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
Citrix Systems, Inc.  Annual Report
Segment Revenues
An analysis of our reportable segment net revenue is presented below:
Year Ended December 31, Revenue
Growth
2005 to 2006
Revenue
Growth
2004 to 2005(In thousands) 2006 2005 2004
Americas(1) $ 499,278 $ 397,233 $ 335,436 25.7% 18.4%
EMEA(2) 391,650 334,900 293,690 16.9 14.0
Asia-Pacific 94,596 77,492 67,930 22.1 14.1
Citrix Online Division 148,795 99,097 44,101 50.2 124.7
Consolidated net revenues $ 1,134,319 $ 908,722 $ 741,157 24.8 22.6
(1) Our Americas segment is comprised of the United States, Canada and Latin America.
(2) Defined as Europe, Middle East and Africa.
With respect to our segment revenues, the increase in
net revenues for the comparative periods presented was
due primarily to the factors previously discussed across
our reportable segments. For additional information on
our segment revenues, please refer to Note 13 of our
consolidated financial statements included elsewhere in
this Annual Report.
Cost of Revenues
Year Ended December 31, 2006
Compared to
2005
2005
Compared to
2004(In thousands) 2006 2005 (a) 2004 (a)
(Restated) (Restated)
Cost of product license revenues $ 32,911 $ 14,404 $ 3,824 $ 18,507 $ 10,580
Cost of services revenues 46,585 26,929 16,705 19,656 10,224
Amortization of product related intangible assets 19,202 16,766 6,127 2,436 10,639
Total cost of revenues $ 98,698 $ 58,099 $ 26,656 $ 40,599 $ 31,443
(a) See Note 2 to our consolidated financial statements included elsewhere in this Annual Report.
Cost of product license revenues consists primarily of
hardware, product media and duplication, manuals,
packaging materials, shipping expense, server capacity
costs and royalties. Cost of services revenue consists
primarily of compensation and other personnel-related
costs of providing technical support, consulting, as well
as the costs related to our online services. Also included
in cost of revenues is amortization of product related
intangible assets. Cost of product licenses revenues
increased during 2006 when compared to 2005 primarily
due to increased sales and the full year impact of the
acquisition of our Application Networking products
which contain hardware components that have a higher
cost than our other software products. Cost of services
revenues increased during 2006 compared to 2005
primarily due to an increase in support and increased
sales of our educational and consulting services related
to our Application Virtualization products, increases in
sales of our online services products, the full year impact
and increased sales of support and educational services
related to our Application Networking products and the
impact of stock-based compensation expenses related to
our adoption of SFAS No 123R. Amortization of product
related intangible assets increased during 2006 as
compared to 2005 primarily due to amortization of product
related intangible assets acquired in acquisitions. For more
information regarding our acquisitions, see “Management’s
Discussion and Analysis of Financial Condition and Results