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Citrix Reports 2010 Fourth Quarter and Fiscal Year Financial Results

Citrix Systems, Inc. (NASDAQ:CTXS) today reported financial results for the fourth quarter and fiscal year ended December 31, 2010.

FINANCIAL RESULTS

In the fourth quarter of fiscal 2010, Citrix achieved revenue of $530 million, compared to $451 million in the fourth quarter of fiscal 2009, representing 17 percent revenue growth. For the fiscal year 2010, Citrix reported annual revenues of $1.87 billion, compared to $1.61 billion in the previous year, a 16 percent increase.

GAAP Results

Net income for the fourth quarter of fiscal 2010 was $94 million, or $0.49 per diluted share, compared to $88 million, or $0.47 per diluted share, for the fourth quarter of 2009. Annual net income for 2010 was $277 million, or $1.46 per diluted share, compared to $191 million, or $1.03 per diluted share in fiscal 2009.

Non-GAAP Results

Non-GAAP net income in the fourth quarter of fiscal 2010 was $125 million, or $0.65 per diluted share, compared to $123 million, or $0.66 per diluted share, in the comparable period last year. Non-GAAP net income for both periods excludes the effects of amortization of intangible assets primarily related to business combinations, stock-based compensation expenses and charges recorded in connection with the restructuring program that the company implemented in January 2009 and the tax effects related to those items.

Annual non-GAAP net income for 2010 was $396 million, or $2.08 per diluted share, compared to $334 million, or $1.81 per diluted share, in 2009. Non-GAAP net income for both periods excludes the effects of amortization of intangible assets primarily related to business combinations, stock-based compensation expenses and charges recorded in connection with the restructuring program that the company implemented in January 2009 and the tax effects related to those items.

“In 2010, we achieved stronger market leadership positions in Desktop Virtualization, Web Collaboration and App Networking. Citrix gained significant strategic visibility in the IT executive suite, and we delivered solid operating leverage in our financial model,” said Mark Templeton, president and chief executive officer for Citrix.

“I’m very pleased with our results – a fantastic year.

“Our customers are telling us they want to simplify enterprise computing, they want to embrace IT consumerization, and they are ready to adopt more cloud services – all to transform IT to an on-demand service. These three powerful market forces are driving a need for Citrix virtual infrastructure and making our platform more relevant and strategic.

“We will focus in 2011 on further leveraging our unique market opportunity by broadening the reach of web collaboration, by enabling public and private clouds, and driving mainstream adoption of desktop virtualization.”

Q4 Financial Summary

In reviewing the fourth quarter results of 2010, compared to the fourth quarter of 2009:

  • Product license revenue increased 17 percent;
  • Revenue from license updates grew 13 percent;
  • Online services revenue grew 16 percent;
  • Technical services revenue, which is comprised of consulting, education and technical support, grew 40 percent;
  • Revenue increased in the Americas’ region by 27 percent, the EMEA region by 7 percent and the Pacific region by 15 percent;
  • Deferred revenue totaled $779 million, compared to $619 million on December 31, 2009;
  • GAAP operating margin was 21 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 2009 restructuring program;
  • Cash flow from operations was $179 million, compared with $178 million in the fourth quarter of 2009; and
  • The company repurchased 1.9 million shares at an average price of $65.90.

 

Annual Financial Summary

In reviewing 2010 results compared to 2009 results:

  • Product license revenue grew 15 percent;
  • License updates revenue grew 13 percent;
  • Online services revenue grew 17 percent;
  • Technical services revenue, which is comprised of consulting, education and technical support, grew 31 percent;
  • Revenue increased in the Americas’ region by 20 percent, the EMEA region by 8 percent, and the Pacific region by 21 percent;
  • GAAP operating margin was 17 percent for fiscal 2010, and non-GAAP operating margin was 26 percent, excluding the effects of amortization of intangible assets primarily related to business combinations, stock-based compensation expense and costs associated with the 2009 restructuring program.
  • Cash flow from operations was $616 million for fiscal 2010 compared with $484 million last year; and
  • During fiscal 2010, the company repurchased 8.3 million shares at an average price of $53.14.

 

Financial Outlook for Fiscal Year 2011

Citrix management expects to achieve the following results during its fiscal year 2011 ending December 31, 2011:

  • Net revenue is expected to be in the range of $2.10 billion to $2.14 billion;
  • GAAP diluted earnings per share is expected to be in the range of $1.78 to $1.84. Non-GAAP diluted earnings per share is expected to be in the range of $2.29 to $2.33, excluding $0.34 related to the effects of amortization of intangible assets primarily related to business combinations, $0.45 related to the effects of stock-based compensation expenses, charges recorded in conjunction with the company’s 2009 restructuring program, if any, and $(0.24) to $(0.34) 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 First Quarter 2011

Citrix management expects to achieve the following results during its first fiscal quarter of 2011 ending March 31, 2011:

  • Net revenue is expected to be in the range of $470 million to $475 million; and
  • GAAP diluted earnings per share is expected to be in the range of $0.27 to $0.28. Non-GAAP diluted earnings per share is expected to be in the range of $0.40 to $0.41, excluding $0.08 related to the effects of amortization of intangible assets primarily related to business combinations, $0.11 related to the effects of stock-based compensation expenses, charges recorded in conjunction with the company’s 2009 restructuring program, if any, and $(0.05) to $(0.07) for the effect of the differential between the GAAP and non-GAAP tax rates and tax effects related to these items.
  • Non-GAAP tax rate, which excludes the effects of amortization of intangible assets primarily related to business combinations, stock-based compensation expense and charges recorded in conjunction with the company’s 2009 restructuring program, if any, is expected to be in the range of 22% to 23%.

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 2010, Citrix announced:

  • Entered into a definitive agreement to acquire Netviewer AG, a privately held European software-as-a-service (SaaS) vendor in collaboration and IT services. Citrix currently expects this acquisition to close in the first quarter of 2011.
  • The worldwide availability of Citrix® XenDesktop® 5, which supports a wide range of new consumer devices, thousands of new third-party products and an entirely new generation of web and SaaS applications. Citrix also announced a new Desktop Transformation Model, which includes a variety of technical services to accelerate desktop virtualization implementations.
  • Citrix Receiver™ for Chrome Notebooks, which will allow Google customers to run their existing Windows business applications directly on the new web-based Chrome notebooks with a native user experience, fast performance and full enterprise security.
  • A new version of Citrix XenServer® with significant new storage and networking innovations.
  • Two additions to the Citrix OpenCloud™ platform, Access and Bridge, that extend the trust, performance and security of the enterprise datacenter to any internal or external cloud environment, regardless of hypervisor, network or application type.
  • A major release of Citrix Receiver that adds extensive user experience enhancements to the company’s universal software client for accessing any existing business application, desktop or document on any device. Enhancements include the ability to touch-enable existing Windows applications on any touchscreen tablet and smartphone as well as support for a broad range of new devices, such as the BlackBerry PlayBook, Cisco Cius, Dell Streak and the Samsung Galaxy offerings.
  • New Citrix NetScaler® VPX™ web application delivery software certified to integrate with HP’s high-performance 5400zl and 8200zl switch series to converge datacenter switching and load balancing into a single device to lower operational costs, increase application availability and speed-up performance.
Published Thursday, January 27, 2011 5:43 AM by David Marshall
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