Earnings

Citrix earnings: WFH drives a big earnings beat

Demand for remote-work tools drove revenue up 20% year-on-year.

Citrix
  • Q1 revenue: $861 million (+20% YoY,+6.2% QoQ, vs. $733.7 million expected)
  • Q1 earnings: $181.2 million (+65% YoY, -12.5% QoQ, above expectations)
  • Q2 guidance: Citrix expects $760-770 million of revenue in Q2, up from $749 million last year. But it thinks earnings will fall significantly, from $93.5 million in Q2 2019 to $79-86 million this year.

The big number: Citrix pointed to a big increase in annualized recurring revenue, which was up 50% year-over-year. It said subscriptions make up an increasing proportion of its total bookings, offering investors a more stable return.

People are talking: "What used to be perceived as a requirement for a subset of employees has emerged as a mission critical enabler of business continuity," CEO David Henshall said in a letter to investors.

Opportunities: Citrix has been a big beneficiary of remote working, with its tools enabling companies to keep things online. Henshall said the "tailwind can be seen broadly across both perpetual and subscription licensing."

Threats: Though Citrix's leadership team stressed that the hardest-hit sectors of the economy — like restaurants — aren't big clients, it's still vulnerable to an economic downturn: "Customers are putting on hold discretionary projects and are less inclined to 'trade-up' from existing solutions as the economic environment continues to weaken," Henshall wrote.

The power struggle: Citrix thinks (and hopes) this crisis may have catalyzed a permanent change. "We expect business continuity and risk mitigation to rise as areas of importance in boardroom discussions and on IT priority lists," he said, adding that he believes "a greater number of employees will expect to continue to be able to work remotely."

Policy

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Photo: Kent Nishimura / Los Angeles Times via Getty Images

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Sarah Roach

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Joe Williams is a writer-at-large at Protocol. He previously covered enterprise software for Protocol, Bloomberg and Business Insider. Joe can be reached at JoeWilliams@Protocol.com. To share information confidentially, he can also be contacted on a non-work device via Signal (+1-309-265-6120) or JPW53189@protonmail.com.

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Why Google Cloud is providing security for AWS and Azure users too

“To just focus on Google Cloud, we wouldn't be serving our customers,” Google Cloud security chief Phil Venables told Protocol.

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Lizzy Lawrence

Lizzy Lawrence ( @LizzyLaw_) is a reporter at Protocol, covering tools and productivity in the workplace. She's a recent graduate of the University of Michigan, where she studied sociology and international studies. She served as editor in chief of The Michigan Daily, her school's independent newspaper. She's based in D.C., and can be reached at llawrence@protocol.com.

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