Computer Associates 2007 Annual Report Download - page 26

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Our operating results and revenue are subject to fluctuations caused by many economic factors associated with our
industry and the markets for our products which, in turn, may individually and collectively affect our revenue,
profitability and cash flow in adverse and unpredictable ways.
Quarterly and annual results of operations are affected by a number of factors associated with our industry and the markets
for our products, including those listed below, which in turn could adversely affect our revenue, profitability and cash flow in
the future.
•Timing and impact of threat outbreaks (e.g., worms and viruses);
•The rate of adoption of new product technologies and releases of new operating systems;
•Demand for products and services;
•Length of sales cycle;
•Customer difficulty in implementation of our products;
•Magnitude of price and product and/or services competition;
•Introduction of new hardware;
•General economic conditions in countries in which customers do a substantial amount of business;
•Changes in customer budgets for hardware, software and services;
•Ability to develop and introduce new or enhanced versions of our products;
•Changes in foreign currency exchange rates;
•Ability to control costs;
•The number and terms and conditions of licensing transactions;
•Reorganizations of the sales and technical services forces;
•The results of litigation; and
•Ability to retain and attract qualified personnel.
Any of the foregoing factors, among others, may cause our operating expenses to be disproportionately high, or cause our
revenue and operating results to fluctuate. As a consequence, our business, financial condition, operating results and cash
flow could be adversely affected. For a discussion of certain factors that could affect our cash flow in the future, for example,
please see Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and
Capital Resources — Sources and Uses of Cash”.
The timing of orders from customers and channel partners may cause fluctuations in some of our key financial metrics
which may impact our quarterly financial results and stock price.
Historically, a substantial portion of our license agreements are executed in the last month of a quarter. Any failure or delay in
executing new or renewed license agreements in a given quarter could cause fluctuations in some of our key financial metrics
(i.e., new deferred subscription value or cash flow), which may have a material adverse effect on our quarterly financial results.
Our historically uneven sales pattern also makes it difficult to predict future new deferred subscription value and cash flow for
each period and, accordingly, increases the risk of unanticipated variations in our quarterly results and financial condition. If
we do not achieve our forecasted results for a particular period, our stock price could decline significantly.
Given the global nature of our business, economic or political events beyond our control can affect our business in
unpredictable ways.
International revenue has historically represented a significant percentage of our total worldwide revenue. Continued success
in selling our products outside the United States will depend on a variety of market and business factors, including:
•Reorganizations of the sales and technical services workforce;
14