Autodesk 2015 Annual Report Download - page 138

2015 Form 10-K 46
Net revenue for MFG increased by 1% during fiscal 2014 as compared to the prior fiscal year primarily due to a 9%
increase in revenue from our MFG suites, which was primarily driven by the Autodesk Product Design Suite. This increase was
partially offset by a decrease in revenue from our flagship product, AutoCAD Mechanical.
Net revenue for M&E decreased by 10% during fiscal 2014 as compared to the prior fiscal year, primarily due to a 7%
decrease in revenue from Animation and a 17% decrease in revenue from Creative Finishing. The decrease in Animation
revenue was primarily due to a 9% decrease in revenue from our flagship product, Maya, and a 16% decrease from our M&E
suites, which was driven by our Autodesk Entertainment Creation Suite. The decline in Creative Finishing was marked by a
general decrease in M&E industry end-market demand.
Cost of Revenue and Operating Expenses
Cost of Revenue
Fiscal Year
Ended
January 31,
2015
Increase compared to
prior fiscal year
Fiscal Year
Ended
January 31,
2014
Increase compared to
prior fiscal year
Fiscal Year
Ended
January 31,
2013
$ % $ %
(in millions)
Cost of revenue:
License and other $ 208.5 $ 29.8 17% $ 178.7 $ 12.7 8% $ 166.0
Subscription 133.6 38.0 40% 95.6 23.1 32% 72.5
$ 342.1 $ 67.8 25% $ 274.3 $ 35.8 15% $ 238.5
As a percentage of net revenue 14% 12% 10%
Cost of license and other revenue includes labor costs associated with product setup and fulfillment and costs of fulfilling
consulting and training services contracts and collaborative project management services contracts. Cost of license and other
revenue also includes stock-based compensation expense, direct material and overhead charges, amortization of purchased
technology, professional services fees and royalties. Direct material and overhead charges include the cost of hardware sold
(mainly PC-based workstations for Creative Finishing in the M&E segment), costs associated with transferring our software to
electronic media, physical media, packaging materials, and shipping and handling costs.
Cost of license and other revenue increased 17% during fiscal 2015, as compared to fiscal 2014, primarily from the
acquisition of Delcam and consulting support costs associated with an increased headcount and increased professional fees
related to the building out of the consulting services offered within customer contracts. Cost of license and other revenue
increased 8% during fiscal 2014, as compared to fiscal 2013, primarily due to an increase in consulting support costs.
Cost of subscription revenue includes the labor costs of providing product support to our maintenance and cloud
subscription customers, including rent and occupancy, shipping and handling costs, professional services fees related to
operating our network infrastructure, including depreciation expense and operating lease payments associated with computer
equipment, data center costs, salaries, and related expenses of network operations. Cost of subscription revenue increased 40%
during fiscal 2015 as compared to fiscal 2014 primarily due to higher employee-related costs as a result of increased premium
support headcount as well as an increase in cloud services-related expenses. Cost of subscription revenue increased 32% during
fiscal 2014 as compared to fiscal 2013 primarily due to an increase in cloud services-related expenses.
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 and slightly increase as a percentage of net revenue during fiscal
2016, as compared to fiscal 2015, primarily due to an increase in costs associated with meeting our major business initiatives.
2015 Annual Report