Autodesk 2016 Annual Report Download - page 120

2016 Form 10-K 48
Total License and other revenue decreased 9% during fiscal 2016 as compared to fiscal 2015. This decrease was primarily
due to an 11% decrease in product license revenue as compared to the same period in the prior fiscal year. The decrease in
product license revenue was primarily due to a 14% decrease in revenue from our flagship products and a 12% decrease in our
suites revenue. Product license revenue, as a percentage of license and other revenue, was 88% and 89% for fiscal 2016 and
fiscal 2015, respectively.
During fiscal 2016, the 11% decrease in product license revenue was due to an 18% decrease in the average net revenue
per seat while the number of seats sold increased by 7% compared to the prior fiscal year. Starting in the first quarter of fiscal
2017, and in connection with the discontinuation of sales of individual perpetual licenses, we will stop reporting changes in
revenue attributable to average net revenue per seat and number of seats sold. We are replacing these disclosures with
disclosure regarding changes in ARPS disclosed within Overview above. ARPS is more relevant to determine whether changes
in net revenues are attributable to increases in price or volume.
During fiscal 2016, total other revenue represented 12% of license and other revenue, and 6% of total net revenue. Other
revenue increased by 12% during fiscal 2016 as compared to fiscal 2015. This increase is primarily due to an 11% increase in
revenue from consulting and a 38% increase in revenue from our consumer product offerings, partially offset by a decrease in
revenue from our education products as a result of our strategic transition to offer free educational licenses of Autodesk
software to students, educators, and institutions.
Backlog related to current software license product orders that had not shipped at the end of the fiscal year decreased by
$9.0 million from $40.4 million at January 31, 2015 to $31.4 million at January 31, 2016. Backlog from current software
license product orders that we have not yet shipped consists of orders for currently available licensed software products from
customers with approved credit status.
Subscription Revenue
Our Subscription revenue consists of three components: (1) maintenance revenue from our software products; (2)
maintenance revenue from our term-based desktop subscription and enterprise offerings; and (3) revenue from our cloud service
offerings. Our maintenance program provides our customers of software products with a cost effective and predictable
budgetary option to obtain the productivity benefits of our new releases and enhancements when and if released during the term
of their contracts. Under our maintenance program, customers are eligible to receive unspecified upgrades when and if
available, downloadable training courses, and online support. We recognize maintenance revenue ratably over the term of the
maintenance agreement, which is generally between one and three years. Revenue for our cloud service offerings is recognized
ratably over the contract term commencing with the date our service is made available to customers and all other revenue
recognition criteria have been satisfied.
Subscription revenue increased 9% during fiscal 2016 as compared to fiscal 2015 primarily due to a 9% increase in
commercial maintenance revenue. The 9% increase in commercial maintenance revenue was due to a 12% increase from
commercial enrollment during the corresponding maintenance contract term, offset by a 3% decrease from net revenue per
maintenance seat. Commercial maintenance revenue represented 96% of Subscription revenue for both fiscal 2016 and fiscal
2015, respectively. Starting in the first quarter of fiscal 2017, and in connection with the discontinuation of sales of individual
perpetual licenses, we will stop reporting changes in revenue attributable to average net revenue per seat and number of seats
sold. We are replacing these disclosures with disclosure regarding changes in ARPS disclosed within Overview above. ARPS is
more relevant to determine whether changes in net revenues are attributable to increases in price or volume.
Changes in Subscription revenue lag changes in net billings for subscription contracts because we recognize the revenue
from those contracts ratably over their contract terms. Net subscription billings increased 16% during fiscal 2016 as compared
to the prior fiscal year primarily due to an increase in multi-year maintenance subscription billings.
Our deferred subscription revenue balance at January 31, 2016 and January 31, 2015 was $1.1 billion and $0.9 billion,
respectively, and primarily related to customer maintenance agreements, which will be recognized as revenue ratably over the
term of the maintenance agreement.
2016 Annual Report