Citrix reports record third quarter earnings results

In the third quarter of fiscal 2007, Citrix achieved revenue of $350 million, compared to $278 million in the third quarter of fiscal 2006, representing 26% revenue growth.

Net income for the third quarter of fiscal 2007 was $61 million, or $0.33 per diluted share, compared to $44 million, or $0.23 per diluted share for the third quarter of 2006.

Non-GAAP net income, in the third quarter of 2007 increased 20% to $77 million, or $0.41 per diluted share, compared to $65 million, or $0.34 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, stock-based compensation expenses, write-off of in-process research and development and the tax effects related to those items.

"I`m very pleased with our third-quarter results," said Mark Templeton, president and chief executive officer for Citrix. "We have been focused on execution, aligning all elements of the business to our strategy, driving the pipeline for new products and adding to our go-to-market strength.

"Our results for the quarter demonstrate our success in these areas."

In reviewing the third quarter results of 2007, compared to the third quarter of 2006: Product licence revenue increased 24%; revenue from licence updates grew 21%; online services contributed $56 million of revenue, up 43%; technical services revenue, which comprises consulting, education and technical support, grew 32%; revenue grew in the America`s region by 24%; the EMEA region by 20%, and the Pacific region by 31%; deferred revenue totalled $396 million, compared to $314 million on 30 September 2006; operating margin was 17% for the quarter; non-GAAP operating margin was 24% for the quarter, excluding the effects of amortisation of intangible assets primarily related to business combinations, and stock-based compensation expense; cash flow from operations was $86 million, compared to $70 million in the third quarter of 2006. This brings total twelve month trailing cash flow from operations to $415 million.

Citrix management offers the following guidance for the fourth fiscal quarter 2007 ending 31 December 2007: Net revenue is expected to be in the range of $374 million to $382 million, compared to $321 million in the fourth quarter of 2006.

GAAP diluted earnings per share is expected to be in the range of $0.24 to $0.25, including $0.03 of dilution related to XenSource`s operating expenses and additional shares issued in conjunction with the acquisition. Non-GAAP diluted earnings per share, which also includes $0.03 of dilution related to XenSource`s operating expenses and additional shares issued in conjunction with the acquisition, is expected to be in the range of $0.42 to $0.43.

In addition, this earnings per share range excludes $0.10 related to the effects of amortisation of intangible assets primarily related to business combinations and the expected write-off of in-process research and development in connection with the acquisition of XenSource, and $0.08 to $0.09 related to the effects of stock-based compensation expenses. The above statements are based on current expectations. These statements are forward-looking, and actual results may differ materially.

Citrix management expects to achieve the following results for the fiscal year 2007: The company expects net revenue to be in the range of $1.36 billion to $1.37 billion, compared to $1.13 billion in fiscal year 2006. GAAP diluted earnings per share is expected to be in the range of $1.05 to $1.06, including $0.03 of dilution related to XenSource`s operating expenses and additional shares issued in conjunction with the acquisition.

Non-GAAP diluted earnings per share, which also includes $0.03 of dilution related to XenSource`s operating expenses and additional shares issued in conjunction with the acquisition, is expected to be in the range of $1.52 to $1.53.

In addition, this earnings per share range excludes $0.22 related to the effects of amortisation of intangible assets primarily related to business combinations and expected write-off of in-process research and development in connection with the acquisition of XenSource and the write-off of in-process research and development related to the Ardence acquisition, and $0.25 to $0.26 related to the effects of stock-based compensation expenses. The above statements are based on current expectations. These statements are forward-looking, and actual results may differ materially.

During the third quarter of 2007, Citrix: Announced our intention to acquire XenSource, to enhance solutions in the server and desktop virtualisation markets; extended its virtualisation alliance with Microsoft by standardising on a virtualisation format, making it easier for customers to deliver desktops and applications to end-users. Citrix Password Manager placed in the Leaders Quadrant for the "Magic Quadrant for Enterprise Single Sign-On, 2007" report authored by Gartner Research; acquired QuickTree to give customers the best way to leverage XML enabled applications and next-generation service-oriented architectures; Citrix GoToMeeting was cited as offering Best Overall Customer Experience in a Wainhouse Research report for ease of use, instant meetings and value; named a `Strong Performer` in Forrester "Wave Report: WAN Optimisation Appliances, Q3 2007" dated 20 July 2007 for having one of the best strategies in the WAN optimisation industry; and received 2007 Frost & Sullivan award for innovation in the SSL VPN marketplace.