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Citrix Reports Third Quarter Financial Results

The following excerpt is from the company's SEC filing.

Quarterly revenue of $813 million up 7 percent year over year

Third quarter GAAP operating margin of 8 percent; non-GAAP operating margin of 26 percent

Third quarter GAAP diluted EPS of $0.35; non-GAAP diluted EPS of $1.04

SANTA CLARA, Calif.--(BUSINESS WIRE)--October 21, 2015--Citrix Systems, Inc. (NASDAQ:CTXS) today reported financial results for the third quarter of fiscal year 2015 ending September 30, 2015.

Financial Results

For the third quarter of fiscal year 2015, Citrix achieved revenue of $813 million, compared to $759 million in the third quarter of fiscal year 2014, representing 7 percent revenue growth.

GAAP Results

Net income for the third quarter of fiscal year 2015 was $56 million, or $0.35 per diluted share, compared to $48 million, or $0.29 per diluted share, for the third quarter of fiscal year 2014. The third quarter of fiscal year 2015 GAAP results include impairment charges of approximately $65 million related to certain intangible assets from the acquisition of ByteMobile, which are included in amortization of product related and other intangible assets, as well as restructuring charges of $14 million for severance and facility closing costs related to the 2015 restructuring program. The third quarter of fiscal year 2014 GAAP results included a charge of approximately $21 million related to a patent lawsuit, as well as a restructuring charge of $3 million for severance costs related to the 2014 restructuring program.

Non-GAAP Results

Non-GAAP net income for the third quarter of fiscal year 2015 was $168 million, or $1.04 per diluted share, compared to $125 million, or $0.75 per diluted share for the third quarter of fiscal year 2014. Non-GAAP net income for the third quarters of fiscal years 2015 and 2014 exclude the effects of amortization of acquired intangible assets, stock-based compensation expenses, charges related to amortization of debt discount, charges related to restructuring programs, and the tax effects related to these items. Non-GAAP net income for third quarter of fiscal year 2014 also excludes charges related to a patent lawsuit and the tax effect related to this item.

“I’m very pleased with our performance for Q3,” said Mark Templeton, president and CEO for Citrix. “Our results are starting to reflect the benefits of the actions we have taken since the start of the year to improve our operating margin and drive integrations among our strategic products. I am extremely proud of the dedication and work of the Citrix team.”

Q3 Financial Summary

In reviewing the results for the third quarter of fiscal year 2015 compared to the third quarter of fiscal year 2014:

Product and license revenue increased 7 percent;

Software as a service revenue increased 15 percent;

Revenue from license updates and maintenance increased 6 percent;

Professional services revenue, which is comprised of consulting, product training and certification, decreased 13 percent;

Excluding software as a service, net revenue increased in the Americas region by 9 percent, increased in the EMEA region by 2 percent, and decreased in the Pacific region by 3 percent;

Deferred revenue totaled $1.5 billion as of September 30, 2015, compared to $1.4 billion as of September 30, 2014, an increase of 7 percent; and

Cash flow from operations was $260 million for the third quarter of fiscal year 2015, compared with $164 million for the third quarter of fiscal year 2014.

During the third quarter of fiscal year 2015:

GAAP gross margin was 82 percent, and non-GAAP gross margin was 85 percent, which excludes the effects of amortization of acquired product related intangible assets and stock-based compensation expense; and

GAAP operating margin was 8 percent, and non-GAAP operating margin was 26 percent, which excludes the effects of amortization of acquired intangible assets, stock-based compensation expense, and costs associated with the restructuring programs.

The company repurchased 3.9 million shares at an average price of $71.76.

Financial Outlook for Fiscal Year 2015

Citrix management expects to achieve the following results for the fiscal year ending December 31, 2015:

Net revenue is targeted to be in the range of $3.24 billion to $3.25 billion.

GAAP diluted earnings per share is targeted to be in the range of $1.83 to $2.05. Non-GAAP diluted earnings per share is targeted to be in the range of $3.85 to $3.90, which excludes $0.92 related to the effects of stock-based compensation expenses, $1.13 related to the effects of amortization of acquired intangible assets, $0.20 related to the effects of amortization of debt discount, $0.41 related to restructuring charges, $(0.01) related to a benefit from a patent lawsuit and $(0.58) to $(0.85) 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.

Business Outlook for 2016

Today, Citrix also said that it plans to announce the results of its on-going operational and strategic reviews and provide its business outlook for fiscal year 2016 in mid-November.

Third Quarter Earnings Conference Call

Citrix will host a conference call today at 4:45 p.m. ET to discuss its financial results, quarterly highlights, business outlook and other items announced today. 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 for approximately 30 days on the Investor Relations section of the Citrix corporate website at

/investors.

About Citrix

Citrix (NASDAQ:CTXS) is leading the transition to software-defining the workplace, uniting virtualization, mobility management, networking and SaaS solutions to enable new ways for businesses and people to work better. Citrix solutions power business mobility through secure, mobile workspaces that provide people with instant access to apps, desktops, data and communications on any device, over any network and cloud. With annual revenue in 2014 of $3.14 billion, Citrix solutions are in use at more than 400,000 organizations and by over 100 million users globally. Learn more at

For Citrix Investors

This release contains forward-looking statements which are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933 and of Section 21E of the Securities Exchange Act of 1934. The forward-looking statements in this release do not constitute guarantees of future performance. Investors are cautioned that statements in this press release, which are not strictly historical statements, including, without limitation, statements by Citrix's president and chief executive officer, statements contained in the Financial Outlook for Fiscal Year 2015 section and under the Non-GAAP Financial Measures Reconciliation section, and statements regarding management's plans, objectives and strategies, constitute forward-looking statements. Such forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those anticipated by the forward-looking statements, including, without limitation, risks associated with the on-going CEO search process and transitions in key personnel and succession risk; the impact of the global economy, foreign exchange rate volatility and uncertainty in the IT spending...


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