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33
Conforming changes have been made for all prior periods presented. See Note 2 to our consolidated financial statements
for more information regarding the reclassifications described above.
Summary of Results
For the year ended December 31, 2012 compared to the year ended December 31, 2011, we delivered the following
financial performance:
• Product and license revenue increased 11.6% to $830.6 million;
• Software as a Service revenue increased 18.9% to $511.3 million;
• License updates and maintenance revenue increased 19.7% to $1,125.1 million;
• Professional services revenue increased 30.1% to $119.1 million;
• Operating income decreased 6.3% to $390.8 million; and
• Diluted earnings per share decreased 0.3% to $1.86.
The increase in our Product and licenses revenue was primarily driven by sales of our Networking and Cloud products,
led by NetScaler and increased sales of our Mobile and Desktop products, led by XenDesktop. We currently target our Product
and licenses revenue to increase when comparing the first quarter of 2013 to the first quarter of 2012. Our Software as a service
revenue increased due to increased sales of our Collaboration products, led by GoToMeeting and our Data Sharing product,
ShareFile. The increase in License updates and maintenance revenue was primarily due to an increase in renewals and sales of
our Subscription Advantage product and an increase in maintenance revenues, primarily driven by increased sales of our
Networking and Cloud products, led by NetScaler. Professional services revenue increased primarily due to increases in
consulting revenues related to increased implementation sales of our Enterprise division’s products. We currently target that
total revenue to increase when comparing the first quarter of 2013 to the first quarter of 2012. In addition, when comparing the
2013 fiscal year to the 2012 fiscal year we target total revenue to increase. The decrease in Operating income and diluted net
income per share when comparing 2012 to 2011 was primarily due to an increase in stock-based compensation costs primarily
related to our retention-focused annual stock grant to key employees and our recent acquisitions and an increase in amortization
of intangible assets primarily related to our recent acquisitions. Also contributing to the decrease is an increase in Cost of net
revenues due to increases in sales of products with a hardware component and increased sales of our services, both of which
have a higher cost than our software products.
2012 Acquisitions
Podio
In April 2012, we acquired all of the issued and outstanding securities of Podio, a privately-held provider of a cloud-based
collaborative work platform. Podio became part of our Online Services division and expands our offerings of integrated cloud-
based support for team-based collaboration. The total consideration for this transaction was approximately $43.6 million, net of
$1.7 million of cash acquired, and was paid in cash. Transaction costs associated with the acquisition were approximately $0.5
million, all of which we expensed during the year ended December 31, 2012 and are included in General and administrative
expense in our accompanying consolidated statements of income in this Annual Report on Form 10-K for the year ended
December 31, 2012. In addition, in connection with the acquisition, we assumed non-vested stock units which were converted
into the right to receive up to 127,668 shares of our common stock, for which the vesting period reset fully upon the closing of
the transaction.
Bytemobile
In July 2012, we acquired all of the issued and outstanding securities of Bytemobile, a privately-held provider of data and
video optimization solutions for mobile network operators. Bytemobile became part of our Enterprise division and extends our
industry reach into the mobile and cloud markets. The total consideration for this transaction was approximately $399.5
million, net of $5.6 million of cash acquired, and was paid in cash. Transaction costs associated with the acquisition were
approximately $2.1 million, all of which we expensed during the year ended December 31, 2012 and are included in General
and administrative expense in the accompanying consolidated statements of income in this Annual Report on Form 10-K for
the year ended December 31, 2012.
2012 Other Acquisitions
During the first quarter of 2012, we acquired all of the issued and outstanding securities of a privately-held company for
total cash consideration of approximately $24.6 million, net of $0.6 million of cash acquired. This business became part of our
Enterprise division. Transaction costs associated with the acquisition were approximately $0.5 million, of which we expensed
$0.4 million and $0.1 million during the years ended December 31, 2012 and 2011, respectively, and are included in General
and administrative expense in the accompanying consolidated statements of income in this Annual Report on Form 10-K for