Why did billings grow 28% while revenue grew only 11%?

Billings equal total revenue plus the net change in deferred revenue. Autodesk's shift to annual billing for multi-year contracts and the new transaction model in Western Europe shifted billing timing. Unbilled deferred revenue rose $1.24 billion while recognized deferred revenue fell 9%, so billings and revenue are growing at different rates. Investors should focus on RPO and recurring revenue for an underlying view of demand.

Why did operating margins decline even as revenue grew?

Marketing and sales expense rose to $525 million from $439 million in the quarter, as the company invested in its go-to-market modernization and direct customer relationships. Amortization of developed technologies also increased sharply, from $12 million to $23 million, following acquisitions. Management says optimization initiatives are already producing benefits and more are planned.

What does the guidance raise imply for the rest of fiscal 2025?

The company raised the midpoints of its FY25 guidance for billings, revenue, margins, EPS and free cash flow. Q4 guidance calls for revenue of $1.623-$1.638 billion and non-GAAP EPS of $2.10-$2.16. Management cited sustained momentum and a smooth Western Europe transaction-model launch, while also noting continued headwinds to new business growth.

Who is Janesh Moorjani and what are the key terms of his appointment?

Moorjani has been CFO of Elastic NV since 2017 and took on COO duties in 2022. Before Elastic he held roles at Infoblox, VMware, Cisco, PTC and Goldman Sachs. His offer includes a $650,000 base salary, a 90% EIP target bonus, a $500,000 one-time signing bonus subject to clawback if he resigns within twelve months, $10.25 million in RSUs and a $14.75 million PSU grant to be issued around April 2025.

Are there any notable risks or items to watch in the non-GAAP figures?

Stock-based compensation is the largest excluded item, at roughly $181 million in the quarter and about 12% of revenue, and it is a real economic cost. GAAP EPS of $1.27 versus non-GAAP EPS of $2.17 reflects this gap. Acquisition-related costs also rose to $39 million year to date from $16 million, consistent with the $801 million in business combinations during the nine months. Investors should weigh GAAP results alongside non-GAAP measures.

ADSK 8-K: Earnings & Results, Leadership Changes & More

01—Abstract

Summary

Summary of the 8-K filed November 26, 2024. Cited figures are marked; the original filing is the authoritative source.

Autodesk reported fiscal Q3 2025 results (quarter ended October 31, 2024) with total revenue up 11% to $1.57 billion^a (12% in constant currency) and total billings up 28% to $1.54 billion.

Recurring revenue was 97% of total. GAAP operating margin fell 2 points to 22% and non-GAAP operating margin fell 3 points to 36%, while GAAP diluted EPS rose to $1.27^b from $1.12 and non-GAAP diluted EPS rose to $2.17 from $2.07. Free cash flow was $199 million, up $186 million year over year.

Net revenue retention stayed within the 100-110% range on a constant currency basis, and RPO grew 17% to $6.11 billion^c. Management attributed the strength to a smooth launch of the new transaction model in Western Europe and to go-to-market optimization, and raised the midpoints of its FY25 billings, revenue, margin, EPS and free cash flow guidance. FY25 guidance now calls for billings of $5.90-$5.98 billion (up 14-15%), revenue of $6.115-$6.130 billion (up about 11%), non-GAAP operating margin of 35.5-36%, non-GAAP EPS of $8.29-$8.35 and free cash flow of $1.47-$1.50 billion.

Investors should note that the margin compression and the sharp billings growth are partly driven by the transaction model shift and timing effects, and that deferred revenue fell 9% to $3.66 billion^d while unbilled deferred revenue rose $1.24 billion. Separately, Autodesk named Janesh Moorjani, currently CFO of Elastic NV, as CFO effective December 16, 2024, succeeding interim CFO Elizabeth (Betsy) Rafael, who will remain an advisor through fiscal 2025 and return to the Board as an independent director. Moorjani's offer includes a $650,000 base salary, a 90% EIP target, a $500,000 one-time cash bonus and sizable RSU and PSU grants.

02—Key points

Key Highlights

Total revenue rose 11% to $1.57 billion (12% constant currency); subscription plan revenue grew 11% to $1.46 billion, and recurring revenue was 97% of total.
Total billings increased 28% to $1.54 billion, and RPO grew 17% to $6.11 billion, with current RPO up 14% to $4.01 billion.
GAAP operating margin declined 2 points to 22% and non-GAAP operating margin declined 3 points to 36%, reflecting higher marketing and sales spend tied to go-to-market changes.
GAAP diluted EPS rose to $1.27 from $1.12; non-GAAP diluted EPS rose to $2.17 from $2.07.
Free cash flow was $199 million, up $186 million year over year; nine-month free cash flow was $889 million versus $855 million.
FY25 guidance midpoints were raised for billings, revenue, margins, EPS and free cash flow, with non-GAAP EPS now $8.29-$8.35 and free cash flow $1.47-$1.50 billion.
Janesh Moorjani was appointed CFO effective December 16, 2024, succeeding interim CFO Betsy Rafael, who remains an advisor through fiscal 2025 and returns to the Board.

03—Questions

Frequently Asked Questions

Why did billings grow 28% while revenue grew only 11%?
Billings equal total revenue plus the net change in deferred revenue. Autodesk's shift to annual billing for multi-year contracts and the new transaction model in Western Europe shifted billing timing. Unbilled deferred revenue rose $1.24 billion while recognized deferred revenue fell 9%, so billings and revenue are growing at different rates. Investors should focus on RPO and recurring revenue for an underlying view of demand.
Why did operating margins decline even as revenue grew?
Marketing and sales expense rose to $525 million from $439 million in the quarter, as the company invested in its go-to-market modernization and direct customer relationships. Amortization of developed technologies also increased sharply, from $12 million to $23 million, following acquisitions. Management says optimization initiatives are already producing benefits and more are planned.
What does the guidance raise imply for the rest of fiscal 2025?
The company raised the midpoints of its FY25 guidance for billings, revenue, margins, EPS and free cash flow. Q4 guidance calls for revenue of $1.623-$1.638 billion and non-GAAP EPS of $2.10-$2.16. Management cited sustained momentum and a smooth Western Europe transaction-model launch, while also noting continued headwinds to new business growth.
Who is Janesh Moorjani and what are the key terms of his appointment?
Moorjani has been CFO of Elastic NV since 2017 and took on COO duties in 2022. Before Elastic he held roles at Infoblox, VMware, Cisco, PTC and Goldman Sachs. His offer includes a $650,000 base salary, a 90% EIP target bonus, a $500,000 one-time signing bonus subject to clawback if he resigns within twelve months, $10.25 million in RSUs and a $14.75 million PSU grant to be issued around April 2025.
Are there any notable risks or items to watch in the non-GAAP figures?
Stock-based compensation is the largest excluded item, at roughly $181 million in the quarter and about 12% of revenue, and it is a real economic cost. GAAP EPS of $1.27 versus non-GAAP EPS of $2.17 reflects this gap. Acquisition-related costs also rose to $39 million year to date from $16 million, consistent with the $801 million in business combinations during the nine months. Investors should weigh GAAP results alongside non-GAAP measures.

04—Continue

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