Why Autodesk Fell Flat in Q2

Autodesk, Inc. (NASDAQ: ADSK) is scheduled to release its fiscal second quarter financial results after the markets closed on Thursday. The firm said that it had $0.65 in earnings per share (EPS) and $796.8 million in revenue, compared with consensus estimates that called for $0.61 in EPS and $786.98 million in revenue. The same period from last year had $0.19 in EPS and $611.7 million in revenue.

During the quarter, total annualized recurring revenue (ARR) increased 31% to $3.07 billion as reported, and on a constant currency basis. Excluding fourth quarter acquisitions, total ARR increased 27% to $2.97 billion as reported, and 26% on a constant currency basis. On a sequential basis, total ARR increased 8% as reported, and 9% on a constant currency basis.

Total recurring revenue in the second quarter was 96% of total revenue, consistent with the second quarter last year.

Separately, total billings increased 48% year over year to $893 million.

Looking ahead to the fiscal third quarter the company expects to see EPS in the range of $0.70 to $0.74 and revenue in the range of $820 million to $830 million. Consensus estimates are calling for $0.77 in EPS and $838.78 million in revenue for the coming quarter.

Andrew Anagnost, Autodesk president and CEO, commented:

We closed a solid first half of the year with a very strong second quarter as revenue, billings, earnings, and free cash flow came in ahead of expectations. ARR grew to a record $3.1 billion, driven by all parts of the business. Construction demonstrated continued strength with wins across all parts of the portfolio, and Fusion 360 – our design-to-manufacturing platform – continued to build momentum. We also made further strides in capturing opportunities within our non-paying user base. In an environment of increasing uncertainty, we believe we are well-positioned to achieve our FY23 goals.

Shares of Autodesk closed Tuesday at $150.21, with a 52-week range of $117.72 to $178.95. The consensus analyst price target is $188.73. Following the announcement, the stock was down about 8.5% at $137.50 in the after-hours session.