"We're very pleased that Autodesk was able to achieve another quarter of record revenue results," said Carl Bass, Autodesk president and CEO. "Our ability to serve diverse business segments globally with leading software design and engineering solutions drove our strong performance. The combination of a strong market position, industry and geographic diversification, a strong balance sheet, and excellent cash flow, positions Autodesk for continued success."
Operational Highlights
In addition to favorable currency exchange rates, Autodesk's performance in the second quarter of fiscal 2009 was driven by continued revenue growth of model-based 3D design solutions, 2D vertical products, emerging economies, as well as total upgrade and maintenance revenue growth.
Combined revenue from the Company's model-based 3D solutions, which includes Inventor, Revit, Civil 3D, NavisWorks, Robobat, and Moldflow, increased 36 percent over the second quarter of fiscal 2008 to $166 million and comprised 27 percent of total revenue for the quarter. Excluding Moldflow, which was acquired during the quarter, model-based 3D solutions grew 31 percent to $159 million. Autodesk shipped approximately 36,000 commercial seats of its model-based 3D design products, including approximately 10,000 commercial seats of Inventor and 26,000 seats of its Architecture Engineering and Construction products -- Revit, Civil 3D, NavisWorks, and Robobat. In addition, revenue from 2D vertical products increased 16 percent compared to the second quarter of fiscal 2008.
Revenue from the emerging economies increased 40 percent over the second quarter of fiscal 2008 to $114 million and represented 18 percent of total revenue. EMEA revenue was $267 million, an increase of 31 percent as reported over the second quarter of fiscal 2008, and 15 percent at constant currency. Revenue in Asia Pacific was $150 million, an increase of 18 percent as reported year-over-year, and 11 percent at constant currency. Revenue in the Americas increased 4 percent over the second quarter of fiscal 2008 to $203 million, despite continued economic headwinds.
Upgrade revenue and maintenance revenue combined increased 34 percent over the second quarter of fiscal 2008 to $238 million. Maintenance revenue increased 36 percent compared to the second quarter of fiscal 2008 to $180 million, or 29 percent of total revenue. Deferred maintenance revenue increased $14 million sequentially and $132 million compared to the second quarter of fiscal 2008. Total upgrade revenue increased 27 percent compared to the second quarter of fiscal 2008.
Business Outlook
The following statements are forward-looking statements which are based on current expectations and which involve risks and uncertainties some of which are set forth below.
Third Quarter Fiscal 2009
Net revenue for the third quarter of fiscal 2009 is expected to be in the range of $625 million and $635 million. GAAP earnings per diluted share are expected to be in the range of $0.40 and $0.42. Non-GAAP earnings per diluted share are expected to be in the range of $0.54 and $0.56 and exclude $0.07 related to stock-based compensation expense and $0.07 for the amortization of acquisition related intangibles.
Fourth Quarter Fiscal 2009
Net revenue for the fourth quarter of fiscal 2009 is expected to be in the range of $660 million and $680 million. GAAP earnings per diluted share are expected to be in the range of $0.52 and $0.56. Non-GAAP earnings per diluted share are expected to be in the range of $0.64 and $0.68 and exclude $0.08 related to stock-based compensation expense and $0.04 for the amortization of acquisition related intangibles.
Full Year Fiscal 2009
For fiscal year 2009, net revenue is expected to be in the range of $2.50 billion and $2.53 billion. Full year GAAP earnings per diluted share are now expected to be in the range of $1.72 and $1.78. Non-GAAP earnings per diluted share are still expected to be in the range of $2.24 and $2.30 and exclude $0.29 related to stock-based compensation expense and $0.23 for the amortization of acquisition related intangibles and in-process research and development expense.
Safe Harbor Statement
This press release contains forward-looking statements that involve risks and uncertainties, including statements in the paragraphs under "Business Outlook" above, statements regarding anticipated market trends and other statements regarding our expected performance and results. Other factors that could cause actual results to differ materially include the following: general market and business conditions, our performance in particular geographies, including emerging economies, difficulties encountered in integrating new or acquired businesses and technologies, the inability to identify and realize the anticipated benefits of acquisitions, fluctuation in foreign currency exchange rates, unexpected fluctuations in our tax rate, the timing and degree of expected investments in growth opportunities, slowing momentum in maintenance revenues, failure to achieve sufficient sell-through in our channels for new or existing products, pricing pressure, failure to achieve continued cost reductions and productivity increases, failure to achieve continued migration from 2D products to 3D products, changes in the timing of product releases and retirements, failure of key new applications to achieve anticipated levels of customer acceptance, failure to achieve continued success in technology advancements, the financial and business condition of our reseller and distribution channels, interruptions or terminations in the business of the Company's consultants or third party developers, and unanticipated impact of accounting for technology acquisitions.
Further information on potential factors that could affect the financial results of Autodesk are included in the Company's reports on Form 10-K for the year ended January 31, 2008 and our Form 10-Q for the quarter ended April 30, 2008, which are on file with the Securities and Exchange Commission. Autodesk does not assume 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.
Earnings Conference Call and Webcast
Autodesk will host its second quarter conference call today at 5:00 p.m. EDT. The live announcement may be accessed at http://www.autodesk.com/investors or by dialing 866-700-7477 or 617-213-8840 (passcode: 68223258). An audio webcast or podcast of the call will be available at 7:00 pm EDT at http://www.autodesk.com/investors. This replay will be maintained on our website for at least twelve months. An audio replay will also be available for one month beginning at 7:00 pm EDT by dialing 888-286-8010 or 617-801-6888 (passcode: 93009896).
About Autodesk
Autodesk, Inc. is the world leader in 2D and 3D design software for the manufacturing, building and construction, and media and entertainment markets. Since its introduction of AutoCAD software in 1982, Autodesk has developed the broadest portfolio of state-of-the-art digital prototyping solutions to help customers experience their ideas before they are real. Fortune 1000 companies rely on Autodesk for the tools to visualize, simulate and analyze real-world performance early in the design process to save time and money, enhance quality and foster innovation. For additional information about Autodesk, visit http://www.autodesk.com.
Note: AutoCAD, Autodesk, Civil 3D, Inventor, Revit, NavisWorks, and Robobat are either registered trademarks or trademarks of Autodesk, Inc., in the US and/or other countries. All other brand names, product names or trademarks belong to their respective holders.
Investors: David Gennarelli, david.gennarelli@autodesk.com, 415-507-6033
Katie Blanchard, katherine.blanchard@autodesk.com,
415-507-6034
Press: Pam Pollace, pam.pollace@autodesk.com, 415-547-2441
Colleen Rubart, colleen.rubart@autodesk.com, 415-547-2368
Autodesk, Inc.
Consolidated Statements of Income
(In millions, except per share data)
Three Months Ended Six Months Ended
July 31, July 31,
2008 2007 2008 2007
(Unaudited) (Unaudited)
Net revenue:
License and other $440.2 $393.6 $872.4 $776.7
Maintenance 179.3 132.3 345.9 257.7
Total net revenue 619.5 525.9 1,218.3 1,034.4
Cost of license and other revenue 57.4 49.6 113.2 100.1
Cost of maintenance revenue 2.1 2.3 4.1 4.4
Total cost of revenue 59.5 51.9 117.3 104.5
Gross margin 560.0 474.0 1,101.0 929.9
Operating Expenses:
Marketing and sales 228.8 198.8 452.7 391.3
Research and development 153.2 114.9 296.9 229.6
General and administrative 59.2 45.8 112.7 93.1
Total operating expenses 441.2 359.5 862.3 714.0
Income from operations 118.8 114.5 238.7 215.9
Interest and other income, net 6.3 3.4 13.2 13.2
Income before income taxes 125.1 117.9 251.9 229.1
Provision for income taxes (35.3) (26.3) (67.5) (54.2)
Net income $89.8 $91.6 $184.4 $174.9
Basic net income per share $0.40 $0.40 $0.82 $0.76
Diluted net income per share $0.39 $0.38 $0.80 $0.72
Shares used in computing basic
net income per share 224.2 230.3 225.2 230.8
Shares used in computing diluted
net income per share 231.1 243.0 232.1 243.7
Autodesk, Inc.
Condensed Consolidated Balance Sheets
(In millions)
July 31, January 31,
2008 2008
(Unaudited)
ASSETS:
Current assets:
Cash and cash equivalents $929.6 $917.9
Marketable securities 32.6 31.4
Accounts receivable, net 325.2 386.5
Deferred income taxes 58.2 98.1
Prepaid expenses and other current
assets 56.9 47.9
Total current assets 1,402.5 1,481.8
Marketable securities 8.3 8.4
Computer equipment, software, furniture and
leasehold improvements, net 109.2 80.2
Purchased technologies, net 106.2 64.4
Goodwill 626.9 443.4
Deferred income taxes, net 67.5 54.6
Other assets 122.9 79.4
$2,443.5 $2,212.2
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
Accounts payable $78.1 $79.3
Accrued compensation 108.0 146.2
Accrued income taxes 21.2 14.4
Deferred revenue 440.7 400.7
Borrowings under line of credit 120.0 -
Other accrued liabilities 101.0 89.7
Total current liabilities 869.0 730.3
Deferred revenue 121.9 105.4
Long term income taxes payable 101.4 86.5
Long term deferred income taxes 29.2 3.3
Other liabilities 62.1 56.2
Commitments and contingencies
Stockholders' equity:
Preferred stock - -
Common stock and additional paid-in capital 997.6 998.3
Accumulated other comprehensive income 19.9 13.8
Retained earnings 242.4 218.4
Total stockholders' equity 1,259.9 1,230.5
$2,443.5 $2,212.2
Autodesk, Inc.
Condensed Consolidated Statements of Cash Flows
(In millions)
Six Months Ended
July 31,
2008 2007
(Unaudited)
Operating Activities
Net income $184.4 $174.9
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 39.1 28.6
Stock-based compensation expense 48.4 35.9
Charge for acquired in-process
research and development 16.8 1.0
Changes in operating assets
and liabilities, net of business
combinations 105.1 87.8
Net cash provided by operating activities 393.8 328.2
Investing Activities
Purchases of available-for-sale marketable
securities (5.6) (705.7)
Sales of available-for-sale marketable
securities 4.7 765.7
Business combinations, net of cash acquired (257.5) (21.3)
Capital and other expenditures (39.9) (18.2)
Net cash provided by (used in) investing
activities (298.3) 20.5
Financing activities
Proceeds from issuance of common
stock, net of issuance costs 50.1 83.8
Draws on line of credit 690.0 -
Repayments of line of credit (570.0) -
Repurchases of common stock (256.5) (325.1)
Net cash used in financing activities (86.4) (241.3)
Effect of exchange rate changes on
cash and cash equivalents 2.6 1.6
Net increase in cash and cash equivalents 11.7 109.0
Cash and cash equivalents at beginning of
fiscal year 917.9 665.9
Cash and cash equivalents at end of period $929.6 $774.9
Autodesk, Inc.
Reconciliation of GAAP financial measures to non-GAAP financial measures
(In millions, except per share data)
To supplement our consolidated financial statements presented on a GAAP
basis, Autodesk provides investors with certain non-GAAP measures
including non-GAAP net income, non-GAAP net income per share, non-GAAP
cost of license and other revenue, non-GAAP gross margin, non-GAAP
operating expenses, non-GAAP income from operations, non-GAAP interest
and other income, net and non-GAAP provision for income taxes. These
non-GAAP financial measures are adjusted to exclude certain costs,
expenses, gains and losses, including stock-based compensation expense,
employee tax reimbursements related to our stock option review,
litigation expenses, in-process research and development expenses,
restructuring expenses, amortization of purchased intangibles, investment
impairment and income tax expenses. See our reconciliation of GAAP
financial measures to non-GAAP financial measures herein. We believe
these exclusions are appropriate to enhance an overall understanding of
our past financial performance and also our prospects for the future, as
well as to facilitate comparisons with our historical operating results.
These adjustments to our GAAP results are made with the intent of
providing both management and investors a more complete understanding of
Autodesk's underlying operational results and trends and our marketplace
performance. For example, the non-GAAP results are an indication of our
baseline performance before gains, losses or other charges that are
considered by management to be outside our core operating results. In
addition, these non-GAAP financial measures are among the primary
indicators management uses as a basis for our planning and forecasting of
future periods.
There are limitations in using non-GAAP financial measures because the
non-GAAP financial measures are not prepared in accordance with generally
accepted accounting principles and may be different from non-GAAP
financial measures used by other companies. The non-GAAP financial
measures are limited in value because they exclude certain items that may
have a material impact upon our reported financial results. The
presentation of this additional information is not meant to be considered
in isolation or as a substitute for the directly comparable financial
measures prepared in accordance with generally accepted accounting
principles in the United States. Investors should review the
reconciliation of the non-GAAP financial measures to their most directly
comparable GAAP financial measures as provided in the tables accompanying
this press release.
The following table shows Autodesk's non-GAAP results reconciled to
GAAP results included in this release.
Three Months Ended Six Months Ended
July 31, July 31,
2008 2007 2008 2007
(Unaudited) (Unaudited)
GAAP cost of license and other revenue $57.4 $49.6 $113.2 $100.1
SFAS 123R stock-based compensation
expense (1.1) (1.1) (2.1) (1.7)
Amortization of developed technology (5.3) (2.1) (8.8) (4.2)
Employee tax reimbursements related
to stock option review - - - (1.1)
Non-GAAP cost of license and other
revenue $51.0 $46.4 $102.3 $93.1
GAAP gross margin $560.0 $474.0 $1,101.0 $929.9
SFAS 123R stock-based compensation
expense 1.1 1.1 2.1 1.7
Amortization of developed technology 5.3 2.1 8.8 4.2
Employee tax reimbursements related
to stock option review - - - 1.1
Non-GAAP gross margin $566.4 $477.2 $1,111.9 $936.9
GAAP marketing and sales $228.8 $198.8 $452.7 $391.3
SFAS 123R stock-based compensation
expense (10.0) (9.0) (20.5) (15.2)
Employee tax reimbursements related
to stock option review - - - (4.8)
Non-GAAP marketing and sales $218.8 $189.8 $432.2 $371.3
GAAP research and development $153.2 $114.9 $296.9 $229.6
SFAS 123R stock-based compensation
expense (7.7) (6.5) (16.1) (11.3)
In-process research and development (16.8) (1.0) (16.8) (1.0)
Employee tax reimbursements related
to stock option review - - - (4.4)
Non-GAAP research and development $128.7 $107.4 $264.0 $212.9
GAAP general and administrative $59.2 $45.8 $112.7 $93.1
SFAS 123R stock-based compensation
expense (4.4) (4.5) (9.7) (7.7)
Amortization of customer
relationships and trademarks (6.4) (2.0) (9.3) (3.9)
Employee tax reimbursements related
to stock option review - - - (1.7)
Non-GAAP general and administrative $48.4 $39.3 $93.7 $79.8
GAAP operating expenses $441.2 $359.5 $862.3 $714.0
SFAS 123R stock-based compensation
expense (22.1) (20.0) (46.3) (34.2)
Employee tax reimbursements related
to stock option review - - - (10.9)
Amortization of customer
relationships and trademarks (6.4) (2.0) (9.3) (3.9)
In-process research and development (16.8) (1.0) (16.8) (1.0)
Non-GAAP operating expenses $395.9 $336.5 $789.9 $664.0
GAAP income from operations $118.8 $114.5 $238.7 $215.9
SFAS 123R stock-based compensation
expense 23.2 21.1 48.4 35.9
Employee tax reimbursements related
to stock option review - - - 12.0
Amortization of developed technology 5.3 2.1 8.8 4.2
Amortization of customer
relationships and trademarks 6.4 2.0 9.3 3.9
In-process research and development 16.8 1.0 16.8 1.0
Non-GAAP income from operations $170.5 $140.7 $322.0 $272.9
GAAP provision for income taxes $(35.3) $(26.3) $(67.5) $(54.2)
Income tax effect on difference
between GAAP and non-GAAP total
costs and expenses at a normalized
rate (11.2) (9.4) (20.3) (16.7)
Non-GAAP provision for income taxes $(46.5) $(35.7) $(87.8) $(70.9)
GAAP net income $89.8 $91.6 $184.4 $174.9
SFAS 123R stock-based compensation
expense 23.2 21.1 48.4 35.9
Employee tax reimbursements related
to stock option review - - - 12.0
Amortization of developed technology 5.3 2.1 8.8 4.2
Amortization of customer
relationships and trademarks 6.4 2.0 9.3 3.9
In-process research and development 16.8 1.0 16.8 1.0
Income tax effect on difference
between GAAP and non-GAAP total
costs and expenses at a normalized
rate (11.2) (9.4) (20.3) (16.7)
Non-GAAP net income $130.3 $108.4 $247.4 $215.2
GAAP diluted net income per share $0.39 $0.38 $0.80 $0.72
SFAS 123R stock-based compensation
expense 0.10 0.09 0.21 0.15
In-process research and development 0.07 - 0.07 -
Employee tax reimbursements related
to stock option review - - - 0.05
Amortization of developed technology 0.02 0.01 0.03 0.02
Amortization of customer
relationships and trademarks 0.03 - 0.04 0.01
Income tax effect on difference
between GAAP and non-GAAP total
costs and expenses at a normalized
rate (0.05) (0.04) (0.09) (0.07)
Non-GAAP diluted net income per share $0.56 $0.44 $1.06 $0.88
GAAP diluted shares used in per share
calculation 231.1 243.0 232.1 243.7
Impact of SFAS 123R on diluted shares 0.8 1.3 0.5 1.3
Non-GAAP diluted shares used in per
share calculation 231.9 244.3 232.6 245.0
Other Supplemental Financial Information (1)
Fiscal Year 2009 QTR 1 QTR 2 QTR 3 QTR 4 YTD 2009
Financial Statistics
(in millions, except
per share data):
Total net revenue $599 $620 $1,218
License and other revenue $432 $440 $872
Maintenance revenue $167 $180 $346
Gross Margin - GAAP 90% 90% 90%
Gross Margin - Non-GAAP 91% 91% 91%
GAAP Operating Expenses $421 $441 $862
GAAP Operating Margin 20% 19% 20%
GAAP Net Income $95 $90 $184
GAAP Diluted Net Income
Per Share $0.41 $0.39 $0.80
Non-GAAP Operating
Expenses (2)(3) $394 $396 $790
Non-GAAP Operating
Margin (2)(4) 25% 28% 26%
Non-GAAP Net Income (2)(5) $117 $130 $247
Non-GAAP Diluted Net
Income Per Share (2)(6) $0.50 $0.56 $1.06
Total Cash and
Marketable Securities $950 $970 $970
Days Sales Outstanding 51 48 48
Capital Expenditures $14 $26 $40
Cash from Operations $185 $209 $394
GAAP Depreciation and
Amortization $17 $22 $39
Deferred Maintenance
Revenue Balance $474 $488 $488
Revenue by Geography
(in millions):
Americas $191 $203 $394
Europe $259 $267 $526
Asia/Pacific $149 $150 $298
Revenue by Segment (in
millions):
Platform Solutions and
Emerging Business and Other $278 $270 $548
Architecture, Engineering
and Construction $129 $144 $273
Manufacturing Solutions $119 $131 $250
Media and Entertainment $67 $69 $136
Other $6 $6 $11
Other Revenue Statistics:
% of Total Rev from
AutoCAD and AutoCAD LT 41% 35% 38%
% of Total Rev from 3D
design products 24% 26% 25%
% of Total Rev from
Emerging Economies 17% 18% 18%
Upgrade Revenue (in millions) $61 $58 $119
Favorable (Unfavorable) Impact
of U.S. Dollar Translation
Relative to Foreign
Currencies Compared to
Comparable Prior Year Period
(in millions):
FX Impact on Total Net Revenue $41 $42 $83
FX Impact on Total Operating
Expenses $(14) $(11) $(25)
FX Impact on Total Net Income $27 $31 $58
Gross Margin by Segment
(in millions):
Platform Solutions and
Emerging Business and
Other $263 $255 $518
Architecture,
Engineering and
Construction $119 $133 $252
Manufacturing Solutions $110 $122 $232
Media and Entertainment $50 $52 $102
Unallocated amounts $(1) $(2) $(3)
Common Stock
Statistics:
GAAP Shares Outstanding 223,616,000 224,528,000 224,528,000
GAAP Fully Diluted
Weighted Average
Shares Outstanding 232,607,000 231,078,000 232,097,000
Shares Repurchased 8,001,000 - 8,001,000
Installed Base
Statistics:
Total AutoCAD-based
Installed Base 4,377,000 4,436,000 4,436,000
Total Inventor
Installed Base 794,000 819,000 819,000
Total Maintenance
Installed Base 1,587,000 1,644,000 1,644,000
(1) Totals may not agree with the sum of the components due to rounding.
(2) To supplement our consolidated financial statements presented on a
GAAP basis, Autodesk provides investors with certain non-GAAP measures
including non-GAAP net income, non-GAAP net income per share, non-GAAP
cost of license and other revenue, non-GAAP gross margin, non-GAAP
operating expenses, non-GAAP income from operations, non-GAAP interest and
other income, net and non-GAAP provision for income taxes. These non-GAAP
financial measures are adjusted to exclude certain costs, expenses, gains
and losses, including stock-based compensation expense, employee tax
reimbursements related to our stock option review, litigation expenses,
in-process research and development expenses, restructuring expenses,
amortization of purchased intangibles, investment impairment and income
tax expenses. See our reconciliation of GAAP financial measures to
non-GAAP financial measures herein. We believe these exclusions are
appropriate to enhance an overall understanding of our past financial
performance and also our prospects for the future, as well as to
facilitate comparisons with our historical operating results. These
adjustments to our GAAP results are made with the intent of providing both
management and investors a more complete understanding of Autodesk's
underlying operational results and trends and our marketplace performance.
For example, the non-GAAP results are an indication of our baseline
performance before gains, losses or other charges that are considered by
management to be outside our core operating results. In addition, these
non-GAAP financial measures are among the primary indicators management
uses as a basis for our planning and forecasting of future periods.
There are limitations in using non-GAAP financial measures because the
non-GAAP financial measures are not prepared in accordance with generally
accepted accounting principles and may be different from non-GAAP
financial measures used by other companies. The non-GAAP financial
measures are limited in value because they exclude certain items that may
have a material impact upon our reported financial results. The
presentation of this additional information is not meant to be considered
in isolation or as a substitute for the directly comparable financial
measures prepared in accordance with generally accepted accounting
principles in the United States. Investors should review the
reconciliation of the non-GAAP financial measures to their most directly
comparable GAAP financial measures as provided in the tables accompanying
this press release.
Fiscal Year 2009 QTR 1 QTR 2 QTR 3 QTR 4 YTD 2009
(3) GAAP Operating Expenses $421 $441 $862
Stock-based compensation
expense (24) (22) (46)
Amortization of customer
relationships and
trademarks (3) (6) (9)
In-process research and
development - (17) (17)
Non-GAAP Operating
Expenses $394 $396 $790
(4) GAAP Operating Margin 20% 19% 20%
Stock-based compensation
expense 4% 4% 4%
Amortization of developed
technology 1% 1% 0%
Amortization of customer
relationships and
trademarks 1% 1% 1%
In-process research and
development 0% 3% 1%
Non-GAAP Operating Margin 25% 28% 26%
(5) GAAP Net Income $95 $90 $184
Stock-based compensation
expense 25 23 48
Amortization of developed
technology 4 5 9
Amortization of customer
relationships and
trademarks 3 6 9
In-process research and
development - 17 17
Income tax effect on
difference between GAAP
and non-GAAP total costs
and expenses at a
normalized rate (9) (11) (20)
Non-GAAP Net Income $117 $130 $247
(6) GAAP Diluted Net
Income Per Share $0.41 $0.39 $0.80
Stock-based compensation
expense 0.11 0.10 0.21
Amortization of developed
technology 0.01 0.02 0.03
Amortization of customer
relationships and
trademarks 0.01 0.03 0.04
In-process research and
development - 0.07 0.07
Income tax effect on
difference between GAAP
and non-GAAP total costs
and expenses at a
normalized rate (0.04) (0.05) (0.09)
Non-GAAP Diluted
Net Income Per Share $0.50 $0.56 $1.06
Web site: http://www.autodesk.com/