Citrix (CTXS) Q1 Earnings & Revenues Surpass Estimates

Citrix Systems Inc. CTXS  delivered first-quarter 2019 non-GAAP earnings of $1.27 per share, beating the Zacks Consensus Estimate of $1.17 per share. However, the figure decreased by 2 cents from the year ago-quarter.

Revenues rose 3% from the year-ago quarter to $719.1 million and comfortably surpassed the Zacks Consensus Estimate of $712 million.

Product and license (18.8% of total revenues) decreased 16% year over year to almost $135 million. Subscription (19.7%) revenues surged 37% from the year-ago figure to $141.6 million. Support and services (61.5%) revenues rose 2% on a year-over-year basis to nearly $442.5 million.

During the quarter under review, SaaS revenue came in at $85 million (60% of total subscription business) and was up 43% year over year. Notably, SaaS revenues are the most significant part of subscription transition.

Subscription revenues during the reported quarter came in at $142 million, up 37% year over year

Citrix Systems, Inc. Price

 

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Revenues as per Product Group

Workspace revenues increased 13% year over year to $515 million (72% of total revenues) on the back of rapid adoption of unified workspace solutions. Workspace subscription revenues increased 45% year over year during the first quarter. Management stated that approximately 62% of new product bookings were subscription based.

Networking revenues declined 18% from the year-ago to $171 million (24% of total revenues). Notably, decline in the SSP business negatively impacted networking revenue during the reported quarter. Management stated that approximately 25% of new product bookings were subscription based. The company anticipates shift toward software-based solutions from traditional hardware.

Professional Services revenues climbed 6.4% on a year-over-year basis to $33.3 million (4% of total revenues).

Geographic Revenues

Revenues in Americas decreased 3% year over year to $401.1 million. Europe, Middle East and Africa (EMEA) revenues advanced 10% from the year-ago quarter to $$236.8 million. Asia-Pacific and Japan (APJ) revenues increased 18% year over year to $81.2 million.

Margin Details

Non-GAAP gross margin during the reported quarter came in at 86.5%. Non-GAAP operating margin was reported at 28.2% during the reported quarter.

Balance Sheet & Cash Flow

As of Mar 31, 2019, cash and cash equivalents were $1.612 billion as compared with $618.8 million in the previous quarter. Long-term debt at the end of the quarter came in at $742.1 million. Cash flow from operations was reported at $267.6 million.

Deferred and unbilled revenues of $2.14 billion grew approximately 21% year over year.

Citrix repurchased shares worth $94 million during the first quarter. Moreover, roughly $670 million is still remaining under share repurchase authorization.

The company paid quarterly dividend of 35 cents worth $46 million during the quarter under review.

Guidance

For second-quarter 2019, Citrix anticipates revenues between $765 million and $775 million. The Zacks Consensus Estimate for revenues is pegged at $764.9 million.

Moreover, non-GAAP earnings are expected in the range of $1.30-$1.35 per share. The Zacks Consensus Estimate for earnings is pegged at $1.38 per share.

Citrix reiterated guidance for 2019. The company continues to expect revenues between $3.08 billion and $3.09 billion. The Zacks Consensus Estimate for revenues for 2019 is pegged at $3.08 billion.

Non-GAAP operating margin is anticipated to be in the range of 31.5% to 32%. Moreover, non-GAAP earnings are expected to be approximately $6.00 per share. The Zacks Consensus Estimate for earnings for 2019 is pegged at $5.99 per share.

Zacks Rank & Stocks to Consider

Citrix carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the same industry are Synopsys, Inc. SNPS, Fortinet, Inc. FTNT and KLA-Tencor Corporation KLAC, each sporting 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 Synopsys, Fortinetand KLA-Tencoris projected at 10%, 15.50% and 11.2%, respectively.

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