Citrix Systems, Inc. (Nasdaq:CTXS) today reported financial results for the second quarter of fiscal 2009 ended June 30, 2009.
FINANCIAL RESULTS In the second quarter of fiscal 2009, Citrix achieved revenue of $393 million, compared to $392 million in the second quarter of fiscal 2008.
GAAP Results Net income for the second quarter of fiscal 2009 was $43 million, or $0.23 per diluted share, compared to $35 million, or $0.18 per diluted share, for the second quarter of 2008. The current quarter GAAP results include a restructuring charge of approximately $2 million.
Non-GAAP Results
Non-GAAP net income in the second quarter of fiscal 2009 was $72 million, or $0.39 per diluted share, compared to $71 million, or $0.38 per diluted share, in the comparable period last year. Non-GAAP net income excludes the effects of amortization of intangible assets primarily related to business combinations and stock-based compensation expense and the tax effects related to those items. In addition, Non-GAAP net income for the second quarter of 2009 excludes 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 pleased with our second quarter results," said Mark Templeton, president and chief executive officer for Citrix. "We are still in a tough economic climate, especially in the EMEA market, but our customers are embracing IT as an on-demand service, confirming our strategy around desktop virtualization, the next generation datacenter and SaaS."
Q2 Financial Summary In reviewing the second quarter results for 2009, compared to the second quarter of 2008:
- Product license revenue decreased 15 percent;
- Revenue from license updates grew 9 percent;
- Online services revenue grew 18 percent;
- Technical services revenue, which is comprised of consulting, education and technical support, grew 3 percent;
- Revenue increased in the America's region by 3 percent, decreased in the EMEA region by 12 percent, and decreased in the Pacific region by 4 percent;
- Deferred revenue totaled $538 million, compared to $476 million on June 30, 2008;
- GAAP operating margin was 10 percent for the quarter, and non-GAAP operating margin was 22 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 restructuring program;
- Cash flow from operations was $86 million; and The company repurchased 1.3 million shares at an average price of $30.32.
Financial Outlook
Due to the volatility of market conditions in the foreseeable future, it is more likely that Citrix's actual results could differ materially from expectations. Similar to the financial outlook we have provided for the last two fiscal quarters, the company is continuing to provide less quantitative guidance than it has historically.
Financial Outlook for Third Quarter 2009
Citrix management currently expects to achieve the following results during its third fiscal quarter of 2009 ending September 30, 2009:
- Net revenue is expected to be flat compared to the third quarter of 2008; and
- Non-GAAP operating margin is expected to increase 100 basis points compared to the second quarter 2009, excluding the effects of amortization of intangible assets primarily related to business combinations, stock-based compensation expense, and restructuring charges, if any.
- Interest income is expected to be $3 million to $4 million.
The above statements are based on current expectations. These statements are forward-looking, and actual results may differ materially.
Financial Outlook for Fiscal Year 2009 Our financial outlook for the full fiscal year 2009 for both net revenue and non-GAAP operating margin remains unchanged.
- The company expects net revenue to be flat as compared to 2008; and
- Non-GAAP operating margin is expected to increase by as much as 100 basis points compared to non-GAAP operating margin from the prior year, excluding the effects of amortization of intangible assets primarily related to business combinations, stock-based compensation expense, and restructuring charges, as well as prior year exclusions of in process research and development related to business combinations.
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 second quarter of 2009, Citrix:
- Announced the availability of the Citrix Receiver <http://www.citrix.com/...> (TM) application on the Apple App Store. The app gives iPhone and iPod touch users access to their Windows applications and documents from anywhere;
- Unveiled Citrix® NetScaler® VPX <http://www.citrix.com/...> , a new software-based virtual appliance version of its industry-leading NetScaler MPX hardware appliance product line;
- Announced upgrades to Citrix Essentials(TM) for XenServer(TM) and Hyper-V(TM) <http://www.citrix.com/...> that adds advanced virtualization management capabilities to two of the industry's fastest growing virtualization platforms;
- Announced nCore(TM) technology <http://www.citrix.com/ncore> that allows its high-end Citrix NetScaler <http://www.citrix.com/...> appliances to deliver rich Web 2.0 applications and cloud services for more users with no new hardware investments required;
- Announced the addition of three new appliance models to its powerful Citrix NetScaler <http://www.citrix.com/...> product line -- NetScaler MPX 9500, MPX 7500 and MPX 5500;
- Announced that LG-Nortel will distribute the Citrix NetScaler <http://www.citrix.com/...> product line to enterprise customers in the Korean market; and
- Unveiled Citrix® Dazzle(TM) <http://www.citrix.com/...> - a self-service "storefront" for enterprise applications. Dazzle gives corporate employees 24x7 self-service access to a broad array of applications, desktops and content, allowing them to choose exactly what they need, when they need it.
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/....
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/... for approximately 30 days. In addition, an audio replay of the conference call will be available for approximately thirty days by dialing (800) 642-1687 or (706) 645-9291 (passcode required: 15446774).
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 Third Quarter 2009 and Fiscal Year 2009 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, the impact of the global economy and uncertainty in the IT spending environment, including 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; the company's product concentration and its ability to develop and commercialize new products and services, including its 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, 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; 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 and the recruitment and retention of qualified employees, including those of acquired companies, and any disruptions due to changes in key personnel; risks in effectively controlling operating expenses, including failure to manage unexpected expenses and to achieve anticipated cost savings from Citrix's cost reduction initiatives; impairment of the value of the company's investments; the effect of new accounting pronouncements on revenue and expense recognition; litigation; changes in the company's pricing and licensing models or policies 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 our Web-based access, collaboration and customer assistance services and for our Web application delivery appliances; 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 our earnings release, conference call, slide presentation or webcast, we 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 and can be found on the Investor Relations page of the Citrix corporate Web site at http://www.citrix.com/....
FINANCIAL RESULTS In the second quarter of fiscal 2009, Citrix achieved revenue of $393 million, compared to $392 million in the second quarter of fiscal 2008.
GAAP Results Net income for the second quarter of fiscal 2009 was $43 million, or $0.23 per diluted share, compared to $35 million, or $0.18 per diluted share, for the second quarter of 2008. The current quarter GAAP results include a restructuring charge of approximately $2 million.
Non-GAAP Results
Non-GAAP net income in the second quarter of fiscal 2009 was $72 million, or $0.39 per diluted share, compared to $71 million, or $0.38 per diluted share, in the comparable period last year. Non-GAAP net income excludes the effects of amortization of intangible assets primarily related to business combinations and stock-based compensation expense and the tax effects related to those items. In addition, Non-GAAP net income for the second quarter of 2009 excludes 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 pleased with our second quarter results," said Mark Templeton, president and chief executive officer for Citrix. "We are still in a tough economic climate, especially in the EMEA market, but our customers are embracing IT as an on-demand service, confirming our strategy around desktop virtualization, the next generation datacenter and SaaS."
Q2 Financial Summary In reviewing the second quarter results for 2009, compared to the second quarter of 2008:
- Product license revenue decreased 15 percent;
- Revenue from license updates grew 9 percent;
- Online services revenue grew 18 percent;
- Technical services revenue, which is comprised of consulting, education and technical support, grew 3 percent;
- Revenue increased in the America's region by 3 percent, decreased in the EMEA region by 12 percent, and decreased in the Pacific region by 4 percent;
- Deferred revenue totaled $538 million, compared to $476 million on June 30, 2008;
- GAAP operating margin was 10 percent for the quarter, and non-GAAP operating margin was 22 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 restructuring program;
- Cash flow from operations was $86 million; and The company repurchased 1.3 million shares at an average price of $30.32.
Financial Outlook
Due to the volatility of market conditions in the foreseeable future, it is more likely that Citrix's actual results could differ materially from expectations. Similar to the financial outlook we have provided for the last two fiscal quarters, the company is continuing to provide less quantitative guidance than it has historically.
Financial Outlook for Third Quarter 2009
Citrix management currently expects to achieve the following results during its third fiscal quarter of 2009 ending September 30, 2009:
- Net revenue is expected to be flat compared to the third quarter of 2008; and
- Non-GAAP operating margin is expected to increase 100 basis points compared to the second quarter 2009, excluding the effects of amortization of intangible assets primarily related to business combinations, stock-based compensation expense, and restructuring charges, if any.
- Interest income is expected to be $3 million to $4 million.
The above statements are based on current expectations. These statements are forward-looking, and actual results may differ materially.
Financial Outlook for Fiscal Year 2009 Our financial outlook for the full fiscal year 2009 for both net revenue and non-GAAP operating margin remains unchanged.
- The company expects net revenue to be flat as compared to 2008; and
- Non-GAAP operating margin is expected to increase by as much as 100 basis points compared to non-GAAP operating margin from the prior year, excluding the effects of amortization of intangible assets primarily related to business combinations, stock-based compensation expense, and restructuring charges, as well as prior year exclusions of in process research and development related to business combinations.
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 second quarter of 2009, Citrix:
- Announced the availability of the Citrix Receiver <http://www.citrix.com/...> (TM) application on the Apple App Store. The app gives iPhone and iPod touch users access to their Windows applications and documents from anywhere;
- Unveiled Citrix® NetScaler® VPX <http://www.citrix.com/...> , a new software-based virtual appliance version of its industry-leading NetScaler MPX hardware appliance product line;
- Announced upgrades to Citrix Essentials(TM) for XenServer(TM) and Hyper-V(TM) <http://www.citrix.com/...> that adds advanced virtualization management capabilities to two of the industry's fastest growing virtualization platforms;
- Announced nCore(TM) technology <http://www.citrix.com/ncore> that allows its high-end Citrix NetScaler <http://www.citrix.com/...> appliances to deliver rich Web 2.0 applications and cloud services for more users with no new hardware investments required;
- Announced the addition of three new appliance models to its powerful Citrix NetScaler <http://www.citrix.com/...> product line -- NetScaler MPX 9500, MPX 7500 and MPX 5500;
- Announced that LG-Nortel will distribute the Citrix NetScaler <http://www.citrix.com/...> product line to enterprise customers in the Korean market; and
- Unveiled Citrix® Dazzle(TM) <http://www.citrix.com/...> - a self-service "storefront" for enterprise applications. Dazzle gives corporate employees 24x7 self-service access to a broad array of applications, desktops and content, allowing them to choose exactly what they need, when they need it.
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/....
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/... for approximately 30 days. In addition, an audio replay of the conference call will be available for approximately thirty days by dialing (800) 642-1687 or (706) 645-9291 (passcode required: 15446774).
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 Third Quarter 2009 and Fiscal Year 2009 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, the impact of the global economy and uncertainty in the IT spending environment, including 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; the company's product concentration and its ability to develop and commercialize new products and services, including its 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, 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; 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 and the recruitment and retention of qualified employees, including those of acquired companies, and any disruptions due to changes in key personnel; risks in effectively controlling operating expenses, including failure to manage unexpected expenses and to achieve anticipated cost savings from Citrix's cost reduction initiatives; impairment of the value of the company's investments; the effect of new accounting pronouncements on revenue and expense recognition; litigation; changes in the company's pricing and licensing models or policies 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 our Web-based access, collaboration and customer assistance services and for our Web application delivery appliances; 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 our earnings release, conference call, slide presentation or webcast, we 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 and can be found on the Investor Relations page of the Citrix corporate Web site at http://www.citrix.com/....
