10-QPeriod: Q3 FY2016

Autodesk, Inc. Quarterly Report for Q3 Ended Oct 31, 2015

Filed December 9, 2015For Securities:ADSK

Summary

Autodesk, Inc. (ADSK) reported a net loss of $43.8 million for the third quarter of fiscal year 2016, compared to a net income of $10.7 million in the prior year's quarter. This downturn was primarily driven by increased operating expenses, notably higher employee-related and cloud-related costs, amidst a strategic business model transition from perpetual licenses to subscriptions. While total net revenue remained relatively flat year-over-year at $599.8 million, a shift from license and other revenue to subscription revenue was evident, with subscription revenue growing 7% to $318.9 million. The company continues to invest heavily in its transition to cloud-based technologies and flexible licensing, which is impacting short-term profitability but is expected to lead to a more predictable business model with recurring revenue over the long term. Key segments like Architecture, Engineering, and Construction (AEC) and Manufacturing (MFG) showed revenue growth, while Platform Solutions and Emerging Business (PSEB) experienced declines. The company maintained a strong liquidity position with $2.8 billion in cash and marketable securities at quarter-end.

Financial Highlights

50 data points
Beta

Revenue

$599.80M

84.8% Gross Margin

Net Income

-$43.80M

-7.3% Net Margin

EPS (Diluted)

$-0.19

Total Assets

$5.22B

Cash & Equivalents

$1.34B

Free Cash Flow

$68.40M

Financial Statements
Beta
Revenue$599.80M
Cost of Revenue$91.00M
Gross Profit$508.80M
R&D Expenses$197.90M
Operating Expenses$523.60M
Operating Income-$14.80M
Net Income-$43.80M
EPS (Basic)$-0.19
EPS (Diluted)$-0.19
Shares Outstanding (Basic)225.30M
Shares Outstanding (Diluted)225.30M

Key Highlights

  • 1Net loss of $43.8 million for the quarter, a significant shift from the $10.7 million net income in the prior year quarter.
  • 2Total net revenue was $599.8 million, a slight decrease of 3% year-over-year.
  • 3Shift towards subscription revenue continues: Subscription revenue grew 7% to $318.9 million, while License and other revenue decreased 12% to $280.9 million.
  • 4Operating expenses increased by 1% to $523.6 million, impacting profitability.
  • 5The company is actively managing its business model transition, investing in cloud and subscription services, which is expected to improve long-term predictability.
  • 6Cash and marketable securities stood at a strong $2.8 billion, providing ample liquidity.

Frequently Asked Questions

The net loss of $43.8 million for the third quarter was primarily due to increased operating expenses, including higher employee-related and cloud-related costs, as Autodesk continues its strategic transition to a subscription-based business model.

The transition from perpetual licenses to subscriptions is causing a shift in revenue recognition. While total net revenue remained relatively flat, subscription revenue saw a 7% increase, indicating a move towards more ratable revenue streams. This transition is expected to impact short-term profitability but is designed to create a more predictable recurring revenue model for the future.

The Architecture, Engineering, and Construction (AEC) segment showed revenue growth of 4%, and the Manufacturing (MFG) segment grew 3%. However, the Platform Solutions and Emerging Business (PSEB) segment experienced a revenue decrease of 15%.

Autodesk maintained a strong liquidity position with $2.8 billion in cash and marketable securities as of October 31, 2015, providing financial flexibility for ongoing operations and strategic investments.