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Citrix Reports 2013 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, 2013.

FINANCIAL RESULTS

For the fourth quarter of fiscal year 2013, Citrix achieved revenue of $802 million, compared to $740 million in the fourth quarter of fiscal year 2012, representing 8 percent revenue growth. For fiscal year 2013, Citrix reported annual revenues of $2.92 billion, compared to $2.59 billion for fiscal year 2012, a 13 percent increase.

GAAP Results

Net income for the fourth quarter of fiscal year 2013 was $139 million, or $0.74 per diluted share, compared to $114 million, or $0.60 per diluted share, for the fourth quarter of fiscal year 2012. Annual net income for fiscal year 2013 was $340 million, or $1.80 per diluted share, compared to $353 million, or $1.86 per diluted share for fiscal year 2012.

Non-GAAP Results

Non-GAAP net income for the fourth quarter of fiscal year 2013 was $195 million, or $1.04 per diluted share, compared to $169 million, or $0.90 per diluted share for the fourth quarter of fiscal year 2012. Non-GAAP net income excludes the effects of amortization of acquired intangible assets, stock-based compensation expenses and the tax effects related to these items.

Annual non-GAAP net income for fiscal year 2013 was $568 million, or $3.02 per diluted share, compared to $543 million, or $2.87 per diluted share for fiscal year 2012. Non-GAAP net income excludes the effects of amortization of acquired intangible assets, stock-based compensation expenses and the tax effects related to these items.

“We continued to see strong growth in our networking business for both the quarter and for the full year,” said David Henshall, acting chief executive officer and chief financial officer. “In the mobility space, XenMobile, while still early stage, also showed strong momentum. We are well positioned to help our customers embrace enterprise mobility by providing infrastructure and cloud services to build and manage secure, mobile workspaces.”

In addition, Citrix announced today that the company’s chief executive officer, Mark B. Templeton, will be returning from his previously announced leave of absence to resume his role as CEO. Mr. Templeton intends to retire within the next year, subject to the naming of his successor. The board of directors has formed a committee of independent directors to lead a search process to identify the next CEO.

David J. Henshall, who has been serving as acting CEO, has been promoted to chief operating officer and will retain a portion of the executive responsibilities that he assumed during Mr. Templeton’s absence. Mr. Henshall will continue in his roles as executive vice president and chief financial officer, with responsibility for the company’s finance and accounting organizations.

“I would like to express my deep appreciation to the board of directors for allowing me time to support my family,” stated Mark Templeton. “I remain fully committed to Citrix until my successor is named and the CEO transition is complete.”

Citrix Chairman Thomas F. Bogan said, “Speaking on behalf of the entire board, we are excited to welcome Mark back as CEO. I also would like to acknowledge the important role that David Henshall has played in leading Citrix during Mark’s absence. We look forward to Mark and David’s continuing leadership and contributions to our company.”

Q4 Financial Summary

In reviewing the results for the fourth quarter of fiscal year 2013, compared to the fourth quarter of fiscal year 2012:

  • Product and license revenue increased a half of a percent;
  • Software as a service revenue increased 13 percent;
  • Revenue from license updates and maintenance increased 11 percent;
  • Professional services revenue, which is comprised of consulting, product training and certification, increased 28 percent;
  • Net revenue increased in the EMEA region by 14 percent, increased in the Americas region by 8 percent and decreased in the Pacific region by 12 percent;
  • Deferred revenue totaled $1.4 billion as of December 31, 2013, compared to $1.2 billion as of December 31, 2012, an increase of 18 percent; and
  • Cash flow from operations was $230 million for the fourth quarter of fiscal year 2013, compared with $227 million for the fourth quarter of fiscal year 2012.

During the fourth quarter of fiscal year 2013:

  • GAAP gross margin was 83 percent and non-GAAP gross margin was 86 percent, excluding the effects of amortization of acquired product related intangible assets and stock-based compensation expense;
  • GAAP operating margin was 20 percent and non-GAAP operating margin was 30 percent, excluding the effects of amortization of acquired intangible assets and stock-based compensation expense; and
  • The company repurchased 4.4 million shares at an average price of $57.84.

Annual Financial Summary

In reviewing the results for fiscal year 2013 compared to fiscal year 2012:

  • Product and license revenue increased 7 percent;
  • Software as a service revenue increased 14 percent;
  • Revenue from license updates and maintenance increased 16 percent;
  • Professional services revenue, which is comprised of consulting, product training and certification, increased 17 percent;
  • Net revenue increased in the Americas region by 14 percent, increased in the EMEA region by 14 percent and increased in the Pacific region by 3 percent; and
  • Cash flow from operations was $928 million for fiscal year 2013 compared with $819 million for fiscal year 2012.

During the year ended December 31, 2013:

  • GAAP gross margin was 83 percent and non-GAAP gross margin was 86 percent, excluding the effects of amortization of acquired product related intangible assets and stock-based compensation expense;
  • GAAP operating margin was 13 percent and non-GAAP operating margin was 24 percent, excluding the effects of amortization of acquired intangible assets and stock-based compensation expense; and
  • The company repurchased 7.0 million shares at an average price of $62.40.

Financial Outlook for Fiscal Year 2014

Citrix management expects to achieve the following results for fiscal year ending December 31, 2014:

  • Net revenue is targeted to grow by approximately 8 percent to 10 percent.
  • GAAP gross margin is targeted to be in the range of 81 percent to 82 percent. Non-GAAP gross margin is targeted to be in the range of 84 percent to 85 percent, excluding 3 percent related to the effects of amortization of acquired product related intangible assets and stock-based compensation expense.
  • GAAP diluted earnings per share is targeted to be in the range of $1.58 to $1.69. Non-GAAP diluted earnings per share is targeted to be in the range of $2.85 to $2.95, excluding $0.75 related to the effects of amortization of acquired intangible assets, $1.05 related to the effects of stock-based compensation expenses, and $(0.43) to $(0.64) for the tax effects related to these items.
  • GAAP tax rate is targeted to be in the range of 19 percent to 20 percent. Non-GAAP tax rate, which excludes the effects of amortization of acquired intangible assets and stock-based compensation expenses, is targeted to be in the range of 24 percent to 25 percent.

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

Financial Outlook for First Quarter 2014

Citrix management expects to achieve the following results for the first quarter of fiscal year 2014 ending March 31, 2014:

  • Net revenue is targeted to grow by approximately 8 percent to 10 percent.
  • GAAP gross margin is targeted to be in the range of 81 percent to 82 percent. Non-GAAP gross margin is targeted to be in the range of 84 percent to 85 percent, excluding 3 percent related to the effects of amortization of acquired product related intangible assets and stock-based compensation expense.
  • GAAP diluted earnings per share is targeted to be in the range of $0.24 to $0.26. Non-GAAP diluted earnings per share is targeted to be in the range of $0.57 to $0.60, excluding $0.19 related to the effects of amortization of acquired intangible assets, $0.26 related to the effects of stock-based compensation expenses, and $(0.09) to $(0.14) for the tax effects related to these items.

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

Published Thursday, January 30, 2014 7:08 AM by David Marshall
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