Reconciliation of Non-GAAP Financial Measures to Comparable U.S. GAAP Measures
Pursuant to the requirements of Regulation G, the Company has provided a reconciliation of each non-GAAP financial measure used in this earnings release and related conference call, slide presentation or webcast to the most directly comparable GAAP financial measure. These measures differ from GAAP in that they exclude amortization primarily related to acquired intangible assets, stock-based compensation expenses and the related tax effect of those items. The Company's basis for these adjustments is described below.
Management uses these non-GAAP measures for internal reporting and forecasting purposes, when publicly providing its business outlook, to evaluate the Company's performance and to evaluate and compensate the Company's executives. The Company has provided these non-GAAP financial measures in addition to GAAP financial results because it believes that these non-GAAP financial measures provide useful information to certain investors and financial analysts for comparison across accounting periods not influenced by certain non-cash items that are not used by management when evaluating the Company's historical and prospective financial performance. In addition, the Company has historically provided this or similar information and understands that some investors and financial analysts find this information helpful in analyzing the Company's operating margins, operating expenses and net income and comparing the Company's financial performance to that of its peer companies and competitors.Management typically excludes the amounts described above when evaluating the Company's operating performance and believes that the resulting non-GAAP measures are useful to investors and financial analysts in assessing the Company's operating performance due to the following factors:
- The Company does not acquire businesses on a predictable cycle. The Company, therefore, believes that the presentation of non-GAAP measures that adjust for the impact of amortization and certain stock-based compensation expenses and the related tax effects that are primarily related to acquisitions, provide investors and financial analysts with a consistent basis for comparison across accounting periods and, therefore, are useful to investors and financial analysts in helping them to better understand the Company's operating results and underlying operational trends.
- Amortization costs and the related tax effects are fixed at the time of an acquisition, are then amortized over a period of several years after the acquisition and generally cannot be changed or influenced by management after the acquisition.
- Although stock-based compensation is an important aspect of the compensation of the Company's employees and executives, stock-based compensation expense is generally fixed at the time of grant, then amortized over a period of several years after the grant of the stock-based instrument, and generally cannot be changed or influenced by management after the grant.
CITRIX SYSTEMS, INC.
Non-GAAP Financial Measures Reconciliation
(In thousands, except per share and operating margin data - unaudited)
The following tables show the non-GAAP financial measures used in this press release reconciled to the most directly comparable GAAP financial measures.
|Three Months Ended September 30,|
|GAAP operating margin||12.9||%|
|Add: stock-based compensation||6.2||%|
|Add: amortization of product related intangible assets||3.6||%|
|Add: amortization of other intangible assets||1.5||%|
|Non-GAAP operating margin||24.2||%|
|Three Months Ended September 30,|
|GAAP net income||$||78,245||$||92,176|
|Add: stock-based compensation||40,103||24,954|
|Add: amortization product related intangible assets||22,930||14,679|
|Add: amortization of other intangible assets||9,838||4,430|
|Less: tax effects related to above items||(22,934||)||(15,665||)|
|Non-GAAP net income||$||128,182||$||120,574|
Three Months Ended September 30,
|GAAP earnings per share – diluted||$||0.41||$||0.49|
|Add: stock-based compensation||0.21||0.13|
|Add: amortization of product related intangible assets||0.12||0.08|
|Add: amortization of other intangible assets||0.05||0.02|
|Less: tax effects related to above items||(0.11||)||(0.08||)|
|Non-GAAP earnings per share – diluted||$||0.68||$||0.64|
CITRIX SYSTEMS, INC.
Forward Looking Guidance
|For the Three Months Ended||For the Twelve Months Ended|
|December 31,||December 31,|
|GAAP earnings per share - diluted||$0.55 to $0.57||$1.81 to $1.83|
|Add: adjustments to exclude the effects of amortization of intangible assets||
|Add: adjustments to exclude the effects of expenses related to stock-based compensation|
|Less: tax effects related to above items||(0.09) to (0.13)||(0.39) to (0.43)|
|Non-GAAP earnings per share - diluted||$0.83 to $0.85||$2.80 to $2.82|
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