Strong Billings and Deferred Revenue
Growth
Autodesk, Inc. (NASDAQ:ADSK) today reported financial results
for the second quarter of fiscal 2016. The company reported strong
billings and deferred revenue growth.
Second Quarter Fiscal 2016
- Total billings increased 7 percent,
compared to the second quarter last year as reported, and 15
percent on a constant currency basis.
- Deferred revenue increased 26 percent
to $1.2 billion, compared to $981 million in the second quarter
last year.
- Total subscriptions increased by
approximately 61,000 from the first quarter of fiscal 2016. Total
subscriptions were 2.39 million at the end of the second
quarter.
- Revenue was $610 million, a decrease of
4 percent compared to the second quarter last year as reported, and
flat on a constant currency basis.
- GAAP operating margin was 1 percent,
compared to 8 percent in the second quarter last year.
- Non-GAAP operating margin was 11
percent, compared to 18 percent in the second quarter last year. A
reconciliation of GAAP to non-GAAP results is provided in the
accompanying tables.
- GAAP diluted net loss per share was
$(1.04). Please refer to the comment below regarding the non-cash
GAAP tax charge recorded in the quarter. GAAP diluted net income
per share was $0.13 in the second quarter last year.
- Non-GAAP diluted net income per share
was $0.19, compared to $0.35 in the second quarter last year.
- Cash flow from operating activities was
$77 million, compared to $96 million in the second quarter last
year.
"We are pleased with the progress of our business model
transition," said Carl Bass, Autodesk president and CEO.
"Strong billings and deferred revenue growth led the quarter and we
continue to see customers adopt our new model subscription
offerings, which are showing strong year-over-year and sequential
growth. For the past two years we've been preparing for this
transition and we're now ready to accelerate the process."
Second Quarter Operational Overview
As a reminder, Autodesk is undergoing a business model
transition in which the company will discontinue selling new
perpetual licenses in favor of subscriptions and flexible license
arrangements. During the transition, billings, revenue, gross
margin, operating margin, EPS, deferred revenue, and cash flow from
operations will be impacted as more revenue is recognized ratably
rather than up front and as new offerings bring a wider variety of
price points.
Revenue in the Americas increased 6 percent compared to the
second quarter last year to $236 million. EMEA revenue was $226
million, a decrease of 7 percent compared to the second quarter
last year as reported, and flat on a constant currency basis.
Revenue in APAC was $148 million, a decrease of 13 percent compared
to the second quarter last year as reported, and 9 percent on a
constant currency basis. Revenue from emerging economies was $92
million, a decrease of 7 percent compared to the second quarter
last year as reported, and 5 percent on a constant currency basis.
Revenue from emerging economies represented 15 percent of total
revenue in the second quarter.
Revenue from the Architecture, Engineering and Construction
business segment was $233 million, an increase of 7 percent
compared to the second quarter last year. Revenue from the Platform
Solutions and Emerging Business segment was $164 million, a
decrease of 21 percent compared to the second quarter last year.
Revenue from the Manufacturing business segment was $171 million,
an increase of 2 percent compared to the second quarter last year.
Revenue from the Media and Entertainment business segment was $41
million, a decrease of 6 percent compared to the second quarter
last year.
Revenue from Flagship products was $272 million, a decrease of
11 percent compared to the second quarter last year. Revenue from
Suites was $226 million, a decrease of 3 percent compared to the
second quarter last year. Revenue from New and Adjacent products
was $112 million, an increase of 13 percent compared to the second
quarter last year.
In the second quarter, Autodesk recorded a non-cash GAAP tax
charge of $214 million to establish a valuation allowance on
certain U.S. deferred tax assets. Due to Autodesk's pre-tax U.S.
GAAP cumulative loss over the last three years, the company
evaluated its deferred tax assets and determined that a valuation
allowance was required. This is a GAAP-only charge and has no
impact to cash this year or in the future. Autodesk will continue
to monitor the application of this accounting rule and will
consider reversing the valuation allowance when conditions
warrant.
"Looking at the second half of this fiscal year we are
maintaining our billings and subscriptions outlook but we're now
expecting a greater portion of our sales to shift from perpetual
licenses to new subscription types," said Scott Herren, Autodesk
Chief Financial Officer. "Since the revenue from these new
subscription types is deferred and recognized ratably we have
revised our revenue, operating margin and EPS outlook for the year.
Looking beyond this year, we are currently refining our plans
around the pace and timeframe for the business model transition and
look forward to providing more detail at our Investor Day event
scheduled for September 29th."
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 third quarter and full year fiscal 2016
assumes, among other things, a continuation of the current economic
environment and foreign exchange currency rate environment. A
reconciliation between the GAAP and non-GAAP estimates for fiscal
2016 is provided below or in the tables following this press
release.
Third Quarter Fiscal 2016
Q3 FY16 Guidance Metrics Q3 FY16
(ending October 31, 2015) Revenue (in millions) $580 -
$600
EPS GAAP ($0.23) - ($0.18)
EPS Non-GAAP (1)
$0.05 - $0.10
_______________
(1) Non-GAAP earnings per diluted share exclude $0.21 related to
stock-based compensation expense and $0.07 for the amortization of
acquisition related intangibles, net of tax.
Full Year Fiscal 2016
FY16 Guidance Metrics FY16 (ending
January 31, 2016) Billings growth (1) 2% - 4%
Revenue
(in millions) (2) $2,465 - $2,505
GAAP operating margin
(2)% - (1)%
Non-GAAP operating margin
9% - 10%
EPS GAAP (3) ($1.39) - ($1.27)
EPS Non-GAAP (4) $0.60
- $0.72
Net subscription additions 375,000 - 425,000
_______________
(1) On a constant currency basis, billings growth would be 9% -
11%.
(2) On a constant currency basis, revenue growth would be 3% -
5%.
(3) GAAP net loss per diluted share includes $0.94 related to
the non-cash GAAP tax charge of $214 million to reduce U.S.
deferred tax assets. The charge reflects the business model
transition and resulting reduction in our pre-tax U.S. GAAP
profitability.
(4) Non-GAAP earnings per diluted share exclude $0.94 related to
the non-cash GAAP tax charge to reduce U.S. deferred tax assets,
$0.75 related to stock-based compensation expense, and $0.31 for
the amortization of acquisition related intangibles, offset by
$0.01 for gains on strategic investment, net of tax.
The third quarter and full year fiscal 2016 outlook assume a
projected annual effective tax rate of 24 percent and 26 percent
for GAAP and non-GAAP results, respectively.
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 pm ET at
http://www.autodesk.com/investors.
This replay will be maintained on Autodesk's website for at least
12 months.
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 regarding the
impacts of our business model transition, expectations regarding
the transition of product offerings to subscription, and other
statements regarding our strategies, market and products 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
maintain our revenue growth and profitability; 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 year ended January 31, 2015 and Form
10-Q for the quarter ended April 30, 2015, which are 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.
© 2015 Autodesk, Inc. All rights reserved.
Autodesk, Inc. Condensed
Consolidated Statements of Operations (In millions, except per
share data)
Three Months EndedJuly
31,
Six Months EndedJuly 31,
2015 2014 2015
2014 (Unaudited) Net revenue: License and other $
290.5 $ 350.4 $ 617.2 $ 666.6 Subscription 319.0 286.7
638.8 563.0 Total net revenue 609.5
637.1 1,256.0 1,229.6 Cost of revenue: Cost of
license and other revenue 53.0 53.4 106.1 102.7 Cost of
subscription revenue 40.0 34.5 78.7 63.9
Total cost of revenue 93.0 87.9 184.8
166.6 Gross profit 516.5 549.2 1,071.2 1,063.0 Operating
expenses: Marketing and sales 240.8 237.6 494.7 463.0 Research and
development 193.1 179.3 387.6 349.8 General and administrative (1)
70.1 71.5 146.0 134.0 Amortization of purchased intangibles (1) 8.2
10.1 17.1 21.0 Restructuring charges, net — 0.8 —
3.1 Total operating expenses 512.2 499.3
1,045.4 970.9 Income from operations 4.3 49.9
25.8 92.1 Interest and other expense, net (3.4 ) (7.0 ) (3.1 )
(13.6 ) Income before income taxes 0.9 42.9 22.7 78.5 Provision for
income taxes (236.4 ) (11.6 ) (239.1 ) (18.9 ) Net (loss) income $
(235.5 ) $ 31.3 $ (216.4 ) $ 59.6 Basic net (loss)
income per share $ (1.04 ) $ 0.14 $ (0.95 ) $ 0.26
Diluted net (loss) income per share $ (1.04 ) $ 0.13 $ (0.95
) $ 0.26 Weighted average shares used in computing basic net
(loss) income per share 227.0 227.3 227.1
227.1 Weighted average shares used in computing diluted net
(loss) income per share 227.0 232.4 227.1
232.4
_____________________
(1) Effective in second quarter of fiscal 2015, Autodesk elected
to present amortization of purchased customer relationships, trade
names, patents, and user lists as a separate line item within
operating expenses. As a result, amortization previously reflected
in “General and Administrative” expense was reclassified to
“Amortization of Purchased Intangibles" within Operating Expenses.
Prior period amounts have been revised to conform to the current
period presentation.
Autodesk, Inc. Condensed Consolidated
Balance Sheets (In millions)
July 31, 2015
January 31, 2015 (Unaudited) ASSETS Current
assets: Cash and cash equivalents $ 1,473.1 $ 1,410.6 Marketable
securities 916.8 615.8 Accounts receivable, net 394.1 458.9
Deferred income taxes, net 10.0 85.1 Prepaid expenses and other
current assets 105.8 100.9 Total current assets
2,899.8 2,671.3 Marketable securities 562.5 273.0
Computer equipment, software, furniture and leasehold improvements,
net 158.2 159.2 Developed technologies, net 73.2 86.5 Goodwill
1,473.8 1,456.2 Deferred income taxes, net 4.2 100.0 Other assets
(1) 170.1 163.5 Total assets $ 5,341.8 $
4,909.7
LIABILITIES AND STOCKHOLDERS’ EQUITY Current
liabilities: Accounts payable $ 90.8 $ 100.5 Accrued compensation
172.2 253.3 Accrued income taxes 52.3 28.2 Deferred revenue 881.6
900.8 Other accrued liabilities 116.9 117.3 Total
current liabilities 1,313.8 1,400.1 Deferred revenue
354.7 256.3 Long term income taxes payable 124.0 158.8 Long term
deferred income taxes 28.9 — Long term notes payable, net (1)
1,486.2 743.1 Other liabilities 132.1 132.2 Stockholders’ equity:
Preferred stock — — Common stock and additional paid-in capital
1,808.0 1,773.1 Accumulated other comprehensive loss (70.3 ) (53.3
) Retained earnings 164.4 499.4 Total stockholders’
equity 1,902.1 2,219.2 Total liabilities and
stockholders' equity $ 5,341.8 $ 4,909.7
_______________
(1) Effective in the second quarter of 2016, Autodesk elected to
retrospectively adopt ASU 2015-03, regarding Subtopic 835-30
“Interest - Imputation of Interest". The adoption resulted in a
$4.1 million reclassification of debt issuance costs from other
assets to a reduction of long term notes payable, net, as of
January 31, 2015.
Autodesk, Inc. Condensed Consolidated
Statements of Cash Flows (In millions)
Six Months
Ended July 31, 2015 2014 (Unaudited)
Operating activities: Net (loss) income $ (216.4 ) $ 59.6
Adjustments to reconcile net (loss) income to net cash provided by
operating activities: Depreciation, amortization and accretion 74.0
73.3 Stock-based compensation expense 90.9 73.4 Deferred income
taxes 197.9 1.1 Restructuring charges, net — 3.1 Other operating
activities (15.3 ) 5.5 Changes in operating assets and liabilities,
net of business combinations: Accounts receivable 64.4 76.3 Prepaid
expenses and other current assets (19.4 ) (7.8 ) Accounts payable
and accrued liabilities (81.5 ) (21.5 ) Deferred revenue 79.2 68.9
Accrued income taxes (10.1 ) (17.0 ) Net cash provided by operating
activities 163.7 314.9 Investing activities:
Purchases of marketable securities (1,314.2 ) (684.2 ) Sales of
marketable securities 187.0 127.3 Maturities of marketable
securities 541.0 407.1 Capital expenditures (29.8 ) (31.6 )
Acquisitions, net of cash acquired (37.5 ) (548.3 ) Other investing
activities (13.1 ) (0.7 ) Net cash used in investing activities
(666.6 ) (730.4 ) Financing activities: Proceeds from issuance of
common stock, net of issuance costs 33.2 91.3 Repurchase and
retirement of common stock (207.7 ) (204.3 ) Proceeds from debt,
net of discount 748.3 — Other financing activities (6.3 ) (1.7 )
Net cash provided by (used in) financing activities 567.5
(114.7 ) Effect of exchange rate changes on cash and cash
equivalents (2.1 ) 0.3 Net increase (decrease) in cash and
cash equivalents 62.5 (529.9 ) Cash and cash equivalents at
beginning of fiscal year 1,410.6 1,853.0 Cash and
cash equivalents at end of the period $ 1,473.1 $ 1,323.1
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, non-GAAP diluted shares used in per share
calculation and billings. Excluding billings, these non-GAAP
financial measures are adjusted to exclude certain costs, expenses,
gains and losses, including stock-based compensation expense,
restructuring charges, amortization of purchased intangibles, gain
and loss on strategic investments, and related income tax expenses.
In the case of billings, we reconcile to revenue by adjusting for
the change in deferred revenue from the beginning to the end of the
period less any deferred revenue balances acquired from business
combination(s) during the period and other discounts. 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 primary 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 July
31, Six Months Ended July 31, 2015
2014 2015 2014 (Unaudited)
(Unaudited) GAAP cost of license and other revenue $
53.0 $ 53.4 $ 106.1 $ 102.7 Stock-based compensation expense (1.2 )
(1.1 ) (2.7 ) (2.0 ) Amortization of developed technology (11.2 )
(13.4 ) (23.6 ) (25.2 ) Non-GAAP cost of license and other revenue
$ 40.6 $ 38.9 $ 79.8 $ 75.5 GAAP
cost of subscription revenue $ 40.0 $ 34.5 $ 78.7 $ 63.9
Stock-based compensation expense (1.2 ) (1.0 ) (2.6 ) (1.8 )
Amortization of developed technology (0.8 ) (1.1 ) (1.9 ) (2.3 )
Non-GAAP cost of subscription revenue $ 38.0 $ 32.4 $
74.2 $ 59.8 GAAP gross profit $ 516.5 $ 549.2
$ 1,071.2 $ 1,063.0 Stock-based compensation expense 2.4 2.1 5.3
3.8
Amortization of developed technology
12.0 14.5 25.5 27.5 Non-GAAP gross
profit $ 530.9 $ 565.8 $ 1,102.0 $ 1,094.3
GAAP marketing and sales $ 240.8 $ 237.6 $ 494.7 $
463.0 Stock-based compensation expense (17.3 ) (17.6 ) (39.0 )
(31.6 ) Non-GAAP marketing and sales $ 223.5 $ 220.0
$ 455.7 $ 431.4 GAAP research and development
$ 193.1 $ 179.3 $ 387.6 $ 349.8 Stock-based compensation expense
(14.8 ) (13.7 ) (32.4 ) (24.6 ) Non-GAAP research and development $
178.3 $ 165.6 $ 355.2 $ 325.2
GAAP general and administrative $ 70.1 $ 71.5 $ 146.0 $ 134.0
Stock-based compensation expense (6.2 ) (6.4 ) (14.2 ) (13.4 )
Non-GAAP general and administrative $ 63.9 $ 65.1 $
131.8 $ 120.6 GAAP amortization of purchased
intangibles $ 8.2 $ 10.1 $ 17.1 $ 21.0 Amortization of purchased
intangibles (8.2 ) (10.1 ) (17.1 ) (21.0 ) Non-GAAP Amortization of
purchased intangibles $ — $ — $ — $ —
GAAP restructuring charges, net $ — $ 0.8 $ — $ 3.1
Restructuring charges, net — (0.8 ) — (3.1 ) Non-GAAP
restructuring charges, net $ — $ — $ — $ —
GAAP operating expenses $ 512.2 $ 499.3 $ 1,045.4 $
970.9 Stock-based compensation expense (38.3 ) (37.7 ) (85.6 )
(69.6 ) Amortization of purchased intangibles (8.2 ) (10.1 ) (17.1
) (21.0 ) Restructuring charges, net — (0.8 ) — (3.1
) Non-GAAP operating expenses $ 465.7 $ 450.7 $ 942.7
$ 877.2 GAAP income from operations $ 4.3 $
49.9 $ 25.8 $ 92.1 Stock-based compensation expense 40.7 39.8 90.9
73.4 Amortization of developed technology 12.0 14.5 25.5 27.5
Amortization of purchased intangibles 8.2 10.1 17.1 21.0
Restructuring charges, net — 0.8 — 3.1
Non-GAAP income from operations $ 65.2 $ 115.1 $
159.3 $ 217.1 GAAP interest and other expense,
net $ (3.4 ) $ (7.0 ) $ (3.1 ) $ (13.6 ) (Gain) loss on strategic
investments (2.4 ) 3.3 (3.4 ) 6.9 Non-GAAP interest
and other expense, net $ (5.8 ) $ (3.7 ) $ (6.5 ) $ (6.7 )
GAAP provision for income taxes $ (236.4 ) $ (11.6 ) $ (239.1 ) $
(18.9 ) Discrete GAAP tax benefit (provision) items 4.3 (2.6 ) 1.2
(4.7 ) Establishment of valuation allowance on deferred tax assets
213.6 — 213.6 — Income tax effect of non-GAAP adjustments 3.1
(15.2 ) (15.4 ) (31.0 ) Non-GAAP provision for income tax $
(15.4 ) $ (29.4 ) $ (39.7 ) $ (54.6 ) GAAP net (loss) income
$ (235.5 ) $ 31.3 $ (216.4 ) $ 59.6 Stock-based compensation
expense 40.7 39.8 90.9 73.4 Amortization of developed technology
12.0 14.5 25.5 27.5 Amortization of purchased intangibles 8.2 10.1
17.1 21.0 Restructuring charges, net — 0.8 — 3.1 (Gain) loss on
strategic investments (2.4 ) 3.3 (3.4 ) 6.9 Discrete GAAP tax
benefit (provision) items 4.3 (2.6 ) 1.2 (4.7 ) Establishment of
valuation allowance on deferred tax assets 213.6 — 213.6 — Income
tax effect of non-GAAP adjustments 3.1 (15.2 ) (15.4 ) (31.0
) Non-GAAP net income $ 44.0 $ 82.0 $ 113.1 $
155.8 GAAP diluted net (loss) income per share $
(1.04 ) $ 0.13 $ (0.95 ) $ 0.26 Stock-based compensation expense
0.18 0.18 0.39 0.32 Amortization of developed technology 0.05 0.06
0.11 0.12 Amortization of purchased intangibles 0.04 0.04 0.07 0.09
Restructuring charges, net — — — 0.01 (Gain) loss on strategic
investments (0.01 ) 0.01 (0.01 ) 0.03 Discrete GAAP tax benefit
(provision) items 0.02 (0.01 ) 0.01 (0.03 ) Establishment of
valuation allowance on deferred tax assets 0.94 — 0.94 — Income tax
effect of non-GAAP adjustments 0.01 (0.06 ) (0.07 ) (0.13 )
Non-GAAP diluted net income per share $ 0.19 $ 0.35 $
0.49 $ 0.67 GAAP diluted shares used in per
share calculation 227.0 232.4 227.1 232.4 Shares included in
non-GAAP net income per share, but excluded from GAAP net loss per
share as they would have been anti-dilutive 4.1 — 4.5
— Non-GAAP diluted weighted average shares used in
per share calculation 231.1 232.4 231.6 232.4
Autodesk, Inc.
Other Supplemental Financial Information (a)
Fiscal Year 2016 QTR 1 QTR
2 QTR 3 QTR 4 YTD
2016 Financial Statistics ($ in millions, except per share
data): Total Net Revenue: $ 647 $ 610 $ 1,256 License
and Other Revenue $ 327 $ 291 $ 617 Subscription Revenue $ 320 $
319 $ 639 GAAP Gross Margin 86 % 85 % 85 % Non-GAAP Gross
Margin (1)(2) 88 % 87 % 88 % GAAP Operating Expenses $ 533 $
512 $ 1,045 GAAP Operating Margin 3 % 1 % 2 % GAAP Net Income
(Loss) $ 19 $ (236 ) $ (216 ) GAAP Diluted Net Income (Loss) Per
Share (b) $ 0.08 $ (1.04 ) $ (0.95 ) Non-GAAP Operating
Expenses (1)(3) $ 477 $ 466 $ 943 Non-GAAP Operating Margin (1)(4)
15 % 11 % 13 % Non-GAAP Net Income (1)(5)(c) $ 69 $ 44 $ 113
Non-GAAP Diluted Net Income Per Share (1)(6)(b)(c) $ 0.30 $ 0.19 $
0.49 Total Cash and Marketable Securities $ 2,271 $ 2,952 $
2,952 Days Sales Outstanding 44 59 Capital Expenditures $ 13 $ 17 $
30 Cash Flow from Operating Activities $ 87 $ 77 $ 164 GAAP
Depreciation, Amortization and Accretion $ 38 $ 36 $ 74
Deferred Subscription Revenue Balance (c) $ 930 $ 1,004 $ 1,004
Revenue by Geography: Americas $ 244 $ 236 $ 480
Europe, Middle East and Africa $ 245 $ 226 $ 471 Asia Pacific $ 157
$ 148 $ 305 % of Total Rev from Emerging Economies 14 % 15 % 15 %
Revenue by Segment: Architecture, Engineering and
Construction $ 237 $ 233 $ 470 Platform Solutions and Emerging
Business $ 185 $ 164 $ 349 Manufacturing $ 185 $ 171 $ 356 Media
and Entertainment $ 40 $ 41 $ 81
Other Revenue
Statistics: % of Total Rev from Flagship 46 % 45 % 45 % % of
Total Rev from Suites 37 % 37 % 37 % % of Total Rev from New and
Adjacent 17 % 18 % 17 % % of Total Rev from AutoCAD and AutoCAD LT
25 % 24 % 25 %
Favorable (Unfavorable) Impact of U.S.
Dollar Translation Relative to Foreign Currencies Compared to
Comparable Prior Year Period:
FX Impact on Total Billings $ (31 ) $ (50 ) $ (81 ) FX Impact on
Total Net Revenue $ (22 ) $ (25 ) $ (47 ) FX Impact on Cost of
Revenue and Total Operating Expenses $ 22 $ 25 $ 47 FX Impact on
Operating Income $ — $ — $ —
Gross Profit by Segment:
Architecture, Engineering and Construction $ 217 $ 210 $ 427
Platform Solutions and Emerging Business $ 163 $ 139 $ 302
Manufacturing $ 158 $ 151 $ 309 Media and Entertainment $ 33 $ 32 $
64 Unallocated amounts $ (16 ) $ (14 ) $ (31 )
Common
Stock Statistics: GAAP Common Shares Outstanding 227.6 226.2
226.2 GAAP Fully Diluted Weighted Average Shares Outstanding 231.7
227.0 227.1 Shares Repurchased 1.6 2.1 3.7
Subscriptions
(in millions): Total Subscriptions (c) 2.33 2.39 2.39
(a) Totals may not agree with the sum of the components due to
rounding. (b) Net Income (loss) per share were computed
independently for each of the periods presented; therefore the sum
of the net income (loss) per share amounts for the quarters may not
equal the total for the year. (c) Total Subscriptions consists of
subscriptions from our maintenance, desktop, cloud service and
enterprise license offerings that are active and paid as of the
quarter end date. For certain cloud based and enterprise license
offerings, subscriptions represent the monthly average activity
within the last three months of the quarter end date. Total
subscriptions do not include data from education offerings,
consumer product offerings, certain Creative Finishing product
offerings, Autodesk Buzzsaw, Autodesk Constructware and third party
products. Subscriptions acquired with the acquisition of a business
are captured once the data conforms to our subscription count
methodology and when added, may cause variability in the quarterly
comparisons of this calculation. (1) 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 billings. Excluding net billings, these non-GAAP
financial measures are adjusted to exclude certain costs, expenses,
gains and losses, including stock-based compensation expense,
restructuring charges, amortization of purchased intangibles, gain
and loss on strategic investments, and related income tax expenses.
In the case of billings, we reconcile to revenue by adjusting for
the change in deferred revenue from the beginning to the end of the
period less any deferred revenue balances acquired from business
combination(s) during the period and other discounts. 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 primary 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 Autodesk's press release.
QTR 1
QTR 2 QTR 3 QTR 4
YTD 2016 (2) GAAP Gross Margin 86 % 85 % 85 % Stock-based
compensation expense — % — % 1 % Amortization of developed
technology 2 % 2 % 2 %
Non-GAAP Gross Margin 88 % 87 % 88 % (3) GAAP Operating
Expenses $ 533 $ 512 $ 1,045 Stock-based compensation expense (47 )
(38 ) (86 ) Amortization of purchased intangibles (9 ) (8 ) (17 )
Restructuring charges, net — —
— Non-GAAP Operating Expenses $ 477 $
466 $ 943 (4) GAAP Operating Margin 3 % 1 % 2 % Stock-based
compensation expense 8 % 7 % 7 % Amortization of developed
technology 2 % 2 % 2 % Amortization of purchased intangibles 2 % 1
% 2 % Restructuring charges, net — % — %
— % Non-GAAP Operating Margin 15 % 11 % 13 %
(5) GAAP Net Income (Loss) $ 19 $ (236 ) $ (216 )
Stock-based compensation expense 50 41 91 Amortization of developed
technology 14 12 26 Amortization of purchased intangibles 9 8 17
Restructuring charges, net — — — (Gain) loss on strategic
investments (1 ) (2 ) (3 ) Discrete GAAP tax (provision) benefit
items (3 ) 4 1 Establishment of valuation allowance on deferred tax
assets — 214 214 Income tax effect of non-GAAP adjustments (19 )
3 (15 ) Non-GAAP
Net Income $ 69 $ 44 $ 113 (6) GAAP Diluted Net Income
(Loss) Per Share $ 0.08 $ (1.04 ) $ (0.95 ) Stock-based
compensation expense 0.21 0.18 0.39 Amortization of developed
technology 0.06 0.05 0.11 Amortization of purchased intangibles
0.04 0.04 0.07 Restructuring charges, net — — — (Gain) loss on
strategic investments — (0.01 ) (0.01 ) Discrete GAAP tax
(provision) benefit items (0.01 ) 0.02 0.01 Establishment of
valuation allowance on deferred tax assets — 0.94 0.94 Income tax
effect of non-GAAP adjustments (0.08 ) 0.01
(0.07 ) Non-GAAP Diluted Net Income Per
Share $ 0.30 $ 0.19 $ 0.49
Reconciliation for
Billings: Q116 Q216 Year over year change
in GAAP net revenue 9 % (4 )% Change in deferred revenue in the
current period (11 )% 10 % Change in hedge gain (loss) applicable
to billings 4 % 2 % Change in acquisition related deferred revenue
and other 1 % (1 )% Year over year change in billings 3 %
7 %
Reconciliation for Subscription Billings
Q116 Q216 Year-over-year change in GAAP
subscription revenue 16 % 11 % Change in deferred subscription in
the current period (20 )% 31 % Change in hedge gain (loss)
applicable to subscription billings 5 % 4 % Change in acquisition
related deferred subscription revenue and other 2 % 6 %
Year-over-year change in subscription billings 3 % 52 %
Reconciliation for Guidance: The following is a
reconciliation of anticipated full year fiscal 2016 GAAP and
non-GAAP operating margins:
Fiscal 2016 GAAP operating
margin (2
)%
(1
)%
Stock-based compensation expense 3 % 3 % Amortization of purchased
intangibles 8 % 8 % Non-GAAP operating margin 9 %
10
% (a) Totals may not agree with the sum of the components
due to rounding.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20150827005982/en/
Autodesk, Inc.Investors:David Gennarelli,
415-507-6033david.gennarelli@autodesk.comPress:Noah Cole,
415-580-3535noah.cole@autodesk.com
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