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Citrix saw a 'pretty crazy' jump in subscription revenue as the remote workforce wave sparked a surge in demand, CEO says (CTXS)

Citrix CEO David Henshall
  • Citrix CEO David Henshall said the cloud software maker saw a "pretty crazy" jump in its subscription revenue as the rise of the remote workforce led to a surge in demand for its cloud software.
  • Experts had expected Citrix, which gives employees easier access to a company's network and devices, to be one of the top gainers when the coronavirus crisis led to a sudden shift to working from home.
  • "A lot of companies are realizing that this is not going to be just two weeks in a stay at home situation," Henshall told Business Insider. "This is really going to foster a new way of working for a very protracted period of time."
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Analysts had expected that Citrix could benefit from the sudden shift to remote work triggered by the coronavirus crisis.
The cloud giant, which sells products that give its customers' employees easier access to their company's network and devices, just confirmed such a boost with a strong first quarter earnings report.
"Our subscription revenue increased 89% year-over-year," CEO David Henshall told Business Insider. "Last year it grew 43%. That kind of acceleration was pretty crazy."
The company reported first quarter profit of $181 million, or $1.42 a share, and revenue of $861 million, beating analyst expectations on both the top and bottom line.
Citrix's products have seen heightened demand as businesses have pivoted sharply to a work-from-home policy because of COVID-19, Henshall says, because its technology helps employees access their work apps and data from any device, including their smartphones.
"A lot of companies are realizing that this is not going to be just two weeks in a stay at home situation," Henshall said. "This is really going to foster a new way of working for a very protracted period of time."
William Blair analyst Jason Ader echoed this point in a note to analysts on Thursday about what he called Citrix's "monster quarter."
"We believe the COVID-19 pandemic will cause many organizations to reevaluate their work from home and business continuity strategies with the effect of permanently raising the number of knowledge workers who can productively work from home," Ader wrote.
Despite the earnings beat, Citrix stock fell about 7% in late trades after the company reported results.
One potential factor: The company's cautious approach to guidance for the second half of the year, which Henshall describes as "very conservative."
That approach was a "reflection of the unknown impact of just how broad and deep will the recession be that we're in right now," Henshall said. "I think companies that claim to have a good handle on that I think are probably a little bit out in front of where they should be."
"There's a lot of unknowns at this point in time," Henshall said.
Citrix's stock is up more than 25% since the beginning of the year. Its first quarter profit of $181 million, or $1.42 a share, compares to $110 million, or 78 cents a share, for the year-ago quarter. Adjusted profit was $1.73 a share.  Its revenue, meanwhile, rose 20% to $861 million.
Analysts were expecting a profit of $1.17 a share on revenue of $733.6 million.
Got a tip about Citrix or another tech company? Contact this reporter via email at bpimentel@businessinsider.com, message him on Twitter @benpimentel or send him a secure message through Signal at (510) 731-8429. You can also contact Business Insider securely via SecureDrop.
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