Citrix Systems (CTXS)
Q1 2012 Earnings Call
April 25, 2012 4:45 pm ET
Eduardo Fleites - Director of Investor Relations
David James Henshall - Chief Financial Officer, Principal Accounting Officer and Executive Vice President of Operations
Mark B. Templeton - Chief Executive Officer, President and Director
Heather Bellini - Goldman Sachs Group Inc., Research Division
Adam H. Holt - Morgan Stanley, Research Division
Philip C. Rueppel - Wells Fargo Securities, LLC, Research Division
Bhavan Suri - William Blair & Company L.L.C., Research Division
Stewart Materne - Evercore Partners Inc., Research Division
Philip Winslow - Crédit Suisse AG, Research Division
Daniel H. Ives - FBR Capital Markets & Co., Research Division
Gregg Moskowitz - Cowen and Company, LLC, Research Division
Steven M. Ashley - Robert W. Baird & Co. Incorporated, Research Division
Kash G. Rangan - BofA Merrill Lynch, Research Division
Walter H. Pritchard - Citigroup Inc, Research Division
Mark L. Moerdler - Sanford C. Bernstein & Co., LLC., Research Division
Brent Thill - UBS Investment Bank, Research Division
Michael Turits - Raymond James & Associates, Inc., Research Division
Edward Maguire - Credit Agricole Securities (USA) Inc., Research Division
Richard G. Sherlund - Nomura Securities Co. Ltd., Research Division
James Derrick Wood - Susquehanna Financial Group, LLLP, Research Division
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Good afternoon. My name is David, and I will be your conference operator today. At this time, I would like to welcome everyone to the Citrix Systems First Quarter 2012 Financial Results Conference Call. [Operator Instructions] I would now like to turn the call over to Mr. Eduardo Fleites, Vice President of Investor Relations. Sir, you may begin your conference.
Thank you, David. Good afternoon, everyone, and thank you for joining us for today's call, where we will be discussing Citrix's first quarter 2012 financial results.
Participating in the call will be Mark Templeton, President and Chief Executive Officer; and David Henshall, Executive Vice President Operations and Chief Financial Officer. This call is being webcast with a slide presentation on the Citrix Systems Investor Relations website. And the slide presentation associated with the webcast will be posted immediately following the call.
Before we begin the review of our financial results, I want to state that we have posted product classification and historical revenue trends related to our product groupings to the Investor Relations page of our website. I'd like to remind you that today's conversation will contain forward-looking statements made under the Safe Harbor provisions of the U.S. Securities laws. These statements are based on current expectations and assumptions that are subject to risks and uncertainties, such as the impact of the global economic climate, uncertainty in the IT spending environment, risks associated with our products, acquisitions and competition. Obviously, these risks could cause actual results to differ from those anticipated.
Additional information concerning these and other factors is highlighted in today's press release and in the company's filings with the SEC, including the risk factor disclosure contained in our most recent annual report on Form 10-K, which is available from the SEC or on the company's Investor Relations website.
Furthermore, we will discuss various non-GAAP financial measures as defined by the SEC's Reg G. A reconciliation of the differences between GAAP and non-GAAP financial measures discussed on today's call can be found at the end of today's press release and on the Investor Relations page of our website.
Now I would like to turn it over to David Henshall, our Chief Financial Officer. David?
David James Henshall
Thanks, Eduardo, and welcome to everyone joining us today. As you see from the release, we continue to have great momentum across the business, delivering total revenue of 20% from last year; adjusted EPS of $0.59 a share; deferred revenue of $23 million, sequentially; and $243 million in cash flow from ops, an increase of 53%.
We're driving market leadership across Desktop Virtualization, delivering powerful new technologies in cloud networking and expanding the breadth of our SaaS products. All trends that could be clearly seen in the results.
From a geographic perspective, the Americas region had revenue growth of 16% from last year, up $252 million. The results within the geo were fairly balanced, with strength coming from both Desktop and NetScaler products. The Americas had 18 individual transactions over $1 million each compared to 11 a year ago, really reflecting the more strategic engagement that we've built with customers. On a vertical basis, only the U.S. federal phase was somewhat uneven.
In EMEA, revenue was up 20% to $160 million. Performance was strong across the region in a number of different geos especially with big deals. The team closed 7 orders over $1 million each at a number of multiyear commitments, including a few very large deals in the government and financial services sector.
And finally, Japan and APAC remained our fastest growing markets, combining for 40% total revenue growth and 48% growth in new product license. These regions are executing really well, and will continue to outpace the rest of the business throughout the year.
So next, let's look at our Q1 results within our primary markets. First, our Desktop Solutions business grew 17% over $338 million including license growth, that was also at 17%. For some context on this business, there's a few metrics that I think really help demonstrate the market adoption we're seeing and the value that customers are placing on Desktop Virtualization within their infrastructure.
In Q1, there were 19 different $1-plus million deals for the Desktop products, representing customers in technology, telecom, government, financial services and other verticals. We transacted with over 3,000 different customers, including 110 deals for more than 1,000 seats of Desktop and 26 deals of more than 5,000 seats, shows an increase of over 50% year-over-year.
New licenses contributed over 90% of the product mix, with the remaining 10% coming from existing customers trading up from XenApp. And while still a modest number in total revenue, we now have over 1,600 cloud service providers delivering several hundred thousand Desktop licenses as a subscription service to their own customers.
So Desktop Virtualization is playing an increasingly prominent role on enterprise IT and serving as an enabling technology to accelerate business imperatives. For example, in Q1, a leading provider of health care IT, a 50,000 XD licenses to further support their hosted services practice, allowing health care providers to concentrate on patient care instead of worrying about IT. Or a large telecom equipment manufacturer with over 100,000 employees worldwide using XenDesktop and NetScaler appliances as a solution to enhance data security at the Desktop. Or a government agency, which purchased 4,000 XD licenses plus some NetScalers to build a computing solution that provide access to multiple isolated secure networks from a singleton client, lowering costs and enhancing security, all while improving productivity. We're increasingly engaging with customers at this level as the conversation has moved from technology to business enablement.