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Citrix' (CTXS) Q4 Earnings and Revenues Surpass Estimates

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Citrix Systems delivered fourth-quarter 2019 non-GAAP earnings of $1.71 per share, beating the Zacks Consensus Estimate by 3%. The figure improved 2.4% on a year-over-year basis.

Revenues of $809.8 million surpassed the Zacks Consensus Estimate by 1%. The figure improved 1% on a year-over-year basis.

Product and license (21.8% of total revenues) decreased 16.2% year over year to $176.7 million.

Support and services (54.3%) revenues declined 4.7% on a year-over-year basis to $439.6 million.

Subscription (23.9%) revenues surged 49.1% from the year-ago figure to $193.5 million.

During the quarter under review, SaaS revenues came in at $113 million (59% of total subscription revenues) and were up 45% year over year. Notably, SaaS revenues form the most significant part of subscription transition. Other subscription revenues in the reported quarter came in at $80 million, up 56% year over year.

Citrix Systems, Inc. Price, Consensus and EPS Surprise

Citrix Systems, Inc. Price, Consensus and EPS Surprise

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

Revenues as per Product Group

Workspace revenues (69.8% of total revenues) increased 1.4% year over year to $565 million due to higher adoption of SaaS-bases subscription solutions. Workspace subscription revenues contributed 27% to the figure. Approximately 73% of Workspace product bookings were subscription based.

Networking revenues (26.2%) increased 2.9% from the year-ago period to $212 million. Networking subscription revenues surged 100% from the prior-year figure. The company anticipates shift toward software-based solutions from traditional hardware to weigh on Networking revenues going ahead.

However, Professional Services revenues (4.1%) declined 15.4% on a year-over-year basis to $33 million.

Customer Wise Revenues

Revenues from SSP customers came in at $36 million (4% of total revenues) during the reported quarter, up 112% year over year. Revenues from non-SSP customers declined 1% year over year to $774 million.

Geographic Revenues

Revenues in the Americas came in at $453 million, up 3% on a year-over-year basis. Meanwhile, revenues in Europe, Middle East and Africa (EMEA) declined 1% from the year-ago quarter to $278 million. Revenues in Asia-Pacific and Japan (APJ) declined 4% year over year to $79 million.

Margin Details

Total operating expenses increased 3.9% year over year to $505.3 million. As a percentage of revenues, the figure expanded 170 basis points (bps) to 62.4%

Non-GAAP operating margin was reported at 34.4%, which contracted 170 bps from the year-ago figure, primarily impacted by the shift toward subscription model.

Balance Sheet & Cash Flow

Cash and cash equivalents at the end of the quarter were $545.8 million compared with $493.8 million in the previous quarter. Long-term debt at the end of the quarter came in at $742.9 million, compared with $742.7 million in the prior quarter.

Cash flow from operations was reported at $206 million, compared with $147 million in the prior quarter.

Deferred and unbilled revenues of $2.501 billion grew approximately 15% year over year.

Citrix repurchased shares of 1 million during the fourth quarter. The company enhanced its share repurchase authorization by $1 billion, bringing the total authorization to approximately $1.75 billion.

The company paid out quarterly dividend of 35 cents worth $46 million.

Key Developments in Q4

Notably, during the fourth quarter, Citrix renewed its partnership with Aston Martin Red Bull Racing where the latter’s team will rely on Citrix’s digital workspace solutions as it adapts to Formula One’s new technical and regulatory framework.

On Dec 4, the company announced deepening of its relationship with Amazon's (AMZN - Free Report) Amazon Web Services (AWS) to provide businesses with greater flexibility and choice in deploying Citrix ADC in hybrid environments.

Guidance

For first-quarter 2020, Citrix anticipates revenues between $730 million and $740 million. The Zacks Consensus Estimate for revenues is pegged at $799.9 million.

Moreover, non-GAAP earnings are expected in the range of $1.15-$1.2 per share. The Zacks Consensus Estimate for earnings is pegged at $1.66 per share.

For full-year 2020, the company expects revenues between $3.1 billion and $3.13 billion. The Zacks Consensus Estimate for revenues is pegged at $3.1 billion.

Non-GAAP operating margin is anticipated to be in the range of 28% to 29%.

Moreover, non-GAAP earnings are expected to be in the range of $5.35-$5.55 per share. The Zacks Consensus Estimate for earnings is pegged at $5.39 per share.

Zacks Rank and Key Picks

Citrix carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader technology sector are MKS Instruments, Inc. (MKSI - Free Report) and Splunk Inc. , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

MKS Instruments and Splunk are set to report their quarterly earnings on Jan 28 and Feb 27, respectively.

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