Autodesk Inc. (
reported second-quarter fiscal 2015 earnings of 21 cents per share,
which beat the Zacks Consensus Estimate by 4 cents. However,
earnings per share (EPS) declined approximately 40% from the
year-ago quarter due to higher operating expenses.
Nonetheless, Autodesk raised its fiscal 2015 guidance. As a
result, share prices increased 5.72% to $59.50 in after-hour
Revenues increased 13% year over year to $637.0 million, ahead
of management's guided range of $595 to $610 million, and beat the
Zacks Consensus Estimate of $596.0 million. Recently acquired
Delcam contributed $11 million in revenues.
Backlog increased by $24 million year over year in the reported
quarter. Total billings increased 27% on a year-over-year basis,
driven by higher license and subscription billings (up 31%). Total
subscriptions increased almost 74K on a sequential basis.
The year-over-year growth in revenues was primarily attributed
to a 15.4% year-over-year jump in subscription revenues to $286.7
million. The improvement in subscription revenues came on the back
of an increase in maintenance subscription revenues.
License revenues increased 11.9% from the year-ago quarter to
$350.4 million attributable to an increase in upgrade revenues.
Cloud-based PLM 360 billings almost doubled on a year-over-year
basis. During the quarter, Autodesk launched the PLM 360 mobile
Segment wise, revenues from Platform Solutions and Emerging
Business (PSEB) increased 5% from the year-ago quarter to $208
million. AutoCAD and AutoCAD LT revenues increased 8% on a
year-over-year basis to $186 million. Revenue from PSEB suites
declined 21% year over year, primarily due to a decrease in
Revenues from the Architecture, Engineering and Construction
(AEC) business segment surged 23% from the year-ago quarter to $218
million. Continued adoption of BIM in the building and
infrastructure industries drove growth in AEC suites, which
increased 40% from the year-ago quarter.
Manufacturing revenues increased 17% on a year-over-year basis
to $168 million. Revenues from manufacturing suites increased 9%
from the year-ago quarter.
Autodesk's Media and Entertainment (M&E) segment remained
flat year over year at $44 million. Revenue from Animation products
decreased 2% year over year, while revenue from Creative Finishing
increased 7% from the year-ago quarter.
Autodesk reported a 20% year-over-year jump in revenues from
Suites (36% of revenues). Revenues from flagship products increased
6% year over year. Revenues from new and adjacent products surged
24% on a year-over-year basis.
Geographically, revenues in the Americas increased 11% on a
year-over-year basis to $223 million. EMEA revenues increased 21%
to $244 million from the second quarter of last year. Revenues in
APAC increased 8% to $170 million from the year-ago quarter.
Revenues from emerging economies increased 14% to $98 million on a
Gross margin (including stock-based compensation) contracted 130
basis points (bps) from the year-ago quarter to 88.8% in the
reported quarter. The decline was primarily due to business model
transition and higher cloud-based cost.
Operating expenses (including stock-based compensation)
increased 22.3% on a year-over-year basis to $488.4 million. The
increase was primarily due to the rise in marketing & sales
(19.9%), research and development (20.4%) and general and
administrative expenses (36.7%) in the quarter.
As a result, operating profit (including stock-based
compensation) plunged 28.7% year over year to $75.3 million.
Autodesk's profitability was negatively impacted by the ongoing
business model transition, investment in cloud infrastructure and
key initiatives and the dilutive effect of the Delcam
Net income (including stock-based compensation) was $51 million
or 21 cents per share compared with $78.8 million or 35 cents per
share in the year-ago quarter.
Autodesk Inc - Earnings Surprise |
Autodesk exited the second quarter with total cash and cash
equivalents (including marketable securities) of $1.91 billion
compared with $2.12 billion in the previous quarter. Cash flow from
operating activities was $96 million compared with $219 million in
the previous quarter.
Deferred revenues increased 22% on a year-over-year basis to a
record $981 million at quarter end.
For the third quarter of fiscal 2015, Autodesk expects revenues
in the range of $590-$605 million. Non-GAAP EPS is expected in the
range of 17 cents to 23 cents for the upcoming quarter. This is
higher than the Zacks Consensus Estimate of 16 cents.
For fiscal 2015, management expects net billings to grow in the
range of 10% to 12% (up from 7% to 9%). Revenues are expected to
increase 7% to 9% (up from 4% to 6%), while operating margin on a
non-GAAP basis is expected to be in the range of 15% to 16% (up
from 14.0% to 16.0%).
Autodesk's second-quarter results reflect an improving demand
environment in the AEC market. We believe that the company will
have significant growth opportunities in the AEC and manufacturing
markets in the long run.
Autodesk believes that the momentum from the BIM product
portfolio will help it to penetrate the $7.0 trillion construction
market fast. We believe that Autodesk's new cloud-based offerings
are gaining traction. Moreover, the business transition will boost
the company's top line and profitability in the long run.
The company's focus on expanding its mobile applications for
both Apple's (
) iOS and Google's (
) Android platforms would also drive market share, going
However, increasing competition from Adobe (
) is a concern. Continued investments in new products might also
hurt margins in the near term.
Currently, Autodesk has a Zacks Rank #3 (Hold).
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