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Why Is Autodesk (ADSK) Up 16.8% Since Last Earnings Report?
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A month has gone by since the last earnings report for Autodesk (ADSK - Free Report) . Shares have added about 16.8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Autodesk due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Autodesk Q3 Earnings and Sales Surpass Expectations
Autodesk reported third-quarter fiscal 2024 non-GAAP earnings of $2.07 per share, which beat the Zacks Consensus Estimate by 4.02% and improved 21.8% year over year.
The company reported revenues of $1.41 billion, which beat the consensus mark by 1.89%. The figure grew 10.5% year over year. The upside was driven by steady subscription renewal rates, new business growth and strong competitive performance.
Top-Line Details
Autodesk’s subscription revenues (92.9% of total revenues) increased 10.6% year over year to $1.31 billion. Maintenance revenues (0.8% of total revenues) declined to $12 million compared with $16 million in the year-ago quarter. Other revenues (6.2% of total revenues) increased 15.8% to $88 million in the reported quarter.
Recurring revenues contributed 98% to Autodesk’s third-quarter fiscal 2024 revenues. The net revenue retention rate was within the company’s 100-110% targeted range.
Region-wise, revenues from the Americas (45.3% of revenues) increased 18.3% from the year-ago quarter’s levels to $640 million. Revenues from the EMEA, which accounted for 36.5% of revenues, climbed 8.4% to $516 million. Revenues from the Asia-Pacific (18.2% of revenues) declined 1.9% to $258 million.
Billings of $1.2 billion decreased 11% 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 (47.7% of revenues) revenues increased 17.4% year over year to $675 million. AutoCAD and AutoCAD LT (26.3% of revenues) revenues rose 5.1% to $372 million. MFG (19% of revenues) revenues increased 5.9% to $269 million. M&E (5.2% of revenues) revenues declined 6.4% to $73 million.
Operating Results
Autodesk reported a non-GAAP operating income of $547 million, up 17.6% year over year.
The non-GAAP operating margin expanded 240 basis points from the year-ago quarter’s levels to 38.7%.
Balance Sheet & Cash Flow
As of Oct 31, 2023, Autodesk had cash and cash equivalents (including marketable securities) of $1.95 billion compared with $2.07 billion as of Jan 31, 2023.
Deferred revenues increased 6% to $4.02 billion. Unbilled deferred revenues were $1.22 billion, representing an increase of $322 million from the year-ago quarter. Remaining performance obligations (RPO) increased 12% to $5.24 billion. Current RPO increased 12% to $3.52 billion.
Cash flow from operating activities was $18 million, representing a decrease of $451 million from the year-ago quarter. Free cash flow was $13 million, representing a decrease of $447 million from the year-ago quarter.
Fiscal 2024 Guidance
Autodesk projects fiscal 2024 revenues between $5,450 billion and $5,465 billion, indicating approximately 9% growth. Billings are estimated in the $5,075-$5,175 billion band, down in the range of 12-11% year over year.
Non-GAAP earnings are expected between $7.43 per share and $7.49 per share. ADSK expects non-GAAP operating margin to be flat year over year.
Free cash flow is anticipated in the $1,200-$1,260 million band.
For the fourth quarter of fiscal 2024, Autodesk expects revenues between $1,422 billion and $1,437 billion. Non-GAAP earnings are anticipated in the range of $1.91-$1.97 per share.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
VGM Scores
At this time, Autodesk has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. However, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Autodesk has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is Autodesk (ADSK) Up 16.8% Since Last Earnings Report?
A month has gone by since the last earnings report for Autodesk (ADSK - Free Report) . Shares have added about 16.8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Autodesk due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Autodesk Q3 Earnings and Sales Surpass Expectations
Autodesk reported third-quarter fiscal 2024 non-GAAP earnings of $2.07 per share, which beat the Zacks Consensus Estimate by 4.02% and improved 21.8% year over year.
The company reported revenues of $1.41 billion, which beat the consensus mark by 1.89%. The figure grew 10.5% year over year. The upside was driven by steady subscription renewal rates, new business growth and strong competitive performance.
Top-Line Details
Autodesk’s subscription revenues (92.9% of total revenues) increased 10.6% year over year to $1.31 billion. Maintenance revenues (0.8% of total revenues) declined to $12 million compared with $16 million in the year-ago quarter. Other revenues (6.2% of total revenues) increased 15.8% to $88 million in the reported quarter.
Recurring revenues contributed 98% to Autodesk’s third-quarter fiscal 2024 revenues. The net revenue retention rate was within the company’s 100-110% targeted range.
Region-wise, revenues from the Americas (45.3% of revenues) increased 18.3% from the year-ago quarter’s levels to $640 million. Revenues from the EMEA, which accounted for 36.5% of revenues, climbed 8.4% to $516 million. Revenues from the Asia-Pacific (18.2% of revenues) declined 1.9% to $258 million.
Billings of $1.2 billion decreased 11% 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 (47.7% of revenues) revenues increased 17.4% year over year to $675 million. AutoCAD and AutoCAD LT (26.3% of revenues) revenues rose 5.1% to $372 million. MFG (19% of revenues) revenues increased 5.9% to $269 million. M&E (5.2% of revenues) revenues declined 6.4% to $73 million.
Operating Results
Autodesk reported a non-GAAP operating income of $547 million, up 17.6% year over year.
The non-GAAP operating margin expanded 240 basis points from the year-ago quarter’s levels to 38.7%.
Balance Sheet & Cash Flow
As of Oct 31, 2023, Autodesk had cash and cash equivalents (including marketable securities) of $1.95 billion compared with $2.07 billion as of Jan 31, 2023.
Deferred revenues increased 6% to $4.02 billion. Unbilled deferred revenues were $1.22 billion, representing an increase of $322 million from the year-ago quarter. Remaining performance obligations (RPO) increased 12% to $5.24 billion. Current RPO increased 12% to $3.52 billion.
Cash flow from operating activities was $18 million, representing a decrease of $451 million from the year-ago quarter. Free cash flow was $13 million, representing a decrease of $447 million from the year-ago quarter.
Fiscal 2024 Guidance
Autodesk projects fiscal 2024 revenues between $5,450 billion and $5,465 billion, indicating approximately 9% growth. Billings are estimated in the $5,075-$5,175 billion band, down in the range of 12-11% year over year.
Non-GAAP earnings are expected between $7.43 per share and $7.49 per share. ADSK expects non-GAAP operating margin to be flat year over year.
Free cash flow is anticipated in the $1,200-$1,260 million band.
For the fourth quarter of fiscal 2024, Autodesk expects revenues between $1,422 billion and $1,437 billion. Non-GAAP earnings are anticipated in the range of $1.91-$1.97 per share.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
VGM Scores
At this time, Autodesk has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. However, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Autodesk has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.