Autodesk 2008 Annual Report Download - page 98

completed the acquisition of NavisWorks, Robobat and Hanna Strategies. The risks associated with such
acquisitions include, among others, the difficulty of assimilating the products, operations and personnel of the
companies, the failure to realize anticipated revenue and cost projections, the requirement to test and assimilate
the internal control processes of the acquired business in accordance with the requirements of Section 404, and
the diversion of management’s time and attention. In addition, such acquisitions and investments may involve
significant transaction or integration-related costs. We may not be successful in overcoming such risks, and such
acquisitions and investments may negatively impact our business. In addition, such acquisitions and investments
have in the past and may in the future contribute to potential fluctuations in quarterly results of operations. The
fluctuations could arise from transaction-related costs and charges associated with eliminating redundant
expenses or write-offs of impaired assets recorded in connection with acquisitions and investments. We also may
need to make further investments to support these acquired companies and may have difficulty identifying and
acquiring appropriate resources. These costs or charges, including those relating to the NavisWorks, Robobat and
Hanna Strategies acquisitions, could negatively impact results of operations for a given period or cause quarter to
quarter variability in our operating results.
Our operating results fluctuate within each quarter and from quarter to quarter making our future revenue
and operating results difficult to predict.
Our quarterly operating results have fluctuated in the past and may do so in the future. These fluctuations
could cause our stock price to change significantly or experience declines. Some of the factors that could cause
our operating results to fluctuate include the timing of the introduction of new products by us or our competitors,
slowing of momentum in upgrade or maintenance revenue, the adoption of SFAS 123R, which required us to
record compensation expense for shares issued under our stock plans beginning in the first quarter of fiscal 2007
with a negative impact on our results of operations, fluctuation in foreign currency exchange rates, failure to
achieve anticipated levels of customer acceptance of key new applications, failure to follow sales policies,
unexpected costs or other operating expenses, changes in product pricing or product mix, platform changes,
failure to convert our 2D customer base to 3D model-based design products, timing of product releases and
retirements, failure to continue momentum of frequent release cycles or to move a significant number of
customers from prior product versions in connection with our programs to retire major products, unexpected
outcomes of matters relating to litigation, failure to achieve continued cost reductions and productivity increases,
unanticipated changes in tax rates and tax laws, distribution channel management, changes in sales compensation
practices, the timing of large Advanced Systems sales, failure to effectively implement our copyright legalization
programs, especially in developing countries, failure to successfully integrate acquired businesses and
technologies, failure to achieve sufficient sell-through in our channels for new or existing products, the financial
and business condition of our reseller and distribution channels, renegotiation or termination of royalty or
intellectual property arrangements, interruptions or terminations in the business of our consultants or third party
developers, failure to grow lifecycle management or collaboration products, unanticipated impact of accounting
for technology acquisitions and general economic conditions, particularly in countries where we derive a
significant portion of our net revenue.
We have also experienced fluctuations in operating results in interim periods in certain geographic regions
due to seasonality or regional economic conditions. In particular, our operating results in Europe during the third
quarter are usually affected by a slow summer period, and the Asia Pacific operations typically experience
seasonal slowing in the third and fourth quarters.
Our operating expenses are based in part on our expectations for future revenue and are relatively fixed in
the short term. Accordingly, any revenue shortfall below expectations could have an immediate and significant
adverse effect on our profitability. Greater than anticipated expenses or a failure to maintain rigorous cost
controls would also negatively affect profitability. Further, gross margins may be adversely affected if our sales
of AutoCAD LT, upgrades and Advanced Systems products, which historically have had lower margins, grow at
a faster rate than sales of our higher-margin products.
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