Autodesk Inc. Q3 adjusted earnings Beat Estimates
Strong revenue and current remaining performance obligations growth, up 18% to $1,126 million and 21% to $2,877 million

Autodesk (ADSK), a maker of design software and tools for project workflow, late Tuesday edged by analyst estimates for its fiscal third quarter. But its outlook for the current quarter came up short. ADSK stock plunged in extended trading.

Autodesk (ADSK) came out with quarterly earnings of $1.33 per share, beating the Zacks Consensus Estimate of $1.25 per share. This compares to earnings of $1.04 per share a year ago. These figures are adjusted for non-recurring items.

“Our customers continue to embrace and prioritize digital transformation to drive growth, efficiency, and sustainability, generating strong demand for Autodesk’s platform,” said Andrew Anagnost, Autodesk president and CEO. “We are rapidly innovating and optimizing our business to enable more customers to experience our ecosystem, and realize the opportunities ahead.”

“Demand was robust in Q3, driving strong new subscriptions growth and renewal rates. We expect it to remain so in Q4,” said Debbie Clifford, Autodesk CFO. “However, supply chain disruption and resulting inflationary pressures, a
global labor shortage, and the ebb and flow of COVID, are impacting the pace of our recovery and outlook.”

This quarterly report represents an earnings surprise of 6.40%. A quarter ago, it was expected that this design software company would post earnings of $1.11 per share when it actually produced earnings of $1.21, delivering a surprise of 9.01%.

Over the last four quarters, the company has surpassed consensus EPS estimates four times.

Autodesk, which belongs to the Zacks Computer – Software industry, posted revenues of $1.13 billion for the quarter ended October 2021, surpassing the Zacks Consensus Estimate by 0.69%. This compares to year-ago revenues of $952.4 million. The company has topped consensus revenue estimates four times over the last four quarters.

Additional Financial Details

Total billings increased 16 percent to $1,168 million.

Total revenue was $1,126 million, an increase of 18 percent as reported, and 17 percent on a constant currency basis. Recurring revenue represents 97 percent of the total.

Design revenue was $994 million, an increase of 17 percent as reported, and 15 percent on a constant currency basis. On a sequential basis, Design revenue increased 5 percent as reported and on a constant currency basis.

Make revenue was $94 million, an increase of 23 percent as reported and on a constant currency basis. On a sequential basis, Make revenue increased 5 percent as reported and on a constant currency basis.

Subscription plan revenue was $1,071 million, an increase of 21 percent as reported, and 19 percent on a constant currency basis. On a sequential basis, subscription plan revenue increased 5 percent as reported and on a constant currency basis.

Maintenance plan revenue was $18 million, a decrease of 56 percent as reported and on a constant currency basis. On a sequential basis, maintenance plan revenue increased 4 percent as reported, and 1 percent on a constant currency basis.

Net revenue retention rate remained within the range of 100 to 110 percent.

GAAP operating income was $193 million, compared to $168 million in the third quarter last year. GAAP operating margin was 17 percent, down 1 percentage point.

Total non-GAAP operating income was $365 million, compared to $287 million in the third quarter last year.

Non-GAAP operating margin was 32 percent, up 2 percentage points compared to the third quarter last year.

GAAP diluted net income per share was $0.61, compared to $0.59 in the third quarter last year.

Non-GAAP diluted net income per share was $1.33, compared to $1.04 in the third quarter last year.

Deferred revenue increased 14 percent to $3.34 billion. Unbilled deferred revenue was $888 million, an increase of $239 million compared to the third quarter of last year. The remaining performance obligations (RPO) increased 18 percent to $4.23 billion. The current RPO increased 21 percent to $2.88 billion.

Cash flow from operating activities was $270 million, a decrease of $91 million compared to the third quarter last year. Free cash flow was $257 million, a decrease of $83 million compared to the third quarter last year.