Autodesk (ADSK - Free Report) reported third-quarter fiscal 2022 non-GAAP earnings of $1.33 per share that increased 27.9% year over year.
Revenues of $1.126 billion beat the consensus mark by 0.7% and rose 18% year over year. At constant currency (cc), revenues were up 17%. The upside was driven by new product subscriptions and higher renewal rates.
Owing to supply chain troubles, labor shortage, highly-evolving COVID situation and certain country-specific challenges, Autodesk lowered fiscal 2022 billings and free cash flow outlook at the mid-point by $150 million and $100 million, respectively.
Billings are now projected to be $4.74-$4.8 billion, suggesting an increase of 14-16% year over year. Previously, billings were projected to be $4.875-$4.795 billion, indicating an increase of 18-20% year over year.
Free cash flow is expected between $1.42 billion and $1.46 billion compared with the earlier guidance of $1.5-$1.575 billion.
Following the announcement, shares are down 13.8% in the premarket trading on Nov 24. In the past year, shares of Autodesk have returned 12.1% compared with the industry’s growth of 50%.
Top-Line Details
Subscription revenues (95.1% of revenues) increased 21% year over year (up 19% on a constant currency basis) to $1.071 billion.
However, maintenance revenues (1.6% of revenues) slumped 56% to $18 million. Other revenues (3.3% of revenues) increased 33% to $37.5 million in the reported quarter.
Recurring revenues contributed 97% to Autodesk’s third-quarter fiscal 2022 revenues. Net revenue retention rate was within the 100-110% range.
Geographically, revenues from the Americas (41% of revenues) increased 18% from the year-ago quarter’s levels to $461.9 million. Europe, Middle East and Africa (EMEA) revenues (38.5% of revenues) increased 19% to $433.2 million. Revenues from Asia-Pacific (20.5% of revenues) rallied 18% to $230.7 million.
Billings of $1.168 billion increased 16% year over year in the reported quarter.
Products Top-Line Details
Autodesk offers primarily four product families — Architecture, Engineering and Construction (AEC), AutoCAD and AutoCAD LT, Manufacturing (MFG) as well as Media and Entertainment (M&E).
AEC (45.4% of revenues) revenues increased 22% year over year to $511.1 million. AutoCAD and AutoCAD LT (28.3% of revenues) revenues rose 14% to $318.4 million. MFG (20% of revenues) revenues increased 16% to $225 million.
M&E (5.6% of revenues) increased 17% to $63 million, while other revenues (0.7% of revenues) increased 36% to $8.3 million.
Operating Results
Non-GAAP gross margin contracted 100 basis points (bps) from the year-ago quarter’s figures to 92%.
Non-GAAP operating expenses increased 13.4% year over year to $675.2 million in the quarter under review.
Autodesk reported a non-GAAP operating income of $365 million, up 27.1% year over year. Non-GAAP operating margin expanded 200 bps from the year-ago quarter’s levels to 32%.
Balance Sheet & Cash Flow
As of Oct 31, 2021, Autodesk had cash and cash equivalents (including marketable securities) of $1.792 billion compared with $924.9 million as of Jul 31, 2021.
Deferred revenues increased 14% to $3.3 billion. Unbilled deferred revenues at the end of the fiscal third quarter were $888.5 million, up 36.8% year over year.
Total RPO of $4.2 billion and current RPO of $2.9 billion increased 18% and 21%, respectively.
In the quarter under review, the company repurchased 980,000 shares for $287 million at an average price of approximately $293 per share. Cash flow from operating activities was $270 million compared with $202 million posted in the previous quarter. Free cash flow was $257 million compared with the previous quarter’s figure of $186 million.
Guidance
For fourth-quarter fiscal 2022, Autodesk expects revenues between $1.185 billion and $1.2 billion. Non-GAAP earnings are anticipated in the range of $1.41-$1.47 per share.
The Zacks Consensus Estimate for revenues and earnings is pegged at $1.2 billion and $1.47 per share, respectively.
For fiscal 2022, Autodesk expects revenues between $4.36 billion and $4.375 billion, indicating growth of 15% year over year. Earlier, Autodesk projected revenues between $4.345 billion and $4.385 billion, indicating growth of 15-16% year over year.
Non-GAAP earnings are expected between $4.98 and $5.04 per share compared with $4.91-$5.06 per share projected earlier.
The Zacks Consensus Estimate for revenues and earnings is pegged at $4.37 billion and $4.97 per share, respectively.
Zacks Rank & Stocks to Consider
Currently, Autodesk carries a Zacks Rank #3 (Hold).
Some better-ranked stocks worth consideration in the broader technology space includes Arrow Electronics (ARW - Free Report) , Alphabet (GOOGL - Free Report) and Monolithic Power Systems (MPWR - Free Report) .
While Alphabet sport a Zacks Rank #1 (Strong Buy), Arrow Electronics and Monolithic carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Arrow Electronics’ shares have gained 33.2% on a year-to-date basis. The long-term earnings growth rate for the company is currently projected at 27.4%.
Alphabet’s shares have surged 66.4% on a year-to-date basis. The long-term earnings growth rate for the company is currently projected at 25.8%.
Monolithic’s shares have rallied 49.1% on a year-to-date basis. The long-term earnings growth rate for the company is currently projected at 25%.
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Autodesk (ADSK - Free Report) reported third-quarter fiscal 2022 non-GAAP earnings of $1.33 per share that increased 27.9% year over year.
Revenues of $1.126 billion beat the consensus mark by 0.7% and rose 18% year over year. At constant currency (cc), revenues were up 17%. The upside was driven by new product subscriptions and higher renewal rates.
Owing to supply chain troubles, labor shortage, highly-evolving COVID situation and certain country-specific challenges, Autodesk lowered fiscal 2022 billings and free cash flow outlook at the mid-point by $150 million and $100 million, respectively.
Billings are now projected to be $4.74-$4.8 billion, suggesting an increase of 14-16% year over year. Previously, billings were projected to be $4.875-$4.795 billion, indicating an increase of 18-20% year over year.
Free cash flow is expected between $1.42 billion and $1.46 billion compared with the earlier guidance of $1.5-$1.575 billion.
Following the announcement, shares are down 13.8% in the premarket trading on Nov 24. In the past year, shares of Autodesk have returned 12.1% compared with the industry’s growth of 50%.
Top-Line Details
Subscription revenues (95.1% of revenues) increased 21% year over year (up 19% on a constant currency basis) to $1.071 billion.
However, maintenance revenues (1.6% of revenues) slumped 56% to $18 million. Other revenues (3.3% of revenues) increased 33% to $37.5 million in the reported quarter.
Recurring revenues contributed 97% to Autodesk’s third-quarter fiscal 2022 revenues. Net revenue retention rate was within the 100-110% range.
Geographically, revenues from the Americas (41% of revenues) increased 18% from the year-ago quarter’s levels to $461.9 million. Europe, Middle East and Africa (EMEA) revenues (38.5% of revenues) increased 19% to $433.2 million. Revenues from Asia-Pacific (20.5% of revenues) rallied 18% to $230.7 million.
Billings of $1.168 billion increased 16% year over year in the reported quarter.
Products Top-Line Details
Autodesk offers primarily four product families — Architecture, Engineering and Construction (AEC), AutoCAD and AutoCAD LT, Manufacturing (MFG) as well as Media and Entertainment (M&E).
AEC (45.4% of revenues) revenues increased 22% year over year to $511.1 million. AutoCAD and AutoCAD LT (28.3% of revenues) revenues rose 14% to $318.4 million. MFG (20% of revenues) revenues increased 16% to $225 million.
M&E (5.6% of revenues) increased 17% to $63 million, while other revenues (0.7% of revenues) increased 36% to $8.3 million.
Operating Results
Non-GAAP gross margin contracted 100 basis points (bps) from the year-ago quarter’s figures to 92%.
Non-GAAP operating expenses increased 13.4% year over year to $675.2 million in the quarter under review.
Autodesk reported a non-GAAP operating income of $365 million, up 27.1% year over year. Non-GAAP operating margin expanded 200 bps from the year-ago quarter’s levels to 32%.
Balance Sheet & Cash Flow
As of Oct 31, 2021, Autodesk had cash and cash equivalents (including marketable securities) of $1.792 billion compared with $924.9 million as of Jul 31, 2021.
Deferred revenues increased 14% to $3.3 billion. Unbilled deferred revenues at the end of the fiscal third quarter were $888.5 million, up 36.8% year over year.
Total RPO of $4.2 billion and current RPO of $2.9 billion increased 18% and 21%, respectively.
In the quarter under review, the company repurchased 980,000 shares for $287 million at an average price of approximately $293 per share. Cash flow from operating activities was $270 million compared with $202 million posted in the previous quarter. Free cash flow was $257 million compared with the previous quarter’s figure of $186 million.
Guidance
For fourth-quarter fiscal 2022, Autodesk expects revenues between $1.185 billion and $1.2 billion. Non-GAAP earnings are anticipated in the range of $1.41-$1.47 per share.
The Zacks Consensus Estimate for revenues and earnings is pegged at $1.2 billion and $1.47 per share, respectively.
For fiscal 2022, Autodesk expects revenues between $4.36 billion and $4.375 billion, indicating growth of 15% year over year. Earlier, Autodesk projected revenues between $4.345 billion and $4.385 billion, indicating growth of 15-16% year over year.
Non-GAAP earnings are expected between $4.98 and $5.04 per share compared with $4.91-$5.06 per share projected earlier.
The Zacks Consensus Estimate for revenues and earnings is pegged at $4.37 billion and $4.97 per share, respectively.
Zacks Rank & Stocks to Consider
Currently, Autodesk carries a Zacks Rank #3 (Hold).
Some better-ranked stocks worth consideration in the broader technology space includes Arrow Electronics (ARW - Free Report) , Alphabet (GOOGL - Free Report) and Monolithic Power Systems (MPWR - Free Report) .
While Alphabet sport a Zacks Rank #1 (Strong Buy), Arrow Electronics and Monolithic carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Arrow Electronics’ shares have gained 33.2% on a year-to-date basis. The long-term earnings growth rate for the company is currently projected at 27.4%.
Alphabet’s shares have surged 66.4% on a year-to-date basis. The long-term earnings growth rate for the company is currently projected at 25.8%.
Monolithic’s shares have rallied 49.1% on a year-to-date basis. The long-term earnings growth rate for the company is currently projected at 25%.
Highest Returns for Any Asset Class
It’s not even close. Despite ups and downs, Bitcoin has been more profitable for investors than any other decentralized, borderless form of money.
No guarantees for the future, but in the past three presidential election years, Bitcoin’s returns were as follows: 2012 +272.4%, 2016 +161.1%, and 2020 +302.8%. Zacks predicts another significant surge in months to come.
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