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Business Cloud Services
results are presented for fiscal year 2013 and 2012 (in thousands):
Segment net sales of $390.1 million in 2013 increased $28.4 million , or 7.9%
, from 2012 primarily due to an increase in our subscriber base and an increase in patent
and technology related licensing revenues.
Segment gross profit of $320.2 million in 2013 increased $23.6 million
from 2012 primarily due to an increase in net sales between the periods. The gross profit as a
percentage of revenues for 2013 was consistent with the prior comparable period.
Segment operating expenses of $121.3 million in 2013 increased $12.0 million
from 2012 primarily due to (a) an increase in sales and marketing costs primarily due to
additional advertising and personnel costs associated with businesses acquired in and subsequent to 2012 and (b) additional depreciation and amortization associated with
businesses acquired in and subsequent to 2012.
As a result of these factors, segment operating earnings of $198.9 million in 2013 increased $11.6 million , or 6.2% , from 2012.
Digital Media
As our Digital Media segment was established as a result of the acquisition of Ziff Davis, Inc. on November 9, 2012, the increase from 2012 to 2013 is due to a full year of
activity in fiscal year 2013. The following segment results are presented for fiscal year 2013 and 2012 (in thousands):
- 40 -
2013
2012
Change
External net sales
$
390,104
100.0
%
$
361,684
100.0
%
$
28,420
7.9
%
Intersegment net sales —
—
—
—
—
—
%
Segment net sales
390,104
100.0
361,684
100.0
28,420
7.9
%
Cost of revenues
69,911
17.9
65,056
18.0
4,855
7.5
%
Gross profit
320,193
82.1
296,628
82.0
23,565
7.9
%
Operating expenses
121,258
31.1
109,268
30.2
11,990
11.0
%
Segment operating income
$
198,935
51.0
%
$
187,360
51.8
%
$
11,575
6.2
%
2013
2012
Change
External net sales
$
130,697
99.7
%
9,712
100.0
%
$
120,985
1,245.7
%
Intersegment net sales
449
0.3
—
—
449
—
Segment net sales
131,146
100.0
9,712
100.0
121,434
1,250.4
Cost of revenues
16,982
12.9
1,956
20.1
15,026
768.2
Gross profit
114,164
87.1
7,756
79.9
106,408
1,371.9
Operating expenses
107,432
81.9
4,867
50.1
102,565
2,107.4
Segment operating income
$
6,732
5.1
%
$
2,889
29.7
%
$
3,843
133.0
%