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Here’s the entire text of the Q&A from Citrix’s (ticker: CTXS) Q3 2005 conference call. The prepared remarks are in a separate article. We recognize that this transcript may contain inaccuracies - if you find any, please post a comment below and we’ll incorporate your corrections. And please note: this conference call transcript is a Seeking Alpha product, so feel free to link to it but reproduction is not permitted without the explicit permission of Seeking Alpha.

You may want to read the prepared remarks before reading the Q&A.

[Operator]:

Our first question comes from the line of Ed McGuire with Merrill Lynch.

[Q]: Yes good afternoon. You got a number of interesting products in the pipeline could you talk about how you are thinking of positing your constellation, Kevlar , IRIS, are these capabilities that are going to folded into existing suite, or sold as discrete products?

[A]: Thanks for the question, the answer is all of the above and we have not made productization decisions yet. Remember that these technologies have been in development, most of them are designed for the Longhorn server environment although we are developing some of them to be backward compatible to Windows Server 2003. We will release some as products; some of them will become features of existing and new products so we will actually do kind of all those things from a packaging perspective. But I think the way to look at all of those project code names and some of the other suites showed at iForum like Blade Runner and so forth. What we are doing with constellation is really applying the vary vast technological base in platform that we have around application virtualization and turning up the velocity and heat and building more products to meet very specific customer segments like customers that use for example very graphic intensive applications like product line management some healthcare type of applications. GIS stock prices apps so that will be a space that we go after with some of the technology as well as obviously expanding the Presentation Server and in addition creating some additional management kind of tools and products as well. So really it’s turning up the velocity and heat in app virtualization to extend our leadership even further.

[Q]: And just a question on channels with, 800 partners reselling the Access Gateway, could you talk about how much overlap there is with your existing Presentation Server channel you know how much of these 800 are new maybe securing brand bar and just touch a little bit on your progress in where your plant were rolling introducing NetScaler to existing channel partner.

[A]: These are been your question about Gateways. The overlap is significant although we have recruited some new integration partners as a result of having the Access Gateway specifically from the security space players that had been selling first generation SSL VPN and as well as IP 6 VPN so this product really distinguish itself when compared to those two categories. But I think the majority of these Access Gateways growth is coming from Citrix channel partners that have been Presentation Server partners and what they are doing is they are going back to Citrix Presentation Server customers and showing how they can turn off the secured gateway feature of Presentation Server and turn on the Accesses Gateway as a more secured more robust and more flexible solution that has a better user experience and that also support all kinds of other application access including web application, connections including made-of-connections to E-mail file services as well as you know a connecting to soft phones IP PBX etc. This is one of the if not the only product that is out there that actually has all those capabilities. That’s were we are getting into traction channel wise with the Access Gateway and by the way that number of around 800 or so, it’s growing everyday and because we haven’t completed the worldwide geographic rollout of the Access Gateway. so that’s still underway. Then it is a good segway to answering your question about our application networking products because we think that many of these same integration partners have not only the skill set, but also have the interest and vision to step up to our application networking products. Because they understand security, they understand application delivery, and they understand how to integrate products within networking infrastructure and all those skills are important for selling and servicing our application networking products. Having set that we will continue to recruit integration partners that have been selling these types of products whether they are first generation so the point product in the space whether it’s a load balancer, a firewall something like that we will up level them to a relay this next generation that is technologies and products. So we will be going after them as well to both single and two tier distribution.

[Q]: Right thanks a lot.

[A]: Okay.

[Operator]:

Your next question comes to the line of Phil Winslow with CFC.

[Q] Hi guys, great quarter, just three quick questions. first just from the NetScaler perspective,. wondering if you comment on what it contributed during Q3 and then also when you start look at Q4 and Q1 as far as moving NetScaler into some of those channel partners. may be you could touch on this sort of what your plan is as far as training.

[A]: Well I will take the first part of that question then turn it over to Mark,. market as far as the part of the ANG performance in the third quarter contributed roughly $6 million in total revenue and remember that it was split about 75% in license and 25% in the services line. On a net dilution basis and a little bit less diluted than we had originally anticipated the deal closed slightly latter in the quarter so it is just under two pennies diluted to the bottom line.

[A]: Phil great question. Training is absolutely essential on new products and so I think most of you know that we have our worldwide summit week in January and every year the focus of that meeting is training. This year imagine we will have probably close to 3000 to 3500 attendees. All of the Citirx employees that customer facing as well as key partners on a worldwide basis probably one third, two third in terms of attendees one third Citirx employees two third partners. The training on our application networking products will absolutely be key and for that event. We have really turned up the velocity on the training materials I mentioned that in some of the prepared comments, we are ready to do this in a more, more repeatable scaleable way and gain plan is to then feather these training programs into our Calx, Citirx authorized learning center. We have over 300 worldwide and we’ll look to have them provides certifications for not only configuring and managing NetScaler products but also selling them. So that’s will our game plan for training, really sort of starting with a focus on the top end our customer facing people and partners and as we go into a sort of mid to back end of the year really having a scaleable repeatable process that partners can advantage of through our Calx.

[Q] Great, there is one last question and you guys great to leverage this quarter. I was just wondering sort of if you comment on your plans as far as whether you would be head count on the sales or R&D side or just more this given up an revenue look at 2006.

[A]: Well I think as we look into a really into Q4 and to next year and we’ll certainly be adding head count in the places that are almost strategic for the business. And in the field it will be not only places where we can drive synergies across the various product groups. But also to expand geo coverage in the places that make sense in each market. Certainly be working in the channel organization, customer care to help drive mail or remove of the subscription advantage program and other support business. But we are certainly focused on the leverage that’s why you seen our head counts grow certainly moderate a lot over the past couple of quarters as we really look to drive return from all the investments we have been making. So imbedded essentially in the operating expense guidance is a modest head count grows and really all off areas of the business in Q4.

[Q]: Great thanks.

[Operator]:

Your next question comes from the line of Adam Holt with JP Morgan.

[Q]: Hi good afternoon and good quarter, a couple of questions on the margins, in the quarter you exceed our expectations and I was wondering if you found that NetScaler was slightly less diluted than you thought, with the margin outside came from the core Citrix business and along that line talk about what the contribution is at this point in the online business.

[A]: Let me take that a couple of seconds. I just answered the question a couple of minutes ago regarding the dilution of the NetScaler business it came between 1 and 2 pennies and slightly less than we had anticipated just because of the close date being slightly lower than we anticipated. So that had minimal effect on it, overall the corporate functional groups as well as the Access management group have been adding a lot of heads throughout the year. We’ve been keeping that growth pretty much in check. So excluding the NetScale business core expenses actually declined just slightly on a sequential basis. The online group posted about 20 to 22% in a standalone profitability so pretty much consistent with what we saw last quarter. I think we are just seeing good success across all areas of the business this quarter. And like I said while we go into business we continued to be focused on driving leverage to the bottom line.

[Q - Adam Holt]: And just two questions if you will on the revenue side. If I took your comments correctly on the contribution for NetScaler and the Access Gateway in the quarter it looks like the combination of Access Suite and Presentation Server grew about 1% year on year. What do you think is the right growth rate for the combination of those two product areas. As we continue to get further into the four hour cycle and the channel continues to ramp.

[A]: I think in David’s comments he mentioned that it was the one area that we saw growth but it really was under what we wanted. And strictly around the activity we saw in EMEA around the Access Suite and having some deals pushed pretty consistent with what we have seen for now three quarter in a row. So I think with that under sort of more normal economic environment in that part of our market because it is a big piece of our business over there. We think we should be able to grow the Presentation Server and Access Suites in the mid single digit. Sort of range and that will be our focus to do that.

[Q]: Just one more question on the services business. Have you starting to pick up now that you are in the online business for a bit a while any kind of seasonality in that business in terms of sequential trajectory and any comments on what we should expect going into next year there.

[A]: Specific to the online business, no real seasonality there its growth rate fluctuate a bit quarter to quarter, but you are seeing that in business is continuing to grow around 65%. So it’s really one of our fastest growing business. If you look at the other lines in the service, really the other components of the services line you did see pretty healthy growth sequentially and year over year. That was driven by better utilization our consulting teams increasing demand for education are in the release, especially in North America and some other things. So we’ve added to consulting capacity around the world. We need to help get customer successful and drive that standardization so I think that it will move around a bit but it will continue to grow in this range over the next year.

[Q]: Great thank you.

[Operator]:

Your next question comes from the line of Steve Ashley with _____.

[Q]: My congratulations on the quarter as well. I just wanted to get a clarification on Phil’s question, I though when you said $6 million contribution with about 75% in license but that’s was just networking group NetScaler acquisition did not include the Access Gateway is that correct.

[A]: yeah.

[Q]: And may be you can give us a little color on the revenue contribution, the earnings that have Access Gateway business.

[A]: That was a lot tougher because it’s been pretty well integrated into the rest of the field promotion over time, we’ve actually integrated the end to end product into the Gateway. So we are looking at it less in terms of a standalone group. So overall the business continues on a standalone however continues to do very very well. As Mark mentioned in up about 50% sequentially still running at a negative overall contributed margin , that we talked about in so many forecasts for the several quarters.

[A]: If I would add just one other things, so David that we do look at it as standalone business because so the market that it addresses one of the markets that it addresses that we just don’t spend a lot of time talking about, is the voice over IP market, where our application gateway is the number one product for driving applications to IP screen phones. And that product seeing some very nice growth via our partnerships with Cisco with Avaya and Nortel as a mater of fact during our conference in Las Vegas I went over with a couple of other of our team to see the implementation at Caesar’s Palace and they have this incredible color IP screen phones in the new tower and are 1500 rooms with the advertising , theatre tickets, bell services, room service right on this screen and they are very excited about it, we’ve only sort of scratched the surface, we have lot of bids out for this kind of implementation, we’ve the done at the Wind hotel there, so this group is also driving that part of the business and we unfortunately have so many products that, feature every one of them in our prepared comments. So we are seeing go traction there as well.

[Q]: David a question, on the tax rate was 21% in the recent period, the outlook for the full year of fourth quarter, can you also comment on either one of those.

[A]: For the fourth quarter, I expected similar tax rate, I think we are somewhere around 21%, as you know the tax rate does move around just based on what geo, a lot of revenue and profitability is being generated from at this point of time I would expect somewhere around 21% to 22% in the fourth quarter, I did mention that into 2006, We expect this tax rate to move up, 2 to 3% points and that’s just because the application networking business gateways online continue to improve and show more and more profitability. We are just having move revenue coming in domestic sources. So those are somewhat upward pressure on the way till next year.

[Operator]:

Your next question comes from the line of Brendan Barnacle with Pacific Securities.

[Q]: Thanks good. I wanted to just get clarity on a Access Gateway presentation server throughout this year again, I think the matter looks 5% growth so we had this on the earlier mentioned 1%, so I wanted to be clear on that but on doing the math right it should be around d$4.5 million to NetScaler, less of that we think about 5% growth for the organic.

[A]: Let me answer in couple of different ways, I mean there is a distinction that I am hearing a lot between organic and acquired businesses. And the one point that I would make is that organic business when we think about the Gateways, it was essentially zero revenue at the time of the acquisition so all of that is basically organic business at this time. And we are talking about online, we running at a level roughly one third of where we are right now. And also new products like Go To Meeting being organically delivered revenue in business. So as we go forward we are trying to ge t reasonable granularity into components like the application networking business etc., It’s just harder and harder to break it out, as we integrate the sales promotion of the product etc., We will be focused on selling whatever makes sense to our customers whether it’s an accessories to gateway etc.,, So take it back to your original question, the license revenue contribution from the application networking group was $4 to $4.5 million quarter and the rest in the services business. The Gateways revenue if you were trying to break it out as a standalone will be a few million dollars with modest growth in the accessories presentation side of the business.

[Q]: Okay great. And on the tax rate, can you give more color on why that would go up to 2% to 3% next year?

[A]: It’s got more revenue. If you look at where the majority of the revenue is coming from, from the online group the Gateways organizations and the applications networking team. Most of that in the US, we do pay close to 40% taxes in the US and a much lower rate for resources coming from outside the US. So as our businesses become much more profitable it just puts pressure on the aggregated rate. So obviously we will be looking to drive incremental revenue outside the US in new markets which is really just new opportunity for those businesses.

[Q]: Great and then Mark there was announcement out of IBM about the work that you guys are doing with them around virtualized host and client infrastructure, I just like to know press release that on, how does that blend in, where do you see that driving revenue and which of these new guidance will play into?

[A]: See we actually demonstrated this in the lab in iForm, we didn’t give it much, well we didn’t any keynote visibility at all, the project that’s called Blade Runner 2 and actually have been working with IBM for over a year and we are excited about it because we think it gives more choices when it comes to virtual machines. And we are all about making the connections between virtual machine devices whether they are servers and desktops that are physical or there are servers and desktops that are virtual. So this announcement is a very interesting one that we partnered with IBM in sort of early market developments in IBM GS, we will have some service offerings around it. If you went to lab during the iForm and looked at Blade Runner you could see sort of public version of it. The private version is even more exciting and we think virtual devices are just one more sort of piece of the infrastructure that we need to connect us to. So that means for customer is that they will end up with more options when it comes to sort of the desktop side, and the server side and for us it means more opportunity because we really cater to making these more heterogeneous and more complex kind of environments driven by more access and application scenarios, we can simply of the delivery of all of it. So it’s good stuff.

[Q]: Great and lastly can you comment on the conducive environment around NetScaler as there has been a lot of talk about _____ do in that market.

[A]: Yeah. We feel really good about our market position, on both the technical front as well as the customer satisfaction and service front and are focus on customers. We are regularly beating the other players in the technology shootouts that happen all the time. So we are feeling really good about that and we are not standing still, we released some exciting new compression technology during the quarter that moved the acceleration and performance up significantly and we have lots more in store there so it is again an exciting market place, the fact that the matter is, the big opportunity is the not competitive front , it is the not share, it is the growing the primary market place. So that what we are trying to is actually use our partner network to communicate with our customers and really explain to them in simple terms where the sweet spot is for using the NetScaler application delivery system around driving TCO driving performance, driving security in terms they understand that I think is a much bigger opportunity then just trying to steal business from one of these other players.

[Q]: Okay thank you.

[Operator]:

Your next question comes from the line of John Resudo with _____ Capital Market.

[Q]: Good afternoon everyone, Mark I wanted to get your comment when you are ready for the 64 bit version presentation server, I think now you are looking at about somewhere between 50 to 80 users per server. And I think you said that could triple with your 64 bit release and is that actually Vista phenomenon or what could we expect around that?

[A]: Okay so the high speed version is not Vista okay. We are talking about the product that’s available today, that runs on the Windows Server 2003 X64 edition, okay, you are talking about 64 bit. So it’s really notwithstanding Vista long formats. It’s now. So there are two things here John, there is what the operating system does in the 64 bit environment that opens up 64 bit addressable memory space which is classically been the limiting factor in most of these percolations projects that we’ve done for many years. So that’s one piece. And then the second piece is a number of technologies that we released in PS4 have been moved forward in the 64 bit world that actually drives the platform in a way that allows to create even more users per server than standard terminal servers. So we’ve broken some boundaries there and that’s part of the value lab that we provide that gives customers instant order line. Even related to sort of basic terminal services capabilities.

[Q]: Just a clarification , is the number that you said, I proposed it was 50 to 80 per server today, and you could actually triple that meaning 150 to 200 let us say. Is that really the type of magnitude you are looking at or we are going off pace here.

[A]: Well okay, I hate to answer to you this way, it all depends.

[Q]: Okay.

[A]: We have customers I can tell you that are running a 150 plus users per server today. Okay and that’s not on PS4 okay, in a 32 bit environment and that’s because that the applications that they are running in that environment and then you have them, that would be in the sort of 80 to 100 range as well. So either case sort of apples to apples they are going to get approximately 3X which if you think about it, when you think about the economic dynamics here, it’s fundamentally changes those and the sort of the cost model around application virtualization in a way that we think will allow customer to move from, using this technology for only remote access or for limited number of apps to a broader set of points over style applications and a broad number of users no matter where they happen to be accessing the application from.

[Q]: Okay. Perfect. Mark with the Access Gateway and NetScaler you have a different product line, you are going through your indirect with these guys obviously supporting it with your internal people as well facing customers, wondering if you could articulate for us the strategy behind that to keep these products not only to leverage half of your existing presentation server obviously for a new deal that is packaged in it as a part of the presentation server for new proposals. But also in a standalone environment. Is your existing channel is the right distribution mechanism to do that would you have to add channel partners, do you have to beef up your internal customized baking organization.

[A]: Okay. So let us see, so it was always tough when you characterize in our channel in one term, to ask whether they are right. They are not. They are not a single person, sort of a range of people and personalities from the local organization and maybe a small town to IBM Global Services. And remember the way we work with partners is sort of two fundamental ways. One is on domain account, we have a little over 400 domain accounts where we accept the responsibility for coordinating the relationship and bringing the right partners and even Citrix specialist to the table to make sure that the customer gets the kind of solution that they need across the product areas. So that’s one piece and in that piece we have great partners and we have the need for more partners that are capable of working more of a enterprise far from multi national type customer. And we’ve continued to develop that kind of partner community, the second sort of way we work with partners is we do a lot to stimulate demand both indirectly and directly and work with them and support them in fulfilling that demand in terms of value selling as well as the fulfillment. In those we are trying to make sure our partners get trained in all the new product areas that they wish to represent us in and if they don’t get trained they don’t handle those products. Where we have gaps in a particular geography with a particular product area we look to recruit partners like that to work with that can driver those markets with us. And so that’s the other part of business so let me now map those to John our application networking and our access gateway products. So first of all the application networking product line is pretty sophisticated, pretty complex and historically has been sold in this more domains account type of manner. And so there is shift there, they brought some new channel partnership to the table because we didn’t have a 100% overlap who would work there, at the same time, next year we just announced NetScaler standard edition product for smaller and midrange type customer and that’s the kind of product because if you look at that product it’s much easier to configure much easier to sell, it’s got the right price point, it’s got a number of characteristic that are really suited towards a larger scale channel that can actually take that product in an proactive basis with our support again , support with training , support with demand generation and support on a transaction level. So that’ how the application networking products, the inverse for the Access Gateway products, I say that the Access Gateway products have really gained traction through our broad based channel really getting exciting about the product, taking it into existing customers as well as customer that they have sold prior, let us an IT VPN or even a first generation, FSL VPN, and the opportunity there now is when you see that some of the analysis we’ve made last week around our advance Access control capabilities and some of the things we are going to be doing in combination with some of the NetScaler technology to really take the Access Gateway product line up market and make it suitable for the domain account in the larger scale type customer in that kind of sale promotion. So it’s a long explanation but these products don’t come prebuilt for specific, for the broad market place, they come with focus so we are accepting that focus trying to amplify it and extend it using our have confidence in.

[Operator]:

And you next question comes from the line of Brent Williams of Keybanc Capital Markets.

[Q]: Okay. Just following up a little bit on Johns question, so in terms of getting things into the hands of channel partners you mentioned things like getting certified to sell Access Essentials or since that is relatively similar to the core products, what is involved in getting certified , that’s just technology training or is that just getting onboard with the marketing message?

[A]: Brent it’s both. And you are right it’s pretty straight forward, it’s not complex right. But we do ask partners to put some skin in the game and show their interest with some real activity upfront and then we try to reward that on supporting them and then remember all these products benefit from our advisory rewards program that I think has been very successful in stimulating the relationship with our channel partners and stimulating them the value sell, to get out there and sell the products in a solution kind of format, whether it’s the simple product like Access Essential or upcoming more sophisticated product like our application networking product line.

[Q]: So in terms of the actual mechanics which tends to sounds like it’s a little harder than cutting this thing off the bark so serial, it’s time to getting your cab to midnight member card but not as much as getting started for the first time for your guys. It’s like two days of training per person or?

[A]: I think with the case of Access Essential it’s not that complex, most of these programs you can actually do online,. Through online training we seen some great performance from our online training offerings. And you can take the test online, you get certified online actually in many of these areas. And we look for that scalability and offering that through our authorized learning centers

[Q]: Okay super that’s it for me. Thanks.

[A]: Okay.

[Operator]:

And you next question comes from the line of Dino Indiana at UBS.

[Q]: Hey guys, sorry, I think you have answered your question already, but your voice kind of faded on my line, but through such a fact that Gateway, what was the license revenue.

[A]: It was about $3 million.

[Q]: $3 million okay, and moving on to Access Essentials did you have any plans to kind of replicate that model in terms of bundling into Microsoft cow, kind of on the enterprise side?

[A]: Dino, not at this time, enterprise customers have select agreements with Microsoft and they are on subscription with Microsoft and there really isn’t much in the way of economic nor simplicity value for them. Incase of the small customer, there is both an economic as well as simplicity of installation, getting the product up and running, sort of need, so we fill that need with these they bundle up the cow.

[Q]: Okay both of my questions have been answered.

[A]: Okay thanks Dino.

[Operator]:

And you next question comes from the line of Jason Craft with SIG.

[Q - Jason Craft]: The switches online margin is 20 22% pretty same as last quarter, which is like 22% what’s your expectation there as far as how much more room there is run, could it be as high as 30% or is this pretty where we should be modeling the (010009) Citrix online going forward.

[A]: Well I think Jason for the short term it’s where we would like to see it, I mean there is really clear trade off that we make, each quarter we are doing plan between growth and profitability in this business. And we think that the market opportunity is still so big that I did rather not run it at a higher profitability that means cutting back our ability to grow top line. So for the foreseeable future, I think kind of in the low 20s is really the place where it would be optimal for us. But it certainly has potential to generate higher margin on a contribution basis. As we do things to integrate more of the back office functions, and they are really easy savings. We will be working on throughout 2006.

[A]: Jason the thing that I would add as I think the team, Dave has done a tremendous job in gaining more and more leverage within the business. And if you look at whether it’s sales cycles, selling cost on a contract and agreement basis, that ‘s where we are getting a lot of the list in the operating margins and so we want to continue to see that very carefully as David mentioned to get the right balance because we are seeing great success from that team and we want feed it.

[Q]: For Q4 with the NetScaler been in there for the first full quarter, what’s your expectation for the blended networking gross margins.

[A]: Blended networking.

[Q]: Include Net 6 and at scale addition of what you are modeling for blended gross margins.

[A]: Well, I mean , we talked about this little bit in our strategy day few months back for the various components before the A&G business obviously, has the standalone may be running in the lower 70s , A&G with the Gateway’s products running in the mid upper 80s. honestly though we are really not modeling the business that way, we are modeling it more on a combined looking at revenue in the aggregate and I think that looking at a 94% 95% is the range that to must really comfortable with going into the fourth quarter.

[Q]: Okay great. Final question on the guidance give some color on the margins for 2006, given some of the comments earlier by Mark on what kind of expectation for presentation or access suite going forward any status what we should be thinking about for 2006 revenue growth range guidance.

[A]: Not yet, not at this time, we are just starting the fourth quarter, I think that on the January call we will get much more granularity in terms of not only Q1 but also what to expect for the later part of 2006.

[Q]: Thanks.

[A]: Thank you Jason.

[Operator]:

Your next question comes from the line of Scott Kessler, Standard & Poor's Equity.

[Q Scott Kessler]: Thanks a lot. Two quick questions. One is give me a give a question but may be your responses maybe longer. I guess If you could provide more details around constellation, I was trying to followup obviously a lot of the information that you provided on the call, in conjunction with some of the slides but wasn’t able to catch up as quickly as I would have liked. Some additional background underlying that would be super and the second question is when do you think we could start seeing some products enhancements from Citrix that include what NetScaler offers. Thanks a lot.

[A]: Okay Scott let us see, I think probably for today, we are not prepared to get into deep conversation around constellation technologies although we would be happy to do that with any of you that are on the call that would like to know more, we’ll certainly talk more about these during our financial analyst meeting, in ’06. Remember this project is really designed to really intersect with the availability of Longhorn server which is, about two years away. Having said that based on some of the other comments made earlier regarding constellations technology, you will start to see some of these capabilities as perhaps features in some products that we would be releasing in the next 12 months let us say. And again as I mentioned to Ed when you asked. We haven’t made the final productization decision, we are working hard on the technology themselves making sure that they are flexible enough to be able to integrate into some of the products that we are looking after as we do it, I think a much better in the future of segmenting the market place in terms of customer needs and really matching products to very simple and clear customer needs and we saw some of that in our, in the excitement at our iForm conference last week.

[Q]: If I could just interject. I mean how would you then suggest that we describe constellation to our constituencies.

[A]: Good question., you should describe constellation as set of technologies that represent the next generation of application virtualization capabilities designed specifically for the Longhorn server platform. That’s the way you should describe them. Okay. So as we go into Longhorn server, the Longhorn server platform will have additional capabilities in the terminal services area that we are going to be able to embrace and extend and some of these technologies reflect our intention to embrace and extend those specific new capabilities of the Longhorn server.

[Q]: Now can you give us example of what’s coming like perhaps, could possible be.

[A]: Well, there will be a few things that maybe you just want to take away. So first of all none of these technologies will allow us in the Longhorn server, timeframe to make sure that our enterprise application virtualization franchise continues to grow and our brand in that area when it comes to meeting the large scale enterprise requirements is unassailable so that’s the first piece. The second piece is that a number of these technologies will allow us to actually build special purpose ad virtualization product for narrowly defying the market segments. Like the (010720) project that we demonstrated, both on stage and in the lab which we demonstrated virtualizing open GL specifically with Rick Mudder talking about the Boeing 787 project and what we are doing there with their systems environments, so there will be more products like that, coming from these technologies and the Longhorn server platform. And there is the number of areas that we need to do more working around the fundamental Access management not only application virtualization but across the platform that some of these technologies that were demonstrated in the lab under the constellation banner will allow us to address, so really it is a pretty broad answer, and represents lot of opportunities and strategy for the future.

[Q]: Yeah that’s really exciting, my other question involves when we could start seeing NetScaler functionality in some of the Citrix offering.

[A]: Again another good question. And an interesting one even internally, it’s awfully hard to ask a team that has got a huge runway and such a huge growth rate, ahead of them, focused on sort of the delivery and web applications and optimizing web application delivery to peal off some technology to support another part of the company. And so it’s interest to date, we do have a group that have advanced products and technologies group that actually works in this area and I think the answer to your question is not in the near future probably a longer term more of a 12 to 18 months time frame. And we will look to make sure that the NetScaler product family is a really good member of the overall access platform so we won’t do it at the expense of slowing that product line down because there is such a vast opportunity there.

[Operator]: Your next question comes from the line of Robert _____ with RBC Capital Market.

[Q]: Good afternoon just one quick question for you Mark. You kind of mentioned that Europe may be live up to your expectations and there was a couple of push outs and maybe that’s been hanging around for a while, is there something you need to try to fix that or how are you looking at that business.

[A]: Yeah. Honestly we’ve been studying it as a team every single quarter that we see this occur. And we’ve done a lot of things in market, I think that historically I think you all know that historically one of our strongest team for our execution in the world, so they are dealing with some significant localized kind of economic issues that are in the macro environment doing their best, but I don’t that there is a lot more that we can do to change that. And so we are working through it like many many enterprise infrastructure companies are in that specific market.

[Q]: Great, a nice quarter.

[Operator]: Your final question comes from the line of Israel Hernandez with Lehman Brothers.

[Q]: Good afternoon, nice quarter guys, Rob just lead me to the punch but an extension to that question with respect to North America as you look at Q4 are you seeing any signs or any push backs from customers given some of the macro concerns that are in the market right now. Or is your expectations based on the pipeline both here and the state as well as in Europe that we are likely to see some phenomenal fourth quarter seasonality.

[A]: Okay Israel I think everyone should be concerned about the macro environment that we are .looking at, I don’t need to repeat all of that, so from a general perspective we are not seeing any of that in the pipeline or in the business at this point in time. But I can tell you as we look into ’06, really do our planning into ’06, we are going to really do a very carefully in context to the macro environment that could start to change after Q4 and so we got a great Q4 plan as the guidance suggests. And a huge pipeline, great excitement in our customers and partner community and our customer facing people, so it’s all there and if the general environment doesn’t work against us we are going to have a great run here.

[Q]: Okay thank you.

[A]: Okay Israel thanks.

[Operator]: Ladies and gentlemen we have reach the end of the allotted time for questions and answers. I will now turn the call back over to the management for closing remarks.

[Q]: Well we are going to close really quickly.. Once again thank you for joining the call for the excellent questions and for your ongoing support as we continue to grow the business and really execute our strategy to be the number player in Access infrastructure. Thank you and we’ll see in three months.

[Operator]: Thank you for participating in today’s Citrix Conference Call, you may now disconnect.

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