Computer Associates 2015 Annual Report Download - page 36

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up-front basis in the period in which they are recorded and not recognized ratably over the life of the contract. There was
also an unfavorable foreign exchange effect of $27 million for fiscal 2014.
Professional Services
Professional services revenue primarily includes product implementation, consulting, customer education and customer
training. Professional services revenue for fiscal 2015 decreased compared with fiscal 2014 primarily due to a decrease in the
size and number of professional services engagements during the first half of fiscal 2015, including non-core engagements
with government customers that are not directly related to our software product sales. We also experienced a decline in
professional services engagements that are connected to new product sales, due to a decrease in our new product sales. For
the long term, we expect new versions of our on-premise software to be easier to implement and a higher percentage of our
business to shift to a SaaS-based model, which could potentially reduce the demand for our professional services
engagements. There was also an unfavorable foreign exchange effect of $6 million for fiscal 2015.
Professional services revenue for fiscal 2014 decreased slightly compared with fiscal 2013 primarily due to a decrease in
engagements relating to customer education and government agencies. Partially offsetting this decrease was an increase in
engagements associated with large renewals that occurred earlier in fiscal 2014 and in the fourth quarter of fiscal 2013.
Software Fees and Other
Software fees and other revenue consists primarily of revenue that is recognized on an up-front basis. This includes revenue
associated with enterprise solutions products sold on an up-front basis directly by our sales force or through transactions
with distributors and volume partners, value-added resellers and exclusive representatives (sometimes referred to as our
‘‘indirect’’ or ‘‘channel’’ revenue). It also includes our SaaS revenue, which is recognized as the services are provided,
generally ratably over the term of the SaaS arrangement, rather than up-front.
Software fees and other revenue increased slightly for fiscal 2015 compared with fiscal 2014 primarily as a result of an
increase of $14 million in SaaS revenue, offset by a decrease of $12 million in sales of enterprise solutions products
recognized on an up-front basis. There was also an unfavorable foreign exchange effect of $6 million for fiscal 2015.
Software fees and other revenue decreased for fiscal 2014 compared with fiscal 2013 primarily as a result of a decrease of
$15 million in sales of enterprise solutions products recognized on an up-front basis. This decrease was partially offset by an
increase in revenue from our SaaS offerings.
Total Revenue by Geography
The following table presents the amount of revenue earned from sales to unaffiliated customers in the United States and
international regions and corresponding percentage changes for fiscal 2015, 2014 and 2013:
FISCAL 2015 FISCAL 2014
COMPARED WITH COMPARED WITH
FISCAL 2014 FISCAL 2013
(dollars in millions)
% OF % OF % % OF % OF %
2015(1) TOTAL 2014(1) TOTAL CHANGE 2014(1) TOTAL 2013(1) TOTAL CHANGE
United States $ 2,615 61% $ 2,645 60% (1)% $ 2,645 60% $ 2,679 59% (1)%
International 1,647 39% 1,767 40% (7)% 1,767 40% 1,825 41% (3)%
Total $ 4,262 100% $ 4,412 100% (3)% $ 4,412 100% $ 4,504 100% (2)%
(1) Information presented excludes the results of our discontinued operations.
Revenue in the United States decreased by $30 million, or 1%, for fiscal 2015 compared with fiscal 2014, primarily due to a
decrease in subscription and maintenance revenue and professional services revenue, as described above. International
revenue decreased by $120 million, or 7%, for fiscal 2015 compared with fiscal 2014, primarily due to an unfavorable
foreign exchange effect of $71 million and a decrease in subscription and maintenance revenue within the Europe, Middle
East and Africa region.
Revenue in the United States decreased by $34 million, or 1%, for fiscal 2014 compared with fiscal 2013, primarily due to a
decrease in subscription and maintenance revenue, as described above. International revenue decreased by $58 million, or
3%, for fiscal 2014 compared with fiscal 2013, primarily due to an unfavorable foreign exchange effect of $32 million.
Excluding the unfavorable foreign exchange effect, revenue declined in all regions except the Latin America region.
Price changes do not have a material effect on revenue in a given period as a result of our ratable subscription model.
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