Autodesk 2016 Annual Report Download - page 95

2016 Form 10-K 23
distributors or resellers were unable to meet their obligations with respect to accounts payable to us, we could be forced to
write off such accounts and may be required to delay the recognition of revenue on future sales to these customers. These
events could have a material adverse effect on our financial results.
A significant portion of our revenue is generated through maintenance revenue; decreases in maintenance renewal rates
would negatively impact 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. The
discontinuance of our perpetual licenses for most individual software products on February 1, 2016 and for perpetual
suites on August 1, 2016 will result in the loss of future maintenance attach opportunities and freeze maintenance growth.
Once we discontinue new perpetual suites we expect customers' renewal rates will decline or fluctuate over time as a
result of a number of factors, including the overall global economy, the health of their businesses, and the perceived value
of the maintenance program. If our customers do not renew their maintenance contract for our products, our maintenance
revenue will decline and our financial results will suffer.
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 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 will continue to do so in the future. These fluctuations
could cause our stock price to change significantly or experience declines. We also provide investors with quarterly and
annual financial forward-looking guidance that could prove to be inaccurate as a result of these fluctuations. 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 in particular geographies, including Europe, APAC,
and emerging economies;
• failure to produce sufficient revenue, billings or subscription growth, and profitability;
• failure to achieve anticipated levels of customer acceptance to our business model transition, including the impact
of the end of upgrades and perpetual licenses;
• weak or negative growth in one or more of the industries we serve, including AEC, manufacturing, and digital media
and entertainment markets;
• restructuring or other accounting charges and unexpected costs or other operating expenses;
• changes in revenue recognition or other accounting guidelines employed by us and/or established by the Financial
Accounting Standards Board or other rule-making bodies;
• fluctuations in foreign currency exchange rates and the effectiveness of our hedging activity;
• failure to achieve and maintain cost reductions and productivity increases;
• dependence on and the timing of large transactions;
• changes in product mix, pricing pressure or changes in product pricing;
• changes in billings linearity;
• the ability of governments around the world to adopt fiscal policies, meet their financial and debt obligations, and
to finance infrastructure projects;
2016 Annual Report