Citrix Systems, Inc. (Nasdaq:CTXS), the global leader in application delivery infrastructure, today reported quarterly revenues and other financial information for the second quarter of fiscal 2007 ended June 30, 2007.

Operational Highlights

In the second quarter of fiscal 2007, Citrix achieved revenue of $334 million, compared to $275 million in the second quarter of fiscal 2006, representing 21 percent revenue growth.

In the second 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 and amortization of intangible assets was approximately $268 million. This amount includes amortization expense of approximately $10 million and approximately $3 million in accounting, legal, and tax fees related to the voluntary stock option review. Other income was approximately $12.5 million. Due to the voluntary stock option review, costs and expenses reported today do not include any stock-based compensation expense.

“I’m very pleased with our second quarter results,” said Mark Templeton, president and chief executive officer for Citrix. “We capped a great first half of the year with record $334 million of revenue in the second quarter, and $642 million for the first half -- growing 21 percent and 20 percent, respectively.

“The combination of our results, strong market traction, and the relevancy of Application Delivery Infrastructure to our customers, fuels my optimism for the rest of the year.”

Stock Option Review

On June 13, 2007, the company announced the findings of its voluntary review into Citrix’s historical stock option granting practices and related accounting. As a result of the voluntary review and as previously announced, the company intends to restate its issued financial statements and reports for fiscal years 2004 and 2005 and for the interim quarterly periods for 2005 and 2006 to reflect the additional non-cash stock-based compensation expense and related tax effects that should have been recorded with respect to stock option grants whose accounting measurement dates are being revised. After completion of its investigation, the Audit Committee of the company’s Board of Directors concluded that there was no intentional wrongdoing by any current executive of the company in connection with the company's stock option grants and procedures during the period under review (1996-2006).

The company also announced its decision to consult with the Office of Chief Accountant ("OCA") of the Securities and Exchange Commission. Because of the pending OCA consultation, the company has not yet determined conclusively the amount of additional non-cash compensation expense to be recorded or the resulting tax impact and today is not providing full GAAP or non-GAAP financial statements for the second quarter of fiscal 2007.

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 completion of the OCA consultation process. The company will release full second quarter financial statements in a press release at that time.

Today the company also announced that the Nasdaq Listing Qualifications Panel, subject to certain conditions, has granted the company a further extension of time until August 30, 2007 in which to file its Annual Report on Form 10-K for the year ended December 31, 2006 and its Quarterly Report on Form 10-Q for the quarter ended March 31, 2007, all required restated and other financial statements for previous periods, and to otherwise meet all necessary listing standards of the Nasdaq Global Select Market. During the extension period, the company's common stock will continue to be listed on the Nasdaq Global Select Market.

Q2 Financial Highlights

In reviewing the second quarter of 2007, compared to the second quarter of 2006:

• Product license revenue increased 16 percent;
• Revenue from license updates grew 18 percent;
• Online services contributed $52 million of revenue, up 47 percent;
• Technical services revenue, which is comprised of consulting, education and technical support, grew 22 percent;
• Deferred revenue totaled $395 million, compared to $311 million on June 30, 2006;
• There was no stock repurchase activity during the quarter due to the voluntary stock option review. Citrix has over $330 million remaining under the current repurchase authorization.

Financial Outlook for Third Fiscal Quarter 2007

Citrix management expects to achieve the following results during the third fiscal quarter 2007 ending September 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 $335 million to $343 million, compared to $278 million in the third quarter of 2006.
• Total cost of revenues and operating expenses in the third quarter are expected to be in a range of approximately $266 million to $272 million. Included in the third quarter outlook are amortization expenses in the range of $10 million to $11 million and $2 million for accounting, legal, and tax fees related to the voluntary stock option review. This estimate of third 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 $1.340 billion to $1.360 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 $1.066 billion to $1.076 billion. Included in the fiscal year 2007 outlook is amortization expenses in the range of $41 million to $42 million, a $1.2 million write-off of in-process research and development related to the closing of the Ardence acquisition and $11 million for accounting, legal, and tax fees related to the voluntary 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 second quarter of 2007, Citrix:

• Was positioned by Gartner, Inc. in the leaders quadrant of the “Magic Quadrant for Application Delivery Products, 2007".
• Introduced Citrix Desktop Server™ 1.0 allowing IT organizations to deliver desktops as a service over the network and marking the company’s entrance into the burgeoning virtual desktop market.
• Unveiled Citrix® NetScaler® 8.0, the first web application delivery controller in the industry to integrate web application firewall, SSL VPN and end-user experience monitoring to improve the delivery of today’s increasingly complex web applications.
• Won two awards from the Software & Information Industry Association’s (SIIA) CODiE Awards in the Best Data Security Solution and Best Identity Management Solution categories for Citrix Password Manager™, now an integrated component of Citrix Presentation Server, Platinum Edition, the company’s flagship Windows application delivery controller.
• Broadened its application delivery management capabilities with Citrix EdgeSight™ 4.5, a leading application performance monitoring solution, and the all-new Citrix EdgeSight™ for Load Testing, a powerful load- and regression-testing solution that substantially increases IT’s ability to ensure a stable and predictable application delivery environment.
• Posted quarter-over-quarter market share gains for the Citrix® NetScaler® web application delivery product line according to a new report from Gartner titled, “Market Share: Application Acceleration Equipment, Worldwide, 1Q07”.
• Debuted Citrix GoToAssist 8.0 redefining the support experience with a new collaborative platform.