Autodesk (ADSK) Q2 Earnings Top Estimates, Revenues Rise Y/Y

Autodesk ADSK reported second-quarter fiscal 2021 non-GAAP earnings of 98 cents per share that beat the Zacks Consensus Estimate by 8.9%.

Moreover, the earnings figure increased 50.8% year over year driven by growth in subscription plan revenues, led by product subscription revenues.

Revenues of $913.1 million beat the consensus mark by 1.3% and grew 14.6% year over year. At constant currency (cc), revenues were up 16%. The growth was driven by higher subscription revenues despite softness in software spending due to the coronavirus outbreak.

Notably, the Zacks Rank #2 (Buy) company’s second-quarter results reflected resilience against coronavirus outbreak similar to that of its Zacks Computer Software industry peers like Microsoft MSFT, Synopsis SNPS and Citrix Systems CTXS. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Microsoft's recently concluded fiscal fourth-quarter 2020 results benefited from Azure momentum, while Synopsys' robust product portfolio helped it to win new designs in fiscal third quarter 2020. Meanwhile, solid adoption of its unified workspace solutions drove Citrix Systems’ second-quarter 2020 earnings results.

Similar to Microsoft, Autodesk benefited from the ongoing transition to cloud. The company witnessed increased usage of its cloud collaboration products due to the remote working wave throughout the quarter.

Notably, Autodesk has underperformed Synopsis while outperforming Microsoft, Citrix Systems and the industry on a year-to-date basis.

Year to Date Performance

Top-Line Details

Subscription revenues (92.1% of revenues) increased 26.7% year over year to $841.2 million.

However, maintenance revenues (5.6% of revenues) slumped 50.5% to $51.2 million. Moreover, other revenues (2.3% of revenues) decreased 30.1% to $20.7 million in the reported quarter.

Recurring revenues represented 98% of Autodesk’s second-quarter fiscal 2021 revenues. Net revenue retention rate was within 110% to 110%.

Geographically, revenues from the Americas (40.7% of revenues) increased 14% from the year-ago quarter to $371.5 million. Europe, Middle East and Africa (EMEA) revenues (38.8% of revenues) increased 12.2% to $354.7 million. Revenues from Asia-Pacific (20.5% of revenues) grew 20.8% to $186.9 million.

Meanwhile, billings of $787 million decreased 12% year over year in the reported quarter.

Product-wise Top-line Details

Autodesk offers primarily four product families, Architecture, Engineering and Construction (AEC), AutoCAD and AutoCAD LT, Manufacturing (MFG), and Media and Entertainment (M&E).

AEC (43.5% of revenues) revenues increased 18.8% year over year to $397 million. AutoCAD and AutoCAD LT (29.8% of revenues) revenues rose 17.6% to $271.9 million. MFG (20.3% of revenues) revenues increased 6.2% to $185.5 million.

M&E (5.8% of revenues) increased 4.9% to $53.3 million while other revenues (0.6% of revenues) declined 8.5% to $5.4 million.

Autodesk witnessed steady renewal rates during the reported quarter and in May. Partial renewal rates remained relatively steady as well.

Operating Results

Non-GAAP gross margin expanded 90 basis points (bps) from the year-ago quarter to 92.6%.

Research & development, marketing & sales and general & administrative expenses as a percentage of revenues declined 160 bps, 170 bps and 120 bps year over year, respectively.

As a result, non-GAAP operating expenses, as a percentage of revenues, contracted 440 bps from the year-ago quarter to 63.9%.

The lower operating expenses reflected disciplined cost management in the reported quarter. The company reduced travel and entertainment expense and monitored hiring rate and marketing spend amid the coronavirus lockdown.

Autodesk reported non-GAAP operating income of $262.4 million compared with the year-ago quarter’s figure of $186.5 million.

Key Q2 Details

During the quarter, Autodesk announced new integration capabilities for Autodesk Construction Cloud with the release of a new integration platform, Autodesk Construction Cloud Connect and an expansion of its partner ecosystem. Autodesk added new APIs, enabling custom connections for BIM 360 and PlanGrid, and 15 new native integrations and bringing the total number of direct integrations in the Autodesk Construction Cloud ecosystem up to more than 140.

Moreover, Autodesk announced the early release of the BIM 360 Assets module within Autodesk Construction Cloud. The BIM 360 Assets module enables construction teams to track and manage project assets through the entire building lifecycle — from design through handover — from one centralized location.

On Jul 22, Autodesk announced signing of a definitive agreement to acquire Pype, a provider of cloud-based solutions for automating construction project management workflows.

The company completed the acquisition on Aug 17, 2020. This acquisition will provide additional value to Autodesk Construction Cloud users, allowing general contractors, subcontractors, and owners to automate workflows such as submittals and project closeout to increase overall productivity, and reduce risk throughout the project lifecycle.

Balance Sheet & Cash Flow

As of Apr 30, 2020, Autodesk had cash and cash equivalents (including marketable securities) of $1.51 billion compared with $1.46 billion as of Apr 30, 2020.

Deferred revenues increased 28% to $2.88 billion. Unbilled deferred revenues at the end of the second quarter were $4469 million.

Remaining performance obligations (RPO) totaled $3.3 billion, up 19%. Current RPO totaled $2.3 billion, up 15%.

The company repurchased shares worth $7.8 million. Cash flow from operating activities was $91 million, compared with $327 million posted in the previous quarter. Free cash flow was $64.4 million, compared with the previous quarter’s figure of $307 million.


For third-quarter fiscal 2021, Autodesk expects revenues between $930 million and $945 million. Non-GAAP earnings are anticipated to be in the range of 91-97 cents per share.

For fiscal 2021, Autodesk expects revenues between $3.71 billion and $3.76 billion, indicating growth in the range of 13.5-15% year over year. Non-GAAP earnings are expected between $3.72 and $3.90 per share.

Billings are projected to be $4.07-$4.17 billion, implying a decline of 3% to growth of 0.5% year over year.

Further, net revenue retention rate is expected in the range of 110%-120% for the rest of the year.

Free cash flow is expected between $1.3 billion and $1.4 billion.

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