percent;
Revenue increased in the Pacific region by 40 percent; increased in the EMEA region by 20 percent; and increased in the America's region by 16 percent;
Deferred revenue totaled $983 million, compared to $789 million as of March 31, 2011;
Cash flow from operations was $243 million, compared with $159 million in the first quarter of 2011, an increase of 53% year-over-year;
GAAP operating margin was 14 percent for the quarter and non-GAAP operating margin was 23 percent for the quarter, excluding the effects of amortization of intangible assets primarily related to business combinations and stock-based compensation expense; and
The company repurchased 1.6 million shares at an average price of $73.06.
Revenue and Expense Reclassifications
During the first quarter of 2012, Citrix reviewed the revenue categories presented in its consolidated statements of income and adopted a revised presentation that is more comparable to those presented by other companies in Citrix's industry and better reflects the company's evolving product and service offerings. As a result, technical support, hardware maintenance and software updates revenues, which were previously presented in Technical Services and License Updates are now classified together as License Updates and Maintenance. A corresponding change was made to rename Cost of Services Revenues to Cost of Services and Maintenance Revenues; however, there was no change in classification. Product training, certification and consulting services, which were previously presented in Technical Services, are now classified together as Professional Services. Product Licenses has been renamed to Product and Licenses to more appropriately describe its composition of both software and hardware; however, there was no change in the composition of total net revenue. The classification of Software as a service remains unchanged. These changes in presentation do not affect total net revenues, total cost of net revenues or gross margin.
Additionally, during the first quarter of 2012, Citrix revised its methodology for allocating certain IT support costs to more closely align those costs with the employees directly utilizing the related assets and services and to reflect how management assesses the cost of headcount. As a result, certain IT support costs were reclassified from general and administrative expenses to cost of services and maintenance revenues, research and development expenses and sales, marketing and services expenses based on the headcount in each of these functional areas.
For additional information concerning these changes in the presentation of Citrix's consolidated statements of income, see the company's unaudited condensed consolidated statements of income for the three months ended March 31, 2012 and 2011 accompanying this release.
Financial Outlook for Second Quarter 2012
Citrix management expects to achieve the following results during its second fiscal quarter of 2012 ending June 30, 2012:
Net revenue is targeted to be in the range of $605 million to $615 million.
GAAP diluted earnings per share is targeted to be in the range of $0.34 to $0.37. Non-GAAP diluted earnings per share is targeted to be in the range of $0.58 to $0.59, excluding $0.11 related to the effects of amortization of intangible assets primarily related to business combinations, $0.19 related to the effects of stock-based compensation expenses, and $(0.05) to $(0.09) for the 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 2012
Citrix management expects to achieve the following results during its fiscal year 2012 ending December 31, 2012:
Net revenue is targeted to be in the range of $2.53 billion to $2.56 billion;
GAAP diluted earnings per share is targeted to be in the range of $1.87 to $1.92. Non-GAAP diluted earnings per share is targeted to be in the range of $2.75 to $2.79, excluding $0.48 related to the effects of amortization of intangible assets primarily related to business combinations, $0.75 related to the effects of stock-based compensation expenses, and $(0.31) to $(0.40) for the 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 2012, Citrix announced:
A new release of Citrix XenDesktop, which fully integrates the personalization technology acquired last year via Ringcube and support for Microsoft System Center 2012, as well as Citrix AppDNA 6 software for application migration management, giving enterprises a seamless way to design, deploy and manage virtual desktops and applications in existing operations.
A new 'Cloud Provider Pack' with powerful automation, application aggregation and mobility technologies for hosting providers delivering Windows apps and desktops as a hosted cloud service.
The general availability of Citrix CloudStack 3, which brings the power of Amazon-style clouds to enterprise customers that want to transform virtualized datacenter resources into automated, elastic, self-service clouds. Related, in early April, Citrix submitted CloudStack to the Apache Software Foundation, home of the world's most successful open source projects, commencing the process to elevate CloudStack into a full open source Apache Software Foundation project.
A strategic partnership with Bytemobile, Inc. to deliver new solutions for the mobile data market by combining Citrix NetScaler's mobile computing solutions and flexible application delivery with Bytemobile's best-in-class traffic management and data optimization solutions, as well as its global footprint of MNO deployments.
Citrix has teamed with Dell to deliver a new VDI appliance that simplifies and accelerates desktop virtualization deployments for the mass market. The Dell DVS Simplified solution with Citrix VDI-in-a-Box will be sold through Dell's global sales team and channels.
Citrix has added HDFaces video conferencing to its GoToMeeting app for iPad, providing a new level of rich mobile collaboration in an easy-to-use, one-tap format.
In April 2012, Citrix announced the acquisition of Podio, an innovative, privately held company that offers a collaborative work platform which supports people and teams getting work done the way they want in a social setting. Podio's unique apps concept adds structure and activity streams to any type of work and collaboration with teams, clients, in projects, and within functions such as sales, recruiting, marketing or any other area of business. A cloud service, Podio unifies the content, traditional business applications, and new mobile apps, as well as the real-time and asynchronous communications required to work in the post PC era. Podio will be part of the GoTo cloud services portfolio, which includes GoToMeeting.
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: 70810500.
Citrix Systems, Inc. (NASDAQ:CTXS) transforms how businesses, people and IT work in the cloud era. Market leading products for collaboration, virtualization, and networking allow Citrix to enable mobile workstyles and power cloud services for 100's of millions of people every day. We service over 260,000 organizations with over 10,000 business partners in 100 countries. Annual revenue in 2011 was $2.21 billion. Learn more at our company headquarters at www.citrix.com.
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 2012 and Financial Outlook for Fiscal Year 2012 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 and ability of markets for these products to become mainstream and sustain growth; 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 sales of its established 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 virtualization, networking and collaboration products; the introduction of new products by competitors or the entry of new competitors into the markets for Citrix's products and services; the ability of Citrix to make suitable acquisitions on favorable terms in the future; risks associated with Citrix's acquisitions, 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; the management of expenses associated with anticipated future growth; the recruitment and retention of qualified employees; risks in effectively controlling operating expenses, including failure to manage untargeted expenses; the effect of new accounting pronouncements on revenue and expense recognition; the risks associated with securing data and maintaining security of customer data stored by our services, including in an environment of anticipated higher demand; 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; 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, investments or licenses; competition, international market readiness, execution and other risks associated with the markets for Citrix's products and services; 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.
Citrix, XenDesktop, AppDNA, CloudStack, NetScaler, VDI-in-a-Box, GoToMeeting, and Podio 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
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