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Citrix (CTXS) Q3 Earnings and Revenues Beat; View Raised
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Citrix Systems Inc. posted encouraging results in the third quarter of 2016, both in terms of earnings and revenues.
The cloud computing company’s earnings (excluding special items) of $1.11 per share beat the Zacks Consensus Estimate of 97 cents. Higher-than-expected revenues contributed to the earnings beat.
Operating Results
Net revenue came in at $841 million, up 3% on a year-over-year basis. The top line also came in above the Zacks Consensus Estimate of $826.5 million. Gross margin was 86% in the quarter under review compared with 85% in the prior-year quarter. Quarterly operating margin was 30% as against 28% in the prior-year quarter. At the end of the reported quarter, deferred revenues grossed $1.6 billion compared with $1.5 billion a year ago.
During the third quarter, Citrix generated approximately $288 million of cash from operations compared with $260 million for the third quarter of 2015. The company exited the quarter with $1,309 million in cash and cash equivalents as against $368.5 million at the end of 2015.
Revenues by Product Mix
Product and Licenses revenues of $206.2 million were flat year over year. License updates and maintenance revenues totaled $398.2 million, up 5% year over year. Software-as-a-Service (SaaS) revenues came in at $207.1 million, reflecting a 9% increase from the prior-year quarter. Professional Services revenues declined 19% to $29.9 million in the reported quarter.
Revenues by Geography
Revenues in the Americas (both North & Latin America) were up 8% year over year. Revenues in Europe, Africa and the Middle East decreased 4% but increased less than 1% in the Asia Pacific region, on a year-over-year basis.
The Fort Lauderdale, FL-based company raised its revenue estimates to a band of $3.40–$3.41 billion from the earlier guidance of $3.37–$3.39 billion, which excludes the GoTo business. GoTo is expected to merge with LogMeIn in the first quarter of 2017. Earnings per share (excluding adjustments) are now projected in the range of $5.18–$5.20 instead of $5.00–$5.10. The Zacks Consensus Estimate for 2016 revenues and earnings is $3.39 billion and $4.16, respectively.
Outlook for 2017
Excluding the GoTo business, net revenue is expected to grow in the range of 3% to 4%. Operating margin is anticipated to be around 32–33%.
In spite of competition from peers such as Infoblox Inc. , Autodesk Inc. (ADSK - Free Report) and Avid Technology, Inc. , Citrix has seen impressive growth in the past few quarters. Also, this Zacks Rank #3 (Hold) company’s prospects appear bright. You can seethe complete list of today’s Zacks #1 Rank stocks here.
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Citrix (CTXS) Q3 Earnings and Revenues Beat; View Raised
Citrix Systems Inc. posted encouraging results in the third quarter of 2016, both in terms of earnings and revenues.
The cloud computing company’s earnings (excluding special items) of $1.11 per share beat the Zacks Consensus Estimate of 97 cents. Higher-than-expected revenues contributed to the earnings beat.
Operating Results
Net revenue came in at $841 million, up 3% on a year-over-year basis. The top line also came in above the Zacks Consensus Estimate of $826.5 million. Gross margin was 86% in the quarter under review compared with 85% in the prior-year quarter. Quarterly operating margin was 30% as against 28% in the prior-year quarter. At the end of the reported quarter, deferred revenues grossed $1.6 billion compared with $1.5 billion a year ago.
During the third quarter, Citrix generated approximately $288 million of cash from operations compared with $260 million for the third quarter of 2015. The company exited the quarter with $1,309 million in cash and cash equivalents as against $368.5 million at the end of 2015.
Revenues by Product Mix
Product and Licenses revenues of $206.2 million were flat year over year. License updates and maintenance revenues totaled $398.2 million, up 5% year over year. Software-as-a-Service (SaaS) revenues came in at $207.1 million, reflecting a 9% increase from the prior-year quarter. Professional Services revenues declined 19% to $29.9 million in the reported quarter.
Revenues by Geography
Revenues in the Americas (both North & Latin America) were up 8% year over year. Revenues in Europe, Africa and the Middle East decreased 4% but increased less than 1% in the Asia Pacific region, on a year-over-year basis.
CITRIX SYS INC Price, Consensus and EPS Surprise
CITRIX SYS INC Price, Consensus and EPS Surprise | CITRIX SYS INC Quote
Outlook for 2016
The Fort Lauderdale, FL-based company raised its revenue estimates to a band of $3.40–$3.41 billion from the earlier guidance of $3.37–$3.39 billion, which excludes the GoTo business. GoTo is expected to merge with LogMeIn in the first quarter of 2017. Earnings per share (excluding adjustments) are now projected in the range of $5.18–$5.20 instead of $5.00–$5.10. The Zacks Consensus Estimate for 2016 revenues and earnings is $3.39 billion and $4.16, respectively.
Outlook for 2017
Excluding the GoTo business, net revenue is expected to grow in the range of 3% to 4%. Operating margin is anticipated to be around 32–33%.
In spite of competition from peers such as Infoblox Inc. , Autodesk Inc. (ADSK - Free Report) and Avid Technology, Inc. , Citrix has seen impressive growth in the past few quarters. Also, this Zacks Rank #3 (Hold) company’s prospects appear bright. You can see the complete list of today’s Zacks #1 Rank stocks here.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>