Computer Associates 2006 Annual Report Download - page 55

Results of Operations
Revenue
The following table presents the percentage of total revenue and the percentage of period-over-period dollar change
for the revenue line items in our Consolidated Statements of Operations for the fiscal years ended March 31, 2006,
2005, and 2004. These comparisons of financial results are not necessarily indicative of future results.
2006 2005
2006/
2005 2005 2004
2005/
2004
Percentage of
Total
Revenue
Percentage
of
Dollar
Change
Percentage of
Total
Revenue
Percentage
of
Dollar
Change
Fiscal Year 2006 Fiscal Year 2005
(restated) (restated) (restated)
Revenue:
Subscription revenue.......... 75% 72% 10% 72% 63% 22%
Maintenance ................ 11% 12% (2)% 12% 16% (15)%
Software fees and other........ 4% 7% (36)% 7% 10% (23)%
Financing fees .............. 1% 2% (42)% 2% 4% (43)%
Professional services .......... 9% 7% 32% 7% 7% 4%
Total revenue ............... 100% 100% 5 % 100% 100% 8 %
Total Revenue
Total revenue for the fiscal year ended March 31, 2006 increased $193 million from the fiscal year ended March 31,
2005, to $3.80 billion. This increase was partially a result of the transition to our business model, which contributed
additional subscription revenue from the prior fiscal year as we continue to add incremental subscription revenue
for contracts that are renewals of prior business model contracts for which revenue was previously recognized up-
front for multiple year licenses under our old business model. The increase in total revenue was also partially
attributable to the sales of Concord, Niku, iLumin, and Wily products, which contributed approximately
$125 million of separately identifiable revenue. It is expected that software fees and other revenue and
maintenance revenue attributable to acquisitions will decline as these acquired products transition to our
business model and revenue attributable to these acquired products is reported as subscription revenue. In
addition, revenue for fiscal year 2006 was negatively impacted by fluctuations in foreign currency exchange
rates by approximately $17 million compared with fiscal year 2005. Total revenue in fiscal year 2006 as compared
with fiscal year 2005 was negatively impacted by decreases in maintenance and financing fees resulting from how
these items are accounted for under our business model. The recognition of maintenance and financing fees under
our business model is discussed further under “Subscription Revenue” in this MD&A. Our revenue was further
negatively impacted by the fact that since the beginning of the second quarter of fiscal year 2005, revenue from
certain contracts in our channel business has been, and continues to be, recorded as new deferred subscription value,
which will be ratably recognized into subscription revenue in future periods compared to prior periods when the
majority of such revenue was recognized on an up-front basis.
Total revenue for the fiscal year ended March 31, 2005 increased $271 million from the fiscal year ended March 31,
2004, to $3.60 billion. This increase was partially a result of the transition to our business model, which contributed
additional subscription revenue from the prior fiscal year. The increase in total revenue was also partially
attributable to the sales of Netegrity products which contributed approximately $32 million of revenue in the
second half of fiscal year 2005. In addition, as our international contracts are denominated in local currencies, the
strengthening of both the euro and the British pound, as well as certain other currencies, against the U.S. dollar
increased our revenue by approximately $103 million.
Subscription Revenue
Subscription revenue represents the portion of revenue ratably recognized on software license agreements entered
into under our business model. Some of the licenses recorded between October 2000, when our business model was
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