Autodesk(ADSK) - 2026 Q2 - Quarterly Results

Executive Summary & Highlights Autodesk reported strong Q2 FY26 results, featuring 17% revenue growth and management's positive outlook on AI innovation and raised full-year guidance Q2 FY26 Financial Highlights Autodesk reported strong second-quarter fiscal 2026 results, with revenue growing 17% year-over-year to $1.76 billion, demonstrating robust performance - Second quarter revenue grew 17 percent, and 18 percent on a constant currency basis, to $1.76 billion[1] Management Commentary Management highlighted Autodesk's AI leadership, strong AECO performance, and raised full-year guidance reflecting business strength and foreign exchange tailwinds - Autodesk is at the forefront of innovation in generative AI, building industry-specific foundation models and products capable of understanding 2D and 3D geometry, design data, and physical behavior[2] - Q2 saw strength in AECO, benefiting from sustained investment in data centers, infrastructure, and industrial buildings, offsetting softness in commercial. The Autodesk Store, billings linearity, and up-front revenue were stronger than expected[2] - Full-year guidance was raised to reflect the underlying strength of the business in the first half of the year and additional foreign exchange tailwinds[2] Q2 FY26 Financial Performance Autodesk demonstrated robust financial performance in Q2 FY26, with significant growth across key metrics including revenue, billings, and free cash flow Overall Financial Metrics Autodesk delivered strong Q2 FY26 financial results, with significant year-over-year growth in billings (36%), revenue (17%), GAAP operating margin (2 ppt increase), and free cash flow (122%) | (In millions, except percentages and per share amounts) | | Q2 FY26 | YoY Change | |---|---|---|---| | Billings | $ | 1,678 | 36 % | | Revenue | $ | 1,763 | 17 % | | GAAP Operating Margin | | 25 % | 2 ppt | | Non-GAAP Operating Margin | | 39 % | 1 ppt | | GAAP EPS | $ | 1.46 | $ 0.16 | | Non-GAAP EPS | $ | 2.62 | $ 0.47 | | Cash flow from operating activities | $ | 460 | 117 % | | Free cash flow | $ | 451 | 122 % | Net Revenue by Product Type In Q2 FY26, Design revenue grew 17% (18% constant currency) to $1,472 million, while Make revenue increased 20% (20% constant currency) to $194 million, demonstrating strong performance across core product categories | (In millions, except percentages) | | Q2 FY26 | YoY Change | YoY Change in Constant Currency | |---|---|---|---|---| | Design | $ | 1,472 | 17 % | 18 % | | Make | | 194 | 20 % | 20 % | | Other | | 97 | 13 % | 11 % | | Total Net Revenue | $ | 1,763 | 17 % | 18 % | Net Revenue by Geographic Area All geographic regions contributed to revenue growth in Q2 FY26, with Americas leading at 19% (19% constant currency) to $786 million, followed by EMEA at 18% (19% constant currency) to $675 million, and APAC at 11% (14% constant currency) to $302 million | (In millions, except percentages) | | Q2 FY26 | YoY Change | YoY Change in Constant Currency | |---|---|---|---|---| | Americas | $ | 786 | 19 % | 19 % | | EMEA | | 675 | 18 % | 19 % | | APAC | | 302 | 11 % | 14 % | | Total Net Revenue | $ | 1,763 | 17 % | 18 % | Net Revenue by Product Family AECO was the strongest performing product family in Q2 FY26, growing 23% (24% constant currency) to $878 million, while AutoCAD and AutoCAD LT and MFG both grew 13% (14% constant currency) | (In millions, except percentages) | | Q2 FY26 | YoY Change | YoY Change in Constant Currency | |---|---|---|---|---| | AECO | $ | 878 | 23 % | 24 % | | AutoCAD and AutoCAD LT | | 440 | 13 % | 14 % | | MFG | | 334 | 13 % | 14 % | | M&E | | 80 | 4 % | 4 % | | Other | | 31 | 3 % | 4 % | | Total Net Revenue | $ | 1,763 | 17 % | 18 % | Remaining Performance Obligations (RPO) Total Remaining Performance Obligations (RPO) increased 24% year-over-year to $7,297 million in Q2 FY26, with unbilled deferred revenue showing significant growth of 59% to $3,453 million | (In millions, except percentages) | Q2 FY26 | | YoY Change | |---|---|---|---| | Deferred Revenue | $ | 3,844 | 4 % | | Unbilled deferred revenue | | 3,453 | 59 % | | Remaining performance obligations ("RPO") | | 7,297 | 24 % | | Current RPO | | 4,677 | 20 % | Business Outlook (Guidance) Autodesk provided Q3 and full-year FY26 guidance, projecting continued revenue growth and increased non-GAAP EPS, reflecting strong business momentum Q3 FY26 Guidance For Q3 FY26, Autodesk projects revenue between $1,800 million and $1,810 million, with non-GAAP EPS expected to be in the range of $2.48 to $2.51 | Q3 FY26 Guidance Metrics | Q3 FY26 (ending October 31, 2025) | |---|---| | Revenue (in millions) | $1,800 - $1,810 | | EPS GAAP | $1.34 - $1.42 | | EPS non-GAAP (1) | $2.48 - $2.51 | Full Year FY26 Guidance Autodesk raised its full-year FY26 guidance, now expecting billings between $7,355 million and $7,445 million, revenue between $7,025 million and $7,075 million, and non-GAAP EPS between $9.80 and $9.98. Free cash flow is projected to be $2,200 million to $2,275 million | FY26 Guidance Metrics | FY26 (ending January 31, 2026) | |---|---| | Billings (in millions) (1) | $7,355 - $7,445 | | Revenue (in millions) (1) | $7,025 - $7,075 | | GAAP operating margin | 21% - 22% | | Non-GAAP operating margin (2) | ~37% | | EPS GAAP | $4.68 - $5.09 | | EPS non-GAAP (2) | $9.80 - $9.98 | | Free cash flow (in millions) (3) | $2,200 - $2,275 | Corporate Updates Autodesk announced the closure of government investigations into its free cash flow and non-GAAP operating margin practices Government Investigations Closed The U.S. Securities and Exchange Commission (SEC) and the United States Attorney's Office for the Northern District of California (USAO) have both closed their respective investigations into Autodesk's free cash flow and non-GAAP operating margin practices - The SEC notified Autodesk on August 19, 2025, and the USAO on August 21, 2025, that they were closing their matters regarding the internal investigation into the Company's free cash flow and non-GAAP operating margin practices[13] Additional Information Supplemental investor materials and conference call details are available, providing further insights into Autodesk's financial performance and operations Earnings Conference Call and Webcast Autodesk hosted its second-quarter conference call on August 28, 2025, with a live broadcast and replay available on its investor relations website - The live broadcast of the Q2 conference call was accessible at autodesk.com/investor, with a replay available for at least 12 months[14] Investor Presentation and Contacts Supplemental investor materials, including an investor presentation and Excel financials, are available on Autodesk's investor relations website, along with contact information for investor relations and press - An investor presentation, Excel financials, and other supplemental materials are available at autodesk.com/investor[15] Key Performance Metrics & Glossary The report details key performance metrics and a comprehensive glossary to clarify financial and operational terms used in Autodesk's business Key Performance Metrics Autodesk utilizes key performance metrics such as billings, recurring revenue, and net revenue retention rate to monitor the strength and long-term health of its recurring business, emphasizing that these metrics are independent of GAAP revenue and deferred revenue - Key performance metrics like billings, recurring revenue, and net revenue retention rate are used to monitor the strength and long-term health of the recurring business, and should be viewed independently of revenue and deferred revenue[16] Glossary of Terms The report provides a comprehensive glossary defining key financial and operational terms specific to Autodesk's business, such as Billings, Cloud Service Offerings, Constant Currency Growth Rates, Design Business, Enterprise Business Agreements (EBAs), Flex, Free Cash Flow, Industry Collections, Maintenance Plan, Make Business, Net Revenue Retention Rate (NR3), Other Revenue, Product Family, Product Subscription, Recurring Revenue, Remaining Performance Obligations (RPO), Solution Provider, Spend, Subscription Plan, Subscription Revenue, and Unbilled Deferred Revenue - Definitions are provided for key terms such as Billings, Net Revenue Retention Rate (NR3), and Remaining Performance Obligations (RPO), among others, to clarify financial and operational terminology[17][24][29] Safe Harbor Statement This section outlines the inherent risks and uncertainties associated with forward-looking statements, including global economic conditions, geopolitical tensions, product development, competition, and regulatory changes, which could cause actual results to differ materially from projections - The press release contains forward-looking statements subject to significant risks and uncertainties, including global economic and political conditions, product development, competition, and regulatory changes, which could cause actual results to differ materially[33] About Autodesk Autodesk empowers designers, engineers, builders, and creators globally with its Design and Make Platform, which leverages data and AI to accelerate insights, automate processes, and deliver better outcomes for businesses and the planet - Autodesk's Design and Make Platform helps designers, engineers, builders, and creators design and make anything, unlocking the power of data to accelerate insights and automate processes[35] Financial Statements (GAAP) The unaudited condensed consolidated financial statements provide a detailed overview of Autodesk's Q2 FY26 operations, balance sheet, and cash flows Condensed Consolidated Statements of Operations The unaudited condensed consolidated statements of operations for the three and six months ended July 31, 2025, show total net revenue of $1,763 million for Q2 FY26, with net income of $313 million and diluted EPS of $1.46 | (In millions, except per share data) | Three Months Ended July 31, 2025 | Six Months Ended July 31, 2025 | |---|---|---| | Total net revenue | $1,763 | $3,396 | | Gross profit | $1,604 | $3,077 | | Income from operations | $444 | $677 | | Net income | $313 | $465 | | Diluted net income per share | $1.46 | $2.15 | Condensed Consolidated Balance Sheets The unaudited condensed consolidated balance sheets as of July 31, 2025, show total assets of $10,856 million and total stockholders' equity of $2,715 million, reflecting a stable financial position | (In millions) | July 31, 2025 | January 31, 2025 | |---|---|---| | Total assets | $10,856 | $10,833 | | Total current liabilities | $4,566 | $5,151 | | Long-term notes payable, net | $2,481 | $1,987 | | Total stockholders' equity | $2,715 | $2,621 | Condensed Consolidated Statements of Cash Flows For the six months ended July 31, 2025, net cash provided by operating activities was $1,024 million, a significant increase from $706 million in the prior year, while net cash used in financing activities was $634 million | (In millions) | Six Months Ended July 31, 2025 | Six Months Ended July 31, 2024 | |---|---|---| | Net cash provided by operating activities | $1,024 | $706 | | Net cash provided by (used in) investing activities | $8 | $(864) | | Net cash used in financing activities | $(634) | $(221) | | Net increase (decrease) in cash and cash equivalents | $404 | $(379) | | Cash and cash equivalents at end of period | $2,003 | $1,513 | Reconciliation of GAAP to Non-GAAP Financial Measures This section reconciles GAAP to non-GAAP financial measures, offering enhanced transparency into Autodesk's core business performance and future guidance Explanation of Non-GAAP Measures Autodesk provides non-GAAP measures to offer greater transparency into key metrics used by management for financial and operational decision-making, helping investors understand core business performance, while also providing GAAP measures for comprehensive evaluation - Non-GAAP measures are used to supplement GAAP financial statements, providing meaningful supplemental information regarding earning potential and performance by excluding certain expenses not indicative of core business operating results[41] - These measures allow for greater transparency with respect to key metrics used by management and are used by institutional investors and analysts to analyze business health[41] - Non-GAAP measures have limitations as they are not prepared in accordance with GAAP and exclude items that may materially impact reported financial results[42] Q2 FY26 GAAP to Non-GAAP Reconciliation The reconciliation for Q2 FY26 shows a non-GAAP operating margin of 39% (vs. GAAP 25%) and non-GAAP diluted EPS of $2.62 (vs. GAAP $1.46), primarily adjusted for stock-based compensation and amortization of intangibles. Free cash flow was $451 million | | Three Months Ended July 31, 2025 | |---|---| | GAAP operating margin | 25 % | | Non-GAAP operating margin | 39 % | | GAAP diluted net income per share | $1.46 | | Non-GAAP diluted net income per share | $2.62 | | Net cash provided by operating activities | $460 | | Free cash flow | $451 | Q3 FY26 & FY26 Guidance GAAP to Non-GAAP Reconciliation The reconciliation for guidance shows projected non-GAAP EPS for Q3 FY26 at $2.48 - $2.51 (vs. GAAP $1.34 - $1.42) and for full-year FY26 at $9.80 - $9.98 (vs. GAAP $4.68 - $5.09), with non-GAAP operating margin for FY26 at ~37% (vs. GAAP 21%-22%) | GAAP to non-GAAP diluted EPS reconciliation | Q3 FY26 (ending October 31, 2025) | |---|---| | GAAP EPS | $1.34 - $1.42 | | Non-GAAP EPS | $2.48 - $2.51 | | GAAP to non-GAAP operating margin reconciliation | FY26 (ending January 31, 2026) | |---|---| | GAAP operating margin | 21%- 22% | | Non-GAAP operating margin (1) | 37% | | GAAP to non-GAAP diluted EPS reconciliation | FY26 (ending January 31, 2026) | |---|---| | GAAP EPS | $4.68 - $5.09 | | Non-GAAP EPS | $9.80 - $9.98 |