Jul

252018

Citrix Reports Second Quarter 2018 Financial Results

Quarterly revenue of $742 million up 7% year-over-year. Quarterly subscription revenue of $111 million up 49% year-over-year. Quarterly GAAP diluted EPS of $0.73; non-GAAP diluted EPS of $1.28. Quarterly GAAP operating margin of 20 percent; non-GAAP operating margin of 30 percent.

FORT LAUDERDALE, Fla. - July 25, 2018 - Citrix Systems, Inc. (NASDAQ:CTXS) today reported financial results for the second quarter of fiscal year 2018 ended June 30, 2018.

Financial Results

For the second quarter of fiscal year 2018, Citrix achieved revenue of $742 million, compared to $693 million in the second quarter of fiscal year 2017, representing 7 percent revenue growth.

GAAP Results

Net income for the second quarter of fiscal year 2018 was $107 million, or $0.73 per diluted share, compared to $109 million, or $0.70 per diluted share, for the second quarter of fiscal year 2017. Net income for the second quarter of fiscal years 2018 and 2017 includes restructuring charges of $7 million and $2 million, respectively, primarily for facility closing costs.

Non-GAAP Results

Non-GAAP net income for the second quarter of fiscal year 2018 was $178 million, or $1.28 per diluted share, compared to $158 million, or $1.03 per diluted share for the second quarter of fiscal year 2017. Non-GAAP net income for the second 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 second quarter of fiscal year 2017 also excludes separation costs and the tax effect related to this item. Non-GAAP net income per diluted share for the second quarter of fiscal years 2018 and 2017 reflects the anti-dilutive impact of the company’s convertible note hedges.

“Q2 was yet another strong quarter for Citrix, posting upside to financial expectations and, at the same time, continuing to execute on our operational transformation across the company and in our go-to-market,” said David Henshall, president and CEO. “Our customers and partners are embracing our cloud strategy, which is driving the multi-year plan that we introduced last year and the progress we’ve made so far in 2018.”

Q2 Financial Summary

The results for the second quarter of fiscal year 2018 compared to the second quarter of fiscal year 2017 are as follows:

  • Subscription revenue increased 49 percent;
  • Product and license revenue increased 1 percent;
  • Support and services revenue increased 3 percent; and
  • Net revenue increased in the EMEA region by 8 percent; increased in the Americas region by 7 percent; and increased in the APJ region by 7 percent.

During the second quarter of fiscal year 2018(1):

  • GAAP gross margin was 85 percent and non-GAAP gross margin was 87 percent;
  • GAAP operating margin was 20 percent and non-GAAP operating margin was 30 percent;
  • Subscription revenue as a percentage of total revenue was 15%;
  • Deferred and unbilled revenue totaled $1.94 billion as of June 30, 2018, compared to $1.77 billion as of March 31, 2018, an increase of 10 percent;
  • Cash flow from operations was $170 million; and
  • The company repurchased approximately 1.8 million shares during the second quarter.

Financial Outlook for Third Quarter 2018(1)

Citrix management expects to achieve the following results for the third quarter of fiscal year 2018:

  • Net revenue is targeted to be in the range of $715 million to $725 million.
  • GAAP diluted earnings per share is targeted to be in the range of $0.72 to $0.74.
  • Non-GAAP diluted earnings per share is targeted to be in the range of $1.23 to $1.26.

Financial Outlook for Fiscal Year 2018(1)

Citrix management expects to achieve the following results for the fiscal year ending December 31, 2018:

  • Net revenue is targeted to be in the range of $2.92 billion to $2.95 billion.
  • GAAP diluted earnings per share is targeted to be in the range of $3.40 to $3.49.
  • Non-GAAP diluted earnings per share is targeted to be in the range of $5.30 to $5.40.
  • In addition, Citrix management is targeting GAAP operating margin to be in the range of 20 percent to 21 percent, and non-GAAP operating margin to be in the range of 30 percent to 31 percent.

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

(1) A reconciliation of GAAP to non-GAAP measures has been provided in the financial statement tables included in this press release. An explanation of these measures is also included below under the heading “Reconciliation of Non-GAAP Financial Measures to Comparable U.S. GAAP Measures.”
 

Second 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

For media inquiries, contact:

Eric Armstrong
Citrix Systems, Inc.
(954) 267-2977
eric.armstrong@citrix.com

Eduardo Fleites
Citrix Systems, Inc.
(954) 229-5758
eduardo.fleites@citrix.com

About Citrix

Citrix (NASDAQ:CTXS) is powering a better way to work with unified workspace, networking, and analytics solutions that help organizations unlock innovation, engage customers, and boost productivity, without sacrificing security.  With Citrix, users get a seamless work experience and IT has a unified platform to secure, manage, and monitor diverse technologies in 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. Learn more at www.citrix.com.

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 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; changes to Citrix’s product and service naming and branding; 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; seasonal fluctuations in the Company's business; 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 size, timing and recognition of revenue from significant orders; conversion of unbilled revenue and backlog into future revenue; the recruitment and retention of qualified employees; transitions in key personnel and succession risk; 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 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 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, and disruption to our ongoing business and diversion of management's attention from our ongoing business; litigation and disputes, including challenges to our intellectual property rights or allegations of infringement of the intellectual property rights of others; charges in the event of a write-off or impairment of acquired assets, underperforming businesses, investments or licenses; 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.

# # #

Citrix® is a trademark or registered trademark 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.