Third quarter operating margins increased significantly year-over-year. The 9 percentage point improvement in GAAP operating margin was driven primarily by higher revenue, reduced stock-based compensation expenses, and the absence of restructuring charges in the current quarter. The 3 percentage point year-over-year improvement in non-GAAP operating margin was driven primarily by higher revenue.
Cash flow from operating activities was $114 million, compared to $47 million in the third quarter last year, and $112 million in the second quarter of fiscal 2011. Autodesk’s cash and investments balance at the end of the third quarter was over $1.3 billion.
Business Outlook
The following statements are forward-looking statements that are based on current expectations and assumptions, and involve risks and uncertainties some of which are set forth below.
Full Year Fiscal 2011
Net revenue for fiscal 2011 is expected to increase by 12 to 13 percent compared to fiscal 2010 and be in the range of $1.924 billion and $1.944 billion. GAAP earnings per diluted share are expected to increase more than 230 percent compared to fiscal 2010 and be in the range of $0.83 and $0.86. Non-GAAP earnings per diluted share are expected to increase by 28 to 31 percent and be in the range of $1.27 and $1.30. Non-GAAP earnings per diluted share for fiscal 2011 exclude $0.24 related to stock-based compensation expense, $0.17 for amortization of acquisition related intangibles, and $0.03 related to restructuring charges, net of tax.
Autodesk anticipates GAAP operating margin for fiscal 2011 to increase between 950 and 990 basis points for full year fiscal 2011 compared to fiscal 2010. Non-GAAP operating margin is expected to increase between 430 and 460 basis points for full year fiscal 2011 compared to fiscal 2010. Non-GAAP operating margin excludes stock-based compensation expense, amortization of acquisition related intangibles, and restructuring charges.
Fourth Quarter Fiscal 2011
Net revenue for the fourth quarter of fiscal 2011 is expected to be in the range of $500 million and $520 million. GAAP earnings per diluted share are expected to be in the range of $0.19 and $0.22. Non-GAAP earnings per diluted share are expected to be in the range of $0.30 and $0.33 and exclude $0.06 related to stock-based compensation expense, and $0.05 for the amortization of acquisition related intangibles, net of tax.
Fourth quarter outlook assumes an effective tax rate of 25 percent for GAAP results and 27 percent for non-GAAP results.
Full Year Fiscal 2012
Net revenue for fiscal 2012 is expected to increase by approximately 10 percent compared to fiscal 2011. GAAP operating margin for fiscal 2012 is expected to increase as the company recorded restructuring charges in fiscal 2011 that it does not anticipate recording in fiscal 2012. Autodesk is not able to provide targets for GAAP operating margins at this time because of the difficulty of estimating certain items that are excluded from non-GAAP that affect operating margin, such as charges related to stock-based compensation expense and amortization of acquisition related intangibles. Autodesk anticipates fiscal 2012 non-GAAP operating margin to increase by approximately 200 basis points compared to fiscal 2011. Autodesk is not providing specific EPS guidance for fiscal 2012 at this time.
Non-GAAP operating margin excludes stock-based compensation expense and amortization of acquisition related intangibles.
Earnings Conference Call and Webcast
Autodesk will host its third quarter conference call today at 5:00 p.m. EST. The live broadcast can be accessed at http://www.autodesk.com/investors. Supplemental financial information and prepared remarks for the conference call will be posted to the investor relations section of Autodesk’s website simultaneously with this press release.
NOTE: The prepared remarks will not be read on the conference call. The conference call will include only brief remarks followed by questions and answers.
A replay of the broadcast will be available at 7:00 pm EST at http://www.autodesk.com/investors. This replay will be maintained on Autodesk’s website for at least 12 months.
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,
economic and revenue trends, cost savings, operational and efficiency
investments, revenue, margin, earnings and cash flow improvement, and
other statements regarding our expected strategies, market and products
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: general market,
economic and business conditions, our performance in particular
geographies, including emerging economies, the financial and business
condition of our reseller and distribution channels, fluctuation in
foreign currency exchange rates, the success of our foreign currency
hedging program, failure to maintain cost reductions and productivity
increases, slowing momentum in maintenance revenues, failure to achieve
sufficient sell-through in our channels for new or existing products,
pricing pressure, failure to successfully expand adoption of our
horizontal design products, our vertical design products and model-based
design products, failure to successfully incorporate sales of products
suites into our overall sales strategy, difficulties encountered in
integrating new or acquired businesses and technologies, the inability
to identify and realize the anticipated benefits of acquisitions,
unexpected fluctuations in our tax rate, the timing and degree of
expected investments in growth and efficiency opportunities, 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,
interruptions or terminations in the business of Autodesk consultants,
the expense and impact of legal or regulatory proceedings, and any
unanticipated accounting charges.
