Citrix Systems Stock Slaughtered After Q2 Revenue Miss, Margin Contraction, Weak Q3 Guidance

Citrix Systems Inc CTXS reported second-quarter FY21 revenue growth of 2% year-on-year to $812 million, missing the analyst consensus of $845.97 million.
Revenue from Subscription rose 54% Y/Y to $374 million, SaaS grew 60% Y/Y to $210 million, Other Subscription grew 46% to $165 million, Product & License revenue declined 55% Y/Y to $59 million, and Support & Services declined 11% Y/Y to $379 million.
Workspace revenue rose 2% Y/Y to $599 million, App Delivery and Security revenue of $186 million was flat Y/Y. Professional Services revenue declined 5% Y/Y to $27 million.
Metrics: Total ARR rose 19% Y/Y to $3.02 billion, Subscription ARR increased 74% Y/Y to $1.65 billion, and SaaS ARR grew 74% Y/Y to $1.03 billion. Citrix Cloud Paid Subscribers increased 52% Y/Y to 11.4 million.
The non-GAAP operating margin contracted 500 bps to 26%.
Non-GAAP EPS of $1.24 beat the analyst consensus of $1.19.
Citrix generated $144 million in operating cash flow and held $532 million in cash and equivalents.
Dividend: The board declared a quarterly dividend of $0.37 per share to be paid on Sep. 24 to shareholders of record on Sep. 10.
Outlook: Citrix sees Q3 revenue of $765 million- $775 million, far lower than the analyst consensus of $850.45 million.
It sees non-GAAP EPS of $0.85-$0.90, significantly short of the analyst consensus of $1.42.
Price action: CTXS shares traded lower by 17.1% at $95 in the premarket session on the last check Thursday.
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