Autodesk, Inc. Announces Fiscal 2020 First Quarter Results

SAN RAFAEL, Calif., May 23, 2019

All growth rates are compared to the first quarter of fiscal 2019 unless otherwise noted. A reconciliation of GAAP to non-GAAP results is provided in the accompanying tables. For definitions, please view the Glossary of Terms later in this document.

• Total ARR increased 33 percent to $2.83 billion;
• Billings were $798 million; adjusting for adoption of ASC 606, billings increased 40 percent;
• Total revenue increased 31 percent to $735 million; recurring revenue represents 96 percent of total;
• GAAP operating margin was 3 percent, up 13 percentage points;
• Non-GAAP operating margin was 18 percent, up 13 percentage points;
• GAAP diluted EPS was $(0.11); Non-GAAP diluted EPS of $0.45;
• Cash flow from operating activities was $221 million; free cash flow was $207 million

"We are off to a strong start in fiscal 2020 with billings and free cash flow coming in at or above expectations and great momentum across the entire business," said Andrew Anagnost, Autodesk president and CEO. "We are particularly pleased with the performance of our Construction portfolio, where we have started realizing both the sales and technology synergies we envisioned when we acquired PlanGrid and BuildingConnected. Overall, we are on track to achieve our fiscal 2020 ARR and free cash flow guidance and are reaffirming our fiscal 2023 targets."

"Our solid execution during the growth phase of the business model transition drove 33% ARR growth and enabled significant margin expansion," said Scott Herren, Autodesk CFO. "All product categories and geographies made solid contributions to our strong start in the first quarter, and market demand remains robust. Over the last 12 months, we have generated $550 million in free cash flow, positioning us well to hit our fiscal 2020 target of $1.35 billion."

First Quarter Fiscal 2020 Financial Highlights

• Total ARR increased 33 percent to $2.83 billion as reported, and 32 percent on a constant currency basis. On a sequential basis, total ARR increased 3 percent as reported, and on a constant currency basis.
• Subscription plan ARR increased 70 percent to $2.38 billion as reported, and 69 percent on a constant currency basis. On a sequential basis, subscription plan ARR increased 8 percent as reported, and on a constant currency basis. Subscription plan ARR includes $505 million related to the maintenance-to-subscription (M2S) program.
• Maintenance plan ARR decreased 38 percent to $448 million as reported, and 40 percent on a constant currency basis. On a sequential basis, maintenance plan ARR decreased 18 percent as reported, and 19 percent on a constant currency basis.
• Core ARR increased 29 percent to $2.65 billion. On a sequential basis, core ARR increased 1 percent.
• Cloud ARR increased 164 percent to $181 million. Excluding fourth quarter acquisitions, cloud ARR increased 43 percent to $98 million. On a sequential basis, total cloud ARR increased 43 percent.
• Net revenue retention rate was within the fiscal 2019 range of approximately 110 to 120 percent.
• Total revenue increased 31 percent to $735 million as reported, and 30 percent on a constant currency basis.
• Total recurring revenue in the first quarter was 96 percent of total revenue, compared to 95 percent in the first quarter last year.
• GAAP operating income was $25 million compared to a loss of $(55) million in the first quarter last year. GAAP operating margin was 3 percent, up 13 percentage points year-over-year. The increase was driven by an increase in revenue, operating leverage, and lower restructuring costs.
• Total non-GAAP operating income was $132 million compared to $29 million in the first quarter last year. Non-GAAP operating margin was 18 percent, up 13 percentage points year-over-year. The increase was driven by an increase in revenue and operating leverage.
• GAAP diluted net loss per share was $(0.11), compared to GAAP diluted net loss per share of $(0.38) in the first quarter last year.
• Non-GAAP diluted net income per share was $0.45, compared to non-GAAP diluted net income per share of $0.06 in the first quarter last year.
• Billings were $798 million; adjusting for adoption of ASC 606, billings increased 40 percent.
• Deferred revenue increased 19 percent to $2.15 billion. The increase is primarily related to the increase in subscription plan billings as well as recent acquisitions. Unbilled deferred revenue at the end of the first quarter was $589 million, a decrease of $2 million compared to the fourth quarter of fiscal 2019. The decrease is primarily due to the normal seasonality of EBA billings. Total deferred revenue (deferred revenue plus unbilled deferred revenue) was $2.74 billion, an increase of 24 percent compared to the first quarter last year.
• Cash flow from operating activities was $221 million, an increase of $238 million compared to the first quarter last year. Free cash flow was $207 million, an increase of $240 million compared to the first quarter last year.