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Autodesk (ADSK) Q3 Earnings and Revenues Meet Estimates
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Autodesk (ADSK - Free Report) reported third-quarter fiscal 2023 non-GAAP earnings of $1.70 per share, in line with the Zacks Consensus Estimate. The bottom line improved 27% year over year.
The company reported revenues of $1.28 billion, which also matched the consensus mark. The figure grew 14% year over year. On a constant-currency basis, revenues were up 15%. The upside was driven by resilient subscription renewal rates, new business growth and strong competitive performance.
Top-Line Details
Autodesk’s subscription revenues (93% of total revenues) increased 14% year over year (up 15% on a constant-currency basis) to $1.19 billion. Maintenance revenues (1% of total revenues) declined to $16 million from $18 million in the year-ago quarter. Other revenues (6% of total revenues) surged 17% to $76 million in the reported quarter.
Recurring revenues contributed 98% to Autodesk’s third-quarter fiscal 2023 revenues. The net revenue retention rate was within the company’s 100-110% targeted range.
Region-wise, revenues from the Americas (42% of revenues) increased 17% from the year-ago quarter’s levels to $541 million. Revenues from the EMEA, which accounted for 36% of revenues, climbed 10% to $476 million. Revenues from the Asia-Pacific (22% of revenues) rallied 14% to $263 million.
Billings of $1.36 billion advanced 16% year over year in the reported quarter.
Product 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 (45% of revenues) revenues increased 13% year over year to $575 million. AutoCAD and AutoCAD LT (28% of revenues) revenues rose 10% to $354 million. MFG (20% of revenues) revenues increased 13% to $254 million. M&E (7% of revenues) revenues surged 37% to $97 million.
Operating Results
Autodesk reported a non-GAAP operating income of $465 million, up 27.4% year over year. The non-GAAP operating margin expanded 400 basis points (bps) from the year-ago quarter’s levels to 36%.
Balance Sheet & Cash Flow
As of Oct 31, 2022, Autodesk had cash and cash equivalents (including marketable securities) of $1.80 billion compared with $1.53 billion as of Jul 31, 2022.
Deferred revenues increased 13% year over year to $3.78 billion. Unbilled deferred revenues at the end of the fiscal third quarter were $896 million, up from $888 million in the year-ago quarter.
The total remaining performance obligation (RPO) of $4.68 billion and the current RPO of $3.14 billion increased 11% and 9%, respectively.
Cash flow from operating activities was $469 million, while free cash flow was $460 million in the reported quarter. During the first nine months of fiscal 2023, ADSK generated $1.16 billion worth of cash from operational activities and its free cash flow was $1.13 billion.
In the first nine months of fiscal 2023, the company repurchased 4.4 million shares for $873 million at an average price of approximately $200 per share.
FY23 Guidance
Autodesk updated its fiscal 2023 guidance. The company now projects fiscal 2023 revenues between $4.99 billion and $5.005 billion instead of the earlier range of $4.985-$5.035 billion. Billings are estimated in the $5.57-$5.67 billion band, down from the earlier projection in the band of $5.705-$5.805 billion.
Non-GAAP earnings are now expected between $6.56 and $6.62 per share compared with the previous forecast in the range of $6.52-$6.71 per share. ADSK continues to expect a non-GAAP operating margin of approximately 36% in fiscal 2023. Free cash flow is now projected in the $1.9-$1.98 billion band, down from the previous forecast in the band of $2.000-$2.080 billion.
For the fourth quarter of fiscal 2023, Autodesk expects revenues between $1.303 billion and $1.318 billion. Non-GAAP earnings are anticipated in the range of $1.77-$1.83 per share.
Zacks Rank & Key Picks
Autodesk currently carries a Zacks Rank #3 (Hold). Shares of ADSK have declined 25.7% year to date.
Some better-ranked stocks worth considering from the broader technology sector are Celestica (CLS - Free Report) , Zscaler (ZS - Free Report) and Coupa Software . Celestica sports a Zacks Rank #1 (Strong Buy) at present, while Zscaler and Coupa each carry a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Celestica’s fourth-quarter 2022 earnings has increased by 9 cents to 53 cents per share over the past 30 days. For 2022, earnings estimates have moved 9.4% up to $1.86 per share in the past 30 days.
CLS' earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 11.8%. Shares of the company have decreased 0.3% YTD.
The Zacks Consensus Estimate for Zscaler's second-quarter fiscal 2023 earnings has been revised 5 cents north to 26 cents per share over the past 90 days. For fiscal 2023, earnings estimates have moved a penny north to $1.18 per share in the past 60 days.
ZS’ earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 28.6%. Shares of the company have declined 57.6% YTD.
The Zacks Consensus Estimate for Coupa's fourth-quarter fiscal 2023 earnings has been revised 3 cents northward to 7 cents per share over the past 90 days. For fiscal 2023, earnings estimates have moved upward by 19 cents to 44 cents per share in the past 90 days.
Coupa's earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 478.1%. Shares of COUP have slumped 71% YTD.
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Autodesk (ADSK) Q3 Earnings and Revenues Meet Estimates
Autodesk (ADSK - Free Report) reported third-quarter fiscal 2023 non-GAAP earnings of $1.70 per share, in line with the Zacks Consensus Estimate. The bottom line improved 27% year over year.
The company reported revenues of $1.28 billion, which also matched the consensus mark. The figure grew 14% year over year. On a constant-currency basis, revenues were up 15%. The upside was driven by resilient subscription renewal rates, new business growth and strong competitive performance.
Top-Line Details
Autodesk’s subscription revenues (93% of total revenues) increased 14% year over year (up 15% on a constant-currency basis) to $1.19 billion. Maintenance revenues (1% of total revenues) declined to $16 million from $18 million in the year-ago quarter. Other revenues (6% of total revenues) surged 17% to $76 million in the reported quarter.
Autodesk, Inc. Price, Consensus and EPS Surprise
Autodesk, Inc. price-consensus-eps-surprise-chart | Autodesk, Inc. Quote
Recurring revenues contributed 98% to Autodesk’s third-quarter fiscal 2023 revenues. The net revenue retention rate was within the company’s 100-110% targeted range.
Region-wise, revenues from the Americas (42% of revenues) increased 17% from the year-ago quarter’s levels to $541 million. Revenues from the EMEA, which accounted for 36% of revenues, climbed 10% to $476 million. Revenues from the Asia-Pacific (22% of revenues) rallied 14% to $263 million.
Billings of $1.36 billion advanced 16% year over year in the reported quarter.
Product 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 (45% of revenues) revenues increased 13% year over year to $575 million. AutoCAD and AutoCAD LT (28% of revenues) revenues rose 10% to $354 million. MFG (20% of revenues) revenues increased 13% to $254 million. M&E (7% of revenues) revenues surged 37% to $97 million.
Operating Results
Autodesk reported a non-GAAP operating income of $465 million, up 27.4% year over year. The non-GAAP operating margin expanded 400 basis points (bps) from the year-ago quarter’s levels to 36%.
Balance Sheet & Cash Flow
As of Oct 31, 2022, Autodesk had cash and cash equivalents (including marketable securities) of $1.80 billion compared with $1.53 billion as of Jul 31, 2022.
Deferred revenues increased 13% year over year to $3.78 billion. Unbilled deferred revenues at the end of the fiscal third quarter were $896 million, up from $888 million in the year-ago quarter.
The total remaining performance obligation (RPO) of $4.68 billion and the current RPO of $3.14 billion increased 11% and 9%, respectively.
Cash flow from operating activities was $469 million, while free cash flow was $460 million in the reported quarter. During the first nine months of fiscal 2023, ADSK generated $1.16 billion worth of cash from operational activities and its free cash flow was $1.13 billion.
In the first nine months of fiscal 2023, the company repurchased 4.4 million shares for $873 million at an average price of approximately $200 per share.
FY23 Guidance
Autodesk updated its fiscal 2023 guidance. The company now projects fiscal 2023 revenues between $4.99 billion and $5.005 billion instead of the earlier range of $4.985-$5.035 billion. Billings are estimated in the $5.57-$5.67 billion band, down from the earlier projection in the band of $5.705-$5.805 billion.
Non-GAAP earnings are now expected between $6.56 and $6.62 per share compared with the previous forecast in the range of $6.52-$6.71 per share. ADSK continues to expect a non-GAAP operating margin of approximately 36% in fiscal 2023. Free cash flow is now projected in the $1.9-$1.98 billion band, down from the previous forecast in the band of $2.000-$2.080 billion.
For the fourth quarter of fiscal 2023, Autodesk expects revenues between $1.303 billion and $1.318 billion. Non-GAAP earnings are anticipated in the range of $1.77-$1.83 per share.
Zacks Rank & Key Picks
Autodesk currently carries a Zacks Rank #3 (Hold). Shares of ADSK have declined 25.7% year to date.
Some better-ranked stocks worth considering from the broader technology sector are Celestica (CLS - Free Report) , Zscaler (ZS - Free Report) and Coupa Software . Celestica sports a Zacks Rank #1 (Strong Buy) at present, while Zscaler and Coupa each carry a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Celestica’s fourth-quarter 2022 earnings has increased by 9 cents to 53 cents per share over the past 30 days. For 2022, earnings estimates have moved 9.4% up to $1.86 per share in the past 30 days.
CLS' earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 11.8%. Shares of the company have decreased 0.3% YTD.
The Zacks Consensus Estimate for Zscaler's second-quarter fiscal 2023 earnings has been revised 5 cents north to 26 cents per share over the past 90 days. For fiscal 2023, earnings estimates have moved a penny north to $1.18 per share in the past 60 days.
ZS’ earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 28.6%. Shares of the company have declined 57.6% YTD.
The Zacks Consensus Estimate for Coupa's fourth-quarter fiscal 2023 earnings has been revised 3 cents northward to 7 cents per share over the past 90 days. For fiscal 2023, earnings estimates have moved upward by 19 cents to 44 cents per share in the past 90 days.
Coupa's earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 478.1%. Shares of COUP have slumped 71% YTD.