-Record Fiscal 2020 Operating and Free Cash Flow of $1.42 Billion and $1.36 Billion, Respectively

SAN RAFAEL, Calif., Feb. 27, 2020 — (PRNewswire) — Autodesk, Inc. (NASDAQ: ADSK) today reported financial results for the fourth quarter of fiscal 2020.

All growth rates are compared to the fourth quarter of fiscal 2019 unless otherwise noted. A reconciliation of GAAP to non-GAAP results is provided in the accompanying tables. For definitions, please view the Glossary of Terms later in this document.

• Total ARR increased 25 percent to $3.43 billion;
• Billings increased 43 percent to $1.49 billion;
• Total revenue increased 22 percent to $899 million; recurring revenue represents 95 percent of total;
• GAAP operating margin was 15 percent, up 9 percentage points;
• Non-GAAP operating margin was 29 percent, up 10 percentage points;
• GAAP diluted EPS was $0.59; Non-GAAP diluted EPS was $0.92;
• Cash flow from operating activities was $698 million; free cash flow was $684 million.

"We ended fiscal 2020 on a very strong note with revenue, earnings, and free cash flow coming in above expectations. We are entering the sustainable growth phase of our subscription journey with great momentum," said Andrew Anagnost, Autodesk president and CEO. "Our construction business had a landmark year, we continue to gain share in manufacturing, and are making steady progress in monetizing non-compliant users. We are highly confident in our long-term growth drivers and fiscal 2023 targets."

"We delivered strong results across the board in fiscal 2020 and are reiterating our fiscal 2021 and 2023 targets," said Scott Herren, Autodesk CFO. "In fiscal 2020, we delivered ARR growth of 25 percent while expanding non-GAAP operating margin by 12 percentage points. Our resilient business model combined with multiple growth drivers, positions us well to deliver on our goals."

Fourth Quarter Fiscal 2020 Financial Highlights

• Total ARR was $3.43 billion, an increase of 25 percent as reported, and 26 percent on a constant currency basis. Acquisitions from the fourth quarter of last year contributed $126 million or 3 percentage points of the growth. On a sequential basis, total ARR increased 6 percent as reported, and 7 percent on a constant currency basis.
• Subscription plan ARR was $3.11 billion, an increase of 41 percent as reported, and 43 percent on a constant currency basis. Acquisitions from the fourth quarter of last year contributed $126 million or 4 percentage points of the growth. On a sequential basis, subscription plan ARR increased 9 percent as reported, and on a constant currency basis. Subscription plan ARR includes $639 million related to the maintenance-to-subscription (M2S) program.
• Maintenance plan ARR was $320 million, a decrease of 42 percent as reported, and on a constant currency basis. On a sequential basis, maintenance plan ARR decreased 12 percent as reported, and on a constant currency basis.
• Core ARR increased 21 percent to $3.17 billion. On a sequential basis, core ARR increased 6 percent.
• Cloud ARR increased 102 percent to $255 million. Acquisitions from the fourth quarter of last year contributed $126 million or 72 percentage points of the growth. On a sequential basis, total cloud ARR increased 10 percent.
• Billings increased 43 percent to $1.49 billion.
• Total revenue was $899 million, an increase of 22 percent as reported, and 23 percent on a constant currency basis. Acquisitions from the fourth quarter of last year contributed $32 million or 3 percentage points of the growth.
• Net revenue retention rate was within the range of 110 to 120 percent.
• Total recurring revenue in the fourth quarter was 95 percent of total revenue, up 2 percentage points from the fourth quarter last year.
• GAAP operating income was $134 million compared to $40 million in the fourth quarter last year. GAAP operating margin was 15 percent, up 9 percentage points.
• Total non-GAAP operating income was $259 million compared to $139 million in the fourth quarter last year. Non-GAAP operating margin was 29 percent, up 10 percentage points.
• GAAP diluted net income per share was $0.59, compared to GAAP diluted net income per share of $0.29 in the fourth quarter last year.
• Non-GAAP diluted net income per share was $0.92, compared to non-GAAP diluted net income per share of $0.46 in the fourth quarter last year.
• Deferred revenue increased 44 percent to $3.01 billion. Unbilled deferred revenue was $550 million, a decrease of $41 million compared to the fourth quarter of last year. Remaining performance obligations (RPO), or the sum of total billed and unbilled deferred revenue, totaled $3.56 billion, an increase of 33 percent. Current RPO totaled $2.37 billion, up 23 percent.
• Cash flow from operating activities was $698 million, an increase of $387 million compared to the fourth quarter last year. Free cash flow was $684 million, an increase of $390 million compared to the fourth quarter last year

Net Revenue by Geographic Area

Net Revenue by Product Family

Our product offerings are focused in four primary product families: Architecture, Engineering and Construction ("AEC"), AutoCAD and AutoCAD LT, Manufacturing ("MFG"), and Media and Entertainment ("M&E").

Fiscal 2020 Financial Highlights

• Billings increased 55 percent to $4.19 billion, up 46 percent adjusted for the impact of ASC 606 in fiscal 2019.
• Total revenue increased 27 percent to $3.27 billion. Total revenue includes a $106 million contribution from the fourth quarter fiscal 2019 acquisitions, and 4 percentage points.
• Recurring revenue increased to 96 percent, compared to 95 percent in fiscal 2019.
• Total subscriptions increased 539,000 from fiscal 2019 to 4.87 million at the end of fiscal 2020. Acquisitions from fourth quarter of fiscal 2019 added 79,000 subscriptions during the year and contributed 205,000 to the year-end balance.
• Subscription plan subscriptions increased 934,000 from the end of fiscal 2019 to 4.47 million at the end of fiscal 2020. Subscription plan subscriptions benefited from 70,000 maintenance subscribers that converted to product subscription under the maintenance-to-subscription program. Acquisitions from fourth quarter of fiscal 2019 contributed 205,000 to the year-end balance.
• Total ARPS increased 11 percent to $704. Included in total ARPS is the negative impact of $4 from the fourth quarter fiscal 2019 acquisitions.
• GAAP operating income (loss) was $343 million compared to $(25) million last year. GAAP operating margin was 10 percent, up 11 percentage points.
• Total non-GAAP operating income was $803 million compared to $316 million last year. Non-GAAP operating margin was 25 percent, up 12 percentage points.
• Cash flow from operating activities increased to $1.42 billion, compared to $377 million in fiscal 2019. Free cash flow increased to $1.36 billion, compared to $310 million in fiscal 2019.

Net Revenue by Geographic Area

Net Revenue by Product Family

Our product offerings are focused in four primary product families: AEC, AutoCAD and AutoCAD LT, MFG, and M&E.

Business Outlook

The following are forward-looking statements based on current expectations and assumptions, and involve risks and uncertainties, some of which are set forth below under "Safe Harbor Statement."  Autodesk's business outlook for the first quarter and full year fiscal 2021 takes into consideration the current economic environment and foreign exchange currency rate environment.  A reconciliation between the fiscal 2021 GAAP and non-GAAP estimates is provided below or in the tables following this press release.

First Quarter Fiscal 2021

Full Year Fiscal 2021

The first quarter and full year fiscal 2021 outlook assume a projected annual effective tax rate of 21 percent and 16 percent for GAAP and non-GAAP results, respectively.  Shifts in geographic profitability continue to impact the annual effective tax rate due to significant differences in tax rates in various jurisdictions.  Thus, assumptions for the annual effective tax rate are evaluated regularly and may change based on the projected geographic mix of earnings.

Earnings Conference Call and Webcast

Autodesk will host its fourth quarter conference call today at 5:00 p.m. ET. The live broadcast can be accessed at http://www.autodesk.com/investor. A transcript of the opening commentary will also be available following the conference call.

A replay of the broadcast will be available at 7:00 p.m. ET at http://www.autodesk.com/investor. This replay will be maintained on Autodesk's website for at least 12 months.

Investor Presentation Details

An investor presentation providing additional information can be found at http://www.autodesk.com/investor.

Key Performance Metrics

In order to help better understand our financial performance we use several key performance metrics including billings, recurring revenue, ARR, net revenue retention rate ("NR3"), ARPS, and subscriptions. These metrics are key performance metrics and should be viewed independently of revenue and deferred revenue. These metrics are not intended to be combined with those items. We use these metrics to monitor the strength of our recurring business. We believe these metrics are useful to investors because they can help in monitoring the long-term health of our business. Our determination and presentation of these metrics may differ from that of other companies. The presentation of these metrics is meant to be considered in addition to, not as a substitute for or in isolation from, our financial measures prepared in accordance with GAAP.

Glossary of Terms

Annualized Recurring Revenue (ARR): Represents the annualized value of total monthly recurring revenue for the preceding three months. "Maintenance plan ARR" captures ARR relating to traditional maintenance attached to perpetual licenses. "Subscription plan ARR" captures ARR relating to subscription offerings. Refer to the definition of recurring revenue below for more details on what is included within ARR. Recurring revenue acquired with the acquisition of a business is captured when total subscriptions are captured in our systems and may cause variability in the comparison of this calculation.

Annualized Revenue Per Subscription (ARPS): Is calculated by dividing ARR by Total Subscriptions.

Billings: Total revenue plus the net change in deferred revenue from the beginning to the end of the period.

Cloud Service Offerings: Represents individual term-based offerings deployed through web browser technologies or in a hybrid software and cloud configuration. Cloud service offerings that are bundled with other product offerings are not captured as a separate cloud service offering.

Constant Currency (CC) Growth Rates: We attempt to represent the changes in the underlying business operations by eliminating fluctuations caused by changes in foreign currency exchange rates as well as eliminating hedge gains or losses recorded within the current and comparative periods. We calculate constant currency growth rates by (i) applying the applicable prior period exchange rates to current period results and (ii) excluding any gains or losses from foreign currency hedge contracts that are reported in the current and comparative periods.

Core Business: Represents the combination of maintenance, product subscription, and EBAs. 

Enterprise Business Agreements (EBAs): Represents programs providing enterprise customers with token-based access or a fixed maximum number of seats to a broad pool of Autodesk products over a defined contract term.

Free Cash Flow: Cash flow from operating activities minus capital expenditures.

Maintenance Plan: Our maintenance plans provide our customers with a cost effective and predictable budgetary option to obtain the productivity benefits of our new releases and enhancements when and if released during the term of their contracts. Under our maintenance plans, customers are eligible to receive unspecified upgrades when and if available, and technical support. We recognize maintenance revenue over the term of the agreements, generally one year.  

Net Revenue Retention Rate (NR3): Measures the year-over-year change in ARR for the population of customers that existed one year ago ("base customers").  Net revenue retention rate is calculated by dividing the current period ARR related to base customers by the total ARR from one year ago related to the same base customers.  ARR is based on USD reported revenue, and fluctuations caused by changes in foreign currency exchange rates and hedge gains or losses have not been eliminated.  ARR related to acquired companies is excluded from the calculation for at least one year from integration.

Other Revenue: Consists of revenue from consulting, training and other services, and is recognized over time as the services are performed. Other Revenue also includes software license revenue from the sale of products that do not incorporate substantial cloud services and is recognized up front.

Product Subscription: Provides customers the most flexible, cost-effective way to access and manage 3D design, engineering, and entertainment software tools. Our product subscriptions currently represent a hybrid of desktop and cloud functionality, which provides a device-independent, collaborative design workflow for designers and their stakeholders.

Recurring Revenue: Consists of the revenue for the period from our traditional maintenance plans and revenue from our subscription plan offerings. It excludes subscription revenue related to consumer product offerings, select Creative Finishing product offerings, education offerings, and third party products. Recurring revenue acquired with the acquisition of a business is captured when total subscriptions are captured in our systems and may cause variability in the comparison of this calculation. 

Remaining Performance Obligations: The sum of total short-term, long-term, and unbilled deferred revenue. Current remaining performance obligations is the amount of revenue we expect to recognize in the next twelve months.

Spend: The sum of cost of revenue and operating expenses.

Subscription Plan: Comprises our term-based product subscriptions, cloud service offerings, and EBAs. Subscriptions represent a combined hybrid offering of desktop software and cloud functionality which provides a device-independent, collaborative design workflow for designers and their stakeholders. With subscription, customers can use our software anytime, anywhere, and get access to the latest updates to previous versions.

Subscription Revenue: Includes subscription fees from product subscriptions, cloud service offerings, and EBAs. 

Total Subscriptions: Consists of subscriptions from our maintenance plans and subscription plan offerings that are active and paid as of the fiscal year end date. For certain cloud service offerings and EBAs, subscriptions represent the monthly average activity reported within the last three months of the fiscal quarter end date.  Total subscriptions do not include education offerings, consumer product offerings, select Creative Finishing product offerings, Autodesk Buzzsaw, Autodesk Constructware, and third party products.  Subscriptions acquired with the acquisition of a business are captured once the data conforms to our subscription count methodology and when added, may cause variability in comparison of this calculation.

Unbilled Deferred Revenue: Unbilled deferred revenue represents contractually stated or committed orders under early renewal and multi-year billing plans for subscription, services and maintenance for which the associated deferred revenue has not been recognized. Under FASB Accounting Standards Codification ("ASC") Topic 606, unbilled deferred revenue is not included as a receivable or deferred revenue on our Condensed Consolidated Balance Sheet.

Safe Harbor Statement

This press release contains forward-looking statements that involve risks and uncertainties, including quotations from management, statements in the paragraphs under "Business Outlook" above and other statements about our short-term and long-term goals, and other statements regarding our strategies, market and product positions, performance and results. There are a significant number of factors that could cause actual results to differ materially from statements made in this press release, including: failure to achieve our revenue and profitability objectives; failure to successfully manage transitions to new business models and markets; failure to maintain cost reductions or otherwise control our expenses; difficulty in predicting revenue from new businesses and the potential impact on our financial results from changes in our business models; general market, political, economic, and business conditions; any imposition of new tariffs or trade barriers; the impact of non-cash charges on our financial results; fluctuation in foreign currency exchange rates; the success of our foreign currency hedging program; our performance in particular geographies, including emerging economies; the ability of governments around the world to meet their financial and debt obligations, and finance infrastructure projects; weak or negative growth in the industries we serve; slowing momentum in subscription billings or revenues; difficulties encountered in integrating new or acquired businesses and technologies; the inability to identify and realize the anticipated benefits of acquisitions; the financial and business condition of our reseller and distribution channels; dependence on and the timing of large transactions; pricing pressure; unexpected fluctuations in our annual effective tax rate; significant effects of tax legislation and judicial or administrative interpretation of tax regulations, including the Tax Cuts and Jobs Act; the timing and degree of expected investments in growth and efficiency opportunities; changes in the timing of product releases and retirements; and any unanticipated accounting charges. Our estimates as to tax rate are based on current tax law, including current interpretations of the Tax Cuts and Jobs Act, and could be affected by changing interpretations of that Act, as well as additional legislation and guidance around that Act.

Further information on potential factors that could affect the financial results of Autodesk are included in Autodesk's reports on Form 10-K and Form 10-Q, which are on file with the U.S. Securities and Exchange Commission. Autodesk disclaims any obligation to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made.

About Autodesk

Autodesk makes software for people who make things. If you've ever driven a high-performance car, admired a towering skyscraper, used a smartphone, or watched a great film, chances are you've experienced what millions of Autodesk customers are doing with our software. Autodesk gives you the power to make anything. For more information visit autodesk.com or follow @autodesk.

Autodesk uses its investors.autodesk.com website as a means of disclosing material non-public information, announcing upcoming investor conferences and for complying with its disclosure obligations under Regulation FD. Accordingly, you should monitor our investor relations website in addition to following our press releases, SEC filings and public conference calls and webcasts.

Autodesk, AutoCAD, AutoCAD LT, BIM 360 and Fusion 360 are registered trademarks of Autodesk, Inc., and/or its subsidiaries and/or affiliates in the USA and/or other countries. All other brand names, product names or trademarks belong to their respective holders. Autodesk reserves the right to alter product and service offerings, and specifications and pricing at any time without notice, and is not responsible for typographical or graphical errors that may appear in this document.

© 2020 Autodesk, Inc. All rights reserved.

 

 

 

 

 

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Company Name: Autodesk, Inc. Investors: Abhey Lamba,415-547-3502 Email Contact Press: Stacy Doyle, 971-238-5722 Email Contact Web: http://www.autodesk.com/ Financial data for Autodesk, Inc.