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Citrix Reports Second Quarter Financial Results

Citrix Systems, Inc. (NASDAQ:CTXS) reported financial results for the second quarter of fiscal year 2013 ended June 30, 2013. FINANCIAL RESULTS: For the second quarter of fiscal year 2013, Citrix achieved revenue of $730 million, compared to $615 million in the second quarter of fiscal year 2012, representing 19 percent revenue growth.

GAAP Results 

Net income for the second quarter of fiscal year 2013 was $64 million, or $0.34 per diluted share, compared to $92 million, or $0.49 per diluted share, for the second quarter of fiscal year 2012. Net income for the second quarter of fiscal year 2012 includes net tax benefits of approximately $22 million, or $0.11 per diluted share, primarily related to the closing of audits with the IRS for certain tax years.

Non-GAAP Results 

Non-GAAP net income for the second quarter of fiscal year 2013 was $124 million, or $0.66 per diluted share, compared to $135 million, or $0.71 per diluted share, for the second quarter of fiscal year 2012. Non-GAAP net income for the second quarter of fiscal year 2012 includes net tax benefits of approximately $22 million, or $0.11 per diluted share, primarily related to the closing of audits with the IRS for certain tax years. 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.
“I’m pleased with our overall Q2 performance,” said Mark Templeton, President and CEO, Citrix. “We’re executing well on product, go-to-market and partnership investments to drive growth in business mobility and cloud infrastructure.
“Everywhere, I continue to hear from CIOs about how they are challenged by the transformation, consumerization and fragmentation that is taking place in computing. Our long-term strategy remains focused on helping our customers as they deal with these areas – using cloud services and business mobility to improve the security and agility of their infrastructure.”

Q2 Financial Summary 

In reviewing the results for the second quarter of fiscal year 2013, compared to the second quarter of fiscal year 2012:
• Product and license revenue increased 21 percent;
• Software as a service revenue increased 15 percent;
• Revenue from license updates and maintenance increased 18 percent;
• Professional services revenue, which is comprised of consulting, product training and certification, increased 25 percent;
• Net revenue increased in the Americas region by 24 percent, increased in the EMEA region by 16 percent and increased in the Pacific region by 10 percent;
• Deferred revenue totaled $1.3 billion as of June 30, 2013, compared to $1.0 billion as of June 30, 2012, an increase of 24%; and
• Cash flow from operations was $209 million for the second quarter of fiscal year 2013, compared with $168 million for the second quarter of fiscal year 2012.
During the second quarter of fiscal year 2013:
• GAAP gross margin was 83 percent and non-GAAP gross margin was 86 percent, excluding the effects of amortization of acquired product related intangible assets and stock-based compensation expense.
• GAAP operating margin was 10 percent and non-GAAP operating margin was 22 percent, excluding the effects of amortization of acquired intangible assets and stock-based compensation expense.
• The company repurchased 0.6 million shares at an average price of $64.58.

Financial Outlook for Third Quarter 2013 

Citrix management expects to achieve the following results for the third quarter of fiscal year 2013 ending September 30, 2013:
• Net revenue is targeted to be in the range of $730 million to $740 million;
• GAAP diluted earnings per share is targeted to be in the range of $0.41 to $0.42. Non-GAAP diluted earnings per share is targeted to be in the range of $0.72 to $0.73, excluding $0.18 related to the effects of amortization of acquired intangible assets, $0.26 related to the effects of stock-based compensation expenses, and $(0.12) to $(0.14) 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 2013 

Citrix management expects to achieve the following results for the fiscal year ending December 31, 2013:
• Net revenue is targeted to be in the range of $2.96 billion to $2.98 billion;
• GAAP gross margin is targeted to be in the range of 82.6 percent to 83.1 percent. Non-GAAP gross margin is targeted to be in the range of 86.0 percent to 86.5 percent, excluding 3.3 percent related to the effects of amortization of acquired product related intangible assets and 0.1 percent related to stock-based compensation expenses.
• GAAP diluted earnings per share is targeted to be in the range of $1.88 to $1.91. Non-GAAP diluted earnings per share is targeted to be in the range of $3.09 to $3.11, excluding $0.74 related to the effects of amortization of acquired intangible assets, $1.00 related to the effects of stock-based compensation expenses, and $(0.51) to $(0.56) 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.