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

To: Hectorite who wrote (8384)	6/12/2000 10:14:00 PM
From: Greg22	Respond to of 9068

Hectorite, I think you nailed it... "so it is possible the DSO number from Q1 was being influenced by shrink wrap gumming up the channel more than they thought."

To: Hectorite who wrote (8384)	6/12/2000 10:49:00 PM
From: jfs	Respond to of 9068

hector, I don't mean to butt in but maybe I can save Mike a post. Mike, please correct me if you have a different take. <What I don't understand is this "paper" vs boxed software distinction. What does it matter how a license is sold? Isn't the revenue still the same in amount and timing?> Imagine you're a reseller with an inventory of 100 units of shrinkwrap, which you expect to cover your months sales. You intend to re-order 100 more units to keep your inventory equal to one months sales - resulting in 100 units revenue to Citrix. But instead you sell 75 shrinkwrap units and 25 paper units, leaving you with 25 shrinkwrap on hand. Now you only need to reorder 50 shrinkwrap units to get your inventory back up to one month's sales (75). Revenue to Citrix is 50 shrinkwrap plus the 25 paper units. Going forward, if the mix stays the same, next month you will reorder 75 units shrinkwrap and pay for the month's 25 paper sales, so Citrix is back to 100 units total revenue. If, as they suggested on the conf call, the proportion of paper units may continue to rise a little, this shrinkage of channel inventory would continue to impact Citrix revenue for another quarter or two. Of course, sales out of the channel are actually increasing, so the effect would only be to temporarily slow Citrix revenue increase. Hope this helps, John

To: Hectorite who wrote (8384)	6/12/2000 11:16:00 PM
From: Mike Buckley	Read Replies (1) \| Respond to of 9068

I wrote: DSO and receivables have absolutely nothing to do with decreased growth in revenue ... Hectorite countered with: Doesn't it? ... If they book revenue as the product goes out the Citrix door AND the channel is full like they say, then the resellers stop taking product and revenue falls. Yes, but the real issue is that the channel is stuffed. It's not a foregone conclusion that when the channel is stuffed the DSO increases. If it were, everytime the DSO increased in a company there would be an immediate slowing of revenue. One doesn't necessarily follow or precede the other. --Mike Buckley