Form
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10-Q
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☒
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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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
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Fort Lauderdale
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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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Title of each class
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Trading symbol(s)
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Name of each exchange on which registered
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Common Stock, par value $.001 per share
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CTXS
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The NASDAQ Global Select Market
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☒
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Large accelerated filer
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☐
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Accelerated filer
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☐
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Non-accelerated filer
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☐
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Smaller reporting company
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☐
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Emerging growth company
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Page
Number
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PART I:
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Item 1.
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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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Item 1A.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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June 30, 2019
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December 31, 2018
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||||
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(Unaudited)
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(Derived from audited financial statements)
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||||
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(In thousands, except par value)
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||||||
Assets
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||||
Current assets:
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||||
Cash and cash equivalents
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$
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504,720
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$
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618,766
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Short-term investments, available-for-sale
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58,425
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583,615
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Accounts receivable, net of allowances of $7,510 and $4,530 at June 30, 2019 and December 31, 2018, respectively
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530,102
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688,420
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Inventories, net
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22,888
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21,905
|
|
||
Prepaid expenses and other current assets
|
155,579
|
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174,195
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Total current assets
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1,271,714
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2,086,901
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Long-term investments, available-for-sale
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30,484
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574,319
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Property and equipment, net
|
245,395
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243,396
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Operating lease right-of-use assets
|
191,010
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—
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Goodwill
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1,800,275
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1,802,670
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Other intangible assets, net
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145,048
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167,187
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Deferred tax assets, net
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116,929
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136,998
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Other assets
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134,341
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124,578
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Total assets
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$
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3,935,196
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$
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5,136,049
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Liabilities, Temporary Equity and Stockholders' Equity
|
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Current liabilities:
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|
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Accounts payable
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$
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96,768
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$
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75,551
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Accrued expenses and other current liabilities
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284,385
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290,492
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Income taxes payable
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11,463
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44,409
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Current portion of convertible notes
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—
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1,155,445
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Current portion of deferred revenues
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1,288,910
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1,345,243
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Total current liabilities
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1,681,526
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2,911,140
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Long-term portion of deferred revenues
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455,804
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489,329
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Long-term debt
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742,482
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741,825
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Long-term income taxes payable
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259,391
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285,627
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Operating lease liabilities
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200,084
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—
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Other liabilities
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87,887
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148,499
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Commitments and contingencies
|
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Temporary equity from convertible notes
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—
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8,110
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Stockholders' equity:
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|
||||
Preferred stock at $.01 par value: 5,000 shares authorized, none issued and outstanding
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—
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—
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Common stock at $.001 par value: 1,000,000 shares authorized; 316,969 and 309,761 shares issued and outstanding at June 30, 2019 and December 31, 2018, respectively
|
317
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310
|
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Additional paid-in capital
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6,078,960
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5,404,500
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Retained earnings
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4,277,586
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4,169,019
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Accumulated other comprehensive loss
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(4,610
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)
|
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(8,154
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)
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10,352,253
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9,565,675
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Less - common stock in treasury, at cost (186,486 and 178,327 shares at June 30, 2019 and December 31, 2018, respectively)
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(9,844,231
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)
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(9,014,156
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)
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Total stockholders' equity
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508,022
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551,519
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Total liabilities, temporary equity and stockholders' equity
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$
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3,935,196
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$
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5,136,049
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Three Months Ended June 30,
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Six Months Ended June 30,
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||||||||||||
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2019
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2018
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2019
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2018
|
||||||||
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(In thousands, except per share information)
|
||||||||||||||
Revenues:
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Subscription
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$
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155,833
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$
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110,796
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$
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297,439
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$
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213,954
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Product and license
|
140,654
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192,058
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275,676
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352,755
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Support and services
|
452,210
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439,511
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894,725
|
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872,848
|
|
||||
Total net revenues
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748,697
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742,365
|
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1,467,840
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1,439,557
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|
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Cost of net revenues:
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Cost of subscription, support and services
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78,817
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67,523
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150,245
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130,908
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|
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Cost of product and license revenues
|
21,878
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29,707
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47,622
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63,579
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|
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Amortization of product related intangible assets
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9,784
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11,519
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20,085
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22,548
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|
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Total cost of net revenues
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110,479
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108,749
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217,952
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217,035
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Gross margin
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638,218
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633,616
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1,249,888
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1,222,522
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|
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Operating expenses:
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Research and development
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134,029
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112,943
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264,292
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211,493
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Sales, marketing and services
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298,429
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286,730
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573,084
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537,943
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|
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General and administrative
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81,162
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77,340
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158,709
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|
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141,067
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|
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Amortization of other intangible assets
|
3,205
|
|
|
4,019
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|
|
6,734
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|
7,685
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|
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Restructuring
|
4,311
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|
|
7,437
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|
|
7,143
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|
13,624
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|
||||
Total operating expenses
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521,136
|
|
|
488,469
|
|
|
1,009,962
|
|
|
911,812
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|
||||
Income from operations
|
117,082
|
|
|
145,147
|
|
|
239,926
|
|
|
310,710
|
|
||||
Interest income
|
3,870
|
|
|
9,402
|
|
|
13,544
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|
|
18,133
|
|
||||
Interest expense
|
(10,289
|
)
|
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(20,542
|
)
|
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(28,322
|
)
|
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(40,878
|
)
|
||||
Other (expense) income, net
|
(3,420
|
)
|
|
(2,537
|
)
|
|
279
|
|
|
(5,549
|
)
|
||||
Income before income taxes
|
107,243
|
|
|
131,470
|
|
|
225,427
|
|
|
282,416
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|
||||
Income tax expense
|
13,748
|
|
|
24,637
|
|
|
21,584
|
|
|
31,324
|
|
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Net income
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$
|
93,495
|
|
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$
|
106,833
|
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$
|
203,843
|
|
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$
|
251,092
|
|
Earnings per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.71
|
|
|
$
|
0.79
|
|
|
$
|
1.55
|
|
|
$
|
1.82
|
|
Diluted
|
$
|
0.70
|
|
|
$
|
0.73
|
|
|
$
|
1.48
|
|
|
$
|
1.72
|
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
131,309
|
|
|
135,993
|
|
|
131,396
|
|
|
137,614
|
|
||||
Diluted
|
134,277
|
|
|
145,447
|
|
|
137,635
|
|
|
145,709
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(In thousands)
|
||||||||||||||
Net income
|
$
|
93,495
|
|
|
$
|
106,833
|
|
|
$
|
203,843
|
|
|
$
|
251,092
|
|
Other comprehensive income:
|
|
|
|
|
|
|
|
||||||||
Available for sale securities:
|
|
|
|
|
|
|
|
||||||||
Change in net unrealized gains (losses)
|
614
|
|
|
332
|
|
|
2,802
|
|
|
(4,210
|
)
|
||||
Less: reclassification adjustment for net (gains) losses included in net income
|
(26
|
)
|
|
243
|
|
|
(584
|
)
|
|
1,244
|
|
||||
Net change (net of tax effect)
|
588
|
|
|
575
|
|
|
2,218
|
|
|
(2,966
|
)
|
||||
Cash flow hedges:
|
|
|
|
|
|
|
|
||||||||
Change in unrealized gains (losses)
|
188
|
|
|
(3,422
|
)
|
|
335
|
|
|
(2,730
|
)
|
||||
Less: reclassification adjustment for net losses (gains) included in net income
|
97
|
|
|
(997
|
)
|
|
991
|
|
|
(2,216
|
)
|
||||
Net change (net of tax effect)
|
285
|
|
|
(4,419
|
)
|
|
1,326
|
|
|
(4,946
|
)
|
||||
Other comprehensive income (loss)
|
873
|
|
|
(3,844
|
)
|
|
3,544
|
|
|
(7,912
|
)
|
||||
Comprehensive income
|
$
|
94,368
|
|
|
$
|
102,989
|
|
|
$
|
207,387
|
|
|
$
|
243,180
|
|
|
Six Months Ended June 30,
|
||||||
|
2019
|
|
2018
|
||||
|
(In thousands)
|
||||||
Operating Activities
|
|
|
|
||||
Net income
|
$
|
203,843
|
|
|
$
|
251,092
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation, amortization and other
|
118,689
|
|
|
106,266
|
|
||
Stock-based compensation expense
|
133,554
|
|
|
91,567
|
|
||
Deferred income tax expense
|
18,870
|
|
|
5,756
|
|
||
Effects of exchange rate changes on monetary assets and liabilities denominated in foreign currencies
|
1,326
|
|
|
6,021
|
|
||
Other non-cash items
|
3,921
|
|
|
5,166
|
|
||
Total adjustments to reconcile net income to net cash provided by operating activities
|
276,360
|
|
|
214,776
|
|
||
Changes in operating assets and liabilities, net of the effects of acquisitions:
|
|
|
|
||||
Accounts receivable
|
155,170
|
|
|
182,469
|
|
||
Inventories
|
(2,594
|
)
|
|
(6,645
|
)
|
||
Prepaid expenses and other current assets
|
22,733
|
|
|
(38,080
|
)
|
||
Other assets
|
(31,126
|
)
|
|
1,795
|
|
||
Income taxes, net
|
(67,283
|
)
|
|
(72,405
|
)
|
||
Accounts payable
|
21,256
|
|
|
19,851
|
|
||
Accrued expenses and other current liabilities
|
(62,812
|
)
|
|
10,435
|
|
||
Deferred revenues
|
(89,858
|
)
|
|
(41,100
|
)
|
||
Other liabilities
|
4,224
|
|
|
5,850
|
|
||
Total changes in operating assets and liabilities, net of the effects of acquisitions
|
(50,290
|
)
|
|
62,170
|
|
||
Net cash provided by operating activities
|
429,913
|
|
|
528,038
|
|
||
Investing Activities
|
|
|
|
||||
Purchases of available-for-sale investments
|
(19,984
|
)
|
|
(332,136
|
)
|
||
Proceeds from sales of available-for-sale investments
|
938,031
|
|
|
434,901
|
|
||
Proceeds from maturities of available-for-sale investments
|
153,708
|
|
|
196,791
|
|
||
Purchases of property and equipment
|
(38,061
|
)
|
|
(32,929
|
)
|
||
Cash paid for acquisitions, net of cash acquired
|
—
|
|
|
(65,983
|
)
|
||
Cash paid for licensing agreements, patents and technology
|
(2,158
|
)
|
|
(1,217
|
)
|
||
Other
|
1,165
|
|
|
3,002
|
|
||
Net cash provided by investing activities
|
1,032,701
|
|
|
202,429
|
|
||
Financing Activities
|
|
|
|
||||
Proceeds from issuance of common stock under stock-based compensation plans
|
—
|
|
|
113
|
|
||
Repayment of acquired debt
|
—
|
|
|
(5,674
|
)
|
||
Repayment on convertible notes
|
(1,164,497
|
)
|
|
—
|
|
||
Stock repurchases, net
|
(250,000
|
)
|
|
(764,978
|
)
|
||
Cash paid for tax withholding on vested stock awards
|
(70,552
|
)
|
|
(49,936
|
)
|
||
Cash paid for dividends
|
(91,851
|
)
|
|
—
|
|
||
Net cash used in financing activities
|
(1,576,900
|
)
|
|
(820,475
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
240
|
|
|
(3,414
|
)
|
||
Change in cash and cash equivalents
|
(114,046
|
)
|
|
(93,422
|
)
|
||
Cash and cash equivalents at beginning of period
|
618,766
|
|
|
1,115,130
|
|
||
Cash and cash equivalents at end of period
|
$
|
504,720
|
|
|
$
|
1,021,708
|
|
Performance Obligation
|
When Performance Obligation
is Typically Satisfied
|
Subscription
|
|
Cloud hosted offerings
|
Over the contract term, beginning on the date that service is made available to the customer (over time)
|
CSP
|
As the usage occurs (over time)
|
On-premise subscription software licenses
|
When software activation keys have been made available for download (point in time)
|
Product and license
|
|
Software Licenses
|
When software activation keys have been made available for download (point in time)
|
Hardware
|
When control of the product passes to the customer; typically upon shipment (point in time)
|
Support and services
|
|
License updates and maintenance
|
Ratably over the course of the service term (over time)
|
Professional services
|
As the services are provided (over time)
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2019
|
|
2018(1)
|
|
2019
|
|
2018(1)
|
||||||||
|
|
(In thousands)
|
||||||||||||||
Products and services transferred at a point in time
|
|
$
|
178,160
|
|
|
$
|
215,523
|
|
|
$
|
341,124
|
|
|
$
|
397,849
|
|
Products and services transferred over time
|
|
570,537
|
|
|
526,842
|
|
|
1,126,716
|
|
|
1,041,708
|
|
||||
Total net revenues
|
|
$
|
748,697
|
|
|
$
|
742,365
|
|
|
$
|
1,467,840
|
|
|
$
|
1,439,557
|
|
(1)
|
Includes a net reclassification from Products and services transferred at a point in time to Products and services transferred over time of $10.0 million for the six months ended June 30, 2018. For the three months ended March 31, 2018, the Company reclassified $11.6 million from Product and services transferred over time to Product and services transferred at a point in time. For the three months ended June 30, 2018, the Company reclassified $21.6 million from Product and services transferred at a point in time to Product and services transferred over time. The change in presentation does not affect the Company's condensed consolidated financial position, results from operations or cash flows.
|
|
|
<1-3 years
|
|
3-5 years
|
|
5 years or more
|
|
Total
|
||||||||
Subscription
|
|
$
|
577,291
|
|
|
$
|
65,164
|
|
|
$
|
2,128
|
|
|
$
|
644,583
|
|
Support and services
|
|
1,534,685
|
|
|
47,078
|
|
|
2,581
|
|
|
1,584,344
|
|
||||
Total net revenues
|
|
$
|
2,111,976
|
|
|
$
|
112,242
|
|
|
$
|
4,709
|
|
|
$
|
2,228,927
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
93,495
|
|
|
$
|
106,833
|
|
|
$
|
203,843
|
|
|
$
|
251,092
|
|
Denominator:
|
|
|
|
|
|
|
|
||||||||
Denominator for basic earnings per share - weighted-average shares outstanding
|
131,309
|
|
|
135,993
|
|
|
131,396
|
|
|
137,614
|
|
||||
Effect of dilutive employee stock awards
|
1,453
|
|
|
1,940
|
|
|
2,145
|
|
|
2,360
|
|
||||
Effect of dilutive Convertible Notes
|
782
|
|
|
6,023
|
|
|
2,867
|
|
|
5,258
|
|
||||
Effect of dilutive warrants
|
733
|
|
|
1,491
|
|
|
1,227
|
|
|
477
|
|
||||
Denominator for diluted earnings per share - weighted-average shares outstanding
|
134,277
|
|
|
145,447
|
|
|
137,635
|
|
|
145,709
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Basic earnings per share
|
$
|
0.71
|
|
|
$
|
0.79
|
|
|
$
|
1.55
|
|
|
$
|
1.82
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted earnings per share
|
$
|
0.70
|
|
|
$
|
0.73
|
|
|
$
|
1.48
|
|
|
$
|
1.72
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||||||||||||||||||||
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
|
$
|
1,680
|
|
|
$
|
—
|
|
|
$
|
(4
|
)
|
|
$
|
1,676
|
|
|
$
|
314,982
|
|
|
$
|
333
|
|
|
$
|
(2,367
|
)
|
|
$
|
312,948
|
|
Corporate securities
|
73,291
|
|
|
1
|
|
|
(205
|
)
|
|
73,087
|
|
|
612,698
|
|
|
116
|
|
|
(4,156
|
)
|
|
608,658
|
|
||||||||
Municipal securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,500
|
|
|
4
|
|
|
—
|
|
|
2,504
|
|
||||||||
Government securities
|
14,160
|
|
|
6
|
|
|
(20
|
)
|
|
14,146
|
|
|
234,668
|
|
|
91
|
|
|
(935
|
)
|
|
233,824
|
|
||||||||
Total
|
$
|
89,131
|
|
|
$
|
7
|
|
|
$
|
(229
|
)
|
|
$
|
88,909
|
|
|
$
|
1,164,848
|
|
|
$
|
544
|
|
|
$
|
(7,458
|
)
|
|
$
|
1,157,934
|
|
•
|
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 June 30, 2019
|
|
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:
|
|
|
|
|
|
|
|
||||||||
Cash
|
$
|
417,088
|
|
|
$
|
417,088
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Money market funds
|
84,666
|
|
|
84,666
|
|
|
—
|
|
|
—
|
|
||||
Corporate securities
|
2,966
|
|
|
—
|
|
|
2,966
|
|
|
—
|
|
||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
||||||||
Agency securities
|
1,676
|
|
|
—
|
|
|
1,676
|
|
|
—
|
|
||||
Corporate securities
|
73,087
|
|
|
—
|
|
|
72,087
|
|
|
1,000
|
|
||||
Government securities
|
14,146
|
|
|
—
|
|
|
14,146
|
|
|
—
|
|
||||
Prepaid expenses and other current assets:
|
|
|
|
|
|
|
|
||||||||
Foreign currency derivatives
|
1,355
|
|
|
—
|
|
|
1,355
|
|
|
—
|
|
||||
Total assets
|
$
|
594,984
|
|
|
$
|
501,754
|
|
|
$
|
92,230
|
|
|
$
|
1,000
|
|
Accrued expenses and other current liabilities:
|
|
|
|
|
|
|
|
||||||||
Foreign currency derivatives
|
1,239
|
|
|
—
|
|
|
1,239
|
|
|
—
|
|
||||
Total liabilities
|
$
|
1,239
|
|
|
$
|
—
|
|
|
$
|
1,239
|
|
|
$
|
—
|
|
|
As of December 31, 2018
|
|
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:
|
|
|
|
|
|
|
|
||||||||
Cash
|
$
|
505,363
|
|
|
$
|
505,363
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Money market funds
|
88,126
|
|
|
88,126
|
|
|
—
|
|
|
—
|
|
||||
Agency securities
|
3,296
|
|
|
—
|
|
|
3,296
|
|
|
—
|
|
||||
Corporate securities
|
9,371
|
|
|
—
|
|
|
9,371
|
|
|
—
|
|
||||
Government securities
|
12,610
|
|
|
—
|
|
|
12,610
|
|
|
—
|
|
||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
||||||||
Agency securities
|
312,948
|
|
|
—
|
|
|
312,948
|
|
|
—
|
|
||||
Corporate securities
|
608,658
|
|
|
—
|
|
|
607,945
|
|
|
713
|
|
||||
Municipal securities
|
2,504
|
|
|
—
|
|
|
2,504
|
|
|
—
|
|
||||
Government securities
|
233,824
|
|
|
—
|
|
|
233,824
|
|
|
—
|
|
||||
Prepaid expenses and other current assets:
|
|
|
|
|
|
|
|
||||||||
Foreign currency derivatives
|
764
|
|
|
—
|
|
|
764
|
|
|
—
|
|
||||
Total assets
|
$
|
1,777,464
|
|
|
$
|
593,489
|
|
|
$
|
1,183,262
|
|
|
$
|
713
|
|
Accrued expenses and other current liabilities:
|
|
|
|
|
|
|
|
||||||||
Foreign currency derivatives
|
2,543
|
|
|
—
|
|
|
2,543
|
|
|
—
|
|
||||
Total liabilities
|
$
|
2,543
|
|
|
$
|
—
|
|
|
$
|
2,543
|
|
|
$
|
—
|
|
|
Fair Value
|
|
Carrying Value
|
||||
2027 Notes
|
$
|
777,015
|
|
|
$
|
742,482
|
|
|
Six Months Ended
|
|||
|
June 30, 2019
|
|
June 30, 2018
|
|
Expected volatility factor
|
0.26 - 0.29
|
|
0.27 - 0.29
|
|
Risk free interest rate
|
2.19% - 2.49%
|
|
1.12% - 1.63%
|
|
Expected dividend yield
|
1.27% - 1.31%
|
|
0
|
%
|
Expected life (in years)
|
0.5
|
|
0.5
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
Income Statement Classifications
|
June 30, 2019
|
|
June 30, 2018
|
|
June 30, 2019
|
|
June 30, 2018
|
||||||||
Cost of subscription, support and services
|
$
|
2,956
|
|
|
$
|
2,241
|
|
|
$
|
5,158
|
|
|
$
|
3,721
|
|
Research and development
|
25,419
|
|
|
17,715
|
|
|
53,256
|
|
|
28,508
|
|
||||
Sales, marketing and services
|
24,424
|
|
|
19,618
|
|
|
44,350
|
|
|
33,185
|
|
||||
General and administrative
|
15,521
|
|
|
16,270
|
|
|
30,790
|
|
|
26,153
|
|
||||
Total
|
$
|
68,320
|
|
|
$
|
55,844
|
|
|
$
|
133,554
|
|
|
$
|
91,567
|
|
|
March 2017 Grant (Modified)
|
March 2017 Grant
|
||
Expected volatility factor
|
0.16-0.32
|
|
0.27-0.32
|
|
Risk free interest rate
|
2.67
|
%
|
1.48
|
%
|
Expected dividend yield
|
0
|
%
|
0
|
%
|
|
Balance at January 1, 2019
|
|
Additions
|
|
|
Other
|
|
|
Balance at June 30, 2019
|
||||||||
Goodwill
|
$
|
1,802,670
|
|
|
$
|
—
|
|
|
|
$
|
(2,395
|
)
|
(1)
|
|
$
|
1,800,275
|
|
(1)
|
Amount relates to adjustments to the purchase price allocation associated with 2018 acquisitions.
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||||
|
Gross Carrying
Amount
|
|
Accumulated
Amortization
|
|
Gross Carrying
Amount
|
|
Accumulated
Amortization
|
||||||||
Product related intangible assets
|
$
|
750,832
|
|
|
$
|
622,078
|
|
|
$
|
746,152
|
|
|
$
|
601,993
|
|
Other
|
227,923
|
|
|
211,629
|
|
|
227,922
|
|
|
204,894
|
|
||||
Total
|
$
|
978,755
|
|
|
$
|
833,707
|
|
|
$
|
974,074
|
|
|
$
|
806,887
|
|
Year ending December 31,
|
|
||
2019 (remaining six months)
|
$
|
24,676
|
|
2020
|
39,148
|
|
|
2021
|
25,159
|
|
|
2022
|
23,309
|
|
|
2023
|
19,958
|
|
|
Thereafter
|
12,798
|
|
|
Total
|
$
|
145,048
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net revenues:
|
|
|
|
|
|
|
|
||||||||
Digital Workspace revenues(1)
|
$
|
535,063
|
|
|
$
|
501,121
|
|
|
$
|
1,049,670
|
|
|
$
|
958,381
|
|
Networking revenues(2)
|
178,204
|
|
|
207,342
|
|
|
349,437
|
|
|
415,965
|
|
||||
Professional services(3)
|
35,430
|
|
|
33,902
|
|
|
68,733
|
|
|
65,211
|
|
||||
Total net revenues
|
$
|
748,697
|
|
|
$
|
742,365
|
|
|
$
|
1,467,840
|
|
|
$
|
1,439,557
|
|
(1)
|
Digital Workspace revenues are primarily comprised of sales from the Company’s application virtualization solutions, which include Citrix Virtual Apps and Desktops, the Company's unified endpoint management solutions, which include Citrix Endpoint Management, related license updates and maintenance and support, Citrix Content Collaboration and cloud offerings.
|
(2)
|
Networking revenues primarily include Citrix ADC and Citrix SD-WAN, related license updates and maintenance and support and cloud offerings.
|
(3)
|
Professional services revenues are primarily comprised of revenues from consulting services and product training and certification services.
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net revenues:
|
|
|
|
|
|
|
|
||||||||
Americas
|
$
|
432,281
|
|
|
$
|
430,184
|
|
|
$
|
833,428
|
|
|
$
|
844,184
|
|
EMEA
|
240,388
|
|
|
234,131
|
|
|
477,201
|
|
|
448,706
|
|
||||
APJ
|
76,028
|
|
|
78,050
|
|
|
157,211
|
|
|
146,667
|
|
||||
Total net revenues
|
$
|
748,697
|
|
|
$
|
742,365
|
|
|
$
|
1,467,840
|
|
|
$
|
1,439,557
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net revenues:
|
|
|
|
|
|
|
|
||||||||
SSP revenue
|
$
|
23,731
|
|
|
$
|
39,167
|
|
|
$
|
45,832
|
|
|
$
|
101,483
|
|
Non-SSP revenue
|
724,966
|
|
|
703,198
|
|
|
1,422,008
|
|
|
1,338,074
|
|
||||
Total net revenues
|
$
|
748,697
|
|
|
$
|
742,365
|
|
|
$
|
1,467,840
|
|
|
$
|
1,439,557
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Subscription:
|
|
|
|
|
|
|
|
||||||||
SaaS
|
$
|
91,208
|
|
|
$
|
64,843
|
|
|
$
|
176,655
|
|
|
$
|
124,759
|
|
Non-SaaS
|
64,625
|
|
|
45,953
|
|
|
120,784
|
|
|
89,195
|
|
||||
Total Subscription revenue
|
$
|
155,833
|
|
|
$
|
110,796
|
|
|
$
|
297,439
|
|
|
$
|
213,954
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Contractual interest expense
|
$
|
8,614
|
|
|
$
|
10,327
|
|
|
$
|
18,507
|
|
|
$
|
20,562
|
|
Amortization of debt issuance costs
|
317
|
|
|
1,374
|
|
|
1,306
|
|
|
2,379
|
|
||||
Amortization of debt discount
|
1,204
|
|
|
8,811
|
|
|
8,191
|
|
|
17,476
|
|
||||
|
$
|
10,135
|
|
|
$
|
20,512
|
|
|
$
|
28,004
|
|
|
$
|
40,417
|
|
|
Asset Derivatives
|
|
Liability Derivatives
|
||||||||||||
|
(In thousands)
|
||||||||||||||
|
June 30, 2019
|
|
December 31, 2018
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||
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
|
|
$1,222
|
|
Prepaid
expenses
and other
current
assets
|
|
$708
|
|
Accrued
expenses
and other
current
liabilities
|
|
$835
|
|
Accrued
expenses
and other
current
liabilities
|
|
$1,811
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset Derivatives
|
|
Liability Derivatives
|
||||||||||||
|
(In thousands)
|
||||||||||||||
|
June 30, 2019
|
|
December 31, 2018
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||
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
|
|
$133
|
|
Prepaid
expenses and other current assets |
|
$56
|
|
Accrued
expenses
and other
current
liabilities
|
|
$404
|
|
Accrued
expenses
and other
current
liabilities
|
|
$732
|
|
For the Three Months Ended June 30,
|
||||||||||||||||
|
(In thousands)
|
||||||||||||||||
Derivatives in Cash Flow
Hedging Relationships
|
Amount of Gain (Loss) Recognized in Other
Comprehensive Income (Loss)
|
|
Location of (Loss) Gain Reclassified
from Accumulated Other Comprehensive Loss into Income |
|
Amount of (Loss) Gain Reclassified from
Accumulated Other
Comprehensive Loss
|
||||||||||||
|
2019
|
|
2018
|
|
|
|
2019
|
|
2018
|
||||||||
Foreign currency forward contracts
|
$
|
285
|
|
|
$
|
(4,419
|
)
|
|
Operating expenses
|
|
$
|
(97
|
)
|
|
$
|
997
|
|
|
For the Six Months Ended June 30,
|
||||||||||||||||
|
(In thousands)
|
||||||||||||||||
Derivatives in Cash Flow
Hedging Relationships
|
Amount of Gain (Loss) Recognized in Other
Comprehensive Income
|
|
Location of (Loss) Gain Reclassified
from Accumulated Other Comprehensive Loss into Income |
|
Amount of (Loss) Gain Reclassified from
Accumulated Other
Comprehensive Loss
|
||||||||||||
|
2019
|
|
2018
|
|
|
|
2019
|
|
2018
|
||||||||
Foreign currency forward contracts
|
$
|
1,326
|
|
|
$
|
(4,946
|
)
|
|
Operating expenses
|
|
$
|
(991
|
)
|
|
$
|
2,216
|
|
|
For the Three Months Ended June 30,
|
||||||||
|
(In thousands)
|
||||||||
Derivatives Not Designated as Hedging Instruments
|
Location of (Loss) Gain Recognized in Income on
Derivative
|
|
Amount of (Loss) Gain Recognized
in Income on Derivative
|
||||||
|
|
|
2019
|
|
2018
|
||||
Foreign currency forward contracts
|
Other (expense) income, net
|
|
$
|
(584
|
)
|
|
$
|
7,161
|
|
|
For the Six Months Ended June 30,
|
||||||||
|
(In thousands)
|
||||||||
Derivatives Not Designated as Hedging Instruments
|
Location of (Loss) Gain Recognized in Income on
Derivative
|
|
Amount of (Loss) Gain Recognized
in Income on Derivative
|
||||||
|
|
|
2019
|
|
2018
|
||||
Foreign currency forward contracts
|
Other (expense) income, net
|
|
$
|
(1,980
|
)
|
|
$
|
3,602
|
|
Foreign Currency
|
Currency
Denomination
|
Australian Dollar
|
AUD 32,000
|
Brazilian Real
|
BRL 7,000
|
Pounds Sterling
|
GBP 20,000
|
Canadian Dollar
|
CAD 2,850
|
Chinese Yuan Renminbi
|
CNY 53,840
|
Danish Krone
|
DKK 67,385
|
Euro
|
EUR 9,336
|
Hong Kong Dollar
|
HKD 33,000
|
Indian Rupee
|
INR 2,847,000
|
Japanese Yen
|
JPY 1,757,501
|
Korean Won
|
KRW 1,079,000
|
Singapore Dollar
|
SGD 20,400
|
Swiss Franc
|
CHF 27,280
|
Czech Koruna
|
CZK 98,000
|
Swedish Krona
|
SEK 10,000
|
|
Foreign currency
|
|
Unrealized loss on available-for-sale securities
|
|
Unrealized (loss) gain on derivative instruments
|
|
Other comprehensive loss on pension liability
|
|
Total
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Balance at December 31, 2018
|
$
|
(2,946
|
)
|
|
$
|
(2,440
|
)
|
|
$
|
(985
|
)
|
|
$
|
(1,783
|
)
|
|
$
|
(8,154
|
)
|
Other comprehensive income before reclassifications
|
—
|
|
|
2,802
|
|
|
335
|
|
|
—
|
|
|
3,137
|
|
|||||
Amounts reclassified from accumulated other comprehensive loss
|
—
|
|
|
(584
|
)
|
|
991
|
|
|
—
|
|
|
407
|
|
|||||
Net current period other comprehensive income
|
—
|
|
|
2,218
|
|
|
1,326
|
|
|
—
|
|
|
3,544
|
|
|||||
Balance at June 30, 2019
|
$
|
(2,946
|
)
|
|
$
|
(222
|
)
|
|
$
|
341
|
|
|
$
|
(1,783
|
)
|
|
$
|
(4,610
|
)
|
|
|
For the Three Months Ended June 30, 2019
|
||||
|
|
(In thousands)
|
||||
Details about accumulated other comprehensive loss components
|
|
Amount reclassified from accumulated other comprehensive loss, net of tax
|
|
Affected line item in the Condensed Consolidated Statements of Income
|
||
Unrealized net gains on available-for-sale securities
|
|
$
|
(26
|
)
|
|
Other (expense) income, net
|
Unrealized net losses on cash flow hedges
|
|
97
|
|
|
Operating expenses *
|
|
|
|
$
|
71
|
|
|
|
|
|
For the Six Months Ended June 30, 2019
|
||||
|
|
(In thousands)
|
||||
Details about accumulated other comprehensive loss components
|
|
Amount reclassified from accumulated other comprehensive loss, net of tax
|
|
Affected line item in the Condensed Consolidated Statements of Income
|
||
Unrealized net gains on available-for-sale securities
|
|
$
|
(584
|
)
|
|
Other (expense) income, net
|
Unrealized net losses on cash flow hedges
|
|
991
|
|
|
Operating expenses *
|
|
|
|
$
|
407
|
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Employee severance and related costs
|
$
|
4,311
|
|
|
$
|
1,278
|
|
|
$
|
7,143
|
|
|
$
|
2,319
|
|
Consolidation of leased facilities
|
—
|
|
|
6,159
|
|
|
—
|
|
|
11,305
|
|
||||
Total Restructuring charges
|
$
|
4,311
|
|
|
$
|
7,437
|
|
|
$
|
7,143
|
|
|
$
|
13,624
|
|
|
Total
|
||
Balance at January 1, 2019
|
$
|
45,095
|
|
Adjustment for ASC 842
|
(42,248
|
)
|
|
Restructuring charges
|
7,143
|
|
|
Payments
|
(6,209
|
)
|
|
Balance at June 30, 2019
|
$
|
3,781
|
|
|
Common Stock
|
|
Additional
Paid In Capital
|
|
Retained
Earnings
|
|
Accumulated Other
Comprehensive
Loss
|
|
Common Stock
in Treasury
|
|
|
Total
Equity
|
||||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|
|||||||||||||||||||||
Balance at March 31, 2019
|
311,732
|
|
|
$
|
312
|
|
|
$
|
5,495,935
|
|
|
$
|
4,232,181
|
|
|
$
|
(5,483
|
)
|
|
(179,832
|
)
|
|
$
|
(9,168,067
|
)
|
|
|
$
|
554,878
|
|
Shares issued under stock-based compensation plans
|
287
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
70,080
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
70,080
|
|
||||||
Temporary equity reclassification
|
—
|
|
|
—
|
|
|
1,163
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
1,163
|
|
||||||
Stock repurchases, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,600
|
)
|
|
(156,195
|
)
|
|
|
(156,195
|
)
|
||||||
Restricted shares turned in for tax withholding
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(104
|
)
|
|
(10,445
|
)
|
|
|
(10,445
|
)
|
||||||
Cash dividends declared
|
—
|
|
|
—
|
|
|
—
|
|
|
(45,827
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
(45,827
|
)
|
||||||
Settlement of convertible notes and hedges
|
4,950
|
|
|
5
|
|
|
509,519
|
|
|
—
|
|
|
—
|
|
|
(4,950
|
)
|
|
(509,524
|
)
|
|
|
—
|
|
||||||
Other
|
—
|
|
|
—
|
|
|
2,263
|
|
|
(2,263
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
||||||
Other comprehensive income, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
873
|
|
|
—
|
|
|
—
|
|
|
|
873
|
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
93,495
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
93,495
|
|
||||||
Balance at June 30, 2019
|
316,969
|
|
|
$
|
317
|
|
|
$
|
6,078,960
|
|
|
$
|
4,277,586
|
|
|
$
|
(4,610
|
)
|
|
(186,486
|
)
|
|
$
|
(9,844,231
|
)
|
|
|
$
|
508,022
|
|
|
Common Stock
|
|
Additional
Paid In Capital
|
|
Retained
Earnings
|
|
Accumulated Other
Comprehensive
loss
|
|
Common Stock
in Treasury
|
|
|
Total
Equity
|
||||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|
|||||||||||||||||||||
Balance at December 31, 2018
|
309,761
|
|
|
$
|
310
|
|
|
$
|
5,404,500
|
|
|
$
|
4,169,019
|
|
|
$
|
(8,154
|
)
|
|
(178,327
|
)
|
|
$
|
(9,014,156
|
)
|
|
|
$
|
551,519
|
|
Shares issued under stock-based compensation plans
|
2,042
|
|
|
2
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
133,554
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
133,554
|
|
||||||
Temporary equity reclassification
|
—
|
|
|
—
|
|
|
8,110
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
8,110
|
|
||||||
Common stock issued under employee stock purchase plan
|
216
|
|
|
—
|
|
|
19,016
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
19,016
|
|
||||||
Stock repurchases, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,511
|
)
|
|
(250,000
|
)
|
|
|
(250,000
|
)
|
||||||
Restricted shares turned in for tax withholding
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(698
|
)
|
|
(70,551
|
)
|
|
|
(70,551
|
)
|
||||||
Cash dividends declared
|
—
|
|
|
—
|
|
|
—
|
|
|
(91,851
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
(91,851
|
)
|
||||||
Settlement of convertible notes and hedges
|
4,950
|
|
|
5
|
|
|
509,519
|
|
|
—
|
|
|
—
|
|
|
(4,950
|
)
|
|
(509,524
|
)
|
|
|
—
|
|
||||||
Cumulative-effect adjustment from adoption of accounting standards
|
—
|
|
|
—
|
|
|
—
|
|
|
838
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
838
|
|
||||||
Other
|
—
|
|
|
—
|
|
|
4,263
|
|
|
(4,263
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
||||||
Other comprehensive income, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,544
|
|
|
—
|
|
|
—
|
|
|
|
3,544
|
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
203,843
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
203,843
|
|
||||||
Balance at June 30, 2019
|
316,969
|
|
|
$
|
317
|
|
|
$
|
6,078,960
|
|
|
$
|
4,277,586
|
|
|
$
|
(4,610
|
)
|
|
(186,486
|
)
|
|
$
|
(9,844,231
|
)
|
|
|
$
|
508,022
|
|
|
Common Stock
|
|
Additional
Paid In Capital
|
|
Retained
Earnings
|
|
Accumulated Other
Comprehensive
loss
|
|
Common Stock
in Treasury
|
|
|
Total
Equity
|
||||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|
|||||||||||||||||||||
Balance at March 31, 2018
|
307,575
|
|
|
$
|
308
|
|
|
$
|
4,938,533
|
|
|
$
|
3,786,521
|
|
|
$
|
(14,874
|
)
|
|
(170,431
|
)
|
|
$
|
(8,187,110
|
)
|
|
|
$
|
523,378
|
|
Shares issued under stock-based compensation plans
|
87
|
|
|
—
|
|
|
43
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
43
|
|
||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
55,844
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
55,844
|
|
||||||
Temporary equity reclassification
|
—
|
|
|
—
|
|
|
(28,081
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
(28,081
|
)
|
||||||
Stock repurchases, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,783
|
)
|
|
(164,978
|
)
|
|
|
(164,978
|
)
|
||||||
Accelerated stock repurchase program
|
—
|
|
|
—
|
|
|
150,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
150,000
|
|
||||||
Restricted shares turned in for tax withholding
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(30
|
)
|
|
(3,019
|
)
|
|
|
(3,019
|
)
|
||||||
Other comprehensive loss, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,844
|
)
|
|
—
|
|
|
—
|
|
|
|
(3,844
|
)
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
106,833
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
106,833
|
|
||||||
Balance at June 30, 2018
|
307,662
|
|
|
$
|
308
|
|
|
$
|
5,116,339
|
|
|
$
|
3,893,354
|
|
|
$
|
(18,718
|
)
|
|
(172,244
|
)
|
|
$
|
(8,355,107
|
)
|
|
|
$
|
636,176
|
|
|
Common Stock
|
|
Additional
Paid In Capital
|
|
Retained
Earnings
|
|
Accumulated Other
Comprehensive
loss
|
|
Common Stock
in Treasury
|
|
|
Total
Equity
|
||||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|
|||||||||||||||||||||
Balance at December 31, 2017
|
305,751
|
|
|
$
|
306
|
|
|
$
|
4,883,670
|
|
|
$
|
3,509,484
|
|
|
$
|
(10,806
|
)
|
|
(162,044
|
)
|
|
$
|
(7,390,193
|
)
|
|
|
$
|
992,461
|
|
Shares issued under stock-based compensation plans
|
1,659
|
|
|
2
|
|
|
111
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
113
|
|
||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
91,567
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
91,567
|
|
||||||
Temporary equity reclassification
|
—
|
|
|
—
|
|
|
(28,081
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
(28,081
|
)
|
||||||
Common stock issued under employee stock purchase plan
|
252
|
|
|
—
|
|
|
17,457
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
17,457
|
|
||||||
Stock repurchases, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,663
|
)
|
|
(914,978
|
)
|
|
|
(914,978
|
)
|
||||||
Accelerated stock repurchase program
|
—
|
|
|
—
|
|
|
150,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
150,000
|
|
||||||
Restricted shares turned in for tax withholding
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(537
|
)
|
|
(49,936
|
)
|
|
|
(49,936
|
)
|
||||||
Cumulative-effect adjustment from adoption of accounting standard
|
—
|
|
|
—
|
|
|
—
|
|
|
132,778
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
132,778
|
|
||||||
Other comprehensive loss, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,912
|
)
|
|
—
|
|
|
—
|
|
|
|
(7,912
|
)
|
||||||
Other
|
—
|
|
|
—
|
|
|
1,615
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
1,615
|
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
251,092
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
251,092
|
|
||||||
Balance at June 30, 2018
|
307,662
|
|
|
$
|
308
|
|
|
$
|
5,116,339
|
|
|
$
|
3,893,354
|
|
|
$
|
(18,718
|
)
|
|
(172,244
|
)
|
|
$
|
(8,355,107
|
)
|
|
|
$
|
636,176
|
|
Declaration Date
|
Dividends per Share
|
|
Record Date
|
|
Payable Date
|
||
January 23, 2019
|
$
|
0.35
|
|
|
March 8, 2019
|
|
March 22, 2019
|
April 24, 2019
|
$
|
0.35
|
|
|
June 7, 2019
|
|
June 21, 2019
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||
|
|
|
June 30, 2019
|
||||||
|
Classification
|
|
|
|
|
||||
Operating lease cost
|
Operating expenses
|
|
$
|
12,377
|
|
|
$
|
24,777
|
|
Variable lease cost
|
Operating expenses
|
|
2,249
|
|
|
4,818
|
|
||
Sublease income
|
Other (expense) income, net
|
|
(233
|
)
|
|
(431
|
)
|
||
Net lease cost
|
|
|
$
|
14,393
|
|
|
$
|
29,164
|
|
|
|
Six Months Ended
|
||
|
|
June 30,
|
||
|
|
2019
|
||
Cash paid for amounts included in the measurement of lease liabilities:
|
|
|
||
Operating cash flows from operating leases
|
|
$
|
27,129
|
|
Right-of-use assets obtained in exchange for lease obligations:
|
|
|
||
Operating leases
|
|
$
|
11,658
|
|
|
|
June 30, 2019
|
|
Weighted-average remaining lease term (years)
|
|
|
|
Operating leases
|
|
6.4
|
|
Weighted-average discount rate
|
|
|
|
Operating leases
|
|
4.58
|
%
|
Year ending December 31,
|
|
Operating Leases
|
||
2019 (remaining six months)
|
|
$
|
27,615
|
|
2020
|
|
54,801
|
|
|
2021
|
|
44,184
|
|
|
2022
|
|
36,506
|
|
|
2023
|
|
32,876
|
|
|
After 2023
|
|
89,746
|
|
|
Total lease payments
|
|
$
|
285,728
|
|
Less: imputed interest
|
|
(39,171
|
)
|
|
Present value of lease liabilities
|
|
$
|
246,557
|
|
Operating Leases
|
|
June 30, 2019
|
||
Operating lease right-of-use assets
|
|
$
|
191,010
|
|
|
|
|
||
Accrued expenses and other current liabilities
|
|
$
|
46,473
|
|
Operating lease liabilities
|
|
200,084
|
|
|
Total operating lease liabilities
|
|
$
|
246,557
|
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
Subscription revenue increased 40.6% to $155.8 million;
|
•
|
SaaS revenue increased 40.7% to $91.2 million and accounted for 58.5% of total subscription revenue;
|
•
|
Product and license revenue decreased 26.8% to $140.7 million;
|
•
|
Support and services revenue increased 2.9% to $452.2 million;
|
•
|
Gross margin as a percentage of revenue decreased 0.2% to 85.2%;
|
•
|
Operating income decreased 19.3% to $117.1 million;
|
•
|
Diluted net income per share decreased 4.1% to $0.70;
|
•
|
Unbilled revenue increased $267.5 million to $484.2 million;
|
•
|
Subscription ARR increased $152.0 million to $614.4 million; and
|
•
|
SaaS ARR increased $136.0 million to $418.0 million.
|
|
Three Months Ended
|
|
Six Months Ended
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||
|
June 30,
|
|
June 30,
|
|
June 30, 2019
|
|
June 30, 2019
|
||||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
vs. June 30, 2018
|
|
vs. June 30, 2018
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Subscription
|
$
|
155,833
|
|
|
$
|
110,796
|
|
|
$
|
297,439
|
|
|
$
|
213,954
|
|
|
40.6
|
%
|
|
39.0
|
%
|
Product and license
|
140,654
|
|
|
192,058
|
|
|
275,676
|
|
|
352,755
|
|
|
(26.8
|
)
|
|
(21.9
|
)
|
||||
Support and services
|
452,210
|
|
|
439,511
|
|
|
894,725
|
|
|
872,848
|
|
|
2.9
|
|
|
2.5
|
|
||||
Total net revenues
|
748,697
|
|
|
742,365
|
|
|
1,467,840
|
|
|
1,439,557
|
|
|
0.9
|
|
|
2.0
|
|
||||
Cost of net revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of subscription, support and services
|
78,817
|
|
|
67,523
|
|
|
150,245
|
|
|
130,908
|
|
|
16.7
|
|
|
14.8
|
|
||||
Cost of product and license revenues
|
21,878
|
|
|
29,707
|
|
|
47,622
|
|
|
63,579
|
|
|
(26.4
|
)
|
|
(25.1
|
)
|
||||
Amortization of product related intangible assets
|
9,784
|
|
|
11,519
|
|
|
20,085
|
|
|
22,548
|
|
|
(15.1
|
)
|
|
(10.9
|
)
|
||||
Total cost of net revenues
|
110,479
|
|
|
108,749
|
|
|
217,952
|
|
|
217,035
|
|
|
1.6
|
|
|
0.4
|
|
||||
Gross margin
|
638,218
|
|
|
633,616
|
|
|
1,249,888
|
|
|
1,222,522
|
|
|
0.7
|
|
|
2.2
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Research and development
|
134,029
|
|
|
112,943
|
|
|
264,292
|
|
|
211,493
|
|
|
18.7
|
|
|
25.0
|
|
||||
Sales, marketing and services
|
298,429
|
|
|
286,730
|
|
|
573,084
|
|
|
537,943
|
|
|
4.1
|
|
|
6.5
|
|
||||
General and administrative
|
81,162
|
|
|
77,340
|
|
|
158,709
|
|
|
141,067
|
|
|
4.9
|
|
|
12.5
|
|
||||
Amortization of other intangible assets
|
3,205
|
|
|
4,019
|
|
|
6,734
|
|
|
7,685
|
|
|
(20.3
|
)
|
|
(12.4
|
)
|
||||
Restructuring
|
4,311
|
|
|
7,437
|
|
|
7,143
|
|
|
13,624
|
|
|
(42.0
|
)
|
|
(47.6
|
)
|
||||
Total operating expenses
|
521,136
|
|
|
488,469
|
|
|
1,009,962
|
|
|
911,812
|
|
|
6.7
|
|
|
10.8
|
|
||||
Income from operations
|
117,082
|
|
|
145,147
|
|
|
239,926
|
|
|
310,710
|
|
|
(19.3
|
)
|
|
(22.8
|
)
|
||||
Interest income
|
3,870
|
|
|
9,402
|
|
|
13,544
|
|
|
18,133
|
|
|
(58.8
|
)
|
|
(25.3
|
)
|
||||
Interest expense
|
(10,289
|
)
|
|
(20,542
|
)
|
|
(28,322
|
)
|
|
(40,878
|
)
|
|
(49.9
|
)
|
|
(30.7
|
)
|
||||
Other (expense) income, net
|
(3,420
|
)
|
|
(2,537
|
)
|
|
279
|
|
|
(5,549
|
)
|
|
34.8
|
|
|
(105.0
|
)
|
||||
Income before income taxes
|
107,243
|
|
|
131,470
|
|
|
225,427
|
|
|
282,416
|
|
|
(18.4
|
)
|
|
(20.2
|
)
|
||||
Income tax expense
|
13,748
|
|
|
24,637
|
|
|
21,584
|
|
|
31,324
|
|
|
(44.2
|
)
|
|
(31.1
|
)
|
||||
Net income
|
$
|
93,495
|
|
|
$
|
106,833
|
|
|
$
|
203,843
|
|
|
$
|
251,092
|
|
|
(12.5
|
)%
|
|
(18.8
|
)%
|
•
|
Digital Workspace is primarily comprised of our Application Virtualization solutions which include Citrix Virtual Apps and Desktops, our unified endpoint management solutions, which include Citrix Endpoint Management, Citrix Content Collaboration, and Citrix Workspace; and
|
•
|
Networking products, which primarily include Citrix ADC and Citrix SD-WAN.
|
•
|
Customer Success Services, which gives customers a choice of tiered support offerings that combine the elements of product version upgrades, guidance, enablement, support and proactive monitoring to help our customers and our partners fully realize their business goals. Fees associated with this offering are recognized ratably over the term of the contract; and
|
•
|
Hardware Maintenance fees for our perpetual Networking products, which include technical support and hardware and software maintenance, are recognized ratably over the contract term; and
|
•
|
Fees from consulting services related to the implementation of our solutions, 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
|
|
Six Months Ended
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||
|
June 30,
|
|
June 30,
|
|
June 30, 2019
|
|
June 30, 2019
|
||||||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
vs. June 30, 2018
|
|
vs. June 30, 2018
|
||||||||||||
|
(in thousands)
|
|
|
||||||||||||||||||||
Subscription
|
$
|
155,833
|
|
|
$
|
110,796
|
|
|
$
|
297,439
|
|
|
$
|
213,954
|
|
|
$
|
45,037
|
|
|
$
|
83,485
|
|
Product and license
|
140,654
|
|
|
192,058
|
|
|
275,676
|
|
|
352,755
|
|
|
(51,404
|
)
|
|
(77,079
|
)
|
||||||
Support and services
|
452,210
|
|
|
439,511
|
|
|
894,725
|
|
|
872,848
|
|
|
12,699
|
|
|
21,877
|
|
||||||
Total net revenues
|
$
|
748,697
|
|
|
$
|
742,365
|
|
|
$
|
1,467,840
|
|
|
$
|
1,439,557
|
|
|
$
|
6,332
|
|
|
$
|
28,283
|
|
|
June 30, 2019
|
|
December 31, 2018
|
|
2019 compared to 2018
|
||||||
Deferred revenue
|
$
|
1,744,714
|
|
|
$
|
1,834,572
|
|
|
$
|
(89,858
|
)
|
Unbilled revenue
|
484,213
|
|
|
338,463
|
|
|
145,750
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||
|
June 30,
|
|
June 30,
|
|
June 30, 2019
|
|
June 30, 2019
|
||||||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
vs. June 30, 2018
|
|
vs. June 30, 2018
|
||||||||||||
|
(In thousands)
|
||||||||||||||||||||||
Cost of subscription, support and services revenues
|
$
|
78,817
|
|
|
$
|
67,523
|
|
|
$
|
150,245
|
|
|
$
|
130,908
|
|
|
$
|
11,294
|
|
|
$
|
19,337
|
|
Cost of product and license revenues
|
21,878
|
|
|
29,707
|
|
|
47,622
|
|
|
63,579
|
|
|
(7,829
|
)
|
|
(15,957
|
)
|
||||||
Amortization of product related intangible assets
|
9,784
|
|
|
11,519
|
|
|
20,085
|
|
|
22,548
|
|
|
(1,735
|
)
|
|
(2,463
|
)
|
||||||
Total cost of net revenues
|
$
|
110,479
|
|
|
$
|
108,749
|
|
|
$
|
217,952
|
|
|
$
|
217,035
|
|
|
$
|
1,730
|
|
|
$
|
917
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||
|
June 30,
|
|
June 30,
|
|
June 30, 2019
|
|
June 30, 2019
|
||||||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
vs. June 30, 2018
|
|
vs. June 30, 2018
|
||||||||||||
|
(In thousands)
|
|
|
||||||||||||||||||||
Sales, marketing and services
|
$
|
298,429
|
|
|
$
|
286,730
|
|
|
$
|
573,084
|
|
|
$
|
537,943
|
|
|
$
|
11,699
|
|
|
$
|
35,141
|
|
|
June 30, 2019
|
|
December 31, 2018
|
|
2019 Compared to 2018
|
||||||
|
(In thousands)
|
||||||||||
Cash, cash equivalents and investments
|
$
|
593,629
|
|
|
$
|
1,776,700
|
|
|
$
|
(1,183,071
|
)
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 4.
|
CONTROLS AND PROCEDURES
|
ITEM 1.
|
LEGAL PROCEEDINGS
|
ITEM 1A.
|
RISK FACTORS
|
•
|
lost sales, including from disruption of customer relationships;
|
•
|
disruptions in the operation of our business;
|
•
|
harm to our reputation or brand;
|
•
|
negative publicity;
|
•
|
lost trust from our customers, partners and employees;
|
•
|
regulatory enforcement action under the General Data Protection Regulation or other legal authority, which could result in significant fines and/or penalties or injunctive remedies;
|
•
|
individual and/or class action lawsuits, due to, among other things, the compromise of sensitive employee or customer information, which could result in financial judgments against us or the payment of settlement amounts, which would cause us to incur legal fees and costs;
|
•
|
costs associated with responding to, and mitigating, the incident in excess of insurance policy limits, or that may not be covered by insurance;
|
•
|
disputes with our insurance carriers concerning coverage for the costs associated with responding to, and mitigating, the incident; and
|
•
|
longer-term remediation and security enhancement expenses.
|
ITEM 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
|
Total Number
of Shares
(or Units)
Purchased
(1)
|
|
Average Price
Paid per Share
(or Unit)
|
|
Total Number of Shares
(or Units) Purchased as
Part of Publicly
Announced Plans or
Programs
|
|
Maximum Number (or Approximate Dollar
Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs
(In thousands)
(2)
|
||||||
April 1, 2019 through April 30, 2019
|
496,647
|
|
|
$
|
100.78
|
|
|
408,985
|
|
|
$
|
632,889
|
|
May 1, 2019 through May 31, 2019
|
643,716
|
|
|
$
|
96.78
|
|
|
627,249
|
|
|
$
|
572,186
|
|
June 1, 2019 through June 30, 2019
|
563,588
|
|
|
$
|
96.33
|
|
|
563,588
|
|
|
$
|
517,896
|
|
Total
|
1,703,951
|
|
|
$
|
97.80
|
|
|
1,599,822
|
|
|
$
|
517,896
|
|
(1)
|
Includes approximately 104,129 shares withheld from restricted stock units that vested in the second quarter of 2019 to satisfy minimum tax withholding obligations that arose on the vesting of restricted stock units.
|
(2)
|
Shares withheld from restricted stock units that vested to satisfy minimum tax withholding obligations that arose on the vesting of awards do not deplete the dollar amount available for purchases under the repurchase program.
|
ITEM 3.
|
DEFAULTS UPON SENIOR SECURITIES
|
ITEM 4.
|
MINE SAFETY DISCLOSURES
|
ITEM 5.
|
OTHER INFORMATION
|
ITEM 6.
|
EXHIBITS
|
(a)
|
List of exhibits
|
Exhibit No.
|
|
Description
|
|
|
|
10.1*†
|
|
|
|
|
|
10.2*†
|
|
|
|
|
|
10.3*†
|
|
|
|
|
|
10.4*†
|
|
|
|
|
|
10.5*
|
|
|
|
|
|
31.1†
|
|
|
|
|
|
31.2†
|
|
|
|
|
|
32.1††
|
|
|
|
|
|
101.SCH
|
|
Inline XBRL Taxonomy Extension Schema Document
|
|
|
|
101.CAL
|
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
101.DEF
|
|
Inline XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
101.LAB
|
|
Inline XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
101.PRE
|
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
104
|
|
Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101.*)
|
|
|
|
*
|
Indicates a management contract or a compensatory plan, contract or arrangement.
|
†
|
Filed herewith.
|
††
|
Furnished herewith.
|
|
|
|
|
CITRIX SYSTEMS, INC.
|
|
|
|
|
|
By:
|
/s/ JESSICA SOISSON
|
|
|
Jessica Soisson
|
|
|
Interim Chief Financial Officer
|
|
|
(Authorized Officer and Principal Financial Officer)
|
Grant Date
|
Performance Period
|
Performance Metric
|
March 30, 2017
|
January 1, 2017-December 31, 2019
|
Relative TSR (Custom Index Companies)
|
March 30, 2017
|
January 1, 2017-December 31, 2019
|
Relative TSR (Nasdaq Composite Index as of January 2, 2019)
|
August 1, 2017 (granted to David Henshall)
|
July 10, 2017-December 31, 2019
|
Subscription Bookings as a Percentage of Product Bookings
|
August 1, 2017 (granted to David Henshall)
|
July 10, 2017-December 31, 2019
|
Non-GAAP Net Operating Margin
|
August 1, 2017
|
July 1, 2017-December 31, 2019
|
Subscription Bookings as a Percentage of Product Bookings
|
August 1, 2017
|
July 1, 2017-December 31, 2019
|
Non-GAAP Net Operating Margin
|
March 29, 2018
|
January 1, 2018-December 31, 2020
|
Subscription Bookings as a Percentage of Product Bookings
|
February 15, 2019
|
January 1, 2019-December 31, 2020
|
Free Cash Flow/Share Year-over-Year Growth
|
i.
|
your continued employment with the Company through April 26, 2019 (the “Termination Date”),
|
ii.
|
your agreement to provide consulting and transitional support following the Termination Date for a 30-day period ending May 26, 2019, as may be requested by the Company from time to time, which, for the avoidance of doubt, will not require you to report to the Company’s offices, and
|
iii.
|
your signing of a separation and release agreement in substantially the form attached to the Executive Agreement, by and between you and the Company, dated as of February 1, 2018 (the “Executive Agreement”), and the final form of which is attached hereto as Exhibit I (the “Separation Agreement and Release”), and the Separation Agreement and Release becoming irrevocable by its terms,
|
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
|
|
|
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/ JESSICA SOISSON
|
|
|
Jessica Soisson
|
|
|
Interim Chief Financial Officer
|
|
|
(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, as amended; 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/ DAVID J. HENSHALL
|
|
|
David J. Henshall
|
|
|
President and Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
|
|
|
|
By:
|
/s/ JESSICA SOISSON
|
|
|
Jessica Soisson
|
|
|
Interim Chief Financial Officer
|
|
|
(Principal Financial Officer)
|
|
|
|
|