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Citrix Systems turned in record-breaking financials in the second quarter.

Revenues at the application, server, and desktop virtualization software specialist hit $530.8m, up 15.8 per cent, and net income was $81.9m, up an impressive 72.3 per cent from the year-ago period.

In the quarter, product license sales rose by 15.2 per cent to $171.3m. License update revenues were up 9.1 per cent to $183.9m, and online services sales shot up by 19.1 per cent to $106.5m. Technical services revenues at Citrix for Q2 did very well, rising 33.2 per cent to $69.1m.

During a conference call with Wall Street analysts, David Henshall, CFO at Citrix, said that the Desktop Solutions division at the company had total sales of $305m in the quarter, up 9 per cent and new license revenue rising 10 per cent. These desktop products include XenApp application virtualization software (formerly known as Presentation Server), which was flat in the quarter, while XenDesktop, a tool for doing virtual desktop infrastructure (VDI) rose more than 10 per cent. New license revenues for XenDesktop were up more than 20 per cent in the quarter, and the company ended the quarter with over 2,800 XenDesktop customers as June came to a close.

In Q2, Citrix had 163 deals with licenses for over 1,000 XenDesktop seats and 19 of those deals were for more than 5,000 seats. Looking ahead to the second half of the year, Henshall told Wall Street that XenApp sales would continue to be flat for the remainder of 2011 and that XenDesktop license sales would accelerate, perhaps cresting above 30 per cent.

In the Data Center and Cloud division, which includes NetScaler network application acceleration and caching appliances, the XenServer hypervisor and related management tools, and the Branch Repeater WAN optimization appliances, rose by 32 per cent to $93m. New license revenues for these products was up by 26 per cent, and total NetScaler license revenues were up by more than 90 per cent.

More than half of the customers that bought NetScaler physical or virtual appliances were first-time Citrix customers, and sales of the NetScaler VPX virtual appliances, which run atop the Xen hypervisor on any x64 server, were up by a factor of 2.5 compared to Q2 2010.

Mark Templeton, president and CEO at Citrix, said that there are now over 1,500 customers using the VPX appliances and that 80 per cent of these customers were new to Citrix. Also, about a quarter of all NetScaler customers are using a mix of MPX hardware appliances and VPX virtual appliances to do their application acceleration. A special version of the NetScaler appliance called SDX started shipping in the quarter, and it puts a XenServer hypervisor and up to 40 VPX appliances on a single server to allow for secure, multi-tenancy for service providers.

Branch Repeater sales were down by 66 per cent in the quarter against a tough compare with a big order in the year ago period.

In the remaining Citrix division, Online Services, sales hit $106m in the second quarter, up 19 per cent. The GoTo family of collaboration products had a 31 per cent spike in the quarter and accounted for more than half of all Online Services sales.

Henshall said that HDFaces, a teleconferencing add-on for GoToMeeting that is being made available for free, would ship in the quarter. The product was previewed a year ago along with a slew of Xen tweaks.

Henshall said that Citrix now has over 6,100 employees, up roughly 1,000 in the past year with 130 (mostly in sales and services roles) added in the second quarter. That does not include the employees that came through the acquisition of Kaviza in May for its SMB-focused VDI competitor to XenDesktop and the acquisition of Cloud.com in July for its expertise in and add-ons for the open source OpenStack cloud fabric.

Speaking of those two acquisitions, Henshall said that these two companies would shave off 3 cents in earnings per share in Q3 and 2 cents in Q4 as Citrix integrates them and figures out how to rationalize and integrate their products into the Xen world.

Looking ahead, Henshall said that Citrix would post somewhere between $540m to $547m in revenues in the third quarter, with earnings per share of 56 to 58 cents, including the hit from the Kaviza and Cloud.com deals. For the full year, Citrix has raised its guidance and now expects for sales to be between $2.16bn and $2.19bn, with earnings per share hitting $2.38 and $2.41 – including the 5 cent whack from those two deals.

Citrix has $1.7bn in cash and investments in the bank, $830m in deferred revenues, and no debts. It will no doubt be on the prowl in the second half of the year to make some more opportunistic acquisitions. ®

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