Citrix Systems Earnings Call Insights: Desktop Business and Mobile Impact To Revenue

Citrix Systems, Inc. (NASDAQ:CTXS) recently reported its second quarter earnings and discussed the following topics in its earnings conference call.

Desktop Business

Rob Owens – Pacific-Crest Securities: Wanted to drill down a little bit into the desktop license line. If I look at the first half of the year, I think it’s down about 5% on a year-over-year basis. Initially when you guys kind of shaped the year I think you talked about flat to slightly up in the desktop biz for 2013, then you added on the XenMobile component. So maybe just help us understand, I think there is some confidence towards the back half, but just what gives you that confidence and if you are still kind of holding to that more organic, flattish type of number for XenApp and XenDesktop this year?

David J. Henshall – EVP of Operations, CFO and Treasurer: Sure, Rob. This is David, let me take that question. A couple of things going on there. First as we think about the mobile and desktop business, we are going to continue to report this as an aggregate number like we talked about last quarter. We are doing that simply because that’s the way we are going to market, that’s the way we thinking about it and that’s how the customer conversation is really happening right now. So we don’t plan on breaking out the various components. So as we think about the entire business, there is a couple of things going on. Externally Europe has been tough, that’s probably the hardest area. Macro is certainly impacting that to a degree. But probably more specific in that, all the success and focus we were having around mobile as a topic has certainly impacted productivity of our sales team to sort of focus on standalone desktop virtualization. More and more so than we would have anticipated I would say. So it’s a double-edged sword. The good news is that these conservations are generating a tremendous amount of pipeline for mobile and desktop right now and we expect that to moderate as a pressure over the balance of the year. So in terms of the actual guidance, as we look at the overall business, I think it does continue to accelerate as we get into the back half of the year. We are not going to be giving specific guidance at a product level, but I feel that – feel much better about the second half going forward and certainly as the teams get more comfortable with the combined solution then – again those pressures ought to moderate.

Rob Owens – Pacific-Crest Securities: Then I guess for Mark on a strategic levels, you look at that combined solution. Do you think you have all the components at this point? Is there other tuck-ins that you like to do as we look at that moving forward?

Mark B. Templeton – President and CEO: Hey, Rob. I think we feel really good about the end-to-end and the complete solution that we have. I think we have a lot of intensity is in better integrations, smoother integrations and improving the user experience consistently, so, on a pretty fast pace roadmap with a couple of releases between here and the end of January. So, it’s much more focus on execution, integration and less on kind of pieces that are missing.

Mobile Impact To Revenue

Brent Thill – UBS: I’m curious if you could give us a sense, is there an easy way to frame the mobile impact to revenue or booking for ’13 given the excitement around the new product line or is this something that we are just going to have to kind of wait till ’14 to get a little more granular on?

David J. Henshall – EVP of Operations, CFO and Treasurer: Yeah. Brent, as far as, the standalone revenue, I think that it’s one of those things that like I said, we won’t break it out. When we did the acquisition, we talked about a number of $30 million of total revenue and we are extremely comfortable with that at this point. It’s going to get harder and harder for us to segment that out in a way that actually adds value to the conversation, because as I mentioned earlier, it really is a unified go-to market, a unified conversation with our customer. In many cases, what’s going on is that it’s the excitement around mobile is starting with devices or apps and then as a customer gets more strategic in the conversation, they start looking at how do I deliver all of my app infrastructure, and in most cases that means Win32, and you know that brings in app and desktop virtualization. So, I think it’s going to be a continuum. We did see right out of the gate, a handful of transactions, big in you top – call of our top 25 transactions that included both XenMobile, XenDesktop and NetScaler as individual products as part of the same project. So, I that’s where we’re going to see more and more going forward.