Q3 2025 Earnings Summary
- 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.
- 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.
| Metric | YoY Change | Reason |
|---|---|---|
Total Revenue | +11% | The increase to $1,570 million was propelled by broad-based product adoption and strong subscription growth, building on the prior year’s success and underscoring the stability of the subscription model and new transaction methods. |
Net Income | +14% | Rising to $275 million, net income benefited from improved operating margins and continued momentum in high-growth segments, following the prior year’s operational efficiencies and cost discipline. |
AEC Segment | +11% | Growth to $751 million was driven by cloud-based solutions like Autodesk Construction Cloud, extending the digital transformation gains seen in the previous year and aided by strong BIM adoption across infrastructure projects. |
AutoCAD Segment | +7% | Revenue reached $398 million, reflecting steady demand and pricing stability in both AutoCAD and AutoCAD LT; this continued the segment’s moderate growth pace from last year, supported by broader usage in design workflows. |
MFG Segment | +14% | Growing to $307 million, this segment built on prior expansions in Fusion 360 and EBA offerings, bolstered by rising average selling prices (ASPs) and capturing additional market share seen in the previous period. |
M&E Segment | +14% | At $83 million, the segment recovered from the subscription-model drag of prior quarters, with improvements in demand despite lingering industry strikes; continuing investments in AI and production pipelines supported this rebound. |
Design Segment | +9% | Increasing to $1,295 million, the segment leveraged last year’s reorganization of the sales force and ongoing product integration strategies, helping to address design-centric accounts more effectively. |
Make Segment | +28% | Reaching $171 million, growth accelerated thanks to construction and Fusion momentum noted in the prior year, plus the Payapps acquisition; this added new functionality and opened additional cross-sell opportunities. |
Americas | +10% | Revenue climbed to $705 million, building on the strong EBA renewals and direct revenue traction that boosted results previously; the new transaction model further enhanced sales efficiency throughout the region. |
EMEA | +12% | At $580 million, the region sustained the broad-based growth from prior quarters, aided by robust end-market demand in AEC and MFG and reduced currency headwinds compared to last year. |
APAC | +10% | Increasing to $285 million, results reflected an uptick from the modest growth in previous periods, as parts of Asia improved despite remaining macroeconomic uncertainties and challenges in specific markets. |
| Metric | Period | Previous Guidance | Current Guidance | Change |
|---|---|---|---|---|
Billings | FY 2025 | $5.88B to $5.98B | $5.90B to $5.98B | raised |
Revenue | FY 2025 | $6.08B to $6.13B | $6.12B to $6.13B | raised |
GAAP Operating Margin | FY 2025 | no prior guidance | 21.5% to 22% | no prior guidance |
Non-GAAP Operating Margin | FY 2025 | 35% to 36% | 35.5% to 36% | raised |
Free Cash Flow | FY 2025 | $1.45B to $1.50B | $1.47B to $1.50B | raised |
Free Cash Flow | FY 2026 | $2.05B | $2.05B | no change |
| Metric | Period | Guidance | Actual | Performance |
|---|---|---|---|---|
Revenue (y/y) | Q3 2025 | ~11% y/y growth for FY 2025 | 1,570M USD (up ~11% from 1,414M USD in Q3 2024) | Met |
| Topic | Previous Mentions | Current Period | Trend |
|---|---|---|---|
Autodesk Construction Cloud momentum | Q2 2025: Competitive strength, mid-market wins, and international growth. Q1 2025: Emphasis on quality of solution and competitive wins. Q4 2024: Record large deals and major customer expansions. | Strong momentum: Net new customers have doubled YoY; notable wins with ENR 400 firms like Power Construction; highlights on integrated end-to-end solutions. | Continues strong momentum |
Make revenue and manufacturing growth (including Fusion 360) | Q2 2025: Make revenue boosted by Payapps, Manufacturing +17%. Q1 2025: Manufacturing +11%, Fusion 360 double-digit subscriber growth. Q4 2024: Make revenue grew 17%, Manufacturing +16%. | Make revenue +28% in constant currency; Manufacturing +16%; Fusion 360 remains one of the fastest-growing products. | Consistent high growth |
New transaction model and transition to annual billing | Q2 2025: Rollout in NA, driving mechanically higher billings but creating timing headwinds. Q1 2025: Transition caused noise in billings, but helps long-term FCF. Q4 2024: About 2 years to finalize rollout, ~1 point lift to revenue growth. | Contributed $17M to revenue and 5–5.5% tailwind; some noise in billings and P&L; smooth EU rollout mentioned. | Ongoing rollout, seen as beneficial |
Macroeconomic factors slowing new business growth | Q2 2025: Softer new business in China/Korea, M&E softness from Hollywood strike. Q1 2025: Hollywood strike and other macro events weighing on new business. Q4 2024: Slow new business growth was one reason for lower revenue target. | No major change in macro environment vs. prior quarters; still a drag on new business but factored into guidance. | Remains a headwind |
Operating leverage and margin uncertainties | Q2 2025: Targeting 35–36% for FY25 margins with about 1–1.5 point underlying improvement offset by model transition; aiming for 38–40% by FY26. Q1 2025: Similar outlook on margin headwinds. Q4 2024: Reiterated margin of 35–36% for FY25 with long-term improvements expected. | Limited detail; focus on expansion but guidance to come later; FX and transaction model affect next-year margins. | Continued caution |
SEC investigation | Q2 2025: No mention. Q1 2025: Voluntary engagement, concluded with no restatements or financial impact. Q4 2024: No mention. | No mention. | Not recurring, concluded |
Geographic challenges in China and Korea | Q2 2025: Softer new business in China/Korea. Q1 2025: Weak demand in China/Korea vs. strength elsewhere. Q4 2024: No mention. | No mention. | Previously noted, not in Q3 |
Hollywood strikes impacting M&E | Q2 2025: M&E softness from Hollywood strike. Q1 2025: Strike impact on M&E. Q4 2024: Strike as a macro factor slowing new business. | Not specifically referenced; M&E grew 15% (PIX acquisition noted). | No new mention |
Payapps acquisition contribution | Q2 2025: No specific quantification. Q1 2025: Extension of construction portfolio. Q4 2024: Expected 0.5% contribution to FY25 revenue. | Inorganic growth driver, helping accelerate Construction segment. | Increased integration |
Expansion among ENR 400 companies | Q2 2025: Not mentioned. Q1 2025: Not mentioned. Q4 2024: Fortis Construction signed a multiyear ACC deal. | Highlighted by Power Construction (#79) standardizing on ACC. | Continued adoption among top contractors |
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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.