What happened
Shares of Citrix Systems (CTXS) gained 12.8% in October, according to data from S&P Global Market Intelligence. The stock climbed after the software-as-a-service (SaaS) provider announced a new client partner and reported third-quarter earnings.
The company published a press release on Oct. 15 to announce that PPS, a financial and healthcare services company based out of South Africa, would be using Citrix SD-WAN to create its new cloud-based platform. Citrix then published its third-quarter results on Oct. 24, delivering sales and earnings for the period that topped the market's expectations.
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So what
Citrix reported earnings of $1.52 per share on sales of $732.9 million. Profit for the period came in well ahead of the average analyst target for per-share earnings of $1.24, and revenue for the period topped the analyst target by roughly $18 million.
Sales were roughly flat compared with the prior-year quarter, but the company accelerated its transition to a subscription-based business model. Annualized recurring revenue climbed 40% year over year to reach $672 million in the period, and subscription-based bookings for its core Workspace project-management software reached 75% of the product's total revenue -- up from 57% in the prior-year quarter.
Now what
The company expects to post sales between $2.99 billion and $3.01 billion for the current fiscal year and non-GAAP (adjusted) earnings per share between $5.60 and $5.70. The new sales target represented an increase from its previous guidance for full-year revenue to be between $2.97 billion and $3.01 billion. Citrix Systems trades at roughly 19.5 times this year's expected earnings.
Management also provided earnings guidance for the next fiscal year, targeting GAAP profits between $3.34 and $3.54 per share and adjusted EPS between $5.25 and $5.45.
