Citrix Systems Inc. (CTXS - Analyst Report) declared strong financial results for the second quarter of 2013. Management has raised its financial guidance for fiscal 2013. As a result, in the after market trade on NASDAQ, the stock price of Citrix was up $4.84 (7.17%) to $72.33.
GAAP net income, in second-quarter 2013, was $64.5 million or 34 cents per share compared with $92 million or 49 cents per share in the prior-year quarter. Quarterly adjusted earnings per share of 47 cents beat the Zacks Consensus Estimate of 45 cents. Second-quarter total revenue was $730.4 million, up 18.7% year over year, easily outpacing the Zacks Consensus Estimate of $710 million.
Gross margin in the second quarter of 2013 was 82.6% compared with 84.7% in the year-ago quarter. Operating expenses in the reported quarter were around $527.3 million compared with $438.7 million in the prior-year quarter. Quarterly operating margin was 10.4% compared with 13.4% in the prior-year quarter. At the end of the reported quarter, deferred revenues were $1.3 billion, up 24% year over year. In the reported quarter, Citrix repurchased 0.6 million of its common shares for a total consideration of about $38.75 million.
During the second quarter of 2013, Citrix generated $208.9 million of cash from operations and free cash flow (cash flow from operations less capital expenditures) was around $170.4 million. At the end of the reported quarter, the company had nearly $1,519.7 million of cash and marketable securities compared with $1,523.6 million at the end of 2012. The balance sheet remains free of any debt obligations.
Revenues by Product Mix
Product and Licenses revenues were $227.2 million, up 20.9% year over year. License updates and maintenance revenues were $322.9 million, up 18.5% year over year. Software-as-a-Service revenues were $143.9 million, an increase of 14.6% over the prior-year quarter and Professional Services revenues were $36.4 million, up 24.5% year over year.
Revenues by Product Grouping
Mobileand Desktop revenues in the second quarter of 2013 were $382.2 million, up 10.8% year over year. Networking and Cloud Solutions revenues were $164.8 million, up by a significant 46.2% year over year. Software-as-a-Service revenues were $143.9 million, an increase of 14.6% over the prior-year quarter. Revenues from Other Products were $39.5 million, up 23.8% year over year.
Revenues by Geography
Revenues in the Americas (both North & Latin America) region were $443.6 million. Revenues in Europe, Africa, and the Middle East region were $209 million. Revenues in the Asia Pacific region were $77.8 million.
Third Quarter of 2013 Financial Outlook
Management forecasted third-quarter 2013 revenues of $730 million to $740 million. GAAP earnings per share are expected to be within the range of 41 cents to 42 cents and non-GAAP earnings per share will be between 72 cents and 73 cents. Stock-based compensation expenses are anticipated to be 26 cents per share.
Financial Outlook for Fiscal 2013
Management has given a revised forecast for full-year 2013 revenues of $2.96 billion to $2.98 billion. GAAP gross margin is targeted to be in the range of 82.6% to 83.1%. GAAP earnings per share will be within the range of $1.88 to $1.91 and non-GAAP earnings per share will be between $3.09 and $3.11. Stock-based compensation expenses will be $1 per share.
Other Stocks to Consider
Citrix Systems currently has a Zacks Rank #4 (Sell). Other stocks to consider in the Business Software & Services industry are Aspen Technology Inc. (AZPN - Snapshot Report), CA Inc. (CA) and Vocus Inc. . All of them currently carry a Zacks Rank #1 (Strong Buy).