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Citrix Reports Record Fourth Quarter and Fiscal Year 2007 Financial Results

Citrix Systems, Inc. (Nasdaq:CTXS), the global leader in application delivery infrastructure, today reported financial results for the fourth quarter and fiscal year ended December 31, 2007.

Financial Results

In the fourth quarter of fiscal 2007, Citrix achieved revenue of $400 million, compared to $321 million in the fourth quarter of fiscal 2006, representing 24 percent revenue growth. Annual revenues for 2007 were $1.39 billion, compared to $1.13 billion in the previous year, a 23 percent increase.

GAAP Results

Net income for the fourth quarter of fiscal 2007 was $63 million, or $0.33 per diluted share, compared to $53 million, or $0.29 per diluted share for the fourth quarter of 2006. Annual net income for 2007 was $214 million, or $1.14 per diluted share, compared to $183 million, or $0.97 per diluted share in fiscal 2006.

Non-GAAP Results

Non-GAAP net income in the fourth quarter of 2007 increased 31 percent to $95 million, or $0.49 per diluted share, compared to $72 million, or $0.39 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, the write-off of in-process research and development (IPR&D) and the tax effects related to those items.

Annual non-GAAP net income for 2007 was $299 million, or $1.59 per diluted share, compared to $260 million, or $1.38 per diluted share, in 2006. Non-GAAP net income excludes the effects of amortization of intangible assets primarily related to business combinations, stock-based compensation expenses, the write-off of IPR&D and the tax effects related to those items.

What a great quarter to cap off an outstanding year, said Mark Templeton, president and CEO of Citrix. For the year, we saw very strong revenue growth, good EPS growth, and real traction in product licensing.

Our results are proof that the application delivery strategy is resonating with our customers.

In addition to quarterly and year-end financial results, Citrix also announced that its board of directors has authorized it to repurchase up to an additional $300 million of its common stock. As of December 31, 2007, approximately $33 million remained in authority from previous approvals. The total amount authorized pursuant to the companys ongoing stock repurchase program is $1.8 billion, including the current authorization. The company plans to buy shares on the open market and through its structured repurchase programs from time to time, depending on market conditions.

Q4 Financial Highlights

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

  • Product license revenue increased 24 percent;
  • Revenue from license updates grew 19 percent;
  • Online services contributed $59 million of revenue, representing an increase of 37 percent; and,
  • Technical services revenue, which is comprised of consulting, education and technical support, grew 28 percent;
  • Revenue grew in the Americas region by 23 percent; the EMEA region by 22 percent, and the Pacific region by 21 percent;
  • Deferred revenue totaled $443 million, compared to $356 million on December 31, 2006;
  • Operating margin was 12 percent for the quarter; non-GAAP operating margin was 25 percent for the quarter, excluding the effects of amortization of intangible assets primarily related to business combinations, stock-based compensation expense and the write-off of IPR&D
  • Cash flow from operations was $112 million, compared to $97 million in the fourth quarter of 2006;
  • Repurchased shares were 5.4 million shares at an average price paid per share of $39.46.

Annual Financial Highlights

  • Total annual revenue grew 23 percent compared to fiscal 2006;
  • Annual diluted earnings per share for fiscal 2007 increased 17 percent compared to fiscal 2006. Annual non-GAAP diluted earnings per share for fiscal 2007 increased 15 percent compared to fiscal 2006. Annual non-GAAP diluted earnings per share excludes the effects of amortization of intangible assets primarily related to business combinations, stock-based compensation expenses, the write-off of IPR&D and the tax effects related to those items;
  • Operating margin was 15 percent for fiscal 2007; non-GAAP operating margin was 23 percent, excluding the effects of amortization of intangible assets primarily related to business combinations, stock-based compensation expenses and the write-off of IPR&D;
  • Cash flow from operations was $424 million for fiscal 2007 compared with $329 million last year;
  • During fiscal 2007, the company repurchased 5.4 million shares at an average net price per share of $38.78 for a total value of approximately $209 million.

Financial Outlook for First Quarter 2008

Citrix management expects to achieve the following results during its first fiscal quarter 2008 ending March 31, 2008:

  • Net revenue is expected to be in the range of $367 million to $377 million, compared to $308 million in the first quarter of 2007;
  • GAAP diluted earnings per share is expected to be in the range of $0.15 to $0.17. Non-GAAP diluted earnings per share is expected to be in the range of $0.33 to $0.35, excluding $0.07 related to the effects of amortization of intangible assets primarily related to business combinations and $0.11 to $0.12 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 2008

Citrix management expects to achieve the following results for the fiscal year 2008:

  • The company expects net revenue to be in the range of $1.615 billion to $1.645 billion. The company expects GAAP diluted earnings per share to be in the range of $0.85 to $0.87. Non-GAAP diluted earnings per share to be in the range of $1.61 to $1.64. In addition, this number excludes $0.27 related to the effects of the amortization of intangible assets and $0.49 to $0.50 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 fourth quarter of 2007, Citrix announced:

  • The completion of the XenSource acquisition;
  • Its end-to-end virtualization strategy following the close of the XenSource acquisition allowing us to provide the industrys broadest virtualization portfolio extending across servers, applications and desktops;
  • A live demonstration in the Citrix iForumTM Tech Lab that highlighted advanced, first-of-its-kind technology marrying application acceleration from Citrix with Windows-based networking and application services from Microsoft;
  • A partnership with Dell to deliver a XenServer embedded hypervisor on all Dell PowerEdge Servers for simple, easy-to-use and manage virtualization to customers of all sizes;
  • A partnership with HP to qualify and sell Citrix XenServer Enterprise Edition on industry-standard HP ProLiant and BladeSystem servers;
  • On-demand provisioning of virtual servers and desktops to dynamically stream datacenter workloads and desktop operating systems from network storage;
  • Gartner, Inc. positioned Citrix Access GatewayTM in the leaders quadrant in the Magic Quadrant for SSL VPN, North America, 3Q07 report;
  • PC Magazine selected Citrix® GoToMeeting® for its list of the Best of 2007 for Web Services. In addition, Customer Interaction Solutions magazine recognized Citrix® GoToWebinar and Citrix® GoToAssist® with two Product of the Year Awards;
  • LAPTOP Magazine picked Citrix® GoToMyPC® for Ultimate Choice and GoToMeeting for Editors Choice awards.
Published Thursday, January 24, 2008 5:48 AM by David Marshall
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