Autodesk, Inc. is a global leader in 3D design, engineering, and entertainment technology solutions, serving industries such as architecture, engineering, construction, product design, manufacturing, media, and entertainment . The company offers a wide range of products categorized into four primary families: Architecture, Engineering and Construction (AEC), AutoCAD and AutoCAD LT, Manufacturing (MFG), and Media and Entertainment (M&E) . Autodesk sells its products globally through a combination of indirect and direct channels, with a significant portion of revenue derived from international markets .
- Architecture, Engineering and Construction (AEC) - Provides comprehensive tools for designing, engineering, and constructing buildings and infrastructure.
- AutoCAD and AutoCAD LT - Offers versatile software for 2D and 3D CAD design, drafting, and modeling.
- Manufacturing (MFG) - Delivers solutions for product design, manufacturing processes, and factory planning.
- Media and Entertainment (M&E) - Supplies technology for creating visual effects, animation, and immersive experiences.
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What went well
- Autodesk's new transaction model is poised to enhance cross-sell and upsell opportunities, as they develop more direct relationships with customers and understand their usage patterns better. This strategy, previously successful with their Enterprise Business Agreements (EBAs), is expected to drive revenue growth as they complete the new transaction model rollout.
- Growing interest from owners and operators in Autodesk's solutions, such as Tandem, a digital twin platform, is driving expansion into new market segments. This focus on the entire lifecycle from design to operations opens up significant growth potential as Autodesk continues to release products and capabilities tailored to the owner space.
- Autodesk's leadership in AI, exemplified by initiatives like Project Bernini, positions the company ahead of competitors. By embedding AI into their products and developing foundational models, Autodesk is enhancing their competitive position, which is crucial for future growth and potential monetization opportunities from these technologies.
What went wrong
- Uncertainty about the effectiveness of the new transaction model in driving cross-sell and upsell, as it's still too early to draw conclusions.
- The benefits from the new transaction model on billings are lower than expected due to increased buy-sell business ahead of the European launch, resulting in less tailwind from the model.
- Monetization of AI initiatives like Project Bernini remains uncertain and is still in early stages, with no clear path to revenue generation.
Q&A Summary
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New CFO Appointment
Q: Tell us more about Janesh joining as CFO.
A: Andrew expressed excitement about Janesh joining Autodesk as CFO in December. Janesh brings seven years of experience as CFO and COO at Elastic, where he drove optimization at scale. He also has a strong background from VMware and Cisco, and industry knowledge from his time at PTC. Janesh will focus on ensuring every dollar invested yields maximum return for the business and investors. -
Free Cash Flow Outlook
Q: Is there potential for better free cash flow in FY '26?
A: Betsy stated there is no change to the free cash flow guidance for fiscal '26; it remains at $2.05 billion at the midpoint. The guidance continues as previously communicated. -
Margin Improvement and Optimization
Q: What areas have efficiency potential after the transaction model rollout?
A: Andrew emphasized that optimization is a mindset at Autodesk, and they are already hitting non-GAAP margin targets set for next year this year. The shift to self-service and better customer understanding will drive efficiencies and margin growth over the next couple of years. By moving channel partners from transactional roles to solution providers, they aim to eliminate redundancies and drive cost efficiencies. -
Revenue Growth Expectations
Q: Could the revenue growth outlook of 10–15% change?
A: Andrew acknowledged they're currently at the bottom end of the 10–15% growth range due to headwinds like the pandemic, inflation, and exiting Russia. It takes time for these factors to build out in a subscription model. As a long-term framework, the 10–15% growth target still makes sense, but they will evaluate as new leadership comes in. -
Current RPO Sustainability
Q: How sustainable is the 12% CRPO growth CAGR?
A: Betsy explained that after adjusting for headwinds and tailwinds, CRPO growth was broadly consistent with the second quarter. Early renewals and the new transaction model are providing a tailwind, while declining contributions from large multiyear EBA cohorts coming up for renewal in fiscal '26 are a headwind. -
Construction Cloud Growth
Q: Is the reacceleration in Construction Cloud durable?
A: Andrew stated they continue to drive consistent high growth in Construction solutions, with net new customers doubling year-over-year. Organic growth remains solid, and acquisitions like Payapps are accelerating growth. Their distribution channel operating at scale helps capture more customers, both in the U.S. and internationally. -
New Transaction Model Impact
Q: Any early learnings from customers on the new transaction model?
A: Andrew indicated it's too early to draw conclusions, but they see shifts to direct channels for customers previously served at arm's length. In terms of driving cross-sell and upsell, it's still early days. Their experience with enterprise business agreements shows that direct relationships enhance cross-sell and upsell capabilities. -
M&A Strategy
Q: Is focusing on strategic tuck-ins the right approach?
A: Andrew remarked that Autodesk has always been an acquisitive company and will pursue acquisitions that make strategic and financial sense. Consolidation in their space is inevitable, but they did not comment on specific deals. -
Macro Environment Consistency
Q: Any change in the overall macro spend environment?
A: Andrew stated the core answer is consistency; they are seeing consistent trends with prior quarters. There are always fluctuations, but the general tone remains the same. -
Project Bernini and AI Initiatives
Q: Update on Project Bernini and monetization opportunity?
A: Andrew explained that Bernini is an AI-driven innovation for generating preliminary outcomes from specifications. They are engaging with targeted customers to enhance Bernini, but it's not yet commercially available. While monetization strategies are still uncertain, Autodesk is ahead in AI, strengthening their competitive position.
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Given that Autodesk is currently at the bottom end of its long-term revenue growth guidance of 10% to 15%, and considering the various headwinds like the pandemic, inflation, and exiting the Russian business , what specific strategies are you implementing to accelerate growth and move towards the higher end of that range?
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With the ongoing transition to the new transaction model and the increased investments in people, processes, and automation , can you provide more details on how these changes will impact your operating margins in the short term, and what is the timeline for realizing the expected efficiencies?
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You mentioned that Project Bernini is not commercially available yet and there's uncertainty around its monetization model ; how do you plan to generate revenue from AI initiatives like Bernini in the future, and what metrics will you use to measure success in this area?
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Given the competitive landscape and your assertion that Autodesk is ahead in AI and cloud investments , how do you plan to maintain your competitive advantage, especially considering that the benefits from AI are still uncertain in terms of monetization?
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Regarding the large license compliance agreement you mentioned, which included one of your largest ever , to what extent are such compliance efforts contributing to your revenue growth, and do you expect this to be a significant contributor going forward?
Q3 2025 Earnings Call
- Issued Period: Q3 2025
- Guided Period: FY 2025 and FY 2026
- Guidance:
- Billings: $5.90 billion to $5.98 billion, with a 5 to 5.5 percentage point tailwind to growth.
- Revenue: $6.12 billion to $6.13 billion, with a 1 to 1.5 percentage point tailwind to growth.
- GAAP Margin: 21.5% to 22%.
- Non-GAAP Margin: 35.5% to 36%, including a 1 to 1.5 percentage point improvement.
- Free Cash Flow: $1.47 billion to $1.5 billion for FY 2025; $2.05 billion for FY 2026 .
Q2 2025 Earnings Call
- Issued Period: Q2 2025
- Guided Period: FY 2025 and FY 2026
- Guidance:
- Non-GAAP Operating Margins: 35% to 36% for FY 2025.
- Free Cash Flow: $1.45 billion to $1.5 billion for FY 2025; $2.05 billion for FY 2026.
- Billings: $5.88 billion to $5.98 billion.
- Revenue: $6.08 billion to $6.13 billion, with around 11% growth.
- Non-GAAP Operating Margin Target for FY 2026: Midpoint of 38% to 40% .
Q1 2025 Earnings Call
- Issued Period: Q1 2025
- Guided Period: FY 2025
- Guidance:
- Revenue: $5.99 billion to $6.09 billion, with 9% to 11% growth.
- Non-GAAP Operating Margins: 35% to 36%.
- Free Cash Flow: $1.43 billion to $1.5 billion, with 35% growth excluding $200 million from FY 2024.
- Impact of New Transaction Model: 1 percentage point tailwind to revenue growth; 3% to 4% tailwind to billings growth.
- Rule of 40 Framework: Aim for 45% or more .
Q4 2024 Earnings Call
- Issued Period: Q4 2024
- Guided Period: FY 2025
- Guidance:
- Revenue: $5.99 billion to $6.09 billion, with 9% to 11% growth.
- Non-GAAP Operating Margins: 35% to 36%, with a 1 point improvement offset by headwinds.
- Free Cash Flow: $1.43 billion to $1.5 billion, with 35% growth excluding $200 million from FY 2024.
- New Transaction Model: 1 percentage point tailwind to revenue growth; 3- to 4-point tailwind to billings growth.
- Acquisition of Payapps: 0.5 point contribution to revenue growth.
- FX Impact: 1 percentage point headwind to revenue growth.
- EBA True-ups: 1 point headwind to revenue growth .
Competitors mentioned in the company's latest 10K filing.
- Adobe Systems Incorporated
- Bentley Systems, Inc.
- Dassault Systèmes S.A. and its subsidiary Dassault Systèmes SolidWorks Corp.
- Intergraph Corporation, a wholly owned subsidiary of Hexagon AB
- MSC Software Corporation
- Nemetschek AG
- Oracle Corporation
- Procore Technologies, Inc.
- PTC Inc.
- 3D Systems Corporation
- Siemens PLM
- Trimble Navigation Limited
Recent developments and announcements about ADSK.
Corporate Leadership
Leadership Change
Leaving: Lorrie Norrington has announced she will not stand for re-election at Autodesk's 2025 Annual Meeting of Stockholders .
Stepping Up: John T. Cahill and Ram Krishnan have been appointed to the Board of Directors, effective immediately. John Cahill is the former Chairman and CEO of Kraft Foods, and Ram Krishnan is the Executive Vice President and COO of Emerson .
Transition: Elizabeth Rafael will transition to an Advisor role, assisting with the onboarding of the new CFO, while continuing as a Board member .
Board Change
John T. Cahill and Ram Krishnan have been appointed to the Autodesk Board of Directors, effective December 18, 2024. Additionally, Lorrie Norrington has announced her intention not to stand for re-election at the 2025 Annual Meeting .
Financial Reporting
Earnings Call
The recent earnings call for Autodesk (ADSK) provided several key insights into the company's financial performance and strategic direction. Autodesk reported a 12% revenue growth in constant currency for the third quarter and has raised its full-year guidance, reflecting strong business momentum and successful strategic execution . The company highlighted its progress in the manufacturing sector, with increased adoption of its Fusion platform, which is driving higher average sales prices and operational efficiencies for customers .
Management provided forward guidance, indicating confidence in achieving a non-GAAP operating margin target of 38% to 40% by fiscal '25, a year ahead of schedule . The new transaction model is expected to enhance sales and marketing efficiency, contributing to improved GAAP margins .
Significant strategic initiatives include the continued investment in AI and cloud technologies, positioning Autodesk ahead of its competitors . The company is also focusing on optimizing its go-to-market strategies, emphasizing self-service and direct customer engagement to drive efficiency and growth .
During the Q&A session, analysts inquired about the impact of the new transaction model on business demand and the company's strategic initiatives like Project Bernini, which involves AI-driven innovations . Management reiterated its commitment to maintaining a competitive edge through continuous innovation and strategic partnerships .
Overall, Autodesk's strategic focus on digital transformation, AI, and cloud solutions, coupled with disciplined execution, is expected to drive sustainable growth and shareholder value in the coming years .