Symantec 2007 Annual Report Download - page 45

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remainder of the revenue increase is due to increases in our consumer products revenue and services offerings of
$181 million and $83 million, respectively, due to continued growth in demand. The segment discussions that
follow further describe the revenue increases. These increases are partially offset by the effects of the increased
flexibility in contract terms and the combination of our buying programs discussed above.
Net revenues increased in fiscal 2006 as compared to fiscal 2005 primarily due to the inclusion of the storage
and availability products and services obtained through our acquisition of Veritas. These products and services
contributed $1.4 billion of net revenues in fiscal 2006 for which there was no comparable revenue in fiscal 2005. In
addition, revenues from our enterprise security products increased $122 million and revenues from our consumer
products increased $67 million in fiscal 2006 compared to fiscal 2005. The increased revenues from these products
were due primarily to continued growth in demand for our enterprise virus protection and anti-spam solutions as
well as our consumer security protection products, as described further in the segment discussions that follow.
Beginning in the December 2005 quarter, as a result of increases in future subscription pricing for our 2006
consumer products that include content updates, revenue for these products is recognized on a ratable basis over the
term of the subscription.
Content, subscriptions, and maintenance revenues
2007 2006 2005
Year Ended March 31,
($ in thousands)
Content, subscriptions, and maintenance revenues ....... $3,917,572 $2,873,211 $1,945,310
Percentage of total net revenues .................... 75% 69% 75%
Period over period increase ....................... $1,044,361 $ 927,901
36% 48%
Content, subscriptions, and maintenance revenue includes arrangements for software maintenance and
technical support for our products, content and subscription services primarily related to our security products,
revenue from arrangements where VSOE of the fair value of undelivered elements does not exist, and managed
security services. These arrangements are generally offered to our customers over a specified period of time and we
recognize the related revenue ratably over the maintenance, subscription, or service period. Beginning with the
release of our 2006 consumer products that include content updates in the December 2005 quarter, we recognize
revenue related to these products ratably. As a result, this revenue has been classified as Content, subscriptions, and
maintenance beginning in the December 2005 quarter. In addition, as noted above, increased flexibility in contract
terms and the combination of our buying programs in the December 2006 quarter have impacted revenue
recognition. These changes caused a larger portion of revenue associated with contracts to be classified as
Content, subscriptions, and maintenance revenue, which is subject to deferral, instead of Licenses revenue, which is
generally recognized immediately, as discussed above in “Total Net Revenues.”
Content, subscriptions, and maintenance revenue also includes professional services revenue, which consists
primarily of the fees we earn related to consulting and educational services. We generally recognize revenue from
our professional services as the services are performed or upon written acceptance from customers, if applicable,
assuming all other conditions for revenue recognition have been met.
Content, subscriptions, and maintenance revenues increased in fiscal 2007 as compared to fiscal 2006
primarily due to the inclusion of the storage and availability products and services obtained through our acquisition
of Veritas for the full twelve months in the 2007 period compared to nine months in the 2006 period. These products
and services contributed $250 million of Content, subscriptions, and maintenance revenues in the June 2006 quarter
for which there was no comparable revenue in the June 2005 quarter. In addition, in fiscal 2007, Content,
subscriptions, and maintenance revenue related to our enterprise products increased $271 million due to the fact that
the amount of revenue recognized in the comparable 2006 period was lower as a result of the purchase accounting
adjustment discussed under “Total Net Revenues” above. Revenue related to our consumer products increased
$179 million as compared to the 2006 period due primarily to growth in Norton Internet Security products and
online revenues due to growth in the use of the Internet, and increased awareness and sophistication of security
threats. Enterprise products and services, excluding Veritas-related products and services, increased $309 million as
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