Citrix 2014 Annual Report Download - page 47

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41
Results of Operations
The following table sets forth our consolidated statements of income data and presentation of that data as a percentage of
change from year-to-year (in thousands other than percentages):
Year Ended December 31,
2014
Compared to
2013
2013
Compared to
2012
2014 2013 2012
Revenues:
Product and licenses $ 899,736 $ 891,630 $ 830,645 0.9 % 7.3 %
Software as a service 651,562 582,872 511,323 11.8 14.0
License updates and maintenance 1,416,017 1,305,053 1,125,094 8.5 16.0
Professional services 175,541 138,879 119,061 26.4 16.6
Total net revenues 3,142,856 2,918,434 2,586,123 7.7 12.8
Cost of net revenues:
Cost of product and license revenues 124,110 114,932 96,962 8.0 18.5
Cost of services and maintenance revenues 349,683 289,990 227,150 20.6 27.7
Amortization of product related intangible assets 146,426 97,873 80,025 49.6 22.3
Total cost of net revenues 620,219 502,795 404,137 23.4 24.4
Gross margin 2,522,637 2,415,639 2,181,986 4.4 10.7
Operating expenses:
Research and development 553,817 516,338 450,571 7.3 14.6
Sales, marketing and services 1,280,265 1,216,680 1,060,829 5.2 14.7
General and administrative 319,922 260,236 245,259 22.9 6.1
Amortization of other intangible assets 45,898 41,668 34,549 10.2 20.6
Restructuring 20,424 — — * *
Total operating expenses 2,220,326 2,034,922 1,791,208 9.1 13.6
Income from operations 302,311 380,717 390,778 (20.6) (2.6)
Interest income 9,421 8,194 10,152 15.0 (19.3)
Interest expense 28,332 128 312 * (59.0)
Other (expense) income, net (7,694)(893) 9,611 761.6 (109.3)
Income before income taxes 275,706 387,890 410,229 (28.9) (5.4)
Income taxes 23,983 48,367 57,682 (50.4) (16.1)
Net income 251,723 339,523 352,547 (25.9) (3.7)
* not meaningful
Revenues by Segment
Net revenues of our Enterprise and Service Provider division include Product and licenses, License updates and
maintenance, and Professional services. Product and licenses primarily represent fees related to the licensing of the following
major products:
• Workspace Services is primarily comprised of our desktop and application virtualization products, which include
XenDesktop and XenApp and our mobility products which include XenMobile products; and
• Delivery Networking is primarily comprised of our cloud networking products, which include NetScaler,
CloudBridge and ByteMobile Smart Capacity.
In addition, we offer incentive programs to our VADs and VARs to stimulate demand for our products. Product and
license revenues associated with these programs are partially offset by these incentives to our VADs and VARs.
License updates and maintenance consists of:
• Our Subscription Advantage program, an annual renewable program that provides subscribers with automatic
delivery of unspecified software upgrades, enhancements and maintenance releases when and if they become