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Citrix (CTXS) Q1 Earnings Beat Estimates, 18' View Positive

Citrix Systems Inc.CTXS delivered first-quarter 2018 adjusted earnings of $1.29 per share, which beat the Zacks Consensus Estimate by 24 cents. The figure surged 33% on a year-over-year basis.

Revenues increased 5.2% from the year-ago quarter to $697.2 million and comfortably surpassed the Zacks Consensus Estimate of $676 million. Revenues were hurt by $10 million negative impact from the adoption of ASC 606.

Product and license (23% of revenues) revenues declined 6% year over year to $160.7 million. Subscription (14.8% of revenues) revenues surged 49.3% from the year-ago to $103.2 million. Support and services (62.1% of revenues) revenues inched up 2.5% on a year-over-year basis to $433.3 million.

Revenues as per Product Group

Workspace services (59.2% of revenues) increased 3% year over year to $412.6 million. Management stated that 42% of new product bookings were subscription based.

Citrix Systems, Inc. Price, Consensus and EPS Surprise

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

Networking (29.9% of revenues) revenues rose 7.9% from the year-ago to $208.6 million. SSP and enterprise product bookings were each up roughly 20% from the year-ago quarter.

Content Collaboration (6.4% of revenues) revenues climbed 14.9% on a year-over-year basis to $44.7 million.

Professional services (4.5% of revenues) advanced 5.4% year over year to $31.3 million.

Geographic Revenues

Professional services (4.5% of revenues) increased 5.4% year over year to $31.3 million.

Revenues in Americas increased 5% year over year to $414 million. There were 33 transactions worth more than $1 million in the reported quarter.

Europe, Middle East and Africa (EMEA) revenues were up 7% from the year-ago quarter to $215 million. There were 12 transactions worth more than $1 million in the reported quarter.

Asia-Pacific and Japan (APJ) revenues dipped 1% from the year-ago quarter to $69 million. There were five transactions worth more than $1 million in the reported quarter.

Operating Details

Reported operating expenses as percentage of revenues declined 530 basis points (bps) on a year-over-year basis to 60.7%.

Research and development (R&D), sales, marketing & services, and general & administrative (G&A) declined 140 bps, 120 bps and 240 bps, respectively.

As a result, reported operating margin expanded 520 bps from the year-ago quarter to 23.7%. Adjusted operating margin expanded 400 bps on a year-over-year basis to 32%.

Balance Sheet & Cash Flow

As of Mar 31, 2018, cash and cash equivalents were $954.7 million as compared with $1.12 billion as of Dec 31, 2017. Cash flow from operations was $358 million in the first quarter.

As of Mar 31, 2018, deferred revenues grossed $1.7 billion as compared with $1.9 billion in the previous quarter.

Citrix repurchased approximately 8.4 million shares during the first quarter.

Guidance

For second-quarter 2018, Citrix anticipates revenues between $710 million and $720 million. The Zacks Consensus Estimate for revenues currently stands at $706.4 million.

Non-GAAP earnings are expected between $1.18 and $1.22 per share. The Zacks Consensus Estimate for earnings is currently pegged at $1.09 per share.

For 2018, Citrix expects revenues between $2.88 billion and $2.91 billion. The Zacks Consensus Estimate for revenues currently stands at $2.88 billion.

Non-GAAP operating margin is expected to be in the range of 30-31%. Moreover, non-GAAP earnings are expected between $5.20 and $5.30 per share. The Zacks Consensus Estimate for earnings is currently pegged at $4.87 per share.

Zacks Rank & Stocks to Consider

Currently, Citrix carries a Zacks Rank #3 (Hold).

VMware VMW , Ptc PTC and The Ultimate Software Group ULTI are stocks worth considering in the broader technology sector. 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 VMware, Ptc and The Ultimate Software is currently pegged at 12.3%, 38.2% and 22.1%, 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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