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Technology Stocks : Citrix Systems (CTXS) -- Ignore unavailable to you. Want to Upgrade?

To: MikeM54321 who wrote (8375)	6/12/2000 7:51:00 PM
From: MikeM54321	Read Replies (2) \| Respond to of 9068

Re: Lots of Details- Q200 Preliminary Earnings Warning CC Thread- I listened to the CC again in it's entirety and it really seems to be coming down to a surprise ramping of paper(license) revenues being quite larger than expected. And if a channel partner does a paper deal, his inventory sits in stock. This inventory is what is being cleaned out this quarter. AND their direct enterprise deals didn't come through to make up for any write-downs in inventory. I don't follow the argument to the top line, but they clearly said channels sales have not slowed. So I don't quite get it, but that is what I thought was said. And they didn't close the 20 direct enterprise deals (5,000 plus seats) they expected to this quarter. Keep in mind, they only closed 2 deals, of this nature, for the first time, in Q499. So by their previous estimate of 20 deals, it shows they have high expectations for large enterprise deals. Reason they didn't do it? Because they weren't set up to sell at the CIO and CTO level. And they are finding it takes a lot longer to make a decision to deploy 5,000 plus seats. They hired a new leader for enterprise sales and are creating relationships with IT companies, and creating their own IT type departments. Their 102 enterprise customers say they need to have separate service departments in order to do large deals with them. With shrink wrap they never had to worry about, "going to committee." It's all new to them, and some of their channel partners to, from what I gather. So with this new market potential comes mistakes. Citrix is learning from them and doing what it takes to close the million dollar deals. Other notes: -Q3 will be about 10% higher than Q2 sequentially. -Q4 will be most likely higher than 10% sequentially. -Have $35 million in deferred revenues. -Sales out of the channel are unchanged. It's just a different mix. Shrink to paper. -Paper are larger accounts which is good, but then shrink wrap inventory needs to be adjusted. -Adjusting revenues down $8 million for shrink wrap inventory adjustment -No sign of any slow down in demand at all. -Intent to deploy both UNIX and Windows in Europe are at historic highs -Have 1,000 pilot projects in Germany now. -France pilots are at all time high. -Graph-on and SCO are not taking business. Sometimes it delays, but does not take. -Mark spent two months. In Europe and at large re-sellers. -Demand is not slowing. Simply no sign of it. -Erricson has 10,500 seats deployed. -Dresden Bank has 5,000 seats deployed. -Compaq has 2,500 seats deployed. -Citrix wants even more big orders and have stumbled getting them. -Ctirix wants a piece of Japan(number three IT budget in the world) and stumbled getting them. -They will NOT reprice options. It's not an alternative. What was most interesting, was there was never a discussion of any sign that things are slowing down. Now I don't know if it's because their CCs are so hard to follow or what? It's pretty factual their top line is not coming in as estimated, but you would have to believe with 102 Fortune 100 type customers, who are all potentials to do $1 million deals, that maybe their current sales problems are valid. I just found it odd, there was no questioning about lack of demand. Just the opposite. Demand is stronger than ever. They simple screwed up moving to the bigger enterprise customer model and Japan is taking longer to set-up than expected. At least that is how I read it. Remember it's all simply IMVHO. -MikeM(From Florida) PS Citrix did work from Friday to Monday 5:00AM, almost non-stop, with their analysis of what happened and preparing for the CC.