Citrix Systems Inc. ( CTXS ) declared financial results for the first quarter of 2014, where both its top and bottom line surpassed the Zacks Consensus Estimate. Following the results, management declared a $1.5 billion share buyback plan.
GAAP net income, in first-quarter 2014, came in at $55.9 million or 30 cents per share compared with $59.7 million or 32 cents per share in the prior-year quarter. Quarterly adjusted earnings per share of 50 cents easily beat the Zacks Consensus Estimate of 38 cents. The total revenue stood at $750.8 million, up 10.4% year over year and also above the Zacks Consensus Estimate of $735 million.
Gross margin in the said quarter was 82.1% compared with 82.9% in the year-ago quarter. Operating expenses were around $554.6 million versus $501.4 million in the prior-year quarter. Quarterly operating margin was 9.6% against 8.4% in the prior-year quarter. At the end of the reported quarter, deferred revenues were $1.4 billion against $1.2 billion in the year-ago quarter.
During the first quarter of 2014, Citrix generated approximately $287.9 million of cash from operations and free cash flow (cash flow from operations less capital expenditures) was around $257.4 million. The company had nearly $829.3 million of cash and marketable securities compared with $734.7 million at the end of 2013. The balance sheet remains free of any debt obligations.
Revenues by Product Mix
Product and Licenses revenues were $207.4 million, up 6.9% year over year. License updates and maintenance revenues were $343.8 million, up 8.2% year over year. Software-as-a-Service revenues came in at $157.1 million, a 12.4% increase from the prior-year quarter while Professional Services revenues were $42.5 million, up 37.6% year over year.
Revenues by Product Grouping
Mobile and Desktop revenues in the first quarter of 2014 were $381 million, up 7% year over year. Networking and Cloud Solutions revenues were $167 million, up 13% year over year. Communications & Documents Cloud revenues were $157 million, an increase of 14% over the prior-year quarter.
Revenues by Geography
Revenues in the Americas (both North & Latin America) region were $323.4 million, up 9.1% year over year. Revenues in Europe, Africa, and the Middle East region came in at $200.6 million, up 15% year over year. Revenues in the Asia Pacific region were $69.7 million, up 8% year over year.
Second Quarter of 2014 Financial Outlook
Management forecasted second-quarter 2014 net revenue to increase to the range of $765-$775 million. GAAP earnings per share are expected to be 21-24 cents and non-GAAP earnings per share will likely be between 57 and 69 cents, exclusive of stock-based compensation expenses, effects of amortization of acquired intangible assets and restructuring expenses of 19, 28 and 3 cents per share, respectively. GAAP gross margin is projected to be between 81% and 82% while non-GAAP gross margin is anticipated in the range of 84-85%.
2014 Financial Outlook
Management projected 2014 net revenue to increase in the range of 8.5-10%. Non-GAAP gross margin is expected to be in between 81 and 82% while non-GAAP gross margin is anticipated in the range of 84-85%. Non-GAAP tax rate is projected to remain at 23% while non-GAAP earnings per share will likely be in the $2.90-$2.95 band.
Other Stocks to Consider
Citrix Systems currently has a Zacks Rank #4 (Sell). Other better-ranked stocks worth considering in the Business Software & Services industry are Manhattan Associates, Inc. ( MANH ), Adobe Systems Inc. ( ADBE ) and Ansys, Inc. ( ANSS ). Manhattan Associates has a Zacks Rank #1 (Strong Buy) while Adobe and Ansys carry Zacks Rank #2 (Buy).
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