Autodesk Faces Topline Trouble in Earnings and Guidance

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Autodesk, Inc. (NASDAQ: ADSK) reported its fiscal third quarter financial results after the markets closed on Thursday. The company had $0.14 in earnings per share (EPS) on $600 million in revenue compared to consensus estimates from Thomson Reuters that call for $0.08 in EPS on $591.55 million in revenue. The same period from the previous year had $0.25 in EPS on $618.00 million in revenue.

Total subscriptions increased by approximately 80,000 to 2.47 million at the end of the fiscal third quarter from the previous quarter.

As for total annualized recurring revenue (ARR), it was $1.35 billion, an increase of 15% compared to the third quarter last year, and up 18% on a constant currency basis. At the same time, deferred revenue increased 20% to $1.21 billion, compared to $1.01 billion last year.

In terms of guidance, Autodesk expects EPS to be in the range of $0.08 to $0.12 and revenue in the range of $620 million to $640 million in the fiscal fourth quarter. The consensus estimates call for $0.10 in EPS on $640.98 million in revenue.

Carl Bass, President and CEO of Autodesk, commented on earnings:

Autodesk continues to focus on delivering world-class software and great experiences to our customers, while driving our business model transition as rapidly as possible. We are balancing the necessary investments in the transition with our ongoing focus on spend management, leading to better than expected profitability for the quarter. And we remain confident in our long-term view that our business model transition will deliver a 20 percent CAGR in subscriptions and a 24 percent CAGR in ARR through fiscal year 2020.

On the books, Autodesk has cash, equivalents and marketable securities that totaled $2.28 billion at the end of the 2016 fiscal third quarter compared to $2.03 billion at the end of fiscal 2015.

Shares of Autodesk closed Thursday up 1.9% at $62.39, with a consensus analyst price target of $64.25 and a 52-week trading range of $42.06 to $65.00. Following the release of the earnings report, shares initially fell about 4% at $59.86 in the after-hours trading session.