2012 Annual Report to the Most Directly Comparable GAAP Financial Measure
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Citrix Systems, Inc. | Annual Report 201 2 Annual Report 2012 The cloud company that enables mobile workstyles FINANCIAL HIGHLIGHTS Year ended December 31 In thousands, except per share data 2012 2011 2010 Net revenues 2,586,123 2,206,392 1,874,662 Cost of net revenues: Cost of product license revenues 96,962 74,393 66,682 Cost of services and maintenance revenues 227,150 164,465 115,080 Amortization of product related intangible assets 80,025 54,741 50,504 Total cost of net revenues 404,137 293,599 232,266 Gross margin 2,181,986 1,912,793 1,642,396 Operating expenses: Research and development 450,571 380,674 361,376 Sales, marketing and services 1,060,829 885,066 771,660 General and administrative 245,259 213,673 173,394 Amortization of other intangible assets 34,549 16,390 14,279 Restructuring — 24 971 Total operating expenses 1,791,208 1,495,827 1,321,680 Income from operations 390,778 416,966 320,716 Other income, net 19,451 13,531 13,104 Income before income taxes 410,229 430,497 333,820 Income taxes 57,682 74,867 57,379 Consolidated net income 352,547 355,630 276,441 Less: Net loss attributable to non-controlling interest — 692 624 Total net income 352,547 356,322 277,065 Earnings per share - diluted 1.86 1.87 1.46 Weighted average shares outstanding - diluted 189,129 190,641 190,335 $2,586 $1.87 $1.86 $819 $2,206 $1.46 $679 $1,875 $616 2010 2011 2012 2010 2011 2012 2010 2011 2012 Revenue (millions) Earnings Per Share Operating Cash Flow (millions) Annual Report 2012 Citrix Systems, Inc. Mark Templeton President and CEO Fellow shareholders, As we head into 2013, I couldn’t be more excited about the future. Our goal at Citrix has always been to help people experience work and life in harmony. And that vision has never been more relevant than it is today. Every day, our cloud computing technologies help millions of people around the world work better, and live better. Our business at Citrix is singularly focused on making this vision a reality. We believe enabling mobile workstyles is not only good for people, it’s good for business. This vision is clearly resonating with customers as they leverage the synergies we’re realizing across our product families. Like the healthcare providers who use our enterprise mobility solutions to help doctors and nurses spend less time in the office, and more time with patients. The financial services companies who rely on our desktop virtualization technology to deliver unprecedented business agility, while keeping confidential data secure at all times. Or mobile operators, and the more than 2 billion subscribers they serve, who depend on our cloud networking solutions to optimize network efficiency and maximize the user experience of the mobile video and web services they provide. Our growing market relevance is clearly reflected in our business performance. 2012 was a record year across financial, operational and strategic dimensions. Overall revenue was up 17% to $2.59 billion, while non-GAAP earnings per share increased 16% to $2.87. Revenue from our SaaS business, license updates and maintenance, and professional services grew 19%, 20%, and 30% respectively – all helping to increase deferred revenue by 25% to a record $1.2 billion. Later, in the annual report section, you can find a full reconciliation between our non-GAAP and GAAP performance. We’ve never been stronger – financially or strategically. I’m proud of our performance in 2012, and grateful for an amazing team of more than 8,000 employees who delivered impressive results, despite a volatile global environment. Our growth demonstrates the continued momentum we’re seeing in the “new era” markets we serve – fueled by the rise of mobile computing, the emergence of the enterprise cloud, and the build-out of hosted cloud services. In aggregate, our markets are growing three times faster than overall IT spending, with a total addressable opportunity estimated to top $19 billion by 2015. No one is better positioned to take advantage of these trends than Citrix. We’re driving at the intersection of mobile workstyles and cloud services where the rules governing IT are changing in our favor. Annual Report 2012 Citrix Systems, Inc. 1 6751_AnnualReportLetter2012_8.25x10.75in_Final.indd 1 4/3/13 4:10 PM Work is no longer a place. Meetings and workspaces are mobile. Desktops, once considered devices, are increasingly delivered as services from the cloud – giving employees easy access to their apps and data from any laptop, smartphone or tablet. Simplicity is disrupting complexity. The long-held focus on “building and operating” computing systems is rapidly moving to “aggregating and delivering” services from a wide range of sources. For customers, navigating these intersections can be difficult – especially for those burdened by the cost and complexity of legacy systems. IT is no longer exclusively in the decider’s seat. Consumer innovation is driving the shift from the PC as the singular platform for work, to a vast array of devices, apps and data. Increasingly, IT decision-making is being shaped by the forces of BYO, personal cloud services, and a millennial generation with digital ideas about where, when and how work is done. The speed of business is increasing. Keeping pace with these changes can feel overwhelming, even in the best run companies. Through innovation, thought leadership, and a commitment to “any-ness”, Citrix is guiding our customers through this intersection. The business outcomes we’re driving are both tangible and profound: accelerating business innovation; simplifying merger integrations; transforming computing costs; ensuring regulatory compliance; increasing employee productivity; improving talent acquisition and retention; enabling new-age workplace design; and creating greener enterprises. No matter how you look at it, the way people work is changing, driven by an unprecedented convergence of mobile, social, and generational forces. Employees today want to move seamlessly across a diverse mix of devices and locations throughout the day, collaborating with others, and sharing information as they go. And companies want the flexibility to move at the speed of business. At Citrix, we’re committed to helping customers make this transition – with cloud computing products that enable mobile workstyles. It’s an approach that’s better for business, better for IT, and better for people. It’s not just a game changer, it’s a life changer. It’s freedom. And with that freedom, we make a difference. Because we believe when people experience work and life in harmony, companies take off. On behalf of the Board and our employees, we thank you for your support and confidence. Mark Templeton President and Chief Executive Officer 2 Annual Report 2012 Citrix Systems, Inc. 6751_AnnualReportLetter2012_8.25x10.75in_Final.indd 2 4/3/13 4:10 PM UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K (Mark One) x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2012 or o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . Commission File Number 0-27084 CITRIX SYSTEMS, INC. (Exact name of registrant as specified in its charter) Delaware 75-2275152 (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 851 West Cypress Creek Road Fort Lauderdale, Florida 33309 (Address of principal executive offices, including zip code) Registrant’s Telephone Number, Including Area Code: (954) 267-3000 Securities registered pursuant to Section 12(b) of the Act: Common Stock, $.001 Par Value The NASDAQ Stock Market LLC (Title of each class) (Name of each exchange on which registered) Securities registered pursuant to Section 12(g) of the Act: NONE Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes x No o Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No x Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). x Yes o No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in 12b-2 of the Exchange Act. x Large accelerated filer o Accelerated filer o Non-accelerated filer o Smaller reporting company Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).