Segment Information

9 Months Ended

Sep. 30, 2014

Segment Reporting [Abstract]

SEGMENT INFORMATION

SEGMENT INFORMATION

The Enterprise and Service Provider division and SaaS division constitute the Company’s two reportable segments. The Company does not engage in intercompany revenue transfers between segments. The Company’s chief operating decision maker (“CODM”) evaluates the Company’s performance based primarily on profitability from its Enterprise and Service Provider and SaaS division products. Segment profit for each segment includes certain research and development, sales, marketing and services and general and administrative expenses directly attributable to the segment as well as other corporate costs allocated to the segment and excludes certain expenses that are managed outside of the reportable segments. Costs excluded from segment profit primarily consist of certain restructuring charges, stock-based compensation costs, charges or benefits related to significant litigation that are not anticipated to be ongoing costs, amortization of product related intangible assets, amortization of other intangible assets, net interest and other (expense) income, net. Accounting policies of the Company’s segments are the same as its consolidated accounting policies.

Net revenues and segment profit, classified by the Company’s two reportable segments were as follows (in thousands):

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2014			2013			2014			2013
Net revenues:
Enterprise and Service Provider division	$	593,741		$	564,552		$	1,808,209		$	1,686,411
SaaS division	165,253			148,179			483,164			429,603
Consolidated	$	758,994		$	712,731		$	2,291,373		$	2,116,014
Segment profit:
Enterprise and Service Provider division	$	131,409		$	134,598		$	394,536		$	380,445
SaaS division	27,402			33,378			92,333			81,427
Unallocated expenses(1):
Amortization of intangible assets	(33,915		)	(34,716		)	(135,515		)	(104,703		)
Patent litigation charge	(20,727		)	—			(20,727		)	—
Restructuring	(3,124		)	—			(17,285		)	—
Net interest and other (expense) income, net	(10,374		)	3,438			(16,897		)	6,009
Stock-based compensation	(42,449		)	(45,893		)	(128,440		)	(137,306		)
Consolidated income before income taxes	$	48,222		$	90,805		$	168,005		$	225,872

(1) Represents expenses presented to management on a consolidated basis only and not allocated to the operating segments.

Revenues by Product Grouping

Revenues by product grouping for the Company’s Enterprise and Service Provider division and SaaS division were as follows (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2014		2013		2014		2013
Net revenues:
Enterprise and Service Provider division
Mobile and Desktop revenues(1)	$	392,875	$	380,878	$	1,170,103	$	1,121,102
Networking and Cloud revenues(2)	155,388		146,474		501,231		458,753
Professional services(3)	42,322		33,725		126,775		96,653
Other	3,156		3,475		10,100		9,903
Total Enterprise and Service Provider division revenues	593,741		564,552		1,808,209		1,686,411
SaaS division revenues	165,253		148,179		483,164		429,603
Total net revenues	$	758,994	$	712,731	$	2,291,373	$	2,116,014

(1) Mobile and Desktop revenues are primarily comprised of sales from the Company’s desktop and application virtualization products, XenDesktop and XenApp, and the Company's Mobility products, which include XenMobile and related license updates and maintenance and support.

(2) Networking and Cloud revenues are primarily comprised of sales from the Company’s cloud networking products, which include NetScaler, CloudBridge and Bytemobile Smart Capacity, and the Company’s cloud platform products which include XenServer, CloudPlatform and CloudPortal and related license updates and maintenance and support.

(3) Professional services revenues are primarily comprised of revenues from consulting services and product training and certification services.

Revenues by Geographic Location

The following table presents revenues by segment and geographic location, for the following periods (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2014		2013		2014		2013
Net revenues:
Enterprise and Service Provider division
Americas	$	318,180	$	306,050	$	977,166	$	925,395
EMEA	202,557		188,220		610,254		553,637
Asia-Pacific	73,004		70,282		220,789		207,379
Total Enterprise and Service Provider division revenues	593,741		564,552		1,808,209		1,686,411
SaaS division
Americas	137,031		124,044		400,580		360,954
EMEA	22,407		18,522		65,780		53,266
Asia-Pacific	5,815		5,613		16,804		15,383
Total SaaS division revenues	165,253		148,179		483,164		429,603
Total net revenues	$	758,994	$	712,731	$	2,291,373	$	2,116,014