Autodesk(ADSK) - 2026 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Autodesk reported a total revenue growth of 17% year-over-year, with an 18% increase in constant currency [9] - Billings increased by 36% as reported and 34% in constant currency, reflecting a shift to annual billings for most multiyear contracts [10] - Free cash flow for the second quarter was $451 million, benefiting from earlier timing of billings [11] - The company raised its full-year billings guidance range to $7.355 billion to $7.445 billion and revenue guidance to $7.025 billion to $7.075 billion [13][16] Business Line Data and Key Metrics Changes - The AECO sector showed strength due to sustained investment in data centers, infrastructure, and industrial buildings, offsetting softness in commercial [8] - The contribution from the new transaction model to revenue was approximately $105 million, while billings from the new model were about $129 million [9][10] - The company noted consistent MACE revenue growth when excluding the impact of acquisitions [10] Market Data and Key Metrics Changes - Autodesk's performance in the U.S. and international markets remained strong, with notable growth in the Middle East and India due to infrastructure investments [65] - The company experienced strong momentum in the construction business, with no signs of deceleration [42] Company Strategy and Development Direction - Autodesk is focused on cloud, platform, and AI strategies, optimizing sales and marketing to drive higher operating margins [6] - The company aims to enhance its position in the construction sector through comprehensive end-to-end platforms and industry clouds [21] - Autodesk is investing in AI and generative design to improve productivity and streamline workflows across its product offerings [28][29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's momentum despite geopolitical and macroeconomic uncertainties [6] - The outlook for the second half of the year remains cautious, with expectations of continued strong performance in the construction and AECO sectors [12][76] - Management emphasized the importance of execution and control over factors that drive revenue and operating margins [13][68] Other Important Information - The company has initiated a sales and marketing efficiency plan to enhance operational leverage and margin expansion [14] - Autodesk's share buyback targets for fiscal 2026 have been raised to between $1.2 billion and $1.3 billion, a 40% to 50% increase compared to fiscal 2025 [16] Q&A Session Summary Question: What is Autodesk's appetite for transformative M&A? - Autodesk's capital allocation strategy prioritizes organic investments, with M&A considered for targeted acquisitions that accelerate existing roadmaps [34] Question: Can you elaborate on the operating margin goal for fiscal 2029? - The margin expansion will largely come from sales and marketing efficiency, with inherent operating leverage contributing to the goal [37] Question: What is driving the ongoing momentum in the construction business? - The construction business is performing well across various segments, with strong international growth and a comprehensive end-to-end platform [42] Question: How is the EBA renewal opportunity shaping up for the back half of the year? - Autodesk has a large pool of renewals and feels well set up for the back half of the year, with strong execution in the first half continuing [48] Question: What are the dynamics behind the increased billings guidance? - The increase in billings guidance reflects strong performance in AECO and construction, with net revenue retention rates remaining robust [52] Question: How is Autodesk addressing customer adoption of new technologies? - Autodesk is seeing increased API usage and customer adoption of granular data, indicating a positive trend in technology acceptance [56] Question: What is the outlook for the second half of the year given the cautious guidance? - The cautious guidance reflects a prudent approach, but management expects to outperform the low end of the range if current momentum continues [104]