Autodesk 2016 Annual Report Download - page 97

2016 Form 10-K 25
Our operating expenses are based in part on our expectations for future revenue and are relatively fixed in the short
term. Accordingly, any revenue shortfall below expectations has had, and in the future could have, an immediate and
significant adverse effect on our profitability. Greater than anticipated expenses or a failure to maintain rigorous cost
controls would also negatively affect profitability.
Our business could suffer as a result of risks, costs, charges and integration risks associated with strategic acquisitions
and investments.
We regularly acquire or invest in businesses, software products and technologies that are complementary to our
business through acquisitions, strategic alliances or equity or debt investments. The risks associated with such
acquisitions include, among others, the difficulty of assimilating products, operations and personnel, inheriting liabilities
such as intellectual property infringement claims, the failure to realize anticipated revenue and cost projections, the
requirement to test and assimilate the internal control processes of the acquired business in accordance with the
requirements of Section 404 of the Sarbanes-Oxley Act of 2002, and the diversion of management's time and attention.
For example, we face risks relating to our fiscal 2017 integration of our Delcam subsidiaries, which previously operated
autonomously.
In addition, such acquisitions and investments involve other risks such as:
• the inability to retain customers, key employees, vendors, distributors, business partners, and other entities
associated with the acquired business;
• the potential that due diligence of the acquired business or product does not identify significant problems;
• exposure to litigation or other claims in connection with, or inheritance of claims or litigation risk as a result of,
an acquisition, including but not limited to, claims from terminated employees, customers, or other third parties;
• the potential for incompatible business cultures;
• significant higher than anticipated transaction or integration-related costs;
• potential additional exposure to fluctuations in currency exchange rates; and
• the potential impact on relationships with existing customers, vendors, and distributors as business partners as a
result of acquiring another business.
We may not be successful in overcoming such risks, and such acquisitions and investments may negatively impact
our business. In addition, such acquisitions and investments have in the past and may in the future contribute to potential
fluctuations in our quarterly financial results. These fluctuations could arise from transaction-related costs and charges
associated with eliminating redundant expenses or write-offs of impaired assets recorded in connection with acquisitions
and investments. These costs or charges could negatively impact our financial results for a given period, cause quarter to
quarter variability in our financial results or negatively impact our financial results for several future periods.
Because we derive a substantial portion of our net revenue from a small number of products, including our AutoCAD-
based software products and suites, if these products are not successful, our revenue will be adversely affected.
We derive a substantial portion of our net revenue from sales of licenses of a limited number of our products,
including AutoCAD software, products based on AutoCAD, which include our suites that serve specific markets and
products that are interoperable with AutoCAD. Any factor adversely affecting sales of these products, including the
product release cycle, market acceptance, product competition, performance and reliability, reputation, price competition,
economic and market conditions and the availability of third-party applications, would likely harm our financial results.
During fiscal 2016 and 2015, combined revenue from our AutoCAD and AutoCAD LT products, not including suites
having AutoCAD or AutoCAD LT as a component, represented 24% and 28% of our total net revenue, respectively.
2016 Annual Report