Citrix Systems, Inc. (NASDAQ:CTXS) today reported financial results for the first quarter of fiscal year 2014 ended March 31, 2014.

FINANCIAL RESULTS

For the first quarter of fiscal year 2014, Citrix achieved revenue of $751 million, compared to $673 million in the first quarter of fiscal year 2013, representing 12 percent revenue growth.

GAAP Results

Net income for the first quarter of fiscal year 2014 was $56 million, or $0.30 per diluted share, compared to $60 million, or $0.32 per diluted share, for the first quarter of fiscal year 2013. The current quarter GAAP results include a restructuring charge of approximately $10 million for severance costs incurred to better align resources to strategic initiatives. Net income for the first quarter of fiscal year 2013 includes net tax benefits of approximately $9 million, or $0.05 per diluted share.

Non-GAAP Results

Non-GAAP net income for the first quarter of fiscal year 2014 was $119 million, or $0.64 per diluted share, compared to $117 million, or $0.62 per diluted share, for the first quarter of fiscal year 2013. Non-GAAP net income for the first quarter of fiscal year 2013 includes net tax benefits of approximately $9 million, or $0.05 per diluted share. 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. In addition, non-GAAP net income for the first quarter of fiscal year 2014 also excludes the effect of the restructuring program implemented in the first quarter of fiscal year 2014.

In addition to quarterly financial results, Citrix also announced that its Board of Directors has authorized it to repurchase up to an additional $1.5 billion of its common stock. As of March 31, 2014, approximately $429 million remained for repurchases from previous authorizations.

“Our customers are looking for ways to embrace mobility, the cloud, IT consumerization and BYOD,” said Mark Templeton, CEO for Citrix. “Those needs are right in our sweet spot. As a leading provider in infrastructure and cloud services, we are uniquely positioned to help our customers deliver secure, managed, mobile workspaces.”

“I’m pleased with our performance in Q1, and the strong start to the year,” said David Henshall, CFO and COO for Citrix. “We saw growth in all our geographic markets, while delivering record cash flow from operations. Our results were driven by balanced growth across all three of our primary businesses: mobile and desktop, cloud networking, and SaaS.”

Q1 Financial Summary

In reviewing the results for the first quarter of fiscal year 2014, compared to the first quarter of fiscal year 2013:

• Product and license revenue increased 7 percent;
• Software as a service revenue increased 14 percent;
• Revenue from license updates and maintenance increased 9 percent;
• Professional services revenue, which is comprised of consulting, product training and certification, increased 60 percent;
• Revenue increased in the EMEA region by 15 percent; increased in the Americas region by 9 percent, and increased in the Pacific region by 8 percent;
• Deferred revenue totaled $1.4 billion as of March 31, 2014, compared to $1.2 billion as of March 31, 2013, an increase of 15%; and
• Cash flow from operations was $288 million for the first quarter of fiscal year 2014, compared with $267 million for the first quarter of fiscal year 2013.

During the first quarter of fiscal year 2014:

• GAAP gross margin was 82 percent, and non-GAAP gross margin was 85 percent, excluding the effects of amortization of acquired product related intangible assets and stock-based compensation expense; and
• GAAP operating margin was 10 percent, and non-GAAP operating margin was 21 percent, excluding the effects of amortization of acquired intangible assets, stock-based compensation expenses and costs associated with the first quarter 2014 restructuring program.

Financial Outlook for Second Quarter 2014

Citrix management expects to achieve the following results for the second quarter of fiscal year 2014 ending June 30, 2014:

• Net revenue is targeted to be in the range of $765 million to $775 million;
• 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 $0.21 to $0.24. Non-GAAP diluted earnings per share is targeted to be in the range of $0.57 to $0.59, excluding $0.19 related to the effects of amortization of acquired intangible assets, $0.28 related to the effects of stock-based compensation expenses, $0.03 related to the effects of restructuring charges, and $(0.12) to $(0.17) 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.

Financial Outlook for Fiscal Year 2014

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

• Net revenue is targeted to grow by approximately 8.5 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 $1.61 to $1.71. Non-GAAP diluted earnings per share is targeted to be in the range of $2.90 to $2.95, excluding $0.74 related to the effects of amortization of acquired intangible assets, $1.02 related to the effects of stock-based compensation expenses, $0.08 related to the effects of restructuring charges, and $(0.50) to $(0.65) for the tax effects related to these items.
• GAAP tax rate is targeted to be in the range of 18 percent to 19 percent. Non-GAAP tax rate, which excludes the effects of amortization of acquired intangible assets, stock-based compensation and restructuring charges is targeted to be in the range of 23 percent to 24 percent.

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