Autodesk (ADSK) Q3 Earnings and Sales Surpass Expectations
Autodesk ADSK reported third-quarter fiscal 2024 non-GAAP earnings of $2.07 per share, which beat the Zacks Consensus Estimate by 4.02% and improved 21.8% year over year.
The company reported revenues of $1.41 billion, which beat the consensus mark by 1.89%. The figure grew 10.5% year over year. The upside was driven by steady subscription renewal rates, new business growth and strong competitive performance.
Autodesk, Inc. Price, Consensus and EPS Surprise
Autodesk, Inc. price-consensus-eps-surprise-chart | Autodesk, Inc. Quote
Top-Line Details
Autodesk’s subscription revenues (92.9% of total revenues) increased 10.6% year over year to $1.31 billion. Maintenance revenues (0.8% of total revenues) declined to $12 million compared with $16 million in the year-ago quarter. Other revenues (6.2% of total revenues) increased 15.8% to $88 million in the reported quarter.
Recurring revenues contributed 98% to Autodesk’s third-quarter fiscal 2024 revenues. The net revenue retention rate was within the company’s 100-110% targeted range.
Region-wise, revenues from the Americas (45.3% of revenues) increased 18.3% from the year-ago quarter’s levels to $640 million. Revenues from the EMEA, which accounted for 36.5% of revenues, climbed 8.4% to $516 million. Revenues from the Asia-Pacific (18.2% of revenues) declined 1.9% to $258 million.
Billings of $1.2 billion decreased 11% year over year in the reported quarter.
Product 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 (47.7% of revenues) revenues increased 17.4% year over year to $675 million. AutoCAD and AutoCAD LT (26.3% of revenues) revenues rose 5.1% to $372 million. MFG (19% of revenues) revenues increased 5.9% to $269 million. M&E (5.2% of revenues) revenues declined 6.4% to $73 million.
Operating Results
Autodesk reported a non-GAAP operating income of $547 million, up 17.6% year over year.
The non-GAAP operating margin expanded 240 basis points from the year-ago quarter’s levels to 38.7%.
Balance Sheet & Cash Flow
As of Oct 31, 2023, Autodesk had cash and cash equivalents (including marketable securities) of $1.95 billion compared with $2.07 billion as of Jan 31, 2023.
Deferred revenues increased 6% to $4.02 billion. Unbilled deferred revenues were $1.22 billion, representing an increase of $322 million from the year-ago quarter. Remaining performance obligations (RPO) increased 12% to $5.24 billion. Current RPO increased 12% to $3.52 billion.
Cash flow from operating activities was $18 million, representing a decrease of $451 million from the year-ago quarter. Free cash flow was $13 million, representing a decrease of $447 million from the year-ago quarter.
Fiscal 2024 Guidance
Autodesk projects fiscal 2024 revenues between $5,450 billion and $5,465 billion, indicating approximately 9% growth. Billings are estimated in the $5,075-$5,175 billion band, down in the range of 12-11% year over year.
Non-GAAP earnings are expected between $7.43 per share and $7.49 per share. ADSK expects non-GAAP operating margin to be flat year over year.
Free cash flow is anticipated in the $1,200-$1,260 million band.
For the fourth quarter of fiscal 2024, Autodesk expects revenues between $1,422 billion and $1,437 billion. Non-GAAP earnings are anticipated in the range of $1.91-$1.97 per share.
Zacks Rank & Key Picks
Autodesk has a Zacks Rank #4 (Sell) at present. Shares of ADSK have gained 16.5% year to date.
Some better-ranked stocks from the broader Computer and Technology sector are Adobe ADBE, Asana ASAN and Broadcom AVGO, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Adobe’s fourth-quarter fiscal 2024 earnings has remained steady at $4.13 per share in the past 30 days. For fiscal 2024, earnings estimates have remained steady at $15.93 in the past 30 days.
ADBE's earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 3.29%. Shares of ADBE have rallied 81% year to date.
The Zacks Consensus Estimate for Asana's third-quarter 2023 loss per share is pegged at 11 cents per share in the past 30 days. For 2023, bottom-line estimates for loss have narrowed by a penny to a loss of 39 cents per share in the past 30 days.
ASAN's earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 43.47%. Shares of ASAN have gained 50.8% year to date.
The Zacks Consensus Estimate for Broadcom's fourth-quarter fiscal 2024 earnings has remained unchanged for the past 30 days at $10.96 per share. For fiscal 2024, earnings estimates have remained steady at $42.14 per share in the past 30 days.
AVGO’s earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 1.61%. Shares of AVGO have climbed 75.5% year to date.
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