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Table of Contents
Commercial
2013 vs 2012
Net revenue in the commercial business unit increased $3.3 million , or 1.1% , to $311.3 million for the year ended December 31, 2013
, from
$307.9 million for the year ended December 31, 2012
. The increase is primarily attributable to increased sales of our switches, partially offset by a
decrease in sales of our wireless products. Contribution income decreased $1.3 million , or 1.9% , to $66.5 million for the year ended
December 31,
2013 , from $67.8 million for the year ended December 31, 2012
. The decrease was primarily attributable to increased cost of revenues driven by
increased freight and warranty costs. The decrease in contribution income as a result of the increase in cost of revenues was partially offset by a benefit
from decreased sales and marketing and research and development costs.
2012 vs 2011
The commercial business unit experienced a decrease in net revenue from 2011 to 2012. The decrease was primarily experienced in the EMEA
region, as the region continued to experience macroeconomic weakness in the European market. Net revenues from sales in the Americas and APAC
regions remained relatively flat. On a product-
level, the decrease was primarily attributable to a decrease in sales from our network storage product line.
Contribution income also decreased, primarily due to the decline in revenue out-
pacing the savings from decreases in our costs of revenue and operating
expenses. Net revenue decreased by 7.1%, while costs of revenue and operating expenses decreased by 6.5% and 6.3% respectively. The decrease in
costs of revenue was primarily attributable to the decrease in net revenues and a more favorable air/sea freight mix. The decrease in our commercial
business unit's operating expenses was primarily due to a decrease in sales and marketing cost, partially offset by an increase in research and
development costs.
Service Provider
2013 vs 2012
Net revenue in the service provider business unit increased $89.3 million , to $548.4 million for the year ended December 31, 2013
, from
$459.2 million for the year ended December 31, 2012
. The increase is primarily attributed to increased sales of our mobile products as a result of the
AirCard acquisition and home security monitoring and automation products, partially offset by a decrease in sales of our broadband gateways. The
decrease in sales of our broadband gateways is partially due to the consolidation among cable operators in Europe in the second half of 2013.
Contribution income increased $10.8 million , or 26.5% , to $51.6 million for the year ended December 31, 2013 , from $40.8 million
for the year
ended December 31, 2012
. The increase is primarily due to an increase in gross profit, largely attributable to revenue growth, partially offset by an
increase in excess and obsolete inventory charges and increased research and development costs.
50
Year Ended December 31,
2013
% Change
2012
% Change
2011
( in thousands, except percentage data)
Net revenue
$
311,261
1.1
%
$
307,945
(7.1
)%
$
331,439
Percentage of net revenue
22.7
%
24.2
%
28.1
%
Contribution income
66,506
(1.9
)%
67,826
(9.3
)%
74,746
Contribution margin
21.4
%
22.0
%
22.6
%
Year Ended December 31,
2013
% Change
2012
% Change
2011
( in thousands, except percentage data)
Net revenue
$
548,448
19.4
%
$
459,179
24.9
%
$
367,784
Percentage of net revenue
40.0
%
36.1
%
31.1
%
Contribution income
51,620
26.5
%
40,794
24.4
%
32,797
Contribution margin
9.4
%
8.9
%
8.9
%