Summary of Autodesk (ADSK) 2025 Conference Call Company Overview - **Company**: Autodesk (ADSK) - **Date**: September 04, 2025 - **Key Speakers**: Sid Huxar (VP of Construction), Mike Haley (SVP of Autodesk Research), Simon (Investor Relations) Core Industry Insights - **Industry Focus**: Construction, Manufacturing, Media Entertainment - **Key Challenges in Construction**: - Labor shortages with nearly 40% of the workforce expected to retire in the next three years [78] - Supply chain issues affecting margins [79] - Rising interest rates impacting project financing, particularly in multifamily residential sectors [80] AI Strategy and Implementation - **AI Strategy**: - Focus on automating tedious tasks across design and construction workflows [10][11] - Enhancing user experience by simplifying complex software through AI [12][13] - Continuous improvement of AI tools based on user feedback, with an 80% acceptance rate of AI predictions in new features [22][21] - **AI Lab**: Established in 2018 to develop AI capabilities tailored to Autodesk's unique data and workflows [15][16] - **Product Development**: Introduction of AI-driven features like "auto constraint" in Fusion, which has seen rapid adoption and positive feedback [19][20] Market Position and Competitive Landscape - **Competitive Advantage**: - Autodesk is a leading publisher of scientific information in AI for design, with a significant head start over competitors [50][51] - The complexity of design data creates barriers for new entrants, making it difficult for startups and traditional competitors to replicate Autodesk's capabilities [52][56] - **Future Competition**: Anticipation of increased competition, particularly from new entrants and traditional software companies beginning to invest in AI [58] Financial and Growth Outlook - **Growth Trajectory**: The construction business is expected to grow at a rate similar to the make business, around 20% [93] - **International Expansion**: Significant growth opportunities identified in markets like India and the Middle East [95] - **Customer Engagement**: Increased traction with large contractors and owners, who are becoming more accountable for project outcomes [99][100] M&A Strategy - **M&A Focus**: Autodesk aims to invest in adjacent verticals and technology enhancements, with a capital allocation strategy that includes R&D and share repurchases [74] Conclusion - **Overall Outlook**: Despite challenges in the construction industry, Autodesk remains optimistic about its growth prospects, driven by strong backlogs, international expansion, and the successful integration of AI into its product offerings [82][84]

Core Viewpoint - Autodesk Inc. has demonstrated resilience in the SaaS market, overcoming initial market skepticism and showcasing strong financial performance and growth potential despite the rise of artificial intelligence applications [1][4][10]. Company Overview - Autodesk's stock is currently priced at $315.15, with a P/E ratio of 65.34 and a price target of $356.83, indicating a potential upside [2]. - The company operates across various sectors, including construction, automotive, and manufacturing, which provides a regulatory moat against competition from freelance and makeshift applications [3]. Financial Performance - Autodesk reported earnings per share (EPS) of $2.17, surpassing market expectations of $2.12 [4]. - Revenue growth was recorded at 18% year-over-year, with billings reaching $1.7 billion, a 36% increase compared to the previous year, indicating both customer growth and increased spending per customer [6]. - Free cash flow for the quarter was $451 million, representing a significant increase of 122% year-over-year, allowing for reinvestment and potential shareholder rewards [8][9]. Market Sentiment and Analyst Ratings - Wall Street analysts currently rate Autodesk as a Moderate Buy, with a target price of $355.2, suggesting approximately 12% upside potential [10]. - Analysts from RBC and UBS have set price targets of $380 and $385 respectively, indicating confidence in the stock's potential for further growth [12]. - AQR Capital Management increased its holdings in Autodesk by 68.9%, making it the largest institutional holder, reflecting institutional confidence in the company's fundamentals [13][14].

Core Insights - Autodesk has remained relatively unnoticed during the AI boom despite being a significant player in the technology sector [1] Company Analysis - Autodesk is recognized for its growth opportunities in technology-related sectors, particularly in relation to current and future trends [1]

PART I. FINANCIAL INFORMATION [ITEM 1. FINANCIAL STATEMENTS](index=4&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) The company presents its unaudited condensed consolidated financial statements for the periods ended July 31, 2025 [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Condensed Consolidated Statements of Operations (Three Months Ended July 31) | Metric | 2025 (Millions USD) | 2024 (Millions USD) | Change (%) | | :--- | :--- | :--- | :--- | | Total Net Revenue | 1,763 | 1,505 | 17.1% | | Gross Profit | 1,604 | 1,365 | 17.5% | | Income from Operations | 444 | 343 | 29.4% | | Net Income | 313 | 282 | 11.0% | | Diluted Net Income Per Share | 1.46 | 1.30 | 12.3% | Condensed Consolidated Statements of Operations (Six Months Ended July 31) | Metric | 2025 (Millions USD) | 2024 (Millions USD) | Change (%) | | :--- | :--- | :--- | :--- | | Total Net Revenue | 3,396 | 2,922 | 16.2% | | Gross Profit | 3,077 | 2,645 | 16.3% | | Income from Operations | 677 | 642 | 5.5% | | Net Income | 465 | 534 | -12.9% | | Diluted Net Income Per Share | 2.15 | 2.46 | -12.6% | [Condensed Consolidated Statements of Comprehensive Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) Condensed Consolidated Statements of Comprehensive Income (Three Months Ended July 31) | Metric | 2025 (Millions USD) | 2024 (Millions USD) | | :--- | :--- | :--- | | Net Income | 313 | 282 | | Total Other Comprehensive Income (Loss) | (6) | 14 | | Total Comprehensive Income | 307 | 296 | Condensed Consolidated Statements of Comprehensive Income (Six Months Ended July 31) | Metric | 2025 (Millions USD) | 2024 (Millions USD) | | :--- | :--- | :--- | | Net Income | 465 | 534 | | Total Other Comprehensive Income (Loss) | 31 | (15) | | Total Comprehensive Income | 496 | 519 | [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheets (Millions USD) | Metric | July 31, 2025 | January 31, 2025 | Change (%) | | :--- | :--- | :--- | :--- | | Total Current Assets | 3,489 | 3,482 | 0.2% | | Total Assets | 10,856 | 10,833 | 0.2% | | Total Current Liabilities | 4,566 | 5,151 | -11.4% | | Total Liabilities and Stockholders' Equity | 10,856 | 10,833 | 0.2% | | Total Stockholders' Equity | 2,715 | 2,621 | 3.6% | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Condensed Consolidated Statements of Cash Flows (Six Months Ended July 31, Millions USD) | Metric | 2025 | 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | 1,024 | 706 | 45.0% | | Net Cash Provided by (Used in) Investing Activities | 8 | (864) | 100.9% | | Net Cash Used in Financing Activities | (634) | (221) | 186.9% | | Net Increase (Decrease) in Cash and Cash Equivalents | 404 | (379) | 206.6% | | Cash and Cash Equivalents at End of Period | 2,003 | 1,513 | 32.4% | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) [Note 1. Basis of Presentation](index=8&type=section&id=Note%201.%20Basis%20of%20Presentation) - Financial statements are unaudited and prepared under U.S. GAAP for interim reporting, consistent with the previous annual report, with no material changes to accounting policies[18](index=18&type=chunk) [Note 2. Recently Issued Accounting Standards](index=8&type=section&id=Note%202.%20Recently%20Issued%20Accounting%20Standards) - FASB issued ASU 2024-03 (Expense Disaggregation Disclosures), effective for fiscal year beginning February 1, 2027, requiring disaggregated expense disclosures[20](index=20&type=chunk) - FASB issued ASU 2023-09 (Income Tax Disclosures), requiring enhanced income tax disclosures, effective for annual financial statements ending January 31, 2026[20](index=20&type=chunk) - FASB issued ASU 2023-07 (Segment Reporting), expanding segment disclosures, adopted for annual disclosures in fiscal year ended January 31, 2025, and for interim periods beginning February 1, 2025[21](index=21&type=chunk) [Note 3. Revenue Recognition](index=9&type=section&id=Note%203.%20Revenue%20Recognition) - Autodesk recognizes revenue from product subscriptions, cloud service offerings, EBAs, maintenance fees, and consulting/other services[22](index=22&type=chunk) - Remaining performance obligations (RPO) totaled **$7.30 billion** as of July 31, 2025, with **64%** expected to be recognized as revenue in the next 12 months[24](index=24&type=chunk) Total Net Revenue by Product Family (Three Months Ended July 31, Millions USD) | Product Family | 2025 | 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Architecture, Engineering, Construction and Operations | 878 | 713 | 23.1% | | AutoCAD and AutoCAD LT | 440 | 389 | 13.1% | | Manufacturing | 334 | 296 | 12.8% | | Media and Entertainment | 80 | 77 | 3.9% | | Other | 31 | 30 | 3.3% | | **Total Net Revenue** | **1,763** | **1,505** | **17.1%** | Total Net Revenue by Sales Channel (Three Months Ended July 31, Millions USD) | Sales Channel | 2025 | 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Indirect | 676 | 908 | -25.6% | | Direct | 1,087 | 597 | 82.1% | | **Total Net Revenue** | **1,763** | **1,505** | **17.1%** | [Note 4. Concentration of Credit Risk](index=10&type=section&id=Note%204.%20Concentration%20of%20Credit%20Risk) - Autodesk diversifies cash, cash equivalents, and marketable securities across multiple financial institutions to limit credit risk[28](index=28&type=chunk) - TD Synnex accounted for **9%** of trade accounts receivable at July 31, 2025, down from **5%** at January 31, 2025[29](index=29&type=chunk) Revenue from TD Synnex Corporation | Period | 2025 (%) | 2024 (%) | | :--- | :--- | :--- | | Three Months Ended July 31 | 16% | 36% | | Six Months Ended July 31 | 18% | 37% | [Note 5. Financial Instruments](index=11&type=section&id=Note%205.%20Financial%20Instruments) - Strategic investments in privately held companies totaled **$167 million** as of July 31, 2025, with net unrealized negative adjustments of **$1 million** for the six months ended July 31, 2025[42](index=42&type=chunk)[43](index=43&type=chunk) Financial Instruments Summary (July 31, 2025, Millions USD) | Category | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | | :--- | :--- | :--- | :--- | :--- | | Cash equivalents | 1,275 | — | — | 1,275 | | Marketable securities (Short-term) | 180 | — | — | 180 | | Marketable securities (Long-term) | 281 | 1 | — | 282 | | Mutual funds | 112 | 18 | — | 130 | | **Total** | **1,901** | **19** | **—** | **1,920** | Fair Value Hierarchy (July 31, 2025, Millions USD) | Category | Level 1 | Level 2 | Level 3 | Total | | :--- | :--- | :--- | :--- | :--- | | Cash equivalents | 1,095 | 180 | — | 1,275 | | Marketable securities | — | 430 | — | 430 | | Mutual funds | 130 | — | — | 130 | | Derivative assets | — | 33 | — | 33 | | Derivative liabilities | — | (30) | — | (30) | | **Total** | **1,225** | **698** | **—** | **1,923** | [Note 6. Equity Compensation](index=16&type=section&id=Note%206.%20Equity%20Compensation) - Performance stock units granted during the six months ended July 31, 2025, totaled **332 thousand**, with vesting based on revenue, non-GAAP operating income, and Relative TSR goals over a three-year period[55](index=55&type=chunk)[57](index=57&type=chunk) Restricted Stock Unit Activity (Six Months Ended July 31, 2025) | Metric | Unvested Restricted Stock Units (in thousands) | Weighted Average Grant Date Fair Value per Share ($) | | :--- | :--- | :--- | | Unvested at January 31, 2025 | 5,188 | 229.09 | | Granted | 2,629 | 263.02 | | Vested | (2,107) | 224.94 | | Canceled/Forfeited | (343) | 230.42 | | Performance Adjustment | 6 | 275.23 | | **Unvested at July 31, 2025** | **5,373** | **248.15** | Stock-based Compensation Expense (Millions USD) | Period | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Six Months Ended July 31, 2025 | Six Months Ended July 31, 2024 | | :--- | :--- | :--- | :--- | :--- | | Related to stock awards and ESPP purchases | 191 | 170 | 421 | 319 | [Note 7. Income Tax](index=19&type=section&id=Note%207.%20Income%20Tax) - The effective tax rate for the three months ended July 31, 2025, differed from the U.S. federal statutory rate of **21%** primarily due to tax on NCTI and withholding tax, offset by varying tax rates on foreign earnings, tax deductible stock-based compensation, and tax credits[70](index=70&type=chunk) - The enactment of the OBBBA permanently eliminated the requirement to capitalize and amortize U.S. research and development expenses, reducing the capitalization requirement to foreign R&D expenses only, and is expected to result in future cash tax savings[191](index=191&type=chunk)[192](index=192&type=chunk) Income Tax Expense and Pre-Tax Income (Millions USD) | Period | Income Tax Expense (2025) | Pre-Tax Income (2025) | Income Tax Expense (2024) | Pre-Tax Income (2024) | | :--- | :--- | :--- | :--- | :--- | | Three Months Ended July 31 | 143 | 456 | 70 | 352 | | Six Months Ended July 31 | 225 | 690 | 127 | 661 | [Note 8. Intangible Assets, Net](index=19&type=section&id=Note%208.%20Intangible%20Assets%2C%20Net) Intangible Assets, Net (Millions USD) | Category | July 31, 2025 (Net) | January 31, 2025 (Net) | Change (%) | | :--- | :--- | :--- | :--- | | Customer relationships | 235 | 255 | -7.8% | | Developed technologies | 274 | 305 | -10.1% | | Trade names and patents | 5 | 7 | -28.6% | | Other | 7 | 7 | 0.0% | | **Total intangible assets, net** | **521** | **574** | **-9.2%** | [Note 9. Cloud Computing Arrangements](index=19&type=section&id=Note%209.%20Cloud%20Computing%20Arrangements) - Costs for application development activities in cloud-based software hosting arrangements are capitalized and amortized straight-line over the hosting arrangement term[74](index=74&type=chunk) Cloud Computing Arrangement Costs (Millions USD) | Metric | July 31, 2025 | January 31, 2025 | | :--- | :--- | :--- | | Capitalized costs | 356 | 327 | | Accumulated amortization | 152 | 136 | Amortization Expense for Cloud Computing Arrangements (Millions USD) | Period | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Six Months Ended July 31, 2025 | Six Months Ended July 31, 2024 | | :--- | :--- | :--- | :--- | :--- | | Amortization expense | 10 | 17 | 20 | 30 | [Note 10. Goodwill](index=20&type=section&id=Note%2010.%20Goodwill) Goodwill Carrying Amount (Millions USD) | Metric | Amount | | :--- | :--- | | Balance as of January 31, 2025 | 4,242 | | Effect of foreign currency translation | 33 | | **Balance as of July 31, 2025** | **4,275** | [Note 11. Deferred Compensation](index=20&type=section&id=Note%2011.%20Deferred%20Compensation) Deferred Compensation and Contract Costs (Millions USD) | Metric | July 31, 2025 | January 31, 2025 | | :--- | :--- | :--- | | Investments in rabbi trust | 130 | 118 | | Assets from costs to obtain a contract with a customer | 692 | 467 | Amortization Expense for Contract Costs (Millions USD) | Period | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Six Months Ended July 31, 2025 | Six Months Ended July 31, 2024 | | :--- | :--- | :--- | :--- | :--- | | Amortization expense | 123 | 44 | 219 | 85 | [Note 12. Computer Equipment, Software, Furniture, and Leasehold Improvements, Net](index=20&type=section&id=Note%2012.%20Computer%20Equipment%2C%20Software%2C%20Furniture%2C%20and%20Leasehold%20Improvements%2C%20Net) Computer Equipment, Software, Furniture, and Leasehold Improvements, Net (Millions USD) | Category | July 31, 2025 | January 31, 2025 | | :--- | :--- | :--- | | Computer hardware, at cost | 106 | 103 | | Computer software, at cost | 50 | 42 | | Furniture and equipment, at cost | 102 | 100 | | Leasehold improvements, land and buildings, at cost | 334 | 333 | | Less: Accumulated depreciation | (483) | (461) | | **Net value** | **109** | **117** | [Note 13. Borrowing Arrangements](index=21&type=section&id=Note%2013.%20Borrowing%20Arrangements) - In May 2025, Autodesk entered into a new **$1.5 billion** unsecured revolving loan facility (2025 Credit Agreement), with no outstanding borrowings as of July 31, 2025[80](index=80&type=chunk) - In June 2025, Autodesk issued **$500 million** aggregate principal amount of **5.3%** notes due June 15, 2035, with net proceeds of **$494 million** used for debt repayment and general corporate purposes[81](index=81&type=chunk) Expected Future Principal Payments for Borrowings (July 31, 2025, Millions USD) | Fiscal Year Ending | Amount | | :--- | :--- | | 2026 (remainder) | — | | 2027 | — | | 2028 | 500 | | 2029 | — | | 2030 | 500 | | Thereafter | 1,500 | | **Total principal outstanding** | **2,500** | [Note 14. Leases](index=22&type=section&id=Note%2014.%20Leases) - Autodesk has operating leases with terms ranging from less than 1 year to 65 years, including extension and termination options[88](index=88&type=chunk) Operating Lease Right-of-Use Assets Impairment Charges (Millions USD) | Period | Three Months Ended July 31, 2025 | Six Months Ended July 31, 2025 | | :--- | :--- | :--- | | Total operating lease right-of-use assets impairment charges | 2 | 11 | Maturities of Operating Lease Liabilities (Millions USD) | Fiscal Year Ending | Amount | | :--- | :--- | | 2026 (remainder) | 27 | | 2027 | 64 | | 2028 | 55 | | 2029 | 47 | | 2030 | 30 | | Thereafter | 53 | | Less imputed interest | 23 | | **Present value of operating lease liabilities** | **253** | [Note 15. Derivative Instruments](index=23&type=section&id=Note%2015.%20Derivative%20Instruments) - Autodesk uses foreign currency contracts as cash flow hedges to reduce exchange rate impact on net revenue or operating expenses, with notional amounts of **$1.97 billion** at July 31, 2025[96](index=96&type=chunk) - Derivatives not designated as hedging instruments are used to reduce exchange rate risk for foreign currency denominated receivables, payables, and cash, with notional amounts of **$277 million** at July 31, 2025[97](index=97&type=chunk) Impact of Derivatives Designated as Hedging Instruments on Statements of Operations (Six Months Ended July 31, Millions USD) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Loss recognized in accumulated other comprehensive income, net of tax | (29) | (3) | | Gain reclassified from accumulated other comprehensive loss into income | 17 | 6 | [Note 16. Restructuring, Other Exit Costs, and Facility Reductions](index=24&type=section&id=Note%2016.%20Restructuring%2C%20Other%20Exit%20Costs%2C%20and%20Facility%20Reductions) - Autodesk initiated a restructuring plan (2026 Plan) in Q1 fiscal 2026 to optimize go-to-market and reallocate resources to cloud, platform, and AI investments[98](index=98&type=chunk) - The 2026 Plan resulted in **$11 million** in lease right-of-use assets impairments and **$6 million** in impairment charges to computer equipment, software, furniture, and leasehold improvements for the six months ended July 31, 2025[100](index=100&type=chunk) Restructuring and Other Exit Costs Liability (July 31, 2025, Millions USD) | Category | Balances, January 31, 2025 | Additions | Payments | Balances, July 31, 2025 | | :--- | :--- | :--- | :--- | :--- | | Employee terminations costs | 15 | 91 | (98) | 8 | | Other exit costs | — | 3 | (3) | — | | **Total** | **15** | **94** | **(101)** | **8** | [Note 17. Commitments and Contingencies](index=25&type=section&id=Note%2017.%20Commitments%20and%20Contingencies) - Autodesk provides indemnifications for product warranties and intellectual property infringement claims, with historically insignificant costs[102](index=102&type=chunk) - The SEC and USAO closed their investigations into Autodesk's free cash flow and non-GAAP operating margin practices on **August 19, 2025**, and **August 21, 2025**, respectively[106](index=106&type=chunk)[252](index=252&type=chunk) - A federal securities class action and stockholder derivative complaints were filed against Autodesk and certain officers/directors, alleging false and misleading statements; the company cannot reasonably estimate potential financial loss[107](index=107&type=chunk)[108](index=108&type=chunk)[253](index=253&type=chunk)[254](index=254&type=chunk) [Note 18. Stockholders' Equity](index=26&type=section&id=Note%2018.%20Stockholders'%20Equity) - Autodesk repurchased **2.5 million shares** for **$709 million** during the six months ended July 31, 2025, at an average price of **$282.39 per share**[109](index=109&type=chunk) - As of July 31, 2025, **$3.17 billion** and **$5 billion** remained available for repurchase under the November 2022 and November 2024 repurchase programs, respectively[109](index=109&type=chunk)[224](index=224&type=chunk) Changes in Stockholders' Equity (Six Months Ended July 31, 2025, Millions USD) | Metric | Common Stock and Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Total Stockholders' Equity | | :--- | :--- | :--- | :--- | :--- | | Balances, January 31, 2025 | 4,239 | (285) | (1,333) | 2,621 | | Common shares issued under stock plans | (120) | — | — | (120) | | Stock-based compensation expense | 427 | — | — | 427 | | Net income | — | — | 465 | 465 | | Other comprehensive income (loss) | — | 31 | — | 31 | | Repurchase and retirement of common shares | (90) | — | (619) | (709) | | **Balances, July 31, 2025** | **4,456** | **(254)** | **(1,487)** | **2,715** | [Note 19. Accumulated Other Comprehensive Loss](index=27&type=section&id=Note%2019.%20Accumulated%20Other%20Comprehensive%20Loss) Accumulated Other Comprehensive Loss (July 31, 2025, Millions USD) | Component | Balances, January 31, 2025 | Net Current Period Other Comprehensive (Loss) Income | Balances, July 31, 2025 | | :--- | :--- | :--- | :--- | | Net Unrealized Gains (Losses) on Derivative Instruments | 24 | (29) | (5) | | Net Unrealized Gains (Losses) on Available-for-Sale Debt Securities | 20 | 1 | 21 | | Defined Benefit Pension Components | (25) | 1 | (24) | | Foreign Currency Translation Adjustments | (304) | 58 | (246) | | **Total** | **(285)** | **31** | **(254)** | [Note 20. Net Income Per Share](index=28&type=section&id=Note%2020.%20Net%20Income%20Per%20Share) Net Income Per Share (Three Months Ended July 31, Millions USD, except per share data) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Net income | 313 | 282 | | Basic net income per share | 1.47 | 1.31 | | Diluted net income per share | 1.46 | 1.30 | Net Income Per Share (Six Months Ended July 31, Millions USD, except per share data) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Net income | 465 | 534 | | Basic net income per share | 2.17 | 2.48 | | Diluted net income per share | 2.15 | 2.46 | [Note 21. Segments](index=28&type=section&id=Note%2021.%20Segments) - Autodesk operates as a single operating and reportable segment, focusing on 3D design, engineering, and entertainment technology solutions[114](index=114&type=chunk) - The CEO, as CODM, reviews consolidated financial information, including net revenue and net income, for resource allocation and performance evaluation[115](index=115&type=chunk) Segment Total Net Revenue and Consolidated Net Income (Millions USD) | Period | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Six Months Ended July 31, 2025 | Six Months Ended July 31, 2024 | | :--- | :--- | :--- | :--- | :--- | | Total net revenue | 1,763 | 1,505 | 3,396 | 2,922 | | Consolidated net income | 313 | 282 | 465 | 534 | [ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=ITEM%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial conditions, operational results, strategic priorities, and liquidity [Strategy](index=30&type=section&id=Strategy) - Autodesk's core strategy is to deliver a trusted design and make platform that connects people through automation, data, and insights[124](index=124&type=chunk) - Strategic priorities include building the platform of choice, accelerating adoption of Fusion, Forma, and Flow, and transforming customer experience[124](index=124&type=chunk) - Autodesk is investing in AI capabilities for augmentation, automation, and analysis in customer workloads, and expanding product functionality through internal development and acquisitions[132](index=132&type=chunk)[137](index=137&type=chunk) - The company is strengthening AECO solutions with organic and inorganic investments, including the acquisition of Payapps Limited in fiscal 2025 to deepen Autodesk Construction Cloud's footprint[130](index=130&type=chunk) [Overview of the Three and Six Months Ended July 31, 2025](index=33&type=section&id=Overview%20of%20the%20Three%20and%20Six%20Months%20Ended%20July%2031%2C%202025) Key Financial Highlights (Three Months Ended July 31, 2025) | Metric | Value (Millions USD) | Change YoY (%) | | :--- | :--- | :--- | | Total Net Revenue | 1,763 | 17% | | Recurring Revenue | 1,719 | 17% | | Recurring Revenue as % of Net Revenue | 98% | +1 pp | | Net Revenue Retention Rate (constant currency) | Above 110% | N/A | Key Financial Highlights (Six Months Ended July 31, 2025) | Metric | Value (Millions USD) | Change YoY (%) | | :--- | :--- | :--- | | Total Net Revenue | 3,396 | 16% | | Recurring Revenue | 3,311 | 16% | | Recurring Revenue as % of Net Revenue | 97% | 0 pp | | Net Revenue Retention Rate (constant currency) | Above 110% | N/A | Remaining Performance Obligations (RPO) (Millions USD) | Metric | July 31, 2025 | January 31, 2025 | Change (%) | | :--- | :--- | :--- | :--- | | Deferred Revenue | 3,844 | 4,128 | -6.9% | | Unbilled Deferred Revenue | 3,453 | 2,810 | 22.9% | | Total RPO | 7,297 | 6,938 | 5.2% | | Current RPO | 4,677 | 4,457 | 4.9% | [Results of Operations](index=35&type=section&id=Results%20of%20Operations) - Net revenue increased **17%** and **16%** for the three and six months ended July 31, 2025, respectively, primarily driven by subscription revenue growth[149](index=149&type=chunk)[166](index=166&type=chunk) - Direct sales channel revenue increased significantly by **82%** and **74%** for the three and six months ended July 31, 2025, respectively, due to the new transaction model, while indirect channel revenue decreased[173](index=173&type=chunk) - Marketing and sales expenses increased primarily due to the recognition of sales commissions to Solution Providers as operating expenses under the new transaction model[182](index=182&type=chunk)[183](index=183&type=chunk) - Income tax expense increased for both periods in 2025 due to the election regarding timing of revenue taxation and increased tax associated with NCTI due to the OBBBA[190](index=190&type=chunk) Net Revenue by Income Statement Presentation (Millions USD) | Metric | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Six Months Ended July 31, 2025 | Six Months Ended July 31, 2024 | | :--- | :--- | :--- | :--- | :--- | | Subscription Revenue | 1,658 | 1,408 | 3,190 | 2,738 | | Maintenance Revenue | 9 | 11 | 17 | 22 | | Other Revenue | 96 | 86 | 189 | 162 | | **Total Net Revenue** | **1,763** | **1,505** | **3,396** | **2,922** | Non-GAAP Financial Measures (Six Months Ended July 31, Millions USD, except per share data) | Metric | 2025 | 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Non-GAAP Gross Profit | 3,151 | 2,706 | 16.4% | | Non-GAAP Income from Operations | 1,289 | 1,050 | 22.8% | | Non-GAAP Operating Margin | 38% | 36% | +2 pp | | Non-GAAP Net Income | 1,057 | 871 | 21.4% | | Non-GAAP Diluted Net Income Per Share | 4.89 | 4.01 | 21.9% | [Liquidity and Capital Resources](index=47&type=section&id=Liquidity%20and%20Capital%20Resources) - Net cash provided by operating activities increased to **$1.02 billion** for the six months ended July 31, 2025, from **$706 million** in the prior year[161](index=161&type=chunk)[217](index=217&type=chunk) - The company has a **$1.5 billion** revolving credit facility (2025 Credit Agreement) with no outstanding borrowings as of July 31, 2025[210](index=210&type=chunk)[211](index=211&type=chunk) - Approximately **49%** of total cash, cash equivalents, and marketable securities are held in foreign jurisdictions[214](index=214&type=chunk) Cash, Cash Equivalents, and Marketable Securities (Millions USD) | Date | Amount | | :--- | :--- | | July 31, 2025 | 2,520 | | January 31, 2025 | 1,866 | [Issuer Purchases of Equity Securities](index=49&type=section&id=Issuer%20Purchases%20of%20Equity%20Securities) - As of July 31, 2025, **$3.17 billion** and **$5 billion** remained available for repurchase under the November 2022 and November 2024 repurchase programs, respectively[224](index=224&type=chunk) Common Stock Repurchases (Three Months Ended July 31, 2025) | Period | Total Number of Shares Purchased (thousands) | Average Price Paid per Share ($) | | :--- | :--- | :--- | | May 1 - May 31 | 342 | 291.46 | | June 1 - June 30 | 388 | 299.31 | | July 1 - July 31 | 456 | 300.74 | | **Total** | **1,186** | **297.59** | [Glossary of Terms](index=49&type=section&id=Glossary%20of%20Terms) - "Recurring Revenue" consists of revenue from traditional maintenance plans, subscription plan offerings, and certain other revenue, excluding third-party products[238](index=238&type=chunk) - "Net Revenue Retention Rate (NR3)" measures the year-over-year change in Recurring Revenue for base customers, calculated by dividing current quarter Recurring Revenue by the corresponding prior year quarter's Recurring Revenue[234](index=234&type=chunk) - "Remaining Performance Obligations (RPO)" is the sum of total short-term, long-term, and unbilled deferred revenue, with current RPO being the amount expected to be recognized in the next twelve months[239](index=239&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=51&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company details its exposure to foreign currency and interest rate risks and outlines its derivative-based management strategies - Autodesk uses foreign currency contracts (cash flow and balance sheet hedges) to manage exposure to foreign currency exchange rate fluctuations, primarily in Euros, Japanese yen, and British pounds[243](index=243&type=chunk) - A hypothetical **10%** appreciation of the U.S. dollar would increase the fair value of foreign currency contracts by **$117 million** at July 31, 2025, while a **10%** depreciation would decrease it by **$130 million**[244](index=244&type=chunk) - Interest rate movements on cash equivalents and marketable securities are monitored, but a hypothetical **50 or 100 basis point** change in interest rates is not expected to have a material impact on results of operations[245](index=245&type=chunk) - Direct investments in privately held companies are considered inherently risky due to early-stage technologies and potential for loss[246](index=246&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=52&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management concluded that disclosure controls and procedures were effective and reported no material changes in internal controls - The CEO and CFO concluded that disclosure controls and procedures were effective as of July 31, 2025, operating at a reasonable assurance level[247](index=247&type=chunk) - No material changes in internal control over financial reporting occurred during the three months ended July 31, 2025[249](index=249&type=chunk) PART II. OTHER INFORMATION [ITEM 1. LEGAL PROCEEDINGS](index=53&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) The company details the closure of regulatory investigations and ongoing securities litigation matters - The SEC and USAO closed their investigations into Autodesk's free cash flow and non-GAAP operating margin practices on **August 19, 2025**, and **August 21, 2025**, respectively[252](index=252&type=chunk) - A federal securities class action and stockholder derivative complaints were filed alleging false and misleading statements, with a motion to dismiss granted with leave to amend in the class action[253](index=253&type=chunk)[254](index=254&type=chunk) - Resolution of pending legal matters is not expected to have a material adverse impact on consolidated results of operations, cash flows, or financial position, though future unfavorable outcomes are possible[251](index=251&type=chunk) [ITEM 1A. RISK FACTORS](index=54&type=section&id=ITEM%201A.%20RISK%20FACTORS) The company details numerous risks that could adversely impact its business, financial condition, and operational results - Risks include limited customer acceptance of new products, global economic and political conditions, challenges with acquisitions, and dependency on international revenue[256](index=256&type=chunk)[257](index=257&type=chunk) - Operational risks involve security breaches, reliance on third-party services and software, complex software errors, and inability to attract/retain key personnel[296](index=296&type=chunk)[304](index=304&type=chunk)[309](index=309&type=chunk)[317](index=317&type=chunk) - Regulatory risks include increasing focus on privacy/data protection laws (e.g., GDPR, PIPL, CCPA), governmental export/import controls, and intellectual property infringement claims[321](index=321&type=chunk)[331](index=331&type=chunk)[336](index=336&type=chunk) - Financial risks encompass currency exchange rate fluctuations, debt service obligations, investment portfolio volatility, and changes in tax rules and accounting standards[342](index=342&type=chunk)[345](index=345&type=chunk)[348](index=348&type=chunk)[351](index=351&type=chunk)[358](index=358&type=chunk) - The Audit Committee's internal investigation has been costly and time-consuming, leading to lawsuits, and may result in additional expenses or litigation, despite the closure of SEC and USAO matters[290](index=290&type=chunk)[292](index=292&type=chunk)[293](index=293&type=chunk)[294](index=294&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=73&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) The company confirms no unregistered sales of equity securities occurred during the quarter - No unregistered sales of equity securities occurred during the three months ended July 31, 2025[363](index=363&type=chunk) - Information on issuer purchases of equity securities is incorporated by reference from the "Issuer Purchases of Equity Securities" section in MD&A[363](index=363&type=chunk) [ITEM 3. DEFAULTS UPON SENIOR SECURITIES](index=73&type=section&id=ITEM%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) This section states there are no defaults upon senior securities to report for the period - This item is not applicable[364](index=364&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURES](index=73&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) This section states there are no mine safety disclosures to report for the period - This item is not applicable[365](index=365&type=chunk) [ITEM 5. OTHER INFORMATION](index=73&type=section&id=ITEM%205.%20OTHER%20INFORMATION) The company discloses the adoption of a new Rule 10b5-1 trading arrangement by its Chief Operating Officer - Steve Blum, COO, adopted a new Rule 10b5-1 trading arrangement on June 5, 2025, to sell up to **22,420 shares** of common stock by December 12, 2025[367](index=367&type=chunk) [ITEM 6. EXHIBITS](index=74&type=section&id=ITEM%206.%20EXHIBITS) This section lists all exhibits filed or incorporated by reference in the Quarterly Report - The report includes exhibits such as the Sixth Supplemental Indenture, Form of Note for **5.300% Notes due 2035**, and the 2022 Equity Incentive Plan[369](index=369&type=chunk) - Certifications of the CEO and CFO pursuant to Rule 13a-14(a) and 18 U.S.C. Section 1350 are filed as Exhibits 31.1, 31.2, and 32.1[369](index=369&type=chunk) [Signatures](index=75&type=section&id=Signatures) This section contains the official signatures confirming the report's submission by Autodesk, Inc - The report is signed by Janesh Moorjani, Executive Vice President and Chief Financial Officer, on September 2, 2025[373](index=373&type=chunk)

Group 1: Hong Kong Stocks Performance - BYD Electronics (00285) rose over 7%, reporting a nearly 14% year-on-year increase in net profit for the first half of 2025, with positive progress in AI data center business [1] - Beihai Kangcheng-B (01228) surged over 11%, achieving profitability in the first half of the year and recently forming a strategic partnership with Baiyang Pharmaceutical [1] - MicroPort Medical (00853) increased over 11%, with a reported loss of $46.602 million for the first half of 2025, a 51.9% reduction in loss year-on-year [1] - Bank of China Hong Kong (02388) rose over 6%, reporting a net profit of HKD 22.12 billion for the first half of 2025, with an increase in net trading income year-on-year [1] - UBTECH (09880) increased over 4%, announcing a strategic partnership agreement worth $1 billion with international investment firm Infini Capital [1] - Gold stocks performed well, with China Silver Group (00815) up over 8%, Zhaojin Mining (01818) up over 7%, Shandong Gold (01787) up over 6%, Chifeng Jilong Gold (06693) up over 6%, and Zijin Mining (02899) up over 6%, driven by rising gold prices due to increased interest rate cut expectations [1] Group 2: Chinese Companies' Financial Results - China Communications Construction (01800) fell over 5%, reporting a 16.9% year-on-year decrease in net profit for the first half of 2025 and not declaring an interim dividend [2] - Evergrande Property (06666) declined over 3%, with a 5.6% year-on-year drop in net profit for the first half of the year, with management expressing pessimism about economic benefits from Evergrande Group [2] - Zoomlion Heavy Industry (01157) rose over 2%, reporting a more than 20% year-on-year increase in net profit for the first half of 2025, with institutions optimistic about export growth in the second half [2] - Midea Group (00300) increased over 2%, reporting a 25.04% year-on-year increase in net profit for the first half of 2025 and proposing an interim dividend of HKD 5 per 10 shares [2] Group 3: US Stocks Performance - Autodesk (ADSK.US) rose 9.09%, reporting a 17% year-on-year revenue increase for the second fiscal quarter and raising its full-year revenue and adjusted EPS guidance [3] - Gap (GAP.US) increased 1.52%, with revenue slightly below market expectations for the second fiscal quarter, and management indicated that tariffs may pressure annual gross margins [3] - Marvell Technology (MRVL.US) fell 18.60%, reporting record revenue of $2.01 billion for the second quarter, a 58% year-on-year increase, but provided a Q3 revenue guidance slightly below expectations [3] - Alibaba (BABA.US) surged 12.90%, with a market value increase of $36.7 billion overnight, reporting an 18% year-on-year decline in Non-GAAP net profit, but strong resilience in core business [3] - Ambarella (AMBA.US) rose 16.78%, providing strong guidance for Q3 revenue, expected to be between $100 million and $108 million, reflecting continued growth in edge AI demand [3] - IREN Ltd (IREN.US) increased 14.93%, exceeding expectations in its fourth-quarter earnings report and announcing a priority partnership with NVIDIA [3] Group 4: Other Notable Stocks - Dell Technologies (DELL.US) fell 8.88%, reporting that its infrastructure division's operating profit margin was below expectations [4] - Affirm Holdings (AFRM.US) rose 10.59%, reporting better-than-expected revenue and profit for the fourth fiscal quarter [4] - TryHard Holdings (THH.US) declined 9.80%, issuing 1.5 million shares at $4 each, at the lower end of the pricing range [5] - GrowHub (TGHL.US) increased 1.48%, issuing 3.8 million shares at $4 each, also at the lower end of the pre-set pricing range [5]

Group 1 - Autodesk is highlighted as a strong investment opportunity due to its robust business model, which includes an almost impenetrable moat, a solid balance sheet, a light asset capital model, effective management, and good growth prospects [1] - The investment philosophy emphasizes deep research and understanding of business model trends to identify long-term growth opportunities while avoiding risky financial instruments [1] Group 2 - The analyst expresses a potential interest in initiating a long position in Autodesk stock or related derivatives within the next 72 hours, indicating a positive outlook on the company's future performance [2]

Group 1 - Triba Research aims to identify high-quality businesses that can deliver sustainable, double-digit returns over the long term [1] - The firm's strategy emphasizes finding companies with strong competitive advantages, operating in growing markets, maintaining low debt levels, and having skilled management teams [1] - Triba Research prioritizes long-term value creation while staying informed about the latest developments in the market [1]

Financial Performance - Autodesk exceeded profit and sales estimates [1] Industry Trends - Demand for Autodesk's design software is driven by artificial intelligence data centers [1]

Group 1 - Since the start of 2025, large-cap tech stocks, particularly those related to AI, have significantly outperformed the broader stock market [1] - Investors have shown strong interest in stocks like Microsoft (MSFT) and Meta (META), betting on their growth potential [1] - The article highlights the author's extensive experience in covering technology companies and involvement with startups, indicating a deep understanding of current industry trends [1]

Core Viewpoint - Autodesk (ADSK.US) shares rose over 7%, reaching a new high for the year at $309.50 following the release of its Q2 FY2026 financial results, which exceeded analyst expectations [1] Financial Performance - The company reported a 17% year-over-year revenue increase to $1.763 billion [1] - Adjusted earnings per share (EPS) were $2.62, surpassing analyst forecasts [1] Future Guidance - Autodesk raised its revenue forecast for FY2026 to between $7.025 billion and $7.075 billion [1] - The adjusted EPS expectation was also increased to a range of $9.80 to $9.98 [1]