Autodesk 2011 Annual Report Download - page 101

Recently Issued Accounting Standards
See Part II, Item 8, Note 1, “Business and Summary of Significant Accounting Policies,” in the Notes to
Consolidated Financial Statements for a full description of recent accounting pronouncements, including the
expected dates of adoption and estimated effects on results of operations and financial condition, which is
incorporated herein by reference.
Overview of Fiscal 2011 Results of Operations
Fiscal Year
Ended
January 31, 2011
As a % of Net
Revenue
Fiscal Year
Ended
January 31, 2010
As a % of Net
Revenue
(in millions)
Net Revenue ...................... $1,951.8 100% $1,713.7 100%
Cost of revenue ................ 196.6 10% 191.8 11%
Gross Profit ....................... 1,755.2 90% 1,521.9 89%
Operating expenses ............. 1,483.8 76% 1,456.3 85%
Income from Operations ............. $ 271.4 14% $ 65.6 4%
Our results for fiscal 2011 reflect recent improvements in global demand, as compared to the prior fiscal
year when the economic downturn had decreased demand for our products and services, and customers reduced
their workforces. While some global macroeconomic indicators improved during fiscal 2011, unemployment
remains high in several important geographies, including the U.S. Additionally, there are a number of mixed data
points as to whether credit has become more readily available, and it is unclear whether and how the availability
of credit continues to impact our customers and partners.
Our business grew year over year as evidenced by our increases in revenue, gross profit and income from
operations. During fiscal 2011, as compared to fiscal 2010, net revenue increase 14%, gross profit increased 15%
and income from operations increased 314%. Contributing to the year over year increases in revenue were
increases in revenue from new seat licenses, maintenance revenue, revenue for most of our major products, all of
our reportable segments, and all of our geographies during fiscal 2011 as compared to the prior fiscal year. In
addition, we continued to make progress in controlling our operating costs, which led to year over year
improvements in profitability. The 314% increase in income from operations in fiscal 2011, as compared to fiscal
2010, was due to the increase in our net revenue, while holding the growth of operating expenses. The majority
of our costs are relatively fixed in the short term as they relate primarily to our workforce. In fiscal 2011 we were
able to grow our net revenue without significantly increasing our workforce. We believe that the improvements
in these areas are indications that our business stabilized and is beginning to grow.
Our total operating margin increased from $65.6 million, or 4% of revenue during fiscal 2010 to $271.4
million, or 14% of revenue during fiscal 2011. The increase in our operating margin during fiscal 2011 was
primarily due to net revenue increasing more rapidly than the increase in our costs due to our cost saving
initiatives during fiscal 2011 and 2010. Net revenue increased 238.1 million or 14% for fiscal 2011, as compared
to fiscal 2010, while our operating expenses increased $27.5 million, or 2% for fiscal 2011. The 2% increase in
operating expenses in fiscal 2011, as compared to fiscal 2010 was due to performance based compensation
related to higher company performance, the return of employee costs which were temporarily suppressed in the
prior year such as, salary reductions, employee incentives and mandatory vacation, and other costs associated
with higher revenue. These increases were partially offset by the decrease in restructuring charges of $37.4
million, the decrease in goodwill impairment charges of $21.0 million and the decrease in stock-based
compensation charges of $12.7 million.
We believe net revenue for fiscal 2012 will increase by approximately 10% compared to fiscal 2011. We
anticipate fiscal 2012 operating margin will increase by approximately 220 basis points compared to fiscal 2011.
Net revenue from Japan was $200.6 million, or approximately 10% of our net revenue, for the fiscal year ended
January 31, 2011. The earthquake and tsunami that struck Japan in March 2011 has created uncertainty, which
may impact our future financial results.
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