Citrix Systems Inc. CTXS reported first-quarter 2015 financial results, wherein its bottom line surpassed the Zacks Consensus Estimate while the top line missed the same.
GAAP net income in the quarter came in at $28.9 million or 18 cents per share compared with $55.9 million or 30 cents in the prior-year quarter. Quarterly adjusted earnings per share of 50 cents were higher than the Zacks Consensus Estimate of 46 cents. Total revenue stood at $760.8 million, up 1.3% year over year but missed the Zacks Consensus Estimate of $772 million.
Gross margin in the reported quarter was 82.6% compared with 82.1% in the year-ago quarter. Operating expenses totaled $576.5 million against $544.6 million in the prior-year quarter. Quarterly operating margin stood at 6.8% against 9.6% in the prior-year quarter. At the end of the reported quarter, deferred revenues grossed $1.5 billion against $1.4 billion in the year-ago quarter.
During the quarter under review, Citrix generated approximately $291.9 million of cash from operations against $287.9 million in the prior-year quarter. The company had nearly $983.3 million of cash and marketable securities compared with $789.4 million at the end of 2014. Also, the company had $1,300.9 million of convertible notes outstanding in the reported quarter against $1,293 million in the last-year quarter.
Revenues by Product Mix
Product and Licenses revenues were $183.3 million, down 11.6% year over year. License updates and maintenance revenues were $371.3 million, up 8% year over year. Software-as-a-Service (SaaS) revenues came in at $169.4 million, reflecting a 7.8% increase from the prior-year quarter while Professional Services revenues were around $36.9 million, down 13.2% year over year.
Revenues by Product Grouping
Mobile Apps revenues in the first quarter of 2015 totaled $169.4 million, Delivery Networking revenues were $155 million, Workspace Service revenues were $390.8 million and Other revenues totaled $39.6 million.
Revenues by Geography
Revenues in the Americas (both North & Latin America) region totaled $320.2 million, down 1% year over year. Revenues in Europe, Africa, and the Middle East region increased 1.3% to $203.3 million while the same in the Asia-Pacific region fell 2.6% to $67.9 million.
2015 Financial Outlook
Citrix expects revenues in the band of $3.22 billion to $3.25 billion for fiscal 2015. Management projects GAAP earnings per share in the range of $2.04 to $2.10 while non-GAAP earnings will likely be in the $3.55–$3.60 band, exclusive of adjustments. Likewise, GAAP gross margin for 2015 is expected to be between 83% and 84%.
For the second quarter of 2015, the company anticipates revenues in the band of $785 to $795 million while non-GAAP earnings per share will likely be in the 80–83 cent range.
Stocks to Consider
Citrix Systems currently has a Zacks Rank #4 (Sell). Better-ranked stocks in the Business Software & Services industry are Progress Software Corporation PRGS, NetSol Technologies, Inc. NTWK and Imperva Inc. IMPV. Both Progress Software and NetSol Technologies sport a Zacks Rank #1 (Strong Buy) while Imperva carries Zacks Rank #2 (Buy).
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