Laurence Dutton Autodesk (NASDAQ:ADSK) is a leading player providing software and cloud subscriptions for the Architecture, Engineering, and Construction (AEC) end-market. Like some other software players, they initiated their transition from a licensing model to SaaS a few years ago. They have achieved double-digit revenue growth with decent operating profit growth. However, the current shift in billing from multi-year contracts to annual subscriptions is expected to result in lower upfront payments fr ...

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Autodesk, Inc. (NASDAQ:ADSK) Barclays Global Technology Conference December 7, 2023 6:05 PM ET Company Participants Stephen Hooper - VP of Design and Manufacturing Simon Mays-Smith - Head of IR Conference Call Participants Saket Kalia - Barclays Saket Kalia Okay, folks. Well, welcome to the last session of day 2 at the Barclays Conference, and I can truly say we saved the best for last. We've got the dream team here from Autodesk. We've got Steve Hooper, VP of Design and Manufacturing. And of course, Simon ...

[Financial Information (Part I)](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) The company reported year-over-year growth in revenue and net income for both the three and nine months ended October 31, 2023, with total assets slightly decreasing while stockholders' equity increased, and net cash from operating activities decreased primarily due to changes in working capital Condensed Consolidated Statements of Operations Highlights (Unaudited) | Metric (In millions, except per share data) | Three Months Ended Oct 31, 2023 | Three Months Ended Oct 31, 2022 | Nine Months Ended Oct 31, 2023 | Nine Months Ended Oct 31, 2022 | | :--- | :--- | :--- | :--- | :--- | | **Total net revenue** | **$1,414** | **$1,280** | **$4,028** | **$3,687** | | Gross profit | $1,287 | $1,160 | $3,647 | $3,331 | | Income from operations | $334 | $256 | $813 | $712 | | **Net income** | **$241** | **$198** | **$624** | **$530** | | **Diluted net income per share** | **$1.12** | **$0.91** | **$2.89** | **$2.43** | Condensed Consolidated Balance Sheets Highlights (Unaudited) | Metric (In millions) | October 31, 2023 | January 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $1,526 | $1,947 | | Total current assets | $2,939 | $3,341 | | **Total assets** | **$9,226** | **$9,438** | | Deferred revenue (Current) | $3,120 | $3,203 | | Total current liabilities | $3,912 | $4,000 | | Long-term notes payable, net | $2,283 | $2,281 | | **Total liabilities** | **$7,744** | **$8,293** | | **Total stockholders' equity** | **$1,482** | **$1,145** | Condensed Consolidated Statements of Cash Flows Highlights (Unaudited) | Metric (In millions) | Nine Months Ended Oct 31, 2023 | Nine Months Ended Oct 31, 2022 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | **$876** | **$1,160** | | Net cash used in investing activities | ($524) | ($84) | | Net cash used in financing activities | ($753) | ($897) | | Net decrease in cash and cash equivalents | ($421) | $137 | [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=33&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Autodesk's financial performance showed continued growth, with a 10% increase in total net revenue for Q3 FY24, driven by subscription growth, while the company executes its strategy focused on customer experience, digital transformation, and its Design and Make platform, maintaining a strong recurring revenue base despite macroeconomic challenges and increased operating expenses [Strategy](index=33&type=section&id=Strategy) Autodesk's strategy focuses on building customer relationships by delivering innovative technology for automation and insight in design and make processes, with key priorities including customer experience, digital transformation, and establishing an industry-leading Design and Make platform, while rolling out a new direct transaction model - The company's strategy is centered on three priorities: delivering a world-class customer experience, catalyzing customer digital transformation, and establishing an industry-leading platform for Design and Make[125](index=125&type=chunk) - Autodesk is strengthening its AEC solutions with investments in Autodesk Forma, an industry cloud for early-stage design, and acquisitions like Innovyze for water infrastructure software[130](index=130&type=chunk) - In manufacturing, the strategy involves creating end-to-end cloud solutions, highlighted by the growth of the Fusion 360 platform and acquisitions like Upchain for cloud-based data management[131](index=131&type=chunk) - A new transaction model is being introduced where channel partners provide quotes, but the transaction occurs directly between Autodesk and the customer, expected to transition globally in fiscal 2025 and 2026[134](index=134&type=chunk) [Financial Performance Overview](index=36&type=section&id=Financial%20Performance%20Overview) For the three and nine months ended October 31, 2023, Autodesk reported solid financial results with revenue growth of 10% and 9% respectively, maintaining high recurring revenue at 98% of total net revenue, though Remaining Performance Obligations (RPO) decreased by 7% compared to the end of the prior fiscal year Key Performance Metrics Highlights (Q3 FY24) | Metric | Q3 FY24 Result | Change vs. Prior Year Period | | :--- | :--- | :--- | | Total Net Revenue | $1.41B | +10% | | Recurring Revenue % | 98% | Flat | | Net Revenue Retention Rate (NR3) | 100% - 110% | Within range | | Remaining Performance Obligations (RPO) | $5.24B | -7% (vs. Q4 FY23) | | Current RPO | $3.52B | Flat (vs. Q4 FY23) | - Total sales to distributor TD Synnex accounted for **39% of total net revenue** for the three months ended October 31, 2023, up from 37% in the prior-year period[148](index=148&type=chunk) - On a constant currency basis, net revenue for Q3 FY24 grew **13%**, indicating a negative impact from foreign exchange rate changes[152](index=152&type=chunk) [Results of Operations](index=39&type=section&id=Results%20of%20Operations) Revenue growth was driven by an 11% increase in subscription revenue in Q3 FY24, led by renewals and EBA offerings, with the AEC product family as the strongest contributor and the Americas leading geographically, while operating expenses rose 5% primarily due to increased R&D and G&A costs Net Revenue by Product Family (Three Months Ended Oct 31, in millions) | Product Family | 2023 | 2022 | % Change | | :--- | :--- | :--- | :--- | | AEC | $675 | $575 | 17% | | AutoCAD and AutoCAD LT | $372 | $354 | 5% | | MFG | $269 | $254 | 6% | | M&E | $73 | $78 | (6)% | | Other | $25 | $19 | 32% | | **Total Net Revenue** | **$1,414** | **$1,280** | **10%** | Net Revenue by Geographic Area (Three Months Ended Oct 31, in millions) | Geographic Area | 2023 | 2022 | % Change | Constant Currency % Change | | :--- | :--- | :--- | :--- | :--- | | Total Americas | $640 | $541 | 18% | 19% | | EMEA | $516 | $476 | 8% | 11% | | APAC | $258 | $263 | (2)% | 3% | | **Total Net Revenue** | **$1,414** | **$1,280** | **10%** | **13%** | - Direct sales channel revenue grew **19%** in Q3 FY24, outpacing the 6% growth in the indirect channel, driven by EBA offerings and the online store[171](index=171&type=chunk) - Total operating expenses increased by **5%** in Q3 FY24, driven by a **9%** increase in R&D and a **28%** increase in G&A, partially offset by a **3%** decrease in Marketing & Sales[180](index=180&type=chunk) [Non-GAAP Financial Measures](index=48&type=section&id=Non-GAAP%20Financial%20Measures) On a non-GAAP basis, the company reported higher profitability than GAAP results, primarily by excluding stock-based compensation and amortization of acquired intangibles, with non-GAAP income from operations at $547 million (39% margin) and non-GAAP net income at $447 million for Q3 FY24 GAAP to Non-GAAP Reconciliation (Three Months Ended Oct 31, 2023, in millions) | Metric | GAAP | Adjustments | Non-GAAP | | :--- | :--- | :--- | :--- | | Gross Profit | $1,287 | $24 | $1,311 | | Income from Operations | $334 | $213 | $547 | | Net Income | $241 | $206 | $447 | - The largest adjustments between GAAP and non-GAAP results are **stock-based compensation expense ($181 million)** and **amortization of developed technologies and purchased intangibles ($21 million)** for Q3 FY24[198](index=198&type=chunk)[200](index=200&type=chunk) [Liquidity and Capital Resources](index=51&type=section&id=Liquidity%20and%20Capital%20Resources) As of October 31, 2023, Autodesk maintained a strong liquidity position with **$2.17 billion** in cash, cash equivalents, and marketable securities, despite a decrease in net cash from operations to **$876 million** for the nine-month period, while continuing its share repurchase program - Principal sources of liquidity as of October 31, 2023, were cash, cash equivalents, and marketable securities totaling **$2.17 billion**[211](index=211&type=chunk) - Net cash provided by operating activities decreased to **$876 million** for the nine months ended Oct 31, 2023, compared to **$1.16 billion** for the same period in 2022[215](index=215&type=chunk) - During Q3 FY24, the company repurchased **543 thousand shares** of common stock for approximately **$111 million**[110](index=110&type=chunk)[220](index=220&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=55&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Autodesk is exposed to market risks primarily from foreign currency exchange rates, interest rate fluctuations, and investments in privately held companies, utilizing foreign currency contracts to hedge a portion of its exposure, while interest rate risk on its cash and securities portfolio is not considered material - The company utilizes foreign currency contracts to manage exposure to volatility in currencies such as the Euro, British pound, and Japanese yen, with the notional amount of forward and option contracts approximately **$4.97 billion** as of October 31, 2023[231](index=231&type=chunk)[232](index=232&type=chunk) - Interest rate movements on the company's **$1.53 billion** portfolio of cash equivalents and marketable securities are not expected to have a material impact on results of operations[233](index=233&type=chunk) - The company makes direct investments in privately held companies, which are considered inherently risky and could result in a loss of all or a substantial part of the investment[234](index=234&type=chunk) [Controls and Procedures](index=56&type=section&id=Item%204.%20Controls%20and%20Procedures) Based on management's evaluation, including the CEO and CFO, the company's disclosure controls and procedures were deemed effective as of October 31, 2023, with no material changes in internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were **effective** at a reasonable assurance level as of the end of the quarter[236](index=236&type=chunk) - No changes occurred during the quarter that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[238](index=238&type=chunk) [Other Information (Part II)](index=57&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=57&type=section&id=Item%201.%20Legal%20Proceedings) Autodesk is involved in various routine claims and legal proceedings, but management does not expect their resolution to have a material adverse impact on the company's consolidated financial results, cash flows, or financial position - The company is involved in routine legal matters including claims of intellectual property infringement, commercial, employment, and tax issues[240](index=240&type=chunk) - Management believes that the resolution of pending legal matters will not have a material adverse impact on the company's financial condition[240](index=240&type=chunk) [Risk Factors](index=57&type=section&id=Item%201A.%20Risk%20Factors) The company faces numerous risks, including those related to its business strategy, global economic conditions, competition, and operational execution, with key concerns involving customer acceptance of new products, dependency on international revenue, prediction of subscription renewals, and potential security incidents - **Strategic Risks:** Challenges in developing and introducing new products, predicting subscription renewal rates, intense competition, and executing new business initiatives[242](index=242&type=chunk)[244](index=244&type=chunk)[263](index=263&type=chunk) - **Economic & International Risks:** Dependency on global economic conditions and international revenue (**64% of total** for the nine months ended Oct 31, 2023), exposing the company to currency fluctuations, political instability, and trade policy changes[242](index=242&type=chunk)[249](index=249&type=chunk)[257](index=257&type=chunk) - **Operational & Technology Risks:** Potential for security incidents, reliance on third-party services like AWS, complexities and potential errors in software, and challenges in managing the use of AI in offerings[242](index=242&type=chunk)[283](index=283&type=chunk)[294](index=294&type=chunk) - **Legal & Regulatory Risks:** Increasing regulatory focus on privacy and data protection (e.g., GDPR, CCPA), compliance with export controls, and potential for costly intellectual property infringement claims[242](index=242&type=chunk)[310](index=310&type=chunk)[326](index=326&type=chunk) [Issuer Purchases of Equity Securities and Other Information](index=75&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During the third quarter of fiscal 2024, Autodesk repurchased 543,000 shares of its common stock at an average price of $205.70 per share, with no unregistered securities sold, and a director adopted a Rule 10b5-1 trading plan in September 2023 Issuer Purchases of Equity Securities (Q3 FY24) | Period | Total Shares Purchased (thousands) | Average Price Paid per Share ($) | | :--- | :--- | :--- | | August 2023 | 139 | $206.25 | | September 2023 | 200 | $208.03 | | October 2023 | 204 | $203.05 | | **Total** | **543** | **$205.70** | - As of October 31, 2023, approximately **$4.80 billion** remained available for future repurchases under the board-authorized plan[220](index=220&type=chunk) - On September 13, 2023, Director Mary McDowell adopted a Rule 10b5-1 trading plan for the potential sale of up to **14,100 shares**[357](index=357&type=chunk)

Autodesk, Inc. (NASDAQ:ADSK) UBS Global Technology Conference November 28, 2023 3:35 PM ET Company Participants Andrew Anagnost - CEO Conference Call Participants Rich Hilliker - UBS Rich Hilliker All right. Well, hi, everyone. My name is Rich Hilliker, and I'm a software analyst here at UBS. We're really excited that you all could join us, and we're very grateful that Autodesk is here again year after year, and we've got Andrew Anagnost, CEO. Thank you for being here. Excited to be up here together and ha ...

Financial Data and Key Metrics Changes - Total revenue grew by 10% year-on-year, and 13% in constant currency [12] - Non-GAAP gross margin remained stable at 93% [14] - Free cash flow was $13 million, primarily impacted by the transition from upfront to annual billings for multiyear contracts [14] Business Line Data and Key Metrics Changes - AutoCAD and AutoCAD LT revenue grew by 7%, AEC revenue grew by 20%, manufacturing revenue grew by 9%, while M&E revenue decreased by 4% [12] - Direct revenue increased by 19%, representing 38% of total revenue, up 3 percentage points from last year [13] Market Data and Key Metrics Changes - Revenue growth in constant currency was 19% in the Americas, 11% in EMEA, and 3% in APAC [13] - Net revenue retention rate remained within the 100% to 110% range at constant exchange rates [13] Company Strategy and Development Direction - The company is transitioning to a new transaction model that enhances direct relationships with customers and integrates more closely with channel partners [6][7] - The focus is on developing next-generation technologies and services for digital transformation in design and manufacturing [8][9] - The company aims to achieve a Rule of 40 framework, balancing growth and free cash flow margins [19] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism despite macroeconomic and geopolitical challenges, noting strong renewal rates and consistent new business trends [5] - The transition to annual billings is expected to impact free cash flow in fiscal 2025, but the company anticipates significant growth in free cash flow in fiscal 2026 [21][24] Other Important Information - The company reported record bid activity in construction and strong momentum in AEC, particularly in transportation and water infrastructure [25][26] - The largest-ever Enterprise Business Agreement (EBA) was signed during the quarter, reflecting strong customer demand [11] Q&A Session Summary Question: Why is the new transaction model considered consequential? - The new model is crucial for modernizing customer relationships and enhancing the integration of cloud-based solutions [34][36] Question: Can you provide more details on fiscal 2025 expectations? - Management highlighted headwinds such as the non-recurrence of EBA upfront revenue and macroeconomic factors affecting new subscriber growth [38][41] Question: What are the strongest areas in Autodesk Construction Cloud? - The company is experiencing strong performance in construction, particularly in industrial and infrastructure projects, with record bid activity [60][61] Question: How is the transition from multiyear to annual billings progressing? - The rollout is on track, with expectations for a mechanical rebuild of free cash flow as the transition continues [48][49] Question: What feedback has been received regarding the new data strategy and AI capabilities? - Customers are generally supportive of the ethical use of data and recognize the productivity benefits of automating model creation [54]

Summary of Autodesk, Inc. Conference Call Company Overview - **Company**: Autodesk, Inc. (NASDAQ:ADSK) - **Industry**: Architecture, Engineering, and Construction (AEC) Key Points Market Opportunity - Autodesk identifies a **Total Addressable Market (TAM)** of **$46 billion** in AEC with **28 million potential professionals** using their products [6] - The design segment alone represents a **$30 billion** market with **11 million potential users** [6] Customer Challenges and Opportunities - Customers face increasing demand for housing due to population growth, necessitating more construction [6] - Challenges include a **labor shortage** and rising costs of materials, which Autodesk aims to address through software automation [7] Building Information Modeling (BIM) - BIM mandates globally are driving the adoption of Autodesk's Revit software, particularly in public sector projects [9] - The UK leads in BIM adoption, with around **50% penetration**, while new mandates in Ireland and Spain are expected to boost usage [11] Industry Clouds - Autodesk introduced three industry clouds: **Fusion, Forma, and Flow** to enhance connected data across design and construction processes [12] - Forma aims to elevate BIM capabilities and improve data accessibility for AI and machine learning applications [14] Generative AI and Data Utilization - Autodesk has over a decade of experience in AI, utilizing it for predictive analysis in construction projects [18] - The company is leveraging structured data to train AI for better project outcomes, such as predicting potential delays [20] Digital Twin Technology - Autodesk's **Tandem** platform is focused on creating digital twins, which are expected to enhance operational efficiency and cost savings for customers [27] - The transition from functional twins to operational twins is underway, integrating IoT data for real-time performance monitoring [28] Infrastructure and Renovation Trends - The company sees significant opportunities in infrastructure projects, particularly in the context of public investments like the **IIJA** [36] - Renovation projects now account for over **50%** of new projects, a shift from new construction trends pre-COVID [44] Competitive Differentiation - Autodesk's depth in civil infrastructure, particularly through acquisitions like **Innovyze**, enhances its competitive edge [33] - The company is focused on integrating design data with construction processes, creating a unique value proposition [52] Labor Market and Automation - The labor shortage in the AEC sector is prompting Autodesk's customers to invest in educational programs and automation to improve efficiency [61] - Autodesk views generative AI as a co-pilot for designers, enhancing productivity and creativity [64] Pricing and Product Strategy - The **Forma** product is priced at **$1,000 per year** and is included in the AEC collection to encourage adoption [67] - Autodesk is exploring flexible pricing models to facilitate cross-selling opportunities within its existing customer base [59] Future Outlook - Autodesk is optimistic about growth in the water infrastructure sector, recognizing its critical role in various projects [75] - The company is positioned to capitalize on the increasing demand for digital solutions in the construction and infrastructure markets [36][38] Additional Insights - Autodesk's strategy includes enhancing the usability of Revit data for digital twins, making it easier for customers to derive value from their existing models [31] - The company is actively addressing the fragmented digital twin market by providing integrated solutions that leverage their existing data [31] This summary encapsulates the key insights and strategic directions discussed during the Autodesk conference call, highlighting the company's focus on innovation, market opportunities, and customer challenges in the AEC industry.

Financial Data and Key Metrics Changes - The company has seen strong performance in the last quarter, exceeding investor expectations despite macroeconomic concerns [20][21] - The Architecture Billing Index (ABI) indicates a healthy nine to ten months backlog for customers, suggesting stability in the construction sector [21] Business Line Data and Key Metrics Changes - Autodesk Construction Solutions has made significant progress in integrating acquired technologies into a single platform, enhancing project management capabilities [11][12] - The company is focusing on monetizing opportunities across enterprise, mid-market, and smaller contractors, indicating a broad growth strategy [9] Market Data and Key Metrics Changes - The total addressable market (TAM) for Autodesk in construction is estimated at $15 billion, with significant growth potential as digitization in the industry continues to evolve [9][16] - The company is expanding its presence in EMEA and Asia-Pacific markets, leveraging strong channel partnerships to reach new customers [18] Company Strategy and Development Direction - Autodesk aims to connect design, construction, and manufacturing through its platform, positioning itself for future trends in offsite and modular construction [12][14] - The integration of construction sales teams into the broader Autodesk sales organization is expected to drive efficiencies and enhance customer engagement [30][32] Management's Comments on Operating Environment and Future Outlook - Management acknowledges challenges in the construction industry, particularly in workforce availability, but sees opportunities for technology to improve efficiency [22][55] - The company is optimistic about the ongoing digitization trends and the potential for growth in sectors like data centers, hospitals, and infrastructure projects [27][28] Other Important Information - Autodesk is investing in training programs for future construction workers, partnering with unions and educational institutions to enhance workforce skills [54][55] - The company is focusing on customer experience and product reliability as key areas for investment moving forward [62] Q&A Session Summary Question: How is Autodesk addressing the impact of the IRA on construction spending? - Management believes that the IRA is a small addition to a much larger infrastructure spending landscape, which remains robust even without it [57][58] Question: What are the top priorities for Autodesk as it integrates its teams? - The top priorities include enhancing product delivery, expanding market presence, and improving customer experience [60][62]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended July 31, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 0-14338 AUTODESK, INC. (Exact name of registrant as specified in its charter) Delaware 94-2819853 (State or other jurisdiction of (I ...

Autodesk, Inc. (NASDAQ:ADSK) Q2 2024 Earnings Conference Call August 23, 2023 5:00 PM ET Company Participants Simon Mays-Smith - VP, IR Andrew Anagnost - CEO Debbie Clifford - CFO Conference Call Participants Saket Kalia - Barclays Jay Vleeschhouwer - Griffin Securities Adam Borg - Stifel Joe Vruwink - Baird Tyler Radke - Citi Jason Celino - KeyBanc Capital Markets Michael Funk - Bank of America Matt Hedberg - RBC Capital Markets Bhavin Shah - Deutsche Bank Ken Wong - Oppenheimer & Company Nay Soe Naing - B ...