Autodesk 2011 Annual Report Download - page 81

negatively impact our operating margins. If we do not achieve the proper balance of these cost reduction
initiatives, we may eliminate critical elements of our operations, the loss of which could negatively impact our
ability to benefit from eventual economic growth.
In addition, any deceleration or reversal of the current domestic and global economic recoveries may cause
us to take, and over the past several years we have taken, actions to stimulate demand for our products through a
number of programs. Although we are attempting to balance the cost of these programs against the longer term
benefits, it is possible that we will make such investments without corresponding increases in demand for our
products and our revenue. This would further reduce our operating margins and have a negative impact on our
financial results.
A significant portion of our revenue is generated through maintenance revenue; decreases in maintenance
attach or renewal rates or a decrease in the number of new licenses we sell negatively impacts our future
revenue and financial results.
Our maintenance customers have no obligation to attach maintenance to their initial license or renew their
maintenance contract after the expiration of their initial maintenance period, which is typically one year. Our
customers’ attach and renewal rates may decline or fluctuate as a result of a number of factors, including overall
global economy, the health of their businesses, and the perceived value of the maintenance program. If our
customers do not attach maintenance to their initial license or renew their maintenance contract for our products,
our maintenance revenue will decline, and our financial results will suffer.
In addition, a portion of the growth of our maintenance revenue has typically been associated with growth of
the number of licenses that we sell. Any reduction in the number of licenses that we sell, even if our customers’
attach rates do not change, will have a negative impact on our future maintenance revenue. This in turn would
impact our business and harm our financial results.
We recognize maintenance revenue ratably over the term of the maintenance contracts, which is
predominantly one year, but may also range up to five years. Decreases in net maintenance billings will
negatively impact future maintenance revenue, however future maintenance revenue will also be impacted by
other factors such as the amount, timing and mix of contract terms of future billings.
Our financial results fluctuate within each quarter and from quarter to quarter making our future revenue and
financial results difficult to predict.
Our quarterly financial 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. In addition to the other factors
described in this Part I, Item 1A, some of the factors that could cause our financial results to fluctuate include:
• general market, economic, business and political conditions, including the impact of sales in particular
geographies, including emerging economies,
• the ability of governments around the world to finance infrastructure projects,
• lower growth or contraction of our upgrade, crossgrade or maintenance programs,
• fluctuations in foreign currency exchange rates and the success of our hedging activity,
• failure to expand our AutoCAD and AutoCAD LT products customer base to related vertical design
products and model-based design products,
• the timing of the introduction of new products by us or our competitors,
• the success of new business or sales initiatives and increasing our portfolio of product suites (“Suites”),
• the financial and business condition of our reseller and distribution channels,
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