ADSK Q1 2026: Guides 9-11% Revenue Growth Amid Macro Uncertainty
- Channel Consolidation and Direct Engagement: Autodesk is deliberately streamlining its partner ecosystem to favor fewer, solution‐focused partners. This not only drives increased price realization—as evidenced by strong store performance—but also enhances customer proximity through the new transaction model, suggesting improved revenue and margin prospects.
- Accelerated AI Integration for Productivity Gains: The rapid adoption of AI-powered features like AutoConstrain, with user acceptance rates exceeding 50%, coupled with ongoing investments in Fusion and Forma enhancements, positions the company to unlock new operational efficiencies and upsell opportunities.
- Resilient Business Momentum Amid Uncertainty: Despite macroeconomic headwinds, consistent Q1 performance—with steady revenue and billings growth—reinforces a robust underlying business model. The management's cautious yet positive guidance reflects confidence in sustaining growth while navigating external challenges.
- Macroeconomic Uncertainty: Several Q&A responses highlighted that ongoing trade policy issues, FX depreciation, and heightened macro uncertainty are increasingly factored into guidance, which could dampen revenue growth if these headwinds persist.
- New Transaction Model Risks: While management noted improved adoption of the new transaction model, earlier disruptions and the continued process of migrating customers onto the new model create execution risks that may adversely affect revenue consistency during the transition. ** **
- Pricing Strategy Concerns: The reliance on long-term subscriptions with capped price increases for the legacy maintenance-to-subscription cohort may limit future pricing flexibility and margin expansion as the company seeks to recapture standard pricing reflective of its ongoing innovation.
| Metric | YoY Change | Reason |
|---|---|---|
Total net revenue | +15% (from $1,417 million in Q1 2025 to $1,633 million in Q1 2026) | Total net revenue increased by 15% driven by strong underlying growth in subscription revenue and favorable market dynamics, reflecting improved customer adoption and shifts to direct sales, as detailed for Q1 2026. |
Subscription revenue | +15% (from $1,330 million in Q1 2025 to $1,532 million in Q1 2026) | Subscription revenue climbed by 15% due to increased customer renewals and growth in cloud service offerings, building on robust prior period performance that established a stable subscription base. |
Operating income | -22% (from $299 million in Q1 2025 to $233 million in Q1 2026) | Operating income fell by 22% primarily because of margin compression, as rising operating expenses (up 26% YoY) reduced profitability despite higher revenue levels. |
Net income | -40% (from $252 million in Q1 2025 to $152 million in Q1 2026) | Net income dropped by nearly 40% and basic EPS fell from $1.17 to $0.71 due to significant expense pressures, including increased operating costs and lower margins, eroding the bottom line compared to the previous period. |
Americas revenue | +17.6% (from $619 million in Q1 2025 to $725 million in Q1 2026) | Americas revenue grew by 17.6%, reflecting robust market conditions and effective sales channel strategies that built on prior period gains, enhancing performance in a key geographic region. |
EMEA revenue | +17.3% (from $534 million in Q1 2025 to $627 million in Q1 2026) | EMEA revenue increased by 17.3%, benefiting from strong regional market momentum and product line performance built upon earlier period trends. |
APAC revenue | +6% (from $264 million in Q1 2025 to $281 million in Q1 2026) | APAC revenue grew by 6%, indicating more modest growth relative to other regions, likely due to regional economic factors and currency effects that were consistent with past performance metrics. |
Operating expenses | +26% (from $981 million in Q1 2025 to $1,240 million in Q1 2026) | Operating expenses surged by 26% as costs associated with sales, marketing, R&D, and other functions increased sharply to support strategic investments, thereby compressing margins relative to previous quarters. |
Net cash provided by operating activities | +14% (from $494 million in Q1 2025 to $564 million in Q1 2026) | Net cash from operations improved by 14% due to higher net income and beneficial working capital adjustments, which partially offset the margin compression experienced during the period. |
Common stock repurchases | +3833% (from $9 million in Q1 2025 to $354 million in Q1 2026) | Common stock repurchases exploded by over 3800% as the company strategically allocated substantially more capital to buybacks in Q1 2026, building on a significant free cash flow increase and favorable market conditions compared to the very modest repurchase activity in Q1 2025. |
| Metric | Period | Previous Guidance | Current Guidance | Change |
|---|---|---|---|---|
Revenue Growth | FY 2026 | 8% to 9% | no current guidance | no current guidance |
Billings Growth | FY 2026 | 17% to 19% | no current guidance | no current guidance |
GAAP Operating Margin | FY 2026 | 21% to 22% | no current guidance | no current guidance |
Non-GAAP Operating Margin | FY 2026 | 39% to 40% | Raised the bottom end of the guidance range | raised |
Free Cash Flow | FY 2026 | $2.075 billion to $2.175 billion | $2.1 billion to $2.2 billion | raised |
Share Buyback | FY 2026 | $1.1 billion to $1.2 billion | no current guidance | no current guidance |
Billings | FY 2026 | no prior guidance | $7.16 billion to $7.31 billion | no prior guidance |
Revenue | FY 2026 | no prior guidance | $6.925 billion to $6.995 billion | no prior guidance |
GAAP Earnings Per Share | FY 2026 | no prior guidance | Reflects one-time charges taken in the first quarter | no prior guidance |
Non-GAAP Earnings Per Share | FY 2026 | no prior guidance | Increased guidance due to the non-GAAP operating margin increase | no prior guidance |
| Metric | Period | Guidance | Actual | Performance |
|---|---|---|---|---|
Revenue Growth (YoY) | Q1 2026 | 8% – 9% | 15.3% YoY (from 1,417To 1,633) | Beat |
GAAP Operating Margin | Q1 2026 | 21% – 22% | 14% (233 ÷ 1,633) | Missed |
Free Cash Flow | Q1 2026 | $2.075B – $2.175B for FY 2026 | $556M = Net operating CF of 564Minus CapEx of 8 | Beat |
| Topic | Previous Mentions | Current Period | Trend |
|---|---|---|---|
Channel Consolidation & Direct Engagement Strategy | In Q2–Q4 2025, Autodesk detailed the shift from transaction‐focused to solution‐focused partners, stressing tighter integrations, centers of excellence, and digital self‐service to boost efficiency. | In Q1 2026, the discussion continues with a deliberate strategy to reduce transactional partners, enhanced commission controls, and emphasis on partner adaptation for renewals and new business. | Consistent focus overall but with greater clarity on risk mitigation and partner adaptation in Q1 2026. |
New Transaction Model Rollout & Execution Risks | Q2–Q4 2025 discussions addressed smooth rollouts in North America and Europe, regional challenges, short‐term P&L noise, and execution risks such as onboarding delays and timing headwinds. | Q1 2026 reports show continued easing of friction, improved channel partner productivity, and positive revenue/billings contributions while noting remaining regional challenges (e.g. in Asia Pacific). | Continuous rollout with decreasing execution friction and improved risk management in Q1 2026. |
Accelerated AI & Cloud Integration with Mixed Monetization Sentiment | In Q2–Q4 2025, Autodesk emphasized strong investments in industry cloud, platform services, and generative AI (e.g. AutoConstrain) while remaining cautious on immediate monetization paths. | In Q1 2026, Autodesk highlights very specific AI enhancements in Fusion and Forma and accelerated cloud integration, reiterating a measured, long-term monetization approach amid robust product innovation. | Steady commitment to AI and cloud with a refined, cautious monetization outlook that persists across periods. |
Macroeconomic Uncertainty & Its Impact on Growth | Q2–Q4 2025 discussions repeatedly noted macro and geopolitical challenges, adjustments in revenue and billings guidance, and regional variances, though underlying business momentum stayed solid. | In Q1 2026, executives again point to customer concerns, region-specific issues (e.g. in Asia Pacific), and a prudently adjusted guidance, but with continued strong core performance indicators. | A consistent theme of cautious guidance and regional nuance persists across periods. |
Revised Revenue Guidance, Pricing Constraints & Legacy Subscription Model Challenges | In Q2–Q4 2025, Autodesk raised guidance (with adjustments for new transaction impacts), acknowledged legacy pricing constraints (especially for maintenance-to-subscription cohorts) and noted headwinds from legacy models. | In Q1 2026, revised fiscal guidance is provided with specific revenue numbers; pricing constraints remain as legacy cohorts are addressed gradually, maintaining a focus on delivering value despite limited near-term pricing flexibility. | Ongoing adjustments to guidance with persistent challenges in legacy pricing, now communicated with more granular revenue details. |
Operational Efficiency & Margin Improvement Amid R&D Investment Delays | Q2 2025 explicitly acknowledged that returns from R&D investments take time, while Q3–Q4 2025 focused on optimization, cost discipline, and margin improvements via process enhancements and restructuring. | In Q1 2026, strong cost discipline and operational efficiency drive non‐GAAP margin improvements, with no explicit mention of R&D delays—suggesting a shift in focus toward immediate efficiency gains. | A sustained drive for efficiency and margin gains continues; early R&D delays are less highlighted in Q1 2026. |
Consistent Segment Performance in AEC/Construction & Manufacturing | Q2–Q4 2025 showcased solid momentum: robust construction growth with key customer wins and steady double-digit growth in manufacturing (with emphasis on Fusion and cloud strategies). | Q1 2026 reiterates strong performance in AEC (e.g. EBAs and digital efficiency needs) and manufacturing (e.g. AI-powered Fusion), underpinning a diversified and resilient business model. | Steady and consistent performance across segments remains a central, positive story. |
Emergence of Digital Twin Solutions & Owner/Operator Market Expansion | In Q3 2025, Autodesk introduced Tandem, its digital twin solution, and detailed expansion into owner/operator markets via tailored APIs and vertical-specific offerings. | Q1 2026 reintroduces the theme with Hitachi Energy’s example, highlighting digital twin capabilities and owner/operator expansion to drive renewable integration and operational efficiency. | An emerging focus now reappears in Q1 2026 after being detailed in Q3 2025, signaling renewed strategic priority. |
Decline in Acquisition-Driven Growth Emphasis | In Q2 and Q3 2025, while acquisitions (e.g. Payapps) supported growth, there was no explicit commentary on a decline in acquisition impact; Q4 2025 focused on continued strategic acquisitions. | In Q1 2026, there is a specific mention that acquisition-driven growth had a smaller impact (about 1 percentage point) compared to prior periods, indicating a subtle shift in emphasis. | A new nuance in Q1 2026 where the relative contribution from acquisitions is declining, highlighting a strategic pivot toward organic and operational improvements. |
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Growth Guidance
Q: Adjusted revenue guidance for macro trends?
A: Management updated guidance to reflect 11%–9% normalized growth with prudent macro adjustments, anticipating a slower second half due to increased uncertainty. -
Margin Expansion
Q: How are savings reinvested for margin growth?
A: Savings from restructuring and cost discipline are being reinvested to boost operating efficiencies, supporting non-GAAP margins expansion. -
Revenue Acceleration
Q: What drove Q1 revenue acceleration?
A: Strong AEC performance, easing implementation friction, and solid organic growth spurred revenue, with acquisition timing playing a minor role. -
NRR Impact
Q: Is NRR improvement driven by the new model?
A: Excluding the new transaction model’s mechanical impact, NRR remains consistent in the 100%–110% range, with the model adding a boost. -
Guidance Assumptions
Q: Is guidance now adjusted for macro uncertainty?
A: Yes; management has factored in increased macro uncertainty and currency effects while keeping core assumptions intact. -
Cost Optimization
Q: Will further expense cuts occur?
A: Ongoing sales and marketing optimization aims to eliminate duplicative costs, enhancing overall operating efficiency. -
Regional Performance
Q: How are regions performing, notably Asia Pacific?
A: Performance was generally robust, though Asia Pacific faced headwinds from Japan’s transition and macro pressures in China and Korea. -
Channel Model
Q: How is the channel model progressing?
A: Channel productivity is improving as partners adapt to the new transaction model, supporting both renewals and new business growth. -
Cross-sell Timing
Q: Are cross-sell opportunities tied to renewals?
A: Cross-sell and upsell initiatives are now integrated dynamically, rather than strictly linked to renewal cycles. -
Sales Leadership
Q: What benefits does the new CRO bring?
A: The new CRO, with strong cloud and enterprise sales credentials, is poised to drive a more solution-focused, direct sales strategy. -
Future AI Role
Q: How will future CAD AI evolve?
A: Advanced AI tools are being developed to streamline CAD processes, promising substantial productivity enhancements in future generations. -
Labor Constraints
Q: How will AI alleviate labor constraints?
A: AI-driven automation is expected to counter persistent labor shortages by simplifying repetitive engineering tasks and boosting efficiency. -
Product Roadmap
Q: What’s accelerating Fusion and Forma development?
A: Increased investment in data management and collaboration capabilities is fast-tracking new features for both Fusion and Forma. -
AI Opportunities
Q: Which new AI functions show promise?
A: Initiatives like AutoConstrain and drawing automation are at the forefront, aiming to eliminate laborious manual tasks. -
Quarter Momentum
Q: Was revenue momentum steady all quarter?
A: Revenue momentum remained consistent from February through May, demonstrating stable business performance. -
Margin Framework
Q: What guides future gross margin targets?
A: A focus on operational leverage and disciplined cost management underpins their long-term margin framework. -
Customer Outlook
Q: How are customer conversations amid uncertainty?
A: Customers remain cautious due to macro pressures but are engaging actively, anticipating stronger activity in the latter half. -
Billing Mechanics
Q: How is constant currency guiding adjust with the new model?
A: The constant currency guidance isolates the new transaction model’s effects to reflect true organic growth dynamics. -
Billings Guide
Q: What headwinds affected billings guidance?
A: There were no significant headwinds; instead, increased transaction model adoption provided a mechanical tailwind that balanced the adjustments. -
Restructuring Impact
Q: Has restructuring disruption eased?
A: Disruptions from restructuring and the CRO transition have been well managed, with normal operations reestablished in Q1. -
Annual Deals
Q: Why are multiyear deals converting to annual?
A: The shift reflects a natural billing transition, where renewals are now structured as annual agreements following the model change.