Autodesk 2006 Annual Report Download - page 4

Strength in numbers
Fiscal 2006 was another year of outstanding
performance. Revenue from new seats still
represents the majority of our revenue, increasing
21% over last year. Revenue from AutoCAD and
AutoCAD LT, our general purpose design solutions,
increased 23% over the prior year. In fact, new
seats of AutoCAD and AutoCAD LT continued to
rise in fiscal 2006, solidifying and growing our
core design base. Additionally, customers are
increasingly adopting our model-based 3D solu-
tions to realize anything their minds can imagine
while driving quality and productivity. As a result,
revenues from our 3D solutions increased 60%
over last year. We continued to execute on our
strategy to grow adoption in emerging economies,
increasing revenue more than 60%. Our subscrip-
tion program continues to appeal to customers as
an easy and cost effective way to keep their design
tools up to date. Subscription revenues increased
56% over last year. As a result, we enter fiscal 2007
with approximately 15% of our anticipated revenues
already booked – a major milestone.
Financially, Autodesk is extremely well positioned.
Our robust sales and continued focus on productiv-
ity generated a substantial increase in operating
cash flow in fiscal 2006. We used $447 million to
repurchase 11.7 million shares of Autodesk stock,
keeping our total shares outstanding relatively
flat from last year. We generated $415 million in
operating activities, ending fiscal 2006 with a
strong balance sheet: no debt, cash and marketable
securities of $378 million, and deferred revenues
of $286 million, including $213 million of deferred
subscription revenue.
We also continued to invest in strategic acquisi-
tions. In addition to ongoing execution of our
goal of acquiring small companies with unique
technology, in fiscal 2006 we acquired Alias, a
leading developer of 3D graphics technology. With
industry leading products and customers in the
manufacturing, building, and media and entertain-
ment markets, Alias provided a unique opportunity
for Autodesk.
Our consistently strong performance has enabled
us to significantly increase our investment in our
business while substantially improving profit-
ability. Since fiscal 2003, spending on research
and development increased by nearly 60%, driving
significant improvements in our existing products
as well as expanding our product offerings to
adjacent markets. Over the same time, revenues
increased 85%. Coupled with our initiatives to
improve our productivity and efficiency, earnings
per diluted share increased more than 800% since
fiscal 2003.
Many divisions, one goal
Net revenues for the Design Solutions Group
(DSG)—comprising the Platform Technology
Division, Manufacturing Solutions Division,
Infrastructure Solutions Division and Building
Solutions Division—reached $1.345 billion in
fiscal 2006, an increase of 26% over fiscal 2005.
DSG operating income increased 32% over fiscal
2005, to $647 million. With new functionality
and better performance in our products from all
DSG divisions, our customers realized increased
innovation, quality, and productivity, resulting in
competitive advantage. In fiscal 2006 we shipped
new releases for all our products, including our
entire family of AutoCAD products. As more of
our customers made the move from 2D to 3D, we
continued to improve the depth and breadth of our
offerings with important new versions of all our 3D
products. In addition, we introduced strategic new
products during the year, including Autodesk Revit
Structure.