Autodesk 2003 Annual Report Download - page 39

during periods of economic downturn. In particular markets, this disruption would likely negatively impact these
third-party developers and end users, which could harm our business.
Net revenues or earnings shortfalls or the volatility of the market generally may cause the market price of our
stock to decline, which could harm our business.
The market price for our common stock has experienced significant fluctuations and may continue to
fluctuate significantly. The market price for our common stock may be affected by a number of factors, including
the following: net revenues or earnings shortfalls and changes in estimates or recommendations by securities
analysts; the announcement of new products or product enhancements by us or our competitors; quarterly
variations in our or our competitors’ results of operations; developments in our industry; and general market
conditions and other factors, including factors unrelated to our operating performance or the operating
performance of our competitors.
In addition, stock prices for many companies in the technology sector have experienced wide fluctuations that
have often been unrelated to the operating performance of such companies. Historically, after extended periods of
volatility in the market price of a company’s securities, a company becomes more susceptible to securities class
action litigation. This type of litigation is often expensive and diverts management’s attention and resources.
Our efforts to develop and introduce new products and service offerings expose us to risks such as limited
customer acceptance, costs related to product defects and large expenditures that may not result in additional
net revenues.
Rapid technological change as well as changes in customer requirements and preferences characterize the
software industry. We are devoting significant resources to the development of technologies and service
offerings to address demands in the marketplace for increased connectivity and use of digital data created by
computer-aided design software. As a result, we are transitioning to new business models, requiring a
considerable investment of technical and financial resources. Such investments may not result in sufficient
revenue generation to justify their costs, or competitors may introduce new products and services that will
achieve acceptance among our current customers, adversely affecting our competitive position.
Additionally, the software products we offer are complex, and despite extensive testing and quality control,
may contain errors or defects. These defects or errors could result in corrective releases to our software products,
damage to our reputation, loss of revenues, an increase in product returns or lack of market acceptance of our
products, any of which would likely harm our business.
Our business could suffer as a result of risks associated with strategic acquisitions and investments.
We periodically acquire or invest in businesses, software products and technologies that are complementary
to our business through strategic alliances, equity investments and the like. For example, in April 2002 we
acquired Revit and in September 2002 we acquired CAiCE. The risks associated with such acquisitions or
investments include, among others, the difficulty of assimilating the operations and personnel of the companies,
the failure to realize anticipated synergies and the diversion of management’s time and attention. In addition,
such investments and acquisitions may involve significant transaction-related costs. We may not be successful in
overcoming such risks, and such investments and acquisitions may negatively impact our business. In addition,
such investments and acquisitions have in the past and may in the future contribute to potential fluctuations in
quarterly results of operations. The fluctuations could arise from merger-related costs and charges associated
with eliminating redundant expenses or write-offs of impaired assets recorded in connection with acquisitions.
These costs or charges could negatively impact results of operations for a given period or cause lack of a
consistent increase quarter to quarter in our operating results.
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