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Citrix Reports Fourth Quarter and Fiscal Year Financial Results for 2009

Citrix Systems, Inc. (Nasdaq:CTXS) today reported financial results for the fourth quarter and fiscal year ended December 31, 2009.

FINANCIAL RESULTS

In the fourth quarter of fiscal 2009, Citrix achieved revenue of $451 million, compared to $416 million in the fourth quarter of fiscal 2008, representing 9 percent revenue growth. For the fiscal year 2009, Citrix reported annual revenues of $1.61 billion, compared to $1.58 billion in the previous year, a 2 percent increase.

GAAP Results

Net income for the fourth quarter of fiscal 2009 was $88 million, or $0.47 per diluted share, compared to $60 million, or $0.33 per diluted share, for the fourth quarter of 2008. Annual net income for 2009 was $191 million, or $1.03 per diluted share, compared to $178 million, or $0.96 per diluted share in fiscal 2008.

Non-GAAP Results

Non-GAAP net income in the fourth quarter of fiscal 2009 was $123 million, or $0.66 per diluted share, compared to $87 million, or $0.48 per diluted share, in the comparable period last year. This includes net tax benefits of approximately $23 million recognized in the quarter. Non-GAAP net income for both periods excludes the effects of amortization of intangible assets primarily related to business combinations and stock-based compensation expense and the tax effects related to those items. In addition, non-GAAP net income for the fourth quarter of 2009 excludes charges recorded in connection with the restructuring program that the company implemented in January 2009, and the tax effects related to those items. Non-GAAP net income in the fourth quarter of 2008 excludes a non-cash benefit of approximately $6 million related to the adjustment of payroll taxes accrued in connection with the company’s voluntary, independent investigation of its historical stock option granting practices that was concluded in 2007. It also excludes in-process research and development and related tax effects.

Annual non-GAAP net income for 2009 was $334 million, or $1.81 per diluted share, compared to $304 million, or $1.63 per diluted share, in 2008. Non-GAAP net income for both periods excludes the effects of the amortization of intangible assets primarily related to business combinations, stock-based compensation expenses, and the tax effects related to those items. In addition, non-GAAP net income for 2009 excludes charges recorded in connection with the restructuring program that the company implemented in January 2009, and the tax effects related to those items. Non-GAAP net income for 2008 excludes the non-cash benefit related to payroll taxes taken in the fourth quarter of fiscal 2008 and of in-process research and development related to business combinations.

“I’m pleased with our results for the fourth quarter, and for the full year in light of the uncertain market conditions we faced,” said Mark Templeton, president and chief executive officer for Citrix.

“In the fourth quarter, we saw a lot of interest in desktop virtualization. That combined with the timely launch of XenDesktop and uncommitted IT budget dollars, helped propel a record-breaking quarter. For the full year, our disciplined financial and operational management served us well, and we are positioned for continued improvement in our cost model. In addition, we continue to see CIOs looking for ways to simplify and drive costs out of enterprise computing. Going forward, we’ll set our sights on helping those CIOs by bringing desktop virtualization to the mainstream, broadening the reach of web collaboration, and powering public and private clouds.”

Q4 Financial Summary

In reviewing the fourth quarter results of 2009, compared to the fourth quarter of 2008:

  • Product license revenue increased 4 percent;
  • Revenue from license updates grew 6 percent;
  • Online services revenue grew 18 percent;
  • Technical services revenue, which is comprised of consulting, education and technical support, grew 20 percent;
  • Revenue increased in the Americas’ region by 7 percent, increased in the EMEA region by 3 percent, and increased in the Pacific region by 21 percent;
  • Deferred revenue totaled $619 million, compared to $533 million on December 31, 2008;
  • GAAP operating margin was 17 percent for the quarter, and non-GAAP operating margin was 28 percent for the quarter, excluding the effects of amortization of intangible assets primarily related to business combinations, stock-based compensation expense and costs associated with the restructuring program;
  • Cash flow from operations was $178 million, compared with $166 million in the fourth quarter of 2008; and
  • The company repurchased 2.0 million shares at an average net price of $38.54 per share.

Annual Financial Summary

In reviewing 2009 results compared to 2008 results:

  • Product license revenue decreased 13 percent;
  • Revenue from license updates grew 8 percent;
  • Online services revenue grew 19 percent;
  • Technical services revenue, which is comprised of consulting, education and technical support, grew 13 percent;
  • Revenue grew in the Americas’ region by 4 percent, decreased in the EMEA region by 8 percent, and grew in the Pacific region by 1 percent;
  • GAAP operating margin was 11 percent for fiscal 2009, and non-GAAP operating margin was 24 percent, excluding the effects of amortization of intangible assets primarily related to business combinations, stock-based compensation expense, and costs associated with the restructuring program;
  • Cash flow from operations was $484 million for fiscal 2009 compared with $462 million last year; and
  • During fiscal 2009, the company repurchased 6.5 million shares at an average net price per share of $33.23.

Financial Outlook for First Quarter 2010

Citrix management expects to achieve the following results during its first fiscal quarter 2010 ending March 31, 2010:

  • Net revenue is expected to be in the range of $405 million to $410 million;
  • Interest income is expected to be $3 million to $4 million; and
  • GAAP diluted earnings per share is expected to be in the range of $0.23 to $0.25. Non-GAAP diluted earnings per share is expected to be in the range of $0.39 to $0.40, excluding $0.09 related to the effects of amortization of intangible assets primarily related to business combinations, $0.14 related to the effects of stock-based compensation expenses, and $(0.07) to $(0.08) for the effect of the differential between the GAAP and non-GAAP tax rates and tax effects related to these items.

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

Financial Outlook for Fiscal Year 2010

Citrix management expects to achieve the following results during its fiscal year 2010 ending December 31, 2010:

  • Net revenue is expected to be in the range of $1.74 billion to $1.76 billion;
  • Non-GAAP operating margin is expected to increase between 75 and 100 basis points compared to the fiscal year 2009, excluding the effects of amortization and stock-based compensation expense, and restructuring;
  • Interest income is expected to be $16 million to $19 million; and
  • GAAP diluted earnings per share is expected to be in the range of $1.33 to $1.34. Non-GAAP diluted earnings per share is expected to be in the range of $1.87 to $1.90, excluding $0.32 related to the effects of amortization of intangible assets primarily related to business combinations, $0.53 related to the effects of stock-based compensation expenses, and $(0.29) to $(0.31) for the effect of the differential between the GAAP and non-GAAP tax rates and tax effects related to these items.

 

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 2009, Citrix announced:

  • Citrix® XenDesktop® 4, the first and only product to deliver every type of virtual desktop from a single, integrated solution thanks to its new FlexCast™ technology. Additionally, XenDesktop 4 now integrates all the capabilities of Citrix® XenApp™.
  • Enhanced high-definition HDX™ technology, available in Citrix XenDesktop 4, which delivers the best possible user experience for real-time multimedia and 3D content while utilizing 90 percent less bandwidth than competing solutions.
  • The “Trade-up to XenDesktop 4” program that allows XenApp customers to trade up their existing concurrent user licenses for twice the number of XenDesktop 4 user licenses.
  • The new Citrix Ready™ Open Desktop Virtualization program, which validates that 10,000 third-party products from 200 industry partners are ready to deploy with Citrix XenDesktop 4.
  • XenDesktop won an InfoWorld Technology of the Year award, being honored as one of the best and most innovative products on the IT landscape.
  • Availability of Citrix Essentials™ for Microsoft® Hyper-V™, which now includes Citrix StorageLink™ Site Recovery, a powerful set of tools that make end-to-end business continuity accessible, affordable, and easy to deploy.
  • “Pay As You Grow” pricing for Citrix® NetScaler® that gives customers unprecedented licensing flexibility to expand capacity and functionality on demand, while managing hardware costs.
  • Availability of Citrix® Dazzle™ for Windows and Mac, along with new versions of Citrix Receiver™ for Windows, Mac, iPhone, Blackberry and Android, bringing self service and mobility to virtual desktop users.

Conference Call Information

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 by visiting the Investor Relations section of the Citrix corporate website at http://www.citrix.com/investors/investors for approximately 30 days. In addition, an audio replay of the conference call will be available for approximately 30 days by dialing (800) 642-1687 or (706) 645-9291 (passcode required: 49871918).

Published Thursday, January 28, 2010 5:42 AM by David Marshall
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