Autodesk, Inc. (NASDAQ:ADSK) Blasts Off on Across-the-Board Beat and Raise

Autodesk, Inc. (NASDAQ:ADSK) caught a major spark this week on a classic beat and raise. Shares burst higher today, breaking back above the stock’s 200-day moving average on 3x average trading volume. The deal to acquire construction software company PlanGrid is also being seen as a factor in the stock’s strong response.

By the numbers, Autodesk announced better than expected third quarter earnings per share of $0.29 on revenues which, too, came in ahead of expectations at $660.9 mln, up about 28% year/year. Billings were $654 mln, an increase of 30% versus a year ago. Under ASC 605, billings were $661 mln, an increase of 31% compared to last year’s third quarter.

Autodesk, Inc. (NASDAQ:ADSK) deferred revenue was $1.79 bln, an increase of 2% compared to a year ago. Total deferred revenue (deferred revenue plus unbilled deferred revenue) was $2.24 bln, an increase of approximately 17%. Under ASC 605, total deferred revenue was $2.32 bln, an increase of approximately 21% compared to the third quarter last year.

Perhaps one of the most important elements in the report was something called Total Annualized Recurring Revenue (ARR), one of the company’s most important performance metrics.

ARR came in at $2.53 bln, a 33% increase compared to last year, and 31% on a constant currency basis. Under the prior revenue accounting standard, ASC 605, total ARR was $2.49 bln, an increase of 31% compared to the third quarter last year. Subscription plan ARR was $1.93 bln, an increase of 108% and 105% on a constant currency basis. Under ASC 605, subscription plan ARR was $1.89 bln, an increase of 105%.

As far as subscriptions, we saw a jump of 143k from the second quarter of fiscal 2019 to 4.08 mln at the end of the third quarter. Subscription plan subscriptions increased 252,000 from the second quarter to 3.12 mln at the end of the third quarter, seeing a benefit from 71,000 maintenance subscribers that migrated to product subscription under the company’s maintenance-to-subscription, or M2S, program, an important feature of ADSK’s broader SaaS transition.

That brings us to the company’s view ahead. ADSK put forth expectations for non-GAAP EPS of $0.95-0.99, up from the previous $0.87-0.95 for FY19 guidance.

The company also modestly raised revenue guidance to growth of 23-24% to $2.533-2.543 bln, up from the prior expectation of 21-22% growth to $2.485-2.505 bln. Billings guidance was also upped, to 17-19% growth to $2.610-2.640 bln from the previous indication of 16-19% growth to $2.58-2.64 bln on total ARR growth of 30-31%.

In other words, the company pushed up guidance basically across all categories at a time when the opposite has been the case for just about everyone else in the cloud space. That’s probably the main reason we saw such a violent upward reaction in the stock on Wednesday.


Top Down View

Autodesk, Inc. (NASDAQ:ADSK) frames itself as a design software and services company worldwide.

The company offers AutoCAD, a professional design, drafting, detailing, and visualization software; and AutoCAD LT, a professional drafting and detailing software; computer-aided manufacturing (CAM) software for computer numeric control machining, inspection, and modelling for manufacturing; and AutoCAD Civil 3D, a surveying, design, analysis, and documentation solution for civil engineering, including land development, transportation, and environmental projects.

It also provides Maya and 3ds Max software products that offer 3D modeling, animation, effects, rendering, and compositing solutions; Revit software for building information modeling; and Inventor tool for 3D mechanical design, simulation, analysis, tooling, visualization, and documentation.

In addition, the company offers BIM 360, a construction management cloud-based software; Shotgun, a cloud-based software for review and production tracking in the media and entertainment industry; and Fusion 360, a 3D CAD, CAM, and computer-aided engineering tool. It licenses or sells its products to customers in the architecture, engineering, and construction; manufacturing; and digital media, consumer, and entertainment industries directly, as well as through distributors and resellers. The company was founded in 1982 and is headquartered in San Rafael, California.

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