Citrix 2000 Annual Report Download - page 18

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The increase in net revenues in 1999 was primarily attributable to
increases in the volume of shipments of the Company's MetaFrame products and
associated additional user licenses, which began shipping in June 1998, while
sales of the WinFrame products and associated additional user licenses
decreased. To a lesser extent, the increase in net revenues in 1999 was due to
an increase in revenue related to the Development Agreement with Microsoft and
increases in the volume of shipments of Management Products, primarily due to
higher sales levels of the Load Balancing Services product as end users
implemented larger scale MetaFrame solutions. Net revenues of Computing
Appliances Products declined in 1999 due to decreased volume of licensing to
OEMs.
An analysis of the Company's net revenues is presented below:
YEAR ENDED DECEMBER 31, REVENUE REVENUE
−−−−−−−−−−−−−−−−−−−−−−− GROWTH GROWTH
2000 1999 1998 1999 TO 2000 1998 TO 1999
−−−−− −−−−− −−−−− −−−−−−−−−−−− −−−−−−−−−−−−
Application Servers....................... 71.4% 74.2% 69.4% 12.2% 73.5%
Management Products....................... 12.3 9.5 4.8 50.8 222.6
Computing Appliances Products............. 1.0 2.4 8.8 (49.4) (55.2)
Microsoft Royalties....................... 8.5 9.9 12.8 0.2 25.5
Services and Other Revenue................ 6.8 4.0 4.2 100.3 49.3
−−−−− −−−−− −−−−−
Net Revenues.............................. 100.0% 100.0% 100.0% 16.7 62.2
===== ===== =====
International and Segment Revenues. International revenues (sales outside
of the United States) accounted for approximately 40.3%, 38.7% and 31.6% of net
revenues for the years ended December 31, 2000, 1999 and 1998, respectively. For
additional information on the breakdown of international revenues, please refer
to Note 12 to the Company's Consolidated Financial Statements appearing in Item
8 of this Annual Report. The increase in international revenues as a percentage
of net revenues was primarily due to the Company's increased sales and marketing
efforts and continued demand for the Company's products in Europe and Asia. The
Company anticipates that international revenues will account for an increasing
percentage of net revenues in the future.
An analysis of geographic segment net revenue is presented below:
YEAR ENDED DECEMBER 31, REVENUE REVENUE
−−−−−−−−−−−−−−−−−−−−−−− GROWTH GROWTH
2000 1999 1998 1999 TO 2000 1998 TO 1999
−−−−− −−−−− −−−−− −−−−−−−−−−−− −−−−−−−−−−−−
Americas.................................. 52.8% 53.0% 57.1% 16.3% 50.5%
EMEA...................................... 33.7 32.1 25.8 22.4 101.9
Asia Pacific.............................. 5.0 5.0 4.3 16.2 87.3
Other..................................... 8.5 9.9 12.8 0.2 25.5
−−−−− −−−−− −−−−−
Consolidated net revenues................. 100.0% 100.0% 100.0% 16.7 62.2
===== ===== =====
The increase in net revenues in 2000 and 1999 was primarily attributable to
greater sales and marketing efforts and continued demand for the Company's
products in the Americas and Europe, Middle East & Africa ("EMEA") regions and
larger scale MetaFrame implementations in these regions. The EMEA revenue
increase in 1999 was also due to the opening and expansion of additional sales
offices in that region.
The Company expects to continue investing in international markets and
expanding its international operations by establishing additional foreign
operations, hiring personnel, expanding its international sales force and adding
new third party channel partners. International revenues may fluctuate in future
periods as a result of difficulties in staffing, dependence on an independent
distribution channel, competition, variability of foreign economic and political
conditions and changing restrictions imposed by regulatory requirements,
localized product release timing and related issues of marketing such products
in foreign countries.
Cost of Revenues. Cost of revenues consisted primarily of the cost of
royalties, product media and duplication, manuals, packaging materials and
shipping expense. All development costs incurred in connection with the
Development Agreement are expensed as incurred and are reported as cost of
revenues. The
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