Citrix Systems Inc. CTXS performed reasonably well in the third quarter of 2015 reporting higher-than-expected earnings as well as revenues.
The cloud computing company’s earnings (excluding special items) came in at 87 cents per share, ahead of the Zacks Consensus Estimate by 20 cents and up 53% from the year-ago quarter. Higher-than-expected revenues contributed to the earnings beat. Including special items, earnings improved 20.7% to 35 cents per share in the third quarter of 2015.
Total revenue came in at $813.3 million, up 7.2% on a year-over-year basis and approximately 3.5% above the Zacks Consensus Estimate. Investors were naturally pleased with the company’s strong earnings performance. Consequently, shares of the company gained in after-market trading on Oct 21.
Gross margin (including stock-based compensation expenses) stood at 84.5% in the reported quarter. Quarterly operating margin (including stock-based compensation expenses) stood at 21.5% against 15.2% in the prior-year quarter. At the end of the reported quarter, deferred revenues grossed $1.5 billion against $1.4 billion a year ago.
During the third quarter of 2015, Citrix generated approximately $260 million of cash from operations, $96 million above the year-ago figure. The company exited the quarter with $527.6 million in cash and cash equivalents, more than double the year-ago figure. The company bought back 3.9 million shares in the reported quarter.
Revenues by Product Mix
Product and Licenses revenues grossed $206.3 million, up 6.8% year over year. License updates and maintenance revenues totaled $379.6 million, up 6% year over year. Software-as-a-Service (SaaS) revenues came in at $190.8 million, reflecting a 13.4% increase from the prior-year quarter while Professional Services revenues declined 13.3% to $36.7 million in the reported quarter.
Revenues by Product Groups
Mobile Apps revenues in the third quarter totaled $191 million, up 15% year over year. Delivery Networking revenues grossed $187 million, up 21% from the year-earlier quarter. Workspace Service revenues were $396 million, up 1% year over year.
Revenues by Geography
Revenues in the Americas (both North & Latin America) region totaled $345.4 million, up 8.5% year over year. Revenues in Europe, Africa and the Middle East region increased 1.9% to $206.4 million while the same in the Asia-Pacific region fell 3.2% to $70.7 million.
Outlook for 2015
Citrix expects revenues in the band of $3.24 billion to $3.25 billion for 2015. Earnings per share (on an adjusted basis) are projected in the band of $3.85 to $3.90. The company stated that it intends to unveil its financial outlook for 2016 next month. The Zacks Consensus Estimate of 2015 hints at earnings of $2.97 per share on revenues of $3.23 billion.
Stocks to Consider
Citrix Systems currently has a Zacks Rank #3 (Hold). Better-ranked stocks in the same space include American Software, Inc. AMSWA, Majesco Entertainment Co. COOL and Dassault Systemes SA DASTY. All the three companies sport a Zacks Rank #1 (Strong Buy).
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