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Citrix Systems ended fiscal 2011 positively but is not carrying that confidence through to the new year judging by its downbeat outlook for Q1 2012. While Q4 revenue came in at $619m, Q1 is expected to drop back to $555m - $565m.
The company has grown on the success of its XenDesk desktop virtualisation solution and that benefitted from the release of Microsoft Windows 7. Windows 8 is not expected until later this year so we believe this will impact Citrix, hence the lower Q1 2012 forecast. Full year revenue 2012 expectations are running at $2.49bn - $2.51bn compared to 2011 revenue of $2.21bn.
The forecast should not detract from a strong year however as Citrix rode the virtualisation wave alongside VMware (see EMC growth impresses, VMware does even better). Q4 revenue was up 17% to $619m; $2.21bn and an 18% rise for the full year. During Q4 Desktop Solutions (which includes XenDesktop) achieved sales of $369m, a 14% increase. It was good to see SaaS revenues growing strongly at 21% to deliver $114.4m for the quarter. Net income for Q4 was up 16% to $109m. For the full year it rose 28% to $356m.
Our current assessment of Citrix is that it is rightly making the most of the demand for virtualisation. But it has a broader portfolio so should be making more capital out of portfolio sales. It is starting to do this and we feel there is much more potential here.
