Citrix Plans to Accelerate Transition to Subscription-Based Model Under New CFO
Summary
Citrix Systems Inc. ’s new chief financial officer, Arlen Shenkman, faces a challenging task as he aims to advance the software company’s transformation to a subscription-based business. Citrix plans to stop issuing new perpetual licenses for its workspace product, a core revenue driver, by 2020, Mr. Shenkman said. Mr. Shenkman took over the finances of the Fort Lauderdale, Fla.-based company in September after nearly 15 years with German software giant SAP SE, where he served as CFO of its North American business and as global head of development and ecosystems. Investors are concerned that the company might encounter difficulties further along into its transition to a subscription-based model, said Dan Ives, a managing director at Wedbush Securities Inc. “It is a huge cost challenge trying to manage the transition while keeping margins and cash flows at a level that keeps investors happy,” said Mr. Ives, pointing toward competitors such as Microsoft Corp. , VMware Inc. and others that are encroaching on Citrix’s turf. Citrix said the transition has been a headwind to its financial results, with a larger portion of its revenue being recognized at a later point in time.