Autodesk, Inc. reported financial results for the third quarter of fiscal 2023.
All growth rates are compared to the third quarter of fiscal 2022, unless otherwise noted. A reconciliation of GAAP to non-GAAP results is provided in the accompanying tables. For definitions, please view the Glossary of Terms later in this document.
Third Quarter Fiscal 2023 Financial Highlights
- Total revenue increased 14 percent to $1,280 million;
- GAAP operating margin was 20 percent, up 3 percentage points;
- Non-GAAP operating margin was 36 percent, up 4 percentage points;
- GAAP diluted EPS was $0.91; Non-GAAP diluted EPS was $1.70;
- Cash flow from operating activities was $469 million; free cash flow was $460 million.
"We recently announced Autodesk Fusion, Forma, and Flow, our three industry clouds, which will connect data, teams and workflows in the cloud on our trusted platform," said Andrew Anagnost, Autodesk president and CEO. "Increasing our engineering velocity, moving data from files to the cloud, and expanding our third-party ecosystem, will enable Autodesk to further increase customer value by delivering even greater efficiency and sustainability."
"In a more challenging macroeconomic environment, Autodesk performed in line with our expectations in the third quarter, excluding the impact of in-quarter currency movements on revenue. Subscription renewal rates remained strong, as did our competitive performance," said Debbie Clifford, Autodesk CFO. "Our fiscal 23 revenue, margin, and earnings per share guidance remains close to the previous mid-points at constant exchange rates and comfortably within our prior guidance ranges. Our lower billings and free cash flow guidance primarily reflect less demand for multi-year, up-front and more demand for annual contracts than we expected."
Additional Financial Details
- Total billings increased 16 percent to $1,360 million.
- Total revenue was $1,280 million, an increase of 14 percent as reported, and 15 percent on a constant currency basis. Recurring revenue represents 98 percent of total.
- Design revenue was $1,087 million, an increase of 12 percent as reported, and 14 percent on a constant currency basis. On a sequential basis, Design revenue increased 2 percent as reported and on a constant currency basis.
- Make revenue was $117 million, an increase of 24 percent as reported, and 26 percent on a constant currency basis. On a sequential basis, Make revenue increased 4 percent as reported and on a constant currency basis.
- Subscription plan revenue was $1,188 million, an increase of 14 percent as reported, and 15 percent on a constant currency basis. On a sequential basis, subscription plan revenue increased 2 percent as reported and on a constant currency basis.
- Net revenue retention rate remained within the range of 100 to 110 percent.
- GAAP operating income was $256 million, compared to $193 million in the third quarter last year. GAAP operating margin was 20 percent, up 3 percentage points compared to the third quarter last year.
- Total non-GAAP operating income was $465 million, compared to $365 million in the third quarter last year. Non-GAAP operating margin was 36 percent, up 4 percentage points compared to the third quarter last year.
- GAAP diluted net income per share was $0.91, compared to $0.62 in the third quarter last year.
- Non-GAAP diluted net income per share was $1.70, compared to $1.34 in the third quarter last year.
- Deferred revenue increased 13 percent to $3.78 billion. Unbilled deferred revenue was $896 million, an increase of $8 million compared to the third quarter of last year. Remaining performance obligations ("RPO") increased 11 percent to $4.68 billion. Current RPO increased 9 percent to $3.14 billion.
- Cash flow from operating activities was $469 million, an increase of $198 million compared to the third quarter last year. Free cash flow was $460 million, an increase of $203 million compared to the third quarter last year.
|
Third Quarter Fiscal 2023 Business Highlights |
|
Net Revenue by Geographic Area |
|
Three Months |
Three Months |
Change prior fiscal year |
Constant currency |
||
|
(In millions, except percentages) (1) |
$ |
% |
% |
||
|
Net Revenue: |
|||||
|
Americas |
|||||
|
U.S. |
$ 447 |
$ 383 |
$ 64 |
17 % |
* |
|
Other Americas |
94 |
79 |
15 |
19 % |
* |
|
Total Americas |
541 |
462 |
79 |
17 % |
17 % |
|
EMEA |
476 |
433 |
43 |
10 % |
12 % |
|
APAC |
263 |
231 |
32 |
14 % |
18 % |
|
Total Net Revenue |
$ 1,280 |
$ 1,126 |
$ 154 |
14 % |
15 % |
|
____________________ |
|
* Constant currency data not provided at this level. |
|
(1) In the current fiscal year, the Company changed its rounding presentation to the nearest whole number in millions of reported amounts, except per share data or as otherwise noted. The current year rounding presentation has been applied to all prior year amounts presented and, in certain circumstances, this change may adjust previously reported balances. |
|
Net Revenue by Product Family |
|
Our product offerings are focused in four primary product families: Architecture, Engineering and Construction ("AEC"), AutoCAD and AutoCAD LT, Manufacturing ("MFG"), and Media and Entertainment ("M&E"). |
|
Three Months |
Three Months |
Change compared to prior fiscal year |
||
|
(In millions, except percentages) (1) |
$ |
% |
||
|
AEC (2) |
$ 575 |
$ 507 |
$ 68 |
13 % |
|
AutoCAD and AutoCAD LT (2) |
354 |
323 |
31 |
10 % |
|
MFG |
254 |
225 |
29 |
13 % |
|
M&E |
78 |
63 |
15 |
24 % |
|
Other |
19 |
8 |
11 |
138 % |
|
Total Net Revenue |
$ 1,280 |
$ 1,126 |
$ 154 |
14 % |
|
____________________ |
|
(1) In the current fiscal year, the Company changed its rounding presentation to the nearest whole number in millions of reported amounts, except per share data or as otherwise noted. The current year rounding presentation has been applied to all prior year amounts presented and, in certain circumstances, this change may adjust previously reported balances. |
|
(2) During the current fiscal year, the Company corrected an immaterial classification error and reclassified certain revenue amounts between Architecture, Engineering and Construction and AutoCAD and AutoCAD LT. Fiscal quarters ended October 31, 2021 (presented here), January 31, 2022, and April 30, 2022 (not presented here), were updated to conform to the current period presentation. These reclassifications did not impact total net revenue. |
Business Outlook
The following are forward-looking statements based on current expectations and assumptions, and involve risks and uncertainties, some of which are set forth below under "Safe Harbor Statement." Autodesk’s business outlook for the fourth quarter and full-year fiscal 2023 considers the current economic environment and foreign exchange currency rate environment. A reconciliation between the fiscal 2023 GAAP and non-GAAP estimates is provided below or in the tables following this press release.
|
Fourth Quarter Fiscal 2023 |
|
Q4 FY23 Guidance Metrics |
Q4 FY23 |
|
Revenue (in millions) |
$1,303 – $1,318 |
|
EPS GAAP |
$0.99 – $1.05 |
|
EPS non-GAAP (1) |
$1.77 – $1.83 |
|
____________________ |
|
(1) Non-GAAP earnings per diluted share excludes $0.74 related to stock-based compensation expense, $0.11 for the amortization of purchased intangibles, $0.04 for lease-related asset impairments and other charges, and $0.01 for acquisition-related costs, partially offset by ($0.12) related to GAAP-only tax charges. |
|
Full Year Fiscal 2023 |
|
FY23 Guidance Metrics |
FY23 |
|
Billings (in millions) (1) |
$5,570 – $5,670 |
|
Revenue (in millions) (2) |
$4,990 – $5,005 |
|
GAAP operating margin |
Approx. 20% |
|
Non-GAAP operating margin (3) |
Approx. 36% |
|
EPS GAAP |
$3.43 – $3.49 |
|
EPS non-GAAP (4) |
$6.56 – $6.62 |
|
Free cash flow (in millions) (5) |
$1,900 – $1,980 |
|
____________________ |
|
(1) Excluding the approximately $195 million impact of foreign currency exchange rates and hedge gains/losses, billings guidance would be $5,765 – $5,865 million. |
|
(2) Excluding the approximately $80 million impact of foreign currency exchange rates and hedge gains/losses, revenue guidance would be $5,070 – $5,085 million. |
|
(3) Non-GAAP operating margin excludes approximately 13% related to stock-based compensation expense, approximately 2% for the amortization of purchased intangibles, less than 1% related to acquisition-related costs, and less than 1% related to lease-related asset impairments and other charges. |
|
(4) Non-GAAP earnings per diluted share excludes $3.02 related to stock-based compensation expense, $0.43 for the amortization of purchased intangibles, $0.13 related to lease-related asset impairments and other charges, and $0.04 related to acquisition-related costs, partially offset by ($0.46) related to GAAP-only tax charges and ($0.03) related to gains on strategic investments and dispositions. |
|
(5) Free cash flow is cash flow from operating activities less approximately $50 million of capital expenditures. |
The fourth quarter and full-year fiscal 2023 outlook assume a projected annual effective tax rate of 20 percent and 17 percent for GAAP and non-GAAP results, respectively. Shifts in geographic profitability continue to impact the annual effective tax rate due to significant differences in tax rates in various jurisdictions. Therefore, assumptions for the annual effective tax rate are evaluated regularly and may change based on the projected geographic mix of earnings.
Earnings Conference Call and Webcast
Autodesk will host its third quarter conference call today at 5 p.m. ET. The live broadcast can be accessed at autodesk.com/investor. A transcript of the opening commentary will also be available following the conference call.
A replay of the broadcast will be available at 7 p.m. ET at autodesk.com/investor. This replay will be maintained on Autodesk’s website for at least 12 months.
Investor Presentation Details
An investor presentation, excel financials and other supplemental materials providing additional information can be found at autodesk.com/investor.
