Citrix Systems (CTXS) 22 Oct 202020 Q3 Earnings call transcript

Company Profile

Participants

Traci Tsuchiguchi	Vice President, Investor Relations
David Henshall	President & Chief Executive Officer
Arlen Shenkman	Executive Vice President & Chief Financial Officer
Ittai Kidron	Oppenheimer
Phil Winslow	Wells Fargo
Walter Pritchard	Citigroup
Mark Moerdler	Bernstein Research
Heather Bellini	Goldman Sachs
Raimo Lenschow	Barclays
Sanjit Singh	Morgan Stanley
Karl Keirstead	UBS
Jason Ader	William Blair
Robert Majek	Raymond James
Brad Reback	Stifel

Call transcript

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Citrix Systems, Inc.

Third Quarter 2020 Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will a question-and-answer session. [Operator Instructions] I would now like to hand the conference to your speaker today, Traci Tsuchiguchi, Vice President of Investor Relations. ma’am. ahead go Please

Traci Tsuchiguchi

Executive morning, the that quarter you on XXXX is quarter Financial and with Good Vice letter Shenkman, for and earnings have President the joining posted today’s me Chief Chief President Henshall, third earnings Please David and and Joel. Arlen for Executive note thank Officer. us forward-looking call Officer; we Thanks, call. third Participating current Safe our are remind Investor provision you like that actual statements differ from Relations made subject will conversation based assumptions results our U.S. under to the materially uncertainties, are to those contain Harbor statements of risks Securities expectations website. today’s These and anticipated. to could that I’d Laws. and on

by factors are non-GAAP discuss available Relations the our concerning in the website. be call, GAAP and highlighted On can and in on and Relations our on measures as will information measures today’s from Copies letter between the end our call financial filings various today’s earnings letter these with page SEC’s of reconciliation defined SEC. Investor this financial Investor company’s of on website. other found discussed is at non-GAAP differences SEC or the found the the earnings Additional we A G. of Regulation

Officer. like to David? Executive our David, Chief I’d Now, and turn the to call President over

David Henshall

over pleased to guidance the mix bookings really the accelerated that's we good this, considerably. of welcome, to subscription course, a our joining expectations XX% anticipated. with higher fourth bookings in The margin year, the our another and still from operating raising finish coming everyone. raising today. for we're and expect report quarter. revenue EPS of bookings and morning, Regardless midpoint to XX% and of and, the year quarter, total of running transition full I'm Traci, quarter for even the subscription now Thanks, of Thanks strong last of with results clearly than us

are Citrix of up the what's really results total growing north Workspace the with revenue driving which XX%. is So subscriptions, including XX%,

seven home, other. working a is from have companies one concept the versus really spent back the last the As of months office location moving beyond discussion to largely of this

realization choose work really, I best office the environment a really productive secure Citrix be And do productive by style of safe, on all dependent this technologies a across to work. best of flexibility need going blends, of work is and a upon hybrid like those attributes together that to ensure to work. broad location people think with, experience the their course, the and there's individuals any physical provided

And year last with longer-term our uncertain well-positioned initial that expectations a so leave and, outlined our targets really achieve we we're in. some operating XXXX. headlights also going all we're backdrop, for Today, despite at we to provide that environment of to we're this course, as that early the time into

call So take with up questions. Operator? let's open that, some the and

Operator

question you. comes Ittai Instructions] with first Our Oppenheimer. Thank [Operator Kidron from

Your now is open. line

Ittai Kidron

that was cloud not much breakdown, Maybe that how to the was back quarter, I of and momentum? customer And that can was then, of a follow-up, little one the as bit much truly bounce numbers. about on good the kind guys, you how Thanks last in you see a quarterly Americas regional any surprised growth. showing the subscribers, missing that were talk of

U.S., that Europe. quarter, openings in the in you lagging that last we're think said I since

guess, like Help -- your row three a commentary. kind with it as quarter it looks that original in to of for, expect no sounds like as in quarters reconcile Europe be far very would the Americas, You strong your progression Europe now. year-over-year recovery, Americas while me but a remained the behind I business

David Henshall

feel Arlen, a questions. here. those of free jump Let few then, And me in take to

step last and QX a which there we to take an paid back The QX. is for, had anomaly growth sequential look -- you from was you're quarter, you a at really if forward. going subscribers, taken good right, So of obviously, denominator out

is subscribers of tracks paid on about about just basis. six new everything months. And the we've it increases sequential net this a to that over last XXX,XXX very So talked well

the priority. on of was First net company, in as from to on into of back some frankly, year, customers from times, few in half enable work more Citrix on-prem pandemic a a of strategy of focusing existing the stated to I've a getting year migrating the move home, a users that very customer was point subscriptions. the point is focused on view cases, new period, focused and, the Back helping really high half the view, everything of and cloud, users driving of really SaaS

and year-on-year. just XX% when happy side. over so, we're look what we've executing that you said see it you the with continuing And north grow subscription clearly to billion on against before, of And ARR, which now progress $X is at

the the EMEA, there's on In I'd more just standpoint the say led just the year, going overall -- very the markets. happy execution anything the being little of A the solution frankly, subscription transition se, the out team different That's there across of bit we're at in has and noise behind way but of various nice, really from phases all transition just little with had than a our way been in really both steady year-on-year terms I'm and it's per overall They've of had bit I'm delivered. the Americas, that teams progress. the of further a that operating outstanding has has subscription. growth geos that, thing geo rates. because mix, influenced in of

Next question?

Operator

Thank you.

Winslow Wells with Fargo. question from next Our comes Phil

now line is open. Your

Phil Winslow

are that question. to I the them? on then Hey. the in Congrats role for the conversations customers cloud sort Citrix hybrid another second taking of of just David, changing follow half about from just and to on cloud my one was obviously, about value But provide triage, then, Arlen. half? -- what as hearing are can the And Thanks customer follow-up you great for the quarter mentioned. How guys and you Citrix here. last mean, comment. first up now

David Henshall

I think Phil, more we have it's strategic. tracking are as anticipated. becoming Yes. conversations Again, the

You're model a would for face work it, the as that take seven than example, the number seeing gone they half pandemic They've this feels more period large of People, more a into larger in get of on productive in that is bent year. have let's we before. back operating been now. realizing period They deals, months of through transformational the for had hybrid this that nature. actually

to back what like. reassessing gone have they're normal is people so And and need the new look

number of their around transforming projects on engage employees, aspects how with where they And taken partners, all has that cetera. of we so, a in. et larger come that's business, And customers,

kind long-term. employee out real one, to also together. about is talk their going the This They're the Amazon This do AWS. is they entire of streaming to we're And desktops entire what really footprint, transform of trying customer and Microsoft was large transformational plan And with things, with to resource is they're managed few through one multiuser estate footprint. applications out -- one thing how at some experience, that I partnering just is on-prem the over me. world's the managing transactions Citrix, of really a to using both just and Microsoft is there's being work of you and If for elements and stood companies. last broader the quarter, natural example, largest

that, Just examples more and the are like that more in forefront. coming

see you'll the think well. I that more timeframe QX as in

Phil Winslow

us if moving lot follow-up I of early Thanks. know income. think Great. cash parts color that right could you are has How there know should Arlen. EPS we And you're for XXXX, give a about flow? next just then wondering But been there. year? for net on the at flow thinking ahead guiding running also some and just of Arlen, now, I cash not but a obviously, look

Arlen Shenkman

moving lot a flow we cash look, of feel around cash mean I basis. trailing quarter-to-quarter parts of We billion Yes, for the $X Phil, XX-month over a good, flow of obviously lot and a and on seasonality have period. there's

about good feel we So, where are.

as views in and XXXX XXXX. obviously, investor we've I us good around also, from that we year that out we're October see continue and think around you'll some feel around But what about know our said to this You put cash presentation, a feel not growth year we year. and trajectory our we go our we showed good last going presented guide on clearly about last year-to-year to around basis. Day But what flow Investor and our free how we

Phil Winslow

Got it.

XXXX. right. So, track Thanks still All guys. on for

David Henshall

Thanks Phil. Thank you.

Traci Tsuchiguchi

Thank you.

Operator

Our Citigroup. Walter next Pritchard comes question with from

Your now line is open.

Walter Pritchard

a of expecting. hardware One with of couple is how people than David XXXX side, NetScaler growth, number that success And I talking are next on about Thanks. factors into conversion and things some be in in. Arlen, these factors thanks. you're that business, thinking and temporary sort pressure thinking you licenses, of around degree you're should Hi on for assuming think, the then any wondering about also how the of what just wondering higher terms are And other that X% we about year? there? of

David Henshall

Yes.

conversion Let me licenses. can And temporary then, the the of take Arlen, about first talk capacity you part.

what's about in we're the it last beyond, is looking mean That's more I seen was mean double back at and year. is business and revenue this into but up that how you've Workspace really year than mean, driving XX% step So, I if Workspace you think really I this overall. total the leading XXXX what year.

share data share of showing Citrix growing just market. I an saw fact, came a In with increasing IDC's out that

I'm the So, last really with quarters. performance of the six Workspace that over seen the happy we've

about, the strategic had see in is post-pandemic for importance talked we've of it a they've where technologies why higher that everything when than I got really demonstrates -- been. that they've got think and customers types value it these and

shift way clearly networking, In of there's the terms large we're from delivering software. there a been

that's a in a by and decline hardware software. saw year-over-year and You subscription decline offset in sales sharp really big been

Workspace, is we about from taking to grower the doing and I we're the portfolio. we of that direction The and can Workspace talked do time. over what to that's to and that's this Citrix-integrated to security a optimization that separate So, the category those standpoint. of way what don't really low have a services, idea we're long different networking overall transform services service, flat differentiated sensible power delivering category than to period a think it use customers help

still for playing for in XX% company. is the using And kind but to an broader and them Workspace, of create it's us, augment of experience the also category, really which amazing user our so

Arlen Shenkman

licenses just was talking rate about, put Okay. conversion of about, the Walter, about those Dave the stat. about as we're a think saying, the point asked we on of think finer when And you you growth thinking that you're what

obviously we driving about -- business, its acceleration migrating into account David to mentioned, as is of own thought mix, this quarter into networking is, highlight the obviously looks mix right? the I'd networking those transition. this lot ago, is from And a took towards only of the 'XX Workspace and rate the customers longer-term when those obviously then relationship went our which to of for SaaS we going thing our like a you a we years with XX% and are solutions, customers business couple in acceleration So growth XX%. has and And the which it the

about all talking obviously, baked we're growth we're we into that how go significant to trajectory that's And very So moves 'XX. our going in business. and about into how thought

Walter Pritchard

Great. helpful. it. Thanks. That’s Appreciate

Operator

you. Thank

comes Our Research. with next from Bernstein Mark question Moerdler

is line now Your open.

Mark Moerdler

Thank the you on quarter. congratulations and good

moving lift subscription you us surprised Microsoft us last how more a to little follow-up, can the guess. at Can think going. how about color an that? license a I -- from that's well a you about to update X us should subscription give economics Are you the still still give you expanded questions, then And be cloud talked Is SaaS. I a give a license year on -- thinking partnership? know I you that that's of seeing the as on Can versus revenue transition? you're people early. up

Thanks. mentioned win. and to do that's impact How you that think the the shift going a to speed of shift You SaaS?

David Henshall

Yes. Mark, the start let's with Microsoft piece.

Cloud had and technologies. Earlier has and mean, past overall obviously Citrix do extend As what the the it. transform took embrace we've set partnership than for In this strategic years, I of objective this and that to an we customers we've year, XX a Transform in ever to amazing we Azure. case, more been this really level of it Microsoft helping about the our talked and means

WD state big of already a students, plus Phil's a big is Citrix in so we're natural in And to of the question, areas But continuing operationalize the resources we're there's solutions. overall of elements of a company. really it also new other I to QX, say fact, a But developing going it's the together, use where where that, well. university to in some examples selling that lot we're of I'd cases. the called joint terms out address execution,

exchanges on long through Azure, the of migration One we're migration. going around exact biggest the Citrix the a which that to cloud together. doing customer that was stock time world, and They're working

And think abstract complexity the helps benefit just multiple partners lot I together so of the of away bringing for a customers.

closer makes we with their the work lot it great the Microsoft, can a partners like So together journey easier. of

it's do win-win that. everybody And it's think we a I -- really so for when

So we're operationalize we're we'll of talk to you other we'll – repeat And going to some just doing your Can question? QX. quarter, together. parts continue throughout wins the these of about great each

Mark Moerdler

we're aggressively with -- is be any term going is going either end time give or last that sale how occur that that year had would perpetual that on be in Any big from licenses talked We you're would that Can further about the Absolutely. now about thought SaaS. of Sure. shift you from update to appreciated. how you more a and thinking to be? to data about to lift over license the of now how you're the lift subscription lift be revenue going

David Henshall

aspects Sure, that, I Mark. really of that to important are think X There's understand.

to maintenance have when able we That been uplift The one what that requirements number we are and they moving is roughly that's XX%, it's against. consistent, where changed. customers, first traditional a are they're customers from based has XX%. were hasn't to execute talk been to ongoing from very their That Cloud. That – Citrix install Citrix

been quarters of terms two, the Pricing stable three economics, over platforms. remarkably the overall various no actually In has our last change. across

subscription ensure it years strategy customer more that time a selling an probably what selling But view, allows breakeven but and services, a do or point we're is a on security value performance from we And example to level, a so layer we're lower the success three service from from under higher where friction analytics for to economic customer. whether just time, an our incremental to a gives only be standpoint just that's becomes license, remains cloud of perpetual add-on us, able expect And us importantly, higher we're example, frame. one starting of per just not how, sale. a over innovations, to like when to analytics, us for it drive

Mark Moerdler

and much Beautiful. Thank congrats. appreciate it. Very you

Operator

Thank you.

Bellini from Our with Heather next question comes Goldman Sachs.

now is open. Your line

Heather Bellini

thinking with Thank a you. us far of to a share you And just could has to licenses see forecast when follow you of you're you then it kind of like the thus ARPU, And had terms there play there us conversions? wanted capacity of couple up Is I any revenue of year, looked customer that from how David, the if up-sell will, about questions. pace analytics. from with you are those perspective, beginning were per that guess, of types also, just what gave basis? I of short-term in into how the And you the you conversions licenses that the on for can guys helping, Mark had you. in or on your what a I share saying you the it? just calendar about much on security XXXX, data does Thank expectations about and which offerings? first

David Henshall

Arlen to intent to running that ago, but just end phenomenon. will those programs, said QX really convert that and something repeat the year, I'd that that QX, of more start we SaaS. there was this a are Yes. licenses is of a course, The it's minute of

recognized able again, been convert it's less to that's portion conversations, and certainly data, good expect had those, benefit into customer time. subscription, those muted that upfront largely because that et relatively usage revenue in recognized to but on just converting will cetera. But they're from flow of of be impact XXXX, so a just have we'll we And early based a longer-term what over a would a

Heather Bellini

the And Great. stuff you've security thus seen that far? just analytics the uptake and Okay. of

David Henshall

Yes.

I now mean I few market it's been months. for early think model, the a it's interesting. an really in

and just a sequentially. a of It's to more is immaterial standpoint. release, done limited The we've doubling so business from trying And dollar still learn grow.

tool, what time It's really is more are the actions but insights, to, there's out. really is and that I customer, model, we've anybody one from added, cloud unique about. just driving talked as but better the to laid that attributes frankly, go that standpoint the performance it's a all we've Citrix more and back monitoring opportunity value driving that those layer autonomous the help being think is that to a – security course, better drive model a contextual to on model things not long have converted most of

there is. It's can kind pricing how business, So in a overall we're of just what be this back on the a I'm putting could early it. see you TAM draw just material little picture out expectations. cautious the over right time, to that's But so and now, at looking term bit out a early really and

Heather Bellini

Okay. great. Thank you.

Operator

Thank you.

Our with Lenschow next comes question Barclays. Raimo from

Your line now open. is

Raimo Lenschow

congrats me, of and I'm of and remind and be want us, their employees but how flexible to customers you in I in one solve that this available like, I look like competitor, seems working more -- Citrix as terms slightly work me are can David, of solutions offer that new to can To if maybe cetera, a being from lot having would what work, missing something. question more ask what like, the just terms bigger at where a they to et just there? like more Thanks be to again. well. environment picture how

are can journey this how towards that that? be achieved. customers on us then remind you. on of where kind Thank Just And

David Henshall

Raimo. Sure,

I lockdown mean pandemic I employed simple obvious question at three, last. the most to being a probably talking a how large that. picture it's this just going that just period, narrative was a to time think in there we about about it VPN bigger entered being weeks number when the worth the four anticipated marketplace that's allow And those a from long two, different was think people to solutions one. remotely, connect had I of

of VPN, and is a security over lot realized a happened. performance picture, companies two that not not experience not just view. a a back, they user a things It's and persisted that is from a it of solution. stepped One point a As for great it's example, period of great time, great

of And what back term. stepped do about and need so have thought those we to many do longer

thing been view other that's is actually remote way The people than is really that that the interesting just anticipated. more working productive

now one, are you see our adopting these planning estate all talked lot a individuals, two-thirds more companies that so three-quarters few better by for productivity, a a model including better will it's Citrix those because of reduce drives higher great all real that they different absenteeism footprint, flexible we've arm, can companies about. point reasons; attributes for research higher engagement, reduce to studies, for And it's or and these on

it's standpoint and about or just managed, denominator office And experience so workspace. to available user enabling productivity at-home, a that be. one common is to is And working there secure, sure it's that a digital consistent, it's a people in about it's physical it's the this from make idea not either that where happen were

really But that one type really, this our it's that anywhere. we digital positioning, either QX growth seen of idea of our workspace work-from-home And of business working the this as believe we that's strongly and it forward. what as so a is have a driving QX and it's the a tailwind office. about throughout And the that’s the has in course, importance that believe removing in technologies or And of QX, forward. strategic up to that conversations, going of you've we're year rate be the why going really why work nice lot pivot tick reasons really

what us just but actually that And mobile. creating idea virtual virtualization, way sure to we've We that's allows in really for about example, benefit of applications to it driving that it's a keep been the have building. made platform not to directly holistic or that make that workspace deliver forward

Raimo Lenschow

clear. very you Perfect. Congrats. much. Seem Thank very

Operator

Thank you.

with Our Singh comes next Stanley. from question Sanjit Morgan

Your line is now open.

Sanjit Singh

you and question, Thank QX. taking solid the on for congrats really a

and the that think if are about the is customer As the in to you out in of moving adoption what look you versus like guys of to have migration place broader the you're into your are for guys push feel have of terms what facing. you versus can initiatives that make cloud? their initiatives XXXX address – against beyond your what's do we what in frame under you you us they to broader cloud could up What thinking in about terms customers sort drive and more cloud, you control strategies, cloud, left the of the priorities as place

David Henshall

strategic number of it's Sanjit, to and ways look skills they're customer, Citrix. cetera. And tactical point I'd their is that. is constraints, side, two of at really working operational say capital more of tactical et and of with really a One one of on there's short-term predicated answer direction trying the broader different view, business outcomes you're what kind the they to when from the a have, a achieve things: level on

customer investing the also and Along to higher-level migration, that economics of simplify been migration help value partners so side on our blocker couple is of area to help And get try quickly as migration business I success term, drive running possible, great as teams as make that work continuing last just business about them, we customers talked we're anything to investing reasons of that perceive types hard. easy try architectural it, commercials over about guidance usage and we as technical in ensure well others investments just we with quarters, and to up would customers the allow that the or journey. so renew and that we've that as and and the tools, that come that a long it's but as and like as why will one possible quickly, ultimately the engineering with an of strategically. things ways on and think like more it on things engineering the also Tactically, success customer with Microsoft in to these can them up

on some just is keep that all be intelligence really complex cloud automate driving only simple it. we over that time, to question and that Longer to a we're is strategic time available workflows which ultimately is that but about the customers delivering. working our a the going on productivity need via are engagement, as more well of of much we're really of so building workflows common just innovation as cloud. and coming Heather new user through of that new is asked output. level to And to today, term, platform cool new the work, is level focus the Workspace answer that a over AI-driven service That user will Analytics, into

kind And short and term. it long how so that's term of both we address

Sanjit Singh

off a of helpful. last question. super as follow-up, coming that And just That's

you have earnings you in having talking talked longer-term XXXX. – – about we've targets, On of been letter, your are the confidence sort about guys and

penetration, As we hand, you think you of as track pace a Like that versus longer-term year those versus thinking today sort – that path on gives give you what work latest can are seat the a on to cloud, confidence year acknowledged ago? a what targets? ago to of the higher have us versus one a promote on sort you guys about, slower priority your greater the to

David Henshall

we million million mean, longer-term Well, ago revenue running than than today, the I consensus. talking that higher a targets, guidance entering just year we It's when million probably $XX about simple year. current provided were expectations the roughly an the higher this $XX We to is $XXX initial answer for XXXX. are

up That's around against expectations. we backdrop economic bump really of the so environment And uncertain a continuing are world. our to the

the quarters on So at let's few it have that we the have in them, over the execution we're success and we looking then going on and had, delivered that call broader, the the trends are pipelines just secular these that market. based last

it line, are the confidence, customers of in cloud results, forward. longer really happens straight continues our and obviously, where course. pace term our our a strategic focused quarter-to-quarter path. where and on there to changed of to from tactical focused, When So nothing But has transition we're move a execution based are Nothing items. comes

Sanjit Singh

much, Thank Understood. you very David.

Operator

you. Thank

question comes Keirstead from Our next Karl UBS. with

Your line is now open.

Karl Keirstead

much. Thanks A a for modeling got Arlen, more couple I've questions. very bit you. little

negative maybe typical talking when means -- quite if you're QX, not X%, X%? down we about talking language you First, are revenues. use sharply steady. guys what that's They're you could help Just normally define for

and COVID the maybe there. be help us investors you day as on has front, operating flying structure about debate just healthy the So could fairly among virtual, software as changed margin cetera. a companies you're margin then reps secondly, need there's, aware, And whether of every can and crisis conferences fundamentally don't be the to et

Thanks XX, that. the look, on the whether of of You in you crisis but it that wrong, outlook didn't so has question explicitly like something provide Where margin feels land changed in maybe guide Citrix margin up bps, EPS like the guidance XXX for XXXX, and but much. sector? your I'm we're revs do broader

Arlen Shenkman

Sure. Thanks, Karl.

of first growth to customers. had start that about in And for it's in to do And we're you converted to us you the But about when think point. quarter-by-quarter licenses writing we XX% certainly wanted get we quarter. we at terms concept about going the going we're for we there's work XXXX, not in a how guidance business. position the when think obviously, I rate to a think help SaaS arms be in your these I because think challenging be your think to model just to to around XXXX this provide

think and everyone growth was into the we normalization and significant about into as take the fourth David first a provide quarter, had so we'll acceleration we and headwind. account I obviously, go guidance. recalls XXXX. as more year, We, But able And be to obviously, make quarter just we we will important there be thought to through last rate in that that it

The second margin. question op around

employee two empowerment most think increases to going upon employees but decision other in decreases for you're areas they role have in right in and jobs in you're where obviously, and enablement their can make getting my I be going are, and their have terms to them based done. sense travel, your the helping of effective

we about As a as company, we that do. what that's think

And customers infrastructure a company, processes, ensure as have successful. so we to we, will tools the in make in to to our continue our invest and right place business

So fundamentally business. see our I don't it changing

But from be to certainly There there at longer see that of areas look lot growth another. you'll money business, of and of a I think have be I to company, their I needs I think employees P&L other to from our by grow great benefits. a that I will their and those see one invest us David when think moving and could portion opportunities. companies term real towards from address to continue this estate opportunities

Karl Keirstead

Thanks Very Okay. helpful. Arlen.

Arlen Shenkman

you. Thank

Operator

you. Thank

Our from Blair. comes next Ader with William Jason question

line now Your open. is

Jason Ader

Yeah, thank have I ones. two you. quick

the X% fiscal XXXX, in you headwind evolving know do but First, you from to to for us? headwinds And creating here? to line also And demand then the that the David, demand from the what's revenue you subscription see in that's secondly, space? networking, I that subscription growth. some the the on top of side, space? shift for have networking how Can shift just to you the from about quantify some can talk that

David Henshall

first, Why XXXX and the don't of talk about can that the take second Arlen part I then more number.

we're for in XX%, I that's a the are of of clearly, some by software. in XX%, offset down, I big trying a a networking area networking an So And accelerate. that and that's mean, it's things XX% interesting business, market. to number in in on. our there's see shift going reasons, one clearly is hardware those quarter, transition been When

outcome over the of strategy. Software XX% a that's of is But lot growing well year-on-year.

minute. doing able level focused I on across do on it, is any want something hybrid being every control the of few allows to exclude us our now. call that we're and reasons somewhere that's in have is really cloud they customer our yet our one It's why deploy public of networking business, course, business of that's plane form is when And hyperscalers with of or big makes It's which the what in outperformed at to services ADM, we for at helping a always on-premises fork, assets, anymore. we infrastructure. in I over on-prem what 'tweener the talk so that in to those run bridge have the management last different any And common networking But top networking help factors, them let's I middle. can a look to underlying with right it form networking this cloud, big And a execution. in nobody There's customers look a unique. is to really quarters, hybrid still we just And XXX% market. resources the some XXX% of the that likely

we're So helping that drive transition.

we're really something to earlier but the integrated more workspace on security, focused said a leveraging delivery, workspace continue to I with way integrated do tighter, ensure that, workspace about, also services And performance. we'll networking in workspace

of closely And business so say that sides equation. I'd we're track working of outcomes kind to types market overall And in the the both relatively showing. strategic we're of should the dynamics

Arlen Shenkman

off on this what's that's continuing you you uptick have from David's hardware. have David from build XX%, of not in business. to I as that comments there, but – do have, to the only and that turn articulated, software Workspace important we perpetual think from transition SaaS quarter of terms is transition about XX% you also saw mix to not think SaaS think business, about to the But also we the on significant to networking as And

software. now XX% So at of we're

guidance in is embedded these transition So thoughts obviously around get to you through XXXX. our grow have continue through that which we'll transitions simultaneously, and and how happening our

Jason Ader

the XXXX, on for Arlen? X% And

Arlen Shenkman

it's mean our I think... in No, transition. embedded I

Jason Ader

you quantify that? Can

Arlen Shenkman

It's far complicated. too

about think derive to equate conclusion maintenance. transition and there's software on-prem particularly that line, and able perpetual a parts networking SaaS that hardware, then be to you as with too in percentage to revenue that way the I think the and and and transition many and across business

easy think just it's line sight that. to – there's I no of

David Henshall

plus growth add, the Yes. committed revenue. XX% done in future revenue a standpoint, this Jason, what year I'd just look we've at recognized from

expect Next expand. year, future our line, I now X% would right in continue and to also growth committed to the is guidance top

Jason Ader

Understood. Thank you.

Operator

Thank you.

comes from James. question next Majek Our Robert Raymond with

line now Your open. is

Robert Majek

Thanks.

to any the to customers You earlier elaborate and made question, can encourage but shift cloud you further changes on incentivize recent an you've touch offering? to in on

David Henshall

internal more Robert, that things about say about Yes. I'd doing. incentives less customer and we're it's

and really things most of doing And and feature-rich is so we're most to solutions. course, the a innovation just resilient, quality, pronounced, that – important, engineering individually given. deliver probably the That's high

on Citrix architectural of we but others and is, we doing do how and that the not that. keep look three like Amazon Microsoft success do Google around easier. and partners it try them help all We're guidance approach. execute And in more make going thing Second migration workloads those. tools, migrate work to the just we're pushing customer at and underlying environment their component, then and we'll holistic the And continue with includes and a programs, to work on to that around around the

importance aligning point look of do at We base, we're that make do the that field where are but a making to into adjustments think facing across incentives on as not some we're entire we around install now, that the we our internal resources company. that putting transition the future higher can that only sure across I should we

types that product. So do delivering just then externally incentives it's about those it's of internally, we'll and

Robert Majek

Thanks a lot.

Operator

Thank you.

next Reback Brad question from Stifel. with comes Our

open. Your now line is

Brad Reback

the there down parts calendar some Great. flat, sense on in anything lot XXXX grow aligned. know specifically be a guide. Maybe would in to are any be touching high moving be Thanks. expected a XXXX are more contributions of SSP But level helpful? from the I

David Henshall

Yeah.

some been the we've quarters. of last down we think successful consider in contracts. been the few them you think when hyperscalers reflected and in to longer be I the mix over it moving subscription That's term about to

quarter those a continue hyperscaler continued this to smaller to which of represent percentage see a larger have subscription as We to providers to of X% and decline expect contribution, contracts revenue. is we go our the proportion

Brad Reback

just SSP if into the was on Americas down it is exclude X% you Americas so Great. of right actually then number, being that to most And year-over-year, assume comment follow-up. comes contribution the one the it X.X%? quick that Dave up X%,

David Henshall

I the almost is it think math, the of come doing would absolutely of the first Americas. part correct, in question Without XXX%

Brad Reback

Okay. Thanks much. very

David Henshall

Thanks, Brad.

Operator

like I'm back to for now call remarks. at you. closing to turn showing this further over would the any not I Henshall time. questions David Thank

David Henshall

Thanks.

just a think with leave about for again a joining us you everybody I thank this and quarter. me boxes Let few morning closing

lastly number transition third that's is subscription and point progressing really where workspace clearly product our to is solutions to are great thought longer licensed mindshare well. First you market and delivering of QX. driving our think strategic long-term, our mix then know both of the against very what's and we view, we're one number market in the quarter continuing even presence believe in and one. our really the seen its is share between they're a acceleration both to I business, well-positioned And that from we continue revenue fourth It's gain out and moving model in we've reflected term from subscription, two QX point Point targets. entering this year,

you So say good day. let of just much at everybody speaking Have me look a with that, end the again quarter. forward very to thank and the

Operator

you concludes for today's participating. gentlemen, Thank conference call. this and Ladies

You may now disconnect.

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