[ACCESSWIRE]
LONDON, UK / ACCESSWIRE / October 25, 2016 / Active Wall St. announces its post-earnings coverage on Citrix Systems, Inc. (NASDAQ: CTXS). The company reported its third quarter fiscal 2016 results on October 19th, 2016. The cloud computing company posted better-than-expected results and raised its outlook for FY16 as it benefited from climbing revenue from its license updates and maintenance business. Register with us now for your free membership at: http://www.activewallst.com/register/.
Today, AWS is promoting its earnings coverage on CTXS. Get our free coverage by signing up to http://www.activewallst.com/registration-3/?symbol=CTXS.
Earnings Reviewed
For the three months ended on September 30th, 2016, Citrix achieved revenue of $841 million compared to $813 million in Q3 2015, representing 3% revenue growth. Revenue also beat Wall Street's forecasts of $826.5 million. The company's net income for Q3 2016 was $132 million, or $0.84 per diluted share, compared to $56 million, or $0.35 per diluted share, for Q3 2015. Non-GAAP net income for Q3 2016 was $208 million, or $1.32 per diluted share, compared to $168 million, or $1.04 per diluted share, for the year ago period. The results surpassed analysts' expectations for earnings of $1.19 per share.
Segment Matters
During Q3 2016, Workspace Service business, which includes Virtualization and Mobility, grew 5% total to $414 million, including a 5% y-o-y increase in product license revenue. Overall, the Citrix Service Provider revenue grew about 30%. For the company's delivery Networking unit, total revenue increased 1% in Q3 2016 to $191 million. The largest part of this overall business, NetScaler ADC, posted license revenue growth of 5% against a strong Q3 2015. Solution Attach segment represented 15% of the mix with a number of app and mobile opportunities that included networking as part of an overall Citrix solution was up modestly from a year ago.
Citrix's SaaS segment increased 9% to $207 million in the reported quarter. The contribution from the GoTo business was $173 million. The company announced that it has received US antitrust approval in September 2016 for the merger between GoTo and LogMeIn, and expect this to close in the Q1 2017 timeframe. For cloud-based services, that are part of core Citrix, the company saw $35 million in total revenue, growing 28% in Q3 2016.
Operating Metrics
During Q3 2016, Citrix's GAAP gross margin was 84%. Non-GAAP gross margin was 86%, excluding the effects of amortization of acquired product related intangible assets and stock-based compensation expense. GAAP operating margin was 18%, while non-GAAP operating margin was 30%, an increase of 411 bps from Q3 2015.
Cash Matters
Citrix's cash flow from operations in Q3 2016 was a record $288 million compared to $260 million for Q3 2015, and over the trailing 12 months, the company generated a total of $1.14 billion in cash from operation. Deferred revenue totaled $1.6 billion as of September 30, 2016, compared to $1.5 billion as of September 30, 2015, an increase of 7%.
Outlook
For FY16, Citrix's management expects to achieve net revenue in the range of $3.40 billion to $3.41 billion with core Citrix's revenue, excluding the GoTo business, targeted to be in the range of $2.71 billion to $2.72 billion. GAAP diluted earnings per share is targeted to be in the range of $3.04 to $3.05.
For FY17, Citrix is projecting Core Citrix's revenue to be in the range of 3%-4%, while Core Citrix's non-GAAP operating margin is expected to be in the range of 32%-33%.
Stock Performance
On Monday, October 24, 2016, Citrix Systems' shares were up 1.14%, finishing the day at $86.17 with volume of 2.26 million shares exchanging hands by the close of the trading session. For the last six months, the stock has gained 3.58%. Furthermore, on a year to date basis, the stock gained 13.91%. Shares of the company have a PE ratio of 28.88.
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