Autodesk, Inc. (ADSK) on Q1 2023 Results - Earnings Call Transcript

Operator: Thank you for standing by and welcome to Autodesk First Quarter Fiscal 2023 Earnings Call. I would now like to hand the call over to your host, VP, Investor Relations, Simon Mays-Smith. Please go ahead. Simon Mays-Smith: Thanks, operator and good afternoon. Thank you for joining our conference call to discuss the first quarter results of our fiscal ‘23. On the line with me are Andrew Anagnost, our CEO and Debbie Clifford, our CFO. Today’s conference call is being broadcast live via webcast. In addition, a replay of the call will be available at autodesk.com/investor. You will find the earnings press release, slide presentation and transcript of today’s opening commentary on our Investor Relations website following this call. During this call, we may make forward-looking statements about our outlook, future results and related assumptions, acquisitions, products and product capabilities and strategies. These statements reflect our best judgment based on currently known factors. Actual events or results could differ materially. Please refer to our SEC filings, including our most recent Form 10-K 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. During the call, we will quote several numeric or growth changes 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. Today, we reported record first quarter revenue, non-GAAP operating margin and free cash flow fueled by strong demand and a robust competitive performance. The structural growth drivers for our business that were critical to our performance during the pandemic, such as flexibility and agility, continue to support and propel us during elevated macroeconomic, geopolitical and policy uncertainty. These growth drivers further cement the important role we play in our customers’ digital transformation and increase our confidence in our strategy. Our steady strategy, industry-leading products, platform and business model innovation, sustained and focused investment, and strong execution are creating additional opportunities for Autodesk. By accelerating the convergence of workflows within and between the industries we serve, we create broader and deeper partnerships with existing customers and bring new customers into our ecosystem. A prime example of this is infrastructure. The combination of Revit, Civil 3D, Navisworks, Autodesk BIM Collaborate Pro, InfraWorks, and more recently, Autodesk Construction Cloud and Innovyze delivers industry-leading end-to-end capabilities in transportation and water from planning and design to construction and operations. And our customers can extend those capabilities through our partnerships with Aurigo in capital planning and ESRI in geospatial mapping. This is important because governments and asset owners across the globe are investing growing amounts in next-generation infrastructure to meet the societal and environmental needs of the next century and are retooling now to do it. That equals opportunity for Autodesk. For example, in the first quarter, we signed our second largest EBA ever with a large global infrastructure company in a deal that included Innovyze and Autodesk Build for the first time. Across Autodesk, we are focused on unifying more common data and fluidly connecting more workflows in the cloud in ways that delight our customers and lead them to new, more efficient and more sustainable ways of working. And by doing that, we will move beyond carbon neutrality for ourselves to transform our customers’ carbon footprint. Together, we can design and make a better world for all that advances equitable access to the in-demand skills of the future. Before I turn the call over to Debbie to take you through the details of our financial performance and outlook, I want to update you on important decisions we made about our business in Russia. You will recall that the invasion of Ukraine occurred hours before our last earnings call. In light of the conflict, we halted all of our new and renewal business in Russia on March 3. We strongly believe this decision was the right thing to do and that it is in our long-term interest, even though it comes at a cost, which Debbie will detail in a moment. Of course, our immediate focus remains on the safety and well-being of our employees in the region and we continue to monitor the situation closely. Beyond the immediate impact in Russia, other leading indicators trend positive. For example, usage remained steady in Europe during the quarter and grew in America and Asia-Pacific region; building connected bid activity again hit record levels; and our partner channel remains optimistic. The strong momentum sets us up well for the remainder of the year. Debbie, now over to you to take everyone through the details of our quarterly financial performance and guidance for the year, I will come back afterwards to provide an update on our strategic growth initiatives. Debbie Clifford: Thanks, Andrew. Q1 was a strong quarter driven by broad-based strength across products and regions. If we compare the revenue result versus guidance, the outperformance was due to that strength as well as the upfront revenue in a large EBA, which we had forecasted would close later in the year. Total revenue grew 18% and 17% in constant currency. By product, AutoCAD and AutoCAD LT revenue grew 21%; AEC revenue grew 17%; Manufacturing revenue grew 14%; and M&E revenue grew 24%. By region, revenue grew 24% in the Americas, 17% in EMEA, and 10% in APAC. Direct revenue increased 22% and represented 34% of total revenue, up 1 percentage point from last year due to strength in both enterprise and e-commerce. Our product subscription renewal rates remained at record highs and our net revenue retention rate was comfortably within our 100% to 110% target range. Billings increased 16% to $1.1 billion, reflecting robust underlying demand. Total deferred revenue grew 12% to $3.7 billion. Total RPO of $4.7 billion and current RPO of $3.1 billion grew 11% and 10% respectively, reflecting strong billings growth, and as I flagged last quarter, the timing and volume of multiyear contracts, which are typically on a 3-year cycle. Turning to the P&L, non-GAAP gross margin remained broadly level at 92%, while non-GAAP operating margin increased by 6 percentage points to approximately 34%, reflecting strong revenue growth and ongoing cost discipline. GAAP operating margins increased by 4 percentage points to approximately 18%. As Andrew mentioned, we delivered record first quarter free cash flow of $422 million, up 34% year-over-year, reflecting strong billings growth in both Q4 and Q1. With the broad equity market pullback in Q1 and our strong cash position, we again accelerated our share repurchasing during the quarter. We purchased 2.1 million shares for $436 million at an average price of approximately $212 per share, which contributed to a reduction in our weighted average shares outstanding of approximately $2 million. While our capital allocation strategy remains unchanged, you can expect that we will continue to invest organically and inorganically to drive growth. Over the last two quarters, we have proactively used our strong liquidity to accelerate repurchasing and will continue to be opportunistic in doing so when market conditions allow for it. Now, let me finish with guidance. The overall headline is that the underlying business conditions that we’ve been seeing are unchanged save for Russia and the continued strengthening of the U.S. dollar. Our business continues to perform well and to post top line growth ahead of our peers. As you can imagine, we are keeping a close eye on the geopolitical, macroeconomic and policy environments. But against that backdrop in Q1, renewal rates remain strong; multiyear billings were in line with our expectations; and we exited the quarter with strong momentum. As we look ahead and as with previous quarters, we are assuming that market conditions in fiscal ‘23 are consistent with recent quarters. The decision to halt our new and renewal business in Russia had a direct impact on our outlook. Billings decreased by approximately $115 million, revenue by $40 million and free cash flow by $80 million. Of course, we are not satisfied with that outcome, and we will work hard to mitigate the impact by accelerating our channel evolution, customer retention and digital growth initiatives and by doubling down on early successes from recent acquisitions like Innovyze. Beyond Russia, the U.S. dollar continued to strengthen during Q1. While we benefit from a robust hedging program, the pace of FX volatility has been incredibly rapid, and it’s having an impact on our fiscal ‘23 outlook, reducing billings, revenue and free cash flow by approximately $80 million, $20 million and $50 million, respectively. Bringing these factors together, we expect fiscal ‘23 revenue to be between $4.96 billion and $5.06 billion. We expect non-GAAP operating margin to increase 400 basis points year-over-year to approximately 36%, reflecting 1 point of impact from removing Russia from our forecast. We expect free cash flow to be between $2.0 billion and $2.08 billion. The slide deck on our website has more details on modeling assumptions for Q2 and full year fiscal ‘23. The volatile global environment has reinforced the structural growth drivers underpinning our strategy give us confidence in our long-term growth potential. We continue to target double-digit revenue growth, non-GAAP operating margins in the 38% to 40% range, and double-digit free cash flow growth on a compound annual basis. These metrics are intended to provide a floor to our revenue growth ambitions and a ceiling to our spend growth expectations. Andrew, back to you. Andrew Anagnost: Thank you, Debbie. Our strategy is to transform the industries we serve with end-to-end cloud-based solutions that drive efficiency and sustainability for our customers. Our business is scalable and extensible into adjacent verticals: from architecture and engineering, through construction and owners; from product engineering to product data management and product manufacturing. It is also scalable and extensible between verticals with industrialized construction and into new workflows like XR. By accelerating the convergence of workloads within and between the industries we serve, we are also creating broader and deeper partnerships with existing customers and bringing new customers into our ecosystem. For example, in AEC, AECOM is the world’s most trusted infrastructure consulting firm that delivers professional services throughout the project lifecycle from planning, design and engineering, to program and construction management. With growing investment in infrastructure, customers are increasingly seeking both efficiency and sustainability to meet ESG goals such as net zero carbon, resiliency, quality of life, social impact and safety. This aligns AECOM and its customers closely with Autodesk’s values and capabilities. In Q1, AECOM renewed and increased its EBA with Autodesk. The renewal promotes further platform standardization and now extends from design further into build with the addition of Autodesk Construction Cloud and from bridges and tunnels to water with the addition of Innovyze. Across the globe, our customers are seeking to connect and streamline their workflows. As we enable our partner network to distribute Autodesk Construction Cloud, we serve more of that growing demand. For example, Bravida, which is based in Sweden, is a leading provider of technical end-to-end consulting design, installation and service solutions across the Nordic region, focusing on efficiency and sustainability. It is responsible for the installation of fire sprinklers, ventilation, electrics and safety systems in the tunnels of The Stockholm Bypass Project, the largest infrastructure project in Sweden’s history. Having adopted Autodesk’s AEC collection and realizing 50% cost savings and a significant reduction in carbon dioxide using Revit in the design phase of the project, Bravida was looking for a complementary system to seamlessly connect the build phase. Adopting Autodesk Build enable it to connect office and field data and workflows in the cloud, standardize and track projects accurately and manage procurement and logistics, health and safety and cost more effectively and efficiently. With the launch of Autodesk Build, the introduction of an account-based pricing business model, distribution through our channel partners and giving subcontractors the ability to have their own instance of their data, we are connecting more workflows, both within construction and between adjacent workflows in design, preconstruction and operations and maintenance. After evaluating various project management solutions for more than a year, Donohoe Construction Company, a top mid-market GC in Washington, D.C., chose Autodesk Build to seamlessly connect project, site and cost management workflows. Autodesk’s industry-leading cost management system, which is integrated into and included with Autodesk Build, is anticipated to enable Donohoe to control change order management and reporting much more seamlessly with its project and site management workflows. We are excited to partner with Donohoe to build a sustainable future together. We are investing in Autodesk Construction Cloud to do even more. For example, we launched Bridge to enable subcontractors to have their own instance of their data, a critical factor in improving their business processes. We are also rapidly integrating ProEst so that estimates can be pushed to the cost module in Autodesk Build, enabling it to automatically create a budget. With strong growth from Autodesk Build and the benefit of recently launched ACC bundles for preconstruction and construction operations, Autodesk Construction Cloud reported its best ever new business growth quarter, with an increasing proportion of that growth coming from EMEA and APAC and growing contract size and renewal rates. Turning to manufacturing, we sustained strong momentum in our manufacturing portfolio this quarter as we connected more workflows beyond the design studio, developed more on-ramps to our manufacturing platform, and delivered new powerful tools and functionality through Fusion 360 Extensions. As we connect and develop new workflows in the cloud and provide more ways for customers to use our products, we have the opportunity to renew engagement with some of our legacy customers. For example, a high-tech manufacturer in Germany, which has been using Autodesk software since 1991, was using Inventor software purchased in 2018. By updating from a perpetual license to a product design and manufacturing collection subscription in Q1, the team will benefit from significant process and performance improvements, which alleviate mechanical engineering bottlenecks and better serve its high demand periods. Because of its familiarity with Autodesk, the customer enabled these improvements immediately and leveraged its existing IP without migration. We are happy to have them back on our latest and most secure software. In automotive, we continue to grow our footprint beyond the design studio into manufacturing as automotive OEMs seek to break down work silos and shorten handoff and design cycles. Enovate Motors, an electric vehicle manufacturer in China, added product design and manufacturing collections on top of its Alias and VRED subscriptions to achieve a seamless digital workflow across design and manufacturing. Enovate will be able to build higher quality cars more efficiently by connecting workloads in the cloud that enable more collaboration and better data integrity. Our Fusion 360 platform approach enables customers to seamlessly connect workflows while also delivering powerful tools and functionality to those that needed through extensions. For example, an educational toy manufacturer based in the U.S. started using Fusion 360 about a year ago and quickly recognized the impact working on the cloud would have on its ability to collaborate across sites between product design and product engineering. Q1 was able to seamlessly activate manage, nesting and product design extensions within the Fusion 360 user interface, giving access to even more powerful tools and functionality to those that needed it. For example, the Fusion 360 Manage Extension unlocks additional data management functionality to manage design changes at any stage of production with the click of a button using pre-built workflows. Fusion 360’s commercial subscribers grew steadily, ending the quarter with 198,000 subscribers with demand for our new extensions, including machining, generative design and nesting and fabrication, continuing to grow at an exceptional pace. Outside of commercial use, our education partnerships are helping students learn the in-demand skills of the future. For example, Government Tool Room & Training Center, or GTTC, is a premier vocational institution in India, with 6,000 students across 28 campuses. Q1 GTTC adopted Fusion 360 and its tool and die making courses, because it was easy for students to learn, spanned the entire course from conceptual design through simulation to fabrication, and gave students hands-on experience with next generation workflows such as generative design, 3D printing for additive manufacturing and digital simulation and generation of G-code outputs. And finally, we continue to bring more users into our ecosystem through business model innovation and license compliance initiatives. BESIX is a multidisciplinary firm whose contracts in construction, infrastructure and machine works often have a high level of complexity. To support its standardization effort across all projects of regions, the BESIX group uses BIM Collaborate Pro and Docs to collaborate on Revit projects in a secure common data environment. For additional security and efficiency, it now leverages our premium plan in Flex. By better understanding its usage through the enhanced reporting functions within our premium plant, it can provide access to occasional users through Flex while realizing the additional security benefits of single sign-on across its global employee base. We continue to work with our customers to maximize their access to current and secure versions of our software. For example, an international research institution in Europe, which is both students and employees, was mistakenly using education subscriptions for commercial use cases. By partnering with their leadership, we ensured the relevant departments had access to the necessary tools by combining subscriptions to our industry collections with Flex tokens. The collaborative approach resulted in a compliance deal of over €1 million. During the quarter, we closed eight deals over $500,000 of our license compliances, two of which were over $1 million. Let me finish with the story. I recently visited the FUTURES exhibition at Smithsonian Institution in Washington. I highly recommend visiting if you are in the area this summer before it closes in mid-July. It is the Smithsonian’s first building-wide exploration of the future. Autodesk partnered with Smithsonian to create an interactive experience called Future Communities that brings visitors together to build a sustainable community block using analytics and goal-driven design with Autodesk generative design technology. Guests collaborate both with each other and AI, adjusting the input they deem most important. Each guest takes on a different persona with specific goals and input factors, which include social, ecological and economic considerations, ranging from availability of green space and low-carbon transportation to the reach of public services and employment opportunities. The evolving community block is displayed in real-time, and the technology showcases the types of trade-offs necessary to achieve various outcomes. The exhibit structure was generally designed to be strong and lightweight, using sustainable materials and modular space frame components that can be easily assembled and disassembled for minimum construction waste. The exhibit not only represents Autodesk vision of the future, that of collaborative and connected workflows and data in the cloud that designs and makes a better world for all, that meets the challenges posed by carbon, water and waste, and that advances equity and access to the in-demand skills of the future. But in addition, the exhibit represents a very diverse set of visions for how the future may unfold. The one thing they share is an unwavering sense of optimism about what we can all accomplish together. Every day, our goal is to empower innovators with design and make technology that turns their vision into reality, helping them to achieve the new possible. I share this story because it gives me great confidence in the future of Autodesk and our vision of a better world, design and made for all. Operator, we would now like to open the call for questions. Operator: Thank you. Our first question comes from the line of Phil Winslow of Credit Suisse. Your line is open. Phil Winslow: Thanks for taking my question and congrats on a great strong start to the year. Now Construction Cloud delivered its best new business growth quarter ever. You signed your second largest EBA ever with an infrastructure company. And I loved obviously the example of a manufacturing vendor getting current moving to subscription from a lapsed perpetual license. But when you think about this, investors have been concerned about Autodesk’s exposure, specifically to these cyclical end markets and the potential impact to your business. However, the numbers you just report, the large deals you highlighted clearly don’t show this. So my questions are, what are you hearing from customers about why Autodesk is seeing sustained demand? And what gives you confidence in the durability of these drivers? Andrew Anagnost: Yes. So Phil, I think somebody wrote a report about us not being a cyclical business anymore. I can’t remember who it was. Phil Winslow: analyst, probably, yes. Andrew Anagnost: Probably an incredibly bright analyst. So look, a couple of things happened in the quarter, and we’re projecting those forward through the year just consistently. And I think it’s important to kind of just talk about this notion of diversification not only of geographical spread of our business, but disciplined spread and also business model spread. And I’ll talk about that on a couple of factors. So first off, let’s just talk about what kind of highlighted in resiliency around our business. Throughout the quarter, the monthly active usage that we track regularly continue to strengthen throughout the entire quarter. It continued to strengthen right up to the end. Yes, we absolutely saw a pullback during the early part of the invasion of Ukraine in Europe, but that rebounded as the quarter progressed. So one, we have a strong demand environment, and we’re selling into that demand environment from multiple vectors, construction, infrastructure and general building design as well as manufacturing. So we’re working across these things. And what was happening at the same time, and I think this is an important point about the underlying kind of health and resilience in our business, is even when we saw dips in our new business growth in Europe during – just as the invasion in the Ukraine started, which, by the way, recovered as the quarter progressed, renewal rates strengthened broadly. So we saw a broad strengthening in renewal rates. So that broad strengthening in renewal rate actually was able to offset some of the slowness in the new businesses. All of these things are things that we expect to see continue throughout the year and provide durability and stability for our business. Now the U.S. was strong during the year as well. We did see some softness early on in APAC because it was most sensitive to the currency effects. But if you take out some of the COVID-effective regions like Japan and China, or just Japan specifically, we saw much higher growth rates in APAC than are indicated by the overall results. All of this is a balance between new business and offsetting impacts from renewal businesses. So between the diversity of – our geographic diversity where we’re kind of distributed across multiple spaces, the vectors of diversity we have around selling into infrastructure, construction, core design, manufacturing and the offsetting of really strong renewal rates – increasing renewal rates even in areas of weaker or at least some weakness in new business, that gives us confidence in terms of the durability for the rest of the year. Phil Winslow: Awesome, thanks. Keep up the great work. Andrew Anagnost: Thank you, Phil. Operator: Thank you. Our next question comes from Jay Vleeschhouwer of Griffin Securities. Your question please. Jay Vleeschhouwer: Good evening. Looking ahead into next year, first fiscal ‘24 cash flow, a question as to how you’re going to work with the channel to get through that, 5 or 6 years ago when you went through your first multiphase transition in the model, you were very conscientious about making sure you’ve got the channel through all the changes in terms of upfront, upgrades, maintenance and so forth. And so when you look into next year and beyond, how are you thinking about preserving or managing channel margins, their cash flow, their recurring revenue streams as you go through that valley of your own cash flow next year and then look through a rebound in fiscal ‘25? That’s the first question. Andrew Anagnost: Yes. Alright. Okay. So let’s start with that, Jay. So first off, let’s just back up and talk about the high-level principle that we’re working towards here, right? We’re trying to move away from these upfront multiyear deals to annualized billings. None of us want this. We don’t like the way it creates a lumpiness in our cash flow. Frankly, our partners don’t like the way it creates the lumpiness in their cash flow as well, and they don’t like discounting to get multiyear upfront deals closed. So you look at this, we’re trying to create a more stable, reliable and predictable cash flow build-out beyond – FY ‘24 and beyond. Okay. So yes, FY ‘24 will be the trough. But after that, we’re going to grow much more consistently double digits out and predictably moving forward, which is what we want, what you want. We can’t get there fast enough. And frankly, our partners can’t get there fast enough. So we do integrate programs to help them get there. One of the core programs here right now is we’re encouraging them to work with us on conserving some of that upfront cash they are going to be collecting because that’s cash flow directly into the partner’s pockets, alright? And then we do adjust for early on some of their back-end incentives to ensure that they can transition smoothly from a cash flow basis and continue to do – to work and support our business the way they have. So it’s not that different from what we’ve done previously. But you’re right, we have to support them through this dip. But once we’re all through this dip, it’s this nice predictable cash flow buildup that we all want and is going to create a stronger and more reliable business and more durable business. They like it. We like it. And we’re helping them through it. Jay Vleeschhouwer: Okay. Thank you for that. Shorter-term question, you mentioned a couple of times so far on the call usage rate, which is always useful to hear about. Could you speak about that, Andrew, in terms of vertical or end markets? You spoke about it by geo and generally, but could you speak about it in terms of AEC including, in particular, ACC manufacturing and perhaps even what are you seeing in terms of standalone apps versus collection usage? Andrew Anagnost: Yes. Here is what’s interesting, alright? And this is another one of these things that’s just really great about our portfolio is the increase in monthly active usage was broad-based. There wasn’t any particular place that was stronger or weaker than the other, all right? So we saw increases in monthly active usage of AutoCAD, Revit, Inventor, Fusion. And in fact, in Construction Cloud, we saw a 30% year-over-year increase in monthly active usage, which is a really nice surge on the Construction Cloud side. So there wasn’t any particular standout or holdout in those monthly active usage numbers. They really were broad across the spectrum. Now when you talk about collection usage, we don’t really look at it that way. I mean we just look at adoption with – adoption of the individual products. We don’t necessarily flag it according to a collection. But one thing we have consistently saw is multi-product usage continues to be robust in the collection environment. And actually, we’ve been slicing that data differently over time. So we got a better sense for how multi-product usage was moving forward. And it looks pretty solid. So the people who buy collections really are engaged in multi-product usage, but no hot spots or cold spots in terms of this monthly active usage growth geographic or industry-wise. I remember there was a slowdown when Russia invaded Ukraine, but it came back as the quarter progressed. Jay Vleeschhouwer: Understood. Thank you, Andrew. Andrew Anagnost: Thank you, Jay. Operator: Thank you. Our next question comes from Saket Kalia of Barclays. Your line is open. Saket Kalia: Okay, great. Hi, guys. Thanks for taking my questions here. Debbie, maybe I’ll start with you. Autodesk did 34% operating margin this quarter, great to see. The guide is for 36% for the year. I know we’re taking a point out of that for Russia. So it’s not a huge ramp through the year, but it’s a question that we get nonetheless. So I’m just wondering for everyone’s benefit, you could just go one level deeper into some of the moving parts around the margin expansion this year, particularly in this inflationary environment. Debbie Clifford: Sure. Thanks, Saket. So before I say anything, I want to let all of you guys know that I have a terrible cold. I say this now because I know my voice sounds gravelly. So I just figured I’d be upfront about it, so there weren’t any questions. I also – I don’t want you to interpret my unusual sounding voice as a lack of enthusiasm. Unfortunately, it’s just a garden variety cold, not COVID that I’m struggling with. So anyway, just wanted to be upfront about it. Saket Kalia: I appreciate that. Debbie Clifford: On to your question, at the end of the day, the biggest driver of margin improvement over time is going to be revenue growth. And it’s that revenue growth combined with our continued discipline with spend that’s going to deliver that leverage. For this year’s guide, the ramp to 36% is a little less peak because of the impact to the top line that we saw from Russia, and we had that impact flow through to the margin. We think it’s important to continue to invest to further our strategy. We don’t want to be doing any kind of knee-jerk reaction on spend because of Russia. Yes, the inflationary pressures that you mentioned are there. We’re monitoring them closely. But right now, we feel it’s all manageable. I’d also point out that the margin target at 36% represents a 4 percentage point improvement year-over-year. So we’re delivering considerable operating margin leverage at our scale. As we progress through fiscal ‘23, we’re assuming a gradual improvement in margin as the revenue grows and as we continue to tightly manage our spend. That’s a similar pattern to what we saw in fiscal ‘22. Saket Kalia: Got it. Very helpful. Andrew, maybe for you for my follow-up. Thanks for the macro commentary. Great to see the consistent renewal rates and the increase in monthly active users. I was wondering if you could just look at it from a different lens and wondering if you could just talk about your new business, sort of how that trended in Q1 qualitatively, of course? And how you’re thinking about that as part of the full year guide? Andrew Anagnost: Yes. So the new business trended pretty consistently in the U.S. throughout the quarter. It trended fairly consistently in APAC throughout the quarter. There was a slowdown during the Ukrainian invasion at the beginning that recovered as the quarter progressed. And what we’re doing right now is we’re looking at those new business trends, and we’re essentially carrying them forward into the year, expecting it to continue at kind of similar levels as we go through the year. Obviously, we saw a complete evaporation of new business in Russia and some impact in Belarus. But like I said, Europe recovered after – shortly after the invasion progressed. So that’s the way we’re viewing these. That’s the way they played out throughout the quarter, and we’re assuming similar performance throughout the year. Saket Kalia: Got it. Very helpful, guys. Thank you. Andrew Anagnost: Thank you, Saket. Have a good one. Operator: Thank you. Our next question comes from Adam Borg of Stifel. Your line is open. Adam Borg: Great. Thanks so much for taking the question. Maybe just for Andrew, you spent a good – as a matter of time in your prepared remarks talking about infrastructure, including the largest EBA deal and just the breadth of your portfolio. So I’d love to just get an update on your conversations with the industry, how you’re thinking about the upfront or the existing infrastructure bill, latest thoughts on the impact to the industry and ultimately the impact of Autodesk, any such timing there? Andrew Anagnost: Yes. So you probably read recently that no, not a lot of money has made it out yet. This is what we told you when the bill originally passed. It takes time for these things to make their way into the system. Most of our customers are in proposal mode right now. Departments of Transportation and other places are in proposal mode. Some grants have been awarded, and the money will start flowing soon. So we expect to see projects related to some of the infrastructure build spending to show up. We are particularly interested in the $100 million that’s being targeted to help departments and transportation drive digital technologies into their processes. And we’ve been talking to the Department of Transportation – the U.S. Department of Transportation on how best to kind of drive that into the DOT so that they can actually utilize that money to change their processes. But we haven’t seen a lot yet. But what we are seeing is customers like, for instance, what we saw with AECOM when their EBA renewals coming on, they are layering in construction cloud and infrastructure capability, specifically Innovyze in the AECOM deal to get ahead of some of this. Water is going to be a big deal in the infrastructure spending, and it’s showing up to be a big deal in a lot of places. I expect we’re going to see that trend continue as we head into some of the contracts actually getting awarded and the money actually flowing out of Washington, that people will buy, for instance, Innovyze on some of their renewals and some of their kind of deal discussions with us to get ahead of some of the things that they are probably going to be bidding on. Adam Borg: That’s really helpful. And maybe just a real quick follow-up on the macro, obviously, you guys are very clear about the diversity of the strength that you’ve seen. And maybe I’ll just ask the diversity question slightly differently. In the past, you talked about a small end of the market, the mid-end and the larger end by different customer sizes, by employees or seats. I’m just curious, any differentiation you saw across the installed base, looking that way in terms of macro, both the installed base and new business there? Thanks again. Andrew Anagnost: Yes. No significant differentiation, actually. The low end of the business held up quite well, actually. And we have a standard clip of new customer acquisition that we see just about every quarter to manage our business. It didn’t change. It held steady and the new customer acquisition, generally speaking, the customers that have never been in our database before, generally come from the low end of our business. So the low end held up well. You saw the high end held up well. There was some pressure with regards to people kind of growing their installs, net revenue retention rate. So new inside of existing accounts saw some pressure, but not a lot. And actually, that improved as well. So, no discernible strong difference worth noting between the various segments. Adam Borg: Excellent. Thanks again for the time. Operator: Thank you. Our next question comes from Matt Hedberg of RBC Capital Markets. Please go ahead. Matt Hedberg: Great. Thanks, guys. Hey, Andrew, maybe for you first. Obviously, I think we all understand at least that this business is not as cyclical as Autodesk of old. And I think that’s clear through the subscription transition here. Now if the global economy works is slow, I just wanted to double-click on really the value of your subscriptions and why these renewal rates could be better than a lot of investors perceive even if there is a slowing. Andrew Anagnost: Well, first off and foremost, they need these subscriptions to do their jobs, right. They have to – they need the software to build their – to do their book of business, right. And if you look at our customers and you talk to our customers, and I am sure you looked at some of the indicators and some of the things that are out there. Our customers have a fairly robust book of business. In fact, most of our customers are building up a backlog. And if you have a conversation with them, their biggest challenge right now is I can’t hire, I am having trouble hiring, materials aren’t showing up on time. Like I told you last year, they were likely to price inflationary pressure into their bids. So, it’s not so much that they are dealing with cost compression between bid price and cost price. It has a lot more to do with labor and access to the materials for delivery. None of them are talking about pulling back anytime soon because of the backlog they are seeing in their business. So, they need the software. They need it. They need it now. So, they are going to continue to renew this software in order to keep using it. And they are looking to hire more people. They just can’t find them right now. Matt Hedberg: That’s super helpful. Thank you for that. And then, Debbie, we will see if your voice can hold up here. Obviously, a big year for multiyear renewals that ramps throughout the year, but I am wondering, was there anything that surprised you about billings duration in 1Q? And maybe how might that progress as the year unfolds? Debbie Clifford: Hi. Thanks Matt. Nothing surprising, we continue, of course, to track the multiyear cohort closely. And the proportional volume that we have been seeing for multiyear was in line with our expectations for all of fiscal ‘22 and also in through Q1 of fiscal ‘23. So, that gives us confidence in our fiscal ‘23 outlook. Matt Hedberg: Got it. Well done guys. Operator: Our next question comes from Joe Vruwink of Baird. Your line is open. Joe Vruwink: Great. Hi everyone. One thing that stood out this quarter was the accelerating growth from the partner channel. How much would you credit some of the recent initiatives like opening up Construction Cloud or being able to get in front of customers with some of the new commercial formats as opposed to just kind of the general trends in the business that you have been talking about? Andrew Anagnost: Yes. That’s an excellent question. I can’t give you a particularly deep answer there. However, we did see significant growth in the partner channel with Construction Cloud, and we are starting to light up Construction Cloud in the channel, which is really important for us in terms of our mid-market expansion of that business. So, it probably had an effect on certain key partners. But to give you the exact detail about how much of that was related to new business within the channel versus their – the traditional business they are turning over, I can’t really give you an exact breakdown on that. Debbie, do we have any fidelity on that at all with regards to the channel business? Debbie Clifford: Not at this point, I would say. I mean we saw broad-based strengths through the channel – through our channel partners during the quarter outside, of course, of Russia. And then that immediate slowdown that we talked about in Europe that then picked back up as we exited Q1. And we did see that momentum as we exited Q1. But I wouldn’t highlight anything specific. Certainly the success that we are seeing in Construction is helping. But remember, Construction, while it’s an explosive growth area for us, on the whole, it’s still a smaller part of our business. So, that strength is contributing to overall partner strength, but we are also seeing just broad-based strength through the core of our business as well. Joe Vruwink: Okay. Great. And then I will ask another macro question. But can you maybe contrast the business environment we have been in late February onward? It sounds like, ultimately, trends have been good and stable. Contrast that with last fall. Obviously, inflationary pressures still around. They haven’t abated. We are layering on some incremental macro things, but it’s stability now as opposed to some moderation last fall, maybe differences or what you see is contributing to the stability more recently. Andrew Anagnost: Yes. Well, if you remember back in the fall, I talked a lot about some of our customers being caught off-guard by the rapid inflation and supply chain difficulties. So some of our customers were on fixed bid contracts. And fixed bid contracts, when your cost of goods are going up, are really a serious issue for their businesses. So, their businesses were feeling a lot of pinch. Manufacturers were able to pass the cost through to their customers directly, AEC customers less so. So, manufacturers suffered more from some of the supply chain things. What you are seeing now is customers – they are not surprised by this. They know how to bid the contract. So, there is a general kind of bidding parity out there, and people are building in inflationary impacts into their bids and into their projects. So, that creates a much more stable environment for them with regards to having a book of projects that are – having their margins deteriorate rapidly and some that you want to get to that have better margins. So, what they are seeing right now is just a better spectrum of margins across the projects. That’s one key thing that contributes to the stability. Does that make sense? Joe Vruwink: It does. Yes. Thank you. Andrew Anagnost: And we fully expected them to do that. Operator: Thank you. Our next question comes from Keith Weiss of Morgan Stanley. Your line is open. Keith Weiss: Hi. Congrats and thanks for taking the question. Very nice quarter. Maybe following on that last question, really a two-parter. One, Debbie, when you are talking to us about the full year guidance, it seems like we are adjusting for currency. That’s just about it. It doesn’t sound like we are adjusting the forecast down for anticipation of any macro weakness or any further weakening of demand trends. So, one, I just wanted to clarify that side of the equation. And then two, if demand does weaken and you do see the macro impacts kind of catching up with all – in software land, what’s the reaction on sort of the spending side of the equation? Is the philosophy that we are looking to protect free cash flows, or is it the market opportunity is too big and we really need to keep investing for growth, and we are going to look to sustain and take advantage of your balance sheet to be able to sustain that investment and get ahead of your competitors? I am trying to understand kind of your philosophy on how you view potential demand slowdown. Thank you. Debbie Clifford: Thanks. Keith, lots to unpack there. So, if I got lost a little bit as I go, please keep me on it. Let’s start with the guidance. The impact to the guidance that we are talking about today relates to FX and Russia. You said FX, but it also includes Russia. There is no change to the underlying business assumptions for the rest of our business, and that’s because we haven’t seen a change in the demand environment for the rest of our business. As a matter of fact, although we saw a bit of a slowdown focused mostly on Europe at the onset of the invasion of Ukraine, we saw a bounce back, and we really exited Q1 with momentum. And so that gives us confidence as we look to the rest of this year. And we have built into our guidance assumptions that reflect the demand that we saw as we exited Q1. And then when we think about margin, remember that with the subscription business model, we have a very resilient business model. Even with the adjustment to revenue for Russia, it was only about a point of our total revenue, we let that flow through to operating margins because we want to make sure that we are not doing any kind of knee-jerk reaction on spend. We think it’s important to continue to invest to make sure that we can further our strategy. I don’t think – I don’t see a scenario at this point where if the world – or the economy were to deteriorate even further that we would see substantial further pressure on operating margins because of that resilient business model. But of course, we are going to manage our business in the best way possible. Andrew Anagnost: And this is absolutely the right time to invest in the business. When you are a business of our size with our resilience and our footprint, and you are up against smaller, less resilient, more challenged competitors, you invest. You invest. You pull ahead of the competition. You keep focused on the things you are trying to do. You expand your category leadership. You solidify category leadership in other places. We have got category leadership in 3D for BIM, which is a very important growth segment in AEC. We have got category leadership for design through Construction, in the Construction space, deals like deals like Bravida, AECOM, BESIX. These are all people trying to buy into this connected AI-driven cloud-based design through construction environment. That’s the category we are in, and we are kind of already the king. So, this is the perfect time to continue to invest. It helps you lap the competition. The competition will be able to invest to the same degree. I think this is not the time you pull back, right, especially given the underlying strength of our business. It’s solid. You can see it. We have got the multiple vectors of resiliency here and the kind of nice portfolio of options that we can leverage. I am definitely in a mindset that investment is good for us. Keith Weiss: Got it. That’s super clear and long-term I think that makes sense. Operator: Thank you. Our next question comes from Steve Koenig of SMBC Nikko. Your line is open. Steve Koenig: Hey Andrew. Hey Debbie. Thanks for taking my question. Debbie, I have a cold, too, and it’s not COVID. So, we are in the same boat. So, hope you get better soon here. I wanted to – I may have missed it and apologize if I did. But can you give us a little more specifics on when you saw business start to bounce back in EMEA, was it right at the end of the quarter? Was it a week after? Was it a little before? And yes – and then I have got one more for you, Debbie. Andrew Anagnost: Yes. Actually, it was fairly short-term after the initial invasion. It was within weeks, alright. It wasn’t like it was a long thing. It fell off. It slowed down a bit as the invasion started. And then within a few weeks, it was rising back up again and back up to where it had started. So, it didn’t take that long. It surprised us, honestly. Steve Koenig: And was it – I was trying to parse your earlier statements. Was it kind of balanced between new business and renewals, or was it kind of more one or the other? Andrew Anagnost: Renewal stayed strength – strong throughout the entire cycle, alright. So, renewals kept building as the quarter progressed. There was never a slowdown in renewal momentum. A matter of fact, if anything, it just kept strengthening and strengthening, alright. It was only in the new business part that we saw a slowdown post invasion that recovered. So, no, renewals just kept building. Steve Koenig: Yes. Got it. Okay. Great. And then for my follow-up, and actually either of you are welcome to answer this as you see fit. So, you raised prices at the end of March, and I am sure that’s all embedded in your guidance. And it allows you to invest appropriately and get to the margins you want. How do you think about in this inflationary environment your internal compensation trajectory and also what you are doing with partners? And how does inflation affect your plans there? What do you have to tweak or finesse to – you have very high employee retention, you have very good rates. So, how do you maintain that? Thanks and I appreciate taking my questions. Andrew Anagnost: Yes. So let me – because there is two questions there. First, let me comment on the price increases so that we are all on the same page here. The price increases were highly targeted to certain parts of the world where we had artificially suppressed the price below our long-term goal of having standard euro, U.S. and yen-denominated pricing. So, what you are seeing is, in certain places, we are raising prices to equalize so that we can get to this kind of standard-based pricing that simplifies some of our go-to-market practices. So, we had some artificially suppressed prices in regions, and that’s what was going on there, okay. It’s – there is no change in our standard pricing policy. In fact, places like Europe did not see a price increase, alright. So, I just want to be clear, we are all on the same page with regards to pricing and the things associated with that. Now, with regards to inflationary pressures and uncertainty in employment area , but we are no different, alright. We see pressure in terms of employee compensation and trying to help our employees navigate an increasingly inflationary environment. We increased our raised pool. We increased our bonus this year. And equally important, we are increasing our stock-based compensation, and you will probably see us continue to increase our stock-based compensation for our employee base. So, these moves were made and baked into the year well ahead of the start of the year to ensure that we were able to meet our employees or at least try to meet our employees where they were at. But we will certainly continue to look at our pay position. We will probably continue to see some pressure there in terms of staying competitive. We are retaining employees at high rates. We will also continue to use stock-based compensation more robustly and more broadly within the organization, which we think is good for the company, good for investors and good for employees. Steve Koenig: It sounds good. Thanks very much Andrew. Operator: Thank you. Our next question comes from Bhavin Shah of Deutsche Bank. Your line is open. Bhavin Shah: Great. Thanks for taking my questions and I will focus my question to Andrew and say Debbie both of course. Andrew, just hoping to get to the call, you noted the robust competitive performance during the quarter. Can you maybe just elaborate on this? What verticals or products are seeing better success or even improved win rates? And what’s driving some of this? Andrew Anagnost: Yes. Well, it’s basically every sector. I mean every one of our industries, we are growing faster than our competitors, alright. So, we are taking share as we are selling more seats in some highly competitive industries. So, you are seeing us doing well in AEC. You are seeing us doing well in manufacturing, both on seat counts and revenue counts, which I think is really important because you want to watch both of those performances. We even did quite nicely in media entertainment year-over-year. So, we are absolutely seeing broad-based competitive performance. I mean obviously, one of the places that we all watch is Construction, too. In Construction, if you look at the kind of the raw make numbers, we grew 24% year-over-year. But you got to remember, some of that construction that make opportunity is actually in the EBAs, which are counted a design. So, when you look at our total make performance and taking that – those EBA impacts where we kind of put – make components into the EBAs, we grew into the mid-30s. And Construction Cloud monthly active usage grew slightly north of 30%. This is all great, solid competitive performance. AEC – Construction Cloud of its best new business growth quarter. International growth for Construction Cloud was significantly higher than its regular growth. We are lighting up the channel in the mid-market. We are kind of solidifying our category leader position in this design through construction position. Essentially, anybody else in this player – this space is kind of outside that category, they are very niche or there is being waiting for the industry to move on and move past them. So, I think we are in a very strong competitive position right now. I think it’s our job to continue to maintain that. But it was across all the industries we serve. Bhavin Shah: Super helpful. And thanks for that color. And just one quick follow-up. It was really interesting to see that large EBA deal include Innovyze, and these are good things here as well. Where are you on your integration plans just with this solution? And where are you in terms of evolving the product set here? And how do we just think about the pipeline of customers who are looking to leverage some of your water-based products? Andrew Anagnost: Yes. Look, we have made really great progress integrating Innovyze in. The company was fairly similar to us when we bought them. So, there is a lot of things that are rapidly getting integrated. Of course, there are some product integration pieces and some back-office systems that are still kind of working through some of the integrations. But in terms of integration, that’s not a barrier right now to where we are at with Innovyze. One of the things that’s exciting about what Innovyze does is it’s already kind of fulfill the end-to-end vision for water that we have for construction and manufacturing. It goes everywhere from design all the way to operate. And it has some fairly sophisticated cloud-based tools for water infrastructure operators, sewage treatment operators, other water infrastructure operators that allow them to actually manage the facilities once they have been put into operations. So, it’s a very robust solution. It covers a very broad piece of it, and it fits incredibly nicely into our portfolio, both story-wise, strategy-wise, and frankly, sales motion-wise. Operator: And ladies and gentlemen, that is all the time we have for Q&A today. This concludes today’s conference call. Thank you for participating. You may now disconnect.
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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.