Autodesk 2016 Annual Report Download - page 124

2016 Form 10-K 52
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 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, depreciation expense and operating lease payments associated with computer equipment,
data center costs, salaries, related expenses of network operations, and allocated IT and facilities costs.
Cost of subscription revenue increased 17% during fiscal 2016 as compared to fiscal 2015 primarily due to an increase in
cloud and hosting related costs in support of our business model transition, and an increase in employee related costs driven by
increased employee headcount and product support costs. 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 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 decrease in absolute dollars and increase as a percentage of net revenue during fiscal 2017,
as compared to fiscal 2016.
Marketing and Sales
Fiscal Year
Ended
January 31,
2016
Increase compared to
prior fiscal year
Fiscal Year
Ended
January 31,
2015
Increase compared to
prior fiscal year
Fiscal Year
Ended
January 31,
2014
$ % $ %
(in millions)
Marketing and sales $ 1,015.5 $ 17.5 2% $ 998.0 $ 155.4 18% $ 842.6
As a percentage of net revenue 41% 40% 37%
Marketing and sales expenses include salaries, bonuses, benefits, and stock-based compensation expense for our
marketing and sales employees, the expense of travel, entertainment and training for such personnel, 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 associated with sales and order processing, sales and dealer commissions,
rent and occupancy, payment processing fees, the cost of supplies and equipment, and allocated IT and facilities costs.
Marketing and sales expenses increased 2% during fiscal 2016, as compared to fiscal 2015, primarily due to an increase
in stock based compensation expense as a result of higher fair market value of awards granted, an increase in salaries
predominantly driven by increased headcount, and an increase in IT costs allocated to marketing and sales. Partially offsetting
the increase in expense was a decrease in sales commission expense.
Marketing and sales expenses increased 18% during fiscal 2015, as compared to fiscal 2014, primarily due to higher
employee-related costs from salaries, commissions, and bonuses as well as advertising and promotional expenses.
We expect marketing and sales expense to decrease in absolute dollars and increase as a percentage of net revenue in
fiscal 2017 as compared to fiscal 2016.
2016 Annual Report