CTXS - Earnings call transcript Q1 2019

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Operator

Good afternoon. My name is Chantelle, and I will be your conference operator today. At this time, I would like to welcome everyone to the Citrix Systems First Quarter 2019 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. you. Thank Instructions] [Operator President Relations. Vice of Tsuchiguchi, Investor Traci

You your conference. may begin

Traci Tsuchiguchi

will and quarter Good and call. joining call Interim President Chief thank is Jessica us website, This webcast Officer; everyone, Chief Participating David Executive and for this Financial earnings for Relations Soisson, XXXX on you afternoon, Citrix a and Investor Henshall, webcast quarter today's on call Officer. be being accompanying have first Systems' earnings immediately posted the Please posted following it Relations our earnings replace we This web prepared first deck will to replay replaces will be our quarter, supplemental press website. memo note call. Beginning Investors earnings our the that next release. and also information. memo verbal slide comments

forward-looking contain anticipated. from statements U.S. and expectations to may call uncertainties. made of the and subject results harbor based today's materially reminder, law. assumptions could a securities those on safe the risks Actual statements provision These are current are under that As differ

SEC's between A be measures release. Regulation defined of the the reconciliation end other our Additional on differences memo discuss the available at found information are may concerning these call, On as SEC. Copies measures on we today's filings financial memo earnings GAAP factors are press in and by financial non-GAAP can and this G. non-GAAP accompanying discussed and also call in Relations with of website. earnings Investor our various today's highlighted and

Chief I'd Officer. Now, it turn to President like to Executive our over David, and

David Henshall

summary to to of The out the disclosures the our here us success business forward. course Thanks quarterly to transition. and everybody of our through has simplify all Traci, Hopefully, the idea is across had new today. result chance joining going read going be understanding designed and we’re model subscription everyone a really our that breaking for thanks and

want Jessica the to Before though, Soisson we welcome to get I started, call.

CFO said, as and pursue to Drew Accounting long-term other our Now, current is opportunities. Interim my Traci you know, as Chief leaving Officer, colleague, she’s

We areas. So, on boil we revenue saw key EPS. summary, and quarter. forecast exceeded in good can really as both you frankly, into the it down three had a And

is the XX% we’ve coming many-many the growth in from seen strength It's years. up year-on-year. total revenue that one was fastest First in Workspace. the is Workspace

total for the Company and Second is that subscription the to ongoing up this bookings. XX% revenues of SaaS was due our strength was

of subscription which strength the consists up future unbilled fact, revenue and In year. of commitment drove XX% from deferred last

to is mix and the subscription of running that expect case I the fact, year. the In be plan ahead throughout

we've three the talked customers couple headwind strategic hyperscale be due really times, revenue a just networking continue provider Third a item about of to as to timing. service those is, historically to largest customers

I’ve We to as expect persist stated. into quarter previously the this second

under XX% when Company of just up SSP for However, customers, rest was the million these is the year-over-year. which you revenue exclude three $XXX

all-in just happy the of really performance So with the quarter.

now, up it open for Q&A. And so, let’s

Operator

[Operator first Sachs. Heather Instructions] Bellini with Your question from comes Goldman

Your open. line is

Heather Bellini

Thank you appreciate. we and really much so David

think new I really appreciate everybody disclosures. the

follow-up. year, type And then causing you evolved? us have business have -- be you that. I mentioned to if had that that see rate? seen how services kind how the of since for of think Workspace to grew, thank to for And look What you So you Can a giving about revenue you growth fastest it? durability wanted take take talk XXXX. of give say you the us I the seems a you you would

David Henshall

broader with in the probably created mean, seen quarters ever raw overall, resonating than the amazing and really trends business an X, what's talking years mobile, productivity, that those and we holistic I really et broader vision SaaS, cetera. I'd is Workspace terms employees, workspace virtualized, now. customers for the the been the simply help drive making still ago. we years something whether have application we mean, providing we in X have Sure, last that are all that the last, infrastructure the had But I over types, the continuing say that virtualization We more is about a business in around in have past. can area. specifically, engage

that's of deals. a have term more so, of to of that's for And longer more higher response lot talking about. we're from sign subscription lot generate we great a getting and large what And been enterprise up a number us customers, deals, allowed

quarter-to-quarter perpetual should significantly we of got, say, so, Right it. of about from and than good will the move perpetual still rate feel I'd term -- have to higher is The rec. license growth now, or higher that It’s tend can mix. premise continue. have just around And on it's we coming subscriptions little bit on a license that that amount based a revenue rev little whether

right I up a trend. So, and bounce would expect little but directionally, that it's it bit along to around

Heather Bellini

just that that below you that the and margin this could us to there is might are noticed it little outlook revenue quarter? looks midpoint, be said a I is bit to giving like talk the better But though the earlier. is if related might was it And a than midpoint the you like forecast you the was earnings have than anything in bit then about second I a follow-up apologize, consensus. the like, the little question looks little just better bit impacting

David Henshall

we growth, hotter that XQ guidance full Specific headwind. toward about thing in of the a we've us is that EPS. say of are that, the about No, full of I'd bit little thinking QX, about to never terms year full year, I'm given $XX.X so guidance margin to X% is up only And before. line in top expecting of year the still caused mix subscription subscription, running

Heather Bellini

Yes.

David Henshall

lowest And synergy our marketing over when that's that conference, of tends quarter quarter. a QX, seasonal if historically. expense the quarter because our we of it items do like big And highest our QX our increases. has reason back you is margin that's correspondingly, look couple years, to highest the be is, last lot merit

So, this be in year pop QX. in expect come tends well. then to it back case would that and the as I QX and down And to

Operator

comes question from from Oppenheimer. next Your Kidron Ittai

is Your open. line

Ittai Kidron

and good they guess understand the large into for it's quarter to lumpiness it. quarters pressure are, I you a a on for the I raw think customers such SSP dig been Thanks of under in up wanted I and guess who four purchases I long and business, that But guys. considering now time. hold would won't the

moved hands my you they your customers? isn't moved a do get sense another get How vendor? reason there and Have you how with get not own, and me developed elsewhere, that sense that's the there visibility help those So bigger to issue that a do around confidence for a the to their weakness?

David Henshall

context as are I to a so talking of things couple Yes, you just put we understand. in about, want

it we a when about revenue. but big the that number, and X% both total secular always are subject SSP of lumpy cyclical it's about It's it's So, business, it's and pressures. not way. talking to me let remind is been everybody, Cyclically,

If the similar last about of the business $XXX year, was and there in it lumpiness. the $XX prior second at you million half, had year the million year look in and first half

into times out going over the break good the little reason that's the we're years, And pretty why primary so, many we forward. harder. a I've as it visibility is the full And quarterization going stated year, but have to

a where it's look so lot of can that past, and hurting understand, contributing to is clarity there And to when it's everybody quarter.

the So, rate about several for yes, now. it's trend, of been broader at on secular XX% declining years

the scaling and And that just about with talked three the have. big going to very it, so, it's the that's consistent way normal are have hyperscales we

Ittai Kidron

you in and about And then as the still it's are networking a early at you've follow-up, a hardware. position subscription how talked predominantly business

Although, networking subscription? with XX% or levels? the to here, I pace within pivot we Should great take of transition that me the would about hardware networking the see product the pace into I high of Help get sorry, given move disclosure, like new should already can to the to subscription Heather, it’s for was that by you which you think think which again, good the -- look surprised longer as business same it booking, the is bookings. am a this proxy thanks and where mix at Workspace revenue

David Henshall

a than by about On strategically is I it's to mean, we to natural there. networking, think Yes, and slower driving. more definitely and transition what two a a think Workspace what go important much that's going things. I back One, think it's company do. product software step software little Workspace. we're a nature. of bit we're That's

a address from that of flexibility virtual And really the a the appliance to hardware giving form different secular those But has been that going service, so, and some sharing in hardware entirely. the to a as a disaggregate container -- the strategy factors. customers some able consume always and call functionality strategy. across be networking trends appliance as itself of let's our been That's networking hardware that's number factor and a in different to our in it in approach capacity appliance, to networking of instances to form instances are really types

more software. continue toward will it to move So,

expectation, on the that be than think the Workspace should be gradual I will it but business. more

Operator

the James. comes Raymond question line next Your of from with Michael Turits

Your line is open.

Michael Turits

the boost Windows competition a the you And getting really as from your at And been service Workspace, incremental which end? strategy getting much from Azure AWS? market towards all its how in at David, XX there? you concerned have what's transition, desktop about Back a of are either or isn’t

David Henshall

about but think be you if productivity. Windows around than types of I the the years one in of drivers. customers about enabling are that those days been that's also platform have because includes it enabling these mean mean most cases of And simply to or that talked things, security less five the I XX, things. two tend evolution. It’s would drivers I to I'd or platform Yes, it's say ago. use workforce mobility they

that’s So, one of I’d many. say that

it’s Virtual that later bit the which doing DaaS, actually But one of do of than reasons DaaS top the competed on product in a It’s we’re of building we've it’s we terms We on in compete talk historically. why We’ve different think about our important. little natively are a Microsoft. top of Azure year. category announced In we we’ll in Desktop, today. this DaaS don’t a

provider going becoming be that’s bundle to We’re a now. and cloud really strategy platform on so our forward. simplicity together solution, the years simplification. and service the the for idea embracing been XX with actually our And infrastructure we can capabilities to going We’ve extending certain that customer Microsoft focus in

forward. do in just like categories think going new new opportunities are DaaS we’ll I that to continue especially that

Operator

Your with next question comes Barclays. Raimo from Lenschow

is Your line open.

Raimo Lenschow

flow cash little me Hey, in talk going an the you thanks extra here talk to on And accounting us can for well. that seasonality as David, question, flow and about just again for a subscription taking QX? And thanks impact disclosure has through my the the for transition question forward? bit and just the more cash the

David Henshall

as contract $XXX typical three value go book Yes, that through are we our is annualized conjunction because as model, is And about to the total disclosing. we as area have to long-long that’s kind of the that about a at billing build cash upfront. look would our you’re unbilled what’s deferred contracts, this. In changing I contract committed talked we billing cycles we’re go this revenue SaaS all going flow time. a that billings. by a future mean of in million it's unbilled year-over-year. historical to we’ve That years for And increased the same like -- building

now, up that to than was the So revenue XX% conversation about just grew everybody committed else. anything Remind it’s total timing billion that more $X.X future year-on-year.

Raimo Lenschow

one then, And follow-up.

about obviously, about? the the we West you best all Coast. the that on transition, timeframe the back What’s thinking think Drew you’re wish If CFO

David Henshall

He'll immediately. be leaving

Raimo Lenschow

I know.

now start you search already. so And the

David Henshall

but a going to not we’re start long beat as we’ll search a go time Yes, here to Jessica for has we my colleague shortly, forward. miss been

Operator

from [Operator Winslow Fargo. the next Instructions] of with question Your comes line Wells Phil

open. Your line is

Jerry Diao

so or whether terms on the give better much. et I Jerry evolved? some Workspace the Heather's you you your for sales quarter. color want build has upon cetera? just functionality comments Hi just reengagement filling in understand specific of this to on reacceleration in this is precisely its Congratulations how kind Could on, Phil. question and new customer driving first what’s Diao of strong Thank

David Henshall

to kind half I’d than all general the reside virtualization customers to think Jerry. way analytics use, Sure, consistent don't that It’s platform we it’s talk that much to allows purpose installed a even means virtualization can strategy value really beyond customers light this talking thinking need address years. those virtualization more in the with application is. whatsoever. security, us automation, expand we’ve about users the that now what any that provides that It's Workspace been broadly say, traditional about -- base. about in upon to and for and and which a really simply very two about opportunity the with the providing that about And year the of have who including

inside and couple us I So, that to all account et of in over overall applications, that all start message is of the really core with potential customers years. seats world cetera. anywhere think past and an re-engage resonating the that's accelerating allowed And business

Operator

Your with Stifel. line Brad of Reback next question comes the from

is Your line open.

Brad Reback

David, give of can what like SSP rate Thanks. you sense a ex growth the us the Americas look business?

David Henshall

keep Americas. the international memo, are SSP. case the I broken level. grew double-digits. at in over the look was SSP a Americas will we two you Workspace, the the quarters. No, been much haven't on that both and We're and level last it really of at geos if influence ex course pretty really pretty all to breakout out I the the that's mean, high see Those of going the try you mean,

Operator

time. questions now There David are no further at the back will over turn Henshall. call I this to

David Henshall

incremental was of that new the for. information is asking the that I providing job this awfully level Okay, quick. doing format memo and its of we're guess

you, throughout year. Synergy really Meeting. Talk subscription in happy Hopefully are of joining joining Conference in driving tuning for to thank at June transition us May you and in or performed to you least today. at I our our continue, soon. the as said, Annual how to business our Overall, expect just Thank in, again Analyst the everyone want we're very QX So, I many to us with again.

Operator

call. conference This today's concludes

You may disconnect. now

Citrix Systems (CTXS) 24 Apr 192019 Q1 Earnings call transcript