Quarterly earnings calls for public companies usually start with the CEO and other officers spending fifteen minutes or more showing slides full of numbers that prove the business is in good shape.
So it’s a measure of Citrix’s confidence that on today’s call for its Q2 2020 results CEO David Henshall didn’t mention the company’s numbers at all, spent just over one minute saying that the company has become “the leading workspace company” and that global shift to “hybrid work styles” that blend time in-office and time working at home mean Citrix’s moment has arrived.
And then he opened the floor to questions.
He was able to do so because Citrix’s year-on-year revenue rose seven percent to $799 million, annualised recurring revenue from subscriptions spiked 54 percent to hit $949m and SaaS subscriptions jumped 41 percent to $590m. The company has $2.654bn of deferred and unbilled revenue on its books, thanks to the 76 percent of business that now comes from subscriptions.
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Citrix’s Letter To Stakeholders [PDF] was packed full of numbers that demonstrate working from home is here to stay. For example, Citrix cited the e 2019 National Compensation Survey from the U.S. Bureau of Labor and Statistics that found seven percent of private workers and four percent of government employees had flexible working options. Now 98 percent of workers want a remote work option and Citrix thinks employers want to deliver on that desire because it saves up to $11,000 a year even if workers only come to the office half the time.
Henshall referred to those numbers repeatedly during the Q&A section of the call, suggesting that remote work facilitated by Citrix’s products first made it possible for businesses to operate and so quickly proved it can deliver productivity that execs are now convinced of its strategic importance.
The CEO did admit that most sales this year have been for on-premises software but said that’s because customers have rushed to ensure they can enable remote work. As the year unfurls he expects more will use Citrix’s cloud, or run its products in the cloud. Which will enhance the value of its deeper relationship with Microsoft.
Henshall said he expects that a change in market conditions that allows business to move on from emergency mode to again consider digital transformation will see more moves to the cloud and therefore more lovely subscriptions for Citrix.
The company therefore again upgraded its guidance, predicting $3.18 billion to $3.21 billion for the full year, up from its previous guesstimate of $3.10bn to $3.16bn.
That’s not a massive jump in normal times. But with the world in recession, any company that grows is welcome.
The entire earnings call was done and dusted in 35 minutes, 15 to 25 minutes less than is usual for these affairs and quite the turnaround compared to the mid-2010s when Citrix endured C-suite churn, substantial layoffs, the stern attention of activist investors and re-shaped its product line.