10-QPeriod: Q2 FY2012

Autodesk, Inc. Quarterly Report for Q2 Ended Jul 31, 2011

Filed September 1, 2011For Securities:ADSK

Summary

Autodesk, Inc. reported strong financial results for the second quarter and first half of fiscal year 2012, driven by robust growth across its segments and geographic regions. Total net revenue increased by 16% and 13% for the three and six months ended July 31, 2011, respectively, compared to the prior year periods. This growth was fueled by a significant rise in license and other revenue, up 19% and 17%, and a solid increase in maintenance revenue, up 11% and 8%. The company also saw strong growth in its suite offerings, with revenue up 45% and 31% for the respective periods, indicating successful adoption of its bundled product strategy. Profitability improved considerably, with income from operations rising 19% and 33% for the three and six months ended July 31, 2011. This was achieved through effective cost management, with operating expenses growing at a slower pace than revenue. The company also benefited from a decrease in restructuring charges. Autodesk continues to expand its global presence, with particular strength in the Asia Pacific region, and is actively pursuing strategic acquisitions, including the recent additions of Scaleform and Blue Ridge Numerics, to further enhance its product portfolio and market position. The company ended the period with a strong liquidity position, with $1.55 billion in cash and marketable securities.

Financial Highlights

48 data points
Beta

Revenue

$546.30M

89.5% Gross Margin

Net Income

$71.20M

13.0% Net Margin

EPS (Diluted)

$0.30

Total Assets

$2.97B

Cash & Equivalents

$1.13B

Free Cash Flow

$115.60M

Financial Statements
Beta
Revenue$546.30M
Cost of Revenue$57.40M
Gross Profit$488.90M
R&D Expenses$139.20M
Operating Expenses$393.90M
Operating Income$95.00M
Net Income$71.20M
EPS (Basic)$0.31
EPS (Diluted)$0.30
Shares Outstanding (Basic)229.40M
Shares Outstanding (Diluted)236.60M

Key Highlights

  • 1Net revenue increased 16% to $546.3 million for the three months ended July 31, 2011, and 13% to $1,074.6 million for the six months ended July 31, 2011, compared to the prior year periods.
  • 2License and other revenue grew by 19% and 17% for the three and six months respectively, indicating strong demand for core software products.
  • 3Maintenance revenue saw healthy growth of 11% and 8% for the three and six months respectively, contributing to recurring revenue streams.
  • 4Revenue from suites increased significantly by 45% and 31% for the three and six months respectively, highlighting the success of Autodesk's product bundling strategy.
  • 5Income from operations increased by 19% for the three months and 33% for the six months, demonstrating improved profitability and operational efficiency.
  • 6The company completed two strategic acquisitions during the period: Scaleform for $36.2 million and Blue Ridge Numerics for $41.2 million, to enhance its product offerings.
  • 7Autodesk maintained a strong liquidity position, ending the period with $1.55 billion in cash and marketable securities.

Frequently Asked Questions

Autodesk's primary goals for the remainder of fiscal 2012 are to grow revenue and improve its operating margin percentage. The company plans to achieve this by delivering market-leading products and solutions, investing in product functionality and new product lines, including suites offerings. However, the company acknowledges that achieving these financial goals is subject to various uncertainties, including global economic conditions, unemployment rates, and credit availability in key industries.

Autodesk derives a significant portion of its revenue from international operations, which exposes it to various risks including regulatory, economic, intellectual property, currency exchange rate, taxation, and political instability. The company actively manages these risks through currency hedging strategies and by diversifying its operations. Emerging markets, particularly in Asia Pacific and Europe, are key growth areas, though they present unique challenges such as economic volatility and intellectual property protection.

Autodesk completed two acquisitions during the six months ended July 31, 2011: Scaleform for $36.2 million and Blue Ridge Numerics for $41.2 million. These acquisitions are expected to enhance its product portfolio and market position. The results of operations for these acquisitions are included in the consolidated statements of operations. While the aggregate impact of these acquisitions was not material to the financial statements, the company continues to integrate them to realize their strategic benefits. Acquisitions are a key part of Autodesk's strategy to accelerate product development and expand its offerings.

Autodesk is actively promoting its product suites as a key part of its growth strategy, aiming to increase customer productivity and the value of their design data. Revenue from suites increased significantly by 45% and 31% for the three and six months ended July 31, 2011, respectively. The company believes that as customers adopt these suites, revenue from suites will increase as a percentage of total revenue, while revenue from standalone flagship products may decline as a percentage. This strategy involves further development and enhancement of existing products, as well as strategic acquisitions.