Autodesk(ADSK) - 2025 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Total revenue in Q4 grew 12% year-over-year, with broad-based growth across products and regions [18][19] - GAAP and non-GAAP operating margins for Q4 were 22% and 37%, reflecting year-over-year increases of 90 basis points and 160 basis points, respectively [21] - Free cash flow for fiscal 2025 was $1.57 billion, exceeding guidance [22] Business Line Data and Key Metrics Changes - By product in constant currency: AutoCAD and AutoCAD LT revenue grew 9%; AECO revenue grew 15%; manufacturing revenue grew 10%; and M&E revenue grew 10% [18] - Direct revenue increased 35% in constant currency, representing 47% of total revenue, up 8 percentage points from last year [19] - Contribution from the new transaction model to revenue was$ 46 million in Q4 and $71 million for the year [19] Market Data and Key Metrics Changes - Revenue grew 11% in the Americas, 13% in EMEA, and 11% in APAC in constant currency [19] - RPO (Remaining Performance Obligations) of$ 6.9 billion and current RPO of $4.5 billion grew 14% and 12%, respectively [20] Company Strategy and Development Direction - Autodesk is focusing on the convergence of design and make in the cloud, enabled by platform, industry clouds, and AI [11][36] - The company is initiating an optimization phase of its sales and marketing plan to enhance customer satisfaction and productivity [8][10] - Future focus includes tighter channel partner integration and broad deployment of self-service capabilities [10][34] Management's Comments on Operating Environment and Future Outlook - Management noted that economic uncertainty continues to impact customer willingness to invest, but they are optimistic about new product subscriptions and emerging businesses driving growth [58][60] - The company expects constant currency billings growth of 17% to 19% and revenue growth of 8% to 9% for fiscal 2026, excluding the impact of the new transaction model [28][29] - Management emphasized the importance of executing their go-to-market optimization plan to drive higher margins over time [65][100] Other Important Information - The company plans to buy back between$ 1.1 billion and $1.2 billion of shares in fiscal 2026, a 30% to 40% increase compared to fiscal 2025 [31] - Autodesk is committed to further margin expansion beyond fiscal 2026, aiming for GAAP margins among the best in the industry [100] Q&A Session Summary Question: What drives new business growth higher over time? - Management indicated that enhancing channel productivity and investing in emerging high-growth businesses will drive new business growth [58][60] Question: Can you provide more color on margin potential and restructuring? - Management expressed confidence in margin expansion due to strong fiscal discipline and the ongoing optimization of the go-to-market strategy [62][65] Question: How is macro uncertainty affecting customer sentiment? - Management noted that customers desire certainty and that uncertainty is fueling customer angst, but they believe Autodesk's diversified business can absorb policy changes [72][73] Question: What are the critical product or technology executables for the future? - Management highlighted investments in industry clouds and AI capabilities as key areas for future growth [81][82] Question: How does the revenue guide reflect potential disruption from restructuring? - Management acknowledged that the guidance considers potential risks associated with restructuring and the CRO transition [88] Question: What is the timeline for seeing benefits from sales and marketing adjustments? - Management indicated that significant benefits are expected in fiscal 2026, with ongoing investments to build capabilities for future optimization [106] Question: How does Autodesk view M&A in light of recent changes? - Management reaffirmed their commitment to being an acquisitive company, looking for opportunities that align with their strategy [108]