APA 7th edition (Do add references & in-text citations)•PhD level writing skills.•Analysis should be well defined•Well-constructed and proof reading must be done•Only peer-reviewed journals and articles should be used.•Yahoo finance can be used
Finance assignment 2/2020-annual-report-and-2021-proxy.pdf 2020 Annual Report + Notice of 2021 Annual Meeting of Shareholders and Proxy Statement (In thousands, except per share data) 2020 2019 2018 Revenues: Subscription 1,114,798 650,810 455,276 Product and license 444,437 583,474 734,495 Support and services 1,677,465 1,776,280 1,784,132 Total net revenues 3,236,700 3,010,564 2,973,903 Cost of net revenues 498,546 464,047 433,803 Gross margin 2,738,154 2,546,517 2,540,100 Operating expenses 2,129,346 2,010,399 1,862,140 Income from operations 608,808 536,118 677,960 Other expense, net (53,928) (26,618) (48,505) Income from operations before income taxes 554,880 509,500 629,455 Income tax expense (benefit) 50,434 (172,313) 53,788 Net income 504,446 681,813 575,667 Net earnings per share—diluted 4.00 5.03 3.94 Weighted average shares outstanding—diluted 126,152 135,495 145,934 Financial highlights Year ended December 31 SaaS revenue (millions) 2018 2019 2020 $274 $391 $541 2018 2019 2020 $1,035 $783 $936 Subscription bookings mix 2018 2019 2020 42% 62% 75% Operating cash flow (millions) Revenue (millions) 2018 2019 2020 $2,974 $3,011 $3,237 In 2020, Citrix revenue grew by 8%. To our stakeholders: The year 2020 was one of transformation, as people and organizations around the world faced unparalleled challenges on a variety of fronts—from public health and social justice to the ongoing threat of climate change. Following the wildfires that began the year—reminding us of the devastating effects of climate change—a pandemic invoked a global crisis, forcing millions of people to shift to working from home in a matter of weeks. Then, in the wake of the onset of the pandemic, we saw the human toll of systemic racial inequality spark mass protests calling for long overdue action. A year later, we are still grappling with these issues. Although it has taken a concerted effort, I am extremely proud of how quickly we were able to respond and help our employees, customers, and partners drive meaningful change during these times. In response to the pandemic, we took decisive actions aimed at making an impact in the most pressing areas: keeping employees safe, helping our customers ensure business continuity, and supporting the communities in which we live and work. Early last March, Citrix employees shifted to remote work seamlessly. We put measures in place to help our teams and neighborhoods by extending benefits for employees directly affected by COVID-19, establishing a relief fund for nonprofits in our local communities, and doubling our match limit for employees’ charitable donations. For our customers, there’s no doubt that the pandemic accelerated their digital transformation roadmaps, move to the cloud, and adoption of flexible and hybrid workstyles. Citrix solutions help organizations deliver a consistent and secure work experience to all users, across all devices in any location. This value proposition became increasingly important—particularly for our customers in the healthcare, supply chain, and public sector verticals. Through the pandemic, we have proudly helped customers around the world and across industries transition to remote work and maintain business operations with minimal disruption. In response to the racial and social injustices experienced in the past year and through the course of time, Citrix remains committed to working toward an equitable future for all. This starts with our own organization—our racial demographics should reflect the world in which we live and the customers we serve. We have implemented a racial equity strategy to I believe more than ever in our ability to change the way the world works. Our strong core values and customer-centric culture have positioned us to deliver innovative solutions to an increasing base of users. David J. Henshall President and CEO Shareholder letter increase Black and African American representation within Citrix and to assess our internal processes to eliminate biases and ensure equality. We are steadfast in our commitment to create lasting impact. In addition, we are investing in STEM programs, scholarships, and youth mentoring to support a diverse talent pipeline for our future and reflect our commitment to long-term systemic change. And finally, as organizations evaluate their future work environments, they are increasingly committed to sustainability—a trend accelerated by the pandemic as we see how widespread remote work and reduced commuting and travel can quickly reduce environmental impacts. Because Citrix solutions increase employee engagement and productivity while working remotely, we can support our customers’ sustainability goals by decreasing energy consumption and greenhouse gas (GHG) emissions—through both the use of energy efficient devices and, longer term, the reduction of real estate needs. In 2020, we also accelerated our environmental, social, and governance (ESG) initiatives—evaluating our own global operations to identify opportunities for improvement—and have set targets tied to executive compensation to further encourage achievement. Moving forward, we are committed to continuing to increase transparency through our ESG-related disclosures. 2020 business performance While 2020 was a challenging year in many ways, our financial performance exceeded expectations, and we made considerable progress in our subscription model transition. In 2020, subscription revenue increased 71 percent year over year, and our future committed revenue, or the combination of deferred and unbilled revenue1, increased 18 percent, to $2.9 billion. Our subscription ARR2 balance reached over $1.2 billion, up 62 percent year over year, and the SaaS component of ARR increased 39 percent, with an ending balance of $725 million. We exited the year with subscription bookings representing 85 percent of our total product bookings, and 95 percent of our Workspace product bookings in the fourth quarter of 2020, up from 69 percent and 73 percent respectively in the fourth quarter of 2019. We are continuing to grow our recurring, predictable, sustainable revenue and cash flow by delivering both Workspace and Application Delivery and Security solutions through subscription offerings. 1. Unbilled revenue primarily represents future billings under our subscription agreements that have not been invoiced and, accordingly, are not recorded in accounts receivable or deferred revenue within our consolidated financial statements. 2. Annualized Recurring Revenue, or ARR, is an operating metric that represents the contracted recurring value of all termed subscriptions normalized to a one-year period. It is calculated at the end of a reporting period by taking each contract’s recurring total contract value and dividing by the length of the contract. ARR includes only active contractually committed, fixed subscription fees. Our definition of ARR includes contracts expected to recur and therefore excludes contracts with durations of 12 months or less where licenses were issued to address extraordinary business continuity events for our customers. All contracts are annualized, including 30-day offerings where we take monthly recurring revenue multiplied by 12 to annualize. ARR should be viewed independently of U.S. GAAP revenue, deferred revenue, and unbilled revenue and is not intended to be combined with or to replace those items. ARR is not a forecast of future revenue. Annualized recurring revenue (millions) 2018 2019 2020 SaaS Subscription $743 $520$528 $350 $1,205 $725 Shareholder letter The onset of COVID-19 in early 2020 resulted in a rapid shift to remote work and a broad realization of hybrid workstyle benefits. We saw customers who already had an established cloud footprint quickly and easily scale capacity as needed with Citrix solutions. Specifically, Citrix Cloud enabled customers to deploy workloads significantly faster than those who ran workloads on-premises. Due to the urgency of remote work, the majority of on-premises customers chose to expand their seats with our on-premises subscription offering, rather than migrating workloads to the cloud. Our Application Delivery and Security business reflects the secular shift to software from hardware- based solutions, and we expect this trend to continue over the longer term. Software accounted for 44 percent of total Application Delivery and Security revenue, up from 29 percent in 2019, with many customers utilizing our Application Delivery and Security solutions to optimize delivery of Citrix Workspace. Customers are seeing the value in our pooled-capacity subscription offering, which allows them to utilize capacity across various deployment models—whether on-premises, in the cloud, or in a hybrid infrastructure. Our solutions enable full visibility with an optimized user experience, while offering maximum protection to our customers’ ecosystems. I’m extremely proud of our team’s performance and how we came together to support our customers. Whether operating in multiple clouds or on-premises, our customers were able to provide their employees a safe and productive work experience through Citrix Workspace, with optimized performance provided by Citrix Application Delivery and Security solutions. Looking ahead With our subscription licensing model transition largely complete, our focus is now on: 1) migrating our large installed customer base from on-premises to the cloud; 2) expanding our existing footprint with general purpose Workspace, Analytics, and Security solutions to reach more users within our customer base; and 3) successfully executing on our opportunity to accelerate growth with our recent acquisition of Wrike. ODOT supports a mobile workforce and COVID-19 volunteers with Citrix Workspace The Ohio Department of Transportation (ODOT) maintains one of the nation’s largest transportation systems, with infrastructure assets valued at over $116 billion. To improve remote access to applications across a wide range of devices, ODOT uses Citrix Workspace to deliver a secure and unified experience for various employees, from roadway construction crews to bridge inspectors and highway maintenance workers. When the global pandemic was declared in early 2020, ODOT did not have a formal work-from-home policy in place. Within four days, Citrix solutions enabled 1,800 employees to work securely and productively at home. ODOT was also able to support neighboring state agencies during the crisis. As Ohio saw unemployment numbers dramatically increase due to COVID-19, the Ohio Department of Jobs and Family Services did not have the capacity to handle the volume of calls and requested assistance from other state agencies. With a modernized workspace architecture powered by Citrix, ODOT quickly took action, and in three days supported more than 1,100 volunteers with the applications they needed, delivering vital support to Ohio citizens through Citrix Workspace. Shareholder letter Accelerating the cloud migration: Organizations are looking to modernize their application infrastructure by both adopting SaaS applications and transitioning on-premises workloads to public clouds. As customers work through various stages of their cloud journey, Citrix solutions simplify their management of applications while offering a flexible, secure, and seamless experience to end users. That said, we know that a customer’s decision to move an on-premises Citrix workload