Citrix: CEO exit plans accelerated, results take a turn.... for the better
Elliot Management are in the building
Citrix – currently locked in the vice-like grip of activist investor Elliott Management – has confirmed exec chairman Robert Calderoni will move into the care-taking CEO position.
Long-serving chief exec Mark Templeton previously confirmed he is to retire at the end of this calendar year, but had planned to man the fort until a successor was found.
But as the virtualisation, networking and cloud company outlined financials for Q3 ended 30 September, it revealed that Templeton will now move further into the background more quickly, serving in an advisory role until the end of the year.
As is politically correct, Citrix bid Templeton farewell and said thanks for helping the business get to $3bn during his 18 years there, but moved on to talk up Calderoni’s 30 years in tech.
Back in the summer, Elliot Management beefed up its stake in Citrix to seven per cent and wasted no time in characterising the business as “under-performing”, saying the channel and product strategies were wrong, and certain units needed to be sold or spun out and separately listed to realise full potential.
Citrix has already agree to find a home for ByteMobile and explore a new way forward, likely a sell, for the GoTo product line.
The financials released last night beat Q3 guidance from analysts and led Citrix to raised the full-year outlook; revenues were up seven per cent to $813m, four per cent ahead of the general consensus from Wall Street moneymen.
The products and licences division expanded to $206.2m from $193.1m in the same period a year ago, thus ending four quarters of consecutive declines.
SaaS swelled 15.4 per cent to $190.7m, licence updates and maintenance jumped to $379.5m from $358.2m, but professional services slipped to $36.6m from $42.3m.
During his 70th and “final” earning call with analysts, Templeton reflected on his time, “Steve Jobs had it right, the journey is the reward. No one has had a more interesting and blessed journey than me.”
Not even Steve Jobs?
The beanies then took centre stage, saying the Q3 revenues numbers grew because it increased sales via the channel and cross sold NetScaler, XenApp and ShareFile.
“We're directing more of our energy towards our core strategy - the secure delivery of apps and data,” said CFO David Henshall.
Operating expenses were up 6.8 per cent in the quarter to $603.2m, but higher sales fed through the improved operating profits of $53.3 versus $48.2m a year earlier. A tax benefit pushed net profit to $55.92m.
The search for a permanent CEO continues, with Calderoni and Elliot Management partner Jesse Cohen – on the board at Citrix – running that particular process. ®