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Autodesk (ADSK) Q1 Earnings Top Estimates, Revenues Rise Y/Y

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Autodesk (ADSK - Free Report) reported first-quarter fiscal 2022 non-GAAP earnings of $1.03 per share that beat the Zacks Consensus Estimate by 9.5%.

Moreover, the earnings figure increased 21.2% year over year driven by growth in subscription plan revenues, led by product subscription revenues.

Revenues of $989.3 million beat the consensus mark by 2.5% and grew 11.7% year over year. At constant currency (cc), revenues were up 11%. The growth was driven by higher subscription revenues.

Notably, this Zacks Rank #4 (Sell) company’s fiscal first-quarter results reflected resilience against the coronavirus outbreak similar to that of its Zacks Computer Software industry peers like Microsoft (MSFT - Free Report) , Cadence Design Systems (CDNS - Free Report) and Aspen Technology (AZPN - Free Report) .

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Microsoft's fiscal third-quarter 2021 results benefited from strong adoption of Azure, impressive Teams user growth led by continuation of remote work set up, and solid uptake of new Xbox consoles

While strength in Cadence’s digital & signoff solutions as well as Cadence Verification Suite drove top-line growth in first-quarter 2021, increases in total bookings owing to strong renewal activity drove Aspen Technology’s third-quarter fiscal 2021 results.

Similar to Microsoft, Autodesk benefited from the ongoing transition to cloud. The company witnessed increased usage of its cloud collaboration products due to the remote working wave throughout the quarter.

Notably, Autodesk has underperformed Microsoft, Aspen Technology and the industry on a year-to-date basis while outperforming Cadence.

Year to Date Performance

Top-Line Details

Subscription revenues (95.8% of revenues) increased 18% year over year to $947.5 million. Moreover, other revenues (2.3% of revenues) increased 10.2% to $22.7 million in the reported quarter.

However, maintenance revenues (1.9% of revenues) slumped 69.2% to $19.1 million.

Recurring revenues represented 98% of Autodesk’s first-quarter fiscal 2022 revenues. Net revenue retention rate was within 100% to 110%.

Geographically, revenues from the Americas (39.6% of revenues) increased 8.1% from the year-ago quarter to $391.7 million. Europe, Middle East and Africa (EMEA) revenues (38.7% of revenues) increased 10.9% to $382.5 million. Revenues from Asia-Pacific (21.7% of revenues) grew 20.4% to $215.1 million.

Meanwhile, billings of $974 billion increased 10% year over year in the reported quarter.

Product-wise Top-line Details

Autodesk offers primarily four product families, Architecture, Engineering and Construction (AEC), AutoCAD and AutoCAD LT, Manufacturing (MFG), and Media and Entertainment (M&E).

AEC (44.7% of revenues) revenues increased 15.7% year over year to $442.6 million. AutoCAD and AutoCAD LT (28.8% of revenues) revenues rose 8.7% to $285.1 million. MFG (19.9% of revenues) revenues increased 7.9% to $197.3 million.

M&E (5.6% of revenues) increased 4.6% to $55 million while other revenues (0.9% of revenues) increased 75.5% to $9.3 million.

Operating Results

Non-GAAP gross margin expanded 20 basis points (bps) from the year-ago quarter to 92.4%.

General & administrative and marketing & sales expenses as a percentage of revenues declined 80 bps and 60 bps, respectively while research & development expenses increased 130 bps year over year.

Non-GAAP operating expenses, as a percentage of revenues, contracted 10 bps from the year-ago quarter to 64.1%.

The lower operating expenses reflected disciplined cost management in the reported quarter.

Autodesk reported non-GAAP operating income of $280 million, up 13% year over year. Operating margin expanded 30 bps from the year-ago quarter to 28.3

Balance Sheet & Cash Flow

As of Apr 30, 2021, Autodesk had cash and cash equivalents (including marketable securities) of $923.2 million compared with $1.85 billion as of Jan 31, 2021.

Deferred revenues increased 11% to $3.35 billion. Unbilled deferred revenues at the end of the fiscal first quarter were $889 million, up 89.6% year over year.

Total RPO of $4.23 billion and current RPO of $2.86 billion both grew 22%. Current RPO growth was primarily driven by the increase in short-term deferred revenues, strong growth in enterprise business agreements and a few early renewals ahead of anticipated price increases.

The company repurchased 0.5 million shares for $142.7 million at an average price of approximately $277 per share. Cash flow from operating activities was $336.1 million, compared with $657.6 million posted in the previous quarter. Free cash flow was $315.8 million, compared with the previous quarter’s figure of $634.1 million.

Guidance

For second-quarter fiscal 2022, Autodesk expects revenues between $1.04 billion and $1.06 million. Non-GAAP earnings are anticipated to be in the range of $1.08 and $1.14 per share.

For fiscal 2022, Autodesk expects revenues between $4.3 billion and $4.38 billion, indicating growth of 14%-16% year over year. Non-GAAP earnings are expected between $4.67 and $4.97 per share.

Billings are projected to be $4.93-$5.05 billion, implying an increase of 19%-22% year over year.

Free cash flow is expected between $1.57 billion and $1.65 billion.

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