Citrix 2009 Annual Report Download - page 31

our base, we will need to maintain a healthy mix of channel members who cater to smaller customers. We may
need to add and remove distribution members to maintain customer satisfaction and a steady adoption rate of our
products, which could increase our operating expenses. Through our Citrix Partner Network and other programs,
we are currently investing, and intend to continue to invest, significant resources to develop these channels,
which could reduce our profits.
We could change our licensing programs or subscription renewal programs, which could negatively impact
the timing of our recognition of revenue.
We continually re-evaluate our licensing programs and subscription renewal programs, including specific
license models, delivery methods, and terms and conditions, to market our current and future products and
services. We could implement new licensing programs and subscription renewal programs, including
promotional trade-up programs or offering specified enhancements to our current and future product and service
lines. Such changes could result in deferring revenue recognition until the specified enhancement is delivered or
at the end of the contract term as opposed to upon the initial shipment or licensing of our software product. We
could implement different licensing models in certain circumstances, for which we would recognize licensing
fees over a longer period, including offering additional products in a software-as-a-service model. Changes to our
licensing programs and subscription renewal programs, including the timing of the release of enhancements,
upgrades, maintenance releases, the term of the contract, discounts, promotions and other factors, could impact
the timing of the recognition of revenue for our products, related enhancements and services and could adversely
affect our operating results and financial condition.
Sales of our Subscription Advantage product constitute substantially all of our License Updates revenue and a
large portion of our deferred revenue.
We anticipate that sales of our Subscription Advantage product will continue to constitute a substantial
portion of our License Updates revenue. Our ability to continue to generate both recognized and deferred revenue
from our Subscription Advantage product will depend on our customers continuing to perceive value in
automatic delivery of our software upgrades and enhancements. A decrease in demand for our Subscription
Advantage product could occur as a result of a decrease in demand for our Desktop Solutions and our Datacenter
and Cloud Solutions. If our customers do not continue to purchase our Subscription Advantage product, our
License Updates revenue and deferred revenue would decrease significantly and our results of operations and
financial condition would be adversely affected.
As our international sales and operations grow, we could become increasingly subject to additional risks that
could harm our business.
We conduct significant sales and customer support, development and engineering operations in countries
outside of the United States. During the year ended December 31, 2009, we derived approximately 43.6% of our
revenues from sales outside the United States. Our continued growth and profitability could require us to further
expand our international operations. To successfully expand international sales, we must establish additional
foreign operations, hire additional personnel and recruit additional international resellers. Our international
operations are subject to a variety of risks, which could cause fluctuations in the results of our international
operations. These risks include:
• compliance with foreign regulatory and market requirements;
• variability of foreign economic, political and labor conditions;
• changing restrictions imposed by regulatory requirements, tariffs or other trade barriers or by U.S.
export laws;
• longer accounts receivable payment cycles;
• potentially adverse tax consequences;
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