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Factors to Note Ahead of Citrix (CTXS) Q2 Earnings Release

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Citrix Systems is scheduled to release second-quarter 2021 results on Jul 29.

For the to-be-reported quarter, the company expects revenues between $840 million and $850 million. The Zacks Consensus Estimate for revenues is pegged at $845.2 million, which indicates an increase of 5.8% from the year-ago quarter’s levels.

Citrix expects non-GAAP earnings in the range of $1.15-$1.20 per share. The consensus mark for second-quarter earnings has been steady at $1.19 per share in the past 30 days. The estimate suggests a decline of 22.2% compared with the prior-year quarter’s reported figure.

The company has a trailing four-quarter earnings surprise of 12.32%, on average.

Citrix Systems, Inc. Price and EPS Surprise

 

Citrix Systems, Inc. Price and EPS Surprise

Citrix Systems, Inc. price-eps-surprise | Citrix Systems, Inc. Quote

 

Factors Likely to Have Influenced Q2 Performance

Citrix’s second-quarter performance is anticipated to have benefited from healthy adoption of its digital workspace and desktop virtualization solutions amid continuation of remote work setup due to the pandemic.

The implementation of hybrid and flexible workspace policies by enterprises is also likely to have contributed to the uptake of the company’s workspace solutions.

In the second quarter, companies including Össur, Denmark-based Albertslund Municipality University, Canada-based Ottawa Hospital and IT solutions provider iOCO have selected Citrix’s digital workspace solutions.

The company’s recent acquisition of Wrike is expected to have aided top-line performance in the quarter to be reported. Wrike provides SaaS-based collaborative work management solutions for enterprises.

Ongoing transition to subscription model is likely to bolster the company’s subscription revenues in the to-be reported quarter.

The Zacks Consensus Estimate for second-quarter subscription revenues is pegged at $389 million, which indicates year-over-year improvement of 60%.

The company’s second-quarter top line is likely to reflect continued gains from the COVID-19 induced digital transformation across all industries, as more enterprises migrate to the cloud from on-premises to improve operational efficiency.

Citrix’s efforts to boost the security capabilities of its offerings amid increasing instances of cyber-attacks is likely to have driven incremental adoption of its security products, which is anticipated to have contributed to second-quarter performance.

Nevertheless, shift toward software-based solutions from traditional hardware is likely to dent App Delivery and Security revenues. Professional services business is being negatively impacted by migration toward subscription model, which is likely to have hurt the segment’s top line.

Increasing investments on product enhancements amid escalating competition from VMware's Horizon, Workspace ONE as well as AirWatch offerings and Amazon’s (AMZN - Free Report) WorkSpaces, are anticipated to have put pressure on margins in the second quarter.

What the Zacks Model Unveils

Our proven model does not predict an earnings beat for Citrix this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.

Citrix has an Earnings ESP of 0.00% and a Zacks Rank #3, at present. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are some other stocks, which you may consider, as our proven model shows that these also have the right mix of elements to beat estimates this time around:

Avnet (AVT - Free Report) has an Earnings ESP of +9.82% and a Zacks Rank of 1, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Fortinet (FTNT - Free Report) has an Earnings ESP of +2.11% and a Zacks Rank of 2 at present.


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