2007 Annual Report
Total Page:16
File Type:pdf, Size:1020Kb
Virtualize. Optimize. Citrix Systems, Inc. Collaborate. Deliver. J Transforming the datacenter into a delivery center. 2007 Annual Report 2007 Annual Report Citrix Systems, Inc. 851 Cypress Creek Road Fort Lauderdale, FL 33309 USA J citrix.com 1162351_CSI_Cvr_R262351_CSI_Cvr_R2 1 44/18/08/18/08 110:47:490:47:49 AAMM REVENUE EARNINGS PER SHARE OPERATING CASH FLOW (millions) (millions) CORPORATE INFORMATION $1.14 Citrix Systems, Inc. (Nasdaq:CTXS) is the global leader and the most trusted name in application delivery infrastructure. More $1,392 $0.97 $424 than 215,000 organizations worldwide rely on Citrix to deliver any application to users anywhere with the best performance, $0.93 highest security and lowest cost. Citrix customers include 100% of the Fortune 100 companies and 99% of the Fortune Global $1,134 $329 500, as well as hundreds of thousands of small businesses and prosumers. The Citrix Partner Network has approximately 8,000 $909 $293 partners in more than 100 countries. Annual revenue in 2007 was $1.4 billion. Learn more at www.citrix.com. Corporate Headquarters Online Division Headquarters Silicon Valley Headquarters Ft. Lauderdale, FL, USA Santa Barbara, CA, USA Santa Clara, CA, USA EMEA Headquarters Pacifi c Headquarters Latin America Headquarters 2005 2006 2007 2005 2006 2007 2005 2006 2007 Schaffhausen, Switzerland Hong Kong, China Coral Gables, FL, USA India Development Center Sydney Development Center UK Development Center FINANCIAL HIGHLIGHTS Bangalore, India Sydney, Australia Chalfont, United Kingdom Year ended December 31, (In thousands, except per share data) 2007 2006 2005 STOCKHOLDER INFORMATION Net revenues $ 1,391,942 $ 1,134,319 $ 908,722 Corporate Offi cers Board of Directors Investor Relations Mark B. Templeton Thomas F. Bogan Citrix’s stock trades on the NASDAQ Global President and Chief Executive Offi cer Partner, Greylock Partners Select Market under the ticker symbol CTXS. Cost of revenues Cost of product revenues 42,984 32,911 14,404 John C. Burris Murray J. Demo The Citrix Annual Report and Form 10-K Cost of services revenues 65,027 46,585 26,929 Senior Vice President, Sales and Services Executive Vice President and are available electronically at Amortization of product related intangible assets 29,596 19,202 16,766 Chief Financial Offi cer, LiveOps, Inc. www.citrix.com/annualreport. Brett M. Caine Total cost of revenues 137,607 98,698 58,099 Senior Vice President, Stephen M. Dow For further information about Citrix, Online Services Division General Partner, Sevin Rosen Funds additional copies of this report, Citrix’s Gross margin 1,254,335 1,035,621 850,623 Form 10-K, or other fi nancial information David R. Friedman Asiff S. Hirji without charge, contact: General Counsel and Senior Vice President, Senior Director, TPG Capital, L.P. Operating expenses Human Resources Citrix Systems, Inc. Research and development 205,103 155,331 108,751 Gary E. Morin Attn: Investor Relations Sales, marketing and support 590,409 480,343 394,153 David J. Henshall Former Executive Vice President and 851 W. Cypress Creek Road General and administrative 229,229 178,669 125,425 Senior Vice President and Chief Financial Offi cer Chief Financial Offi cer, Lexmark International, Inc. Fort Lauderdale, FL 33309 United States Amortization of other intangible assets 17,387 16,934 11,622 Peter J. Levine Godfrey R. Sullivan In-process research and development 9,800 1,000 7,000 Senior Vice President, Former President, Hyperion Solution Corp., Tel: +1 954 267 3000 Total operating expenses 1,051,928 832,277 646,951 Virtualization and Management Division a wholly owned subsidiary of Oracle Corp. Tel: +1 800 424 8749 Income from operations 202,407 203,344 203,672 Gordon Payne Mark B. Templeton www.citrix.com/investors Senior Vice President, President and Chief Executive Offi cer, Delivery Systems Division Citrix Systems, Inc. Other income, net 48,501 39,737 20,682 Wes R. Wasson Income before income taxes 250,908 243,081 224,354 Senior Vice President and Chief Marketing Offi cer Income taxes 36,425 60,084 58,745 Transfer Agent and Registrar Independent Registered Annual Meeting of Computershare Trust Company, N.A. Public Accountants Stockholders Net income $ 214,483 $ 182,997 $ 165,609 P.O. Box 43078 Ernst & Young LLP The Annual Meeting of Stockholders Providence, RI 02940-3078 100 Northeast Third Avenue, of Citrix Systems, Inc. will be held Tel: +1 877 282 1168 Suite 700 on May 30, 2008 at 2:00 p.m. Earnings per share - diluted $ 1.14 $ 0.97 $ 0.93 www.computershare.com Fort Lauderdale, FL 33301 4988 Great America Parkway Santa Clara, CA 95054 Weighted average shares outstanding - diluted 187,380 187,725 177,771 United States 1162351_CSI_Cvr_R262351_CSI_Cvr_R2 2 44/18/08/18/08 110:47:490:47:49 AAMM Mark Templeton President and CEO Virtualize. Dear Fellow Stockholders, 2007 was another year of solid growth for Citrix – strategically, operationally, and fi nancially. Our goal is to deliver top notch revenue growth with increasing operating profi t and cash fl ow. We’re reporting revenue of $1.4 billion – up 23% over last year – once again surpassing most of our peers in the soft ware industry who grew an average of 15%. We achieved diluted EPS of $1.14, growing 18% from last year, and cash fl ow from operations was up 29% to a record $424 million. Th e key measure of fi nancial strength – our balance sheet – is stronger than ever and a critical ingredient of our business transformation. Citrix is being rewarded for the pace of product innovation, successful selection of acquisitions, and aggressive expansion of our go-to-market footprint. Citrix products and services are becoming more strategic and relevant every day. In 2007, revenue from our enterprise businesses drove growth across three key metrics: 18% product licensing growth; 19% license update growth; and 28% growth in technical services. And revenue from our Online Services business, mostly with small and medium business customers, was up 44% over last year. Th ese exceptional results demonstrate excellent execution in some of today’s hottest soft ware markets, for virtualization, for application networking and for real-time collaboration. Over the last fi ve years, we’ve achieved top-tier fi nancial performance while creating a solid foundation for sustainable growth. At the same time, we believe our industry has faced the slowest IT spending environment since the personal computer was born. In spite of this, Citrix has grown briskly – an average of 21% revenue growth per year – with a focus on building long-term value, for customers, for employees and for stockholders. Results like this are a credit to Citrix employees, families, and business partners. I’d like to gratefully thank each one of them. Th is kind of business velocity has taught us a lot about strategic transformation. It has taught us that a customer-centric vision is highly valuable, that we must be willing to invest to yield longer-term opportunity, that questioning the status quo creates strength, and that we must not fear the business risks that accompany innovation. Mostly, we’ve learned that we must face change with optimism because it’s a process that has no end – only milestones against which we can measure our trajectory. Driving into the Mainstream I have not seen a year in Citrix history where our products, message, team and strategic foundation are more in the market’s mainstream. Driven by the increased complexity of a growing product line, we entered 2007 with a well-craft ed and well-defi ned plan for go-to-market simplifi cation. Th e main theme of the plan was to better align our products, target customers and selling strategies for medium, large and global enterprises around the world. Th e plan also included growing our share of the real-time collaboration market with small and medium business customers. Th e results speak for themselves. Great execution in 2007 included a rich set of product launches across all the application delivery markets we serve. Th ere are several that were highly impactful. Citrix Systems, Inc. J 2007 Annual Report 1 1162351_CSI_Narr_R1.indd62351_CSI_Narr_R1.indd 1 44/16/08/16/08 33:17:40:17:40 PMPM Optimize. Within our application virtualization product line, we introduced a new version of our fl agship product, Presentation Server 4.5, with valuable new features that redefi ned the state-of-the-art of Windows® application delivery. Th is also included the launch of a brand new “Platinum Edition” of Presentation Server – incorporating Citrix Access Gateway, Password Manager and EdgeSight technologies – off ering our most strategic customers a comprehensive “end-to-end” system. Revenue from this product far exceeded our expectations, amounting to 20% of our product revenue in application virtualization. Our application networking products, led by the NetScaler product line, grew 42% to over $150 million. NetScaler 8.0 – introduced mid-year – is the fi rst web application delivery controller in the industry to integrate web application fi rewall, SSL VPN and end-user experience monitoring to improve the delivery of today’s increasingly complex web applications. We also launched a new “Platinum Edition” of NetScaler, creating an even more robust solution for enterprise web applications. Th e Citrix Access Gateway and WANScaler product lines were enhanced to improve our competitive positions in those markets and to support the Platinum Edition packaging strategy. In 2007, our Online Services products – GoToMyPC, GoToAssist, and GoToMeeting – were all upgraded, to give customers more value and to actively support subscription renewals. Th ese products contributed $214 million in revenue and placed us in the top fi ve Soft ware-as-a-Service (SaaS) providers in the world. Our “online virtualization platform” hosted over 100 million user sessions in 2007, including almost 90% growth in GoToMeeting attendees.