Autodesk 2009 Annual Report Download - page 118

Cost of Revenue
Fiscal Year
Ended
January 31,
2009
Increase (decrease)
compared to
prior fiscal year
Fiscal Year
Ended
January 31,
2008
Increase (decrease)
compared to
prior fiscal year
Fiscal Year
Ended
January 31,
2007$ % $ %
(in millions)
Cost of revenue:
License and other ........... $210.2 $11.1 6% $199.1 $ (9.9) -5% $209.0
Maintenance . . . . . . . . . . . . . . . 8.9 0.3 3% 8.6 (0.1) -1% 8.7
$219.1 $11.4 5% $207.7 $(10.0) -5% $217.7
As a percentage of net revenue . . . . . 9% 10% 12%
Cost of license and other revenue includes direct material and overhead charges, labor costs of fulfilling
service contracts and order processing, including stock-based compensation expense for these employees, royalties
and amortization of purchased technology. Direct material and overhead charges include the cost of hardware sold
(mainly PC-based workstations for Advanced Systems in the M&E segment), costs associated with transferring our
software to electronic media, printing of user manuals and packaging materials and shipping and handling costs.
Cost of license and other revenue increased 6% during fiscal 2009, as compared to fiscal 2008 even though
license and other revenue decreased by 1%. Cost of license and other revenue increased in fiscal 2009 due to an
increase in amortization of purchased technology due to the number of acquisitions completed during fiscal years
2009 and 2008, slightly offset by decreases in employee-related expenses. Since many of these costs are
headcount-related expenses, they do not vary proportionally with changes in revenue. Cost of license and other
revenue decreased 5% during fiscal 2008, as compared to fiscal 2007, due primarily to a shift in Advanced
Systems from SGI hardware to PC-based hardware.
Cost of maintenance revenue includes costs of sales associated with our maintenance program. Costs of
maintenance revenue remained relatively consistent in both relative dollars and as a percentage of net revenue
during fiscal 2009 as compared to fiscal 2008. Costs of maintenance revenue remained relatively consistent in
both relative dollars and as a percentage of net revenue during fiscal 2008 as compared to fiscal 2007.
Cost of revenue, at least over the near term, is affected by the volume and mix of product sales, changing
consulting costs, software amortization costs, royalty rates for licensed technology embedded in our products,
new customer support offerings and the effect of expensing employee stock-based compensation expense. We
expect cost of revenue to decline in absolute dollars during fiscal 2010, as compared to fiscal 2009, with
decreases in revenue as we continue to find ways to reduce our operating expenses to align with our financial
condition, and increase as a percentage of net revenue during fiscal 2010, as compared to fiscal 2009.
Marketing and Sales
Fiscal year
Ended
January 31,
2009
Increase
compared to
prior fiscal year
Fiscal year
Ended
January 31,
2008
Increase
compared to
prior fiscal year
Fiscal year
Ended
January 31,
2007$ % $ %
(in millions)
Marketing and sales ............... $900.7 $53.0 6% $847.7 $147.3 21% $700.4
As a percentage of net revenue . . . . . . 39% 39% 38%
Marketing and sales expenses include salaries, benefits, bonuses and stock-based compensation expense for
our marketing and sales employees and costs of programs aimed at increasing revenue, such as advertising, trade
shows and expositions, and various sales and promotional programs. Marketing and sales expenses also include
travel and facility costs for our marketing, sales, dealer training and order support personnel, sales and dealer
commissions, labor costs of sales order processing, and overhead charges.
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