10-QPeriod: Q2 FY2021

Autodesk, Inc. Quarterly Report for Q2 Ended Jul 31, 2020

Filed September 2, 2020For Securities:ADSK

Summary

Autodesk, Inc.'s fiscal Q2 2021 (ending July 31, 2020) report shows robust revenue growth driven by a significant increase in subscription revenue, up 27% year-over-year for the quarter and 31% year-to-date. This growth is partially offset by a decline in maintenance revenue as the company continues its transition to a subscription-based model. Total net revenue increased 15% for the quarter and 17% year-to-date. The company demonstrated strong profitability with net income of $98.2 million for the quarter, a substantial increase from $40.2 million in the prior year period. This performance highlights Autodesk's successful transition towards a recurring revenue model and its ability to generate strong financial results even amidst the ongoing COVID-19 pandemic. The company's strategic priorities, including delivering on the promise of subscription, digitizing operations, and reimagining construction and manufacturing, appear to be gaining traction. Despite some COVID-19 related impacts such as a slight decrease in product usage and a mid-teen percentage decline in new business in Q2, the company is seeing a stable recovery and increased usage of its cloud collaboration products. Management's focus on cost management, including reduced travel and entertainment expenses, and continued investment in R&D and strategic areas, positions Autodesk to navigate the economic challenges and emerge stronger. The company maintained a strong liquidity position with $1.52 billion in cash and marketable securities.

Financial Highlights

50 data points
Beta

Revenue

$913.10M

91.1% Gross Margin

Net Income

$98.20M

10.8% Net Margin

EPS (Diluted)

$0.44

Total Assets

$5.75B

Cash & Equivalents

$1.44B

Free Cash Flow

$64.40M

Financial Statements
Beta
Revenue$913.10M
Cost of Revenue$80.90M
Gross Profit$832.20M
R&D Expenses$232.50M
Operating Expenses$686.10M
Operating Income$146.10M
Net Income$98.20M
EPS (Basic)$0.45
EPS (Diluted)$0.44
Shares Outstanding (Basic)219.20M
Shares Outstanding (Diluted)222.20M

Key Highlights

  • 1Total net revenue increased by 15% to $913.1 million for the three months ended July 31, 2020, compared to the prior year period.
  • 2Subscription revenue saw a significant increase of 27% to $841.2 million for the three months ended July 31, 2020, indicating strong adoption of the subscription model.
  • 3Net income more than doubled to $98.2 million for the three months ended July 31, 2020, compared to $40.2 million in the prior year period.
  • 4Gross profit increased by 16% to $832.2 million, demonstrating improved profitability on revenue.
  • 5Operating expenses increased by 7% to $686.1 million, outpacing revenue growth at a slower rate, leading to improved operating income.
  • 6Remaining Performance Obligations (RPO) stood at $3.35 billion, providing visibility into future contracted revenue.
  • 7The company maintained a strong cash position with $1.44 billion in cash and cash equivalents as of July 31, 2020.

Frequently Asked Questions

Autodesk reported a 15% increase in total net revenue for the three months ended July 31, 2020, reaching $913.1 million. This growth was primarily driven by a substantial 27% increase in subscription revenue, which reached $841.2 million, reflecting the company's successful transition to a subscription-based business model. Maintenance revenue continued to decline as expected due to this transition.

Profitability significantly improved, with net income reaching $98.2 million for the quarter ended July 31, 2020, more than double the $40.2 million reported in the same period last year. Diluted earnings per share also increased to $0.44 from $0.18 year-over-year. This strong performance was supported by increased revenue and disciplined management of operating expenses.

While the pandemic led to a slight decrease in product usage and a mid-teen percentage decline in new business during the second quarter, Autodesk experienced a stable recovery and increased usage of its cloud collaboration products as customers worked from home. The company also implemented measures to support customers, such as extended payment terms and deferred price increases. Autodesk is actively managing spending and investing in key areas to navigate the ongoing economic challenges.

Autodesk maintains a strong liquidity position with $1.52 billion in cash and marketable securities as of July 31, 2020. The company expects to meet its liquidity needs through existing cash, ongoing cash flows, and its available credit facility. Management believes its investment in cloud products and a subscription business model provide a robust foundation to navigate current economic challenges.