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Citrix Reports Record Third Quarter Earnings Results
Citrix Systems, Inc.,the global leader in application delivery infrastructure, today reported financial results for the third quarter of fiscal 2007 ended Sept. 30, 2007.

Financial Results

In the third quarter of fiscal 2007, Citrix achieved revenue of $350 million, compared to $278 million in the third quarter of fiscal 2006, representing 26 percent revenue growth.

GAAP Results

Net income for the third quarter of fiscal 2007 was $61 million, or $0.33 per diluted share, compared to $44 million, or $0.23 per diluted share for the third quarter of 2006.

Non-GAAP Results

Non-GAAP net income, in the third quarter of 2007 increased 20 percent to $77 million, or $0.41 per diluted share, compared to $65 million, or $0.34 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, stock-based compensation expenses, write-off of in-process research and development and the tax effects related to those items.

Im very pleased with our third quarter results, said Mark Templeton, president and chief executive officer for Citrix. We have been focused on execution, aligning all elements of the business to our strategy, driving the pipeline for new products and adding to our go-to-market strength.

Our results for the quarter demonstrate our success in these areas.

Q3 Financial Highlights

In reviewing the third quarter results of 2007, compared to the third quarter of 2006:

  • Product license revenue increased 24 percent;
  • Revenue from license updates grew 21 percent;
  • Online services contributed $56 million of revenue, up 43 percent;
  • Technical services revenue, which is comprised of consulting, education and technical support, grew 32 percent;
  • Revenue grew in the Americas region by 24 percent; the EMEA region by 20 percent, and the Pacific region by 31 percent;
  • Deferred revenue totaled $396 million, compared to $314 million on September 30, 2006;
  • Operating margin was 17 percent for the quarter; non-GAAP operating margin was 24 percent for the quarter, excluding the effects of amortization of intangible assets primarily related to business combinations, and stock-based compensation expense;
  • Cash flow from operations was $86 million, compared to $70 million in the third quarter of 2006. This brings total twelve month trailing cash flow from operations to $415 million.

Financial Outlook for Fourth Fiscal Quarter 2007

Citrix management offers the following guidance for the fourth fiscal quarter 2007 ending Dec. 31, 2007:

  • Net revenue is expected to be in the range of $374 million to $382 million, compared to $321 million in the fourth quarter of 2006.
  • GAAP diluted earnings per share is expected to be in the range of $0.24 to $0.25, including $0.03 of dilution related to XenSources operating expenses and additional shares issued in conjunction with the acquisition. Non-GAAP diluted earnings per share, which also includes $0.03 of dilution related to XenSources operating expenses and additional shares issued in conjunction with the acquisition, is expected to be in the range of $0.42 to $0.43. In addition, this earnings per share range excludes $0.10 related to the effects of amortization of intangible assets primarily related to business combinations and the expected write-off of in-process research and development in connection with the acquisition of XenSource, and $0.08 to $0.09 related to the effects of stock-based compensation expenses. 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:

  • The company expects net revenue to be in the range of $1.36 billion to $1.37 billion, compared to $1.13 billion in fiscal year 2006.
  • GAAP diluted earnings per share is expected to be in the range of $1.05 to $1.06, including $0.03 of dilution related to XenSources operating expenses and additional shares issued in conjunction with the acquisition. Non-GAAP diluted earnings per share, which also includes $0.03 of dilution related to XenSources operating expenses and additional shares issued in conjunction with the acquisition, is expected to be in the range of $1.52 to $1.53. In addition, this earnings per share range excludes $0.22 related to the effects of amortization of intangible assets primarily related to business combinations and expected write-off of in-process research and development in connection with the acquisition of XenSource and the write-off of in-process research and development related to the Ardence acquisition, and $0.25 to $0.26 related to the effects of stock-based compensation expenses. 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 third quarter of 2007, Citrix:

  • Announced our intention to acquire XenSource, Inc., to enhance solutions in the server and desktop virtualization markets
  • Extended its virtualization alliance with Microsoft by standardizing on a virtualization format making it easier for customers to deliver desktops and applications to end users
  • Citrix Password Manager placed in the Leaders Quadrant for the Magic Quadrant for Enterprise Single Sign-On, 2007 report authored by Gartner Research
  • Acquired QuickTree to give customers the best way to leverage XML enabled applications and next-generation service oriented architectures
  • Citrix® GoToMeeting® was cited as offering Best Overall Customer Experience in a Wainhouse Research report for ease of use, instant meetings and value
  • Named a Strong Performer in Forrester Wave Report: WAN Optimization Appliances, Q3 2007 dated July 20, 2007 for having one of the best strategies in the WAN optimization industry
  • Received 2007 Frost & Sullivan award for innovation in the SSL VPN marketplace
Published Thursday, October 18, 2007 5:33 AM by David Marshall
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