Citrix Systems Inc (CTXS) Q4 2020 Earnings Call Transcript

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Citrix Systems Inc (CTXS)
Q4 2020 Earnings Call
Jan 21, 2021, 8:15 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Citrix Systems Fourth Quarter 2020 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions]

I would now like to hand the conference over to your speaker today, Ms. Traci Tsuchiguchi. Thank you, and please go ahead, ma'am.

Traci Tsuchiguchi -- Vice President, Investor Relations

Great. Thanks, Katherine. Good morning, and thank you for joining us for today's fourth quarter and fiscal year 2020 earnings call. Participating on the call will be David Henshall, President and Chief Executive Officer; Arlen Shenkman, Executive Vice President and Chief Financial Officer; and Andrew Filev, Founder and CEO of Wrike. Please note that we have posted our fourth quarter earnings letter to our Investor Relations website.

I'd like to remind you that today's conversation will contain forward-looking statements made under the safe harbor provision of the US Securities law. These statements are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ materially from those anticipated. Additional information concerning these and other factors is highlighted in today's earnings letter and in the Company's filings with the SEC. Copies are available from the SEC or on our Investor Relations website.

On this call, we will discuss various non-GAAP financial measures as defined by SEC's Regulation G. A reconciliation of the differences between GAAP and non-GAAP financial measures discussed on today's call can be found at the end of our earnings letter and on the Investor Relations of our website.

Now, I'd like to turn it over to David, our President and Chief Executive Officer. David?

David J. Henshall -- President and Chief Executive Officer

Thanks, Traci. Good morning, and thanks, everyone, for joining us on this earlier-than-expected fourth quarter earnings call. We clearly moved the earnings call up a few days, just given the timing of the announcement of the Wrike transaction.

So, today, though, I'm really pleased to result strong fourth quarter and full-year results. The transformation of Citrix that we initiated a few years back has been really successful. We now have over $1.2 billion in subscription ARR. And importantly, SaaS ARR, which is now $725 million, reaccelerated in the fourth quarter, up nearly 40% year-on-year. What drove this strong growth is our installed base, moving more aggressively to Citrix Cloud. This is a trend that we talked about earlier in the year, started to pick up in Q3, and it really stepped up a lot in the fourth quarter as we continue to demonstrate the value of new technologies and, of course, the TCO benefits and moving to Citrix Cloud.

Our fourth quarter and full-year results, again, exceeded expectations, both on the top and the bottom line. When I step back and reflect on the full-year of 2020 and compare results against the original guidance that we provided at this time last year, our reported revenue came in over $120 million above the midpoint, and EPS was more than $0.60 above the midpoint. We accomplished all this while aggressively transitioning to a subscription model, sunsetting the general availability of the perpetual license option in the Workspace and driving 75% of our total product bookings sold as subscriptions. And this is up from 62% a year ago.

So, now, with the large majority of our business on a subscription model, we're focused on moving even faster in our transition to the cloud. So today's announcement of the agreement to acquire Wrike is really a reflection of this. As a leading cloud-native, collaborative work management platform, Wrike is a natural extension to the functionalities that we deliver through the Citrix Workspace. And the go-to-market leverage opportunities for us are really, really exciting as we go forward. I'm personally very excited to welcome the Wrike team to Citrix, and I'm confident that, together, we're going to deliver great results for our customers and all of our shareholders.

So with that, I'd like to introduce Andrew Filev, the Founder and CEO of Wrike. Andrew?

Andrew Filev -- Founder and Chief Executive Officer of Wrike

Thanks, David, and good morning, everybody. I'd like to echo what David said and express how incredibly excited we are to be joining the Citrix team. This is such an important day for Wrike.

When we started to explore the partnership with Citrix, it became obvious that their combination would allow us to access a much larger base of customers. And we have long-admired Citrix as an industry leader, and we're impressed with what their team has done to help create the digital workspace category.

What might be less obvious is that, Wrike and Citrix share common vision when it comes to the future work, which provides very strong foundation for complementary product strategy. Our cloud solutions provide digital workspace experience that enables teams to access the resources they need to collaborate in the most effective way across any device or location. Not only will the combined company be positioned to deliver the future work, but as part of this, we'll also be able to create unique opportunities to reach new users and unlock new revenue streams. We view this transaction as a win-win for all stakeholders.

And before I turn the call over back to David, I'd like to take a moment to thank the entire Wrike team for getting us to this point. Their dedication and commitment has been and will continue to be critical to our success. I'm personally really excited to be joining Citrix and to work alongside the Citrix and the Wrike teams to execute on the many opportunities in front of us.

Now, let me hand the call back over to David.

David J. Henshall -- President and Chief Executive Officer

Thanks, Andrew. And, of course, huge welcome to you and your entire team.

So, Katherine, with that, why don't we go ahead and open up the call for questions.

Questions and Answers:

Operator

Thank you. [Operator Instructions] And our first question comes from Raimo Lenschow with Barclays. Your line is open.

Raimo Lenschow -- Barclays -- Analyst

Hey. If I may, I might squeeze in two. David, you kind of talked about or -- and we saw it in the shareholder letter as well that the SaaS business started to kind of come out of that low we saw in the first half of the year. The seat count number went up really nicely in Q4. Could you just maybe kind of go a little bit deeper there in terms of what you're seeing there, what kind of do you think drove this, and how sustainable that is?

And then a follow-up then on the Wrike. Like, so how do we have to think about this now in the context of overall Citrix that we're kind of on the beginning of a journey to broaden the portfolio? Is this the last missing piece that you -- that was missing there? Just kind of help us understand the acquisition in a broader context, please? Thank you.

David J. Henshall -- President and Chief Executive Officer

Sure, Raimo. Let me take both of those questions. First off, on the SaaS business. Yeah. Like you said, we saw a nice acceleration of SaaS ARR coming up close to 40% in the quarter. So just to step back a little bit, remind everybody what we've talked about throughout this year. The first half of the year, especially Q1, was really focused on helping customers manage through short-term requirements, the pandemic and everything needed to get their teams to a position where they were safe, secure and able to operate remotely. As we move through Q2, we started talking about refocusing a lot of our efforts back on installed base migration, net new Citrix Cloud. And you saw those results in the third quarter as we stepped up probably 50% improvement over what we had seen in the second quarter and then the further expectation that that would continue to take off in Q4. And that's exactly what happened. We actually exceeded our plan for installed base migration. And we're doing that because customers are really seeing the value, both in terms of the net new technologies that we're bringing to bear across the Citrix Cloud portfolio that allows them to do a number of new things, managing a hybrid infrastructure, optimizing virtual delivery of infrastructure, as well as all of the other capabilities around intelligence and endpoints, etc. We've also demonstrated the TCO benefits of being able to migrate from an on-premise to a cloud solution, working together with great partners like Microsoft and others, bringing down their total cost of ownership pretty substantially. And I think all those messages are resonating, and we expect that to continue into 2021.

So, second question, you're talking about how to think about Wrike overall and how it fits. And so, I think the context there is really important. And so, I think among the top priorities of companies around the world, and you hear this a lot, is really figuring out what work is going to look like once we get into this post-pandemic period. Create an environment, of course, for them that allows them to drive the highest level of productivity out of their teams around the world. And so, one thing that's super clear is that, this hybrid or distributed work model that we've all seen over the last nine months is really here to stay. It's generated a tremendous amount of benefits, and companies are really embracing this as the go-forward.

And so, what we've done, I think, as everyone knows, is provide this digital work platform that securely delivers all of the work resources that people need to be productive, applications, content, business services, etc. And what Wrike brings is a platform for collaborative work management that transforms the way distributed teams operate, making them much more efficient through better visibility, cross-departmental collaboration, automation, etc. So we're really now managing holistically all the complexity at the IT end and all the complexity at the end user end. So we think, together, this is a really powerful combination. And as Andrew says, opening up a number of new revenue opportunities for both the Workspace to drive incremental penetration and also for a stand-alone platform like Wrike to be able to access our hundreds of thousands of customers around the world. So, we think this is a very complete platform at this point in time. Our number one priority right now is making sure that we scale and drive success across this acquisition and integrate the technologies over a period of time. So that's the way you should think about it with the appropriate context.

Raimo Lenschow -- Barclays -- Analyst

Perfect. Thank you. Congratulations.

David J. Henshall -- President and Chief Executive Officer

Thanks, Raimo.

Operator

Thank you. Our next question comes from Phil Winslow with Wells Fargo. Your line is open.

Philip Winslow -- Wells Fargo Securities -- Analyst

Hi. Thanks for taking my question and congrats on the great close to the year. David, just a follow-up on that. Obviously, the subscriber count on Citrix Cloud was also strong again this quarter. Wondering what you -- if you could just give us what you're hearing from customers about sort of their migration to the Cloud and how they're thinking about that potentially accelerating in '21? And then just have one follow-up to that.

David J. Henshall -- President and Chief Executive Officer

Sure, Phil. One of the things that I think has been clear to everyone across the industry over 2020 was that those that have embraced cloud had a much higher ability to adapt rapidly. The agility that cloud brings has allowed companies to respond from a business continuity standpoint through the pandemic, of course, being able to tap in and access new ways of reaching customers and other business partners and, of course, new revenue models. And so, this trend that we had seen even before that just migrated infrastructure to cloud for all the obvious benefits really accelerated. That, of course, is true across the Citrix portfolio as well.

I mean, once -- as I said to Raimo, once people have gotten through the initial push of the pandemic, they could step back, think about what's going to drive their business long term, how do they drive some competitive advantage. And obviously, the agility benefits are one of those drivers. And so, right now, I think that this move for Citrix is only going to accelerate from here. We've seen great success in the second half of the year. We're demonstrating the benefits to customers. And we're reinforcing that, of course, with things that we're doing internally across our innovation portfolio, across compensation structures, etc., to make sure that that continues into '21.

Philip Winslow -- Wells Fargo Securities -- Analyst

Great. And then just a follow-up on the limited-use licenses that you talked about in Q1 and at the very beginning of Q2. Any update on those in terms of if you're seeing it as renew or renew early in Q4 and how are you thinking about Q1?

David J. Henshall -- President and Chief Executive Officer

Yeah. The majority of those, just remind everybody, were put in place so with one-year terms at the very end of Q1 and into Q2. So, a lot of those conversations are just starting right now to have one really good anecdotal data point. One of the world's largest financial services institution's actually decided to early migrate some of their limited-use licenses to Citrix Cloud that resulted in a seven-figure transaction in Q4. So, that's clearly the plan. We're working on that over the first half of this year to migrate those to SaaS as much as possible.

Philip Winslow -- Wells Fargo Securities -- Analyst

Awesome. Thanks, guys. Have a great day.

David J. Henshall -- President and Chief Executive Officer

Thanks.

Operator

Thank you. And our next question comes from Walter Pritchard with Citi. Your line is open.

Walter Pritchard -- Citigroup -- Analyst

Hi. David, just first question on cash flow. I think you put in the letter that you -- the cash flow would be up year-over-year. Wondering if you could just help us understand the shape of cash flow -- free cash flow this year. And then are we still talking about the $10 number in '22? And then I had a follow-up on Wrike.

David J. Henshall -- President and Chief Executive Officer

Sure, Walter. Yeah, as we said in the letter, cash flow per share was up nicely this year, over 30%. We expect it to be up again nicely in 2021. What we have said regarding the Wrike transaction is, there'll be some level of impact on the financials in this year as we work through the normal things, purchase accounting, integration cost, financing, etc. But that will be neutral to our 2022 results, both at the operating line and in cash flow. So we're standing by the $10 number that we put out in terms of 2022. Don't expect any change to that.

Walter Pritchard -- Citigroup -- Analyst

Great. And then on Wrike, I guess, how would you characterize or compare this to -- in the past, Citrix has undergone more transformational M&A and maybe with some mixed results. How should we think about just the approach and the outcomes you're looking for here versus how you thought about larger M&A in the past?

David J. Henshall -- President and Chief Executive Officer

Walter, this is a very synergistic transaction when we step back and we think about it. Like I described earlier to Phil's question, being able to manage the needs of distributed teams in the world right now is a critical driver for a lot of businesses. And bringing together the Citrix platform, which I think everybody knows, is distributing all of those IT-focused work resources, giving people the tools and the access and the ability to securely work from anywhere is critical. The right platform essentially manages the exact same complexity for all of these distributed teams when it comes to a platform for work. And so, bringing these together gives us a truly holistic and differentiated solution.

So, we're looking at this across a couple of different dimensions, opening up revenue opportunities for both independent product lines, if you will, but more importantly, bringing together a holistic approach to managing distributed teams. And I think that's one of the buying triggers that we have heard listening to our customers about what it would take to drive penetration of the Workspace more broadly across their enterprises and managing these distributed teams, driving end user productivity is one of those buying triggers. So a lot of this is listening to customers and responding to their needs and where they're trying to drive their businesses in the future.

Walter Pritchard -- Citigroup -- Analyst

Okay. Thank you, David.

Operator

Thank you. And our next question comes from Brent Thill with Jefferies. Your line is open.

Brent Thill -- Jefferies -- Analyst

Good morning. David, just on the demand profile. I'm just curious if you could give us a sense of the excitement you're seeing. If you go back to -- when the pandemic started and the excitement that was around your solution, how would you put that and frame it relative to what you're seeing today and maybe frame the first half versus second half of this year?

And just as a follow-up, I wanted to ask about Americas. It decelerated in the fourth quarter from the third quarter in terms of growth. Is that just the transition to subscription or is there something else going on inside that Americas number?

David J. Henshall -- President and Chief Executive Officer

Yeah. Brent, let me take the second question first, in the Americas business. The Americas is the geo that have led the initial push to subscription and, frankly, the initial push to SaaS. And so, they've just got a higher level of mix in that respect. And that's what's driving the recognized revenue change. If I step back and I look at the Americas bookings, total bookings were up in the low-double digits for the full-year. So that business is strong, and it's just a matter of working through the model transition.

When I think about the full-year, though, I think it's pretty consistent with everything that we have said over the last three or four quarters. The first quarter of the year was really focused on just getting teams productive, getting them secure, getting them available to work at home. Second quarter was a little bit more of fixing the mistakes that customers made in the first quarter is the rush. Things like replacing VPN solutions, maybe making sure they had the appropriate level of security in the infrastructure and just ensuring that things were working effectively.

And then the second half of the year started to move more toward the future, what do they want their businesses to look like on a long-term basis, whether that was revenue models, overall transformation or, in most cases, talking about the workforce. And this is where this concept of a distributed workforce has really come home. I mean, you're seeing now that two-thirds or more of organizations are planning on embracing a much more distributed or remote workforce going forward for the obvious benefits. It drives higher engagement, drives higher productivity, lower turnover, all these great quantifiable benefits for companies. And so, that becomes a nice tailwind for us. What we do is help manage a lot of these distributed teams, making them more effective, making them more productive. And I think that that's where a lot of the customer conversations are right now, bigger transformational projects, thinking about where they're going in the future. And fortunately, the workforce and distributed teams is a large part of that.

Brent Thill -- Jefferies -- Analyst

Thanks.

Operator

Thank you. Our next question comes from Matt Hedberg with RBC Capital Markets. Your line is open.

Matthew Hedberg -- RBC Capital Markets -- Analyst

Great. Thanks. Hey. David, I guess, piggyback on some of these questions. We are hearing better data points on just enterprise spending in general, I think your results would echo that. Just at a high-level, how are CIOs prioritizing enterprise spending? Post-COVID, the vaccine is obviously rolling out globally here, maybe at a slower pace, but what are those conversations like at this point of the cycle?

David J. Henshall -- President and Chief Executive Officer

Matt, I think they're constructive conversations. I mean, we're talking about large transformational-type projects. We don't really break out seven-figure deals anymore. It's a little less relevant in a subscription world. But if I was to think about it through that lens, we probably had a record number of larger transactions than I certainly remember in a long time, and I think that's just reflective of the types of projects that people are willing to engage in. There's certainly been a different level of scrutiny over transformation. It's obviously got a lot of elements of security, compliance, regulation, distributed work productivity. I mean, things that are pretty tangible and very, very focused, but certainly, marrying that with migrations to cloud and other parts of infrastructure that just allows them to be more resilient, more focused. That's why I would characterize most of the conversations. They are big and transformational at this point in time, and fortunately, we play a good part of that.

Matthew Hedberg -- RBC Capital Markets -- Analyst

That's great. And then, I guess, either for yourself or Andrew, could you talk a bit more about the competitive dynamic here for Wrike? Obviously, there is a lot of stand-alone players in the market, but also Microsoft, and you guys have a great partnership with those guys. Does this increase the competitive dynamic with them a bit more? Just sort of curious on both those angles.

David J. Henshall -- President and Chief Executive Officer

Now, let me -- Matt, let me just take the first part of that and then ask Andrew to jump in. So, I mean, there are a number of differences across the collaborative work management players. And I'll ask Andrew to talk about why Wrike wins and why they've been able to really separate themselves from the pack. And also when it comes to Microsoft, not only the incredible partnership that we've had over all these years, but Andrew can talk about the partnership that he and his team have built with Microsoft at the same time. So, I think that's actually opens up more opportunities for us to continue to drive integration, both across really the entire Workspace Suite right now.

So, Andrew, why don't you fill in the blanks on some of the competitive dynamics?

Andrew Filev -- Founder and Chief Executive Officer of Wrike

Yeah. So, competitively, we are -- we -- sorry, so on the competitive landscape, we focus on the work management side as opposed to communications. And in the work management, we lead the business products. So, we have the most versatile and intelligent work management platform that is capable of offering very part of our functionality, at the same time, in the package that's very user accessible. That allows us to both combine very large customers in our platform but also enable an easy access, and that's returned by experience that leads to the global penetration.

When it comes to enterprise capabilities, we pride ourselves on security, which is actually a great fit with specifics. We've got heavy focus on security, including some very innovative features on the platform that differentiate us and allow us to sell our solution to security-sensitive customers like financial institutions. We are also proud of ourselves in the core work management and collaboration capabilities, able to provide advanced and sophisticated functionality like resource management to our customers. So really have that complete product package that allows us to win over the deals in upmarket and enterprise.

And when it comes to Microsoft, they're great partner. As you know, they're putting heavy capital emphasis in Teams right now as their communication platform and trying to win that market as their companies are switching to remote and distributed works. And we have an amazing and innovative product integration with Teams and a good partnership with Microsoft to market together.

Matthew Hedberg -- RBC Capital Markets -- Analyst

Thanks, guys. Congrats on the deal.

David J. Henshall -- President and Chief Executive Officer

Thank you.

Operator

Thank you. Our next question comes from Karl Keirstead with UBS. Your line is open.

Karl Keirstead -- UBS -- Analyst

Thank you. Maybe a couple for Arlen. Maybe I'll ask both at the same time. Arlen, the mix between SaaS subscription or term license can have a big impact on reported financials. So I'm just wondering whether you have any updated views as to what that mix might look like in Q1 '21 and calendar '21 that informs your revenue guidance.

And then the second question is really around the SaaS revenue line, which decelerated in the fourth quarter despite the fact that SaaS ARR accelerated nicely. I'm wondering if that's just a timing issue. Thank you.

Arlen Shenkman -- Executive Vice President and Chief Financial Officer

Yeah. Karl, I think that's right. I mean, on the second part of that, it is a timing issue. I mean, if you look -- as Dave and I have consistently been talking about, when you look at the transitions, we started to hit our stride in the third quarter and really came out of the year with a strong return on our cloud transition business, which is obviously having that 39% growth rate, about 300 basis points up on the transition.

And then as we said in the guidance, I mean, we're at about 50% of our revenue in subscription, and we expect the mix for the year to be between 50% and 60%. And we'll start to think about that more specifically as we guide through the quarters, we get more comfortable with it. But what we're going to do, Karl, is we're going to, at some point in the first half of this year, have an Investor Day and start to really give you guys a little bit more finer point around some of this mix in the business so that we can sit down, and just like we did last year, have a much more detailed granular view of how we see the transition and where we are in the transition rather than trying to do that on a quarter-by-quarter basis, but to give a little -- a better view of the long-term nature of the business.

Karl Keirstead -- UBS -- Analyst

Got it. And Arlen, maybe if I could ask a follow-up just broadly on capital allocation. Over the last couple of years, buybacks have been a reasonably important driver, at least, of the bottom line. It feels like with the Wrike deal that buybacks in calendar '21 are certainly going to fall down the priority list. Do you mind just framing whether that's, in fact, the case?

Arlen Shenkman -- Executive Vice President and Chief Financial Officer

Yeah. I think the way to think about it, Karl, as I'm sure you noticed, we increased our dividend today. So we stand by strongly our dividend. We'll continue to make purchases to address any dilutive impacts from equity issuances. But, obviously, we think that our capital spent on investing and creating the category and driving growth in our business is better spent with an acquisition like Wrike at this point, but we still stand by our share repurchase program, and we'll sure address the dilution.

Karl Keirstead -- UBS -- Analyst

Okay. Got it. Thank you, Arlen.

Arlen Shenkman -- Executive Vice President and Chief Financial Officer

You're welcome.

Operator

Thank you. Our next question comes from Sanjit Singh with Morgan Stanley. Your line is open.

Sanjit Singh -- Morgan Stanley -- Analyst

Thank you for taking the question and congrats on the 4Q results. David, I was wondering if you could get sort of an update on how much of the maintenance base has transitioned over to cloud. I think entering last year, we're sort of at 7% or 8%. As we enter 2021, is there any way you can update that number?

Secondly, on Wrike, what has been some of the lessons learned in some of the Company's past efforts on the Teams collaboration space? I'm thinking of ShareFile, that used to be a high-growth market, ended up not being as high-growth as many thought. Both for the market and for you guys, any sort of lessons learned there as you look to scale the Wrike business? Thank you.

David J. Henshall -- President and Chief Executive Officer

Yeah. Sanjit, let me take second part of that question. I think that like all markets, they obviously go through a level of evolution. And as you said, for file sync and share, we grew that business dramatically for many years in the independent category, that over time decided that it was better serving our customers to integrate those core capabilities into the Workspace to not only focus on providing a storage option, of course, but really a control plane or a platform to allow people to access files regardless of where they reside, whether it's in one of the more popular cloud storage repositories or whether that's on-premise. So it really becomes an integrated service delivery part of the platform. For us, it's a incremental capabilities, but also a broad differentiator.

So, I think we'll just wait and see how the markets evolve over a many year period of time. The collaborative work management market right now is multi-billion dollars in nature. It's growing at a very rapid clip, and it has the -- certainly, potential to show extreme growth in this business for many, many years. But as you would imagine, we always just stay very focused on what our customers are asking for, how we differentiate and defend our portfolio position, and we'll continue to invest behind that.

Can you repeat the first part of your question?

Sanjit Singh -- Morgan Stanley -- Analyst

Yeah. No, happy to. Yeah. Just what percentage of the maintenance space has transitioned over to Citrix Cloud? I think I recall, early last year, we were talking about approximately 7% to 8% of the base had moved over. Just wanted -- looking for an update on that number.

David J. Henshall -- President and Chief Executive Officer

Yeah. In terms of overall installed base, two things are important. One thing to keep in mind is that, the denominator keeps growing pretty aggressively. I mean, we have been expanding that opportunity throughout this year and growing the Workspace faster than ever before. So, it's a little bit of a moving target. It's one of those metrics that we'll update at our Analyst Meeting, talk about it with more context. But it's probably north of 10% now. I mean, it continues to be higher. It's just -- even though the base is getting bigger. As Arlen and I have both said in a couple of these comments, we've just been really focused over the back half of the year on migrating the installed base to cloud. We've seen great success with that, and it's going to be a focus area for us going into '21.

Sanjit Singh -- Morgan Stanley -- Analyst

Appreciate it, David. Thank you.

Operator

Thank you. Our next question comes from Kirk Materne with Evercore ISI. Your line is open.

Kirk Materne -- Evercore ISI -- Analyst

Hey, guys. Thanks and congrats on the quarter. Just a question on Wrike, David. I think within your letter, you talked about Citrix has traditionally been selling into the IT and security departments, whereas Wrike has been selling into line of businesses. I realize you're going to keep Wrike essentially stand-alone for now. But how are you thinking about sort of go-to-market longer-term now that you have the ability to sort of talk across all the entire corporation? Does that change what you're thinking about, at least in the near-term or maybe the long-term? And then just one quick follow-up on this as well.

David J. Henshall -- President and Chief Executive Officer

Yeah. Kirk, it gives us a lot of optionality and really opens up the aperture. As I think everybody knows, we have historically sold into IT or the CIO as kind of the initial entry point for the Citrix Workspace. And over time, one of the buying triggers that we have seen for driving incremental penetration has been to broaden out those buying centers to work with line of businesses, to address a larger set of issues, address -- focused on end user productivity, etc., and that fits perfectly with how Wrike has built their business, selling into lots of line of businesses, as well as IT.

As you'd imagine, as the product and the platform go from departments to divisions to corporations, so that obviously brings in IT as part of the process. And so, we look at it as, again, an opportunity to broaden the go-to-market for Wrike as an individual product, but also for the Workspace, continuing to drive higher and higher penetration. So, I think we're very optimistic about right out of the gate, opening up our 10,000 strong partner channel network, hundreds and hundreds of direct sellers on our side, 400,000 relationships with IT and CIOs around the world as an ability to accelerate this business.

Kirk Materne -- Evercore ISI -- Analyst

Okay. And then just in terms of customer overlap, obviously, you all are kind of everywhere. I think Wrike has 20,000 or so customers. Just what are you seeing within the customers that maybe have had both Citrix and Wrike installed already, if some of the benefits they've gotten there? Are -- any, I guess, thoughts you've had in terms of the synergies from a technology perspective? I realize it's early days on how much due diligence you've done on that to a degree, but I was just kind of curious if you had any high-level thoughts on sort of the technology integration and what people are doing with the combined products already?

David J. Henshall -- President and Chief Executive Officer

Yeah. Kirk, it is pretty early, but I'd say the largest Wrike customers are, of course, Citrix customers. And we have that benefit of being able to deliver mission-critical IT infrastructure for a long time now to most medium and large businesses around the world. And so, again, that's one of the reasons why we see this as very synergistic. What we're seeing is that, we help manage the delivery of IT infrastructure to a lot of these teams. Increasingly, we've been working on areas of workflow automation and integration and things that start moving us much closer to the end user. And that's received a lot of great response from our traditional customer. It's one of the reasons why pushing even further toward end user productivity, end user engagement, managing these distributed teams, as we will do with Wrike, is synergistic. It's just the way people are choosing to work more and more in the future. And these two product platforms, bringing that together, gives us that ability to solve these problems uniquely and holistically.

Kirk Materne -- Evercore ISI -- Analyst

Great. Thank you.

Operator

Thank you. [Operator Instructions] Our next question comes from Farhad Wallaji [Phonetic] with Bernstein. Your line is open.

Farhad Wallaji -- Sanford C. Bernstein & Co. -- Analyst

Hi. Good morning. David, one quick question. Now that some -- now that perpetual license is behind us, do you have a preference for selling term versus cloud license -- cloud subscription?

And second question is, if cloud is something that you prefer, how do you incentivize customers to choose between term and cloud? That's it. Thank you.

David J. Henshall -- President and Chief Executive Officer

Sure. Yes, I'd say, the clear preference is to sell cloud, which is a SaaS license and move our customers to Citrix Cloud. On-premise term is, I think of that as a bridge license for those customers that are not quite ready to move to cloud for whatever reasons. We incentivize that in two ways. One is by demonstrating to customers the value of cloud. And those are things that I've talked about earlier, lots of incremental capabilities, TCO savings and many things that we can talk about from a business point of view. Internally, when you talk about incentives, yes, we tweak our own internal incentives to make sure that our field sellers are incented to sell cloud, net new customers, as well as installed base migration. And frankly, we're rolling out some of that more broadly across the Company to make sure that throughout all of Citrix, we're very much focused on customer success, active use, migrating customers to cloud, etc. So, I'd say, it's a very holistic approach.

Farhad Wallaji -- Sanford C. Bernstein & Co. -- Analyst

Got it. Thank you.

Operator

Thank you. And there's no other questions in the queue. I'd like to turn the call back to David Henshall, President and CEO, for closing remarks.

David J. Henshall -- President and Chief Executive Officer

Okay. Great. So, thank you, again, everybody, for joining us this morning. I'd like to leave you with just a few closing thoughts. First is, we're clearly gaining traction in the transition of our installed base in the cloud as we've been forecasting throughout the year, and we expect this to continue into 2021. Second is that, our announced acquisition of Wrike really accelerates our strategy and is expected to be neutral to 2022 non-GAAP earnings and cash flow while accelerating revenue growth. And finally, the secular trends toward distributed hybrid work, again, that we've talked about throughout the year, should provide a nice healthy tailwind to both our organic and our combined businesses in the future. That's why we're very excited about '21 and excited about Citrix.

So with that, I look forward to speaking with many of you throughout the quarter. Have a great day.

Operator

[Operator Closing Remarks]

Duration: 36 minutes

Call participants:

Traci Tsuchiguchi -- Vice President, Investor Relations

David J. Henshall -- President and Chief Executive Officer

Andrew Filev -- Founder and Chief Executive Officer of Wrike

Arlen Shenkman -- Executive Vice President and Chief Financial Officer

Raimo Lenschow -- Barclays -- Analyst

Philip Winslow -- Wells Fargo Securities -- Analyst

Walter Pritchard -- Citigroup -- Analyst

Brent Thill -- Jefferies -- Analyst

Matthew Hedberg -- RBC Capital Markets -- Analyst

Karl Keirstead -- UBS -- Analyst

Sanjit Singh -- Morgan Stanley -- Analyst

Kirk Materne -- Evercore ISI -- Analyst

Farhad Wallaji -- Sanford C. Bernstein & Co. -- Analyst

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