Avid 2015 Annual Report Download - page 49

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43
The expected timing of recognition of revenue backlog as revenue in the future is as follows as of December 31, 2015 (in
thousands):
For the Year Ending December 31,
2016 2017 2018 2019 2020 Thereafter Total
Orders executed prior to January 1, 2011 $ 24,772 $ 952 $ 144 $ — $ — $ — $ 25,868
Orders executed or materially modified on
or after January 1, 2011 244,112 117,458 68,011 35,292 21,407 39,938 526,218
$ 268,884 $ 118,410 $ 68,155 $ 35,292 $ 21,407 $ 39,938 $ 552,086
Orders included in revenue backlog may be reduced, canceled or deferred by our customers. The expected timing of the
recognition of revenue backlog as revenue is based on our current estimates and could change based on a number of factors,
including (i) the timing of delivery of products and services, (ii) customer cancellations or change orders, or (iii) changes in the
estimated period of time Implied Maintenance Release PCS is provided to customers. As there is no industry standard definition
of revenue backlog, our reported revenue backlog may not be comparable with other companies. Revenue backlog as of any
particular date should not be relied upon as indicative of our net revenues for any future period.
Cost of Revenues, Gross Profit and Gross Margin Percentage
Cost of revenues consists primarily of costs associated with:
• procurement of components and finished goods;
• assembly, testing and distribution of finished products;
• warehousing;
• customer support related to maintenance;
• royalties for third-party software and hardware included in our products;
• amortization of technology; and
• providing professional services and training.
Amortization of technology included in cost of revenues represents the amortization of developed technology assets acquired as
part of acquisitions and is described further in the Amortization of Intangible Assets section below.
Costs of Revenues for the Years Ended December 31, 2015 and 2014
(dollars in thousands)
2015 Change 2014
Costs $ % Costs
Products $ 131,881 $ (11,884) (8.3)% $ 143,765
Services 61,501 845 1.4% 60,656
Amortization of intangible assets 4,063 4,013 8,026.0% 50
Total cost of revenues 197,445 (7,026) (3.4)% 204,471
Gross profit $ 308,150 $ (17,630) (5.4)% $ 325,780