Autodesk(US:ADSK)2023-11-22 02:09Financial 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]