Autodesk Inc (ADSK) Reports Solid Revenue Growth in Q3 Fiscal 2024
Autodesk Inc (NASDAQ:ADSK) sees a 10% year-over-year revenue increase to $1.4 billion in Q3 fiscal 2024.
GAAP operating margin improves by 4 percentage points; non-GAAP operating margin up by 3 percentage points.
GAAP diluted EPS rises to $1.12, while non-GAAP diluted EPS grows to $2.07.
Current remaining performance obligations grow 12% year over year to $3.5 billion.
On November 21, 2023, Autodesk Inc (NASDAQ:ADSK) released its 8-K filing, announcing the financial results for the third quarter of fiscal 2024. The company reported a 10% increase in total revenue, reaching $1.4 billion, and a 13% increase at constant exchange rates. Autodesk's performance reflects a robust demand for its software solutions, with a notable rise in earnings per share (EPS) and operating margins.
Financial Performance Overview
Autodesk's third-quarter results demonstrated solid growth across several financial metrics. The GAAP operating margin expanded to 24%, a 4 percentage point increase year over year. Non-GAAP operating margin also saw an improvement, rising to 39%, up by 3 percentage points. The company's GAAP diluted EPS was $1.12, up from $0.91 in the same quarter last year, while non-GAAP diluted EPS increased to $2.07 from $1.70.
Despite these positive results, total billings decreased by 11% to $1,204 million. Cash flow from operating activities and free cash flow both saw significant decreases compared to the third quarter of the previous year, with cash flow from operating activities at $18 million and free cash flow at $13 million.
Revenue and Earnings Growth
Autodesk's revenue growth was driven by a consistent increase in subscription plan revenue, which rose by 11% to $1,314 million. The company's Design and Make segments both contributed to this growth, with Design revenue increasing by 10% and Make revenue by 15%. Recurring revenue now represents 98% of total revenue, underscoring the company's successful transition to a subscription-based model.
Deferred revenue increased by 6% to $4.02 billion, and unbilled deferred revenue grew by $322 million compared to the third quarter of the previous year. The company's remaining performance obligations (RPO) increased by 12% to $5.24 billion, with current RPO also up by 12% to $3.52 billion.
Geographic and Product Performance
Geographically, Autodesk saw revenue growth across all regions, with the Americas leading at an 18% increase, followed by EMEA at 8%, and APAC, despite a slight decline, still managed a 3% increase on a constant currency basis. By product family, the Architecture, Engineering, and Construction (AEC) segment stood out with a 17% increase in revenue.
Management Commentary
Andrew Anagnost, Autodesk's president and CEO, highlighted the company's commitment to innovation, stating,
Autodesk AI and Platform Services will enable Autodesk, our customers, and partners to build more valuable, data-driven, and connected products and services in our industry clouds and on our platform."
CFO Debbie Clifford expressed confidence in the company's financial trajectory,
Our financial performance in the third quarter was strong with much of the outperformance coming from larger-than-expected expansions of existing EBAs."
She also announced raised guidance for revenue, EPS, and free cash flow.
Outlook and Investor Information
Looking ahead, Autodesk provided guidance for the fourth quarter and full-year fiscal 2024, taking into account the current economic and foreign exchange currency rate environment. The company expects revenue for the fourth quarter to be between $1,422 million and $1,437 million, with GAAP EPS between $0.99 and $1.05 and non-GAAP EPS between $1.91 and $1.97.
For the full year, Autodesk anticipates billings to be down by 12% to 11%, revenue to increase by approximately 9%, and free cash flow to be between $1,200 million and $1,260 million. The projected annual effective tax rate is 24% for GAAP and 18% for non-GAAP results.
Investors and interested parties can access more details on Autodesk's investor relations website, where the company regularly posts updates, financials, and other important information.
Autodesk Inc (NASDAQ:ADSK) continues to demonstrate financial resilience and growth potential, with a strong focus on subscription revenue and a commitment to innovation that resonates with its customer base. The company's raised guidance and strategic initiatives suggest a positive outlook for the coming quarters.
Explore the complete 8-K earnings release (here) from Autodesk Inc for further details.
This article first appeared on GuruFocus.
