core sector communique

Citrix Reports First Quarter Financial Results

Quarterly Revenue of $589 million up 20% year-over-year

GAAP Diluted Earnings Per Share of $0.36

Non-GAAP Diluted Earnings Per Share of $0.59

Deferred revenue of $983 million up 25% year-over-year

Cash flow from operations of $243 million up 53% year-over-year

India — April 27, 2012 — Citrix Systems, Inc. (NASDAQ:CTXS) today reported financial results for the first quarter of fiscal 2012 ended March 31, 2012.

FINANCIAL RESULTS

In the first quarter of fiscal 2012, Citrix achieved revenue of $589 million, compared to $491 million in the first quarter of fiscal 2011, representing 20 percent revenue growth.

GAAP Results

Net income for the first quarter of fiscal 2012 was $68 million, or $0.36 per diluted share, compared to $74 million, or $0.38 per diluted share, for the first quarter of fiscal 2011.

Non-GAAP Results

Non-GAAP net income in the first quarter of fiscal 2012 was $111 million, or $0.59 per diluted share, compared to $97 million, or $0.50 per diluted share, in the first quarter of fiscal 2011. Non-GAAP net income excludes the effects of amortization of intangible assets primarily related to business combinations, stock-based compensation expenses and the tax effects related to those items. In addition non-GAAP net income for the first quarter of fiscal 2011 excludes amounts recorded in connection with the restructuring program that the company implemented in January 2009 and the related tax effect.

“I’m pleased with our strong start to 2012,” said Mark Templeton, president and chief executive officer for Citrix. “We’ve made great strides in web collaboration, desktop virtualization and cloud networking, strengthening and solidifying our company and product leadership in these markets.

“We are expanding into fast growing, adjacent markets, all fueled by three powerful forces – the need for mobility, the enterprise cloud evolution, and the build-out of hosted cloud services.”

Q1 Financial Summary

In reviewing the first quarter results of 2012, compared to the first quarter of 2011:

• Product and licenses revenue increased 19 percent;
• Revenue from license updates and maintenance increased 19 percent;
• Software as a Service revenue increased 21 percent;
• Professional services revenue, which is comprised of consulting, product training and certification increased 33 percent;
• Revenue increased in the Pacific region by 40 percent; increased in the EMEA region by 20 percent; and increased in the America’s region by 16 percent;
• Deferred revenue totaled $983 million, compared to $789 million as of March 31, 2011;
• Cash flow from operations was $243 million, compared with $159 million in the first quarter of 2011, an increase of 53% year-over-year;

· GAAP operating margin was 14 percent for the quarter and non-GAAP operating margin was 23 percent for the quarter, excluding the effects of amortization of intangible assets primarily related to business combinations and stock-based compensation expense; and

· The company repurchased 1.6 million shares at an average price of $73.06.

Revenue and Expense Reclassifications

During the first quarter of 2012, Citrix reviewed the revenue categories presented in its consolidated statements of income and adopted a revised presentation that is more comparable to those presented by other companies in Citrix’s industry and better reflects the company’s evolving product and service offerings. As a result, technical support, hardware maintenance and software updates revenues, which were previously presented in Technical Services and License Updates are now classified together as License Updates and Maintenance. A corresponding change was made to rename Cost of Services Revenues to Cost of Services and Maintenance Revenues; however, there was no change in classification. Product training, certification and consulting services, which were previously presented in Technical Services, are now classified together as Professional Services. Product Licenses has been renamed to Product and Licenses to more appropriately describe its composition of both software and hardware; however, there was no change in the composition of total net revenue. The classification of Software as a service remains unchanged. These changes in presentation do not affect total net revenues, total cost of net revenues or gross margin.

Additionally, during the first quarter of 2012, Citrix revised its methodology for allocating certain IT support costs to more closely align those costs with the employees directly utilizing the related assets and services and to reflect how management assesses the cost of headcount. As a result, certain IT support costs were reclassified from general and administrative expenses to cost of services and maintenance revenues, research and development expenses and sales, marketing and services expenses based on the headcount in each of these functional areas.

For additional information concerning these changes in the presentation of Citrix’s consolidated statements of income, see the company’s unaudited condensed consolidated statements of income for the three months ended March 31, 2012 and 2011 accompanying this release.

Financial Outlook for Second Quarter 2012

Citrix management expects to achieve the following results during its second fiscal quarter of 2012 ending June 30, 2012:

• Net revenue is targeted to be in the range of $605 million to $615 million.
• GAAP diluted earnings per share is targeted to be in the range of $0.34 to $0.37. Non-GAAP diluted earnings per share is targeted to be in the range of $0.58 to $0.59, excluding $0.11 related to the effects of amortization of intangible assets primarily related to business combinations, $0.19 related to the effects of stock-based compensation expenses, and $(0.05) to $(0.09) for the tax effects related to these items.

The above statements are based on current targets. These statements are forward-looking, and actual results may differ materially.

Financial Outlook for Fiscal Year 2012

Citrix management expects to achieve the following results during its fiscal year 2012 ending December 31, 2012:

• Net revenue is targeted to be in the range of $2.53 billion to $2.56 billion;
• GAAP diluted earnings per share is targeted to be in the range of $1.87 to $1.92. Non-GAAP diluted earnings per share is targeted to be in the range of $2.75 to $2.79, excluding $0.48 related to the effects of amortization of intangible assets primarily related to business combinations, $0.75 related to the effects of stock-based compensation expenses, and $(0.31) to $(0.40) for the tax effects related to these items.

The above statements are based on current targets. These statements are forward-looking, and actual results may differ materially.

Company, Product and Alliance Highlights

During the first quarter of 2012, Citrix announced:

· A new release of Citrix® XenDesktop®, which fully integrates the personalization technology acquired last year via Ringcube and support for Microsoft System Center 2012, as well as Citrix AppDNA™ 6 software for application migration management, giving enterprises a seamless way to design, deploy and manage virtual desktops and applications in existing operations.

· A new “Cloud Provider Pack” with powerful automation, application aggregation and mobility technologies for hosting providers delivering Windows apps and desktops as a hosted cloud service.

· The general availability of Citrix CloudStack™ 3, which brings the power of Amazon-style clouds to enterprise customers that want to transform virtualized datacenter resources into automated, elastic, self-service clouds. Related, in early April, Citrix submitted CloudStack to the Apache Software Foundation, home of the world's most successful open source projects, commencing the process to elevate CloudStack into a full open source Apache Software Foundation project.

· A strategic partnership with Bytemobile, Inc. to deliver new solutions for the mobile data market by combining Citrix NetScaler®’s mobile computing solutions and flexible application delivery with Bytemobile’s best-in-class traffic management and data optimization solutions, as well as its global footprint of MNO deployments.

· Citrix has teamed with Dell to deliver a new VDI appliance that simplifies and accelerates desktop virtualization deployments for the mass market. The Dell DVS Simplified solution with Citrix VDI-in-a-Box™ will be sold through Dell’s global sales team and channels.

· Citrix has added HDFaces video conferencing to its GoToMeeting® app for iPad, providing a new level of rich mobile collaboration in an easy-to-use, one-tap format.

· In April 2012, Citrix announced the acquisition of Podio™, an innovative, privately held company that offers a collaborative work platform which supports people and teams getting work done the way they want in a social setting. Podio's unique apps concept adds structure and activity streams to any type of work and collaboration with teams, clients, in projects, and within functions such as sales, recruiting, marketing or any other area of business. A cloud service, Podio unifies the content, traditional business applications, and new mobile apps, as well as the real-time and asynchronous communications required to work in the post PC era. Podio will be part of the GoTo cloud services portfolio, which includes GoToMeeting.

About Citrix

Citrix Systems, Inc. (NASDAQ:CTXS) transforms how businesses, people and IT work in the cloud era. Market leading products for collaboration, virtualization, and networking allow Citrix to enable mobile workstyles and power cloud services for 100’s of millions of people every day. We service over 260,000 organizations with over 10,000 business partners in 100 countries. Annual revenue in 2011 was $2.21 billion.