Citrix Systems takes connectivity to the next level. The company makes network access devices and software designed to enable PCs, IP phones, smartphones, and other devices to remotely and securely access applications across wired and wireless networks, freeing customers from the difficult and costly task of installing and updating software on each piece of hardware. Its product line includes application virtualization software (XenDesktop), network access devices (NetScaler), cloud computing connectivity and aggregation applications (CloudPlatform), and online meeting software (GoToMeeting). Citrix also offers managed online services for meetings and presentations, technical support, and remote desktop access.
Citrix divides its business into two reportable segments: Enterprise and Service Provider (primarily consisting of desktop, data center, and cloud products) and Mobility Apps (Communications Cloud, Documents Cloud, and Workflow Cloud products). The Enterprise division accounts for 80% of sales, while the Mobility unit brings in the rest.
Florida-based Citrix rings up about 41% of its revenue from outside the US. The Americas (the US, Canada, and Latin America) is the company's largest market segment, accounting for about 60% of sales, followed by Europe, the Middle East and Africa, representing about 30%. The rest comes from the Asia-Pacific region, the company's smallest but fastest-growing market.
Sales and Marketing
Citrix markets and licenses its products and services through multiple channels worldwide, among them value-added resellers (VARs), independent software vendors (ISVs), direct through the Web, and original equipment manufacturers (OEMs). These distribution channels are managed by Citrix's global sales and services organizations, which provide training and certification to integrators, VARs, and consultants for products and services. One distributor, Ingram Micro, accounted for 13% of Citrix's net revenue in 2014.
Its products and services are for customers of all sizes, including consumers who subscribe to its GoToMyPC remote access service (remote access), network engineers who purchase its NetScaler Web application devices (cloud networking), and IT professionals who license its XenDesktop infrastructure products (desktop virtualization). Citrix targets such customers as CIOs, desktop operations managers, IT infrastructure managers, network architects, and server operations managers, as well as small business and individuals.
Citrix has seen strong revenue growth over the past decade. It reported sales of $3.14 billion in 2014, a 7.7% increase from 2013. The gain was driven by increases across all lines of products and services led by NetScaler, software as a service sales (up 12%), license updates and maintenance revenue (up 9%), and revenue from professional services (up 26%). Despite the revenue gain, net income tumbled 25% in 2014 to $251 million, following a 4% drop in 2013 from 2012. Expenses -- particularly those for sales, marketing, research an development, and services -- have grown rapidly. Net income in 2013 was down 4% to $339 million.
Citrix's cash flow from operations followed the trajectory traced by net income. Cash flow in 2014 fell 9% to $846 million because of changes in income tax (it had risen 15% the prior year).
Citrix is focused on three trends that are reshaping the computing landscape: personal mobility, enterprise cloud evolution, and cloud services build-out. Mobile is at the core of the company's strategy as it shifts from the focus on virtualization. It continues to introduce new versions of its products to address these markets. In 2015 Citrix introduced the NetSCaler MPX 2500 series, an app delivery controller for communications service providers. The product features Citrix's TriScale technology.
In addition, the company regularly uses acquisitions to broaden its product line and expand into complementary markets.
Mergers and Acquisitions
In 2015, Citrix acquired data storage company Sanbolic, which aims to make virtual desktops and apps easier and cheaper to use. About 200 Citrix customers already use Sanbolic's technology with XenDesktop and XenApp.
Citrix added Grasshopper, which provides telephone services for small businesses. The acquisition expands Citrix's communication and collaboration services for small businesses.
In 2014, Citrix bought RightSignature, which develops e-signatures applications, for about $38 million. Prior to the acquisition, the companies had been working together on a joint ShareFile/RightSignature application that provides customers with secure file storage, syncing, sharing, and signing. The RightSignature technology expands Citrix's Documents Cloud product beyond storage and file transfer to support e-signature and approval workflows.
Another 2014 purchase was Framehawk, which provides virtual desktop and application optimization for mobile devices. Early the previous year it acquired Redwood City, California-based mobile device management (MDM) leader Zenprise. Citrix integrated Zenprise with its own products to form a single, integrated enterprise product line for managing mobile devices, apps, and data.