Autodesk 2007 Annual Report Download - page 115

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2007 Annual Report
2D and 3D products. Had exchange rates for fiscal 2006 been in effect during the same period of fiscal
2007, translated net revenues in the APAC region would have been higher by $9.7 million in fiscal 2007.
We believe that international net revenues will continue to comprise a significant portion of our
total net revenues. Economic weakness in any of the countries that contribute a significant portion of our
net revenues could have an adverse effect on our business in those countries. Strengthening of the U.S.
dollar relative to foreign currencies could significantly and adversely impact our future financial results
for a given period. International net revenues represented 66% of our net revenues in both fiscal 2007
and fiscal 2006. Net revenues in emerging economies of China, India, Eastern Europe and Latin America
grew by 39% from fiscal 2006 to fiscal 2007. This growth was a significant factor in our international sales
growth during fiscal 2007. Had exchange rates during fiscal 2006 been in effect during the same period of
fiscal 2007, translated international revenues would have been $1.0 million lower in fiscal 2007.
Net Revenues by Operating Segment
Design Solutions Segment net revenues increased during fiscal 2007, as compared to fiscal 2006,
primarily due to both strong sales of new seats and maintenance revenues. These increases were partially
offset by a 6% decline in revenues from upgrades in fiscal 2007. Maintenance revenues increased to 24% of
Design Solutions Segment revenue during fiscal 2007 compared to 20% in fiscal 2006. Sales of AutoCAD
and AutoCAD LT continue to comprise a significant portion of our net revenues. Such sales, reflected in
the net revenues for the Platform Technology Division and Other, represented 40% of net revenues in
fiscal 2007 and 43% of consolidated net revenues in the same period of the prior fiscal year, increasing 11%
in absolute dollars between the periods. Net revenues for our 3D model-based design products (Autodesk
Inventor Family of Products, Autodesk Revit Family of Products and Autodesk Civil 3D) increased 41% during
fiscal 2007 compared to fiscal 2006. Total sales of 3D design products represented 22% of consolidated
net revenues in fiscal 2007 compared to 18% in fiscal 2006. A critical component of our growth strategy
is to continue to add new 2D users while migrating our customers, including customers of AutoCAD and
related vertical industry products, to our 3D products, which generally have higher prices, particularly for
annual subscription contracts. However, should sales of 2D products decrease without a corresponding
increase in sales of our 3D model-based products, our results of operations could be adversely affected.
Net revenues for the Media and Entertainment Segment (“M&E”) increased during fiscal 2007, as
compared to fiscal 2006, primarily from revenue increases in our Animation business line and from both
our January 2006 acquisition of Alias and the introduction of new versions of 3ds Max and Maya products
during the second quarter of fiscal 2007. Although net revenues from Advanced Systems sales did not
increase significantly during fiscal 2007 compared to the same period in the prior fiscal year, such sales
progressively improved during each quarter of fiscal 2007 as a result of substantial progress made in the
transition of our Advanced Systems product portfolio from SGI platforms to Linux platforms. We do not
expect the transition of our Advanced Systems customers from proprietary SGI platforms to open PC-
based platforms to continue to adversely impact Advanced Systems revenue in fiscal 2008.
Fiscal 2006 Net Revenues Compared to Fiscal 2005 Net Revenues
The increase in net revenues during fiscal 2006 was due primarily to strong increase in maintenance
revenues and an increase in the sale of new seats, continued growth in AutoCAD and AutoCAD LT revenues,
along with a favorable product mix shift towards 3D products which generally have higher sales prices.
In addition, we experienced strong growth in all three of our geographic regions and we experienced
especially strong growth rates in the emerging economies of China, Eastern Europe, Latin America and
India.
Growth in license and other revenues during fiscal 2006, as compared to fiscal 2005, was primarily
due to an increase in the sale of new seats for most major products and, to a lesser extent, to a modest
increase in revenues from upgrades. The increases in revenues from new seats were driven by volume