Symantec 2009 Annual Report Download - page 100

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EMEA revenues decreased slightly for fiscal 2009 as compared to fiscal 2008 primarily due to decreased
revenues related to our Consumer and Security and Compliance segments as a result of a strengthening U.S. dollar
and a decrease in endpoint security product sales to small and medium sized businesses. This decrease was partially
offset by an increase in revenues related to our Storage and Server Management and Services segments.
Asia Pacific Japan revenues increased for fiscal 2009 as compared to fiscal 2008 primarily due to increased
revenues related to our Storage and Server Management segment.
International revenues increased in fiscal 2008 as compared to fiscal 2007 primarily due to increased revenues
related to our Storage and Server Management and Security and Compliance segments, as a result of increased
demand for products related to the standardization and simplification of data center infrastructure and higher
amortization of deferred revenue for the reasons described above. These products also contributed to the increased
revenues in the Americas in fiscal 2008 as compared to fiscal 2007. Sales of new products from our acquisition of
Altiris increased revenues in the international regions and the Americas for which there is no comparable revenue in
the prior period. Growth in revenues in international regions and the Americas from sales of our Consumer products
was driven by prior period demand for Norton Internet Security products. Foreign currencies had a favorable impact
on net revenues in fiscal 2008 compared to fiscal 2007.
Our international sales are and will continue to be a significant portion of our net revenues. As a result, net
revenues will continue to be affected by foreign currency exchange rates as compared to the U.S. dollar. While the
current global economic slowdown has recently resulted in a strengthening U.S. dollar, we are unable to predict the
extent to which revenues in future periods will be impacted by changes in foreign currency exchange rates. If
international sales become a greater portion of our total sales in the future, changes in foreign currency exchange
rates may have a greater impact on our revenues and operating results.
Cost of Revenues
Fiscal
2009 $ %
Fiscal
2008 $ %
Fiscal
2007
2009 vs. 2008 2008 vs. 2007
($ in thousands)
Cost of revenues........ $1,226,927 $6,597 1% $1,220,330 $4,504 0% $1,215,826
Gross margin .......... 80% 79% 77%
Cost of revenues consists primarily of the amortization of acquired product rights, fee-based technical support
costs, the costs of billable services, payments to OEMs under revenue-sharing arrangements, manufacturing and
direct material costs, and royalties paid to third parties under technology licensing agreements.
Gross margin increased slightly in fiscal 2009 as compared to fiscal 2008 primarily due to higher revenues and,
to a lesser extent, lower OEM royalty payments and distribution costs, partially offset by a year over year increase in
technical support costs.
Gross margin increased in fiscal 2008 as compared to fiscal 2007 due primarily to an increase in revenue and
the fact that the terms of several of our OEM arrangements changed from revenue-sharing arrangements to
placement fee arrangements in late fiscal 2007. Placement fee arrangements are expensed on an estimated average
cost basis, while revenue-sharing arrangements are generally amortized ratably over a one-year period. In addition,
we realized year over year increases in services and technical support costs.
Cost of content, subscriptions, and maintenance
Fiscal
2009 $ %
Fiscal
2008 $ %
Fiscal
2007
2009 vs. 2008 2008 vs. 2007
($ in thousands)
Cost of content, subscriptions,
and maintenance ......... $839,843 $13,504 2% $826,339 $2,814 0% $823,525
As a percentage of related
revenue................ 17% 18% 21%
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