Earnings Call Excerpt
Here’s the entire text of the prepared remarks from Citrix’s (ticker: CTXS) Q3 2005 conference call. The Q&A is in a separate article. We recognize that this transcript may contain inaccuracies - if you find any, please post a comment below and we’ll incorporate your corrections. And please note: this conference call transcript is a Seeking Alpha product, so feel free to link to it but reproduction is not permitted without the explicit permission of Seeking Alpha.
[Jeff Lilly, Senior Manager, Investor Relations]
Thank you, Myles. Good afternoon, everyone, and thank you for joining us. In this call today, we will be discussing Citrix's third quarter 2005 financial results. Participating in the call will be Mark Templeton, President and Chief Executive Officer, and David Henshall, Senior Vice President and Chief Financial Officer. This call is being webcast with slides on the Citrix Investor Relations website, and the slide presentation associated with the webcast will be posted immediately following the call.
[Standard disclaimer omitted]
[David Henshall, Senior Vice President and Chief Financial Officer]
Thank you, Jeff, and good afternoon. Today, I'm pleased to report strong third quarter result of the company, demonstrating solid execution across all four product groups. This was a great quarter for Citrix and really highlight the trends to continue drive our business in additional to provide you some comments in the third quarter results, I'll discuss our current trends in our business, and provide you with an outlook for the fourth quarter and full year 2005. I'll also provide you some early thoughts on the operating model for 2006. Beginning with our financial results, I should note that certain numbers discussed are adjusted figures, please refer to the press release or investor relations website for full reconciliation of adjusted figures, US GAAP figures.
So, let's take a look at our Q3 highlights. Total revenue was $227 million, an increase of 21% over last year. Our GAAP EPS including $7 million write off of in process R&D relating to the acquisition of NetScaler was $0.23, this compares to EPS of $0.22 a year ago. Our adjusted EPS was $0.29 compared to $0.24 last year an increase of 21%, adjusted operating margin was 27% and cash flow from operations was over $76 million. So across the Board really a great quarter. Now I would like to discuss our revenue by product mix and geography as well as our operating performance. Turning to revenue mix, let me first talk about recurring revenue streams. Our online services revenue $26 million in Q3 an increase of 63% over the last year. When normalized for purchase accounting adjustments. The product license update revenue was $85 million, up 20% year-over-year and technical services, which consist of consulting, education and support was $19 million up 30% year-over-year. Finally product license revenue which includes our Access managements, Gateways and Application Networking products was over $97 million in the third quarter. This category grew 10% year-over-year with the major of the growth coming from the Gateways and the application networking groups. Overall we are very happy with the license growth. We are strong despite the fact that a number of anticipated Access re-transactions didn’t close EMEA. A pattern that we have seen all year in this region especially in Germany.
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