EXHIBIT 99.1
Citrix Reports Record Second Quarter Revenue of $334 Million
Year-over-year Quarterly Revenue Growth of 21%
Year-over-year Product License Growth of 16%
FORT LAUDERDALE, Fla.--(BUSINESS WIRE)--July 18, 2007--Citrix
Systems, Inc. (Nasdaq:CTXS), the global leader in application delivery
infrastructure, today reported quarterly revenues and other financial
information for the second quarter of fiscal 2007 ended June 30, 2007.
Operational Highlights
In the second quarter of fiscal 2007, Citrix achieved revenue of
$334 million, compared to $275 million in the second quarter of fiscal
2006, representing 21 percent revenue growth.
In the second quarter of fiscal 2007, total cost of revenues and
operating expenses - which include cost of product license and
services revenues, research and development, sales, marketing and
support, general and administrative and amortization of intangible
assets was approximately $268 million. This amount includes
amortization expense of approximately $10 million and approximately $3
million in accounting, legal, and tax fees related to the voluntary
stock option review. Other income was approximately $12.5 million. Due
to the voluntary stock option review, costs and expenses reported
today do not include any stock-based compensation expense.
"I'm very pleased with our second quarter results," said Mark
Templeton, president and chief executive officer for Citrix. "We
capped a great first half of the year with record $334 million of
revenue in the second quarter, and $642 million for the first half --
growing 21 percent and 20 percent, respectively.
"The combination of our results, strong market traction, and the
relevancy of Application Delivery Infrastructure to our customers,
fuels my optimism for the rest of the year."
Stock Option Review
On June 13, 2007, the company announced the findings of its
voluntary review into Citrix's historical stock option granting
practices and related accounting. As a result of the voluntary review
and as previously announced, the company intends to restate its issued
financial statements and reports for fiscal years 2004 and 2005 and
for the interim quarterly periods for 2005 and 2006 to reflect the
additional non-cash stock-based compensation expense and related tax
effects that should have been recorded with respect to stock option
grants whose accounting measurement dates are being revised. After
completion of its investigation, the Audit Committee of the company's
Board of Directors concluded that there was no intentional wrongdoing
by any current executive of the company in connection with the
company's stock option grants and procedures during the period under
review (1996-2006).
The company also announced its decision to consult with the Office
of Chief Accountant ("OCA") of the Securities and Exchange Commission.
Because of the pending OCA consultation, the company has not yet
determined conclusively the amount of additional non-cash compensation
expense to be recorded or the resulting tax impact and today is not
providing full GAAP or non-GAAP financial statements for the second
quarter of fiscal 2007.
Citrix intends to file its Annual Report on Form 10-K for the year
ended December 31, 2006 containing the required restatements of its
financial statements as soon as practicable after the completion of
the OCA consultation process. The company will release full second
quarter financial statements in a press release at that time.
Today the company also announced that the Nasdaq Listing
Qualifications Panel, subject to certain conditions, has granted the
company a further extension of time until August 30, 2007 in which to
file its Annual Report on Form 10-K for the year ended December 31,
2006 and its Quarterly Report on Form 10-Q for the quarter ended March
31, 2007, all required restated and other financial statements for
previous periods, and to otherwise meet all necessary listing
standards of the Nasdaq Global Select Market. During the extension
period, the company's common stock will continue to be listed on the
Nasdaq Global Select Market.
Q2 Financial Highlights
In reviewing the second quarter of 2007, compared to the second
quarter of 2006:
-- Product license revenue increased 16 percent;
-- Revenue from license updates grew 18 percent;
-- Online services contributed $52 million of revenue, up 47
percent;
-- Technical services revenue, which is comprised of consulting,
education and technical support, grew 22 percent;
-- Deferred revenue totaled $395 million, compared to $311
million on June 30, 2006;
-- There was no stock repurchase activity during the quarter due
to the voluntary stock option review. Citrix has over $330
million remaining under the current repurchase authorization.
Financial Outlook for Third Fiscal Quarter 2007
Citrix management expects to achieve the following results during
the third fiscal quarter 2007 ending September 30, 2007. As a result
of the voluntary stock option review, Citrix is not providing earnings
per share guidance at this time.
-- Net revenue is expected to be in the range of $335 million to
$343 million, compared to $278 million in the third quarter of
2006.
-- Total cost of revenues and operating expenses in the third
quarter are expected to be in a range of approximately $266
million to $272 million. Included in the third quarter outlook
are amortization expenses in the range of $10 million to $11
million and $2 million for accounting, legal, and tax fees
related to the voluntary stock option review. This estimate of
third quarter spending does not take into account any
stock-based compensation expense or other charges likely to
result from the voluntary stock option review.
The above statements are based on current expectations. These
statements are forward-looking, and actual results may differ
materially.
Financial Outlook for Fiscal Year 2007
Citrix management expects to achieve the following results for the
fiscal year 2007:
-- For fiscal year 2007, the company expects net revenue to be in
the range of $1.340 billion to $1.360 billion, compared to
$1.13 billion in fiscal year 2006. The company expects total
cost of revenues and operating expenses to be in the range of
$1.066 billion to $1.076 billion. Included in the fiscal year
2007 outlook is amortization expenses in the range of $41
million to $42 million, a $1.2 million write-off of in-process
research and development related to the closing of the Ardence
acquisition and $11 million for accounting, legal, and tax
fees related to the voluntary stock option review. This
estimate of fiscal year 2007 spending does not take into
account any stock-based compensation expense or other charges
likely to result from the voluntary stock option review.
The above statements are based on current expectations. These
statements are forward-looking, and actual results may differ
materially.
Company, Product and Alliance Highlights
During the second quarter of 2007, Citrix:
-- Was positioned by Gartner, Inc. in the leaders quadrant of the
"Magic Quadrant for Application Delivery Products, 2007".
-- Introduced Citrix Desktop Server(TM) 1.0 allowing IT
organizations to deliver desktops as a service over the
network and marking the company's entrance into the burgeoning
virtual desktop market.
-- Unveiled Citrix(R) NetScaler(R) 8.0, the first web application
delivery controller in the industry to integrate web
application firewall, SSL VPN and end-user experience
monitoring to improve the delivery of today's increasingly
complex web applications.
-- Won two awards from the Software & Information Industry
Association's (SIIA) CODiE Awards in the Best Data Security
Solution and Best Identity Management Solution categories for
Citrix Password Manager(TM), now an integrated component of
Citrix Presentation Server, Platinum Edition, the company's
flagship Windows application delivery controller.
-- Broadened its application delivery management capabilities
with Citrix EdgeSight(TM) 4.5, a leading application
performance monitoring solution, and the all-new Citrix
EdgeSight(TM) for Load Testing, a powerful load- and
regression-testing solution that substantially increases IT's
ability to ensure a stable and predictable application
delivery environment.
-- Posted quarter-over-quarter market share gains for the
Citrix(R) NetScaler(R) web application delivery product line
according to a new report from Gartner titled, "Market Share:
Application Acceleration Equipment, Worldwide, 1Q07".
-- Debuted Citrix GoToAssist 8.0 redefining the support
experience with a new collaborative platform.
Conference Call Information
Citrix will host a conference call today at 4:45 p.m. EDT to
discuss its financial information, 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 by visiting the Investor Relations section of the Citrix
corporate Web site at http://www.citrix.com/investors for
approximately 30 days. In addition, an audio replay of the conference
call will be available through July 20, 2007, by dialing 800-642-1687
or 706-645-9291 (passcode required: 6242204).
About Citrix
Citrix Systems, Inc. (Nasdaq:CTXS) is the global leader and the
most trusted name in application delivery infrastructure. More than
200,000 organizations worldwide rely on Citrix to deliver any
application to users anywhere with the best performance, highest
security and lowest cost. Citrix customers include 100% of the Fortune
100 companies and 98% of the Fortune Global 500, as well as hundreds
of thousands of small businesses and prosumers. Citrix has
approximately 6,200 channel and alliance partners in more than 100
countries. Annual revenue in 2006 was $1.1 billion.
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
management, statements concerning the company's voluntary stock option
review, the statements contained in the Financial Outlook for Third
Quarter 2007, Financial Outlook for Fiscal Year 2007 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, the risks
summarized in the immediately succeeding paragraph and the following:
the success and growth of the company's product lines; the company's
product concentration and its ability to develop and commercialize new
products and services; the success of investments in its product
groups, foreign operations and vertical and geographic markets;
Citrix's and Microsoft's ability to develop and market a
multi-function Citrix branch office appliance; the company's ability
to successfully integrate the operations and employees of acquired
companies, and the possible failure to achieve or maintain anticipated
revenues and profits from acquisitions; the company's ability to
maintain and expand its core business in large enterprise accounts;
the company's ability to attract and retain small-sized customers; the
size, timing and recognition of revenue from significant orders; the
effect of new accounting pronouncements on revenue and expense
recognition; the company's reliance on and the success of the
company's independent distributors and resellers for the marketing and
distribution of the company's products and the success of the
company's marketing and licensing programs; intellectual property
litigation; increased competition; changes in the company's pricing
policies or those of its competitors; management of operations and
operating expenses; charges in the event of the impairment of assets
acquired through business combinations and licenses; the management of
anticipated future growth and the recruitment and retention of
qualified employees; competition and other risks associated with the
market for our Web-based access, training and customer assistance
products and appliance products; as well as risks of downturns in
economic conditions generally; political and social turmoil; and the
uncertainty in the IT spending environment; and other risks detailed
in the company's filings with the Securities and Exchange Commission
("SEC"). Citrix assumes no obligation to update any forward-looking
information contained in this press release or with respect to the
announcements described herein.
There can be no assurance that the finalization of the review by
the company's Audit Committee of the company's historical stock option
granting practices and the related accounting will not result in
adjustments to the financial information for the second quarter ended
June 30, 2007 released today. In addition, the finalization of the
review and its conclusions has and may continue to require additional
expenses to be recorded, adversely affect the company's ability to
file required reports with the SEC on a timely basis and adversely
impact the company's ability to meet the requirements of the Nasdaq
Global Select Market for continued listing of its shares; and may
adversely impact management's conclusions on the effectiveness of its
internal control over financial reporting and disclosure controls and
procedures, result in claims and proceedings relating to such matters,
including shareholder litigation and actions by the SEC and/or other
governmental agencies, and negative tax, costs related to the
remediation of certain tax-related liabilities or other implications
for the company resulting from any accounting adjustments or other
factors.
Citrix(R), NetScaler(R), GoToMyPC(R), Ardence(R), RTX(R), Citrix
Desktop Server(TM), Citrix Presentation Server(TM), Citrix Application
Gateway(TM), Citrix Access Gateway(TM) and GoToWebinar(TM) are
trademarks of Citrix Systems, Inc. and/or one or more of its
subsidiaries, and may be registered in the U.S. Patent and Trademark
Office and in other countries. All other trademarks and registered
trademarks are property of their respective owners.
CITRIX SYSTEMS, INC.
SELECTED FINANCIAL METRICS
Selected Consolidated Net Revenue Line Items
(In thousands -- unaudited)
Three Months Three Months
Ended Ended
June 30, 2007 June 30, 2006
Revenues:
Product licenses $136,587 $117,799
License updates 118,163 99,750
Online services 51,810 35,128
Technical services 27,804 22,791
---------------------------
Total net revenues $334,364 $275,468
Selected Consolidated Cost of Revenues Line Items
(In thousands -- unaudited)
Three Months Three Months
Ended Ended
June 30, 2007 June 30, 2006
---------------------------
Cost of revenues (1):
Cost of product license revenues $9,846 $8,116
Cost of services revenues 15,006 11,034
Amortization of product related
intangible assets 6,656 4,585
Selected Consolidated Operating Expense Line Items
(In thousands -- unaudited)
Three Months Three Months
Ended Ended
June 30, 2007 June 30, 2006
---------------------------
Operating expenses (1):
Research and development $44,721 $33,499
Sales, marketing and support 135,360 111,131
General and administrative 52,610 37,695
Amortization of other intangible assets 3,651 4,150
Selected Consolidated Income Statement Line Item
(In thousands -- unaudited)
Three Months Three Months
Ended Ended
June 30, 2007 June 30, 2006
---------------------------
Other income, net $12,508 $10,340
Selected Consolidated Balance Sheet Line Items
(In thousands -- unaudited)
June 30, December 31,
2007 2006
--------------------------
Total cash equivalents and investments
(including restricted cash equivalents &
investments) $991,382 $807,196
Accounts receivable, net $177,418 $204,974
Total deferred revenue $394,690 $356,288
(1) -- Due to the voluntary stock option review, cost of revenues
and operating expenses presented above and under the caption
Operational Highlights do not include any stock-based compensation
expense and may be considered non-GAAP financial measures as defined
by the Securities and Exchange Commission's Regulation G. The GAAP
financial measure most directly comparable to each potential non-GAAP
financial measure used above and under the caption Operational
Highlights and a reconciliation of the differences between each such
potential non-GAAP financial measure and the comparable GAAP financial
measure cannot be provided by Citrix at this time because the
voluntary stock option review, among other things, makes such
information with respect to stock-based compensation expense
unavailable. Until the completion of the voluntary stock option
review, Citrix intends to use cost of revenues and operating expenses
as presented above for internal reporting and forecasting purposes and
to evaluate the company's performance. Citrix has provided cost of
revenues and operating expenses as presented above because it believes
that these financial measures provide useful information to certain
investors and financial analysts during the pendency of the Audit
Committee's voluntary stock option review. Citrix will release GAAP
cost of revenues and operating expenses for the second quarter ended
June 30, 2007 upon completion of the company's consultation with the
OCA.
CONTACT: Citrix Systems, Inc., Fort Lauderdale
For media inquiries, contact:
Eric Armstrong, 954-267-2977
eric.armstrong@citrix.com
or
For investor inquiries, contact:
Eduardo Fleites, 954-229-5758
eduardo.fleites@citrix.com