Autodesk, Inc. (NASDAQ: ADSK) today reported financial results
for the first quarter of fiscal 2017.
First Quarter Fiscal 2017
- Total subscriptions increased 132,000
from the fourth quarter of fiscal 2016 to 2.71 million at the end
of the first quarter. New model subscriptions increased 140,000
from the fourth quarter of fiscal 2016 to 567,000.
- Total annualized recurring revenue
(ARR) was $1.44 billion, an increase of 9 percent compared to the
first quarter last year as reported, and 12 percent on a constant
currency basis. New model ARR was $308 million and increased 71
percent compared to the first quarter last year as reported, and 76
percent on a constant currency basis.
- Deferred revenue increased 32 percent
to $1.52 billion, compared to $1.15 billion in the first quarter
last year.
- Revenue was $512 million, a decrease of
21 percent compared to the first quarter last year as reported, and
17 percent on a constant currency basis. During Autodesk's business
model transition, revenue is negatively impacted as more revenue is
recognized ratably rather than up front and as new offerings
generally have a lower initial purchase price.
- Total GAAP spend (cost of revenue plus
operating expenses) was $667 million, an increase of 7 percent
compared to the first quarter last year. A charge of $52 million
for a previously announced restructuring was recorded in the first
quarter of fiscal 2017.
- Total non-GAAP spend was $539 million,
a decrease of 2 percent compared to the first quarter last year. A
reconciliation of GAAP to non-GAAP results is provided in the
accompanying tables.
- GAAP diluted net loss per share was
$(0.77). GAAP diluted net income per share was $0.08 in the first
quarter last year.
- Non-GAAP diluted net loss per share was
$(0.10), compared to non-GAAP diluted net income per share of $0.30
in the first quarter last year.
"We had a strong first quarter, which builds on last quarter's
momentum and is a great start to the fiscal year," said Carl Bass,
Autodesk president and CEO. "Our customers and partners continue to
embrace Autodesk's transition to a subscription-based business
model and cloud-based software. We continue to diligently control
our costs while investing in the transition. We're striking a
healthy balance in achieving both short-term and long-term
goals."
First Quarter Operational Overview
"Our first quarter results demonstrate the success we are having
with our business model transition," said Scott Herren, Autodesk
Chief Financial Officer. "In addition to terrific subscription
growth for the quarter, we experienced strong growth in new model
ARR and deferred revenue. Revenue decreased, as expected, while
recurring revenue jumped significantly to 70 percent of total
revenue."
Total subscriptions were 2.71 million, a net increase of 132,000
from the fourth quarter of fiscal 2016. Under which, new model
subscriptions (product (formerly titled Desktop), enterprise
flexible license, and cloud subscription) were 567,000, a net
increase of 140,000. The increase in new model subscriptions was
led by product subscription. Maintenance subscriptions were 2.14
million, a net decrease of 8,000 from the fourth quarter of fiscal
2016.
Total ARR for the first quarter increased 9 percent to $1.44
billion compared to the first quarter last year as reported, and 12
percent on a constant currency basis. New model ARR was $308
million and increased 71 percent compared to the first quarter last
year as reported, and 76 percent on a constant currency basis.
Maintenance ARR was $1.13 billion and decreased 1 percent compared
to the first quarter last year as reported, and increased 2 percent
on a constant currency basis. Total recurring revenue in the first
quarter was 70 percent of total revenue compared to 51 percent of
total revenue in the first quarter last year.
As a reminder, during the business model transition, revenue has
been and will be negatively impacted as more revenue is recognized
ratably rather than up front and as new product offerings generally
have a lower initial purchase price. As part of the business model
transition, Autodesk discontinued new perpetual license sales for
most individual products at the end of the fourth quarter of fiscal
2016.
Revenue in the Americas was $218 million, a decrease of 11
percent compared to the first quarter last year as reported, and 10
percent on a constant currency basis. EMEA revenue was $203
million, a decrease of 17 percent compared to the first quarter
last year as reported, and 11 percent on a constant currency basis.
Revenue in APAC was $92 million, a decrease of 42 percent compared
to the first quarter last year as reported, and 39 percent on a
constant currency basis.
Revenue from our Architecture, Engineering and Construction
(AEC) business segment was $219 million, a decrease of 8 percent
compared to the first quarter last year. Revenue from our
Manufacturing business segment was $158 million, a decrease of 14
percent compared to the first quarter last year. Revenue from our
Platform Solutions and Emerging Business (PSEB) segment was $100
million, a decrease of 46 percent compared to the first quarter
last year. Revenue from our Media and Entertainment (M&E)
business segment was $35 million, a decrease of 12 percent compared
to the first quarter last year.
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." Autodesk's
business outlook for the second quarter and full year fiscal 2017
assumes, among other things, a continuation of the current economic
environment and foreign exchange currency rate environment. A
reconciliation between the fiscal 2017 GAAP and non-GAAP estimates
is provided below or in the tables following this press
release.
Second Quarter Fiscal 2017
Q2 FY17 Guidance Metrics
Q2 FY17 (ending July 31, 2016)
Revenue (in millions) $500 - $520
EPS GAAP ($0.73) -
($0.63)
EPS non-GAAP (1) ($0.18) - ($0.11)
_______________
(1) Non-GAAP earnings per diluted share exclude $0.26 related to
stock-based compensation expense, between $0.12 and $0.09 related
to GAAP-only tax charges, $0.09 related to restructuring charges
and other facility exit costs, and $0.08 for the amortization of
acquisition related intangibles.
Full Year Fiscal 2017
FY17 Guidance Metrics FY17 (ending January 31,
2017) Revenue (in millions) (1) $1,950 - $2,050
GAAP
spend growth (cost of revenue plus operating expenses) 3% - 4%
Non-GAAP spend growth (cost of revenue plus operating expenses)
(2) (1%) - flat
EPS GAAP ($3.25) - ($2.87)
EPS
non-GAAP (3) ($0.95) - ($0.70)
Net subscription
additions 475,000 - 525,000
_______________
(1) Excluding the impact of foreign currency rates and hedge
gains/losses revenue guidance would be $1,995 - $2,095 million.
(2) Non-GAAP spend excludes $229 million related to stock-based
compensation expense, $88 million related to restructuring charges
and other facility exit costs, and $66 million for the amortization
of acquisition-related intangibles.
(3) Non-GAAP earnings per diluted share excludes $1.02 related
to stock-based compensation expense, between $0.59 and $0.46 of
GAAP-only tax charges, $0.39 related to restructuring charges and
other facility exit costs, and $0.30 for the amortization of
acquisition-related intangibles.
The second quarter and full year fiscal 2017 outlook assume a
projected annual effective tax rate of (11) percent and 26 percent
for GAAP and non-GAAP results, respectively. Assumptions for the
annual effective tax rate are regularly evaluated and may be change
based changes in the projected geographic mix of earnings. At this
stage of the business model transition, small shifts in geographic
profitability significantly impact the effective tax rate.
Earnings Conference Call and Webcast
Autodesk will host its first quarter conference call today at
5:00 p.m. ET. The live broadcast can be accessed at http://www.autodesk.com/investors. Supplemental
financial information and prepared remarks for the conference call
will be posted to the investor relations section of Autodesk's
website simultaneously with this press release.
A replay of the broadcast will be available at 7:00 p.m. ET at
http://www.autodesk.com/investors.
This replay will be maintained on Autodesk's website for at least
12 months.
Glossary of Terms
Annualized Recurring Revenue (ARR): Represents the
annualized value of our average monthly recurring revenue for the
preceding three months. "Maintenance plan ARR" captures ARR
relating to traditional maintenance attached to perpetual licenses.
"New Model ARR" captures ARR relating to new model subscription
offerings. Recurring revenue acquired with the acquisition of a
business may cause variability in the comparison of this
calculation.
ARR is currently our key performance metric to assess the health
and trajectory of our business. ARR should be viewed independently
of revenue and deferred revenue as ARR is a performance metric and
is not intended to be combined with any of these items.
Constant Currency (CC) Growth Rates: We attempt to
represent the changes in the underlying business operations by
eliminating fluctuations caused by changes in foreign currency
exchange rates as well as eliminating hedge gains or losses
recorded within the current and comparative periods. Our constant
currency methodology removes all hedging gains and losses from the
calculation and applies a constant exchange rate across
periods.
Safe Harbor Statement
This press release contains forward-looking statements that
involve risks and uncertainties, including statements in the
paragraphs under "Business Outlook" above, statements about our
short-term and long-term goals, statements regarding the impacts
and results of our business model transition, expectations
regarding the transition of product offerings to subscription and
acceptance by our customers and partners of subscriptions,
statements regarding the impact of our restructuring activities,
and other statements regarding our strategies, market and product
positions, performance, and results. There are a significant number
of factors that could cause actual results to differ materially
from statements made in this press release, including: failure to
achieve our revenue and profitability objectives; failure to
successfully manage transitions to new business models and markets,
including the introduction of additional ratable revenue streams
and our continuing efforts to attract customers to our cloud-based
offerings and expenses related to the transition of our business
model; difficulty in predicting revenue from new businesses and the
potential impact on our financial results from changes in our
business models; general market, political, economic and business
conditions; the impact of non-cash charges on our financial
results; fluctuation in foreign currency exchange rates; the
success of our foreign currency hedging program; failure to control
our expenses; our performance in particular geographies, including
emerging economies; the ability of governments around the world to
meet their financial and debt obligations, and finance
infrastructure projects; weak or negative growth in the industries
we serve; slowing momentum in subscription billings or revenues;
difficulties encountered in integrating new or acquired businesses
and technologies; the inability to identify and realize the
anticipated benefits of acquisitions; the financial and business
condition of our reseller and distribution channels; dependence on
and the timing of large transactions; failure to achieve sufficient
sell-through in our channels for new or existing products; pricing
pressure; unexpected fluctuations in our tax rate; the timing and
degree of expected investments in growth and efficiency
opportunities; changes in the timing of product releases and
retirements; and any unanticipated accounting charges.
Further information on potential factors that could affect the
financial results of Autodesk are included in Autodesk's Annual
Report on Form 10-K for the fiscal year ended January 31, 2016,
which is on file with the U.S. Securities and Exchange Commission.
Autodesk disclaims any obligation to update the forward-looking
statements provided to reflect events that occur or circumstances
that exist after the date on which they were made.
About Autodesk
Autodesk helps people imagine, design and create a better world.
Everyone--from design professionals, engineers and architects to
digital artists, students and hobbyists--uses Autodesk
software to unlock their creativity and solve important challenges.
For more information visit autodesk.com or follow
@autodesk.
Autodesk is a registered trademark of Autodesk, Inc., and/or its
subsidiaries and/or affiliates in the USA and/or other countries.
All other brand names, product names or trademarks belong to their
respective holders. Autodesk reserves the right to alter product
and service offerings, and specifications and pricing at any time
without notice, and is not responsible for typographical or
graphical errors that may appear in this document.
© 2016 Autodesk, Inc. All rights reserved.
Autodesk, Inc. Condensed Consolidated Statements of
Operations
(In millions, except per share data)
Three Months Ended April 30, 2016
2015 (Unaudited) Net revenue: Subscription $ 326.0 $
319.8 License and other 185.9 326.7 Total net revenue
511.9 646.5 Cost of revenue: Cost of subscription revenue 39.7 38.7
Cost of license and other revenue 52.8 53.1 Total
cost of revenue 92.5 91.8 Gross profit 419.4 554.7
Operating expenses: Marketing and sales 242.9 253.9 Research and
development 195.5 194.5 General and administrative 75.8 75.9
Amortization of purchased intangibles 7.9 8.9 Restructuring charges
and other facility exit costs, net 52.3 — Total
operating expenses 574.4 533.2 (Loss) income from
operations (155.0 ) 21.5 Interest and other (expense) income, net
(3.6 ) 0.3 (Loss) income before income taxes (158.6 ) 21.8
Provision for income taxes (14.4 ) (2.7 ) Net (loss) income $
(173.0 ) $ 19.1 Basic net (loss) income per share $ (0.77 )
$ 0.08 Diluted net (loss) income per share $ (0.77 ) $ 0.08
Weighted average shares used in computing
basic net (loss) income per share
224.4 227.2
Weighted average shares used in computing
diluted net (loss) income per share
224.4 231.7
Autodesk, Inc. Condensed
Consolidated Balance Sheets (In millions)
April 30, 2016 January 31, 2016 (Unaudited)
ASSETS Current assets: Cash and cash equivalents $ 1,223.4 $
1,353.0 Marketable securities 1,043.9 897.9 Accounts receivable,
net 256.4 653.6 Prepaid expenses and other current assets 105.3
88.6 Total current assets 2,629.0 2,993.1
Marketable securities 538.9 532.3 Computer equipment,
software, furniture and leasehold improvements, net 174.9 169.3
Developed technologies, net 70.0 70.8 Goodwill 1,580.5 1,535.0
Deferred income taxes, net 9.8 9.2 Other assets 202.5 205.6
Total assets $ 5,205.6 $ 5,515.3
LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities:
Accounts payable $ 107.2 $ 119.9 Accrued compensation 132.8 243.3
Accrued income taxes 25.1 29.4 Deferred revenue 1,091.8 1,068.9
Other accrued liabilities 117.6 129.5 Total current
liabilities 1,474.5 1,591.0 Long term deferred
revenue 431.9 450.3 Long term income taxes payable 153.8 161.4 Long
term deferred income taxes 78.1 67.7 Long term notes payable, net
1,488.4 1,487.7 Other liabilities 143.0 137.6 Stockholders’ equity:
Preferred stock
— — Common stock and additional paid-in capital 1,865.6 1,821.5
Accumulated other comprehensive loss
(121.5 ) (121.1 ) Retained earnings (308.2 ) (80.8 )
Total stockholders' equity
1,435.9 1,619.6
Total liabilities and stockholders'
equity
$ 5,205.6 $ 5,515.3
Autodesk, Inc.
Condensed Consolidated Statements of Cash Flows (In
millions)
Three Months Ended April 30,
2016 2015 (Unaudited) Operating activities:
Net (loss) income $ (173.0 ) $ 19.1 Adjustments to reconcile net
(loss) income to net cash provided by operating activities:
Depreciation, amortization and accretion 37.4 37.8 Stock-based
compensation expense 56.9 50.2 Deferred income taxes 6.2 (5.3 )
Restructuring charges and other facility exit costs, net 52.3 —
Other operating activities 8.3 (3.5 ) Changes in operating assets
and liabilities, net of acquisitions: Accounts receivable 397.4
143.1 Prepaid expenses and other current assets (14.9 ) (22.4 )
Accounts payable and accrued liabilities (197.2 ) (110.8 ) Deferred
revenue 4.1 (3.4 )
Accrued income taxes
(13.1 ) (18.3 ) Net cash provided by operating activities 164.4
86.5 Investing activities: Purchases of marketable
securities (577.5 ) (485.2 ) Sales of marketable securities 107.6
97.5 Maturities of marketable securities 322.6 192.4 Capital
expenditures (22.3 ) (12.5 ) Acquisitions, net of cash acquired
(59.6 ) (34.5 )
Other investing activities
(1.0 ) (10.6 ) Net cash (used in) investing activities (230.2 )
(252.9 ) Financing activities: Proceeds from issuance of common
stock, net of issuance costs 51.2 57.2
Taxes paid related to net share settlement
of equity awards
(18.3 ) (23.1 )
Repurchase and retirement of common
stock
(100.1 ) (95.4 ) Net cash (used in) financing activities (67.2 )
(61.3 )
Effect of exchange rate changes on cash
and cash equivalents
3.4 (0.2 ) Net (decrease) in cash and cash equivalents
(129.6 ) (227.9 ) Cash and cash equivalents at beginning of the
period 1,353.0 1,410.6 Cash and cash equivalents at
end of the period $ 1,223.4 $ 1,182.7
Autodesk, Inc. Reconciliation of GAAP financial measures
to non-GAAP financial measures (In millions, except per share
data) To supplement our consolidated financial
statements presented on a GAAP basis, Autodesk provides investors
with certain non-GAAP measures including non-GAAP gross margin,
non-GAAP operating expenses, non-GAAP operating margin, non-GAAP
net income, non-GAAP net income per share, and non-GAAP diluted
shares used in per share calculation. These non-GAAP financial
measures are adjusted to exclude certain costs, expenses, gains and
losses, including stock-based compensation expense, restructuring
charges and other facility exit costs, amortization of purchased
intangibles, gain and loss on strategic investments, and related
income tax expenses. See our reconciliation of GAAP financial
measures to non-GAAP financial measures herein. We believe these
exclusions are appropriate to enhance an overall understanding of
our past financial performance and also our prospects for the
future, as well as to facilitate comparisons with our historical
operating results. These adjustments to our GAAP results are made
with the intent of providing both management and investors a more
complete understanding of Autodesk's underlying operational results
and trends and our marketplace performance. For example, non-GAAP
results are an indication of our baseline performance before gains,
losses or other charges that are considered by management to be
outside our core operating results. In addition, these non-GAAP
financial measures are among the indicators management uses as a
basis for our planning and forecasting of future periods.
There are limitations in using non-GAAP financial measures because
the non-GAAP financial measures are not prepared in accordance with
generally accepted accounting principles and may be different from
non-GAAP financial measures used by other companies. The non-GAAP
financial measures are limited in value because they exclude
certain items that may have a material impact upon our reported
financial results. The presentation of this additional information
is not meant to be considered in isolation or as a substitute for
the directly comparable financial measures prepared in accordance
with GAAP in the United States. Investors should review the
reconciliation of the non-GAAP financial measures to their most
directly comparable GAAP financial measures as provided in the
tables accompanying this press release. The following table
shows Autodesk's non-GAAP results reconciled to GAAP results
included in this release.
Three Months Ended April
30, 2016 2015 (Unaudited)
GAAP cost of subscription revenue $ 39.7 $ 38.7 Stock-based
compensation expense
(1.7
) (1.4 ) Amortization of developed technology (0.3 ) (1.1 )
Non-GAAP cost of subscription revenue $ 37.7 $ 36.2
GAAP cost of license and other revenue $ 52.8 $ 53.1
Stock-based compensation expense (1.8 ) (1.5 ) Amortization of
developed technology (10.6 ) (12.4 ) Non-GAAP cost of license and
other revenue $ 40.4 $ 39.2 GAAP gross profit
$ 419.4 $ 554.7 Stock-based compensation expense 3.5 2.9
Amortization of developed technology 10.9 13.5
Non-GAAP gross profit $ 433.8 $ 571.1 GAAP
marketing and sales $ 242.9 $ 253.9 Stock-based compensation
expense (23.6 ) (21.7 ) Non-GAAP marketing and sales $ 219.3
$ 232.2 GAAP research and development $ 195.5 $ 194.5
Stock-based compensation expense (20.9 ) (17.6 ) Non-GAAP research
and development $ 174.6 $ 176.9 GAAP general
and administrative $ 75.8 $ 75.9 Stock-based compensation expense
(8.9 ) (8.0 ) Non-GAAP general and administrative $ 66.9 $
67.9 GAAP amortization of purchased intangibles $ 7.9
$ 8.9 Amortization of purchased intangibles (7.9 ) (8.9 ) Non-GAAP
amortization of purchased intangibles $ — $ —
GAAP restructuring charges and other facility exit costs, net $
52.3 $ — Restructuring charges and other facility exit costs, net
(52.3 ) — Non-GAAP restructuring charges and other facility
exit costs, net $ — $ — GAAP operating
expenses $ 574.4 $ 533.2 Stock-based compensation expense (53.4 )
(47.3 ) Amortization of purchased intangibles (7.9 ) (8.9 )
Restructuring charges and other facility exit costs, net (52.3 ) —
Non-GAAP operating expenses $ 460.8 $ 477.0
GAAP (loss) income from operations $ (155.0 ) $ 21.5
Stock-based compensation expense 56.9 50.2 Amortization of
developed technology 10.9 13.5 Amortization of purchased
intangibles 7.9 8.9 Restructuring charges and other facility exit
costs, net 52.3 — Non-GAAP (loss) income from
operations $ (27.0 ) $ 94.1
GAAP interest and other (expense) income,
net
$ (3.6 ) $ 0.3 Gain on strategic investments (0.5 ) (1.0 ) Non-GAAP
interest and other (expense), net $ (4.1 ) $ (0.7 ) GAAP
(provision) for income taxes $ (14.4 ) $ (2.7 ) Discrete GAAP tax
(provision) items (1.9 ) (3.1 ) Income tax effect of non-GAAP
adjustments 24.4 (18.5 ) Non-GAAP benefit (provision) for
income tax $ 8.1 $ (24.3 ) GAAP net (loss) income $
(173.0 ) $ 19.1 Stock-based compensation expense 56.9 50.2
Amortization of developed technology 10.9 13.5 Amortization of
purchased intangibles 7.9 8.9 Restructuring charges and other
facility exit costs, net 52.3 —
(Gain) on strategic investments
(0.5 ) (1.0 ) Discrete GAAP tax benefit (provision) items (1.9 )
(3.1 ) Income tax effect of non-GAAP adjustments 24.4 (18.5
) Non-GAAP net (loss) income $ (23.0 ) $ 69.1 GAAP
diluted net (loss) income per share $ (0.77 ) $ 0.08 Stock-based
compensation expense 0.25 0.21 Amortization of developed technology
0.05 0.06 Amortization of purchased intangibles 0.04 0.04
Restructuring charges and other facility exit costs, net 0.23 —
(Gain) on strategic investments — — Discrete GAAP tax (provision)
items (0.01 ) (0.01 ) Income tax effect of non-GAAP adjustments
0.11 (0.08 )
Non-GAAP diluted net (loss) income per
share
$ (0.10 ) $ 0.30 GAAP diluted shares used in per
share calculation 224.4 231.7 Shares included in non-GAAP net
income per share, but excluded from GAAP net loss per share as they
would have been anti-dilutive — — Non-GAAP diluted
weighted average shares used in per share calculation 224.4
231.7
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version on businesswire.com: http://www.businesswire.com/news/home/20160519006445/en/
Autodesk, Inc.Investors:David Gennarelli,
415-507-6033david.gennarelli@autodesk.comorPress:Noah Cole,
415-580-3535noah.cole@autodesk.com
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