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Here's What to Expect Ahead of Citrix's (CTXS) Q3 Earnings

Citrix Systems CTXS is scheduled to release third-quarter 2021 results on Nov 4.

For the to-be-reported quarter, the company expects revenues between $765 million and $775 million. The Zacks Consensus Estimate for revenues is pegged at $770.5 million, which indicates an increase of 0.4% from the year-ago quarter’s levels.

Citrix expects non-GAAP earnings in the range of 85-90 cents per share. The consensus mark for earnings has been steady at 88 cents per share in the past 30 days. The estimate suggests a decline of 36.2% compared with the prior-year quarter’s reported figure.

The company beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average surprise being 6.8%.

Citrix Systems, Inc. Price and EPS Surprise


Citrix Systems, Inc. price-eps-surprise | Citrix Systems, Inc. Quote


Factors Likely to Have Influenced Q3 Performance

Citrix’s third-quarter performance is anticipated to have benefited from the healthy adoption of its digital workspace and desktop virtualization solutions, amid the continuation of remote work trends and hybrid work innovation.

Citrix’s efforts to enhance the security capabilities of its offerings amid the increasing threat of cyber-attacks is likely to have driven the incremental adoption of its products. This is expected to have acted as a tailwind.

In September 2021, Citrix rolled out a cloud-powered solution — Citrix App Delivery and Security Service — designed primarily to simplify and automate the process of app delivery like provisioning, on-boarding and management. This will help IT teams to provide augmented user experience.

In the third quarter, companies including Hollands Kroon, Peninsula Health, Kaizen, Australia-based CoreSenses, University of Toronto Mississauga, Synopsys SNPS and Southern Housing Group selected Citrix’s digital workspace solutions.

Acquisition (February 2021) of Wrike is expected to have boosted the top-line performance. Wrike provides SaaS-based collaborative work management solutions for enterprises.

The Zacks Consensus Estimate for the third-quarter Subscription revenues is pegged at $361 million, which indicates a year-over-year improvement of 37.3%. The consensus estimate for Support and services revenues is pegged at $361 million, which indicates a year-over-year decline of 13.4%.

However, Citrix’s performance is likely to have been affected by the ongoing business transition to a subscription-based model. The transition is exerting pressure on Product and License revenues as well as Support and Services revenues.

In the last reported quarter, the company announced that it was implementing several changes to its sales organization as well as processes and go-to-market strategies in the second half of 2021 to boost its SaaS business.

Increasing investments on portfolio expansion via product enhancements and acquisitions — amid stiff competition from VMware's Horizon, Workspace ONE, and AirWatch offerings and Amazon’s WorkSpaces — are anticipated to have put pressure on margins in the third quarter.

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for Citrix this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

Citrix has an Earnings ESP of 0.00% and a Zacks Rank #3, at present, making earnings beat prediction difficult. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are some stocks, which you may consider, as our proven model shows that these have the right mix of elements to beat estimates this time around:

HP Inc HPQ has an Earnings ESP of +1.89% and a Zacks Rank #2, presently. You can see the complete list of today's Zacks #1 Rank stocks here.

Synaptics Incorporated SYNA has an Earnings ESP of +0.38% and a Zacks Rank #2.

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