Autodesk 2010 Annual Report Download - page 110

• the timing of large sales,
• failure to effectively implement our copyright legalization programs, especially in developing
countries,
• failure to achieve sufficient sell-through in our channels for new or existing products,
• 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,
• the timing and degree of expected investments in growth and efficiency opportunities,
• failure to achieve continued success in technology advancements, and
• unanticipated impact of accounting rules, regulations or interpretations.
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 our third
quarter are usually affected by a slow summer period, and our Asia Pacific operations typically experience
seasonal slowing in our 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 Advanced Systems products, which historically have had lower margins, grow at a faster rate than sales of our
higher-margin products.
Net revenue or earnings shortfalls or the volatility of the market generally may cause the market price of our
stock to decline.
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:
• shortfalls in our expected net revenue, earnings or key performance metrics;
• 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;
• unusual events such as significant acquisitions, divestitures, regulatory actions and litigation;
• changes in laws, rules or regulations applicable to our business;
• general socio-economic, political or market conditions and
• other factors, including factors unrelated to our operating performance, such as instability affecting the
economy or the operating performance of our competitors.
For example, current global economic conditions have negatively impacted our financial performance and in
turn the market price of our common stock.
Significant changes in the price of our common stock could expose us to additional costly and time-
consuming litigation. Historically, after 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.
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