思杰系統 (CTXS) 2006 Q4 法說會逐字稿

Good afternoon. My name is Marvin, and I will be your conference facilitator today. At this time, I would like to welcome everyone to the Citrix Systems fourth quarter earnings conference call. All lines have been placed on mute, to prevent any background noise. After the speakers remarks, there will be a question-and-answer period. [OPERATOR INSTRUCTIONS] Thank you.

I would now like to introduce Mr. Jeff Lilly, Director of Investor Relations. Mr. Lilly, you may begin your conference.

Thank you, Marvin. Good afternoon, everyone, and thank you for joining us for today's call where we will be discussing Citrix's fourth quarter and fiscal year 2006 financial results. Participating in the call will be Mark Templeton, President and Chief Executive Officer, and David Henshall, Senior Vice President and Chief Financial Officer. This call is being webcast with a slide presentation on the Citrix Systems Investor Relations Website, and the slide presentation associated with the webcast will be posted immediately following the call.

Before we begin the review of our financial results, I want to provide you with an update on some planned changes to the format of our product performance discussions. To simplify the way we discuss our product performance, we have classified our products into four groupings, which logically map to the way our business has evolved. The four groupings include our Application Virtualization products, our Application Networking products, our Online Services, and Other, which includes our emerging products. This classification of our products, and historical revenue trends related to these four groupings, have been posted to our Website, and David will be discussing their performance in his prepared remarks.

As we get started, I want to emphasize that some of the information discussed in this call may be characterized as forward-looking statements made pursuant to the Safe Harbor Provisions of the U.S. Securities laws.

These statements involve a number of factors that could cause actual results to differ materially, including risks associated with the Company's businesses, involving the Company's revenue growth, products, their development and distribution, product demand in the pipeline, economic and competitive factors, the Company's key strategic relationships, the effect of new accounting pronouncements on revenue and expense recognition, including the effects of FAS 123-R on certain of the Company's GAAP financial measures, acquisition and related integration risks, and the Company's ongoing review of the stock option granting practices and the related accounting.

Additional information concerning these factors is highlighted in the earnings press release, and in the Company's filings with the SEC, including the Safe Harbor disclosure contained in our most recent 10-K filing, available from the SEC, or the Company's Investor Relations Website.

Additionally during this call, we will discuss various non-GAAP financial measures as defined by SEC Regulation G of certain adjusted figures, which include operating expenses, gross and operating margin, operating and net income, and earnings per share. The most directly comparable GAAP financial measures, and a reconciliation of the differences discussed on today's call can be found at the end of our press release dated today, and on the Investor Relations page of the Citrix Systems corporate Website.

Now I would like to turn it over to David Henshall, our Chief Financial Officer. David?

Thanks, Jeff. And good afternoon. Today I am pleased to report fourth quarter and fiscal year 2006 results for the Company, demonstrating continued growth across all of our geographic segments and product areas. In addition to providing you with some of the commentary on the results, I will discuss the trends in our business, and review our current outlook for Q1 and full year 2007.

Before I get started, I wanted to point out an item that you may have seen in the press release. We announced today that the Company is conducting a voluntary review of historical stock option practices, given the intense focus on this topic. This process is being managed under the direction of the Company's Audit Committee. Because this is an ongoing review, we won't be able to provide any additional commentary until the process is complete.

As a result, the financial results reported today are preliminary, and do not take into account any adjustments that could potentially be required in connection with the completion of this review. I do want to reiterate however, that this work is being done voluntarily, and the Company has not received any inquiries from any regulatory agencies to date on this topic.

So let's get back to the financial results. As you see from the reported numbers, we are finishing 2006 with a great fourth quarter. Completing a record year for Citrix, and really demonstrating momentum, and continued execution against our strategy.

Taking a look at Q4 and 2006 financial highlights, total revenue in the period was 321 million, an increase of 19% over last year. For the full year, the Company posted almost 25% increase in revenue, exceeding $1.1 billion. Our adjusted EPS was $0.39 in Q4, and $1.40 for 2006, representing growth of 8%, and 19% respectively. Adjusted operating margin was 27% for both the quarter and the year. And cash flow from operations was nearly 100 million during the quarter, and over 320 million for the 12-month period.

So overall, a very strong quarter performance. Next, what I would like to do is cover some of our achievements in 2006. And how we did relative to our goals and objectives for the year.

The four product market areas I would like to review include, first, our Application Virtualization products, and the steady growth we have seen in this area. Second, the Company's success delivering software as a service. Third, our work to establish Citrix as a leading player in the App Networking market. And finally, the pipeline of emerging products and technologies that we've built to help fuel future growth. These four product groupings are the best way to think about our product offerings and core requirements for the app delivery market.

This is a logical organization because of the way we are leveraging common technologies, addressing specific buyers, and solving related problems for our customers. So first, let me focus on the App Virtualization products, including Presentation Server and the Access Suite. These grew 11% in Q4 to 245 million in revenue. This includes license growth of 2%.

For the full year, total revenue in this business grew 12%, and licenses increased by 4%, within our target range for these products. Customers are continuing to renew their software subscriptions at positive rates, over 80% in Q4. And others are making conscious purchase choices to get current. As they realize our vision of App delivery. A good indicator about viewing Citrix as a strategic solution provider, in fact, PS4 has become our most rapidly adopted product to date, and we continue to see customers migrate to our newest release, demonstrating the value of this platform, and our continuing innovation.

Next, regarding our ongoing success delivering software as a service, our GoTo products continue to meet the needs of customers in this rapidly-growing segment of the market, which demands secure, affordable, fast, and easy software to service offerings. Revenues from these products reached almost 150 million for the year, yielding an annual growth rate of 50%.

During the second half of the year, we launched our fourth offering in this group, GoToWebinar, which has already received awards and accolades including being named the Best New Web Conferencing Service for 2006 by Frost & Sullivan, and winning the Laptop magazine Editor's Choice Award. Our continuing pace of innovation should allow us to help drive further gains in the market for web-based application-sharing technologies.

The third area I would like to highlight is the progress we have made in establishing Citrix as a leading player in the App Networking market. In Q4, our App Networking business, which consists of NetScaler, WANScaler and the SSL VPN products, generated 32 million in total revenue, an increase of over 70%.

For the full year, we delivered well over 100 million in revenue from these products and services in this category. We have expanded our addressable market opportunity by entering the rapidly growing space of WAN optimization and acceleration. With our new WANScaler line of products, which are to be formally launched at the end of this month, we are literally just scratching the surface of opportunity in this area.

And according to industry analysts, Citrix has firmly established itself as a leader in the web App delivery and SSL VPN magic quadrants, and we have already been placed in the visionary quadrant for WAN optimization. We are extremely excited about the opportunities in this space, and believe that we are well positioned for strong growth. The final objective from last year was to build a solid pipeline of emerging products and technologies, to compliment our existing solutions and to help fuel future growth.

On the acquisition front, we added Web EdgeSight for Application Performance monitoring, WANScaler, as mentioned for addressing App delivery and branch offices, and other remote locations, and Ardence, for expanding desktop delivery and realtime OS. Additionally, technologies coming to the market in 2007 from our internal R&D efforts will include application streaming, Project Kent for workforce continuity services, and Project Trinity for desktop delivery.

So in total, we are proud to have delivered these results and achievements for 2006, and how we did relative to our goals. Mark will address some of these items in a little bit more detail during his comments. When we look at revenue by geographic segment in the quarter, the Americas grew 20% year-over-year to 139 million. This growth was fueled by both the App Networking products and by strong demand for customers upgrading to PS4.

EMEA was up 8% over Q4 last year to 112 million. This was a slightly slower growth rate than normal, due to the end of sale program for MetaFrame XP, which took place in EMEA in Q4 2005, and created a tough year-over-year comparison. The Pacific region grew 33%, highlighted by strength in emerging markets, and early adoption of our App Networking solutions, and finally, Online Services, which are not included in these geo segments, grew 50% in the fourth quarter as I mentioned earlier.

Now let me talk briefly about expenses and operations. Adjusted OpEx during Q4 was 213 million, up about 23% year-over-year, and 14% sequentially.

The annual increase was driven by several factors, including the OpEx associated with recent acquisitions, ongoing head count growth and marketing programs. Specific to the G&A line however, in Q4, we incurred some expenses related to a change in plan for the development of a new campus in Santa Barbara. This required us to expense certain costs that had previously been capitalized, amounting to a few million dollars. Regarding head count growth we ended the year with over 3700 employees, up about 110 people in the fourth quarter. The largest increases were in the sales and services team, focused on App Networking and support.

On the balance sheet, deferred revenue grew a record $42 million sequentially, bringing the total to 356 million, up 25% from last year. The driving factors here included existing customers buying upgrades, and the ongoing success of our subscription advantage program, as I reviewed earlier. Our AR balance was just over 200 million at the end of the quarter, yielding a DSO of 57 days. This nine-day increase in DSO from Q3 is mainly attributable to the record growth in deferred revenue during the period, as well as the strength in bookings throughout December.

Looking forward, I would expect DSOs to be back in our target range of 45 to 55 days this quarter. Also as I said earlier, cash flow from operations looked great in Q4 coming in at nearly 100 million. Our primary use of cash during the quarter was to fund our ongoing stock buyback program. In total, the Company received 3.6 million shares, valued at about $100 million during Q4.

So in summary, I am really pleased with the results for the fourth quarter and for all of 2006. The Company has delivered consistent growth in all of the important financial metrics, while still balancing significant investments in the new businesses, and the routes to market that are important for long-term success. While many of our investments are still in their early stages, I believe that we have created a solid foundation to build on this year.

Finally, I would like to discuss our current outlook and expectations for the first quarter and full year ending December 31st, 2007. It should be noted that we are about to make forward-looking statements that incorporate certain risks, so please refer the Safe Harbor statement noted in our press release, and the risks that are stated in our SEC filings.

As a reminder, in 2006, we began recognizing stock-based comp under FAS 123-R, while this number will be included in our GAAP results, it will be excluded from our adjusted results. So for the first quarter, we expect total revenue in the range of 298 to 308 million, of which we expect Online Services to contribute about 44.5 to 45.5 million in revenue. Adjusted gross margin should be in the range of 92 to 93%. Interest income of approximately 11 million, weighted average shares between 185 and 188 million, and finally, we expect earnings of $0.24 to $0.25 on a GAAP basis, and adjusted EPS of $0.34 to $0.35.

For the full year 2007, we expect total revenue in the range of $1.29 billion to $1.31 billion, GAAP EPS of $1.14 to $1.19, and adjusted EPS of $1.51 to $1.54.

So now, I would like to turn it over to Mark to give you some additional details on the quarter's performance, and discuss our ongoing businesses.

Mark?

Thanks a lot, David. We had another extraordinary fourth quarter, and a strong finish to an outstanding year of growth. We have built excellent momentum across the business, and I believe we are entering 2007 with by far the strongest products, channels, technology pipeline, and brand we have ever had. I am pleased to report that Citrix is in great shape for continued growth, and for developing the application delivery market from the pole position.

Exactly one year ago, we shared our financial goals with you, top line growth, expense management, and driving revenue diversity from newly acquired products, software as a service, license updates, and product upgrades. Today, I am extremely proud to say we delivered. We are reporting 25% revenue growth over 1.1 billion for the year, and 19% growth in adjusted EPS of $1.40. And impressively, 19% growth in product licensing. That's almost double the 2005 growth rate and our best in five years.

In 2006, we also on boarded over 550 new employees, and completed three strategic acquisitions. Reflectent Software, Orbital Data, and Ardence. These new employees bring us talent, experience, and deep domain expertise, in some of the fastest growing areas of our business. And our acquisitions significantly add to the application delivery capabilities we can offer our customers. Consistently strong execution across strategic, operational, and financial dimensions is a must, and 2006 was no exception.

Before looking into our 2007 plan, I would like to spend a moment acknowledging a significant business milestone for us, exceeding 1 billion in revenue. Achieved by less than two dozen software companies in all of history, and a level that even fewer have been able to sustain. I am extremely proud of this '06 achievement, exiting the year well above the mark. As David mentioned in the guidance, we are driving to exceed 1.3 billion in 2007.

When we established this goal over four years ago, it meant we would need to double our revenue. More importantly, however, it also meant we would have to double down on building new competencies and strategic planning, innovation, M&A, building scalability and nurturing our culture. While it is only a milestone in our history, it does underscore our strength in execution. Our ability to meet the goals we set, and our commitment to invest in technologies that will make our customers successful.

So now, I would like to turn your attention to looking forward, into 2007. Our App Virtualization products are the industry's gold standard, and provide a solid foundation for us. Our App Networking products have really skyrocketed to the forefront of the application delivery market. And our software as a service offerings continue to expand with the 2006 launch of GoToWebinar.

As we amplify our messaging, one of our key areas of focus will be to make application delivery a top strategic priority for our customers. We laid out this vision at our Annual I-forum conference a couple of months ago. We will be doing the same for our business partners next week in Orlando during our Annual partner summit.

Application Delivery is a profoundly strategic message and opportunity for Citrix. Why? Because infrastructure for application delivery is the core enabler, to a world where anyone can work from anywhere. That's our vision, and I strongly believe it is a business imperative. Driven by the dynamic forces of globalization, business disruption, industry consolidation, government regulation, and echo boomers, all very significant drivers of our growth.

The fact is, these dynamic forces of change are creating much more distance between users and applications, dramatically increasing the degree of difficulty of delivering applications over the network for I.T. organizations. Though every I.T. organization needs the enabling infrastructure to optimize a delivery of every type of application, web apps, client server apps, desktop applications, as well as voice and video applications.

They need an innovative service oriented approach that decouples users, networks and organizations, and then dynamically recouples them into systems that support new work styles, and enable an infinite number of business scenarios that require an On-demand connection between an application's point of origin, and a user's point of access.

Our complete range of infrastructure offers the dynamic coupling that allows business change On-demand, by delivering applications to users anywhere they work, with the best performance, security, and cost. In 2007, to execute on this vision, we are focusing on six of our premise-based products that we believe are strategic to application delivery.

Presentation Server for delivering Windows based client server and desktop apps, NetScaler for delivering any type of web application, Access Gateway for securing access to applications, WANScaler for accelerating branch office application delivery, EdgeSight for realtime application performance visibility, and a new product based on Project Trinity for delivering the best Windows desktop experience. By streamlining, and aligning our products in more consumable ways, we expect to drive further growth in our installed base, and address new greenfield opportunities.

Now we won't be making any official product announcements today, saving them for next week's summit and the rest of Q1. As a preview however, and good example of how we are driving further growth in our install base, is the introduction of a new premium edition of Presentation Server. This edition will replace the Access suite at the same price point, and offer more value at the same time. Additionally, branding it as a Presentation Server product will make it easier for our customers to buy, and our partners to sell. And it will also increase the ASP of the overall Presentation Server product family. You will hear more about this later in the quarter.

An example of a greenfield opportunity we are really excited about is our dynamic desktop initiative, which takes aim at a market that leverages our existing technical and go-to-market competencies in virtualization and streaming. Dynamic desktops are centrally delivered Windows desktops posted in the data center. The benefits for I.T. include cost savings, better security, flexibility, manageability, and overall accessibility, everything I.T. needs today.

Meanwhile, office workers enjoy a great Windows desktop experience, while avoiding many of the traditional disadvantages like theft, viruses, extended downtime, or having to rebuild preferences after a refresh cycle. This is particularly timely as many customers consider their plans for migration to Windows Vista.

The market is expected to be significant, with Gartner estimating over 30 million hosted virtual desktops by the year 2010. To address this market, we will be introducing a new product for delivering virtual desktops, based upon a project we code named Trinity. From a competitive perspective, it will be the only product that supports all three types and styles of virtual desktops. Based on, first, terminal services, second virtual machines, and third, lay PCs.

This approach gives customers the flexibility they need to deliver virtual desktops to the widest array of office-based workers, at the lowest aggregate cost. And we began to offer some of this capability in Q4 by making the desktop broker feature available to Presentation Server customers. The early response has been amazing, and I believe we will see a tremendous number of desktop delivery private projects in 2007, with significant implementations starting in 2008.

Recently, we closed the acquisition of Ardence, giving us fundamental IP and 100 talented employees. Ardence pioneered streaming technologies designed for on-demand provisioning of operating systems. We believe this acquisition will advance our competitive position in the desktop delivery market, allowing us to do for Windows desktops, what we have done for Windows applications, as the only company that can both virtualize and stream Windows desktops over the network.

Ardence Technologies will also include the manageability of our overall app delivery system, and open doors to deeper industry partnering opportunities. We will be integrating the Ardence team over the course of the year, operating the unit as a separate business within our Management Systems group. All while we channel ready the products, leverage core technologies across other product lines, and grow the embedded software part of the business.

These are a couple of examples of how we're simplifying and aligning our product offerings for future growth, in Q1 and over the course of 2007, we have quite a few product launches that leverage the best product pipeline we have ever had, building on the Q4 momentum that David discussed.

Net/net 2007 promises to be another exciting year. So as we enter 2007, here is what to expect from Citrix. First, we will begin to put Application Delivery on the radar screen of every enterprise CIO. Second, we will focus on our six products most critical to successful app delivery, particularly in our installed base. Third, we will expand go-to-market capacity in application networking, and at Citrix Online, especially internationally. Fourth, we will improve operational efficiencies to ensure our scalability, as we continue to grow. And fifth, we will continue our relentless focus on attracting and retaining the best talent to build a world class company.

I firmly believe we have a sustainable business and technology platform on which to build. I am bullish about the relevance of virtualization, of streaming, of sharing, and optimization of desktops and apps, especially considering the very dynamic business environment that will be the hallmark of the next five years. Our pace of investment and our vision for application delivery has put us in an amazing position. So I would like to thank every Citrix customer, every business partner, every employee, and every family member. You are the best of the best. And I have never been more proud.

Now we will open it up for questions.

Ladies and gentlemen, [OPERATOR INSTRUCTIONS] We will pause for just a moment to compile the Q&A roster. Our first question comes from the line of Steve Ashley with Robert Baird.

Congratulations on a solid quarter. Hey, David, I would just like to get maybe a little bit more color on the guidance for the first quarter and for the full year. Maybe you could talk about, when we look at the core virtualization Presentation Server business, what kind of license growth you might be baking into your expectations?

Right now, I think that while I don't want to get into the habit of giving product by product guidance, especially given the way we are going to be, you know, thinking about the business a lot going forward, but I will say, because I know it is a pretty big focal point right now that for the virtualization businesses, which include Presentation Server, and the Access suite, I think that, you know, consistent with what we thought going into Q4, you know of flat to down a few percentage points would be the way to think about it in Q1, and we think the business and the changes we are making in that product line are extremely powerful, and being done at the right time.

But given the effect that we saw from the end of sale of XP in the Americas, Pacific region in Q1 last year, I just think we have got a really tough comp to overcome, so consistent with what we thought going into Q4, I carry that forward into Q1.

And do you anticipate the Application Networking group to be profitable in the first quarter?

Yes, I would. I think that in general, it is getting much more challenging to break that out, because, you know, we have integrated the GoTo-market activities, we have integrated the G&A and operational activities, so there is not a discrete P&L across product groups right now. However, based on our original modeling that we have done through the various acquisitions, I would expect it to be, you know, breakeven to profitable in the first quarter.

Great. And lastly, Mark, you have been fairly active in terms of acquisitions in the past two years. How should we think about this year 2007, relative to your M&A activity of the last two years?

Steve, I think, you know, basically, no change in our posture, looking forward. I think we're doing well, absorbing the acquisitions from the last two years. We are getting better and better at it, so there is some, there is a learning curve that is benefiting us here, and at the same time, there is, you know, a huge number of opportunities, you know, mainly in greenfield, sort of technology spaces, and places that, you know, things that we think fit our business pretty well, so nothing huge, but similar types of things that we have seen in the past.

Great. Thanks so much.

Thanks, Steve.

Our next question comes from the line of Phil Winslow with Credit Suisse.

Hi, guys. Great quarter. Dave, I just have one question on the G&A line, you mentioned some sort of one-time expenses there. How should we think about that Q1, and what should we back out if they're not ongoing here?

Yes, there was actually a lot of different things going on in Q4. It is hard to call out things that are nonrecurring, because there is always something that happens in every quarter that is unique to that period, but I will say that when we talked about the Citrix online facility, that is one that I wanted to call out, because it was between $3 million and $4 million dollars, and that was just, you know, essentially a decision that we made, given the increasing cost and complexity around, you know, building from the ground up.

And so we have got a great new alternative there that is going to allow us to expand at a much more rapid pace, get people into a new facility faster, but not have to build it from the ground up. And ultimately it is going to end up being a lot cheaper in the long run. So that is just a more detailed explanation about that line item.

There is also, you know, unique costs associated with, you know, both the stock option work that I mentioned in my prepared comments, and a few other things. So I think that on a go forward basis, you know, you should expect G&A to certainly come down, on a sequential basis, and you know, be more in-line with the percent of revenue that we saw throughout 2006, excluding Q4.

Great. And then also, you know, you just had Orbital Data for a few months this quarter, just sort of wondering what that contributed to the A&G line?

In line with what our original expectations that we talked about, you know, 1 or $2 million, the products really haven't been launched. They are being launched at our summit event which is occurring at the end of this month, and we have great early feedback and traction across the customer and partner networks, so stay tuned.

Great. And just sort of along those lines when I guess backing, you know, WANScaler out of Q4, that would have put you guys up, you know, a couple million, you know, 1 to 2 million sequentially on the NetScaler side, just wondering what trends are you seeing there in Q4, anything different than previous quarters, and then I will just go back into the queue.

I would say no unique trends in Q4. The business overall was up 70% year-over-year. I think we are extremely happy with it. One of the things given the, you know, the historically the Internet-centric bias of that business, we always see Q3 as a really big quarter, and you saw that sequentially, and that's because, you know, a lot of those, the capital purchasing cycles for that business is really focused around the September quarter, as they prepare for the holiday shopping season, and the seasonality that they see.

So I think we will always see a pretty good, you know, a pretty good bump there. However, as we add more and more on the enterprise side, and that begins to dominate the mix over the future quarters, I would expect to see probably a higher ramp into the fourth quarter, and then more of a seasonal down in the first quarter. But it is still early days for us here.

Our next question comes from the line of Ed McGuire with Merrill Lynch.

Yes, good afternoon. Could you talk about the concentration of large deals in the quarter, roughly what the average size was of the Top 10?

Sure, Ed. We had nine deals actually in the quarter that were over a million. About five of those were in the EMEA market, two in North America, and two in Pacific. So overall, a lot of big deals. No one major deal that stood out as being more than a couple of million. So you know, I would say nothing terribly unique in the quarter, and consistent with what we would expect in any fourth period.

Were any of those from the Application Networking group?

No, they weren't. I mean the Application Networking group, when we talk about this, we generally talk more in terms of individual POs or transactions, and what we see a lot in that business is just ongoing steady purchases from, you know, from a lot of the larger customers. However, if we were to aggregate those up, you know, we generally have more that would fall into the seven-figure category.

Okay. And on the deferred revenues you had pretty healthy sequential growth there, and you talked about fairly healthy renewals. Was there, could you quantify or at least qualify the impact of any get current activity during the quarter as well?

Yes, I think we are seeing really great success in get currents, particularly in the North American markets, and it is important to point out that get current is really broken down into, you know, two individual focus areas. One is really the customers that have let their subscription lapse for less than a year, that's really what get current is about, getting them current on that program, so that they can participate in the future versions of the products, and that we saw really solid progress there. We are finally tapping into that huge installed base, that I talk about each quarter, those, you know, millions and millions of licenses that, you know, customers have bought that are not currently on active subscription, so I think that is a big opportunity.

The other section of get current is really about upgrades, and that is about customers that, you know, either never had subscription, or you know, had let it lapse well over a year. And that's another area that we saw great success in the fourth quarter. Actually selling back into the installed base, selling upgrades, and getting people, you know, really up and running on the most recent platform of the product, so across the board, really good performance.

And just finally, could you comment on the proportion of sales in the virtualization group from the Access suite and Access essentials?

No, actually I don't have that in front of me. We really don't look at the products, you know, in terms of individual ones. I look at them much more in terms of the product family, because it is an overlapping Venn diagram.

Our overall strategy is to certainly move more and more of a concentration to the higher ASP products, to generate a higher value per seat, and I think that some of the changes that we are making this month, that Mark alluded to, it is going to really help that going into 2007.

Thank you very much.

Our next question comes from the line of Kirk Materne with Banc of America Securities.

Thanks very much. I will echo my congratulations. I guess Dave, maybe following up on Ed's question, just in terms of the App Virtualization business and some of the bigger deals, do you see those deals getting larger due to an increase in seats these days, or an increase in the value of the seat, meaning do you see more and more of your larger customers transferring on to the suite, or are they just simply expanding their usage?

I think overall, the primary trend continues to just be broad penetration, you know, as we have enhanced the products we have talked about each and every quarter, broaden the applicability of the solution, the radically change, the economics of the solution, and just made it a much more compelling value proposition for customers to deploy on a wider basis, so no real trends in terms of industry or customer concentration.

You know, we are seeing growth in the suite, the suite certainly grew year-over-year, and that helps out to a minor amount. But right now it is really about unit growth, and just continued adoption of the overall solution.

Kirk, it is Mark, I will just add to that and this Premium Edition of Presentation Server is really designed to get those customers that have been expanding with the Enterprise Edition mostly, to actually take a look at the deeper value, and the end-to-end application delivery capabilities for Windows apps, within the, you know, the big installed base of Presentation Server Enterprise. So, you know, we think that can give us some uplift in the ASP, and obviously, give us a deeper relationship with the customers at the strategic level, when it comes to, you know, Windows-based application delivery.

Okay. And the second and final question is actually on Citrix Online, you can give us maybe just some qualitative, I guess metrics around how Citrix Online is doing, in terms of renewal rate trends, or op margins, that business continues to be sort of on a quarterly basis, so I was kind of interested to see what is going on there? Is it more people taking on more products in that group? Or is it simply just better execution, just kind of interested in renewal rates and not margins specifically.

Well, a couple of things. One op margins, we do break that segment out, because it is fairly well contained, this quarter consistent with what we have seen in the past, and if you exclude that one-time charge related to the building, it would be generating profitability in the mid-20s. So extremely profitable still.

But just overall, extremely happy with the continued execution on the team in Santa Barbara, growing what was already a big number, another 50% year-over-year. You know, the highlights there were, you know, GoToMeeting and GoToWebinar, which are really contained in the GoToMeeting family, growing well over 150% year-over-year, and now contributing about 25% of the overall product revenue in that group. So just strength across all of the products.

The thing that I would add is to point out that it is a vast market that is continuing to grow enormously, in just in terms of total opportunity. And this team is excellent at execution within that context of the marketplace. And then obviously, introducing new products like GoToWebinar that are innovative, changing the game, et cetera, continuing to support, you know, a great growth rate, and great profitability.

And do you see that growth rate being supported by you all expanding the market, or actually taking some share from competitors as well?

Both. I think both. I think it depends upon the product, of course, because we are on three sort of core product spaces within our online services, but I would say both. And the pie overall, if you look at all of the other players in online services, they are all growing very nicely as well.

Just becoming a much more accepted way of doing business, online meetings, Webinars, working remotely, these are all of the capabilities and supporting people remotely, these are all of the capabilities that a dynamic world is going to require, so we think that we are in really good shape there.

Thank you very much.

Thanks.

Our next question comes from the line of Adam Holt with J.P. Morgan.

Good afternoon. My first question is on the Application Virtualization group. Plus 2% in the quarter, actually looked like it accelerated from maybe a little bit of a negative number in the third quarter. Could you maybe drill down a little bit on the factors there, you had a tough comp on the Presentation server side, obviously, and I mean was it the contribution of the direct sales organization?

Was it ELA activity? Obviously you had a good large deal number. Maybe give us a little bit of clarity there. And then rolling over to the first quarter, where you talk about, you know, kind of flat to down Presentation Server, what are the implications there for the broader Application Virtualization group?

Well, Adam, this is Mark. So within the App Virtualization business, I think that the growth there, even though the comp was tough, was pretty broad-based as a matter of fact, both in new licenses, as well as the contribution, you know, from the kind of get current programs that David talked about a little bit earlier.

So, you know, nothing particularly remarkable, North America, just had a, you know, slamming, is the word we use around here Q4, and congratulations to the North America team. Al Monserrat has done a tremendous job of rebuilding the team over the last three years, and '06 was a stunning performance for everyone on that team. So I think that is how I would characterize it.

And I think that as we looked at what took place in the quarter with a lot of customers coming back to either a get-back current on their subscription, or to upgrade, as part of that program, you know, we are really encouraged by the moves that we will be announcing later this quarter, to really formalize that kind of process, with incentives for channels, for our own sales team, as well as demand generation programs that are really going to, you know, go back into the installed base, in a much more systematic way.

And Adam, let me add, I just want to clarify something regarding 2007. When we talk about the Presentation Server businesses, that is Presentation Server and Access suite together, and that is really what makes up the Application Virtualization group. And it was the group and the products that grew 2% year-over-year, not the individual point product.

And when I make comments about looking forward, I think that, you know, we are going into Q1 with the same posture we had going into Q4, in terms of it being, you know, flat to down a few percentage points, just you know, a comment about the tough comp we see on a year-over-year basis.

And just one more question, if I could, about the outlook for the year, and more broadly obviously, I know you will not drill down on a product level but is it possible to give us maybe general sort of growth expectations, either you know, positive, negative or flattish for that group for '07, and then secondly, if you look at the operating margin, or the sort of implied operating margin for '07 on the guidance that you did give top and bottom line, not a ton of operating margin expansion, you are taking on some acquisitions. How should we be thinking about margins versus growth on a going forward basis?

Sure. I think that specific to the App Virtualization business, we continue to target this in the low to mid-single digit growth range, consistent with what we have said for the last few years, and even with the outlook for the current outlook for the first quarter, we believe that that is the target range for the full year.

I think if we look at the operating margin, that is included in our guidance right now, it points you to our standard range of mid to upper 20%, we always put that out there with, you know, the idea around that, of being able to, you know, produce and demonstrate the top quartile profitability in our peer group, but also have the, you know, the discipline to continue to invest, very focused, in terms of long-term growth of the business.

And what we need to do to really build out not only the product sets, but also the GoTo-market channels for the new and acquired businesses, so we will be balancing both going into 2007. But are, you know, maintaining the very consistent approach of, you know, mid to upper 20% op margins is our target range.

Great. Thank you.

Our next question comes from the line of Brian Essex with Morgan Stanley.

Hi, good afternoon. I just had a question on the Virtualization. Do you have any sense for how to look at, besides the coming product cycle, how we should look at seasonality through the year, for any updates, a schedule, end support for certain products? Kind of building our expectations, not just for a flat to down for Q1, but for the remainder of the year as well?

Brian, I don't think there are any catalysts in '07 for like end of sale programs that you might point to. I think the bigger catalyst for our App Virtualization products in '07, probably have more to do with the introduction of Vista, and the introduction of Office 2007. On across sort of both dimensions, they create demand in a very natural way for delivering applications, sort of independent of the desktop, the version of the desktop operating system.

So we really, you know, those products really make rolling out an Office 2007 upgrade much, much easier, much lower cost than the alternative, and with some of the new technologies, we will be including, and with Presentation Server, which we will be announcing, it will make it even easier. I think those are more of the catalysts to growth for our App Virtualization business in '07, than any, you know, sort of end of sale, end of life, end of support program.

Okay. And any metrics around that business, as we look at the Virtualization Server group, any metrics we can get our arms around, in terms of installed base, or average selling price or attach rates that we can track on a go forward basis for the rest of that business?

Well, not a lot of metrics in terms of ASP's.

We talk a lot about installed base, and you know, that includes both people on active subscriptions, and the people that are on either expired or no subscription. And you know, overall, we are looking at a number, just a broad number, but active, you know, somewhere north of about 10 million concurrent users, in that product line, and people that have expired subscription, probably in the range of about 6 million overall.

So I mean that is the base that I talk about each quarter, in terms of that real hard target opportunity in terms of going back in, and either selling a get current type thing, to get them back on to the subscription benefit program, or really just being target key customers for potential upgrade, as we migrate through more and more powerful versions of the solution.

In terms of how that active subscription, and its expired base has grown I guess versus last year?

Well, they have both grown very substantially as we ship several hundred thousand units each and every quarter. Overall if you look at our renewal rates over the last few years we have been building out our customer care teams, the programs are on that, we have been able to increase the renewal rates of the program from the mid-60s a few years ago, up to now we are in the low 80s. So we continue to make very, very good progress there.

I think over the longer term, I would like to see renewal rates approach 90%, which I think is attainable for more mature enterprise software products, and I think that while we won't get there in a straight line, we have got a lot of good people and programs working on it, over the next couple of years ought to be able to get close.

Thank you very much.

Our next question comes from the line of Jason Kraft with SIG.

Thanks. One housekeeping question. Unless I missed one of the supplementals is there a pro forma breakdown of the op expense line items, ex the stock comp?

I'm sorry, could you repeat your question?

Is there a non-GAAP breakdown of the R&D, sales and marketing, and G&A, that doesn't include the FAS 123-R, is there a supplemental I'm missing that may have been posted to the Website?

Yes, it is posted on the Website.

I guess a question for Mark, from just a high level, you know, with you guys doing the DDI, being more pushing VDI, and with today's results from EMC and VMware from a total revenue perspective pretty much rivaling that of your core business, can you just touch on the threats you see from them, and also the opportunities to work with them, as you move through 2007 and '08, as this whole virtual desktop market starts to take off?

Well, you know, we definitely see them much more as a partner than a competitor. And see them as actually very much part of our dynamic desktop initiative. Obviously, they work at the virtual machine level, kind of, which is by the way supports their tremendous growth, and have done a tremendous job there at the logic tier, and the data tier in the data center, and they have done tremendous job there.

And at the user tier, very different, and that is really, you know, our specialty, and where we are strongest, and therefore, where we have a strong partnership with VMware across a lot of dimensions, and including this DDI program we are getting it off the ground. So I think that's the way we look at it.

And then at the user tier, when it comes to delivering desktops, there are a tremendous number of technologies that are outside of the machine itself, and being able to virtualize the machines, in order to be able to deliver the kind of desktop experience that is going to be required for end users to accept this sort of way and style of using a Windows desktop, and that is really our focus.

And we have great opportunities to add lots of value there, and we will start to do later in the year, et cetera. So Version 1.0 you will see announced here in the next few weeks, based on Project Trinity, and then we have more coming in that product line over the course of the year, and as the market starts to build. So you know, really, I think it is very complimentary working with them.

And obviously, we work with,and our goal is to work with all of the virtual machine vendors, because this is a hot space and it has lots of value, we got a great partnership in that area with Microsoft, a new and growing partnership with the guys over at Zen, so you know, we are optimistic about partnering with all of them.

Great. And that's kind of where the questioning goes to, is just your partnership with Microsoft, Virtual Server, that coming out in the next several quarters, just what kind of fine line you are going to have to walk there, when you butt up against VMware?

Well, you know, I mean in the end, the customer makes the decision. And I think obviously the value in virtual machines, and the HyperViser is going more and more and more toward the management of these things, not in the HyperViser itself as being commoditized.

So in the end, the customer makes that choice, and we will look at the management systems that by the way we will plug into and leverage. We're not building virtual machine management systems by any means which is really, you know, the core business that Microsoft, Zen, VMware and others, you know, have to establish their value. So we will just let the customers kind of decide on that one.

Thanks.

Our next question comes from the line of Brad Leal with Jefferies and Company.

Hi good afternoon, it is Katherine Egbert with Jefferies. A couple of quick questions, Dave. On the renewal rates you said that you think over time they could get to 90%. Do you expect to see an uptake in people getting current in front of Longhorn in particular?

Well, right now, I think that when I look at the primary reason why people get current, or why they have lapsed for one reason or another, the #1 reason historically has been that we just haven't reached out and been able to touch each and every one of the many thousands of customers, and so I think a lot of our success is attributable to just much more mature programs, much more dedicated focus on the overall effort.

The other value is just, you know, we are producing a ton of innovation on a regular basis. We are putting out new products that customers can demonstrate, you know, ROI and a lot of economic metrics around, such that it pays for itself very, very quickly. So I don't know if it is really being impacted that much by external factors, but I really believe it is being, you know, impacted by internal factors more than anything else.

Do you have any metrics that you could share with us, to give us an update on your success of selling the gateway products into the Presentation Server installed base?

Well, we are not breaking those out, but it has just been a tremendous success. I think David mentioned in his comments the awards and the place that we have ended up in the annual analytics by Gartner and Forester, which are based upon the market research that they do with all of the vendors across revenue and unit volumes, market shares, and forward road maps.

So I think we, you know, clearly exited the year with the #2 market share, and no matter who you ask, and no matter how you measure it, and that is basically going from zero to #2 in the market in 24 months. And being acknowledged by, you know, the analysts that really follow this from a product perspective, as a visionary and execution leader, which is exactly where we want to be.

So I think those were the metrics, those are probably the metrics we can talk about.

All right. And then I just wanted to confirm, the tax rate for 2007, in your guidance are you still using 25%, or are you going with an increase, like you talked about last quarter?

Well, right now we're talking about, you know, 25 to 26%, which is, you know, where based on about the 24% or so that I talked to, that we posted for the full year this year, I think, is a reasonable expectation at this point. Now I will point out that remember, it is really going to be predicated on the geographic mix being the single biggest factor, and we are looking for a lot of success coming out of the App Networking business and Citrix Online, and other things that up to this point certainly have a higher concentration in North America, versus the other markets. So yes, short answer, I do think that, you know, 25 to 26 is the right way to think about it right now.

Okay. Thank you.

Our next question comes from the line of Fred [Gribe] with Goldman Sachs.

Good afternoon. It is actually Sarah Friar here. Good quarter, guys. Just going back to the ANG group, everyone has focused a lot on Presentation Server for obvious reasons, but within Application Networking, did you see an ability to start penetrating more enterprise class customers versus what has been a more traditional Internet spike? And I ask that because as I think of your competitive environment, I think you need to show that ability to take those products into your core base.

We agree Sarah and the answer is yes, we did see that across a couple of dimensions so we exited the year with a net of about 360 partners, go-to-market partners that are actively, you know, working our NetScaler, well, all of our App Networking products for the most part, even though some of them are just now being introduced. And the transaction rates, we saw more enterprise transactions during the quarter. So we are really pleased with the progress we've made. We have got a ways to go. But very pleased with the enterprise progress that we have made in Q4.

And so is it reasonable, I know you've talked about kind of 40% year-over-year type growth rates for that business. Is that still kind of the targeted rate we should think about? Or anything that kind of moves the needle either way?

I think overall, the growth rates we have talked about are being able to exceed the growth rates of the underlying markets, which are in the, which are right in that 30 to 40% range. So you know, going forward, we certainly expect to be able to grow faster than the market and one of the things that would allow us to be at the high end of that range would certainly be, you know, continued, you know, continued traction and execution, into our couple of hundred thousand, you know, enterprise customers that we currently have as an installed base.

So I think there is quite a few catalysts there, and a lot of the summit event coming at the end of the month is around training and education, and it is just making sure that we are, you know, broadening the message as much as possible, and giving the field and the channel partners the capabilities to be very, very successful in this market.

Sarah, the other thing significant, and probably the biggest single investment we are making in the business in '07, on the go-to-market side at least, is really upleveling the total capacity of our GoTo-market capability, especially internationally, for all of our Application Networking products, which is where we've been weakest, you know, just from a capacity perspective, so that will be a huge catalyst. Along with the introduction, the introductions that we have slated for later this quarter that we're pretty excited about. And we will be talking by the way about all of these things in detail during our financial Analyst Day in I think it is the first week of March.

Got it. One very other quick one, David, if you don't mind. Just on the buyback, given the pending options investigation, does that preclude you from going back to do buyback at this point in time? Or a should we expect that sort of buyback rate to continue over the next couple of quarters?

No, I think that, you know, you know us, we are always going to operate in the most conservative posture possible, so we will impose a self imposed blackout window until that is wrapped up.

Okay. Fair enough. Thank you.

Our next question comes from the line of Dino Diana with UBS.

Hi, guys. Thanks. Nice quarter. From a get current perspective, I know you had some comments around it, but can we assume it was in the 12 million-ish range from a bookings perspective? And do you have any more would you say I guess increased visibility on that front?

I think on the bookings basis, I mean right now, we still call get current both the, call it the reinstatement of subscription, that I talked about as well as upgrades, you know, so overall, it was a substantially more than the 12 million that you mentioned, but I think that going forward, we do have more visibility into the opportunity pool, and a lot more focused effort in terms of going in there and individually attacking and driving specific programs into that installed base. And you know, the more we are able to do that, I think the more success we're going to continue to see in this going forward.

Okay. On the, looking at NetScaler and Citrix Online, when you look at, I guess international traction, I would imagine going to be one of your biggest pushes for '07. Can you talk about maybe, do you feel like you have a lot of that, is that a lot of the reason why we could expect some margin, margin decline from '07 to '06? Would that be a big part of that? Obviously offset by those things becoming more profitable?

Actually, I don't think we are forecasting any margin decline. We are still in our traditional range of mid to upper 20%.

I mean from '06 to '07 now.

Yes, our guidance for '07 is to continue the, you know the mid to upper 20% operating margins, where we have been really over the last several years, having posted just under 27% for 2006. More directly though, I think that, you know, absolutely, there is a lot of investments we want to continue to make, in both the App Networking space and in Citrix Online, to drive, you know, more international revenue.

I think these are huge untapped markets right now for us to a large extent. Simply because, you know, these businesses have been historically focused on the North American markets, and that is where all of the success has come from. Not all of it, but a large portion of the success, and it is just a much broader opportunity for us to leverage the customer base, and the GoTo market engine throughout the rest of the world.

One last housekeeping. In terms of accrued expenses and accounts payable, as a percentage of total revenue, they have been I guess higher than they have been in the last quarter, and this quarter, they have been higher than they have been in the past year or two years. Is there anything there, does it have anything to do with the acquisition? Can you give us some sense of why that is?

In Q4, I think you are always going to see a spike in accruals. You know, primarily related to commissions and bonuses, and all of the things that end up getting paid out in Q1, so I would expect it to go down next quarter.

Okay. Thanks, guys.

Our next question comes from the line of Steven Freitas with BMO Capital Markets.

Hi, good evening. I just had a question regarding DDI. I'm just curious if you plan to use ICA as a transport protocol for that?

Of course, Steve. Absolutely. It is one of the competitive advantages that we have in terms of performance and functionality.

And we are looking at, you know, some other possibilities certainly to support RDP with our products, and even I think at our, you may have seen at our October I-forum event, that we demonstrated how the protocols that are underlying, GoToMyPC can be used to make the dynamic desktop very portable.

So the good news is we have lots of ways to really provide the kind of connectivity needed to drive desktops to the data center, but yet give users the kind of access that they need from either their desktop, or when they are away from it.

And just extend that line of questioning in the GoToMyPC vein, is there any reason why you couldn't provide a dynamic desktop as a service using your Citrix Online platform some day?

There is no technical reason. I think, that you know, there are lots of market, sociological, you know, all kinds of other reasons, but there really is no technical reason. I mean if you think about it, when you enroll your PC into GoToMyPC service, you are creating a desktop delivery service of your own. And you know, it is a service of one.

And it is a highly scalable platform, and can handle, you know, massive numbers of PCs, so that is not the issue. It is more business and go-to-market and market development-related. We will see how that plays out. I think the next five years, this style of delivering a desktop, and having lots of methodologies for doing it, a very, very strategic set of technologies for us to have, possession of, and leadership in.

Okay. I will ask my rest offline.

Okay. Thank you.

Our next question comes from the line of Manny Recarey with Kaufman Brothers.

Thanks. Two questions. One, can you talk a little bit about the competitive environment in the application networking area? And as you focus more on the enterprise customers, are you running into Cisco and F5 any more? And then the second question is, with the stock option inquiry that you are taking on, would it be fair to assume that you won't be filing your 10-K until that gets completed?

Let me take the second question first to get that out of the way. I mean it is an ongoing review, so you know, we don't have any direct control over exactly when it is going to conclude. But I can tell that you the Board and their outside advisors are certainly driving towards the 10-K filing date. We wouldn't file it until such time as the review is complete, but you know, obviously are looking to complete the work as thoroughly and as quickly as possible.

Manny, this is Mark. So as far as the competitive landscape, I would say there are really no significant changes here. We do see that the second tier players are really starting to fall behind. And we see them pop up maybe in some international markets, but you know, when you look at North America, especially, they are just not around any more. Cisco, you know, is omnipresent, very much in the picture, routing, switching, and so forth, but no increase that is notable in terms of competition from them in the application centric web App delivery market.

And you know, as we look at deals, and competitive situations, bake-offs, host customers, trained partners, recruit partners, all of those activities on a day-to-day basis, it really looks to us like it continues to be a two-horse race, between us and F5. And that's, you know, that is a competitive statement, but at the same time, we believe the total available market, and the ability to grow the primary market here certainly as the number of web apps increases dramatically, is greater than, you know, kind of trying to steal share from, you know, one player or another.

Okay. Thank you.

Our next question comes from the line of Rob Owens with Pacific Crest Securities.

Yes, good afternoon. Can you give us a sense of your expectations for Ardence, both in Q1 and for all of 2007?

Yes, I think what we've said so far for Ardence is that we would expect it to contribute between 15 and 18 million in total revenue for 2007. And be neutral to EPS for that period.

Relative to Q1 is there any drag on earnings, and what is the revenue contribution we should expect?

Actually, it is actually pretty consistent through the year. You know, the first couple of quarters, you know, maybe just breakeven to, you know, fractionally, but I think right now the plan is to run it at a neutral basis throughout the entire year.

As far as revenue contribution in the first quarter, I think in the range of 3 to 4 million is reasonable at this point in time. Probably 2 to 4 million is reasonable at this point in time.

Okay. And then on the gross margin guidance, I think you said 92 to 93, on a prior conference call, I think you were talking more of 2 points of compression and given the rapid growth that you are seeing in ANG, why is it a little less than you previously thought, what has changed?

Well, we are talking as much as 2 percentage points compression over the full year of 2006. For the full year it goes to 93.2% gross margin I believe, and you know, with a guidance in Q1 of taking that down as much as 100 basis points, I think we are beginning to see that. But as we ramp the App Networking products throughout the year, I think that is the place where you would start to see a gradual decline in gross margin, down towards another 100 basis points or more into the fourth quarter.

Okay. And then I think one of the major mandates for '07 was to improve operational efficiencies, given the op margin you now see in the Online business, and the fact that contribution margin should exceed corporate margin I would guess, on a run rate basis, by the end of '07. Why aren't we seeing more margin leverage in the model at that point?

I think right now going into 2007 there are so many different factors across investing, and in all the multiple businesses, and whether that is in R&D to integrate enhanced capabilities or develop brand new activities, or whether it is in go-to-market, investing in the ways that are most efficient for each geography, whether it is direct, partner, et cetera.

Online, the real challenge there is balancing growth and profitability, and if anything I think that I would like to accelerate the investment in online, to drive even faster growth into the future. So you know, we will balance that in a prudent way, and make sure that we are continuing to produce very solid op margins out of that division, but are certainly biased for long term market share gains and sustainability.

Great. Thanks.

Thank you.

We have time for one further question from the line is Israel Hernandez with Lehman Brothers.

Good afternoon everyone. Congratulations Mark, to you and your team. Most of my questions have been asked. So I will be pretty brief here. Mark, can you comment on just the macro environment, and the IT spending environment as we head into 2007, given that we have had a couple of large software disappointments so far in the quarter. And a question for Dave, can you comment on the profitability of the Online business, in the past you have talked about the business running the mid-20s I believe from a margin perspective, is that where we are currently? Thanks.

Sure. Let me take the second part of the question first, and then turn it over to Mark. You know, overall the business continues to operate in the mid-20s as I think I mentioned that a little bit earlier. If you exclude the adjustment in Q4 for the termination of the building project that we had going on, that dropped it down to below 20% in the quarter. So on a pro forma basis continues to execute really, really well. Mark?

Thanks David. So Israel, I will comment about IT spending for sure. So I think actually as we came through 2006 feeling like aggregate spending on IT at 4.5 to 5%. It felt like it was pretty steady throughout the year. And then in December I think a lot of people noticed that Gartner came out with a report, revised their forecast for '07 down from this 4.5 to 5%, to 2.5 to 3%.

And I think we see that in the marketplace, and not surprised that there would be some larger scale vendors maybe missing on their expectations. I think overall there is a huge compression going on in IT, and just anecdotally, I was at a very large customer in December, and they told me that their spending on IT at the departmental level, off the IT budget, was actually faster in growing, than the spending on IT from a corporate level. Where departments were buying some of their own software services, certainly like our GoToMeeting, and our GoToWebinar products, and even buying some of their applications on-demand, like SalesForce.com, and so forth.

So I think this is a trend we are going to see, I have been pretty consistent on that for quite a while, and I like to think of this topic, these are the good old days, and we need to figure out how to operate with IT spending growing in aggregate around this rate. Which is why we feel really good about 25% year-over-year growth on the top line, 20% on the bottom line approximately. And we have been able to do that the last few years.

And I believe we will be able to continue to turn this type of weight faster than aggregate spending growth rates as our products and our application delivery message is way, way more relevant going forward, than it is looking backwards.

Great. Thank you.

There are no further questions at this time.

Well thank you for joining the call today. As we close out, I would like to give you an important save the date reminder. We plan to host our Annual Analyst Day for financial analysts this quarter. It is on Tuesday, March 6th, and we will hold it in Santa Clara just across the street from our brand new, beautiful Silicon Valley offices.

We will be providing further details on the event on our website, and you will hear lots more from our IR team in the coming weeks. We look forward to seeing you there, talking a lot more about the '07 plan, product announcements, Go-to-market announcements, et cetera. Engagement with the executive organization and answering your questions.

So thanks again, we look forward to seeing you there, and appreciate you joining us today.

This concludes today's conference call. You may now disconnect.