10-QPeriod: Q2 FY2024

Autodesk, Inc. Quarterly Report for Q2 Ended Jul 31, 2023

Filed August 29, 2023For Securities:ADSK

Summary

Autodesk, Inc. (ADSK) reported solid financial results for the second quarter of fiscal year 2024, with total net revenue increasing by 9% year-over-year to $1.345 billion. This growth was primarily driven by a strong performance in subscription revenue, which rose by 9% to $1.270 billion, underscoring the company's successful transition to a subscription-based model. Net income also saw a significant increase of 19% to $222 million, translating to diluted EPS of $1.03. The company demonstrated robust operational efficiency, with income from operations increasing by 8% to $262 million. Key financial strengths highlighted include consistent recurring revenue at 98% of net revenue, demonstrating customer stickiness and the recurring nature of Autodesk's business. Remaining Performance Obligations (RPO) stood at $5.22 billion, indicating a strong future revenue pipeline, with $3.51 billion expected to be recognized within the next 12 months. The company also maintained a healthy cash flow from operations, increasing by 24% to $858 million for the first six months of the year, and continued to return capital to shareholders through share repurchases totaling $621 million in the first six months. While the company faces macroeconomic headwinds and currency fluctuations, the consistent revenue growth, strong recurring revenue base, and solid cash generation provide a positive outlook.

Financial Highlights

49 data points
Beta

Revenue

$1.34B

90.6% Gross Margin

Net Income

$222.00M

16.5% Net Margin

EPS (Diluted)

$1.03

Total Assets

$9.11B

Cash & Equivalents

$1.71B

Free Cash Flow

$128.00M

Financial Statements
Beta
Revenue$1.34B
Cost of Revenue$127.00M
Gross Profit$1.22B
R&D Expenses$355.00M
Operating Expenses$956.00M
Operating Income$262.00M
Net Income$222.00M
EPS (Basic)$1.04
EPS (Diluted)$1.03
Shares Outstanding (Basic)214.00M
Shares Outstanding (Diluted)215.00M

Key Highlights

  • 1Total net revenue increased 9% to $1.345 billion for the three months ended July 31, 2023.
  • 2Subscription revenue grew 9% to $1.270 billion, indicating strong customer adoption and retention of the subscription model.
  • 3Net income increased 19% to $222 million, resulting in diluted EPS of $1.03.
  • 4Income from operations rose 8% to $262 million, demonstrating effective cost management.
  • 5Recurring revenue remained strong at 98% of net revenue.
  • 6Remaining Performance Obligations (RPO) stood at $5.22 billion, providing visibility into future revenue.
  • 7Cash provided by operating activities increased 24% to $858 million for the six months ended July 31, 2023.

Frequently Asked Questions

The primary driver of revenue growth was the increase in subscription revenue, which rose by 9% to $1.270 billion. This reflects the company's successful ongoing transition to a subscription-based business model and strong customer retention.

Autodesk had approximately $2.30 billion in principal debt outstanding as of July 31, 2023, comprising several series of notes. The company also has a $1.5 billion revolving credit facility, under which it had no outstanding borrowings at the reporting date. The company's cash flow from operations and existing cash balances are expected to be sufficient to meet its liquidity needs.

Remaining Performance Obligations (RPO) represent future revenue that Autodesk has secured through contracts but has not yet recognized. At $5.22 billion, a substantial portion ($3.51 billion) is expected to be recognized as revenue in the next 12 months, providing strong visibility into future financial performance and indicating the stability of the company's revenue stream.

Autodesk acknowledges macroeconomic headwinds and foreign exchange rate fluctuations as potential impacts. They actively manage a portion of their foreign currency exposure using derivative instruments for anticipated transactions. While they do not aim to completely mitigate all currency impacts, their strategy focuses on managing a portion of the risk.