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Citrix Virtual Apps and Desktops (formerly XenDesktop) is a fully-integrated, cloud-enabled app and desktop virtualization solution that gives customers the flexibility to remotely deliver desktops and applications - from any cloud, on-premises datacenters or both. Citrix Virtual Apps and Desktops include HDX technologies to give users a high-definition experience - even when using multimedia, real-time voice and video collaboration, USB devices and 3D graphics content - while consuming less bandwidth than competing solutions. Citrix Virtual Apps and Desktops is available in multiple editions designed for different requirements, from simple VDI-only deployments to sophisticated, enterprise-class desktop and application delivery services that can meet the needs of everything from basic call center environments to high-powered graphics workstations. With Citrix Virtual Apps and Desktops Advanced and Premium editions - as well as the cloud service - customers also receive Citrix Virtual Apps to manage and mobilize Windows applications.

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Citrix Virtual Apps (formerly XenApp) is a widely deployed solution that enables Windows and Linux applications to be remotely delivered to Macs, PCs, thin clients and Android/iOS mobile devices from any cloud, on-premises datacenter or both. Citrix Virtual Apps enable people to work better by running applications in the security of the data center or cloud, and using Citrix HDX technologies to deliver a superior user experience to any device, anywhere. Keeping business applications under the centralized control of IT administrators enhances security and reduces the costs of managing applications on every PC. Exclusively available as a cloud service, on-premises or hybrid solution, it allows customers to choose the deployment option that best aligns with their enterprise cloud strategy. In partnership with Microsoft, Citrix Virtual Apps is designed to embrace and extend Microsoft Remote Desktop technology by providing advanced provisioning, performance, monitoring and management functionality. Our joint solution with Microsoft lowers the cost of delivering and maintaining Windows applications for all users in the enterprise.

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Citrix Endpoint Management provides unified endpoint management for a secure digital workspace allowing IT to meet mobile device security and compliance requirements for "bring your own device" programs and corporate devices while enabling user productivity. As part of a workspace, Citrix Endpoint Management centralizes the management of mobile devices, traditional desktops, laptops and Internet of Things, or IoT, through a single platform. Citrix Endpoint Management directly integrates with Microsoft EMS/Intune to extend mobility and device management capabilities.

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Citrix Content Collaboration (formerly ShareFile) is a secure, cloud-based file sharing and storage solution built for mobile business, giving users enterprise-class data services across all corporate and personal mobile devices, while maintaining total IT control. Citrix Content Collaboration protects data throughout the storage and transfer process, using up to 256-bit encryption and SSL or Transport Layer Security, or TLS, encryption protocols for transfer and 256-bit encryption for files at rest on ShareFile servers. Password protection and granular access to folders and files stored with Citrix Content Collaboration ensure that data remains in control of the company. With Citrix Content Collaboration Enterprise, organizations can manage their data on-premises in customer managed StorageZones, select Citrix managed secure cloud options or create a mix of both to meet the needs for data sovereignty, compliance, performance and costs. For businesses that use multiple storage repositories, Citrix Content Collaboration provides unified access to a wide range of cloud-based and on-premises storage repositories, making it simple and easy for employees to find and access their files and documents. Additionally, Citrix Content Collaboration supports e-signature, feedback and approval workflows that help businesses adopt the mobile, digital office.

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Citrix Workspace delivers a unified user experience for any app or desktop on any device, including tablets, smartphones, PCs, Macs or thin clients. IT can securely deliver content over low-bandwidth high-latency WANs, highly variable 3G/4G mobile networks or a reliable corporate LAN to improve end-user experience while offering enterprise-grade security to data and applications. Citrix Workspace provides a unified, flexible solution that can streamline device, application and desktop deployment and lifecycle management to increase employee engagement, productivity, and reduce IT costs. Citrix Workspace offers choice of device, cloud and network and can be deployed on-premises, via the cloud or as a hosted service.

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Citrix ADC (formerly NetScaler ADC) is a software-defined application delivery controller designed to meet the demands of organizations undergoing digital transformation. Citrix ADC enables the adoption of hybrid and multi-cloud application delivery with improved application performance, reliability and security at an optimized price point. Citrix ADC allows customers to obtain detailed application analytics with the value of machine learning. It also optimizes application delivery for cloud native application architectures based on the Kubernetes orchestration platform, and provides service graph analytics for efficient troubleshooting within the microservices environment. Additionally, we extend the platform with best-of-breed web application firewall, or WAF, capabilities

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Citrix SD-WAN (formerly NetScaler SD-WAN) increases the security, performance and reliability of applications delivered from the legacy data center, cloud, or SaaS, while delivering additional value for virtualized applications and desktops. The platform combines routing, security, WAN optimization, and path control to simplify implementation and maintenance of the branch network, allowing customers to adopt a hybrid WAN architecture that effectively increases WAN capacity and manageability.

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Customer Success Services are offered in support of our perpetual software and our cloud-based services. Customers are given a choice of tiered offerings combining product version upgrades, guidance, enablement, support and proactive monitoring to help customers and partners fully realize their business goals and maximize their Citrix investments. Additionally, customers may upgrade to receive personalized support from a dedicated team led by an assigned account manager. Fees associated with this offering are recognized ratably over the term of the contract.

•	Hardware Maintenance is offered in support of our Networking products. Customers are given a choice of tiered offerings including technical support, software upgrades, and replacement of malfunctioning appliances. Dedicated account management is available as an add-on to the program. Fees associated with this offering are recognized ratably over the term of the contract.

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Citrix Consulting guides the successful implementation of Citrix technologies and solutions with proven methodologies, tools and leading practices. Citrix Consulting focuses on strategic engagements with enterprise customers who have complex, mission-critical, or large-scale Citrix deployments. These engagements are typically fee-based engagements for the most challenging projects in terms of scope and complexity, requiring consultants with project methodology qualifications and Citrix expertise. Citrix Consulting is also responsible for developing best practices which are disseminated to businesses, partners and end users through training and written documentation. Leveraging these best practices enables our integration resellers to provide more complex systems, reach new buyers within existing customer organizations, and provide more sophisticated system proposals to prospective customers.

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Product Training & Certification enables customers and partners to be successful with Citrix and achieve business objectives faster. Authorized Citrix training is available as needed. Traditional or virtual instructor-led training offerings feature Citrix Certified Instructors delivering Citrix-developed courseware in a classroom or remote setting at one of our Citrix Authorized Learning Centers, or CALCs, worldwide. Self-Paced Online offerings provide technically robust course content without an instructor and include hands-on practice via virtual labs. Certifications validate key skills and are available for administrators, engineers, architects and sales professionals.

•	Strategic IT Executives including chief information officers, chief technology officers, chief information security officers and vice presidents of infrastructure, who have responsibility for ensuring that IT services are enablers to business initiatives and are delivered with the best performance, availability, security and cost.

•	Desktop Operations Managers who are responsible for managing Windows Desktop environments including corporate help desks.

•	IT Infrastructure Managers who are responsible for managing and delivering Windows-based applications.

•	Directors of Messaging and Mobility, who are, respectively, responsible for messaging technologies and defining mobile strategies and solutions for securing and managing mobile devices including their content and applications.

•	Network Architects who are responsible for delivering Web-based applications who have primary responsibility for the WAN infrastructure for all applications.

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•	Server Operations Managers who are responsible for specifying datacenter systems and managing daily operations.

•	Small business owners who are responsible for choosing the systems needed to support their business goals, such as SaaS.

•	Chief technology officer and engineering department (managers and architects, among others) for telecommunications service providers.

•	Line of business and functional executives that determine the need for our cloud and subscription-based offerings at certain enterprises.

•	Chief information officer and engineering departments within service providers, using our solutions to deliver desktops and applications as hosted cloud services.

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•	we may not be able to effectively or efficiently transition our customers from consuming our solutions and services as on premises solutions to cloud-based solutions;

•	we may not be able to implement effective go-to-market strategies and train or properly incentivize our sales team and channel partners in order to effectively market our subscription offerings;

•	we may be unsuccessful in maintaining our target pricing, adoption and renewal rates;

•	we may select solution prices that are not optimal and could negatively affect our sales or earnings;

•	we may incur costs at a higher than forecasted rate as we expand our cloud-delivered services thereby decreasing our gross margins;

•	we may experience unpredictability in revenue as a result of usage fluctuations within our cloud service provider business;

•	we may not be able to meet customer demand or solution requirements for cloud-delivered services;

•	we may encounter customer concerns regarding changes to pricing, service availability, and security; and

•	our cloud-delivered services are primarily operated through third party data centers, which we do not control and which may be vulnerable to damage, interruption and cyber-related risks.

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•	rapid technological change;

•	evolving industry standards;

•	fluctuations in customer demand;

•	changing customer business models and increasingly sophisticated customer needs; and

•	frequent new solution and service introductions and enhancements.

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•	new competitive product releases and updates to existing products delivered as on premises solutions, especially cloud-based products;

•	industry trend to focus on the secure delivery of applications on mobile devices;

•	introduction of new or alternative technologies, products or service offerings by third parties;

•	termination or reduction of our product offerings and enhancements;

•	potential market saturation;

•	failure to enter new markets;

•	price and product competition resulting from rapid and frequent technological changes and customer needs;

•	general economic conditions;

•	complexities and cost in implementation;

•	failure to deliver satisfactory technical support;

•	dissatisfied customers; or

•	lack of commercial success of our technology relationships.

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•	loss or destruction of customer data;

•	interruption in the delivery of our cloud services;

•	negative publicity and harm to our reputation or brand, which could lead some customers to seek to cancel subscriptions, stop using certain of our solutions or services, reduce or delay future purchases of our solutions or services, or use competing solutions or services;

•	individual and/or class action lawsuits, which could result in financial judgments against us or the payment of settlement amounts, which would cause us to incur legal fees and costs;

•	regulatory enforcement action under the General Data Protection Regulation or other legal authority, which could result in significant fines and/or penalties or other sanctions and which would cause us to incur legal fees and costs; and/or

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in the event that we or one of our customers were the victim of a cyberattack or other security breach, additional costs associated with responding to such breach, such as investigative and remediation costs, and the costs of providing data owners or others with notice of the breach, legal fees, costs of any additional fraud detection activities required by such customers' credit card issuers, and costs incurred by credit card issuers associated with the compromise and additional monitoring of systems for further fraudulent activity.

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•	our sales force generally needs to explain and demonstrate the benefits of a large-scale deployment of our solution to potential and existing customers prior to sale;

•	our service personnel typically spend a significant amount of time assisting potential customers in their testing and evaluation of our solutions and services;

•	our customers are typically large and medium size organizations that carefully research their technology needs and the many potential projects prior to making capital expenditures for software infrastructure; and

•	before making a purchase, our potential customers usually must get approvals from various levels of decision makers within their organizations, and this process can be lengthy.

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•	compliance with foreign regulatory and market requirements;

•	variability of foreign economic, political, labor conditions and global policy uncertainty;

•	changing restrictions imposed by regulatory requirements, tariffs or other trade barriers or by U.S. export laws;

•	regional data privacy laws that apply to the transmission of our customers’ data across international borders;

•	health or similar issues such as pandemic or epidemic;

•	difficulties in staffing and managing international operations;

•	longer accounts receivable payment cycles;

•	potentially adverse tax consequences;

•	difficulties in enforcing and protecting intellectual property rights;

•	compliance with the Foreign Corrupt Practices Act, including potential violations by acts of agents or other intermediaries;

•	burdens of complying with a wide variety of foreign laws; and

•	as we generate cash flow in non-U.S. jurisdictions, if required, we may experience difficulty transferring such funds to the U.S. in a tax efficient manner.

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•	an uncertain revenue and earnings stream from the acquired company, which could dilute our earnings;

•	difficulties and delays integrating the personnel, operations, technologies, solutions and systems of the acquired companies;

•	undetected errors or unauthorized use of a third-party’s code in solutions of the acquired companies;

•	our ongoing business may be disrupted and our management’s attention may be diverted by acquisition, transition or integration activities;

•	challenges with implementing adequate and appropriate controls, procedures and policies in the acquired business;

•	difficulties managing or integrating an acquired company’s technologies or lines of business;

•	potential difficulties in completing projects associated with purchased in-process research and development;

•	entry into markets in which we have no or limited direct prior experience and where competitors have stronger market positions and which are highly competitive;

•	the potential loss of key employees of the acquired company;

•	potential difficulties integrating the acquired solutions and services into our sales channel;

•	assuming pre-existing contractual relationships of an acquired company that we would not have otherwise entered into, the termination or modification of which may be costly or disruptive to our business;

•	being subject to unfavorable revenue recognition or other accounting treatment as a result of an acquired company’s practices;

•	potential difficulties securing financing necessary to consummate substantial acquisitions;

•	issuing shares of our stock, which may be dilutive to our stockholders; and

•	intellectual property claims or disputes.

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•	the expansion of our product lines through product development and acquisitions;

•	the volume of patent infringement litigation commenced by non-practicing entities;

•	an increase in the number of competitors in our industry segments and the resulting increase in the number of related solutions and services and the overlap in the functionality of those solutions and services;

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•	an increase in the number of our competitors and third parties that use their own intellectual property rights to limit our freedom to operate and exploit our solutions, or to otherwise block us from taking full advantage of our markets;

•	our reliance on the technology of others and, therefore, the requirement to obtain intellectual property licenses from third parties in order for us to commercialize our solutions or services, which licenses we may not be able to obtain or continue to obtain from these third parties on reasonable terms; and

•	the unauthorized or improperly licensed use of third-party code in our solutions.

•	pay damages (including the potential for treble damages), license fees or royalties (including royalties for past periods) to the party claiming infringement;

•	cease selling solutions or services that use the challenged intellectual property;

•	obtain a license from the owner of the asserted intellectual property to sell or use the relevant technology, which license may not be available on reasonable terms, or at all; or

•	redesign the challenged technology, which could be time consuming and costly, or not be accomplished.

•	undetected errors or unauthorized use of another person’s code in the third party’s software;

•	disagreement over the scope of the license and other key terms, such as royalties payable and indemnification protection;

•	infringement actions brought by third-parties;

•	the creation of solutions by third parties that directly compete with our solutions; and

•	termination or expiration of the license.

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•	make us more vulnerable to adverse changes in general U.S. and worldwide economic, industry and competitive conditions and adverse changes in government regulation;

•	limit our flexibility in planning for, or reacting to, changes in our business and our industry;

•	place us at a disadvantage compared to our competitors who have less debt; and

•	limit our ability to borrow additional amounts to fund acquisitions, for working capital and for other general corporate purposes.

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•	actual or anticipated variations in operating and financial results, including the failure to meet key operational metrics;

•	analyst reports or recommendations;

•	rumors, announcements, or press articles regarding our or our competitors’ operations, management, organization, financial condition, or financial statements; and

•	other events or factors, many of which are beyond our control.

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(1)	Includes approximately 168,933 shares withheld from restricted stock units that vested in the fourth quarter of 2018 to satisfy minimum tax withholding obligations that arose on the vesting of restricted stock units.

(2)	Shares withheld from restricted stock units that vested to satisfy minimum tax withholding obligations that arose on the vesting of such awards do not deplete the dollar amount available for purchases under the repurchase program.

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(a)	The selected financial data for fiscal years ended December 31, 2017, 2016, 2015 and 2014 has been adjusted to be presented on a continuing operations basis. Refer to Note 3 Discontinued Operations in our Consolidated Financial Statements for additional information.

(b)	Cost of net revenues includes amortization and impairment of product related intangible assets of $47.1 million, $65.7 million, $55.4 million, $127.3 million, and $142.2 million in 2018, 2017, 2016, 2015 and 2014, respectively.

(c)	Operating expenses includes amortization and impairment of other intangible assets of $15.9 million, $17.2 million, $15.1 million, $97.5 million, and $41.9 million in 2018, 2017, 2016, 2015 and 2014, respectively. Operating expenses also include restructuring charges of $16.7 million, $72.4 million, $67.4 million, $98.7 million and $14.1 million in 2018, 2017, 2016, 2015 and 2014, respectively.

(d)	Balance Sheet amounts prior to 2017 include amounts for the GoTo Business. Refer to Note 3 Discontinued Operations in our Consolidated Financial Statements for additional information.

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•	Subscription revenue increased 44.7% to $455.3 million;

•	Product and license revenue decreased 4.2% to $734.5 million;

•	Support and services revenue increased 2.3% to $1.78 billion;

•	Gross margin as a percentage of revenue increased 1.0% to 85.4%;

•	Operating income increased 18.7% to $678.0 million;

•	Diluted earnings per share increased from $0.14 to $3.94; and

•	Unbilled revenue increased $258.4 million to $338.5 million.

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•	Digital Workspace is primarily comprised of our Application Virtualization solutions which include Citrix Virtual Apps and Desktops, our unified endpoint management solutions, which include Citrix Endpoint Management, Citrix Content Collaboration, and Citrix Workspace; and

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•	Networking products, which primarily include Citrix ADC and Citrix SD-WAN.

•	Customer Success Services, which gives customers a choice of tiered support offerings that combine the elements of product version upgrades, guidance, enablement, support and proactive monitoring to help our customers and our partners fully realize their business goals. Fees associated with this offering are recognized ratably over the term of the contract; and

•	Hardware Maintenance fees for our perpetual Networking products, which include technical support and hardware and software maintenance, are recognized ratably over the contract term; and

•	Fees from consulting services related to the implementation of our solutions, which are recognized as the services are provided; and

•	Fees from product training and certification, which are recognized as the services are provided.

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(1)	The amounts in the table above include $64.3 million in exited facility costs related to restructuring activities.

(2)

During the second quarter of 2014, we completed a private placement of $1.4 billion principal amount of 0.5% Convertible Senior Notes due 2019. The amount above represents the principal balance to be repaid in April 2019. See Note 13 to our consolidated financial statements included in this Annual Report on Form 10-K for the year ended December 31, 2018 for detailed information on the Convertible Notes offering and the transactions related thereto.

(3)

During the fourth quarter of 2017, we completed the issuance of $750.0 million principal amount of 4.5% Senior Notes due 2027. The amount above represents the balance to be repaid. See Note 13 to our consolidated financial statements included in this Annual Report on Form 10-K for the year ended December 31, 2018 for detailed information on the 2027 Notes offering and the transactions related thereto.

(4)	Purchase obligations represent non-cancelable commitments to purchase inventory ordered before year-end 2018 of approximately $5.3 million and a contingent obligation to purchase inventory of approximately $16.6 million. It also includes minimum purchase commitments for our use of certain cloud services with a third-party provider of $50.0 million.

(5)	Represents transition tax payable on deemed repatriation of deferred foreign income incurred as a result of the 2017 Tax Act. See Note 11 to our consolidated financial statements included in this Annual Report on Form 10-K for the year ended December 31, 2018 for further information.

(6)

Total contractual obligations do not include agreements where our commitment is variable in nature or where cancellations without payment provisions exist and excludes $89.9 million of liabilities related to uncertain tax positions recorded in accordance with authoritative guidance, because we could not make reasonably reliable estimates of the period or amount of cash settlement with the respective taxing authorities. See Note 11 to our consolidated financial statements included in this Annual Report on Form 10-K for the year ended December 31, 2018 for further information.

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(a)	1. Consolidated Financial Statements.

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(1)	Product and licenses as previously reported included revenue from CSPs and on-premise subscriptions that are now included in Subscription. Current period presentation only includes revenues from perpetual offerings and hardware.

(2)	License updates and maintenance as previously reported included revenue from CSPs and on-premise license updates and maintenance that are now included in Subscription.

(3)	Support and services includes revenues from license updates and maintenance from perpetual offerings as well as professional services.

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(1)	Amount relates to preliminary purchase price allocation of goodwill associated with the 2018 business combinations. See Note 4 for more information regarding the Company's acquisitions.

(2)	Amount relates to the purchase price allocation of goodwill associated with the 2017 business combination. See Note 4 for more information regarding the Company's acquisitions.

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•	Level 1. Observable inputs such as quoted prices in active markets for identical assets or liabilities;

•	Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

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•	Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

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(1)	Digital Workspace revenues are primarily comprised of sales from the Company’s application virtualization solutions, which include Citrix Virtual Apps and Desktops, the Company's unified endpoint management solutions, which include Citrix Endpoint Management, related license updates and maintenance and support, Citrix Content Collaboration, and cloud offerings.

(2)	Networking revenues primarily include Citrix ADC and Citrix SD-WAN, related license updates and maintenance and support and cloud offerings.

(3)	Professional services revenues are primarily comprised of revenues from consulting services and product training and certification services.

(4)	Prior period amounts have not been adjusted under the modified retrospective method of adoption of the revenue recognition standard. See Note 2 for further information regarding the Company’s adoption of the revenue recognition standard.

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(1)	Charged against revenues.

(2)	Uncollectible accounts written off, net of recoveries.

(3)	Adjustments from acquisitions.

(4)	Credits issued for returns.

(5)	Related to deferred tax assets on foreign tax credits, net operating loss carryforwards, and depreciation.