Citrix 2007 Annual Report Download - page 50

Our cost of services revenues and operating expenses increased for 2006 when compared to 2005 due to the
recognition of stock-based compensation expense related to our adoption of SFAS No. 123R. In 2008, we
anticipate that our stock-based compensation expense will increase primarily due to awards assumed in
conjunction with our XenSource Acquisition. See “Management’s Discussion and Analysis of Financial
Condition and Results of Operations—Critical Accounting Policies and Estimates” and “—2007 Acquisitions” as
well as Notes 2, 3 and 6 to our consolidated financial statements included in this Annual Report on Form 10-K
for the year ended December 31, 2007 for more information related to our adoption of SFAS No. 123R and our
acquisitions.
The following table sets forth our consolidated statements of income data and presentation of that data as a
percentage of change from period-to-period.
Year Ended December 31, 2007
Compared to
2006
2006
Compared to
20052007 2006 2005
(In thousands)
Revenues:
Product licenses ....................... $ 577,144 $ 488,487 $409,435 18.1% 19.3%
License updates ....................... 484,669 405,756 331,102 19.4 22.5
Online services ........................ 213,744 148,795 99,097 43.6 50.2
Technical services ..................... 116,385 91,281 69,088 27.5 32.1
Total net revenues ......................... 1,391,942 1,134,319 908,722 22.7 24.8
Cost of revenues:
Cost of product license revenues .......... 42,984 32,911 14,404 30.6 128.5
Cost of services revenues ................ 65,027 46,585 26,929 39.6 73.0
Amortization of product related intangible
assets ............................. 29,596 19,202 16,766 54.1 14.5
Total cost of revenues .............. 137,607 98,698 58,099 39.4 69.9
Gross margin ............................. 1,254,335 1,035,621 850,623 21.1 21.7
Operating expenses:
Research and development .............. 205,103 155,331 108,751 32.0 42.8
Sales, marketing and support ............. 590,409 480,343 394,153 22.9 21.9
General and administrative .............. 229,229 178,669 125,425 28.3 42.5
Amortization of other intangible assets ..... 17,387 16,934 11,622 2.7 45.7
In-process research and development ...... 9,800 1,000 7,000 * (85.7)
Total operating expenses ............ 1,051,928 832,277 646,951 26.4 28.6
Income from operations ..................... 202,407 203,344 203,672 (0.5) (0.2)
Interest income ............................ 49,704 41,210 23,614 20.6 74.5
Interest expense ........................... (737) (927) (2,426) (20.5) (61.8)
Other expense, net ......................... (466) (546) (506) (14.7) 7.9
Income before income taxes ................. 250,908 243,081 224,354 3.2 8.3
Income taxes ............................. 36,425 60,084 58,745 (39.4) 2.3
Net income ....................... $ 214,483 $ 182,997 $165,609 17.2 10.5
* not meaningful.
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