Citrix Reports Q1 2010 Financial Results

Citrix Systems today reported financial results for the first quarter of fiscal 2010 ended March 31, 2010.

In the first quarter of fiscal 2010, Citrix achieved revenue of $414 million, compared to $369 million in the first quarter of fiscal 2009, representing 12 percent revenue growth.

GAAP Results
Net income for the first quarter of fiscal 2010 was $47 million, or $0.25 per diluted share, compared to $7 million, or $0.04 per diluted share, for the first quarter of 2009.

Non-GAAP Results
Non-GAAP net income in the first quarter of fiscal 2010 was $75 million, or $0.40 per diluted share, compared to $59 million, or $0.32 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.

In addition to quarterly financial results, Citrix also announced that its board of directors has authorized it to repurchase up to an additional $400 million of its common stock.  As of March 31, 2010, approximately $58 million remained in authority from previous approvals.

Q1 Financial Summary
In reviewing the first quarter results of 2010, compared to the first quarter of 2009:

• In reviewing the first quarter results of 2010, compared to the first quarter of 2009:
• Product license revenue increased 10 percent;
• Revenue from license updates grew 10 percent;
• Online services revenue grew 18 percent;
• Technical services revenue, which is comprised of consulting, education and technical support, grew 18 percent;
• Revenue increased in the America’s region by 14 percent; increased in the EMEA region by 6 percent; and increased in the Pacific region by 13 percent;
• Deferred revenue totaled $636 million, compared to $535 million on March 31, 2009;
• GAAP operating margin was 13 percent for the quarter, compared to one percent in the first quarter of 2009, and non-GAAP operating margin was 23 percent for the quarter, compared to 19 percent in the first quarter of 2009, 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 $144 million, compared with $82 million in the first quarter of 2009; and
• The company repurchased 2.3 million shares at an average price of $43.71.

Financial Outlook for Second Quarter 2010
Citrix management expects to achieve the following results during its second fiscal quarter of 2010 ending June 30, 2010:

• Net revenue is expected to be in the range of $430 million to $440 million;
• Interest income is expected to be $3 million to $4 million;
• Weighted average shares outstanding is expected to be in the range of 190 million to 192 million shares; and
• GAAP diluted earnings per share is expected to be in the range of $0.28 to $0.29. Non-GAAP diluted earnings per share is expected to be in the range of $0.44 to $0.45, excluding $0.08 related to the effects of amortization of intangible assets primarily related to business combinations, $0.14 related to the effects of stock-based compensation expenses, certain 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.

The above statements are based on current expectations. These statements are forward-looking, and actual results may differ materially.

Financial Outlook for Fiscal Year 2010
Citrix management expects to achieve the following results during its fiscal year 2010 ending December 31, 2010:

• Net revenue is expected to be in the range of $1.765 billion to $1.78 billion;
• Non-GAAP operating margin is expected to increase by 100 basis points compared to fiscal year 2009, excluding the effects of amortization of intangible assets primarily related to business combinations and stock-based compensation expense, and certain charges recorded in conjunction with the company’s 2009 restructuring program;
• Interest income is expected to be $16 million to $19 million; and
• GAAP diluted earnings per share is expected to be in the range of $1.29 to $1.34. Non-GAAP diluted earnings per share is expected to be in the range of $1.88 to $1.91, excluding $0.33 related to the effects of amortization of intangible assets primarily related to business combinations, $0.52 related to the effects of stock-based compensation expenses, certain charges recorded in conjunction with the company’s 2009 restructuring program and $(0.23) to $(0.30) 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.

Company, Product and Alliance Highlights
During the first quarter of 2010, Citrix announced:

• The Feature Pack 1 release of Citrix XenDesktop 4, which sets new scalability records, simplifies management, and lets end user access virtual desktops up to five times faster – all in order to accelerate the adoption of desktop virtualization.
• Citrix XenDesktop 4 was honored as an InfoWorld 2010 Technology of the Year Award winner, selected by editors and reviewers as one of the best and most innovative products on the IT landscape.
• The release of Citrix XenApp 6, with major enhancements to the de facto standard for on-demand application delivery that simplifies management, enhances scalability, and expands high-definition support and self-service access to apps from any device, including PCs, Macs, laptops and smart phones.
• A new high-performance appliance in its Citrix NetScaler MPX family of application networking systems to round out a comprehensive and cost-effective product line that spans small, single application virtual appliances to massive, high-end systems designed to power the world’s busiest websites with unmatched scalability.
• A joint collaboration agreement with Microsoft to accelerate virtual desktop adoption.  The agreement includes the “VDI Kick Start” promotion, which offers new customers a more than 50 percent discount off the estimated retail price and the “Rescue for VMware VDI” promotion, which allows VMware customers to trade in up to 500 View licenses at no additional cost in order to “jump start” a complete VDI solution.  Additionally, the companies will work together to enable the high-definition HDX technology in Citrix XenDesktop to enhance and extend the capabilities of the Microsoft RemoteFX platform, ensuring that virtual desktops are a rich, high-definition experience for all users, regardless of their device, location or role.