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Citrix (CTXS) Beats on Q3 Earnings & Revenues, Hikes 18' View

Citrix Systems Inc . CTXS delivered third-quarter 2018 non-GAAP earnings of $1.40 per share, beating the Zacks Consensus Estimate by 15 cents. The figure surged 14.8% on a year-over-year basis.

Revenues increased 6% from the year-ago quarter to $732.5 million and comfortably surpassed the Zacks Consensus Estimate of $723 million.

Product and license (23.3% of total revenues) increased 1.3% year over year to almost $171 million. Subscription (15.2%) revenues surged 37.1% from the year-ago figure to $111.5 million. Support and services (61.4%) revenues rose 2% on a year-over-year basis to almost $450 million.

Citrix reported 55 transactions worth more than $1 million in the reported quarter, primarily from technology, healthcare and government sectors.

Revenues as per Product Group

Workspace services increased 7% year over year to $462 million due to rapid adoption of unified workspace solutions. Management stated that approximately 50% of new product bookings were subscription based.

Networking revenues rose 5% from the year-ago to $195 million. Management is elated that subscription based revenues increased 95% from the prior-year figure on the back of hybrid cloud offerings.

Content Collaboration revenues climbed 12% on a year-over-year basis to $47 million. With ShareFile is gaining traction for the company's enterprise Workspace customers, management anticipates integrating Content Collaboration business with Workspace results during 2019.

Geographic Revenues

Revenues in Americas increased 6.5% year over year to $432.7 million. Europe, Middle East and Africa (EMEA) revenues advanced 6.6% from the year-ago quarter to $228.2 million. Asia-Pacific and Japan (APJ) revenues increased 1.6% from the year-ago quarter to $71.6 million.

Citrix Systems, Inc. Revenue (TTM)

Citrix Systems, Inc. Revenue (TTM) | Citrix Systems, Inc. Quote

Margin Details

Non-GAAP gross margin during the reported quarter came in at 87.7%. Non-GAAP operating margin was reported at 31.8%, which expanded by 20 basis points from the year ago figure of 31.6%.

Balance Sheet & Cash Flow

As of Sep 30, 2018, cash and cash equivalents were $1.205 billion as compared with $1.021 billion in the previous quarter. Cash flow from operations was reported at $301 million.

Deferred and unbilled revenues of $1.9 billion grew approximately 11% year over year.

Citrix repurchased approximately 1.1 million shares during the third quarter. Moreover, roughly $398 million is still remaining under share repurchase authorization.

The company increased ongoing share repurchase program by $750 million and announced the first-ever quarterly dividend payment of 35 cents to be paid on Dec 21, 2018.

Citrix Systems, Inc. Price, Consensus and EPS Surprise

Citrix Systems, Inc. Price, Consensus and EPS Surprise | Citrix Systems, Inc. Quote

Guidance

For fourth-quarter 2018, Citrix anticipates momentum in the adoption of subscription-based solutions to continue.

Citrix raised guidance for fiscal 2018. The company now expects revenues between $2.95 billion and $2.97 billion (up from previous guidance of $2.92 billion and $2.95 billion). The Zacks Consensus Estimate for revenues is pegged at $2.95 billion.

Non-GAAP operating margin is now anticipated to be in the range of 30.5-31.5% compared with the earlier band of 30-31%. Moreover, non-GAAP earnings are now expected in the range of $5.55-$5.60 per share (previously $5.30-$5.40 per share). The Zacks Consensus Estimate for earnings is pegged at $5.37 per share.

For 2019, Citrix anticipates revenues to grow 4%. Subscription bookings as a percentage of total product bookings are projected to come in at 50-55%. Non-GAAP earnings are projected at $6.00 per share.

Zacks Rank & Stocks to Consider

Citrix carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader technology sector include Nikon Corp. NINOY , Cadence Design Systems CDNS and Vishay Intertechnology VSH . All the three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here .

Long-term earnings growth rate for Nikon, Cadence and Vishay Intertechnology is projected to be 22%, 12% and 9.2%, respectively.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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