Autodesk 2011 Annual Report Download - page 108

“Cost of maintenance revenue,” due to a change in our cost allocation methodology. These expenses have been
updated in the Consolidated Statements of Operations, which include reclassifying $7.9 million and $6.5 million
from cost of license to cost of maintenance revenue for fiscal years 2010 and 2009, respectively. See Note 1,
“Basis of Presentation,” in the Notes to Consolidated Financial Statements for further discussion.
Cost of license and other revenue decreased 6% during fiscal 2011, as compared to fiscal 2010 primarily
due to savings on shipping and handling costs caused by the switch to a lower cost vendor as well as an increase
in electronic order fulfillment. Cost of license and other revenue decreased 16% during fiscal 2010, as compared
to fiscal 2009 primarily due to the 39% decrease in license and other revenue. Cost of license and other revenue
did not decline as rapidly as the associated net revenue in fiscal 2010 as compared to fiscal 2009 because of
increased amortization of purchased technology related to fiscal years 2010 and 2009 acquisitions, costs
associated with redundant services as we migrated a portion of our IT systems onto a new platform, and higher
costs associated with the implementation of our electronic fulfillment system.
Cost of maintenance revenue includes labor costs of providing product support to our maintenance customers,
including stock-based compensation expense for these employees, rent and occupancy, shipping and handling costs and
professional services fees. Cost of maintenance revenue increased 74% during fiscal 2011 as compared to fiscal 2010
due to an increase in maintenance support headcount. These increases were partially offset by savings on freight and
materials costs as fewer maintenance customers require physical shipments than in the past due to electronic fulfillment.
Cost of maintenance revenue increased 29% during fiscal 2010 as compared to fiscal 2009 due to an increase in product
support headcount due to the acquisition of Moldflow Corporation in the second quarter of fiscal 2009.
Cost of revenue, at least over the near term, is affected by the volume and mix of product sales, mix of
physical versus electronic fulfillment, fluctuations in consulting costs, amortization of purchased technology,
new customer support offerings, royalty rates for licensed technology embedded in our products, and employee
stock-based compensation expense. We expect cost of revenue to increase in absolute dollars, but to remain
relatively consistent as a percentage of net revenue during fiscal 2012, as compared to fiscal 2011.
Marketing and Sales
Fiscal year
Ended
January 31,
2011
Increase
compared to
prior fiscal year
Fiscal year
Ended
January 31,
2010
Decrease
compared to
prior fiscal year
Fiscal year
Ended
January 31,
2009$ % $ %
(in millions)
Marketing and sales .............. $776.0 $44.1 6% $731.9 $(168.8) -19% $900.7
As a percentage of net revenue ..... 40% 43% 39%
Marketing and sales expenses include salaries, bonuses, benefits, and stock-based compensation expense for
our marketing and sales employees, and the expense of travel, entertainment and training for such personnel, and
the 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 labor costs of sales and order
processing, sales and dealer commissions, rent and occupancy, and the cost of supplies and equipment.
Marketing and sales expenses increased 6% during fiscal 2011, as compared to fiscal 2010, primarily due to
higher employee-related costs related to variable compensation, including commissions, bonuses and related
fringe benefits. Variable compensation expenses increased as a result of exceeding our fiscal 2011 target revenue
growth and operating margin growth targets more than we did in fiscal 2010. Our annual incentive plans are
based on forecasted revenue and operating margin, with current year targets set at the beginning of fiscal 2011.
These increases were partially offset by the decrease in advertising and promotion spending and stock-based
compensation expense. Marketing and sales expenses decreased 19% during fiscal 2010, as compared to fiscal
2009, primarily due to lower employee-related costs, driven by decreased marketing and sales headcount and
decreased travel expenditures and reduced advertising and promotional expenses.
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