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Citrix (CTXS) Earnings & Revenues Beat Estimates in Q4

Citrix Systems Inc. CTXS delivered fourth-quarter 2018 non-GAAP earnings of $1.67 per share, beating the Zacks Consensus Estimate of $1.59 per share. The figure increased by 1 cent from the year ago-quarter.

Revenues rose 3.1% from the year-ago quarter to $801.9 million and comfortably surpassed the Zacks Consensus Estimate of $790 million.

Product and license (26.3% of total revenues) decreased 10.9% year over year to almost $210.8 million. Subscription (16.2%) revenues surged 44.7% from the year-ago figure to $129.8 million. Support and services (57.5%) revenues rose 2.2% on a year-over-year basis to almost $461.3 million.

During the quarter under review, SaaS revenue came in at $78 million and accounted for nearly 10% of total revenues. Notably, SaaS revenues are the most significant part of subscription transition.

Notably, the company's shares have gained 15.6% year over year, substantially outperforming the industry 's rally of 10.3%.

Revenues as per Product Group

Workspace revenues increased 6% year over year to $557 million due to rapid adoption of unified workspace solutions. Workspace subscription revenues increased 35% year over year during the fourth quarter. Management stated that approximately 60% of new product bookings were subscription based.

Networking revenues declined 4% from the year-ago to $206 million. Notably, a dip in the SSP business negatively impacted networking revenue by roughly $20 million during the reported quarter. Management is elated that subscription based revenues more than doubled from the prior-year figure on the back of hybrid cloud offerings.

Content Collaboration revenues climbed 4% 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 decreased 1% year over year to $440 million. Europe, Middle East and Africa (EMEA) revenues advanced 10% from the year-ago quarter to $$279.4 million. Asia-Pacific and Japan (APJ) revenues increased 4% year over year to $82.4 million.

Notably, subscription revenues increased more than 40% year over year during the quarter under quarter in the Americas and in EMEA. In APJ the same almost doubled year over year.

Margin Details

Non-GAAP gross margin during the reported quarter came in at 88%. Non-GAAP operating margin was reported at 35%, which contracted by 500 basis points from the year-ago figure of 40%.

Balance Sheet & Cash Flow

As of Dec 31, 2018, cash and cash equivalents were $618.8 million as compared with $1.205 billion in the previous quarter. Cash flow from operations was reported at $206 million.

Deferred and unbilled revenues of $2.17 billion grew approximately 12% year over year.

Citrix repurchased approximately 3.7 million shares worth $380 million during the fourth quarter. Moreover, roughly $770 million is still remaining under share repurchase authorization.

The company increased paid the first-ever quarterly dividend payment of 35 cents worth $47 million during the quarter under review.

Full year 2018 Highlights

Citrix reported non-GAAP earnings of $5.67 per share. Revenues increased 5% year over year to $2.97 billion.

Product and license decreased 4% year over year. Subscription revenues surged 45% from the year-ago figure. Support and services revenues rose 2% on a year-over-year basis.

Guidance

For first-quarter 2019, Citrix anticipates revenues between $700 million and $710 million The Zacks Consensus Estimate for revenues is pegged at $790.3 million.

Moreover, non-GAAP earnings are expected in the range of $1.15-$1.20 per share. The Zacks Consensus Estimate for earnings is pegged at $1.59 per share.

Citrix provided guidance for fiscal 2019. The company expects revenues between $3.08 billion and $3.09 billion. The Zacks Consensus Estimate for revenues is pegged at $3.09 billion.

Non-GAAP operating margin is anticipated to be in the range of 31.5% to 32%. Moreover, non-GAAP earnings are expected to be approximately $6.00 per share. The Zacks Consensus Estimate for earnings is pegged at $6.04 per share.

Zacks Rank & Stocks to Consider

Citrix carries a Zacks Rank #3 (Hold).

Few better-ranked stocks in the broader technology sector are Twitter, Inc. TWTR , Pure Storage, Inc. PSTG and Marvell Technology Group Ltd. MRVL , both flaunting 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 Twitter, Pure Storage and Marvell is currently pegged at 22.1%, 17.5% and 9.4%, 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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