Autodesk, Inc.
CEO : Dr. Andrew Anagnost Ph.D.
Quarterly earnings growth(YoY,%)
| Period | Revenue | Operating Income | EPS | Release Date |
|---|---|---|---|---|
| 2025 Q3 | -7.4% YoY | 1.2% | -319.5% | 2024-08-29 |
Betsy Rafael says,
Revenue and Growth Performance
- Total revenue increased by 12%, with a constant currency growth of 13%.
- AutoCAD and AutoCAD LT revenue grew by 8%, AEC by 15%, and manufacturing revenue by 17%.
- Media and Entertainment (M&E) segment showed a growth of 5%.
- Direct revenue increased by 21%, accounting for 40% of total revenue, a 3 percentage point increase from last year.
- **Overall revenue growth supports positive investor sentiment.**
Transition to New Transaction Model
- The shift to the new transaction model affects billings, deferred revenue, and operating costs.
- Channel partner payments under the new model are recorded as sales and marketing expenses.
- This transition causes timing headwinds but not a change in business momentum.
- **Expected to provide long-term revenue tailwinds and optimize business operations.**
Billing and Revenue Guidance
- Revised fiscal ’25 billings guidance is between $5.88 billion and $5.98 billion.
- Revenue guidance is increased to a range between $6.08 billion and $6.13 billion.
- The transaction model launch in Western Europe provides a tailwind to 2025 billings.
- **Guidance revisions align with continued growth expectations.**
Free Cash Flow and Shareholder Returns
- Free cash flow for fiscal ’25 is now expected between $1.45 billion and $1.5 billion.
- Fiscal ’26 free cash flow is projected to reach approximately $2.05 billion.
- 471,000 shares were repurchased for $115 million in Q2, with increased buybacks anticipated.
- **Continued focus on capital returns enhances long-term shareholder value.**
Operational Efficiency and Margin Improvements
- GAAP and non-GAAP operating margins increased by 4 and 1 percentage points, respectively.
- Stock-based compensation as a percentage of revenue is expected to fall below 10% over time.
- Operational improvements are aiding in mitigating the costs from the new transaction model.
- **Commitment to maintaining competitive GAAP margins is emphasized.**
| Metric | Q2 2025 Value | Fiscal 2025 Guidance Range |
|---|---|---|
| Total Revenue | 12% growth | $6.08B – $6.13B |
| Billings | 13% increase | $5.88B – $5.98B |
| Free Cash Flow | $203M | $1.45B – $1.5B |
| Operating Margin | Increase by 4 points | 35% – 36% |
Andrew Anagnost says,
Revenue Growth and Guidance
- Autodesk reported a 13% revenue growth in constant currency for both the second quarter and the first half of the fiscal year.
- The company has raised its guidance for the full year, indicating confidence in sustained business momentum.
- The new transaction model was successfully launched in North America in June and is expected to launch in Western Europe in September, supporting continued growth.
Strategic Initiatives and Investments
- Autodesk is focusing on secular growth trends such as digital transformation in AEC and the cloud transition in manufacturing and entertainment.
- Investments in cloud, platform, and AI are underway to enhance customer solutions and expand the ecosystem.
- The company is modernizing its go-to-market approach for better customer relationships and increased efficiency.
Financial Performance and Margins
- Autodesk expects to reach the midpoint of its fiscal ’26 non-GAAP operating margin target of 38% to 40% in fiscal ’25, a year ahead of schedule.
- This represents approximately a 300 basis points improvement since fiscal ’23.
- The new transaction model is anticipated to enhance sales and marketing efficiency, contributing to industry-leading GAAP margins.
Shareholder Returns and Capital Deployment
- Disciplined execution and capital deployment strategies are driving operational efficiency and supporting revenue and cash flow growth.
- Share buybacks are expected to increase in fiscal ’26 as free cash flow recovers from a fiscal ’24 trough.
- This will likely result in further share count reduction, continuing the trend of strong capital returns to shareholders.
Key Metrics and Future Outlook
- Non-GAAP operating profit, including stock-based compensation, will be a key metric to monitor as the company transitions its business model.
- The company expects continued strong and sustained momentum in terms of both growth and resilience relative to peers.
Q & A sessions,
AEC and Construction Business Performance
- Strong momentum in AEC (Architecture, Engineering, and Construction), driven by infrastructure and construction sectors transitioning to comprehensive cloud-based solutions.
- Key partnerships include Thornton Tomasetti and a European consortium of water operators enhancing their capabilities with Autodesk solutions.
- Adoption of Autodesk Build by a major Midwest subcontractor, highlighting the value of connected workflows and data control.
- Autodesk’s construction business continues to show robust net new customer growth, reinforcing its industry-leading position.
Manufacturing Sector Advancements
- Significant expansion of EBA with a leading European automotive manufacturer, utilizing Alias, VRED, and Flow solutions to streamline processes.
- Meissner utilizes Autodesk tools to enhance production cycle times and reduce costs in tool and plant construction.
- Increased demand for Fusion extensions, boosting average sales prices and driving innovation at reduced costs.
Strategic Educational Partnerships
- Bochum University in Germany replaces a competitive solution with Autodesk Fusion, highlighting expanded capabilities in electronics and PCB design.
- Autodesk software facilitates better collaborative learning and reduces administration costs, enhancing employability for students.
Financial Performance and Guidance
- Revenues and free cash flows show substantial growth, with guidance up 1% at the midpoint.
- Transition from multi-year contracts billed upfront to annual billings is now effectively complete, smoothing revenue recognition.
- Non-GAAP targets for the year are set to be achieved ahead of schedule, underscoring discipline and strategic focus.
- Tailwinds for revenue growth expected to be greater in fiscal ’26 than in ’25, with a resulting headwind to margins that is actively managed.
Market and Geographic Insights
- AEC sector continues to perform well, aided by growing construction activities and strong international growth.
- Manufacturing beats competitors, while media and entertainment segments face challenges from recent strikes.
- Geographical performance mixed with strengths across most regions, but China and Korea present challenges.
- Autodesk’s business model demonstrates resilience with balanced project and geographic diversification.
| Key Metric | Current Performance | Expected Impact |
|---|---|---|
| Revenue Growth | Up 1% at midpoint | Improved visibility with new billing model |
| Free Cash Flow | $2.05 billion at midpoint | Significant increase expected next year |
| Market Expansion | Strong international growth | Continuous further expansion globally |
No bad stock 