Citrix Systems, Inc., the global leader in application delivery infrastructure, today reported quarterly revenues and other financial information for the first quarter of fiscal 2007 ended March 31, 2007.

Operational Highlights
In the first quarter of fiscal 2007, Citrix achieved revenue of $308 million, compared to $260 million in the first quarter of fiscal 2006, representing 18 percent revenue growth.

In the first quarter of fiscal 2007, total cost of revenues and operating expenses – which include cost of product license and services revenues, research and development, sales, marketing and support, general and administrative, amortization of intangible assets and acquisition related charges was approximately $250 million.  This amount includes amortization expense of approximately $10 million, a $1 million write-off of in-process research and development related to the closing of the Ardence acquisition and approximately $6 million in accounting, legal, and tax fees related to the voluntary stock option review. Other income was approximately $12 million.  Due to the ongoing voluntary stock option review, costs and expenses reported today do not include any stock-based compensation expense.

“I’m very pleased with our first quarter performance,” said Mark Templeton, president and chief executive officer for Citrix. “We generated great momentum in our product lines, and are off to a solid start to 2007.  

“We saw good pipeline growth for Presentation Server Platinum Edition due to the positioning, pricing and packaging moves we made, as well as the positive influence EdgeSight has on upgrades.  I am also pleased with the growth in our application networking product line.”

Stock Option Review Update
In the quarter ended December 31, 2006, the Audit Committee of the company’s Board of Directors began a voluntary review of the company’s historical stock option granting practices and the related accounting for the years 1996 through 2006. This voluntary review was initiated in light of news about the option practices of numerous companies across several industries and not in response to any governmental investigation, whistleblower complaint, stockholder lawsuit or inquiries from media organizations. The Audit Committee engaged independent outside legal counsel to conduct the review.

The Audit Committee has nearly completed its review and has reached a determination that incorrect measurement dates were used to account for certain historical stock option grants during the years under review. Citrix expects that the difference in these measurement dates will result in material non-cash stock-based compensation expenses and the restatement of previously issued financial statements. Today Citrix is not providing full GAAP or non-GAAP financial statements for the first quarter of fiscal 2007 due to the ongoing stock option review.

Because this review is ongoing, the Audit Committee has not reached any final conclusions. However, it has found nothing to date that would cause it to conclude that there was intentional wrongdoing by a current executive of the company.

Citrix intends to file its Annual Report on Form 10-K for the year ended December 31, 2006 containing the required restatements of its financial statements as soon as practicable after the voluntary review is completed. The company will release full first quarter financial statements on a press release at that time.

Q1 Financial Highlights
In reviewing the first quarter of 2007, compared to the first quarter of 2006:

• Product license revenue increased 7 percent;
• Revenue from license updates grew 20 percent;
• Online services contributed $47 million of revenue, up 49 percent;
• Technical services revenue, which is comprised of consulting, education and technical support, grew 28 percent;
• Deferred revenue totaled $376 million, compared to $292 million at March 31, 2006; and
• There was no stock repurchase activity during the quarter due to the ongoing stock option review. Citrix has over $330 million remaining under the current repurchase authorization.

Financial Outlook for Second Fiscal Quarter 2007
Citrix management expects to achieve the following results during the second fiscal quarter 2007 ending June 30, 2007.  As a result of the voluntary stock option review, Citrix is not providing earnings per share guidance at this time.

• Net revenue is expected to be in the range of $317 million to $324 million, compared to $275 million in the second quarter of 2006.
• Total cost of revenues and operating expenses in the second quarter are expected to be in a range of approximately $254 million to $258 million. Included in the second quarter outlook are amortization expenses in the range of $10 million to $11 million and $3 million for accounting, legal, and tax fees related to the ongoing stock option review. This estimate of second quarter spending does not take into account any stock-based compensation expense or other charges likely to result from the voluntary stock option review.   

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

Financial Outlook for Fiscal Year 2007
Citrix management expects to achieve the following results for the fiscal year 2007:

• For fiscal year 2007, the company expects net revenue to be in the range of $1.31 billion to $1.33 billion, compared to $1.13 billion in fiscal year 2006. The company expects total cost of revenues and operating expenses to be in the range of $1.03 billion to $1.04 billion. Included in the fiscal year 2007 outlook is amortization expenses in the range of $41 million to $42 million, a $1 million write-off of in-process research and development related to the closing of the Ardence acquisition and $9 million for accounting, legal, and tax fees related to the ongoing stock option review. This estimate of fiscal year 2007 spending does not take into account any stock-based compensation expense or other charges likely to result from the voluntary stock option review.   

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 fiscal 2007, Citrix:

• Introduced a new version of its flagship product – Citrix Presentation Server™ 4.5 redefining state-of-the-art application delivery for Windows;
• Introduced a new Citrix Access Gateway™ appliance that supports more than 10,000 users, which is more than double what other market leading products offer;
• Introduced a new version of Citrix® GoToMyPC® 6.0, the market-leading remote access service, with a new sound capability allowing users to listen to music, voice-mail and system sounds on their PC from anywhere;
• Completed the acquisition of Ardence Inc. bringing on-demand provisioning to its application delivery infrastructure;
• Introduced version 7.1 of Ardence® RTX®, a market-leading real-time software solution, with significant enhancements including support for IPv6 and greater performance and reliability;
• Acquired Aurema Pty Ltd., which improved application delivery for Windows-based applications by boosting workload management capabilities;
• Opened a new Silicon Valley headquarters in Santa Clara, California;
• Won the 2007 SC Magazine Reader Trust Award for IPSec/SSL VPN Solution;
• Placed in the SSL VPN Leader Quadrant by Gartner, Inc., and soared to No. 2 in worldwide SSL VPN market share according to Infonetics Research Inc.;
• Won a “Top 10 Product of the Year Award” from Small Business Technology for Citrix® GoToWebinar™, and an “Excellence in Technology Award” from Small Business Computing; and
• Honored with INTERNET TELEPHONY® Magazine’s 2006 Product of the Year Award for Citrix Application Gateway™.