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Citrix Systems (CTXS) Misses on Q2 Earnings, Revenues Beat

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Citrix Systems Inc. (CTXS - Free Report) posted lower-than-expected earnings but better-than-expected revenues in the second quarter of 2017.

The cloud computing company’s earnings came in at 83 cents per share, falling short of the Zacks Consensus Estimate of 85 cents. Earnings also plunged 16.16% from the year-ago figure primarily due to higher costs.

Operating Results

Net revenue came in at $693.2 million, marginally above the Zacks Consensus Estimate of $690.7 million. However, revenues slumped 17.76% on a year-over-year basis. Gross margin (adjusted) was 86.1% in the quarter under review compared with 84.9% in the prior-year quarter. Quarterly operating margin (adjusted) was 26.1% compared with 28.5% in the prior-year quarter. As of Jun 30, 2017, deferred revenues grossed $1.7 billion compared with $1.5 billion a year ago. Total operating expenses increased 6.7% to $462 million in the reported quarter.

During the second quarter of 2017, Citrix generated approximately $164 million of cash from operations compared with $194 million in the same quarter of 2016. Citrix exited the quarter with $844.8 million in cash and cash equivalents compared with $836.0 million at the end of 2016.

Revenues by Product Mix

Product and Licenses revenues grossed $211 million, down 4% year over year. License updates and maintenance revenues totaled $409 million, up 6% year over year. Software-as-a-Service (SaaS) revenues came in at $41.5 million, up 27% from the prior-year quarter. Professional Services revenues declined 9% to $31.7 million in the reported quarter.

Revenues by Geography

Net revenues in the Americas (both North & Latin America) were flat on a year-over-year basis. While revenues in Europe, Middle East and Africa (EMEA) region increased 6%, the Pacific region saw a 10% rise.

Citrix Systems, Inc. Price, Consensus and EPS Surprise


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

Outlook for Third-Quarter 2017

The company expects net revenues in the band of $685-$695 million for the third quarter of 2017. Earnings per share (on an adjusted basis) are projected in the range of $1.02-$1.05. The Zacks Consensus Estimate for third-quarter revenues and earnings per share is $699.64 million and $1.03, respectively.

Outlook for 2017

The Fort Lauderdale, FL-based company expects net revenue in the range $2.81-$2.83 billion (previous guidance: $2.81-$2.84 billion). The Zacks Consensus Estimate for the same is $2.83 billion. Earnings per share (on an adjusted basis) are projected in the $4.60-$4.65 band, unchanged from the previous view and ahead of the Zacks Consensus Estimate of $3.91.

Zacks Rank & Key Picks

Citrix carries a Zacks Rank #3 (Hold). Some other stocks worth considering from the broader Computer and Technology sector are Dassault Systemes SA (DASTY - Free Report) , Red Hat, Inc. (RHT - Free Report) and Symantec Corporation (SYMC - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of Dassault Systemes, Red Hat and Symantec have surged over 30%, 41% and 25% respectively, on a year-to-date basis.

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