ADSK
Autodesk, INC
NASDAQ
8-K: Autodesk Reports Strong Q3 Results and Appoints New CFO, Raising Full-Year Guidance
Sentiment:
Quarterly Report
26 November 2024 4:05 PM
Autodesk announced positive third-quarter fiscal 2025 results, raised its full-year guidance, and appointed Janesh Moorjani as its new Chief Financial Officer.
Better than expected
Autodesk's results were better than expected due to strong billings growth and the raising of full-year guidance across multiple metrics.
Summary
- Autodesk's total revenue for the third quarter of fiscal year 2025 increased by 11% to $1.57 billion.
- The company's GAAP operating margin was 22%, a decrease of 2 percentage points, while the non-GAAP operating margin was 36%, down 3 percentage points.
- GAAP diluted earnings per share (EPS) was $1.27, and non-GAAP diluted EPS was $2.17.
- Total billings increased by 28% to $1.54 billion.
- Recurring revenue accounted for 97% of total revenue.
- The net revenue retention rate remained between 100% and 110% on a constant currency basis.
- Autodesk has raised the midpoints of its full-year billings, revenue, margins, earnings per share, and free cash flow guidance ranges.
- Janesh Moorjani has been appointed as the new Chief Financial Officer, effective December 16, 2024, replacing interim CFO Elizabeth Rafael.
Sentiment
Score: 8
Explanation: The sentiment is positive due to strong financial results, increased guidance, and the appointment of a new CFO. However, there are some concerns about decreasing operating margins and the general economic climate.
Positives
- Autodesk experienced strong revenue growth, with a total increase of 11% in Q3 FY25.
- Billings saw a substantial increase of 28%, indicating strong future revenue potential.
- The high percentage of recurring revenue (97%) demonstrates the stability of the business model.
- The company is raising its full-year guidance across multiple metrics, reflecting confidence in future performance.
- The appointment of a new CFO with extensive experience is a positive step for the company's leadership.
- Free cash flow increased significantly by $186 million to $199 million.
Negatives
- The GAAP operating margin decreased by 2 percentage points to 22%.
- The non-GAAP operating margin decreased by 3 percentage points to 36%.
- Deferred revenue decreased by 9% to $3.66 billion.
Risks
- The company faces challenges from global economic and political conditions, including foreign exchange headwinds and recessionary fears.
- Geopolitical tensions and armed conflicts could impact the business.
- The company is dependent on international revenue and operations, exposing it to various risks.
- There is a risk of not being able to predict subscription renewal rates.
- The company faces competition and rapidly evolving technological changes.
- Security incidents or other incidents compromising the integrity of our or our customers offerings, services, data, or intellectual property.
Future Outlook
Autodesk has raised the midpoints of its full-year guidance for billings, revenue, margins, earnings per share, and free cash flow, indicating a positive outlook for the remainder of fiscal year 2025. The company expects full-year billings to be between $5.900 and $5.980 billion, up 14-15%, and revenue to be approximately 11% higher than the previous year.
Management Comments
- Andrew Anagnost, Autodesk president and CEO, stated that the company is leading the industry in modernizing its go-to-market motion and has seen significant benefits from optimization initiatives.
- Betsy Rafael, Autodesk interim CFO, noted that the company experienced broad-based underlying growth across products and regions, with strong renewal rates and headwinds to new business growth.
- Andrew Anagnost expressed excitement about welcoming Janesh Moorjani as CFO, highlighting his experience and the value he will bring to the company.
- Janesh Moorjani stated he is thrilled to join Autodesk and work with the team to capitalize on growth opportunities.
Industry Context
Autodesk's results reflect a continued trend of growth in the software industry, particularly in the areas of design and manufacturing. The company's focus on recurring revenue and subscription models aligns with industry best practices. The appointment of a new CFO with experience in the technology sector is also a common move for companies looking to drive further growth and efficiency.
Comparison to Industry Standards
- Autodesk's recurring revenue of 97% is a strong indicator of a healthy subscription-based business model, which is a benchmark for software companies like Adobe and Microsoft.
- The 28% increase in billings is a positive sign, suggesting strong future revenue growth, which is comparable to the growth rates seen in other high-growth SaaS companies.
- While the GAAP and non-GAAP operating margins decreased slightly, they are still within a competitive range for the industry, with companies like Dassault Systèmes and Ansys having similar margin profiles.
- The net revenue retention rate between 100% and 110% is a good indicator of customer loyalty and is in line with industry standards for successful SaaS businesses.
- The appointment of Janesh Moorjani, who has experience at Elastic NV, a search-powered solutions company, is a strategic move to bring in expertise from a company with a similar business model.
Stakeholder Impact
- Shareholders will likely react positively to the strong financial results and increased guidance.
- Employees may be impacted by the ongoing business optimization initiatives.
- Customers will benefit from the company's continued investment in its products and services.
- Suppliers and creditors will be impacted by the company's overall financial performance.
Next Steps
- Janesh Moorjani will assume the role of CFO on December 16, 2024.
- The company will continue to focus on its go-to-market initiatives and optimization efforts.
- Autodesk will host its third quarter conference call today at 5 p.m. ET.
- The company will continue to deploy capital to offset and buy forward dilution.
- The company will continue to monitor the macroeconomic environment and its impact on the business.
Key Dates
- May 31, 2024: Elizabeth Rafael became interim Chief Financial Officer.
- October 31, 2024: End of the third fiscal quarter of 2025.
- November 25, 2024: Janesh Moorjani appointed as Chief Financial Officer.
- November 26, 2024: Autodesk issued a press release reporting financial results for the third fiscal quarter ended October 31, 2024.
- December 16, 2024: Janesh Moorjani will officially start as Chief Financial Officer.
- January 31, 2025: End of the fourth fiscal quarter of 2025.
- April 2025: Approximate date for the next annual grant of performance stock units.
Keywords
Autodesk, Financial Results, CFO Appointment, Recurring Revenue, Billings, Software, Guidance, Operating Margin, EPS, Free Cash Flow
ADSK
Autodesk, INC
NASDAQ
Sector: TBD
Filings with Classifications
Capital raise
6 June 2025 4:11 PM
Debt Offering Announcement
- Autodesk, Inc. issued and sold $500,000,000 aggregate principal amount of 5.300% Notes due 2035.
- The notes were sold in a public offering through an underwriting agreement with Citigroup Global Markets Inc., BofA Securities, Inc., and J.P. Morgan Securities LLC as representatives of the underwriters.
- The net proceeds are intended for general corporate purposes, potentially including the repayment of other indebtedness.
Worse than expected
29 May 2025 4:02 PM
Quarterly Report
- Despite a 15% increase in total net revenue, net income decreased by nearly 40% and income from operations fell by 22%. This significant decline in profitability, driven by a 26% surge in operating expenses, including a substantial $105 million restructuring charge, indicates a performance worse than what would typically be expected from a growing technology company without explicit prior guidance for such a sharp profitability drop.
- The ongoing internal investigation by the Audit Committee, contact from the SEC and USAO, and multiple related lawsuits introduce significant unquantified financial and reputational risks that were not fully anticipated or priced in by the market, contributing to a worse-than-expected overall picture.
Better than expected
26 March 2025 8:04 PM
Proxy Statement
- Autodesk's FY25 revenue of $6.1 billion exceeded expectations, demonstrating a 16% annual increase since FY19.
- Non-GAAP operating margins have increased by over 2,400 bps since FY 2019, indicating better-than-expected profitability.
- Free cash flow grew to $1.6 billion in FY 2025, surpassing previous targets and leading to an increased FY 2026 target of $2.075 billion $2.175 billion.
Worse than expected
6 March 2025 9:24 PM
Annual Results
- The company is undergoing an internal investigation regarding free cash flow and non-GAAP operating margin practices, which could lead to penalties and reputational harm.
Better than expected
26 November 2024 4:05 PM
Quarterly Report
- Autodesk's results were better than expected due to strong billings growth and the raising of full-year guidance across multiple metrics.
Worse than expected
3 September 2024 4:06 PM
Quarterly Report
- The decrease in deferred revenue and remaining performance obligations (RPO) indicates a potential slowdown in future revenue growth compared to previous expectations.
Better than expected
29 August 2024 4:04 PM
Quarterly Report
- Autodesk's Q2 results exceeded expectations, leading to an increase in the mid-points of their full-year guidance for billings, revenue, earnings per share, and free cash flow.
Better than expected
11 June 2024 4:05 PM
Quarterly Report
- The company's revenue, operating margin, and EPS all showed significant year-over-year improvements, indicating better than expected performance.
Delay expected
10 June 2024 4:19 PM
Quarterly Report
- Autodesk obtained lender consent to extend the period to provide annual audited consolidated financial statements to June 14, 2024.
Worse than expected
10 June 2024 4:19 PM
Quarterly Report
- The decrease in deferred revenue and remaining performance obligations indicates a potential slowdown in future revenue growth.
- The decrease in operating cash flow suggests a decline in the company's ability to generate cash from its operations.
Delay expected
3 June 2024 4:05 PM
8-K Filing with Preliminary Results and Business Outlook
- The company is still working to file its annual report on Form 10-K and hold an earnings call, indicating a delay in reporting.
- The company remains in a closed period and is restricted in its communications with investors until the Form 10-K is filed.
Delay expected
25 April 2024 4:10 PM
Regulatory Filing
- The company is delayed in filing its Annual Report on Form 10-K for the year ended January 31, 2024.
- The delay is due to an ongoing internal investigation.
Disclaimer: This summary was generated by artificial intelligence and its accuracy is not guaranteed. The information provided here is for general informational purposes only and does not constitute financial advice, recommendation, or endorsement of any kind. It may contain errors or omissions. You should not rely on this information to make financial decisions. Always seek the advice of a qualified financial professional before making any investment or financial decisions. Use of this information is at your own risk.