|
Form 10-Q
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x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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|
Delaware
|
|
75-2275152
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(State or other jurisdiction of
incorporation or organization)
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(IRS Employer
Identification No.)
|
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|
|
851 West Cypress Creek Road
Fort Lauderdale, Florida
|
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33309
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(Address of principal executive offices)
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(Zip Code)
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x
Large accelerated filer
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o
Accelerated filer
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o
Non-accelerated filer
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o
Smaller reporting company
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Page
Number
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PART I:
|
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|
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Item 1.
|
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||
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Item 2.
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Item 3.
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Item 4.
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PART II:
|
|
|
|
|
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Item 1.
|
||
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|
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Item 1A.
|
||
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Item 2.
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Item 5.
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Item 6.
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||
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March 31,
2012 |
|
December 31,
2011 |
||||
|
(In thousands, except par value)
|
||||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
390,881
|
|
|
$
|
333,296
|
|
Short-term investments — available-for-sale
|
476,200
|
|
|
406,461
|
|
||
Accounts receivable, net of allowances of $4,439 and $3,925 at March 31, 2012 and December 31, 2011, respectively
|
389,807
|
|
|
484,431
|
|
||
Inventories, net
|
9,430
|
|
|
8,507
|
|
||
Prepaid expenses and other current assets
|
112,115
|
|
|
95,419
|
|
||
Current portion of deferred tax assets, net
|
45,296
|
|
|
44,916
|
|
||
Total current assets
|
1,423,729
|
|
|
1,373,030
|
|
||
Long-term investments — available-for-sale
|
741,619
|
|
|
737,844
|
|
||
Property and equipment, net
|
278,671
|
|
|
277,429
|
|
||
Goodwill
|
1,266,408
|
|
|
1,239,120
|
|
||
Other intangible assets, net
|
327,456
|
|
|
343,372
|
|
||
Long-term portion of deferred tax assets, net
|
51,963
|
|
|
67,479
|
|
||
Other assets
|
61,272
|
|
|
61,267
|
|
||
|
$
|
4,151,118
|
|
|
$
|
4,099,541
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
53,939
|
|
|
$
|
58,034
|
|
Accrued expenses and other current liabilities
|
295,874
|
|
|
302,454
|
|
||
Current portion of deferred revenues
|
822,048
|
|
|
818,642
|
|
||
Total current liabilities
|
1,171,861
|
|
|
1,179,130
|
|
||
Long-term portion of deferred revenues
|
160,836
|
|
|
141,241
|
|
||
Other liabilities
|
40,888
|
|
|
48,680
|
|
||
Commitments and contingencies
|
|
|
|
||||
Stockholders' equity:
|
|
|
|
||||
Preferred stock at $.01 par value: 5,000 shares authorized, none issued and outstanding
|
—
|
|
|
—
|
|
||
Common stock at $.001 par value: 1,000,000 shares authorized; 284,393 and 282,774 shares issued and outstanding at March 31, 2012 and December 31, 2011, respectively
|
284
|
|
|
283
|
|
||
Additional paid-in capital
|
3,470,787
|
|
|
3,385,053
|
|
||
Retained earnings
|
2,279,738
|
|
|
2,211,471
|
|
||
Accumulated other comprehensive loss
|
(4,421
|
)
|
|
(11,561
|
)
|
||
|
5,746,388
|
|
|
5,585,246
|
|
||
Less — common stock in treasury, at cost (98,522 and 96,960 shares at March 31, 2012 and December 31, 2011, respectively)
|
(2,968,855
|
)
|
|
(2,854,756
|
)
|
||
Total stockholders' equity
|
2,777,533
|
|
|
2,730,490
|
|
||
|
$
|
4,151,118
|
|
|
$
|
4,099,541
|
|
|
Three Months Ended March 31,
|
||||||
|
2012
|
|
2011
|
||||
|
(In thousands, except per share information)
|
||||||
Revenues:
|
|
|
|
||||
Product and licenses
|
$
|
178,364
|
|
|
$
|
150,260
|
|
Software as a service
|
120,733
|
|
|
99,772
|
|
||
License updates and maintenance
|
264,525
|
|
|
221,379
|
|
||
Professional services
|
25,873
|
|
|
19,477
|
|
||
Total net revenues
|
589,495
|
|
|
490,888
|
|
||
Cost of net revenues:
|
|
|
|
||||
Cost of product and license revenues
|
18,804
|
|
|
14,041
|
|
||
Cost of services and maintenance revenues
|
51,004
|
|
|
33,237
|
|
||
Amortization of product related intangible assets
|
16,535
|
|
|
12,699
|
|
||
Total cost of net revenues
|
86,343
|
|
|
59,977
|
|
||
Gross margin
|
503,152
|
|
|
430,911
|
|
||
Operating expenses:
|
|
|
|
||||
Research and development
|
103,622
|
|
|
90,548
|
|
||
Sales, marketing and services
|
248,457
|
|
|
205,544
|
|
||
General and administrative
|
59,856
|
|
|
50,403
|
|
||
Amortization of other intangible assets
|
10,467
|
|
|
3,509
|
|
||
Restructuring
|
—
|
|
|
24
|
|
||
Total operating expenses
|
422,402
|
|
|
350,028
|
|
||
Income from operations
|
80,750
|
|
|
80,883
|
|
||
Interest income
|
3,078
|
|
|
3,939
|
|
||
Other income, net
|
722
|
|
|
3,633
|
|
||
Income before income taxes
|
84,550
|
|
|
88,455
|
|
||
Income taxes
|
16,283
|
|
|
15,108
|
|
||
Consolidated net income
|
68,267
|
|
|
73,347
|
|
||
Less: Net loss attributable to non-controlling interest
|
—
|
|
|
156
|
|
||
Net income attributable to Citrix Systems, Inc.
|
$
|
68,267
|
|
|
$
|
73,503
|
|
Net income per share attributable to Citrix Systems, Inc. stockholders:
|
|
|
|
||||
Net income per share attributable to Citrix Systems, Inc. stockholders — basic
|
$
|
0.37
|
|
|
$
|
0.39
|
|
Net income per share attributable to Citrix Systems, Inc. stockholders — diluted
|
$
|
0.36
|
|
|
$
|
0.38
|
|
Weighted average shares outstanding:
|
|
|
|
||||
Basic
|
185,730
|
|
|
187,571
|
|
||
Diluted
|
188,884
|
|
|
191,500
|
|
|
Three Months Ended March 31,
|
||||||
|
2012
|
|
2011
|
||||
|
(In thousands)
|
||||||
|
|
|
|
||||
Consolidated net income
|
$
|
68,267
|
|
|
$
|
73,347
|
|
Other comprehensive income:
|
|
|
|
||||
Change in foreign currency translation adjustment
|
1,952
|
|
|
5,433
|
|
||
Available for sale securities:
|
|
|
|
||||
Change in net unrealized gains
|
1,434
|
|
|
151
|
|
||
Less: reclassification adjustment for net losses included in net income
|
193
|
|
|
490
|
|
||
Net change (net of tax effect)
|
1,627
|
|
|
641
|
|
||
Cash flow hedges:
|
|
|
|
||||
Change in unrealized gains
|
2,034
|
|
|
2,217
|
|
||
Less: reclassification adjustment for net losses included in net income
|
1,527
|
|
|
620
|
|
||
Net change (net of tax effect)
|
3,561
|
|
|
2,837
|
|
||
Other comprehensive income
|
7,140
|
|
|
8,911
|
|
||
Comprehensive income
|
75,407
|
|
|
82,258
|
|
||
Less: Comprehensive loss attributable to non-controlling interest
|
—
|
|
|
156
|
|
||
Comprehensive income attributable to Citrix Systems, Inc.
|
$
|
75,407
|
|
|
$
|
82,414
|
|
|
Three Months Ended March 31,
|
||||||
|
2012
|
|
2011
|
||||
|
(In thousands)
|
||||||
Operating Activities
|
|
|
|
||||
Net income
|
$
|
68,267
|
|
|
$
|
73,347
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Amortization of intangible assets
|
27,002
|
|
|
16,208
|
|
||
Depreciation and amortization of property and equipment
|
22,545
|
|
|
19,641
|
|
||
Stock-based compensation expense
|
30,557
|
|
|
17,884
|
|
||
(Gain) Loss on investments
|
(3,366
|
)
|
|
490
|
|
||
Provision for doubtful accounts
|
546
|
|
|
(901
|
)
|
||
Provision for product returns
|
2,945
|
|
|
1,530
|
|
||
Provision for inventory reserves
|
411
|
|
|
517
|
|
||
Tax effect of stock-based compensation
|
13,856
|
|
|
15,492
|
|
||
Excess tax benefit from exercise of stock options
|
(14,597
|
)
|
|
(15,502
|
)
|
||
Effects of exchange rate changes on monetary assets and liabilities denominated in foreign currencies
|
(1,202
|
)
|
|
(3,350
|
)
|
||
Other non-cash items
|
791
|
|
|
964
|
|
||
Total adjustments to reconcile net income to net cash provided by operating activities
|
79,488
|
|
|
52,973
|
|
||
Changes in operating assets and liabilities, net of the effects of acquisitions:
|
|
|
|
||||
Accounts receivable
|
88,114
|
|
|
85,622
|
|
||
Inventories
|
(1,334
|
)
|
|
(1,050
|
)
|
||
Prepaid expenses and other current assets
|
(18,682
|
)
|
|
(6,009
|
)
|
||
Other assets
|
2,536
|
|
|
(1,293
|
)
|
||
Deferred tax assets, net
|
15,293
|
|
|
(14,196
|
)
|
||
Accounts payable
|
(4,513
|
)
|
|
(21,456
|
)
|
||
Accrued expenses and other current liabilities
|
(872
|
)
|
|
(41,759
|
)
|
||
Deferred revenues
|
23,001
|
|
|
2,240
|
|
||
Other liabilities
|
(8,228
|
)
|
|
30,809
|
|
||
Total changes in operating assets and liabilities, net of the effects of acquisitions
|
95,315
|
|
|
32,908
|
|
||
Net cash provided by operating activities
|
243,070
|
|
|
159,228
|
|
||
Investing Activities
|
|
|
|
||||
Purchases of available-for-sale investments
|
(314,387
|
)
|
|
(182,919
|
)
|
||
Proceeds from sales of available-for-sale investments
|
104,185
|
|
|
180,434
|
|
||
Proceeds from maturities of available-for-sale investments
|
138,488
|
|
|
169,008
|
|
||
Proceeds from the sale of cost method investments
|
5,559
|
|
|
—
|
|
||
Purchases of property and equipment
|
(23,147
|
)
|
|
(26,845
|
)
|
||
Purchases of cost method investments
|
(1,712
|
)
|
|
(1,852
|
)
|
||
Cash paid for acquisitions, net of cash acquired
|
(24,033
|
)
|
|
(118,440
|
)
|
||
Cash paid for licensing agreements and product related intangible assets
|
(61
|
)
|
|
(1,522
|
)
|
||
Net cash (used in) provided by investing activities
|
(115,108
|
)
|
|
17,864
|
|
||
Financing Activities
|
|
|
|
||||
Proceeds from issuance of common stock under stock-based compensation plans
|
30,260
|
|
|
42,337
|
|
||
Repayment of acquired debt
|
(2,456
|
)
|
|
(10,926
|
)
|
||
Excess tax benefit from exercise of stock options
|
14,597
|
|
|
15,502
|
|
||
Stock repurchases, net
|
(99,996
|
)
|
|
(99,954
|
)
|
||
Cash paid for tax withholding on vested stock awards
|
(14,102
|
)
|
|
(8,797
|
)
|
||
Net cash used in financing activities
|
(71,697
|
)
|
|
(61,838
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
1,320
|
|
|
3,924
|
|
||
Change in cash and cash equivalents
|
57,585
|
|
|
119,178
|
|
||
Cash and cash equivalents at beginning of period
|
333,296
|
|
|
396,162
|
|
||
Cash and cash equivalents at end of period
|
$
|
390,881
|
|
|
$
|
515,340
|
|
|
|
|
Three Months Ended March 31, 2011
|
|
|
|
||||||
As Previously Reported
|
|
Amount Reclassified
|
|
As Reported Herein
|
||||||||
Revenues:
|
|
|
|
|
Revenues:
|
|
||||||
License updates
|
$
|
177,876
|
|
|
$
|
43,503
|
|
|
License updates and maintenance
(2)
|
$
|
221,379
|
|
Technical services
(1)
|
62,980
|
|
|
(43,503
|
)
|
|
Professional services
(3)
|
19,477
|
|
|||
Total
|
$
|
240,856
|
|
|
$
|
—
|
|
|
Total
|
$
|
240,856
|
|
|
|
(1)
|
Technical services revenue was comprised of hardware maintenance, consulting services, product training and certification and technical support.
|
(2)
|
License updates and maintenance is comprised of license updates, hardware and software maintenance and technical support.
|
(3)
|
Professional services is comprised of consulting services and product training and certification.
|
|
|
|
Three Months Ended March 31, 2011
|
|
|
|
||||||
As Previously Reported
|
|
Amount Reclassified
|
|
As Reported Herein
|
||||||||
Cost of services revenues
|
$
|
30,666
|
|
|
$
|
2,571
|
|
|
Cost of services and maintenance revenues
|
$
|
33,237
|
|
Research and development
|
82,718
|
|
|
7,830
|
|
|
Research and development
|
90,548
|
|
|||
Sales, marketing and services
|
194,243
|
|
|
11,301
|
|
|
Sales, marketing and services
|
205,544
|
|
|||
General and administrative
|
72,105
|
|
|
(21,702
|
)
|
|
General and administrative
|
50,403
|
|
|||
Total
|
$
|
379,732
|
|
|
$
|
—
|
|
|
Total
|
$
|
379,732
|
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2012
|
|
2011
|
||||
Numerator:
|
|
|
|
||||
Net income attributable to Citrix Systems, Inc. stockholders
|
$
|
68,267
|
|
|
$
|
73,503
|
|
Denominator:
|
|
|
|
||||
Denominator for basic earnings per share — weighted-average shares outstanding
|
185,730
|
|
|
187,571
|
|
||
Effect of dilutive employee stock awards
|
3,154
|
|
|
3,929
|
|
||
Denominator for diluted earnings per share — weighted-average shares outstanding
|
188,884
|
|
|
191,500
|
|
||
Net income per share attributable to Citrix Systems, Inc. stockholders — basic
|
$
|
0.37
|
|
|
$
|
0.39
|
|
Net income per share attributable to Citrix Systems, Inc. stockholders — diluted
|
$
|
0.36
|
|
|
$
|
0.38
|
|
Anti-dilutive weighted-average shares
|
3,805
|
|
|
857
|
|
|
March 31, 2012
|
|
December 31, 2011
|
||||||||||||||||||||||||||||
Description of the
Securities
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair Value
|
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair Value
|
||||||||||||||||
Agency securities
|
$
|
656,187
|
|
|
$
|
5,429
|
|
|
$
|
(313
|
)
|
|
$
|
661,303
|
|
|
$
|
641,997
|
|
|
$
|
4,506
|
|
|
$
|
(279
|
)
|
|
$
|
646,224
|
|
Corporate securities
|
458,432
|
|
|
1,059
|
|
|
(407
|
)
|
|
459,084
|
|
|
392,365
|
|
|
618
|
|
|
(1,190
|
)
|
|
391,793
|
|
||||||||
Municipal securities
|
69,910
|
|
|
84
|
|
|
(16
|
)
|
|
69,978
|
|
|
80,004
|
|
|
57
|
|
|
(35
|
)
|
|
80,026
|
|
||||||||
Government securities
|
27,274
|
|
|
185
|
|
|
(5
|
)
|
|
27,454
|
|
|
26,056
|
|
|
206
|
|
|
—
|
|
|
26,262
|
|
||||||||
Total
|
$
|
1,211,803
|
|
|
$
|
6,757
|
|
|
$
|
(741
|
)
|
|
$
|
1,217,819
|
|
|
$
|
1,140,422
|
|
|
$
|
5,387
|
|
|
$
|
(1,504
|
)
|
|
$
|
1,144,305
|
|
•
|
Level 1.
Observable inputs such as quoted prices in active markets for identical assets or liabilities;
|
•
|
Level 2
. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and
|
•
|
Level 3
. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.
|
|
As of March 31, 2012
|
|
Quoted
Prices In
Active Markets
for Identical
Assets (Level 1)
|
|
Significant
Other
Observable
Inputs (Level 2)
|
|
Significant
Unobservable
Inputs (Level 3)
|
||||||||
|
(in thousands)
|
||||||||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
136,453
|
|
|
$
|
136,453
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Corporate securities
|
51,168
|
|
|
—
|
|
|
51,168
|
|
|
—
|
|
||||
Municipal securities
|
6,029
|
|
|
—
|
|
|
6,029
|
|
|
—
|
|
||||
Cash
|
197,231
|
|
|
197,231
|
|
|
—
|
|
|
—
|
|
||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
||||||||
Agency securities
|
661,303
|
|
|
—
|
|
|
661,303
|
|
|
—
|
|
||||
Corporate securities
|
459,084
|
|
|
—
|
|
|
454,278
|
|
|
4,806
|
|
||||
Municipal securities
|
69,978
|
|
|
—
|
|
|
69,978
|
|
|
—
|
|
||||
Government securities
|
27,454
|
|
|
—
|
|
|
27,454
|
|
|
—
|
|
||||
Prepaid expenses and other current assets:
|
|
|
|
|
|
|
|
||||||||
Foreign currency derivatives
|
3,387
|
|
|
—
|
|
|
3,387
|
|
|
—
|
|
||||
Total assets
|
$
|
1,612,087
|
|
|
$
|
333,684
|
|
|
$
|
1,273,597
|
|
|
$
|
4,806
|
|
Accrued expenses and other current liabilities:
|
|
|
|
|
|
|
|
||||||||
Foreign currency derivatives
|
5,083
|
|
|
—
|
|
|
5,083
|
|
|
—
|
|
||||
Total liabilities
|
$
|
5,083
|
|
|
$
|
—
|
|
|
$
|
5,083
|
|
|
$
|
—
|
|
|
|
||
|
Investments
|
||
|
(in thousands)
|
||
Balance at December 31, 2011
|
$
|
3,696
|
|
Purchases of Level 3 securities
|
1,252
|
|
|
Transfers out of Level 3
|
(142
|
)
|
|
Balance at March 31, 2012
|
$
|
4,806
|
|
|
Three Months Ended
|
|
Three Months Ended
|
||||
Income Statement Classifications
|
March 31, 2012
|
|
March 31, 2011
|
||||
Cost of services and maintenance revenues
|
$
|
450
|
|
|
$
|
268
|
|
Research and development
|
11,144
|
|
|
5,685
|
|
||
Sales, marketing and services
|
9,970
|
|
|
6,032
|
|
||
General and administrative
|
8,993
|
|
|
5,899
|
|
||
Total
|
$
|
30,557
|
|
|
$
|
17,884
|
|
|
Three Months Ended
|
|
Three Months Ended
|
||
|
March 31, 2012
|
|
March 31, 2011
|
||
Expected volatility factor
|
0.38
|
|
|
0.39
|
|
Approximate risk free interest rate
|
0.65
|
%
|
|
1.10
|
%
|
Expected term (in years)
|
3.91
|
|
|
3.27
|
|
Expected dividend yield
|
0
|
%
|
|
0
|
%
|
Expected volatility factor
|
0.21 - 0.39
|
|
Risk free interest rate
|
0.47
|
%
|
Expected dividend yield
|
0
|
%
|
|
Balance at January 1, 2012
|
|
Additions
|
|
|
Other
|
|
|
Balance at March 31, 2012
|
||||||||
Enterprise division
|
$
|
956,504
|
|
|
$
|
25,920
|
|
(1)
|
|
$
|
(49,971
|
)
|
(2)
|
|
$
|
932,453
|
|
Online Services division
|
282,616
|
|
|
—
|
|
|
|
51,339
|
|
(2)
|
|
333,955
|
|
||||
Consolidated
|
$
|
1,239,120
|
|
|
$
|
25,920
|
|
|
|
$
|
1,368
|
|
|
|
$
|
1,266,408
|
|
|
|
(1)
|
Amount primarily relates to acquisitions. See Note 4 for more information regarding the Company’s acquisitions.
|
(2)
|
Amount primarily relates to reclassification of goodwill between segments. In the first quarter of 2012, the Company moved the business acquired in its recent acquisition of ShareFile from its Enterprise division to its Online Services division. See Note 4 for more information regarding the Company's acquisitions and Note 9 for more information regarding the Company's segments.
|
|
March 31, 2012
|
|
December 31, 2011
|
||||||||||||
|
Gross Carrying
Amount
|
|
Accumulated
Amortization
|
|
Gross Carrying
Amount
|
|
Accumulated
Amortization
|
||||||||
Product related intangible assets
|
$
|
482,592
|
|
|
$
|
282,622
|
|
|
$
|
472,582
|
|
|
$
|
268,332
|
|
Other
|
270,022
|
|
|
142,536
|
|
|
274,816
|
|
|
135,694
|
|
||||
Total
|
$
|
752,614
|
|
|
$
|
425,158
|
|
|
$
|
747,398
|
|
|
$
|
404,026
|
|
Year ending December 31,
|
|
||
2012
|
$
|
87,785
|
|
2013
|
74,736
|
|
|
2014
|
68,279
|
|
|
2015
|
47,226
|
|
|
2016
|
34,731
|
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2012
|
|
2011
|
||||
Net revenues:
|
|
|
|
||||
Enterprise division
|
$
|
468,762
|
|
|
$
|
391,116
|
|
Online Services division
|
120,733
|
|
|
99,772
|
|
||
Consolidated
|
$
|
589,495
|
|
|
$
|
490,888
|
|
Segment profit:
|
|
|
|
||||
Enterprise division
|
$
|
117,173
|
|
|
$
|
100,449
|
|
Online Services division
|
21,136
|
|
|
14,550
|
|
||
Unallocated expenses (1):
|
|
|
|
||||
Amortization of intangible assets
|
(27,002
|
)
|
|
(16,208
|
)
|
||
Restructuring
|
—
|
|
|
(24
|
)
|
||
Net interest and other income
|
3,800
|
|
|
7,572
|
|
||
Stock-based compensation
|
(30,557
|
)
|
|
(17,884
|
)
|
||
Consolidated income before income taxes
|
$
|
84,550
|
|
|
$
|
88,455
|
|
|
|
(1)
|
Represents expenses presented to management on a consolidated basis only and not allocated to the operating segments.
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2012
|
|
2011
|
||||
Net revenues:
|
|
|
|
||||
Enterprise division
|
|
|
|
||||
Desktop Solutions revenues
(1)
|
$
|
338,120
|
|
|
$
|
289,116
|
|
Datacenter and Cloud Solutions revenues
(2)
|
99,673
|
|
|
77,667
|
|
||
Professional services
(3)
|
25,873
|
|
|
19,478
|
|
||
Other
|
5,096
|
|
|
4,855
|
|
||
Total Enterprise division revenues
|
468,762
|
|
|
391,116
|
|
||
Online Services division revenues
|
120,733
|
|
|
99,772
|
|
||
Total net revenues
|
$
|
589,495
|
|
|
$
|
490,888
|
|
|
|
(1)
|
Desktop Solutions revenues are primarily comprised of sales from the Company’s desktop virtualization product, XenDesktop, and the Company’s application virtualization product, XenApp, and related license updates and technical support.
|
(2)
|
Datacenter and Cloud Solutions revenues are primarily comprised of sales from the Company’s cloud networking products, which include NetScaler, Branch Repeater and Access Gateway, and the Company’s CloudPlatform products which include XenServer, CloudStack and CloudPortal and related license updates and maintenance.
|
(3)
|
Professional services revenues are primarily comprised of revenues from consulting services and product training and certification.
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2012
|
|
2011
|
||||
Net revenues:
|
|
|
|
||||
Enterprise division
|
|
|
|
||||
Americas
|
$
|
252,483
|
|
|
$
|
217,472
|
|
EMEA
|
160,071
|
|
|
133,373
|
|
||
Asia-Pacific
|
56,208
|
|
|
40,271
|
|
||
Total Enterprise division revenues
|
468,762
|
|
|
391,116
|
|
||
Online Services division
|
|
|
|
||||
Americas
|
103,227
|
|
|
88,290
|
|
||
EMEA
|
14,455
|
|
|
9,287
|
|
||
Asia-Pacific
|
3,051
|
|
|
2,195
|
|
||
Total Online Services division revenues
|
120,733
|
|
|
99,772
|
|
||
Total net revenues
|
$
|
589,495
|
|
|
$
|
490,888
|
|
|
Asset Derivatives
|
|
Liability Derivatives
|
||||||||||||
|
(In thousands)
|
||||||||||||||
|
March 31, 2012
|
|
December 31, 2011
|
|
March 31, 2012
|
|
December 31, 2011
|
||||||||
Derivatives Designated as
Hedging Instruments
|
Balance Sheet
Location
|
|
Fair
Value
|
|
Balance Sheet
Location
|
|
Fair
Value
|
|
Balance Sheet
Location
|
|
Fair
Value
|
|
Balance Sheet
Location
|
|
Fair
Value
|
Foreign currency forward contracts
|
Prepaid
expenses
and other
current
assets
|
|
$3,262
|
|
Prepaid
expenses
and other
current
assets
|
|
$2,762
|
|
Accrued
expenses
and other
current
liabilities
|
|
$4,974
|
|
Accrued
expenses
and other
current
liabilities
|
|
$8,252
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset Derivatives
|
|
Liability Derivatives
|
||||||||||||
|
(In thousands)
|
||||||||||||||
|
March 31, 2012
|
|
December 31, 2011
|
|
March 31, 2012
|
|
December 31, 2011
|
||||||||
Derivatives Not Designated as
Hedging Instruments
|
Balance Sheet
Location
|
|
Fair
Value
|
|
Balance Sheet
Location
|
|
Fair
Value
|
|
Balance Sheet
Location
|
|
Fair
Value
|
|
Balance Sheet
Location
|
|
Fair
Value
|
Foreign currency forward contracts
|
Prepaid
expenses
and other
current
assets
|
|
$125
|
|
Prepaid
expenses
and other
current
assets
|
|
$69
|
|
Accrued
expenses
and other
current
liabilities
|
|
$109
|
|
Accrued
expenses
and other
current
liabilities
|
|
$202
|
|
For the Three Months Ended March 31,
|
||||||||||||||||
|
(In thousands)
|
||||||||||||||||
Derivatives in Cash Flow
Hedging Relationships
|
Amount of Gain Recognized in Other
Comprehensive Income
(Effective Portion)
|
|
Location of Loss Reclassified
from Accumulated Other
Comprehensive Loss into
Income
(Effective Portion)
|
|
Amount of Loss Reclassified from
Accumulated Other
Comprehensive Loss
(Effective Portion)
|
||||||||||||
|
2012
|
|
2011
|
|
|
|
2012
|
|
2011
|
||||||||
Foreign currency forward contracts
|
$
|
3,561
|
|
|
$
|
2,837
|
|
|
Operating expenses
|
|
$
|
(1,527
|
)
|
|
$
|
(620
|
)
|
Foreign Currency
|
Currency
Denomination
|
Australian dollars
|
AUD 1,844
|
British pounds sterling
|
GBP 26,329
|
Canadian dollars
|
CAD 5,566
|
Chinese renminbi
|
CNY 14,627
|
Euro
|
EUR 47,368
|
Hong Kong dollars
|
HKD 49,600
|
Indian rupees
|
INR 529,806
|
Japanese yen
|
JPY 53,879
|
Singapore dollars
|
SGD 8,156
|
Swiss francs
|
CHF 30,740
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
Product and licenses revenue increased 18.7% to $
178.4 million
;
|
•
|
Software as a service revenue increased 21.0% to $
120.7 million
;
|
•
|
License updates and maintenance revenue increased 19.5% to $
264.5 million
;
|
•
|
Professional services revenue increased 32.8% to $
25.9 million
;
|
•
|
Operating income decreased 0.2% to $
80.8 million
; and
|
•
|
Diluted net income per share decreased 5.8% to $
0.36
.
|
|
Three Months Ended
|
|
Three Months Ended
|
|||||||
|
March 31,
|
|
March 31, 2012 vs. March 31, 2011
|
|||||||
|
2012
|
|
2011
|
|
||||||
Revenues:
|
|
|
|
|
|
|||||
Product and licenses
|
$
|
178,364
|
|
|
$
|
150,260
|
|
|
18.7
|
%
|
Software as a service
|
120,733
|
|
|
99,772
|
|
|
21.0
|
|
||
License updates and maintenance
|
264,525
|
|
|
221,379
|
|
|
19.5
|
|
||
Professional services
|
25,873
|
|
|
19,477
|
|
|
32.8
|
|
||
Total net revenues
|
589,495
|
|
|
490,888
|
|
|
20.1
|
|
||
Cost of net revenues:
|
|
|
|
|
|
|||||
Cost of product and license revenues
|
18,804
|
|
|
14,041
|
|
|
33.9
|
|
||
Cost of services and maintenance revenues
|
51,004
|
|
|
33,237
|
|
|
53.5
|
|
||
Amortization of product related intangible assets
|
16,535
|
|
|
12,699
|
|
|
30.2
|
|
||
Total cost of net revenues
|
86,343
|
|
|
59,977
|
|
|
44.0
|
|
||
Gross margin
|
503,152
|
|
|
430,911
|
|
|
16.8
|
|
||
Operating expenses:
|
|
|
|
|
|
|||||
Research and development
|
103,622
|
|
|
90,548
|
|
|
14.4
|
|
||
Sales, marketing and services
|
248,457
|
|
|
205,544
|
|
|
20.9
|
|
||
General and administrative
|
59,856
|
|
|
50,403
|
|
|
18.8
|
|
||
Amortization of other intangible assets
|
10,467
|
|
|
3,509
|
|
|
198.3
|
|
||
Restructuring
|
—
|
|
|
24
|
|
|
*
|
|
||
Total operating expenses
|
422,402
|
|
|
350,028
|
|
|
20.7
|
|
||
Income from operations
|
80,750
|
|
|
80,883
|
|
|
(0.2
|
)
|
||
Interest income
|
3,078
|
|
|
3,939
|
|
|
(21.9
|
)
|
||
Other income, net
|
722
|
|
|
3,633
|
|
|
(80.1
|
)
|
||
Income before income taxes
|
84,550
|
|
|
88,455
|
|
|
(4.4
|
)
|
||
Income taxes
|
16,283
|
|
|
15,108
|
|
|
7.8
|
|
||
Consolidated net income
|
68,267
|
|
|
73,347
|
|
|
(6.9
|
)
|
||
Less: Net loss attributable to non-controlling interest
|
—
|
|
|
156
|
|
|
*
|
|
||
Net income attributable to Citrix Systems, Inc.
|
$
|
68,267
|
|
|
$
|
73,503
|
|
|
(7.1
|
)%
|
*
|
not meaningful
|
•
|
Our Desktop Solutions, comprised primarily of our desktop virtualization product, XenDesktop, and our application virtualization product, XenApp; and
|
•
|
Our Datacenter and Cloud Solutions, comprised primarily of our cloud networking products, which include NetScaler, Branch Repeater and Access Gateway, and our Cloud platform products, which include XenServer, CloudStack and CloudPortal.
|
•
|
Our web collaboration products, which primarily include our GoToMeeting, GoToWebinar, Hi-Def Audio and GoToTraining products;
|
•
|
Our connectivity product, GoToMyPC;
|
•
|
Our remote IT support products, which primarily include GoToAssist; and
|
•
|
Our data sharing products, which primarily include our ShareFile products.
|
•
|
Our Subscription Advantage program, an annual renewable program that provides subscribers with automatic delivery of unspecified software upgrades, enhancements and maintenance releases when and if they become available during the term of the subscription, for which fees are recognized ratably over the term of the contract, which is typically 12 to 24 months; and
|
•
|
Our maintenance fees, which include technical support and hardware and software maintenance, and which are recognized ratably over the contract term.
|
•
|
Fees from consulting services related to implementation of our products, which are recognized as the services are provided; and
|
•
|
Fees from product training and certification, which are recognized as the services are provided.
|
|
Three Months Ended
|
|
Three Months Ended
|
||||||||
|
March 31,
|
|
March 31, 2012
|
||||||||
|
2012
|
|
2011
|
|
vs. March 31, 2011
|
||||||
|
(In thousands)
|
||||||||||
Product and licenses
|
$
|
178,364
|
|
|
$
|
150,260
|
|
|
$
|
28,104
|
|
Software as a service
|
120,733
|
|
|
99,772
|
|
|
20,961
|
|
|||
License updates and maintenance
|
264,525
|
|
|
221,379
|
|
|
43,146
|
|
|||
Professional services
|
25,873
|
|
|
19,477
|
|
|
6,396
|
|
|||
Total net revenues
|
$
|
589,495
|
|
|
$
|
490,888
|
|
|
$
|
98,607
|
|
|
|
|
|
|
Increase for the
|
|||||
|
Three Months Ended
|
|
Three Months Ended
|
|||||||
|
March 31,
|
|
March 31, 2012
|
|||||||
|
2012
|
|
2011
|
|
vs. March 31, 2011
|
|||||
Enterprise division
|
$
|
468,762
|
|
|
$
|
391,116
|
|
|
19.9
|
%
|
Online Services division
|
120,733
|
|
|
99,772
|
|
|
21.0
|
%
|
||
Net revenues
|
$
|
589,495
|
|
|
$
|
490,888
|
|
|
20.1
|
%
|
|
Three Months Ended
|
|
Three Months Ended
|
||||||||
|
March 31,
|
|
March 31, 2012
|
||||||||
|
2012
|
|
2011
|
|
vs. March 31, 2011
|
||||||
|
(In thousands)
|
||||||||||
Cost of product and license revenues
|
$
|
18,804
|
|
|
$
|
14,041
|
|
|
$
|
4,763
|
|
Cost of services and maintenance revenues
|
51,004
|
|
|
33,237
|
|
|
17,767
|
|
|||
Amortization of product related intangible assets
|
16,535
|
|
|
12,699
|
|
|
3,836
|
|
|||
Total cost of net revenues
|
$
|
86,343
|
|
|
$
|
59,977
|
|
|
$
|
26,366
|
|
|
Three Months Ended
|
|
Three Months Ended
|
||||||||
|
March 31,
|
|
March 31, 2012
|
||||||||
|
2012
|
|
2011
|
|
vs. March 31, 2011
|
||||||
|
(In thousands)
|
||||||||||
Sales, marketing and services
|
$
|
248,457
|
|
|
$
|
205,544
|
|
|
$
|
42,913
|
|
|
Three Months Ended
|
|
Three Months Ended
|
||||||||
|
March 31,
|
|
March 31, 2012
|
||||||||
|
2012
|
|
2011
|
|
vs. March 31, 2011
|
||||||
|
(In thousands)
|
||||||||||
Other income, net
|
$
|
722
|
|
|
$
|
3,633
|
|
|
$
|
(2,911
|
)
|
|
March 31, 2012
|
|
December 31, 2011
|
|
2012 Compared to 2011
|
||||||
|
(In thousands)
|
||||||||||
Cash, cash equivalents and investments
|
$
|
1,608,700
|
|
|
$
|
1,477,601
|
|
|
$
|
131,099
|
|
•
|
Level 1.
Observable inputs such as quoted prices in active markets for identical assets or liabilities;
|
•
|
Level 2
. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and
|
•
|
Level 3
. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.
|
|
Investments
|
||
|
(in thousands)
|
||
Balance at December 31, 2011
|
$
|
3,696
|
|
Purchases of Level 3 securities
|
1,252
|
|
|
Transfers out of Level 3
|
(142
|
)
|
|
Balance at March 31, 2012
|
$
|
4,806
|
|
|
March 31, 2012
|
|
December 31, 2011
|
|
2012 Compared to 2011
|
||||||
|
(In thousands)
|
||||||||||
Accounts receivable
|
$
|
394,246
|
|
|
$
|
488,356
|
|
|
$
|
(94,110
|
)
|
Allowance for returns
|
(1,602
|
)
|
|
(1,361
|
)
|
|
(241
|
)
|
|||
Allowance for doubtful accounts
|
(2,837
|
)
|
|
(2,564
|
)
|
|
(273
|
)
|
|||
Accounts receivable, net
|
$
|
389,807
|
|
|
$
|
484,431
|
|
|
$
|
(94,624
|
)
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 4.
|
CONTROLS AND PROCEDURES
|
ITEM 1.
|
LEGAL PROCEEDINGS
|
ITEM 1A.
|
RISK FACTORS
|
ITEM 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
|
(a)
Total Number
of Shares
(or Units)
Purchased
(1)(2)
|
|
(b)
Average Price
Paid per Share
(or Unit)
|
|
(c)
Total Number of Shares
(or Units) Purchased as
Part of Publicly
Announced Plans or
Programs
|
|
(d)
Maximum Number
(or approximate dollar value)
of Shares (or Units) that
may yet be Purchased
under the Plans or
Programs
|
||||||
January 1, 2012 through January 31, 2012
|
147,387
|
|
|
$
|
65.10
|
|
|
147,387
|
|
|
$
|
177,630
|
|
February 1, 2012 through February 29, 2012
|
836,381
|
|
|
72.44
|
|
|
836,381
|
|
|
117,695
|
|
||
March 1, 2012 through March 31, 2012
|
577,882
|
|
|
75.99
|
|
|
577,882
|
|
|
86,622
|
|
||
Total
|
1,561,650
|
|
|
$
|
73.06
|
|
|
1,561,650
|
|
|
$
|
86,622
|
|
|
|
|
|
|
(1)
|
Represents shares acquired in open market purchases. We expended approximately
$100.0 million
during the quarter ended
March 31, 2012
for repurchases of our common stock. For more information see Note 12 to our condensed consolidated financial statements.
|
(2)
|
Includes
183,050
shares withheld from stock units that vested in the
first
quarter of
2012
to satisfy minimum tax withholding obligations that arose on the vesting of stock units.
|
ITEM 5.
|
OTHER INFORMATION
|
ITEM 6.
|
EXHIBITS
|
(a)
|
List of exhibits
|
Exhibit No.
|
|
Description
|
|
|
|
10.1*
|
|
Form of Global Restricted Stock Unit Agreement under the Citrix Systems, Inc. Amended and Restated 2005 Equity Incentive Plan (Market and Service Condition)
|
|
|
|
31.1
|
|
Rule 13a-14(a) / 15d-14(a) Certification
|
|
|
|
31.2
|
|
Rule 13a-14(a) / 15d-14(a) Certification
|
|
|
|
32.1†
|
|
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
101††
|
|
The following financial statements from Citrix Systems, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2012, as filed with the SEC on May 7, 2012, formatted in XBRL, as follows:
|
|
|
|
|
|
(i) the Condensed Consolidated Balance Sheets
|
|
|
|
|
|
(ii) the Condensed Consolidated Statement of Income
|
|
|
|
|
|
(iii) the Condensed Consolidated Statements of Comprehensive Income
|
|
|
|
|
|
(iv) the Condensed Consolidated Statements of Cash Flows
|
|
|
|
|
|
(v) the Notes to Condensed Consolidated Financial Statements, tagged in summary and detail
|
|
|
|
*
|
Indicates a management contract or a compensatory plan, contract or arrangement.
|
†
|
Furnished herewith.
|
††
|
As provided in Rule 406T of Regulation S-T, this information is furnished and not filed for purposes of Sections 11 and 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act of 1934.
|
|
|
|
|
CITRIX SYSTEMS, INC.
|
|
|
|
|
|
By:
|
/s/ D
AVID
J. H
ENSHALL
|
|
|
David J. Henshall
|
|
|
Executive Vice President, Operations, Chief Financial Officer and Treasurer
|
|
|
(Authorized Officer and Principal Financial Officer)
|
Exhibit No.
|
|
Description
|
|
|
|
10.1*
|
|
Form of Global Restricted Stock Unit Agreement under the Citrix Systems, Inc. Amended and Restated 2005 Equity Incentive Plan (Market and Service Condition)
|
|
|
|
31.1
|
|
Rule 13a-14(a) / 15d-14(a) Certification
|
|
|
|
31.2
|
|
Rule 13a-14(a) / 15d-14(a) Certification
|
|
|
|
32.1†
|
|
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
101††
|
|
The following financial statements from Citrix Systems, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2012, as filed with the SEC on May 7, 2012, formatted in XBRL, as follows:
|
|
|
|
|
|
(i) the Condensed Consolidated Balance Sheets
|
|
|
|
|
|
(ii) the Condensed Consolidated Statement of Income
|
|
|
|
|
|
(iii) the Condensed Consolidated Statements of Comprehensive Income
|
|
|
|
|
|
(iv) the Condensed Consolidated Statements of Cash Flows
|
|
|
|
|
|
(v) the Notes to Condensed Consolidated Financial Statements, tagged in summary and detail
|
|
|
|
*
|
Indicates a management contract or a compensatory plan, contract or arrangement.
|
†
|
Furnished herewith.
|
††
|
As provided in Rule 406T of Regulation S-T, this information is furnished and not filed for purposes of Sections 11 and 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act of 1934.
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Citrix Systems, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange ActRules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
By:
|
/s/ MARK B. TEMPLETON
|
|
|
Mark B. Templeton
|
|
|
President and Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Citrix Systems, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
By:
|
/s/ DAVID J. HENSHALL
|
|
|
David J. Henshall
|
|
|
Executive Vice President, Operations,
|
|
|
Chief Financial Officer and Treasurer
|
|
|
(Principal Financial Officer)
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
|
|
By:
|
/s/ MARK B. TEMPLETON
|
|
|
Mark B. Templeton
|
|
|
President and Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
|
|
|
|
By:
|
/s/ DAVID J. HENSHALL
|
|
|
David J. Henshall
|
|
|
Executive Vice President, Operations, Chief Financial Officer and Treasurer
|
|
|
(Principal Financial Officer)
|
|
|
|
|