Shares of Citrix (NASDAQ:CTXS) have gotten crushed today, down by 11% as of 2:15 p.m. EDT, after the company reported second-quarter earnings. The results topped analysts' estimates, but investors may have been pricing in higher expectations, as the stock has rallied in recent months.
Revenue in the second quarter increased 7% to $799 million, ahead of the $769.1 million in sales that analysts were modeling for. That translated into adjusted earnings per share of $1.53, also beating the $1.23 per share in adjusted profits that Wall Street was expecting. Subscription annualized recurring revenue (ARR) was $949 million in the second quarter, with subscription bookings representing 76% of total product bookings. The shift to remote work is boosting demand for Citrix's virtualization offerings.
"Citrix has never been more relevant to our customers and our partners," CEO David Henshall wrote in a letter to shareholders. "We are focused and aligned to maximize the opportunity we have to drive continued sustainable growth over the long-term aided by the secular shifts toward remote work, security and employee experience."
Citrix said that it would discontinue sales of new perpetual licenses for Citrix Workspace effective Oct. 1 as part of its ongoing transition to a subscription model. The tech company warned that the move could impact the timing of how license revenue is recognized and reported in the fourth quarter.
Guidance for the third quarter calls for revenue of $750 million to $760 million, with adjusted earnings per share of $1.20 to $1.25. For the full year, revenue is expected to be $3.18 billion to $3.21 billion, with adjusted earnings per share of $5.65 to $5.85.