Citrix (CTXS) Q1 Earnings Beat Estimates, 18' View Positive

Citrix Systems Inc. CTXS delivered first-quarter 2018 adjusted earnings of $1.29 per share, which beat the Zacks Consensus Estimate by 24 cents. The figure surged 33% on a year-over-year basis.

Revenues increased 5.2% from the year-ago quarter to $697.2 million and comfortably surpassed the Zacks Consensus Estimate of $676 million. Revenues were hurt by $10 million negative impact from the adoption of ASC 606.

Product and license (23% of revenues) revenues declined 6% year over year to $160.7 million. Subscription (14.8% of revenues) revenues surged 49.3% from the year-ago to $103.2 million. Support and services (62.1% of revenues) revenues inched up 2.5% on a year-over-year basis to $433.3 million.

Revenues as per Product Group

Workspace services (59.2% of revenues) increased 3% year over year to $412.6 million. Management stated that 42% of new product bookings were subscription based.
 

Citrix Systems, Inc. Price, Consensus and EPS Surprise

 

Citrix Systems, Inc. Price, Consensus and EPS Surprise | Citrix Systems, Inc. Quote

 

Networking (29.9% of revenues) revenues rose 7.9% from the year-ago to $208.6 million. SSP and enterprise product bookings were each up roughly 20% from the year-ago quarter.

Content Collaboration (6.4% of revenues) revenues climbed 14.9% on a year-over-year basis to $44.7 million.

Professional services (4.5% of revenues) advanced 5.4% year over year to $31.3 million.

Geographic Revenues

Professional services (4.5% of revenues) increased 5.4% year over year to $31.3 million.

Revenues in Americas increased 5% year over year to $414 million. There were 33 transactions worth more than $1 million in the reported quarter.

Europe, Middle East and Africa (EMEA) revenues were up 7% from the year-ago quarter to $215 million. There were 12 transactions worth more than $1 million in the reported quarter.

Asia-Pacific and Japan (APJ) revenues dipped 1% from the year-ago quarter to $69 million. There were five transactions worth more than $1 million in the reported quarter.

Operating Details

Reported operating expenses as percentage of revenues declined 530 basis points (bps) on a year-over-year basis to 60.7%.

Research and development (R&D), sales, marketing & services, and general & administrative (G&A) declined 140 bps, 120 bps and 240 bps, respectively.

As a result, reported operating margin expanded 520 bps from the year-ago quarter to 23.7%. Adjusted operating margin expanded 400 bps on a year-over-year basis to 32%.

Balance Sheet & Cash Flow

As of Mar 31, 2018, cash and cash equivalents were $954.7 million as compared with $1.12 billion as of Dec 31, 2017. Cash flow from operations was $358 million in the first quarter.

As of Mar 31, 2018, deferred revenues grossed $1.7 billion as compared with $1.9 billion in the previous quarter.

Citrix repurchased approximately 8.4 million shares during the first quarter.

Guidance

For second-quarter 2018, Citrix anticipates revenues between $710 million and $720 million. The Zacks Consensus Estimate for revenues currently stands at $706.4 million.

Non-GAAP earnings are expected between $1.18 and $1.22 per share. The Zacks Consensus Estimate for earnings is currently pegged at $1.09 per share.

For 2018, Citrix expects revenues between $2.88 billion and $2.91 billion. The Zacks Consensus Estimate for revenues currently stands at $2.88 billion.

Non-GAAP operating margin is expected to be in the range of 30-31%. Moreover, non-GAAP earnings are expected between $5.20 and $5.30 per share. The Zacks Consensus Estimate for earnings is currently pegged at $4.87 per share.

Zacks Rank & Stocks to Consider

Currently, Citrix carries a Zacks Rank #3 (Hold).

VMware VMW, Ptc PTC and The Ultimate Software Group ULTI are stocks worth considering in the broader technology sector. All the three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for VMware, Ptc and The Ultimate Software is currently pegged at 12.3%, 38.2% and 22.1%, respectively.

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