Citrix released financial results for the second quarter of this year yesterday. I couldn't listen in to the call myself but a contact of mine did and he has given me permission to publicise his synopsis of what was said. Unfortunately I can't name him in person due to compliance issues surrounding his role but I'm sure he will accept my thanks in absentia for the below. (I am going to a wedding in Germany tomorrow so don't have the time to add my own comments today but will do so next week some time.)
Europe was by far the strongest region for the company, and grew revenue 22% versus the year-ago quarter, which outpaced the total 17% growth.
The company did see signs of a weaker economy in Asia Pacific with deals slipping out of the quarter and the same held true for the US.
One of the more important discussions that would relate to your geography is the high likelihood for price increases in Europe to offset the foreign exchange fluctuations. Management didn't provide a whole lot of detail regarding local pricing initiatives, but said details will likely be announced before the end of the quarter. I would be curious to see if this information would help close deals in the pipeline sooner, or push them out indefinitely...
The company's Application Virtualization group was up 7% year-over-year, but there was a slight decline in license revenue offset by solid renewals in subscription advantage contracts. Platinum continued to sell well and was 30% of total Application Virtualization license revenue for the quarter. Sales pipelines were said to be running at unprecedented levels, and they saw a record number of million-dollar deals in the quarter. Going forward the company expects XenApp license growth to be flat for the second-half of the year, which I think is a reflection of a cautious spending environment and also difficult year-over-year comparisons that were driven by price increases in Q2 of 2007. This was previously a segment that management thought would be growing in mid-to-high single digits.
Expectations for XenServer were cut in half. Management reduced expectations from $50M to $25M in 2008 saying that a slower ramp from OEM distribution and slowing economy forced their hand. In 2009, they expect revenues to at least double, so probably around $50M. Management sounded encouraged about the future opportunity, saying that of the 3,100 authorized XenServer partners, 500 contributed to deals in the quarter. They signed 800 new customers, but the majority are still in pilot mode from the sound of it. In Q3, they will be delivering the next release of XenServer focused around 4 key upgrades: 1) high availability; 2) disaster recovery; 3) P to V migration tools; and 4) XenCenter for configuration management.
XenDesktop has had a fairly successful launch - Citrix had 10,000 downloads in the first 30 days, and they already have 2 customers with more than 1,000 seats each. Sounds like many of the beta customers have committed to going live in the second-half.
Application Networking was a huge surprise as it beat expectations across the board. The new NetScaler MPX box accounted for just over 10% of the products shipped, and Enterprise (versus internets) were the biggest buyer. The company also signed a big deal for WANScaler worth over $5 million which helped the division out tremendously.
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