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Citrix Reports Second Quarter 2018 Financial Results

Citrix Reports Second Quarter 2018 Financial Results

FORT LAUDERDALE, Fla. - July 25, 2018 - Citrix Systems, Inc. (NASDAQ:CTXS) today reported financial results for the second quarter of fiscal year 2018 ended June 30, 2018.

Financial Results

For the second quarter of fiscal year 2018, Citrix achieved revenue of $742 million, compared to $693 million in the second quarter of fiscal year 2017, representing 7 percent revenue growth.

GAAP Results

Net income for the second quarter of fiscal year 2018 was $107 million, or $0.73 per diluted share, compared to $109 million, or $0.70 per diluted share, for the second quarter of fiscal year 2017. Net income for the second quarter of fiscal years 2018 and 2017 includes restructuring charges of $7 million and $2 million, respectively, primarily for facility closing costs.

Non-GAAP Results

Non-GAAP net income for the second quarter of fiscal year 2018 was $178 million, or $1.28 per diluted share, compared to $158 million, or $1.03 per diluted share for the second quarter of fiscal year 2017. Non-GAAP net income for the second quarter of fiscal years 2018 and 2017 excludes the effects of stock-based compensation expense, amortization of acquired intangible assets, amortization of debt discount, restructuring charges and the tax effects related to these items. Non-GAAP net income for the second quarter of fiscal year 2017 also excludes separation costs and the tax effect related to this item. Non-GAAP net income per diluted share for the second quarter of fiscal years 2018 and 2017 reflects the anti-dilutive impact of the company’s convertible note hedges.

“Q2 was yet another strong quarter for Citrix, posting upside to financial expectations and, at the same time, continuing to execute on our operational transformation across the company and in our go-to-market,” said David Henshall, president and CEO. “Our customers and partners are embracing our cloud strategy, which is driving the multi-year plan that we introduced last year and the progress we’ve made so far in 2018.”

Q2 Financial Summary

The results for the second quarter of fiscal year 2018 compared to the second quarter of fiscal year 2017 are as follows:

  • Subscription revenue increased 49 percent;
  • Product and license revenue increased 1 percent;
  • Support and services revenue increased 3 percent; and
  • Net revenue increased in the EMEA region by 8 percent; increased in the Americas region by 7 percent; and increased in the APJ region by 7 percent.

During the second quarter of fiscal year 2018(1):

  • GAAP gross margin was 85 percent and non-GAAP gross margin was 87 percent;
  • GAAP operating margin was 20 percent and non-GAAP operating margin was 30 percent;
  • Subscription revenue as a percentage of total revenue was 15%;
  • Deferred and unbilled revenue totaled $1.94 billion as of June 30, 2018, compared to $1.77 billion as of March 31, 2018, an increase of 10 percent;
  • Cash flow from operations was $170 million; and
  • The company repurchased approximately 1.8 million shares during the second quarter.

Financial Outlook for Third Quarter 2018(1)

Citrix management expects to achieve the following results for the third quarter of fiscal year 2018:

  • Net revenue is targeted to be in the range of $715 million to $725 million.
  • GAAP diluted earnings per share is targeted to be in the range of $0.72 to $0.74.
  • Non-GAAP diluted earnings per share is targeted to be in the range of $1.23 to $1.26.

Financial Outlook for Fiscal Year 2018(1)

Citrix management expects to achieve the following results for the fiscal year ending December 31, 2018:

  • Net revenue is targeted to be in the range of $2.92 billion to $2.95 billion.
  • GAAP diluted earnings per share is targeted to be in the range of $3.40 to $3.49.
  • Non-GAAP diluted earnings per share is targeted to be in the range of $5.30 to $5.40.
  • In addition, Citrix management is targeting GAAP operating margin to be in the range of 20 percent to 21 percent, and non-GAAP operating margin to be in the range of 30 percent to 31 percent.

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

(1) A reconciliation of GAAP to non-GAAP measures has been provided in the financial statement tables included in this press release. An explanation of these measures is also included below under the heading “Reconciliation of Non-GAAP Financial Measures to Comparable U.S. GAAP Measures.”
 

Second Quarter Earnings Conference Call

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 for approximately 30 days on the Investor Relations section of the Citrix corporate website at http://www.citrix.com/investors.  

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