Autodesk, Inc. (ADSK) on Q4 2024 Results - Earnings Call Transcript

Operator: Thank you for standing by. And welcome to Autodesk's Fourth Quarter and Full Year Fiscal 2024 Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] I would now like to hand the call over to Simon Mays-Smith, Vice President, Investor Relations. Please go ahead. Simon Mays-Smith: Thanks, operator. And good afternoon. Thanks for joining our conference call to discuss the fourth quarter and full year fiscal 2024 results. On the line with me are Andrew Anagnost, our CEO; and Debbie Clifford, our CFO. During this call, we will make forward-looking statements including outlook and related assumptions, products and strategy. Actual events or results could differ materially. Please refer to our SEC filings, including our most recent Form 10-Q and the Form 8-K filed with today's press release for important risks and other factors that may cause our actual results to differ from those in our forward-looking statements. Forward-looking statements made during the call are being made as of today. If this call is replayed or reviewed after today, the information presented during the call may not contain current or accurate information. Autodesk disclaims any obligation to update or revise any forward-looking statements. We will quote several numeric or growth changes during this call as we discuss our financial performance. Unless otherwise noted, each such reference represents a year-on-year comparison. All non-GAAP numbers referenced in today's call are reconciled in our press release or Excel financials and other supplemental materials available on our Investor Relations website. And now, I will turn the call over to Andrew. Andrew Anagnost: Thank you, Simon. And welcome, everyone, to the call. We finished the year strongly, delivering 40% constant currency revenue growth in the fourth quarter of fiscal 2024. Resilience, discipline and opportunity again underpinned our robust financial and competitive performance. Autodesk's resiliency comes from its subscription business model and its product and customer diversification, which balances growth across different regions and industries. Renewal rates remained strong. And new business growth and leading indicators were consistent with recent quarters. Despite ongoing macroeconomic policy and geopolitical headwinds, we saw growing usage, record big activity on BuildingConnected and cautious optimism from channel partners. Disciplined and focused execution and strategic capital deployment through the economic cycle enables Autodesk to realize the significant benefits of its strategy, while mitigating the risks of having to make expensive catch-up investments later on. With the new transaction model, we are approaching the final phase of modernizing our go-to-market motion, which has involved updating our infrastructure, retiring old system to end business models, and building more durable and direct relationships with our customers and ecosystem. At the same time, we are advancing a multi-year process to develop lifecycle solutions within and between our industry clouds, powered by shared platform services and with Autodesk's data model at its core. Together, these will enable Autodesk, its customers, and partners to create more valuable, data-driven and connected products and services. Having led the industry in general design, we are leading again in 3D generative AI. Autodesk is getting closer to a transformational leap where Autodesk AI is to [three] (ph) design and make where ChatGPT is to language. Our new multimodal foundation models will enable design and make customers to automate low-value and repetitive tasks and generate more high-value complex designs more rapidly and with much greater consistency. We can already generate 3D representations from images 10 times faster and with faster higher-quality and currently available through the AI. We're bolstering our homegrown capabilities and data with partnerships and acquisitions in existing and adjacent verticals. Our recent bidirectional integration of fusion with cadence and the acquisition of payouts are good examples. Discipline and focus on executing our strategy and deploying capital also underpin our opportunity. Our go-to-market and platform initiatives will drive even greater operational velocity and efficiency within Autodesk, which will free up further resources to invest in our industry clouds and capabilities, including AI and sustained margin improvement. And with a modernized go-to-market motion, lifecycle solutions and platform services, Autodesk will fulfill its potential to break down the silos within and between manufacturing, AEC and media entertainment, enabling our customers to unleash their data and design a better world built for all. I will now turn the call over to Debbie to take you through our quarterly financial performance and guidance for fiscal 2025, I'll then come back to update you on our strategic growth initiatives. Debbie Clifford: Thanks, Andrew. Our financial performance in the fourth quarter and for the fiscal year was strong, particularly in our enterprise business. Early renewals and strong upfront revenue from enterprise business agreements or EBAs and federal governments drove some of the outperformance relative to our expectations in both Q4 billings and revenue. Overall market conditions and the underlying momentum of the business were consistent with the last few quarters. Total revenue grew 11% and 14% in constant-currency with upfront revenue driving 2 percentage points of that growth. By products in constant currency, AutoCAD and AutoCAD LT revenue grew 7%, AEC revenue grew 18%, manufacturing revenue grew 16% and M&E revenue was up 8%. AEC and manufacturing benefited from EBA true-up and upfront revenue. By region in constant currency, revenue grew 19% in the Americas, 11% in EMEA and 8% in APAC. Direct revenue increased 19% and represented 39% of total revenue, up 3 percentage points from last year, benefiting from strong growth in both EBAs and the Autodesk's store. Net revenue retention rate remained within the 100% to 110% range at constant exchange rates. Billings declined 19% in the quarter, resulting from the transition from upfront to annual billings for multiyear contracts as expected. So, slightly offset by some early renewals in North America. As part of our implementation sequencing for the new transaction model, we shifted our North American price increase from the end of March to the beginning of February. This resulted in some renewals moving from Q1 fiscal 2025 to Q4 fiscal 2024 which modestly boosted billings in January. Total deferred revenue decreased 7% to $4.3 billion and expected result of the transition from upfront to annual billings for multiyear contracts. Total RPO of $6.1 billion and current RPO of $4 billion grew 9% and 13% respectively. Early renewals drove about 1 percentage point of current RPO growth. Total RPO growth decelerated in Q4 when compared to Q3 when we closed our largest-ever EBA. The year-over-year deceleration was due to the lower mix of multiyear contracts in fiscal 2024 when compared to fiscal 2023, which I mentioned last quarter. In line with recent quarters and our expectations, we again saw some evidence of multiyear customers switching to annual contracts during the quarter. Turning to the P&L, GAAP and non-GAAP gross margin were broadly level, while operating margin was modestly lower in the fourth quarter, primarily due to the timing of Autodesk University costs shifting from Q3 to Q4, which we flagged last quarter. As expected, full-year non-GAAP operating margin was level year-over-year but up about one 1 percentage point at constant exchange rates. Fourth-quarter GAAP operating margin was up 40 basis points year-over-year and about 1 percentage point at constant exchange rates, partly due to a reduction in stock-based compensation as a percent of revenue. At current course and speed, the ratio of stock-based compensation as a percent of revenue peaks in fiscal 2024. We expect it to fall to 10% or lower over time. Free cash flow for the quarter and full year was $427 million and $1.28 billion respectively with early renewals, providing a modest tailwind in the fourth quarter. The most significant free-cash-flow headwinds from our transition from upfront to annual billings for multiyear contracts are now behind us, which means our free-cash-flow through during fiscal 2024 and will mechanically rebuild over the next few years. Turning to capital allocation. We continue to actively manage capital within our framework and deploy it with discipline and focus through the economic cycle to drive long-term shareholder value. As you heard from Andrew, we continue to invest organically and through complementary acquisitions to enhance our capabilities and the industry clouds and platform that underpin them. During the quarter, we purchased approximately 300,000 shares for $63 million at an average price of approximately $217 per share. We have now offset estimated dilution from our stock-based compensation program well into fiscal 2026. We will continue to repurchase shares opportunistically to offset dilution from stock-based compensation when it makes sense to do so. Now let me finish with guidance. Overall, end-market demand has remained pretty consistent over the last few quarters. Macroeconomic and one-off factors like the Hollywood writer strike dragged on the new business growth rate during fiscal 2024 and will modestly drag on revenue growth in fiscal 2025, but Autodesk's resilience and robust underlying demand for its products and services reinforce its long-term growth potential. Turning to revenue. I want to highlight four key puts and takes impacting growth in fiscal 2025. First, let me talk about the new transaction model. We've added some slides to the earnings deck to help illustrate how to think about this shift, which I'll briefly summarize. The new transaction model enables Autodesk to build closer, more direct relationships with its customers and partners and to better understand and serve them with more data, more self-service and greater predictability. It will be a cornerstone of the data services that Andrew talked about earlier. As you can see from Slide 11, the transition mechanically drives higher revenue and costs is broadly neutral to operating profit and free-cash-flow dollars and is a headwind to operating margin percent. About $600 million of payments made the resellers and developed markets in fiscal 2024 were accounted for as contra-revenue. As this business moves to the new transaction model, these payments will shift to marketing and sales expense over the next few years, all else equal, with the timing of cost recognition not materially different than before. The change affects a substantial majority of our business, but note that emerging markets and our federal government business will remain on the buy-sell model for the foreseeable future. The pace of the shift will primarily be determined by the mechanical build from ratable subscription revenue accounting and the rate of regional rollout of the new transaction model. While the former is relatively easy to predict given the ratable revenue recognition of our subscription business model, which fills over time, the latter will in part be determined by what we learn as we roll out the model further. We gained useful insights from the successful rollout in Australia, and we're expecting to learn more as we roll out with much higher volumes in North America this year. We will be able to apply those learnings when we launch in EMEA. Our fiscal 2025 guidance assumes the new transaction model is deployed in North America in Q2 of fiscal 2025 and provides about a 1 percentage point tailwind to Autodesk's revenue growth and a 3 points to 4 point tailwind to billings growth. Second, the acquisition of payouts, which closed on February 20th, is expected to contribute about 0.5 point of revenue growth in fiscal 2025. Third, token consumption for the fiscal 12021 EBA cohort exceeded consumption predictions made during the pandemic which resulted in true-up payments in fiscal 2024. Token consumption and the smaller post-pandemic fiscal 2022 EBA cohort is tracking more in line with predictions, which means we expect fewer true-up payments in fiscal 2025. This pandemic echo effect is about a point of headwind to fiscal 2025 revenue growth. And fourth, our rolling four-quarter foreign-exchange hedges means that FX is expected to be about a 1 percentage point headwind to reported revenue growth in fiscal 2025. Bringing this altogether, we expect revenue of between $5.99 billion and $6.09 billion in fiscal 2025, which translates into a revenue growth of about 9% to 11% compared to fiscal 2024. Adjusting the midpoint of our guidance to exclude noise from the new transaction model, acquisitions, the absence of EBA true-up revenue and FX, we expect underlying revenue to grow more than 10% in fiscal 2025. Moving on to margins. We're going to manage our non-GAAP operating margins between a range of 35% and 36% in fiscal 2025, with the goal of keeping them roughly level with fiscal 2024. This means we expect a roughly one-point underlying margin improvement will be broadly offset by the margin headwind from the new transaction model. As we transition to the new transaction model, we'll see operating margin headwinds from the accounting change of moving reseller costs from contra-revenue to sales and marketing expense. We'll also have incremental investment in people, processes and automation. But over the long-term, we expect that this transition to the new transaction model will enable us to further optimize our business, which we anticipate will provide a tailwind to revenue, operating income and free-cash-flow dollars, even after the incremental costs we expect to incur. Moving on to free cash flow, we expect to generate between $1.43 billion and $1.5 billion of free cash flow in fiscal 2025. In Australia, some channel partners accelerated renewals ahead of the transition to the new transaction model to derisk month one of the transition. Because the new transaction model will be rolled out in Q2 in North America, it may be that the behavior we saw in Australia occurs also in North America, which may accelerate billings and free cash flow to earlier quarters, but should not materially change the outlook for the year. Excluding $200 million from fiscal 2024 free cash flow from multiyear upfront billings, which are now billed annually, in fiscal 2025, we expect free cash flow growth of about 35% at the midpoint of our guidance. We expect faster free-cash-flow growth in fiscal 2026 because of the return of our largest multi-year renewal cohort, the mechanical stacking of multiyear contracts billed annually and a larger EBA cohort. As we navigate the new transaction model transition, the pace of the rollout will create noise in the P&L. So we think free cash flow is the best measure of our performance. At current course and speed, our free cash flow estimate for fiscal 2026 at the midpoint is approximately $2.05 billion, which is in line with consensus estimates. In the context of significant macroeconomic, geopolitical, policy, health and climate uncertainty, the mechanical rebuilding of our free cash flow as we transition to annual billings for multiyear contracts gives Autodesk an enviable source of visibility and certainty. We continue to manage our business using a Rule-of-40 framework with a goal of reaching 45% or more over time. We are taking significant steps toward our goal this year and next. We think this balance between compounding growth and strong free-cash-flow margins, captured in the Rule-of-40 framework is the hallmark of the most valuable companies in the world and we intend to remain one of them. The slide deck on our website has more details on modeling assumptions for Q1 and full-year fiscal 2025. Andrew, back to you. Andrew Anagnost: Thank you, Debbie. Let me finish by updating you on our strong progress in the fourth quarter. We continue to see good momentum in AEC, particularly in infrastructure and construction fueled by customers consolidating onto our solutions to connect and optimize previously siloed workflows through the cloud. The cornerstone of that growing interest is our comprehensive end-to-end solutions, encompassing design, preconstruction, field execution through handover and into operations. This breadth of connected capability enables us to extend our footprint further into infrastructure and construction and also expand our reach into the mid-market. As a sign of that growing momentum, we closed a record number of deals over 100,000 and $1 million in construction accounts in the United States and worldwide during this quarter. Let me give you a few examples. First, Vinci, a world leader in concessions, energy and construction has been leveraging Autodesk solutions to streamline its operations and drive international expansion. With a platform approach, Revit customization and BIM as a standard practice, Vinci has achieved significant time savings annually and captured more business abroad. In Q4, Vinci renewed its fourth enterprise business agreement with Autodesk, expanding the deployment of Autodesk Construction Cloud on major projects to further integrate its data and workflows, and ensure a seamless transition from design through construction. Second, after a competitive RFP process early in the year, Fortis Construction, an ENR 400 firm based in Oregon ran a thorough peer assessment and selected Autodesk Construction Cloud for a six-month pilot. With the confidence gained during the pilot and close alignment between the construction technology vision and Autodesk roadmap to a connected design-build-operate platform, Fortis committed in Q4 to a multi-year agreement across preconstruction and construction. And third, the Pennsylvania Department of Transportation recently chose Autodesk Construction Cloud as the primary tool powering its project delivery collaboration center, which will manage the project delivery of infrastructure projects in the state, in large part due to our software-inclusive open ecosystem. Again, these stories have a common theme, managing people, processes and data across the project lifecycle to increase efficiency and sustainability, while decreasing risk. Overtime, we expect the majority of all projects to be managed this way and we remain focused on enabling that transition through our industry clouds. With the acquisition of Payapps, Autodesk will embed payment and compliance management into the project lifecycle. It can take an average of 83 days for subcontractors to get paid after putting work in place. And because of the risk, many will not bid on a project if a general contractor or an owner has a reputation for slow payments. Our goal is to leverage technology that eases the burden of construction payment management in a simpler, faster and more efficient process for all construction project stakeholders. Moving on to manufacturing. We made excellent progress on our strategic initiatives. Customers continue to invest in their digital transformations and consolidate our design and make platform to grow their business and make it more resilient. In automotive, we continue to grow our footprint beyond the design studio into manufacturing and connected factories as automotive OEMs connect data and shorten hand-off to the design cycle. In the US, a leading manufacturer of leveraged AEC Solutions Fusion and Autodesk platform services to develop a connected factory, it delivered a much greater ROI to significantly faster design durations, product prototyping and data federation. Due to expanded EBA signed in Q4, it is exploring using VR studio tools in customization and increasing its adoption of Autodesk Construction Cloud to bring its new factories to life. We continue to serve some of the largest manufacturers in the world with a full breadth of our portfolio, as they design and make both products and factories. One of the largest private manufacturers in the US leverages our advanced manufacturing portfolio including Fusion, PowerMill and Moldflow, which has helped reduce rework in plastic designed by 20%. To build clean-energy solutions, it utilizes our AEC collection, including BIM metadata, assembly breakout and installation instructions for its building products. In Q4, the customer increased its EBA with Autodesk, and plans to expand our partnership beyond Revit and Autodesk Construction Cloud to support the digitalization of its factories. Fusion remains one of the fastest-growing products in the manufacturing industry and ended the quarter with 255,000 subscribers, driven by the growing number of customers who recognize the value of cloud-based workflows, enhancing efficiency, sustainability and resilience within their organization. As the breadth and depth of Fusion features and capabilities expand, we're beginning to drive adoption by larger companies and sort of higher-value segments of the professional market through expansion. As we do this, commercial subscriptions will become less complete indicators of Fusion's performance relative to the value we can realize in our reporting or change to reflect that. In education, we are preparing future engineers to drive innovation through next-generation design, analysis and manufacturing solutions. In the fall, the University of Delaware selected Fusion for more than 600 students to use in its introduction to engineering class, replacing a competitor's solution. Fusion was chosen because it facilitated better team collaboration, was easily adopted thing to available teaching resources and provided a single integrated platform to learn CAD, stimulation and CAM. And lastly, we continue to work with our customers to ensure they are using the latest and most secure versions of our software. In Q4, an American pharmaceutical company looked to understand its own usage better and ensure remains compliant in the transition to our named user model. In collaboration with our license compliance team, a preventative audit was conducted to identify risk areas and construct the combination of subscriptions and Flex tokens for continued access. It is also taking the opportunity Flex enables us to trial new products from our portfolio, resulting in an annual spend increase of more than 30%. Autodesk remains relentlessly curious with a propensity and desire to evolve and innovate. Time and again, our success in executing strategic transformation and added new growth vectors, built a more diverse and resilient business, forged broader, trusted and more durable partnerships with more customers and given Autodesk a longer runway of growth and free-cash-flow generation. We are building the future with focus, purpose and optimism. Operator, we would like to open the call up for questions. Operator: [Operator Instructions] Our first question comes from the line of Saket Kalia of Barclays. Your question, please Saket. Saket Kalia: Okay. Great. Hey Andrew, hey Debbie. Thanks for taking my questions here and nicely done. Debbie Clifford: Thanks, Sakit. Andrew Anagnost: Thanks, Sakit. Saket Kalia: Hey, guys. Andrew, maybe just to start with you, you talked a little bit more about generative AI on this call, which was great to hear. Maybe just to make sure the question is asked, can you just talk about what your sort of core engineering customers are saying about generative AI? And I'm sure it's a very long discussion, but how do you think about the value that Autodesk can provide sort of on that journey? Andrew Anagnost: Yeah. So first off, Saket, let me make it clear that, it’s our intent to be the market leader in generative AI, just like we were in generative design over 10 years ago. So we intend to lean into this pretty heavily. Our AI lab has been in existence since 2018, it's been where some of the core research that's contributing to some of the things I talked about in the opening commentary came from. But also, we've been delivering AI in our products for several years now -- we just released drawing automation into Fusion, which allows people to automate manufacturing drawing stacks, which is a very labor intensive effort, and it's a high productivity driver for our customers. So, in terms of what our customers are saying to us. One, they're looking for the productivity increases. They're asking what are they going to look like, what kind of productivity increases are you going to deliver to this, and how are you going to use our data to deliver those productivity increases. Now, in terms of how we're going to do this is, there's two avenues that we're going to be approaching here. One is going to be more disruptive to how our customers work and the other one is going to be basically automating the capabilities and workflows they have today. We have to do both. Both have different value levers, both will have different adoption curves. Some of the things I talked about in the opening commentary about some of our new tools for generating 3D models from photographs or for incomplete 3D models, those are disruptive approaches that set up initial model ideas for our customers and allow them to do things initially with a blank slate kind of concept, where they create a model from specifications and requirements. We haven't released any of that yet, we will at some point release that to a private beta. But right now it's just something we're really proud of and we think is really important. That's an important disruptive technology. The other technologies are also going to look a lot like what we did with Fusion drawing automation. There are going to be tools that take the complexity of delivering and creating a 3D model and all of its outputs to a process and take it from months to weeks or sometimes even days and that's going to make customers who are currently using these tools maybe slower in the adoption of more disruptive tools, incredibly more productive. Both avenues are valid, both are important, and both are areas that we're focusing on. Saket Kalia: Got it. That makes a lot of sense. Debbie, maybe for my follow up for you, Autodesk obviously provides a lot of value to its customers, which you're also able to capture as well. Maybe the question is, can you just talk a little about some of the recent pricing actions that have been out there? And what sort of customer behavior that might drive as a result? I think there was a little bit of difference in pricing, sort of between one year and multi-year subscriptions. How do you think about that impacting the model, if at all, going forward? Debbie Clifford: Sure. So let's start first with what we did. So there's a couple of things that are going on. We did about a 3 point increase for market factors and then we did a 5% increase for renewals. With market factors this was something that we've been talking about for a while. Our goal is to streamline pricing around the world. And then for the renewals price change before the increase, we had a 10 point price differential between new and renewal and with this move to agency or the move to the new transaction model, we don't see as much of a need for that delta. In Q4 what we did was, we moved up the timing of the price increase so that we could better sequence things with the new transaction model coming and that led to some early renewals down the stretch. That's part of what gave an extra point of growth to current RPO. But the price increase overall was most helpful to billings, but it wasn't material to revenue and free cash flow. Saket Kalia: Got it. Very helpful. Thanks, guys. Operator: Thank you. Our next question comes from the line of Adam Borg of Stifel. Your question please, Adam. Adam Borg: Great. And thanks much for taking the question. Maybe on the transactional model and thanks guys for all of the disclosures around it. Maybe talk a little bit more about the learnings you have from the early customer and partner feedback in Australia and even now that you have the early days of this direct relationship, anything interesting there that you're learning from your more direct relationship with customers, be it usage or adoption or expansion that you clearly didn't have before with the prior model? Thanks. Andrew Anagnost: Yes. Thanks, Adam, for that question. First off, let me just reinforce something here, because I want to make sure that we're all on the same page here about why we're doing this, right? This is a critical part of a relentless, ongoing modernization of Autodesk business, getting us ready for the long term success we expect in a world of AI driven, cloud-based solutions for design to make lifecycles, right? It's a necessary step in this. It's the last big one in our journey of all the ones we've done at this point, and it really has some big benefits for our customers, long term. One, it's going to allow us to understand them a lot better in ways that we can't currently understand them because don't have the full account record of what the customer is doing. Two, it's going to allow us to deliver a lot more self service capability to these customers. And three, it's going to turn our partner channel into design made collaborators and consultants for our customers with their own unique IP and their own services and away from transaction partners. So it's critical that we kind of get on the same page of that. With regards to Australia, we actually did learn a lot, right? Mostly about the transactions at this point because it was only for a quarter and a little bit. It didn't necessarily have direct impacts on customer behavior. But what we did learn we've now put into the process. In fact, we actually delayed our US rollout by 30 days based on some of the learnings during the Australian process. We changed our roadmap for some of the capabilities, updated and upgraded some of the capabilities in the transaction systems to kind of correspond with some things we saw in Australia. And we also kind of delivered some new enablement materials for partners and frankly for customers as well, so they understand how this transaction model impacts their relationship with Autodesk. So we definitely took the learnings to the bank to make sure that we were better prepared and we even gave ourselves a little bit more time, based on what we learned to finish up a few things that we think are going to be impactful. Adam Borg: That's great. And maybe just as a quick follow up, you talked about some success with state DoT, as you think about kind of the infrastructure bill and the stimulus that continues to be deployed. Maybe just give a quick update on Innovyze and just a quick State of the Union there and the opportunity as part of the broader infrastructure push. Thanks so much. Andrew Anagnost: Yea, so you'll probably hear us use the word -- name Innovyze a lot less and talk a little bit more about Autodesk Construction or water solutions moving forward, all right. So I just want to be clear about that. Water is and has been a big part of our EBA successes. Larger customers are adding water solutions. I think there's an obvious reason for that. Water is just as important as it was before, if not more so. I think you're probably aware that in California, we just had yet another kind of flood where people didn't expect to have floods in San Diego and that's all because water management infrastructure is moving water in the wrong places. So people need to build and rebuild water infrastructure of all types, water scarcity, water purity, all of these things. Water is going to be a big business moving into the future and it's continued to enhance some of our EBAs with that respect. Since you mentioned infrastructure in general, I just want to kind of point a little bit to something that you heard in the opening commentary about PennDOT, all right. I think that's a really important story about what's going on there. Why is PennDOT choosing our solutions? What's going on? Because of the infrastructure bill and some of the money that was put in the infrastructure bill to help some of these Departments of Transportation understand how to invest in the future, PennDOT looked at its portfolio of tools, they looked at the future, they looked at what they need going out 10 years, 20 years in the future, what kind of modern stacks they want to work on, and they chose to move to our solutions and incorporate more of our solutions in their environment. That's an important first step in what we're trying to do. We want to be part of modernizing these Departments of Transportation with the kind of modern staff that we've created in the end-to-end design to make solutions. That's another vector here to pay attention to as the infrastructure boom kind of continues to roll out into the United States. Adam Borg: Great. Thanks for all the details. Operator: Thank you. Our next question comes from the line of Jay Vleeschhouwer of Griffin securities. Your question please, Jay. Jay Vleeschhouwer: Thank you. Good afternoon. Andrew, first question concerns the transaction model and what I'd like to ask about is relating the operational and transactional and accounting systems and compensation systems that you've put in place relative to the scale of your volume. You added well over 700,000 subscriptions in fiscal 2024, more than you added in fiscal 2023. You've spoken of certain growth expectations for volume over time. So, maybe help us understand the capacity that you have in place now to support the long term volume growth expectations that you have, because undoubtedly you're looking to do substantially more subscription additions than you did in fiscal 2024. Andrew Anagnost: Yes. So Jay, obviously the modernization of Autodesk and its back office infrastructures isn't just about rolling out the new transaction model and the kind of the nuts and bolts of that. It's actually about increasing our internal capacity to do these things at scale, which is exactly what we were trying to test in Australia, in the various environments and that we've been testing since then. So, we are very confident that we've not only built a transaction environment, but a cascading set of capabilities that allow us to scale significantly as we move forward. Because you're right, we intend to get deeper and deeper into people's design and make processes and that's going to increase the amount of subscriptions that are being used downstream in other types of make processes and we have to be able to operate at scale. So this is not just a new transactional model modernization effort. It's a full scale modernization effort inside of Autodesk that captures all aspects of this. And the good thing about the cascading rollout, the way we're doing it this year with the US first, is again we're going to get yet another test on the volume and capacity of the systems that allows us to understand where we're at before we go live with the next level of rollout and volume capture. But just know that this is more than just a transaction model. It is a full scale modernization of what's going on under the hood at Autodesk. Jay Vleeschhouwer: Yes. Understood. Second question concerns products and technology. When we think back to the various product sessions and roadmap sessions that you talked about at AU a few months ago, what do you think are the critical executables -- product deliverables that you're aiming for, for this year either in terms of improving upon or expanding the existing products, such as Revit or other new tools? Andrew Anagnost: Yes, so I'll just hit a few here okay. First off, in manufacturing, the critical thing that really needs to happen this year for Fusion, for example, is we have to improve our capability to help move Fusion from small teams in the design and make part of the business, all the way up to supporting full scale engineering team. So basically scaling the size of installations inside of our customer base with Fusion. That's going to be through a combination of things we do with our cloud based data management solutions as well as some of our AI-based solutions which basically attract people to the product because of the productivity enhancement. But that is definitely an important effort. There's a second ancillary effort with regards to the Fusion around ensuring that our partnerships with companies like Cadence and the internal EDA capabilities we built in the Fusion set us up for a boom in smart products. We want to be the solution that people choose for smart products. We built enough capability into Fusion that people can get a certain way end-to-end with Fusion and we're partnering to make sure that when things get more sophisticated, we're able to move up into the more sophisticated processes associated with these smart products. Now, when it comes to Forma, Forma and Fusion kind of dance together here and one of the things that -- it's really important to do as we move into this year is make sure that Forma and Revit play together as our customers try to move forward as they adopt Fusion and also as they use Revit more collaborative in the cloud, that these two products work together in some way, that they exchange data and interoperate in ways that nobody else can achieve. Because the truth of the matter is, the work that people are doing with Revit isn't going away. It's a huge amount of what they do and we need to make sure that, that work is more efficient in a formal world. So, look for us to not only increase the capabilities of Forma, but increase its relationship with Revit as well, which I think is really important. The last thing I'll say, just around media and entertainment is, we have to continue to take what we're doing with regards to moving beyond post production special effects into full production management, script-to-screen capabilities for our customers in the filmmaking industry and make some of that real with the flow platform and that's really the big goal for the media entertainment team, is to make flow real this year and help our customers really see possibilities of integrating new types of complex solutions on top of a single production management environment. Jay Vleeschhouwer: Very good. Thank you Andrew. Thank you Debbie. Andrew Anagnost: You're very welcome. Operator: Thank you. Our next question comes from the line of Joe Vruwink of Baird. Please go ahead Joe. Joe Vruwink: Great. Hi everyone. Thanks for taking my questions. I wanted to ask -- so Autodesk has framed growth rates over the long arc of time in that 10% to 15% range. 2025 guidance is obviously holding to the 10%. When you think about 10% conceptually, is that ultimately, as you would expect, just given the nature of your businesses being exposed to certain end markets that are perhaps now closer to their bottoming or troughing point in a given cycle? And if that maybe is the case and this is the bottoming point, what indications are you watching over coming quarters to maybe set the stage for a recovery scenario, which, of course, your markets typically do after they reach that bottoming point? Debbie Clifford: Thanks. So, we continue to target that 10% to 15% revenue growth algorithm and you're right, the midpoint for fiscal 2025 was right at that 10% coming off a year where we did 13% growth in constant currency. And really what we've said is that where we end up in that 10% to 15% range is going to be contingent upon the macroeconomic backdrop that we operate in, as well as our ability to harvest the opportunities that we have before us across AEC, manufacturing and so on. And so, the things that we're watching as we proceed through this year with that 10% midpoint are some of the things that we've been talking about for a while now. So, new business growth is really important indicator of future revenue performance for the company and we said in this last quarter that new business growth grew, but it was relatively soft, consistent with what we had seen over the previous several quarters. So, definitely being impacted by macro and that's one of the factors that's driving the 10% revenue growth midpoint in fiscal 2025, so we'll continue to watch that closely. We also watch product usage, we watch bidding activity on our BuildingConnected platform, and we stay close to our channel partners, try and understand what they're seeing in terms of their demand. So those are the things that we're going to be watching to see how this year progresses and beyond. Joe Vruwink: Okay thanks. That's helpful. And then I wanted to follow-up on the free cash flow. I think I heard $2.05 billion for fiscal 2026. At one point there was a comment that the progression between FY 2024 and 2026, that was going to be linear, of course, if you normalize for that $200 million effect benefit last year and then comes out this year. I guess as I look at that and the $2.05 billion, it's not quite linear. It would seem like FY 2026 is actually maybe a bit stronger. Did something change in kind of the modeling out of the progression? Just any color there? Debbie Clifford: Nothing's changed Joe. So we said that we anticipate that cash flow would grow greater in fiscal 2026 than what we saw in fiscal 2025. And when you think about modeling the growth rate, just remember that you have to remove the $200 million in fiscal 2024 before we stopped selling multi-year contracts upfront. Joe Vruwink: Okay, I'll leave it there. Thank you very much. Operator: Thank you. Our next question comes from the line of Jason Celino of KeyBanc Capital Markets. Your line is open, Jason. Jason Celino: Great. Thanks for taking my question. Maybe first for Andrew, just on the acquisition of Payapps and they were a great partner of yours. Just curious on what drove the decision to acquire them outright versus just extending the partnership? Thanks. Andrew Anagnost: Yes. All right, so since you opened up the door there, let's talk a little bit about construction in general, because I think it's important to kind of highlight what's been going on there. We had a great EBA quarter for construction. Construction saw strong growth in our largest accounts, which is really important for the long term health of construction. And at a really high level we also saw an increase in $100,000 deals and $1 million deals both in the US and internationally and that's really important. And this is where -- one of the things where Payapps comes in, right? Remember, we're going end-to-end with our solutions here from design all the way to make. And we want to make sure that we get into the preconstruction planning and other types of our customers processes. It takes 83 days for our customers to process payments in their environment that's just too long. Now, we're not getting into the transaction business. What we're doing is, we're getting into the business of helping them automate and track those payments across their entire life cycle so that they can get, quicker return, reduce that 83 days to be faster, and increase their cash flows. This has to be something we tightly integrate into our solution. So, we intend to tightly integrate this in just like we rebuilt some of the other solutions we acquired previously into what is today Autodesk Build, which is a new modern platform for doing some of these things. So we thought it was very important to own this so that we can integrate it. And then we went out there and we bought a premium asset. It's a leader. It's a global leader in payment processors. It's not a small company, it's not what we could afford, it's what we needed. And I think that's really important. So, when we look forward at construction right now, we see tools like this being critical as well as our pre-construction tools and we actually see the deal cycles maybe getting a little longer, but we're competing head-to-head a lot more. And I want to again highlight that Fortis deal out of Oregon, which was a head-to-head competitive deal with a pilot period that ended up going fully to Autodesk. So what we see right now in our business is building momentum driven by the end-to-end solution and kind of acquisitions, like Payapps as well. So, when we look forward into next year, we don't see deceleration of the business, we see acceleration. Jason Celino: Okay. No, that's very helpful. And then my quick follow up for Debbie. Sorry if I missed it, but the 13% constant currency growth we did this year, did you mention how much was from the strong renewal cohort and then maybe any upfront revenues? I'm just trying to understand the several points of decel embedded in the 2025 guide? Thanks. Debbie Clifford: Yes. So the early renewal cohort didn't have any impact to revenue really, that had more of an impact on billings than it would have on revenue. And then the strength that we saw in enterprise represented about 1 point of growth. Jason Celino: Okay, great. Thank you. Operator: Thank you. Our next question comes from the line of Tyler Radke of Citi. Please go ahead Tyler. Tyler Radke: Yes. Thanks for taking the question. Along the similar lines of Jason's question on construction Andrew. I'm just wondering if you could provide us an update on the go-to-market changes that you made, I believe last year and how you're expecting that business and you talked about acceleration, obviously make revenue is growing in the teens. Is this a business you think can be 20% over the medium term? Just help us frame what you're seeing both from the go-to-market and pipeline perspective? Thank you. Andrew Anagnost: Yes. So, as you know, last year was the full year of integrating the sales force back into the mainline sales force. We went through some of the integration efforts to do that. There were obviously some slowdowns in the business related to integration of those things. Those things are past us now, the business is fully integrated. It's starting the year off, not only fully integrated from the get-go, but with all of the processes, plans and capabilities all lined up according to how we want to grow the business heading into the year. And one of the things I wanted you to notice in my previous commentary is that, we're seeing deal activity going up. So, the pipeline is actually firming up really well and we're in more deals and some of these deals are more competitive, but we embrace that because when we're in a competitive deals, that means we're showing up in places we weren't showing up before because people are calling us in. That's a really important part of this whole entire process. People are starting to ask themselves what solution do they need for the next 10 years, 15 years versus what's available out there today. And the end-to-end capabilities we're delivering, especially leaning more heavily into our preconstruction capabilities, which lock in a lot of the cost and complexity and risk of a construction project, this is where we're leaning into this year and this is where we're going to be driving the growth. So I think we're past integration issues moving forward into pure execution at scale inside the mainline salesforce. The EBA success is a great example of that. Tyler Radke: That's helpful. And maybe a follow up for Debbie and apologies I've been jumping around calls, but can you just frame how you're thinking about the relative drivers of the top line growth outlook for FY 2025 between subs growth and pricing and the usual factors that build up to that? Thank you. Debbie Clifford: Sure. So, we typically are trying to target roughly 50-50 split of growth coming from volume and it's either price mix or margin basically, partner margin is how we think about it. So, across volume and price, again, our target is to do roughly 50-50 in fiscal 2025 that would continue to be our goal. Now there's certainly years where it's going to vacillate between one or the other and we've talked about how this past year our new business was growing slower than we would anticipate in a more normal macroeconomic environment. As we look ahead, we're hoping to get that growth coming from roughly equally across those two, volume and price. So that's how we're thinking about it. Tyler Radke: Thanks, Debbie. Operator: Thank you. Our next question comes from the line of Michael Funk of Bank of America. Your question, please, Michael? Michael Funk: Yes. Thank you for the questions. So first, one of your competitors mentioned pressure on projected seat growth due to the declining ranks of engineers. Are you seeing a similar impact or is that not impacting your customers? Andrew Anagnost: We are not seeing a decline in our growth rates because of any pressure out there associated with engineers. As a matter of fact, one of the things that's really important because we're moving into design and make processes, we have a pretty broad swath of people that we're able to touch. Also, we continue to displace competitive products, especially with Fusion in the manufacturing space. So, we're not seeing that kind of effect declining bases. We do see customers at times optimizing their installations with Autodesk to try to right size things, but not because they're downsizing their employment base. Michael Funk: Thank you for that. Then one for you Debbie, and thank you for the clarity and moving pieces in 2025. In the press release, you mentioned that the guidance for growth in 2025, you said adjusting for FX, EBA acquisitions, transaction model you gave additional data points on the call, is the right way to think about it that guidance, constant currency ex-EBA transaction model and acquisitions is basically 9.5% to 11.5% growth rate in 2025, is that the right very basic math? Debbie Clifford: So what we talked about was a point of headwind from FX, a point of headwind from the absence of EBA true-ups, half a point of tailwind from acquisitions, and a point of tailwind from the new transaction model. So the net effect of that is half a point. So, yes. Michael Funk: Great. Thank you very much. Operator: Thank you. Our next question comes from the line of Stephen Tusa of JP Morgan. Your question please, Stephen. Stephen Tusa: Hey, guys. Congrats on a good quarter. What would do you think is in the kind of crystal ball to drive you to the low end of the range? Like what are you concerned about that you can see today? I assume that's part of the macro, but what within the macro would get you to the low end of the range? Debbie Clifford: We'll continue to watch that new business grow. That's something that we're laser focused on and if macroeconomic conditions were to shift, then that would be probably one of the first things that we'd be impacted and that can take us to the lower end of the range. We're watching end market demand pretty closely so that's why we talk about bid activity on BuildingConnected and it continues to be at record highs. But of course, if that were to take a turn, that can have an impact on us. And then we monitor these sentiment that we're hearing from our channel partners to understand how they're seeing end market demand and what the impacts might be for our business. So, those are the types of things that could inform whether or not we would be at the lower end of the range. Stephen Tusa: Okay and just to be clear, I thought it was when you went through some of the other moving parts on guidance that it netted out to kind of a point of tailwind. I guess you're throwing in the EBA true ups, or at least adjusting those out to get to an underlying rate. Is that part of the calc there? Debbie Clifford: Yes. And sorry to go back to the last question, because there's a lot of moving parts here, and it has been confusing. So for revenue in the guide, it's 1 point of headwind from FX, 1 point of headwind from the absence of EBA true-ups, 0.5 point of tailwind from the acquisitions, and 1 point of tailwind from the new transaction model, which is a net negative. So net 0.5 negative headwind as we look into the guide for fiscal 2025. Stephen Tusa: Okay. And then just one last quick one on the subs. I guess they're up 12 for the year, if I have that number right. Your constant currency was 13 can you maybe explain what you mean by half coming from volume and half coming from price? It seems like that's a lot from -- much more from volume there maybe there's some mix or something like that? Debbie Clifford: Yeah, there's definitely mix effects. And like I said, our target is to have it be roughly 50-50 between volume and price. But in any given year, we're going to have some puts and takes between that. But when we think about our guidance for fiscal 2025, we're targeting that 50-50 mix again. Stephen Tusa: Okay, great. Thanks a lot. Operator: Thank you. Our next question comes from the line of Nay Soe Naing of Berenberg. Your question, please Nay. Nay Soe Naing: Hi, everyone. Thank you for taking my questions. I've got two, if I may. Starting with you mentioned a lot of positive developments in the products like ACC BuildingConnect and the Fusion 360. I was wondering how we should think about that when it comes to your make revenue. And if we look at the growth rates in make segment, it's been consistent around 17% on constant currency for the past three quarters. Is there a possibility with all the positive developments that the make revenue will go back to growth rates in the 20s going forward? That was my first question. And the second question is on the new transaction model, please. I think Debbie, you mentioned that you're expecting 1 percentage point of growth tailwind from the new transaction, FY 2025, which will equate about $55 million and then the slide deck you mentioned there's about $600 million of reseller commission in total. So the remaining $450 million or so -- sorry, apologies, $550 million or so, will that all come through in FY 2026, or will it take longer for all the contra revenue to flush through in your P&L? Thank you. Debbie Clifford: So a couple of things. So first sorry, you were a little bit garbled and coming through, so we didn't quite get the first question and we'll go ahead and try and take those in the callbacks. But when we think about the new transaction model and the $600 million, I think the most important things to take away are the $600 million is a good number to model with. As you think about how to model the business during the transition and the pace at which you'll see the new transaction model cost, that $600 million bleed into revenue and expense over time is really going to be dictated by the pace of the rollout. And so, think of it as something that's going to be bleeding into revenue and expense over the next couple of years. Nay Soe Naing: Right. I think at the previous quarter you mentioned it would take about two years to implement this new transaction model. So, presumably this total $600 million bleeding into revenue and cost will take longer than two years to complete in totality? Debbie Clifford: So the act of transitioning, the invoicing will take approximately two years to complete. But remember that we recognize revenue over approximately one year. So it's going to be a little past that when the invoices at the higher amount bleed into revenue. Nay Soe Naing: Right. Okay, understood. Thank you. My first question is around the make revenue. The growth rates has been consistent around 17% past three quarters. Should we expect that to go back to the 20% plus that we had in the past given the positive developments around the products like BuildingConnect or ACC or Fusion 360? Debbie Clifford: Our goal would be to drive greater growth from the make revenue line. That's going to be an important aspect of our ability to achieve our target 10% to 15% growth algorithm over time and it's an area where we've been making incremental investments. So, we anticipate that, that revenue growth rate is going to be higher than the core business. Operator: Ladies and gentlemen, as that is all the time we have for Q&A today, I would now like to turn the call back to Simon Mays-Smith for close remarks. Sir? Simon Mays-Smith: Thank you everyone for joining us. We look forward to seeing many of you on the road over the coming weeks and at our Q1 conference call later in the year. Thanks very much. Operator: This concludes today’s conference call. Thank you for participating and you may now disconnect.
ADSK Ratings Summary
ADSK Quant Ranking
Related Analysis

Autodesk Inc. (NASDAQ:ADSK) Faces Mixed Sentiments Amid Analysts' Ratings

  • HSBC downgrades Autodesk Inc. (NASDAQ:ADSK) from "Buy" to "Hold" due to valuation and growth concerns.
  • Citi raises its price target for Autodesk to $361, highlighting the company's strong third-quarter billings as a sign of healthy revenue collection.
  • Autodesk's third-quarter results present a mixed bag, with uncertainty around fiscal year 2026 free cash flow targets and varied reactions to the new CFO appointment.

Autodesk Inc. (NASDAQ:ADSK) is a leading software company known for its design and engineering software, primarily used in architecture, engineering, construction, manufacturing, and media industries. The company faces competition from firms like Adobe and Dassault Systèmes. Recently, HSBC downgraded Autodesk from a "Buy" to a "Hold" rating, citing concerns about valuation and growth moderation. At the time, the stock price was around $291.98.

Despite HSBC's downgrade, Citi has shown confidence in Autodesk by raising its price target from $358 to $361 while maintaining a "Buy" rating. This decision comes after Autodesk's strong third-quarter performance, particularly in billings, which indicates healthy revenue collection. Citi's analyst views the recent dip in Autodesk's share price as a potential buying opportunity.

Autodesk's third-quarter results have been a mixed bag for investors. While the company has outperformed its peers in estimate revisions, there is some uncertainty regarding its fiscal year 2026 free cash flow targets. Additionally, the appointment of Janesh Moorjani as the new CFO has received varied reactions from investors, adding to the mixed sentiment.

Currently, Autodesk's stock is trading at $291.90, showing a slight increase of $1.26 or 0.43%. The stock has fluctuated between $289.03 and $292.62 today. Over the past year, it has seen a high of $326.62 and a low of $195.32, reflecting its volatility. Autodesk's market capitalization stands at approximately $62.76 billion, with a trading volume of 1,317,326 shares on the NASDAQ exchange.

Autodesk Shares Drop 7% Despite Narrow Q3 Earnings Beat and Revenue Growth

Autodesk (NASDAQ:ADSK) saw its shares decline by more than 7% in pre-market today after reporting third-quarter results that slightly exceeded expectations but failed to impress investors.

For the third quarter of fiscal 2025, the design software company posted adjusted earnings per share of $2.17, beating the Street consensus estimate of $2.12. Revenue rose 11% year-over-year to $1.57 billion, marginally surpassing analyst projections of $1.56 billion.

Autodesk issued mixed guidance for the fourth quarter. The company projected adjusted EPS in the range of $2.10 to $2.16, aligning closely with analyst expectations of $2.12. Revenue guidance of $1.623 billion to $1.638 billion placed the midpoint slightly above the consensus estimate of $1.62 billion.

The company faced headwinds, with its GAAP operating margin dropping by two percentage points to 22% and its non-GAAP operating margin declining by three percentage points to 36%. Autodesk's net revenue retention rate stayed within the 100% to 110% range on a constant currency basis, reflecting steady performance in retaining customers.

Autodesk, Inc. (NASDAQ:ADSK) Sees Positive Analyst Sentiment and Growth Potential

  • Analysts have raised the consensus price target for Autodesk, indicating a positive outlook on the company's future performance.
  • The transition to a subscription model is expected to provide long-term stability for Autodesk, despite short-term cash flow impacts.
  • Activist investor Starboard Value's involvement suggests potential operational enhancements and increased shareholder value, leveraging Autodesk's strong market position.

Autodesk, Inc. (NASDAQ:ADSK) is a leading software company known for its 3D design, engineering, and entertainment software and services. It serves various industries, including architecture, engineering, construction, and media. Autodesk competes with companies like Adobe and Dassault Systèmes. The company is transitioning to a subscription model, which is expected to provide long-term stability.

The consensus price target for Autodesk has shown a notable upward trend over the past year. Last month, the average price target was $330, indicating positive sentiment among analysts. This suggests potential growth and confidence in Autodesk's future performance. The stock price has increased by 27% year-to-date, reflecting this optimism.

Three months ago, the average price target was $300.62, marking a significant increase of nearly $30 in just a quarter. This reflects growing optimism about Autodesk's prospects. However, the company's stretched valuation and challenges from maintenance revenues and competition have caused some investors to remain cautious.

A year ago, the average price target stood at $287.59. Over the past year, the consensus price target has increased by approximately $42.41. Analyst Matthew Hedberg from RBC Capital has set a price target of $295, indicating confidence in Autodesk's potential to surpass quarterly earnings estimates.

Autodesk's transition to a subscription model and recent billing changes have impacted short-term cash flow. However, these changes are expected to provide long-term growth potential. Activist investor Starboard Value is pressuring Autodesk to enhance operations and increase shareholder value, highlighting the company's strong market position and potential in generative AI.

Autodesk, Inc. (NASDAQ:ADSK) Quarterly Earnings Preview

  • Analysts predict an EPS of $2.12, indicating a year-over-year increase of 1.9%.
  • Projected revenue for the quarter is approximately $1.56 billion, a 10.5% increase from the previous year.
  • Financial ratios such as a P/E ratio of 64.45 and a debt-to-equity ratio of 0.95 highlight Autodesk's market valuation and financial stability.

Autodesk, Inc. (NASDAQ:ADSK) is a leading software company known for its design and engineering software, widely used in industries like architecture, construction, and manufacturing. As it prepares to release its quarterly earnings on November 26, 2024, analysts are closely watching its financial performance. Autodesk competes with companies like Adobe and Dassault Systèmes in the software industry.

Wall Street analysts estimate Autodesk's earnings per share (EPS) to be $2.12 for the upcoming quarter. However, the company is expected to report an EPS of $2.11, reflecting a year-over-year increase of 1.9%. This slight difference in estimates highlights the importance of accurate earnings projections, as changes can significantly impact investor reactions, as highlighted by empirical studies.

Autodesk's projected revenue for the quarter is approximately $1.56 billion, marking a 10.5% increase compared to the same quarter last year. This growth indicates strong performance in its core markets. The company's price-to-sales ratio of 11.70 suggests that the market values Autodesk at nearly 12 times its annual sales, reflecting investor confidence in its revenue-generating capabilities.

Despite a high price-to-earnings (P/E) ratio of 64.45, Autodesk's earnings yield stands at 1.55%, providing a measure of return on investment. The enterprise value to sales ratio is slightly higher at 11.89, indicating the company's total valuation in relation to its sales. These metrics suggest that investors are optimistic about Autodesk's future growth prospects.

Autodesk's debt-to-equity ratio of 0.95 shows it has slightly less debt than equity, which is a positive sign for financial stability. However, the current ratio of 0.64 suggests potential challenges in covering short-term liabilities with short-term assets. This could be a point of concern for investors, as it may impact the company's liquidity position.

Morgan Stanley Reiterates Overweight on Autodesk, Raises Conviction in EPS Growth

Morgan Stanley analysts reiterated an Overweight rating on Autodesk (NASDAQ:ADSK) with a price target of $320 on the stock.

The analysts emphasized that Autodesk is Morgan Stanley's top pick, highlighting the company's potential for margin and EPS growth. Autodesk's shares are currently trading at a discount compared to both design software and larger software peers, despite improving fundamentals in areas such as free cash flow, revenue growth, and operating margins.

Following Autodesk's Q2 2025 results, where management emphasized their industry-leading GAAP margins, the analysts conducted an in-depth analysis of the company’s path to further margin expansion, go-to-market optimizations, and the impact of its new transaction model. The analysts believe these factors will drive EPS growth and position the company for multiple expansion, further solidifying Autodesk's strong risk/reward profile.

Deutsche Bank Adjusts Autodesk Inc. Rating to "Hold"

  • Autodesk's quarterly earnings for April 2024 showed a revenue of $1.42 billion, an 11.7% increase year-over-year, and an EPS rise to $1.87 from $1.55, surpassing Wall Street expectations.
  • The company has consistently outperformed consensus revenue and EPS estimates over the last four quarters, indicating strong financial resilience and operational efficiency.
  • Autodesk's focus on 3D AI technology and generative design technologies, along with its significant increase in remaining performance obligations, positions it well for future industry advancements.

Deutsche Bank's recent adjustment of its stance on Autodesk Inc. (NASDAQ:ADSK) to a "Hold" rating, as reported by StreetInsider, reflects a cautious yet observant perspective on the company's future performance. Autodesk, a leader in 3D design, engineering, and entertainment software, has shown a consistent ability to innovate and adapt to the evolving demands of the digital world. This adjustment comes at a time when Autodesk reported a notable increase in its quarterly earnings, showcasing the company's financial health and growth trajectory.

Autodesk's earnings for the quarter ending April 2024 were impressive, with revenue of $1.42 billion, marking an 11.7% increase over the previous year. This growth in revenue is a testament to Autodesk's strong market position and its ability to capitalize on the increasing demand for its software solutions. The company's earnings per share (EPS) also saw a significant rise to $1.87, up from $1.55 in the year-ago quarter, surpassing Wall Street expectations. Such financial metrics are crucial indicators of Autodesk's robust performance and its potential for sustained growth.

The company's ability to exceed analyst predictions, with both revenue and EPS beating the Zacks Consensus Estimate, underscores its operational efficiency and strategic initiatives. Autodesk has consistently outperformed consensus revenue and EPS estimates over the last four quarters, highlighting its financial resilience and the effectiveness of its business model. This trend of surpassing expectations is a positive signal for investors, indicating Autodesk's strong execution and potential for future success.

Operating within the competitive computer software industry, Autodesk's latest financial achievements demonstrate its sustained growth and ability to exceed market expectations. The company's focus on 3D AI technology and generative design technologies positions it well for future advancements in the industry. Autodesk's significant increase in its remaining performance obligations and its leadership in developing industry clouds and platforms for 3D AI products and services further solidify its market position.

Despite the recent decrease in its stock price, Autodesk's financial performance and strategic advancements indicate a promising outlook. The company's market capitalization and trading volume reflect its significance in the industry and investor interest in its growth potential. As Autodesk continues to innovate and expand its offerings, it remains a key player in the software industry, poised for continued success.

Autodesk, Inc. Quarterly Earnings Preview

  • Anticipated Earnings Report: Autodesk is expected to release its quarterly earnings on Thursday, June 13, 2024, with an EPS of $1.8  and projected revenue of $1.4 billion.
  • Q1 Performance: Autodesk reported Q1 revenue of $1.42 billion, an 11.7% increase year-over-year, surpassing both revenue and EPS estimates.
  • Market Position and Innovation: The company's focus on 3D AI and industry clouds has strengthened its market position, reflected in its stock performance and market capitalization of approximately $45.57 billion.

Autodesk, Inc. (NASDAQ:ADSK) is gearing up to release its quarterly earnings report on Thursday, June 13, 2024, after the market closes. The anticipation among investors and analysts is palpable, with Wall Street setting its sights on an earnings per share (EPS) of $1.8 and projecting the company's revenue for the quarter to be around $1.4 billion. Autodesk, a leader in 3D design, engineering, and entertainment software, has consistently demonstrated its ability to meet and exceed market expectations, making this upcoming earnings report a significant event for stakeholders.

In the first quarter ended April 2024, Autodesk reported revenue of $1.42 billion, marking an 11.7% increase over the same period last year. This performance not only surpassed the Zacks Consensus Estimate of $1.4 billion by a margin of 1.46% but also exceeded the anticipated EPS, coming in at $1.87 compared to the forecasted $1.78. This indicates robust financial health and operational efficiency, as the company managed to outperform analyst estimates on both top and bottom lines, a trend that investors hope will continue in the upcoming earnings report.

Autodesk's ability to consistently surpass expectations is a testament to its strong position within the Zacks Computer Software industry. The company's focus on innovation, particularly in 3D AI and industry clouds, has allowed it to maintain a competitive edge and sustain its growth trajectory. With a reported 12 percent increase in first-quarter revenue and a 12 percent year-over-year increase in current remaining performance obligations, Autodesk's strategic advancements in technology and business model evolution are clearly paying off.

The company's stock performance reflects its operational success, despite the fluctuations in the market. Currently trading at $211.5, Autodesk has seen its shares fluctuate between highs and lows, yet maintains a solid market capitalization of approximately $45.57 billion. This resilience in the stock market, coupled with the company's consistent financial performance, makes Autodesk a noteworthy entity in the eyes of investors and industry observers alike.

As the date of the earnings report approaches, all eyes will be on Autodesk to see if it can continue its streak of exceeding market expectations. The company's previous performance, characterized by significant growth in revenue and EPS, sets a high bar for the upcoming quarter. Investors and analysts alike will be keenly watching to see if Autodesk can maintain its momentum and further solidify its position as a leader in the software industry.