Citrix has been looking for a CEO to replace Mark Templeton ever since he announced his retirement in July, but on Wednesday — after Citrix reported its third-quarter earnings — Templeton was replaced, with the search still incomplete.
Executive chairman Robert Calderoni was unanimously appointed interim president and CEO, effective immediately, and will continue serving as executive chairman to the board that put him in place. Templeton, Citrix’s CEO since 2001, will serve in an advisory role until the end of the year.
“Mark Templeton was a great CEO for Citrix and under his leadership Citrix went from being a niche company that specialized in one thing, thin client computing, to a multi-billion dollar organization that had VDI, Networking and cloud solutions,” says Zeus Kerravala, principal analyst with ZK Research. “Mark Templeton moving on is certainly no surprise, this just seems to be faster than anyone had expected.”
Calderoni was appointed as a director of the Citrix Board in June of last year, and executive chairman of the board in July.
Citrix’s board will continue to search for a permanent CEO through its search committee, which is comprised of committee chair Calderoni, Godfrey R. Sullivan and Jesse A. Cohn. Citrix is being assisted in its CEO search by executive search firm Heidrick & Struggles.
Templeton is quoted in today’s earnings report as saying Wednesday’s results reflect Citrix’s efforts “to improve our operating margin and drive integrations among our strategic products.”
Citrix started the year by shedding 900 employees in January. In June, hedge fund Elliott Management, which now owns a 7.5 percent stake in the company, stepped in and demanded that Citrix make major changes to improve its share price.
Citrix drew the interest of private equity investors prior to to giving a seat on its board to Elliott senior partner Cohn in July, the same day that it announced Templeton would retire.
Also in July, Citrix and Elliott said they would explore selling or spinning off the GoTo suite of products, which include videoconferencing service GoToMeeting. At the time, Reuters reported that Dell was an interested buyer — but Dell now has other things on its mind.
Bloomberg reported today that Citrix is favoring a spinoff of GoToMeeting rather than a sale. Kerravala says Citrix is likely to look much different next year at this time so bringing in a new leader makes sense.
“The market has changed and Citrix will need to go through some significant changes to grow and be competitive in the rapidly changing IT landscape, which is why Elliot has stepped in,” he says.
Citrix’s Third Quarter
Citrix’s third-quarter earnings reflected Templeton’s optimism, as the company exceeded expectations.
It reported a profit of $56 million, or 35 cents a share, compared to $48 million, or 29 cents a share, in the same quarter a year ago. Citrix’s revenue increased by 7.2 percent year-over-year, to $813 million.
Non-GAAP earnings rose to $1.04 per share from 75 cents a year ago. The third-quarter analyst consensus estimate for Citrix was 85 cents a share.
Cash flow from operations was $260 million, compared with $164 million in last year’s third quarter.
For the year, Citrix estimated that its per-share, non-GAAP earnings would be between $3.85 and $3.90 on net revenue of $3.24 billion to $3.25 billion.