One of the messages that came through from the Q1 results from Citrix was that organisations are struggling to piece together frameworks and strategies around tablets and smartphones, which contributed to a slowdown in sales of the XenDesktop application and desktop virtualization products.
The net result was that although revenue was up 14% to $673m, it was just below market expectations, and net income fell c12% to $60m (R&D and sales and marketing costs went up 19% during the quarter). This is not the first profits stumble it has had – see here. Citrix shares suffered, dropping 7% following the release of the results for the period ending March 31 2013.
With growth of 13% (taking revenue to $137.6m), SaaS revenue outpaced product and licence sales which saw an 8.3% growth rate (to $193.1m). But maintenance revenue was up 19.4% (although it did include some appliance revenue) to $315.7m. Ongoing growth in maintenance revenue indicates that SaaS has still get into its stride across the business as a whole. Certain areas are doing well though such as the GoTo, ShareFile, and related services which were up 14% (GoTo services increased 22%, ShareFile services rose 86%). Surprisingly, the Mobile and Desktop business was only up 5% with licence revenue down 13%, which underlines the issue Citrix says organisations have understanding how to fit mobile devices in to the architecture. The results prove that suppliers need to offer more than technology. The pressure is on to provide more advice and guidance – but that increases the cost of sale.