Citrix 2006 Annual Report Download - page 38

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Product License revenue increased during 2006 when
compared to 2005 primarily due to the full year impact and
increased sales of our Application Networking products
and, to a lesser extent, increased sales of our Application
Virtualization products. License Updates revenue increased
during 2006 when compared to 2005 primarily due to
a larger base of subscribers and increasing renewals
related to our Subscription Advantage program. Online
Services revenue increased during 2006 when compared
to 2005 primarily due to increased customer adoptions
and renewals of our Online Services products. Technical
Services revenue increased during 2006 when compared
to 2005 primarily due to the full year impact and increased
sales of support and services related to our Application
Networking products and an increase in sales of services
and support related to the implementation of our
Application Virtualization products. We currently anticipate
that our Application Virtualization Product License revenue
will be flat to slightly down when comparing the first quarter
of 2007 to the fourth quarter of 2006; however, for fiscal
year 2007, we expect Product License revenue to increase
overall primarily due to expected growth from sales of our
Application Networking products, and to a lesser extent,
growth from our Application Virtualization products. We
also anticipate that License Updates revenue will increase
in 2007 due primarily to increased renewals and continued
growth in our installed customer base. Online Services
revenues are also expected to increase in 2007.
Product License revenue increased during 2005 when
compared to 2004 primarily due to increased sales of our
Application Networking products which were acquired in
our 2005 and 2004 Acquisitions and increased sales of
our Application Virtualization products. License Updates
revenue increased during 2005 when compared to 2004
primarily due to a larger base of subscribers and increasing
renewals related to our Subscription Advantage program.
Online Services revenue increased during 2005 when
compared to 2004 primarily due to continued acceptance
of our new and existing online services products. Technical
Services revenue increased during 2005 when compared
to 2004 primarily due to increased sales of consulting
services related to implementation of our products and,
to a lesser extent, services related to our Application
Networking products.
Deferred revenues are primarily comprised of License
Updates revenue from our Subscription Advantage
product, Online Services revenues from annual service
agreements for our online services products and Technical
Services revenues related to our support services and
consulting contracts. Deferred revenues increased
approximately $70.3 million as of December 31, 2006
compared to December 31, 2005 is primarily due to
increased renewals of Subscription Advantage product,
increased sales of our online service agreements and, to
a lesser extent, sales of services related to our Application
Virtualization and Application Networking products. We
currently expect deferred revenue to continue to increase
in 2007.
We do not believe that backlog, as of any particular
date, is a reliable indicator of future performance. While
it is generally our practice to promptly ship our products
upon receipt of properly finalized purchase orders, we
sometimes have product license orders that have not
shipped or have otherwise not met all the required criteria
for revenue recognition. Although the amount of such
product license orders may vary, the amount, if any, of such
product license orders at the end of a particular period has
not been material to total revenue at the end of the
same period.
International Revenues
International revenues (sales outside the United States)
accounted for approximately 47.4% of our net revenues
for the year ended December 31, 2006, 50.0% of our
net revenues for the year ended December 31, 2005
and 53.2% for the year ended December 31, 2004. The
decrease in international revenue as a percent of net
revenues for the year ended December 31, 2006 compared
to the year ended December 31, 2005 is primarily due to
increased performance in the United States, increased
sales performance and growth in our online services
products and Application Networking products, which
are currently primarily comprised of domestic revenues.
For detailed information on international revenues, please
refer to Note 13 to our consolidated financial statements
included elsewhere in this Annual Report.