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We made excellent progress in 2003 – a great year for Citrix, strategically, financially and operationally.
Revenues were $589 million, up 12% over our 2002 performance of $527 million. In fact, excluding royalties, 2003 was a record year for Citrix revenue. It was also a record year for bookings, driven by solid software license sales and renewals of Subscription Advantage, our software license update program. Annual net income for 2003 was $126.9 million, or $0.74 per diluted share, as compared to net income for 2002 of $93.9 million, or $0.52 per diluted share. And operating margins were solid at 26%, up from 20% in 2002.
Our 2003 performance is the result of long-term strategic planning and reflects the larger market of access infrastructure that our new suite of products addresses. It was also a year of exceptional execution – especially in our product, partner, and go-to-market development. 2003 was, in fact, a transformational year in positioning Citrix to achieve our goals for growth.
In February, we began repositioning Citrix from the server-based computing market into the much larger access infrastructure market – which we estimate will grow to $8–10 billion over the next three to four years.
In March, we announced the Citrix MetaFrame Access Suite, the most comprehensive access infrastructure solution for accessing any enterprise information resource. By September, we’d shipped upgrades to Citrix MetaFrame Presentation Server for Windows and UNIX, and three new products, Secure Access Manager, Conferencing Manager, and Password Manager. The Citrix MetaFrame Access Suite had gone from strategy to reality.
At our October customer conference, Citrix iForum 2003, we made it easy to buy the suite, with three bundled pricing options – the Suite Edition for new customers, the Step-Up Edition for existing customers, and the Migration Edition for MetaFrame 1.8 customers.
Late in Q3, we launched our first-ever, multi-million-dollar, worldwide advertising campaign featuring customers describing how Citrix software is helping them grow and improve their business. The multi-faceted campaign, which will continue through 2004, features the CIOs of such companies as Delta Air Lines, AutoNation and Sumitomo Corporation going on record to explain the value of their investment in Citrix and the benefits it is yielding for their business.
Going forward, we are elevating everything – our focus on access, our market, our products, our customer relationships, our brand, our partners, our employees and our business systems. And, to drive the standardization of Citrix access infrastructure, we are also elevating access from a tactical component of IT to a strategic element of every business.
Every business initiative – from M&A to business continuity, from partner commerce to branch office expansion, from centralizing IT to regulatory compliance – has an information access component that is critical to its success. It is the job of CIOs to support these initiatives by ensuring that employees, customers and partners have on-demand access to the information they need.
Yet, most businesses still employ “if-then” access tactics when connecting employees demanding information with applications supplying information. If you’re at headquarters, for example, then access to an application works one way. If you’re at a branch office, the same application is accessed another way. If you’re a company’s business partner, that application is accessed yet a different way. And so on. These multiplying “if-then” tactics add greater complexity, more cost and additional rigidity to an already complex and costly IT environment.
Citrix is in a unique position to solve these problems by enabling our customers to create a single, well-conceived, holistic strategy for providing secure, easy and instant access – eliminating the “if-then” approach. Our customers are able to provide on-demand access to any application or information, no matter where it lives, for anyone, from virtually anywhere, anytime, using any device, over any connection.
Our focus on access was the rationale for our December agreement to acquire Expertcity, a market leader in Web-based desktop access services. With the completion of the acquisition at the end of February 2004, Expertcity is now the Citrix Online Division, with GoToMyPC® and GoToAssist™ extending Citrix access to applications and information that live on the desktop PC. Now, whether your applications are hosted on the server, the desktop, or both, you can access them with Citrix software.
We entered the year as the leader in server-based computing, and exited the year as the leader in a much larger market, with multiple products in an integrated suite, and more products on the way to address the single, critical customer value that Citrix stands for: access.
When I look ahead to the rest of 2004 and beyond, I get very excited at our prospects. I believe that we’ve laid the groundwork for growth in a large-scale, long-term infrastructure market.
Thank you for your confidence in us as we drive toward our goals.
Mark Templeton
President and CEO
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