Citrix Q1: Remote Work Drives Growth In Workspace Deployments, Licensing Revenues

Citrix reported better-than-expected first quarter financial results on Thursday buoyed by a surge in demand for its products and services during the novel coronavirus pandemic. The company said it saw growth in both perpetual and subscription licensing as work from home orders were implemented in Q1. 

Core to this growth is Citrix's Workspace Suite, which includes its server and desktop and application virtualization products XenApp, XenDesktop, and XenServer, along with XenMobile mobile-device management tools, ShareFile Enterprise file sync and sharing, and networking. 

The company said it saw a significant increase in Workspace deployments as more people were forced to work remotely and demanded a secure remote work infrastructure. Workspace revenue totaled $654 million, up 27% from a year ago, the company said. 

Broken out, Citrix said product and license revenues rose 28% year over year to $172.8 million. Support and services revenues declined 5% on a year-over-year basis to $418.9 million. Subscription revenues increased 89% from the year-ago period to $268.2 million. Networking revenues increased to $180 million, while networking subscription revenues climbed 131% from the year prior-year period. 

Citrix CEO David Henshall noted on a call with analysts that the company expects to see a lasting impact from the current remote work boom, as businesses realize the cost savings and engagement benefits of a well-connected remote workforce. 

"Once we come out of this, regardless of how long that takes, the expectation is that we'll land in a place that is somewhere between where we are and where we were when it comes to remote work," Henshall said. "Most of the customers that I talk to are realizing a level of productivity benefits, cost savings and employee engagement that they hadn't -- expect and so they're going back and questioning some of their original assumptions, whether that is real estate footprint, travel, attendance at major conferences. And so longer term, I expect that these will -- this environment will continue to be a secular change that's very good for our business."

Elsewhere on the balance sheet, Citrix said net income came to $181.2 million, or $1.42 a share, up from $110.3 million, or 78 cents, during the same quarter a year ago. For 2020, Citrix said it expects adjusted earnings to range from $5.40 to $5.60 a share, with revenue in the range of $3.1 billion to $3.16 billion. Analysts are expecting EPS of $5.39 on revenue of $3.11 billion. Shares of Citrix were down Thursday.