Citrix reports first quarter earnings results

Citrix Systems, the global leader in access infrastructure solutions, today reported financial results for the first quarter of fiscal 2006 ended 31 March 2006.

In the first quarter of fiscal 2006, Citrix achieved revenue of $260 million, compared to $202 million in the first quarter of fiscal 2005, representing 29% revenue growth.

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Net income for the first quarter of fiscal 2006 was $45 million, or $0.24 per diluted share, compared to $39 million, or $0.22 per diluted share, for the first quarter of fiscal 2005.

Non-GAAP net income, in the first quarter of 2006, increased 45% to $61 million, or $0.33 per diluted share, compared to $42 million, or $0.24 per diluted share, in the comparable period last year. Non-GAAP net income excludes the effects of amortisation of intangible assets primarily related to business combinations and the effects of stock-based compensation. Stock-based compensation impacted operating income by approximately $12 million.

"Our first quarter results were excellent," said Mark Templeton, president and chief executive officer for Citrix. "We had strong top line and earnings growth, and another quarter of very solid cash flow. Our business continued its product licence and licence update growth, especially in Presentation Server licences as our customers continued to upgrade to version 4.

"The results indicate that customers are finding our broad portfolio of products and services to be the most compelling set of access infrastructure solutions on the market."

In reviewing the first quarter results of 2006, compared to the first quarter of 2005:

* Revenue grew in the America`s region by 27%, the EMEA region by 26%, and the Pacific region by 18%;
* Product licence revenue increased 27%;
* Online services contributed $32 million of revenue, up 55%;
* Revenue from licence updates grew 22%; and
* Technical services revenue, which is comprised of consulting, education and technical support, grew 42%.

Other financial highlights included:

* Deferred revenue totalled $292 million, compared to $230 million at 31 March 2005;
* Operating margin was 20% for the quarter; non-GAAP operating margin was 28% for the quarter excluding the effects of amortisation of intangible assets primarily related to business combinations and the effects of stock-based compensation expenses; and
* Cash flow from operations was $95 million, compared to $73 million in the first quarter of 2005. This brings total 12-month trailing cash flow from operations to $316 million.

Citrix management offers the following guidance for the second fiscal quarter 2006 ending 30 June 2006:

* Net revenue is expected to be in the range of $259 million to $265 million, compared to $211 million in the second quarter of 2005.
* GAAP diluted earnings per share is expected to be in the range of $0.24 to $0.26, compared to $0.16 in the second quarter of 2005. Non-GAAP diluted earnings per share is expected to be in the range of $0.32 to $0.33, excluding $0.03 related to the effects of amortisation of intangible assets primarily related to business combinations, and $0.04 to $0.05 related to the effects of stock-based compensation expenses. This compares to $0.27 in the same quarter of the previous year, adjusted to exclude the effects of amortisation of intangible assets, amortisation of deferred stock-based compensation, and a net tax provision recorded in anticipation of repatriating certain foreign earnings pursuant to the American Jobs Creation Act of 2004.

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

For fiscal year 2006, the company expects net revenue to be in the range of $1.07 billion to $1.09 billion, compared to $909 million in fiscal year 2005. The company expects GAAP diluted earnings per share to be in the range of $0.98 to $1.05, compared to $0.93 in fiscal year 2005. Non-GAAP diluted earnings per share to be in the range of $1.33 to $1.37, excluding $0.14 related to the effects of amortisation of intangible assets primarily related to business combinations and $0.18 to $0.21 related to the impact stock-based compensation expenses. This compares to $1.17 for fiscal year 2005, when adjusted to exclude the effects of amortisation of intangible assets primarily related to business combinations, deferred stock-based compensation, the write-off of in process research and development, the related tax effects of these items and the tax provision related to the repatriation of foreign earnings under the American Jobs Creation Act.

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

During the first quarter of 2006, Citrix announced:

* Citrix GoToMyPC 5, offering breakthrough drag-and-drop file-transfer, a crisp true-colour environment, convenient multi-monitor support, performance monitoring and tuning.
* Citrix Access Essentials 1.5, a new version of its secure remote access product for small to mid-sized businesses.
* Citrix NetScaler Application Firewall Standard Edition, a new version of its market-leading Web application firewall designed specifically for mid-sized enterprises and business units within large companies.
* Citrix Access Gateway Enterprise Edition, extending its SSL VPN leadership for large customers with a new Access Gateway edition that adds increased scalability and performance for the most complex and demanding enterprise environments.
* Technology Marketing Corporation`s Internet Telephony magazine (www.itmag.com) named Citrix Application Gateway with Smart Agent, as a recipient of a 2005 Product of the Year Award.
* Its board of directors authorised the company to repurchase up to an additional $200 million of Citrix common stock.