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 Citrix Reports Fourth Quarter and Fiscal Year Financial Results
   Wednesday, January 27, 2016 4:05:01 PM ET

--Quarterly GAAP operating margin of 12 percent; non-GAAP operating margin of 32 percent

--Quarterly GAAP diluted EPS of $0.84; non-GAAP diluted EPS of $1.66

--Record annual cash flow from operations of $1.03 billion

--Board of directors authorizes $400 million increase to share repurchase program

Citrix Systems, Inc. (CTXS ) today reported financial results for the fourth quarter and fiscal year ended December 31, 2015.

Financial Results

For the fourth quarter of fiscal year 2015, Citrix achieved revenue of $905 million, compared to $851 million in the fourth quarter of fiscal year 2014, representing 6 percent revenue growth. For fiscal year 2015, Citrix reported annual revenue of $3.28 billion, compared to $3.14 billion for fiscal year 2014, a 4 percent increase.

GAAP Results

Net income for the fourth quarter of fiscal year 2015 was $131 million, or $0.84 per diluted share, compared to $95 million, or $0.58 per diluted share, for the fourth quarter of fiscal year 2014. Net income for the fourth quarter of fiscal year 2015 includes impairment charges of $58 million related to certain intangible assets, which are included in amortization of product related and other intangible assets. In addition, net income for the fourth quarter of fiscal year 2015 includes restructuring charges of $38 million for severance and facility closing costs related to the 2015 restructuring programs and $6 million in separation costs associated with the previously announced spin-off of the GoTo business. Net income for the fourth quarter of fiscal year 2015 also includes net tax benefits of $25 million, or $0.16 per diluted share, primarily related to the extension of the 2015 federal research and development tax credit and a change in the mix of income between U.S. and foreign operations driven by the impairment of certain intangible assets.

Annual net income for fiscal year 2015 was $319 million, or $1.99 per diluted share, compared to $252 million, or $1.47 per diluted share for fiscal year 2014. Annual net income for fiscal year 2015 includes impairment charges of $123 million related to certain intangible assets, which are included in amortization of product related and other intangible assets. In addition, annual net income for the fiscal year 2015 includes a restructuring charge of $100 million for severance and facility closing costs related to the 2015 restructuring programs. Net income for fiscal year 2015 also includes net tax benefits of $21 million, or $0.12 per diluted share, primarily related to the closing of audits with the IRS for certain tax years during the second quarter of fiscal year 2015. Results for fiscal year 2014 included impairment charges of $60 million related to certain intangible assets, which are included in amortization of product related and other intangible assets, a charge of $21 million related to a patent lawsuit, as well as a restructuring charge of $20 million for severance costs related to a restructuring program implemented in the first quarter of 2014. In addition, net income for fiscal year 2014 included net tax benefits of $9 million, or $0.05 per diluted share, primarily related to the closing of audits with the IRS for certain tax years.

Non-GAAP Results

Non-GAAP net income for the fourth quarter of fiscal year 2015 was $259 million, or $1.66 per diluted share, compared to $180 million, or $1.10 per diluted share for the fourth quarter of fiscal year 2014. Non-GAAP net income for the fourth quarter of fiscal year 2015 includes net tax benefits of $25 million, or $0.16 per diluted share. Non-GAAP net income for the fourth quarter of fiscal year 2015 and 2014 excludes the effects of amortization of acquired intangible assets, stock-based compensation expense, amortization of debt discount, restructuring charges, and the tax effects related to these items. Non-GAAP net income for the fourth quarter of fiscal year 2015 also excludes separation costs associated with the previously announced spin-off of the GoTo business and the tax effect related to this item.

Annual non-GAAP net income for fiscal year 2015 was $695 million, or $4.34 per diluted share, compared to $565 million, or $3.30 per diluted share for fiscal year 2014. Annual non-GAAP net income for fiscal year 2015 includes net tax benefits of $21 million, or $0.12 per diluted share. Annual non-GAAP net income for fiscal year 2014 included net tax benefits of $9 million, or $0.05 per diluted share. Annual non-GAAP net income for fiscal year 2015 and 2014 excludes the effects of amortization of acquired intangible assets, stock-based compensation expenses, amortization of debt discount, the effect of a patent lawsuit, restructuring charges, and the tax effects related to these items. Annual non-GAAP net income for the fiscal year 2015 also excludes separation costs associated with the previously announced spin-off of the GoTo business and the tax effect related to this item.

In addition to quarterly financial results, Citrix also announced that its Board of Directors has authorized it to repurchase up to an additional $400 million of its common stock. As of December 31, 2015, approximately $33 million remained for repurchases from previous authorizations.

"I’m pleased with our progress in the fourth quarter," said Bob Calderoni, executive chairman for Citrix. "We saw strong topline growth, improvement in the bottom-line, and we made solid progress in simplifying and focusing our resources on our strategic products. While there is still much work to do, we are moving in the right direction.

"I am excited that we have secured such an experienced product and business leader as Kirill to build on this positive momentum. I look forward to supporting Kirill and the Citrix leadership team to continue to advance this focused strategy."

Recently appointed president and CEO for Citrix, Kirill Tatarinov, said: "I am very excited to be part of Citrix. We have an amazing opportunity ahead of us. And a solid and focused plan in place to capitalize on key market trends and drive sustained profitable growth. I look forward to leading the next chapter in Citrix’s growth story and create even greater value for our customers, partners, and employees."

Q4 Financial Summary

In reviewing the results for the fourth quarter of fiscal year 2015 compared to the fourth quarter of fiscal year 2014:

-- Product and license revenue increased 5 percent;

-- Software as a service revenue increased 15 percent;

-- Revenue from license updates and maintenance increased 7 percent;

-- Professional services revenue, which is comprised of consulting, product training and certification, decreased 24 percent;

-- Net revenue increased in the Americas region by 11 percent, increased in the EMEA region by less than 1 percent, and decreased in the Pacific region by 13 percent;

-- Deferred revenue totaled $1.65 billion as of December 31, 2015, compared to $1.56 billion as of December 31, 2014, an increase of 6 percent; and

-- Cash flow from operations was $282 million for the fourth quarter of fiscal year 2015, compared with $190 million for the fourth quarter of fiscal year 2014.

During the fourth quarter of fiscal year 2015:

-- GAAP gross margin was 78 percent. Non-GAAP gross margin was 86 percent, excluding the effects of amortization of acquired product related intangible assets and stock-based compensation expense;

-- GAAP operating margin was 12 percent. Non-GAAP operating margin was 32 percent, excluding the effects of amortization of acquired intangible assets, stock-based compensation expense, costs associated with the restructuring programs and separation costs related to the previously announced spin-off of the GoTo business; and

-- The company received 4.3 million shares from repurchases at an average price of $73.84.

Annual Financial Summary

In reviewing the results for fiscal year 2015 compared to fiscal year 2014:

-- Product and license revenue decreased 3 percent;

-- Software as a service revenue increased 12 percent;

-- Revenue from license updates and maintenance increased 7 percent;

-- Professional services revenue, which is comprised of consulting, product training and certification, decreased 16 percent;

-- Net revenue increased in the Americas region by 5 percent, increased in the EMEA region by 1 percent, and decreased in the Pacific region by 7 percent; and

-- Cash flow from operations was $1.03 billion for fiscal year 2015 compared with $846 million for fiscal year 2014.

During the year ended December 31, 2015:

-- GAAP gross margin was 81 percent. Non-GAAP gross margin was 85 percent, excluding the effects of amortization of acquired product related intangible assets and stock-based compensation expense;

-- GAAP operating margin was 11 percent. Non-GAAP operating margin was 26 percent, excluding the effects of amortization of acquired intangible assets, stock-based compensation expense, costs associated with the restructuring programs, and separation costs related to the previously announced spin-off of the GoTo business; and

-- The company received 11.4 million shares from repurchases at an average price of $70.38.

Financial Outlook for Fiscal Year 2016

Citrix management expects to achieve the following results at the consolidated level for the fiscal year ending December 31, 2016:

-- Net revenue is targeted to be in the range of $3.31 billion to $3.32 billion.

-- GAAP diluted earnings per share is targeted to be in the range of $2.50 to $2.60. Non-GAAP diluted earnings per share is targeted to be in the range of $4.65 to $4.75, excluding $1.27 related to the effects of stock-based compensation expenses, $0.53 related to the effects of amortization of acquired intangible assets, $0.19 related to restructuring charges, $0.21 related to the effects of amortization of debt discount, $0.71 related to separation costs associated with the previously announced spin-off of the GoTo business and $0.66 to $0.86 for the tax effects related to these items.

Financial Outlook for First Quarter 2016

Citrix management expects to achieve the following results at the consolidated level for the first quarter of fiscal year 2016 ending March 31, 2016:

-- Net revenue is targeted to be in the range of $785 million to $790 million.

-- GAAP diluted earnings per share is targeted to be in the range of $0.28 to $0.31. Non-GAAP diluted earnings per share is targeted to be in the range of $0.91 to $0.93, excluding $0.31 related to the effects of stock-based compensation expenses, $0.14 related to the effects of amortization of acquired intangible assets, $0.15 related to restructuring charges, $0.05 related to the effects of amortization of debt discount, $0.17 related to separation costs associated with the previously announced spin-off of the GoTo business and $0.17 to $0.22 for the tax effects related to these items.

The above statements are based on current targets. These statements are forward-looking, and actual results may differ materially.

Fourth Quarter Earnings Conference Call

Citrix will host a conference call today at 4:45 p.m. ET to discuss its financial results, quarterly highlights and business outlook. The call will include a slide presentation, and participants are encouraged to listen to and view the presentation via webcast at http://www.citrix.com/investors .

The conference call may also be accessed by dialing: (888) 799-0519 or (706) 634-0155, using passcode: CITRIX. A replay of the webcast can be viewed for approximately 30 days on the Investor Relations section of the Citrix corporate website at http://www.citrix.com/investors .

About Citrix

Citrix (CTXS ) is leading the transition to software-defining the workplace, uniting virtualization, mobility management, networking and SaaS solutions to enable new ways for businesses and people to work better. Citrix solutions power business mobility through secure, mobile workspaces that provide people with instant access to apps, desktops, data and communications on any device, over any network and cloud. With annual revenue in 2015 of $3.28 billion, Citrix solutions are in use at more than 400,000 organizations and by over 100 million users globally. Learn more at www.citrix.com.

For Citrix Investors

This release contains forward-looking statements that are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933 and of Section 21E of the Securities Exchange Act of 1934. The forward-looking statements in this release do not constitute guarantees of future performance. Investors are cautioned that statements in this press release, which are not strictly historical statements, including, without limitation, statements by Citrix’s executive chairman and by its CEO and president, statements contained in the Financial Outlook sections and under the Non-GAAP Financial Measures Reconciliation section, and statements regarding management’s plans, objectives and strategies, constitute forward-looking statements. Such forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those anticipated by the forward-looking statements, including, without limitation, risks associated with transitions in key personnel, including our newly appointed CEO, and succession risk; the completion and timing of the proposed spinoff, the future performance of core Citrix and the GoTo businesses on a standalone basis if the spinoff is completed, the expected strategic, operational and competitive benefits of the proposed spinoff, and the effect of the separation on Citrix, its shareholders, customers, partners and employees; the impact of the global economy, volatility in global stock markets, foreign exchange rate volatility and uncertainty in the IT spending environment; the success and growth of the company’s product lines, including competition, demand and pricing dynamics and other transitions in the markets for Citrix’s virtualization products and collaboration services; the company’s ability to develop and commercialize new products and services, including its enterprise mobility products, while growing its established virtualization and networking products and services; disruptions to execution due to Citrix’s restructuring programs and actions to be taken as a result of its operational review; the introduction of new products by competitors or the entry of new competitors into the markets for Citrix’s products and services; changes in our revenue mix towards products and services with lower gross margins; seasonal fluctuations in the company’s business; failure to execute Citrix’s sales and marketing plans; failure to successfully partner with key distributors, resellers, system integrators, service providers and strategic partners and the company’s reliance on and the success of those partners for the marketing and distribution of the company’s products; the company’s ability to maintain and expand its business in large enterprise accounts; the size, timing and recognition of revenue from significant orders; the success of investments in its product groups, foreign operations and vertical and geographic markets; the ability of Citrix to make suitable acquisitions on favorable terms in the future; risks associated with Citrix’s acquisitions, including failure to further develop and successfully market the technology and products of acquired companies, failure to achieve or maintain anticipated revenues and operating performance contributions from acquisitions, which could dilute earnings, the retention of key employees from acquired companies, difficulties and delays integrating personnel, operations, technologies and products, disruption to our ongoing business and diversion of management’s attention from our ongoing business; the recruitment and retention of qualified employees; risks in effectively controlling operating expenses, including failure to achieve anticipated cost savings from the restructuring programs and other cost savings initiatives; ability to effectively meet our domestic cash requirements and manage our capital structure and the impact of related changes on our operating results and financial condition; risks and costs associated with engaging with activist stockholders; the effect of new accounting pronouncements on revenue and expense recognition; the risks associated with securing data and maintaining security of our networks and customer data stored by our services; failure to comply with federal, state and international regulations; litigation and disputes, including challenges to our intellectual property rights or allegations of infringement of the intellectual property rights of others; the inability to further innovate our technology or enter into new businesses due to the intellectual property rights of others; changes in the company’s pricing and licensing models, promotional programs and product mix, all of which may impact Citrix’s revenue recognition; charges in the event of a write-off or impairment of acquired assets, underperforming businesses, investments or licenses; international market readiness, execution and other risks associated with the markets for Citrix’s products and services; unanticipated changes in tax rates, non-renewal of tax credits or exposure to additional tax liabilities; risks of political and social turmoil; and other risks detailed in the company’s filings with the Securities and Exchange Commission. Citrix assumes no obligation to update any forward-looking information contained in this press release or with respect to the announcements described herein.

Citrix(R) is a trademarks or registered trademarks of Citrix Systems, Inc. and/or one or more of its subsidiaries, and may be registered in the U.S. Patent and Trademark Office and in other countries. All other trademarks and registered trademarks are property of their respective owners.

                                                                                                                                                                   CITRIX SYSTEMS, INC.
                                                                                                                                                        Condensed Consolidated Statements of Income
                                                                                                                                                     (In thousands, except per share data - unaudited)
                                                                                                                                                                                       
                                                                                                                                   Three Months Ended                                                                                                                                  Year Ended
                                                                                                                                      December 31,                                                                                                                                    December 31,
                                                                                    2015          2014                              2015            2014    
                                                                                -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- --------- --------------------                      -------------------- --------- --------------------
Revenues:
     Product and licenses                                                                          $ 281,300                                                              $ 267,367                                                              $   875,807                                                              $   899,736
     Software as a service                                                                           193,587                                                                168,398                                                                  731,292                                                                  651,562
     License updates and maintenance                                                                 392,964                                                                366,952                                                                1,521,007                                                                1,416,017
     Professional services                                                         36,912                           48,766                            147,488                            175,541  
                                                                                -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- --------- --------------------                      -------------------- --------- --------------------
            Total net revenues                                                                       904,763                                                                851,483                                                                3,275,594                                                                3,142,856
                                                                                                                                                                                                                                                                                                        
Cost of net revenues:
     Cost of product and licenses revenues                                                            34,432                                                                 35,966                                                                  118,265                                                                  124,110
     Cost of services and maintenance revenues                                                        94,698                                                                 94,920                                                                  364,916                                                                  349,683
     Amortization of product related intangible assets                             73,623                           43,766                            131,183                            146,426  
                                                                                -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- --------- --------------------                      -------------------- --------- --------------------
             Total cost of net revenues                                                              202,753                                                                174,652                                                                  614,364                                                                  620,219
Gross margin                                                                                         702,010                                                                676,831                                                                2,661,230                                                                2,522,637
                                                                                                                                                                                                                                                                                                        
Operating expenses:
     Research and development                                                                        140,003                                                                141,947                                                                  563,975                                                                  553,817
     Sales, marketing and services                                                                   299,112                                                                323,978                                                                1,195,362                                                                1,280,265
     General and administrative                                                                      100,968                                                                 77,316                                                                  342,665                                                                  319,922
     Amortization of other intangible assets                                                          11,361                                                                 13,043                                                                  108,732                                                                   45,898
     Restructuring                                                                 38,160                            3,139                            100,411                             20,424  
                                                                                -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- --------- --------------------                      -------------------- --------- --------------------
            Total operating expenses                                              589,604                          559,423                          2,311,145                          2,220,326  
                                                                                -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- --------- --------------------                      -------------------- --------- --------------------
                                                                                                                                                                                                                                                                                                        
Income from operations                                                                               112,406                                                                117,408                                                                  350,085                                                                  302,311
                                                                                                                                                                                                                                                                                                        
Interest income                                                                                        2,996                                                                  2,716                                                                   11,675                                                                    9,421
Interest expense                                                                                      10,957                                                                 10,731                                                                   44,153                                                                   28,332
Other income (expense), net                                                         7,750                           (1,692 )                                              (5,730 )                                              (7,694 )
                                                                                -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- --------- --------------------                      -------------------- --------- --------------------
Income before income taxes                                                                           112,195                                                                107,701                                                                  311,877                                                                  275,706
                                                                                                                                                                                                                                                                                                        
Income tax (benefit) expense                                                      (19,079 )                                            12,473                             (7,484 )                                              23,983  
                                                                                -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- --------- --------------------                      -------------------- --------- --------------------
Net income                                                                                         $ 131,274                                           $  95,228                                           $   319,361                                           $   251,723  
                                                                                ==================== ======= ====================                      ==================== ======= ====================                      ==================== ========= ====================                      ==================== ========= ====================
                                                                                                                                                                                                                                                                                                        
Earnings per common share - diluted                                                   $    0.84                                           $    0.58                                           $      1.99                                           $      1.47  
                                                                                ==================== ======= ====================                      ==================== ======= ====================                      ==================== ========= ====================                      ==================== ========= ====================
Weighted average shares outstanding - diluted                        156,268                          163,215                            160,362                            171,270  
                                                                                ==================== ======= ====================                      ==================== ======= ====================                      ==================== ========= ====================                      ==================== ========= ====================
 
                                                                                                     CITRIX SYSTEMS, INC.
                                                                                             Condensed Consolidated Balance Sheets
                                                                                                  (In thousands - unaudited)
                                                                                                                                   
                                                                                                             December 31, 2015(*)                                                         December 31, 2014
                                                                                                --------------------------------------------------                        --------------------------------------------------
ASSETS:
Cash and cash equivalents                                                                                          $    368,518                                                              $    260,149
Short-term investments                                                                                                  502,852                                                                   529,260
Accounts receivable, net                                                                                                669,276                                                                   674,401
Inventories, net                                                                                                         10,521                                                                    12,617
Prepaid expenses and other current assets                                                                               132,784                                                                   166,005
Current portion of deferred tax assets, net                                                                -                              45,892  
                                                                                                -------------------- ---------- --------------------                      -------------------- ---------- --------------------
     Total current assets                                                                                             1,683,951                                                                 1,688,324
                                                                                                                                                                           
Long-term investments                                                                                                   891,964                                                                 1,073,110
Property and equipment, net                                                                                             373,817                                                                   367,779
Goodwill                                                                                                              1,962,722                                                                 1,796,851
Other intangible assets, net                                                                                            283,418                                                                   390,717
Long-term portion of deferred tax assets, net                                                                           215,196                                                                   128,198
Other assets                                                                                          70,370                              67,028  
                                                                                                -------------------- ---------- --------------------                      -------------------- ---------- --------------------
     Total assets                                                                                                  $  5,481,438                                           $  5,512,007  
                                                                                                ==================== ========== ====================                      ==================== ========== ====================
                                                                                                                                                                           
LIABILITIES AND STOCKHOLDERS’ EQUITY:
Accounts payable                                                                                                         95,396                                                                    79,884
Accrued expenses and other current liabilities                                                                          317,468                                                                   298,079
Income taxes payable                                                                                                     18,351                                                                    12,053
Current portion of deferred revenues                                                               1,249,754                           1,200,093  
                                                                                                -------------------- ---------- --------------------                      -------------------- ---------- --------------------
     Total current liabilities                                                                                        1,680,969                                                                 1,590,109
                                                                                                                                                                           
Long-term portion of deferred revenues                                                                                  414,314                                                                   357,771
Convertible notes                                                                                                     1,324,992                                                                 1,292,953
Other liabilities                                                                                                        87,717                                                                    97,529
                                                                                                                                                                           
Stockholders’ equity:
Common stock                                                                                                                299                                                                       295
Additional paid-in capital                                                                                            4,566,919                                                                 4,292,706
Retained earnings                                                                                                     3,474,625                                                                 3,155,264
Accumulated other comprehensive loss                                                                                    (28,527 )                                                                 (36,790 )
Less - common stock in treasury, at cost                                             (6,039,870 )                                           (5,237,830 )
                                                                                                -------------------- ---------- --------------------                      -------------------- ---------- --------------------
   Total stockholders’ equity                                           1,973,446                           2,173,645  
                                                                                                -------------------- ---------- --------------------                      -------------------- ---------- --------------------
     Total liabilities and stockholders’ equity                                         $  5,481,438                                           $  5,512,007  
                                                                                                ==================== ========== ====================                      ==================== ========== ====================
 

(*) During the fourth quarter of fiscal 2015 we elected to early adopt an accounting standard update on income taxes on a prospective basis. The new guidance requires deferred tax liabilities and assets along with any related valuation allowance to be classified as noncurrent on the condensed consolidated balance sheet. The December 31, 2014 condensed consolidated balance sheet was not retrospectively adjusted.

                                                              CITRIX SYSTEMS, INC.
                                                 Condensed Consolidated Statement of Cash Flows
                                                     (In thousands - unaudited)
 
                                                                                              Year Ended
                                                                                                              December 31, 2015
                                                                                            --------------------------------------------------
OPERATING ACTIVITIES
Net Income                                                                                                     $    319,361
Adjustments to reconcile net income to net cash provided by
operating activities:
   Amortization of intangible assets                                                                                239,915
   Depreciation and amortization of property and equipment                                                          152,964
   Amortization of debt discount and transaction costs                                                               36,013
   Stock-based compensation expense                                                                                 147,368
   Deferred income tax benefit                                                                                      (89,079 )
   Excess tax benefit from stock-based compensation                                                                  (5,873 )
   Effects of exchange rate changes on monetary assets and liabilities                                               13,416
   denominated in foreign currencies
Other non-cash items                                                                               8,740  
 
liabilities demo
                                                                                            -------------------- ---------- --------------------
               Total adjustments to reconcile net income to net cash                                                503,464
                    provided by operating activities
Changes in operating assets and liabilities, net of the effects of
acquisitions:
        Accounts receivable                                                                                          (7,226 )
        Inventories                                                                                                     703
        Prepaid expenses and other current assets                                                                    (8,057 )
        Other assets                                                                                                 (2,550 )
        Income taxes, net                                                                                            51,695
        Accounts payable                                                                                             10,959
        Accrued expenses and other current liabilities                                                               49,586
        Deferred revenues                                                                                           107,150
        Other liabilities                                                                          9,463  
                                                                                            -------------------- ---------- --------------------
Total changes in operating assets and liabilities, net of the                                    211,723  
effects of acquisitions
                                                                                            -------------------- ---------- --------------------
Net cash provided by operating activities                                                                         1,034,548
INVESTING ACTIVITIES
Purchases of available-for-sale investments                                                                      (2,182,831 )
Proceeds from sales of available-for-sale investments                                                             1,745,290
Proceeds from maturities of available-for-sale investments                                                          637,052
Proceeds from cost method investments, net                                                                            6,476
Purchases of property and equipment                                                                                (160,825 )
Cash paid for acquisitions, net of cash acquired                                                                   (256,907 )
Cash paid for licensing agreements and product related intangible                                                   (11,403 )
assets technology
Other                                                                                             (1,267 )
                                                                                            -------------------- ---------- --------------------
Net cash used in investing activities                                                                              (224,415 )
FINANCING ACTIVITIES
Proceeds from issuance of common stock under stock-based                                                            112,285
compensation plans
Proceeds from revolving credit facility                                                                              95,000
Repayments on credit facility                                                                                       (95,000 )
Repayment of acquired debt                                                                                           (7,569 )
Excess tax benefit from stock-based compensation                                                                      5,873
Stock repurchases, net                                                                                             (755,704 )
Cash paid for tax withholding on vested stock awards                                             (46,336 )
                                                                                            -------------------- ---------- --------------------
Net cash used in financing activities                                                           (691,451 )
                                                                                            -------------------- ---------- --------------------
Effect of exchange rate changes on cash and cash equivalents                                     (10,313 )
                                                                                            -------------------- ---------- --------------------
Change in cash and cash equivalents                                                              108,369  
                                                                                            -------------------- ---------- --------------------
Cash and cash equivalents at beginning of period                                                 260,149  
                                                                                            -------------------- ---------- --------------------
Cash and cash equivalents at end of period                                                                     $    368,518  
                                                                                            ==================== ========== ====================
 

Reconciliation of Non-GAAP Financial Measures to Comparable U.S. GAAP Measures

(Unaudited)

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 and debt discount, stock-based compensation expenses, charges associated with the Company’s restructuring programs, significant litigation charges or benefits, separation costs 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 of intangible assets and 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 of intangible assets 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.

? Under GAAP, certain convertible debt instruments that may be settled in cash on conversion are required to be accounted for as separate liability (debt) and equity (conversion option) components in a manner that reflects the issuer’s non-convertible debt borrowing rate. The difference between the imputed interest expense and the coupon interest expense, net of the interest amount capitalized, is excluded from management’s assessment of the company’s operating performance because management believes that the exclusion of these charges will better help investors and financial analysts understand the Company’s operating results and underlying operational trends.

? The charges incurred in conjunction with the Company’s restructuring programs, which relate to reductions in headcount and the consolidation of leased facilities, are not anticipated to be ongoing costs; and, thus, are outside of the normal operations of the Company’s business. The Company, therefore, believes that the exclusion of these charges will better help investors and financial analysts understand the Company’s operating results and underlying operational trends as compared to prior periods.

? Charges or benefits related to significant litigation are not anticipated to be ongoing costs; and, thus, are outside of the normal operations of the Company’s business. These charges or benefits are recorded in the period when it is probable a liability had been incurred and the amount of loss can be reasonably estimated even though the subject matter of the underlying dispute may relate to multiple or different periods. As such, the Company believes that these expenses do not accurately reflect the underlying performance of continuing operations for the period in which they are incurred.

? Separation costs represent transaction and transition costs associated with preparing businesses for independent operations consisting primarily of financial advisory fees, legal fees, accounting fees, tax services and information systems infrastructure duplication. These charges are not anticipated to be ongoing costs; and, thus, are outside of the normal operations of the Company’s business. As such, the Company believes that these expenses do not accurately reflect the underlying performance of continuing operations for the period in which they are incurred.

These non-GAAP financial measures are not prepared in accordance with accounting principles generally accepted in the United States ("GAAP") and may differ from the non-GAAP information used by other companies. There are significant limitations associated with the use of non-GAAP financial measures. The additional non-GAAP financial information presented here should be considered in conjunction with, and not as a substitute for or superior to, the financial information presented in accordance with GAAP (such as net income and earnings per share) and should not be considered measures of the Company’s liquidity. Furthermore, the Company in the future may exclude amortization related to newly acquired intangible assets and debt discount, additional charges related to its restructuring programs, significant litigation charges or benefits, separation costs and the related tax effects from financial measures that it releases, and the Company expects to continue to incur stock-based compensation expenses.

CITRIX SYSTEMS, INC.

Non-GAAP Financial Measures Reconciliation

(In thousands, except per share, gross margin 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
                                                                                   December 31, 2015
                                                                                 --------------------
GAAP gross margin                                                                        77.6%
     Add: stock-based compensation                                                        0.1
     Add: amortization of product related intangible assets                               8.1
                                                                                 --------------------
Non-GAAP gross margin                                                                    85.8%
                                                                                 ====================
                                                                                  
                                                                  Three Months
                                                                                         Ended
                                                                                   December 31, 2015
                                                                                 --------------------
GAAP operating margin                                                                    12.4%
     Add: stock-based compensation                                                        4.9
     Add: amortization of product related intangible assets                               8.1
     Add: amortization of other intangible assets                                         1.3
     Add: separation costs                                                                0.7
     Add: restructuring charges                                                           4.2
                                                                                 --------------------
Non-GAAP operating margin                                                                31.6%
                                                                                 ====================
                                                                                  
                                                                         Three Months Ended December 31,
                                                                                    2015              2014
                                                                                 ----------                      --------------------
GAAP net income                                                                    $131,274                                   $95,228
     Add: stock-based compensation                                                   43,694                                    40,847
     Add: amortization of product related intangible assets                          73,623                                    43,766
     Add: amortization of other intangible assets                                    11,361                                    13,043
     Add: amortization of debt discount                                               8,100                                     7,861
     Add: separation costs                                                            6,352                                         -
     Add: restructuring charges                                                      38,160                                     3,139
     Less: tax effects related to above items                                      (53,915)                                  (24,026)
                                                                                 ----------                      --------------------
Non-GAAP net income                                                                $258,649                                  $179,858
                                                                                 ==========                      ====================
                                                                                                                  
                                                                    Three Months Ended December 31,
                                                                                    2015         2014
                                                                                 ----------                      ----------
GAAP earnings per share - diluted                                        $0.84                           $0.58
     Add: stock-based compensation                                                     0.28                            0.25
     Add: amortization of product related intangible assets                            0.47                            0.27
     Add: amortization of other intangible assets                                      0.07                            0.08
     Add: amortization of debt discount                                                0.05                            0.05
     Add: separation costs                                                             0.04                               -
     Add: restructuring charges                                                        0.24                            0.02
     Less: tax effects related to above items                                        (0.33)                          (0.15)
                                                                                 ----------                      ----------
Non-GAAP earnings per share - diluted                                    $1.66                           $1.10
                                                                                 ==========                      ==========
 

CITRIX SYSTEMS, INC.

                                                                  Twelve Months
                                                                                         Ended
                                                                                   December 31, 2015
                                                                                 --------------------
GAAP gross margin                                                                        81.2%
     Add: stock-based compensation                                                        0.1
     Add: amortization of product related intangible assets                               4.0
                                                                                 --------------------
Non-GAAP gross margin                                                                    85.3%
                                                                                 ====================
                                                                                  
                                                                 Twelve Months
                                                                                        Ended
                                                                                  December 31, 2015
                                                                                 -----------------
GAAP operating margin                                                                   10.7%
     Add: stock-based compensation                                                       4.4
     Add: amortization of product related intangible assets                              4.0
     Add: amortization of other intangible assets                                        3.3
     Add: separation costs                                                               0.2
     Add: restructuring charges                                                          3.1
                                                                                 -----------------
Non-GAAP operating margin                                                               25.7%
                                                                                 =================
 
                                                                   Twelve Months Ended December 31,
                                                                                    2015         2014
                                                                                 ----------                      ----------
GAAP net income                                                                    $319,361                        $251,723
     Add: stock-based compensation                                                  147,368                         169,287
     Add: amortization of product related intangible assets                         131,183                         146,426
     Add: amortization of other intangible assets                                   108,732                          45,898
     Add: amortization of debt discount                                              32,039                          20,832
     Add: separation costs                                                            6,352                               -
     Add: restructuring charges                                                     100,411                          20,424
     Add: charge (benefit) related to a patent lawsuit                                (982)                          20,727
     Less: tax effects related to above items                                     (149,163)                       (110,000)
                                                                                 ----------                      ----------
Non-GAAP net income                                                                $695,301                        $565,317
                                                                                 ==========                      ==========
                                                                                                                             
                                                                        Twelve Months Ended December 31,
                                                                                    2015              2014
                                                                                 ----------                      --------------------
GAAP earnings per share - diluted                                        $1.99                                     $1.47
     Add: stock-based compensation                                                     0.92                                      0.99
     Add: amortization of product related intangible assets                            0.82                                      0.85
     Add: amortization of other intangible assets                                      0.68                                      0.27
     Add: amortization of debt discount                                                0.20                                      0.12
     Add: separation costs                                                             0.04                                         -
     Add: restructuring charges                                                        0.62                                      0.12
     Add: charge (benefit) related to a patent lawsuit                               (0.01)                                      0.12
     Less: tax effects related to above items                                        (0.92)                                    (0.64)
                                                                                 ----------                      --------------------
Non-GAAP earnings per share - diluted                                    $4.34                                     $3.30
                                                                                 ==========                      ====================
                                                                                                                  

Forward Looking Guidance

                                                     For the Three Months   For the Twelve
                                                                                                   Ended                              Months Ended
                                                                                                 March 31,                            December 31,
                                                                                                   2016                                   2016
                                                                                                                 
                                                                                           --------------------                      --------------
GAAP earnings per share - diluted                                                $0.28 to $0.31                         $2.50 to $2.60
     Add: adjustments to exclude the effects of amortization of                                    0.14                                   0.53
     intangible assets
     Add: adjustments to exclude the effects of expenses related to                                0.31                                   1.27
     stock-based compensation
     Add: adjustments to exclude the effects of amortization of debt                               0.05                                   0.21
     discount
     Add: adjustments to exclude separation costs                                                  0.17                                   0.71
     Add: adjustments to exclude the effects of restructuring charges                              0.15                                   0.19
     Less: tax effects related to above items                                                 (0.17 to 0.22)                         (0.66 to 0.86)
                                                                                           --------------------                      --------------
Non-GAAP earnings per share - diluted                                            $0.91 to $0.93                         $4.65 to $4.75
                                                                                           ====================                      ==============
                                                                                                                                                     

http://cts.businesswire.com/ct/CT?id=bwnews&sty=20160127006247r1&sid=cmtx6&distro=nx&lang=en

View source version on businesswire.com: http://www.businesswire.com/news/home/20160127006247/en/

SOURCE: Citrix Systems, Inc.

Citrix Systems, Inc. 
For media inquiries: 
Eric Armstrong, 954-267-2977 
eric.armstrong@citrix.com 
or 
For investor inquiries: 
Eduardo Fleites, 954-229-5758 
eduardo.fleites@citrix.com


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