10-KPeriod: FY2019

Autodesk, Inc. Annual Report, Year Ended Jan 31, 2019

Filed March 25, 2019For Securities:ADSK

Summary

Autodesk's 2019 10-K filing reveals a company in the midst of a significant business model transition, shifting from perpetual software licenses to a subscription-based model. This transition is driving substantial growth in subscription revenue and Annualized Recurring Revenue (ARR), indicating a positive trajectory for recurring revenue streams. The company reported a net revenue of $2.57 billion for fiscal year 2019, a 25% increase from the previous year, with subscription revenue growing by 102%. This growth is supported by strategic acquisitions in the construction technology sector, such as PlanGrid and BuildingConnected, aimed at strengthening their cloud-based construction platform. Despite these positive developments, the company incurred a net loss of $80.8 million, partly due to ongoing investments in product development and restructuring charges associated with the business model shift. Investors should note the company's strong focus on converting maintenance plan customers to subscriptions, with over 794,000 conversions achieved. Autodesk aims to convert the remaining 796,100 maintenance plan customers, which represents a significant opportunity for continued ARR growth. The company's product portfolio spans architecture, engineering, construction, product design & manufacturing, and media & entertainment, with key products like AutoCAD and Revit remaining central. International revenue constitutes a substantial portion of the company's sales, highlighting exposure to global economic conditions and currency fluctuations. Key financial metrics to watch include ARR growth, subscription plan adoption rates, and the ongoing impact of the shift away from perpetual licenses.

Financial Highlights

54 data points
Beta

Revenue

$2.57B

88.9% Gross Margin

Net Income

-$80.80M

-3.1% Net Margin

EPS (Diluted)

$-0.37

Total Assets

$4.73B

Cash & Equivalents

$886.00M

Free Cash Flow

$310.10M

Financial Statements
Beta
Revenue$2.57B
Cost of Revenue$285.90M
Gross Profit$2.28B
R&D Expenses$725.00M
Operating Expenses$2.31B
Operating Income-$25.00M
Net Income-$80.80M
EPS (Basic)$-0.37
EPS (Diluted)$-0.37
Shares Outstanding (Basic)218.90M
Shares Outstanding (Diluted)218.90M

Key Highlights

  • 1Autodesk reported a 25% year-over-year increase in net revenue to $2.57 billion for fiscal year 2019, driven by a 102% surge in subscription revenue.
  • 2The company is actively transitioning to a subscription-based business model, with Subscription Plan ARR growing by 87% to $2.20 billion.
  • 3Autodesk completed significant acquisitions in fiscal 2019, including PlanGrid and BuildingConnected, to enhance its cloud-based construction platform.
  • 4The company is focused on converting maintenance plan customers to subscriptions, having successfully moved over 794,000 customers and aiming to convert the remaining 796,100.
  • 5International revenue represented a significant portion of total revenue, with Americas (41%), EMEA (40%), and APAC (19%).
  • 6The company incurred a net loss of $80.8 million in fiscal 2019, impacted by investments in product development and restructuring costs.
  • 7Autodesk's stock repurchase program is active, indicating a return of capital to shareholders.

Frequently Asked Questions

Autodesk's primary business strategy, as highlighted in the 2019 10-K, is to transition from selling perpetual software licenses to a subscription-based model. This shift aims to provide customers with greater flexibility and to capture recurring revenue through subscription plans, industry collections, and cloud services.

Autodesk demonstrated strong revenue growth in fiscal year 2019, with net revenue increasing by 25% to $2.57 billion. This growth was primarily fueled by a significant 102% increase in subscription revenue. Annualized Recurring Revenue (ARR) also saw a substantial increase of 34% to $2.75 billion, with Subscription Plan ARR growing by 87%.

In fiscal year 2019, Autodesk made several key acquisitions to bolster its construction technology offerings: PlanGrid, Inc., BuildingConnected, Inc., and Assemble Systems, Inc. These acquisitions are intended to create a more comprehensive, cloud-based construction platform, enhancing their capabilities in bid management, document-centric workflows, and field execution.

Autodesk is actively incentivizing its maintenance plan customers to move to subscription offerings through a 'maintenance-to-subscription' (M2S) program. The company has successfully converted over 794,000 maintenance plan customers and aims to convert the remaining approximately 796,100 customers, which is a key driver for future subscription growth.