Autodesk's First Quarter Results Led By Strong Annualized Recurring Revenue (ARR) Growth
Autodesk's First Quarter Results Led By Strong Annualized Recurring Revenue (ARR) Growth
SAN RAFAEL, Calif., May 24, 2018 /PRNewswire/ -- Autodesk, Inc. (NASDAQ: ADSK) today reported financial results for the first quarter of fiscal 2019.
First Quarter Fiscal 2019
Note: Starting the first quarter of fiscal 2019, Autodesk reports its results under two new accounting standards. Revenue is now reported under Accounting Standard Codification ("ASC") 606 and sales commissions are now reported under ASC 340-40. We did not recast historical information as we elected to use the modified retrospective transition method. These new standards did not result in a change in timing or amount of revenue recognized for the majority of our maintenance and subscription offerings. However, we are required to capitalize and amortize sales commissions under the new standards. ASC 606 and ASC 340-40 do not affect cash flows or subscriptions.
-- Subscription plan ARR was $1.40 billion, an increase of 103 percent
compared to the first quarter last year as reported, and 101 percent on
a constant currency basis. Under the prior revenue accounting standard,
ASC 605, subscription plan ARR was $1.43 billion, an increase of 106
percent compared to the first quarter last year.
-- Total ARR was $2.13 billion, an increase of 22 percent compared to the
first quarter last year as reported, and on a constant currency basis.
Under ASC 605, total ARR was $2.17 billion, an increase of 25 percent
compared to the first quarter last year.
-- Subscription plan subscriptions increased 307,000 from the fourth
quarter of fiscal 2018 to 2.57 million at the end of the first quarter
of fiscal 2019. Subscription plan subscriptions benefited from 154,000
maintenance subscribers that converted to product subscription under the
maintenance-to-subscription (M2S) program.
-- Total subscriptions increased 101,000 from the fourth quarter of fiscal
2018 to 3.82 million at the end of the first quarter of fiscal 2019.
-- Deferred revenue was $1.81 billion, flat compared to the first quarter
last year. Unbilled deferred revenue at the end of the first quarter was
$412 million. Total deferred revenue (deferred revenue plus unbilled
deferred revenue) was $2.22 billion, an increase of approximately 21
percent compared to the first quarter last year. Under ASC 605, total
deferred revenue was $2.28 billion, an increase of approximately 24
percent compared to the first quarter last year.
-- Revenue was $560 million, an increase of 15 percent compared to the
first quarter last year as reported, and on a constant currency basis.
Under ASC 605, total revenue was $574 million, an increase of 18 percent
compared to the first quarter last year.
-- Billings were $411 million, a decrease of 18 percent compared to the
first quarter last year driven primarily by the initial impact of the
adoption of ASC 606. Under ASC 605, billings were $561 million, an
increase of 12 percent compared to the first quarter last year.
-- Total GAAP spend (cost of revenue plus operating expenses) was $615
million, an increase of 2 percent compared to the first quarter last
year. Absent ASC 340-40, total GAAP spend was $602 million, a decrease
of 1 percent compared to the first quarter last year.
-- Total non-GAAP spend was $531 million, an increase of 1 percent compared
to the first quarter last year. A reconciliation of GAAP to non-GAAP
results is provided in the accompanying tables. Absent ASC 340-40, total
non-GAAP spend was $518 million, a decrease of 1 percent compared to the
first quarter last year.
-- GAAP diluted net loss per share was $(0.38), compared to GAAP diluted
net loss per share of $(0.59) in the first quarter last year. Under ASC
605 and absent ASC 340-40, total GAAP diluted net loss per share was
$(0.27).
-- Non-GAAP diluted earnings per share was $0.06, compared to non-GAAP
diluted net loss per share of $(0.16) in the first quarter last year.
Under ASC 605 and absent ASC 340-40, total non-GAAP diluted net income
per share was $0.16.
For definitions, please view the Glossary of Terms later in this document.
"Our first quarter results are a good start to the new fiscal year and demonstrate Autodesk is firmly in the growth phase of our business model transition," said Andrew Anagnost, Autodesk president and CEO. "Once again, our focus on driving growth in ARR has yielded strong results, which we believe will accelerate as we move through the year. Our focus and investment on our customers' experience continued to drive customers to migrate from maintenance to subscription during the quarter. We've now seen approximately half a million maintenance subscriptions convert to product subscriptions in less than a year and we expect that number to grow significantly in the coming quarters."
"Our growth in ARR was only part of the story during the first quarter, as we also delivered strong growth in billings, total deferred revenue, and ARPS," said Scott Herren, Autodesk CFO. "This quarter also marked another milestone in our business model transition with our return to non-GAAP profitability. Overall, we remain confident in achieving the targets we set for this year and the long-term targets laid out at our recent investor day."
First Quarter Operational Overview
Subscription plan ARR was $1.40 billion, an increase of 103 percent compared to the first quarter last year as reported, and 101 percent on a constant currency basis. Subscription plan ARR includes $273 million related to the maintenance-to-subscription program. Maintenance plan ARR was $725 million, a decrease of 31 percent compared to the first quarter last year as reported, and on a constant currency basis. Total ARR was $2.13 billion, an increase of 22 percent compared to the first quarter last year as reported, and on a constant currency basis.
Subscription plan subscriptions (product, EBA, and cloud) were 2.57 million, a net increase of 307,000 from the fourth quarter of fiscal 2018, led by new product subscriptions and 154,000 product subscriptions that migrated from maintenance plan subscriptions. Maintenance plan subscriptions were 1.24 million, a net decrease of 206,000 from the fourth quarter of fiscal 2018, which includes the 154,000 that migrated to product subscription. Total subscriptions were 3.82 million, a net increase of 101,000 from the fourth quarter of fiscal 2018.
Total recurring revenue in the first quarter was 95 percent of total revenue compared to 90 percent of total revenue in the first quarter last year.
Revenue in the Americas was $234 million, an increase of 11 percent compared to the first quarter last year. Revenue in EMEA was $221 million, an increase of 16 percent compared to the first quarter last year as reported, and on a constant currency basis. Revenue in APAC was $106 million, an increase of 23 percent compared to the first quarter last year as reported, and 22 percent on a constant currency basis.
Under ASC 605
-- Subscription plan ARR was $1.43 billion, an increase of 106 percent
compared to the first quarter last year.
-- Maintenance plan ARR was $746 million, a decrease of 29 percent compared
to the first quarter last year.
-- Total ARR was $2.17 billion, an increase of 25 percent compared to the
first quarter last year.
-- Billings were $561 million, an increase of 12 percent compared to the
first quarter last year.
-- Total revenue was $574 million, an increase of 18 percent compared to
the first quarter last year as reported, and on a constant currency
basis.
-- Revenue in the Americas was $238 million, an increase of 13 percent
compared to the first quarter last year.
-- Revenue in EMEA was $229 million, an increase of 21 percent compared to
the first quarter last year, and 20 percent a constant currency basis.
-- Revenue in APAC was $107 million, an increase of 25 percent compared to
the first quarter last year, and 24 percent on a constant currency
basis.
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 second quarter and full year fiscal 2019 assumes, among other things, a continuation of the current economic environment and foreign exchange currency rate environment. A reconciliation between the fiscal 2019 GAAP and non-GAAP estimates is provided below or in the tables following this press release.
Starting the first quarter of fiscal 2019, Autodesk reports its results under two new accounting standards. Revenue is now reported under Accounting Standard Codification ("ASC") 606 and sales commissions are now reported under ASC 340-40. We did not recast historical information as we elected to use the modified retrospective transition method. These new standards did not result in a change in timing or amount of revenue recognized for the majority of our maintenance and subscription offerings. However, we are required to capitalize and amortize sales commissions under the new standards. ASC 606 and ASC 340-40 do not affect cash flows or subscriptions.
Second Quarter Fiscal 2019
Q2 FY19 Guidance Metrics Q2 FY19 under 606
(ending July 31,
2018)
Revenue (in millions) $595 - $605
EPS GAAP $(0.38) - $(0.35)
EPS non-GAAP (1) $0.13 - $0.16
(1) Non-GAAP
earnings per
diluted share
excludes
$0.27 related
to stock-
based
compensation
expense,
between $0.16
related to
GAAP-only tax
charges,
$0.05 related
to
restructuring
and other
facility exit
costs, and
$0.03 for the
amortization
of
acquisition-
related
intangibles.
Full Year Fiscal 2019
FY19 Guidance Metrics FY19 under 605 (ending FY19 under 606 (ending
January 31, 2019) January 31, 2019) (1)
Billings (in
millions) $2,720 - $2,820 $2,560 - $2,660 (2)
Revenue (in millions) $2,495 - $2,545 $2,455 - $2,505 (3)
GAAP spend growth
(cost of revenue
plus operating
expenses) (2.5)% - (1.5)% (2.5)% - (1.5)%
Non-GAAP spend
growth (cost of
revenue plus
operating expenses)
(4) 1 - 2% 1 - 2%
EPS GAAP $(0.58) - $(0.40) $(0.73) - $(0.55)
EPS non-GAAP (5) $0.92 - $1.10 $0.77 - $0.95
Net subscription
additions 500k - 550k 500k - 550k
Total ARR growth 29% - 31% 28% - 30%
--------
(1) The move to
the new
revenue
standard
results in a
net reduction
to revenue
and EPS of
approximately
$40 million
and $0.15
respectively,
compared to
what would
have been
recognized
under ASC
605, and a
reduction of
approximately
$20M in ARR.
(2) Billings
guidance
reflects the
initial
impact of the
adoption of
ASC 606.
This
adjustment
does not
impact cash
flow.
(3) Excluding the
impact of
foreign
currency
exchange
rates and
hedge gains/
losses,
revenue
guidance
would be
$2,420 -
$2,470
million.
(4) Non-GAAP
spend
excludes $235
million
related to
stock-based
compensation
expense, $33
million
related to
restructuring
and other
facility exit
costs, and
$28 million
for the
amortization
of
acquisition-
related
intangibles.
(5) Non-GAAP
earnings per
diluted share
excludes
$1.08 related
to stock-
based
compensation
expense,
$0.15 related
to GAAP-only
tax charges,
$0.15 related
to
restructuring
and other
facility exit
costs, $0.13
for the
amortization
of
acquisition-
related
intangibles,
and ($0.01)
related to
gains on
strategic
investments
and
dispositions.
The second quarter and full year fiscal 2019 outlook assume a projected annual effective tax rate of (68) percent and 19 percent for GAAP and non-GAAP results, respectively. Assumptions for the annual effective tax rate are regularly evaluated and may change based on the projected geographic mix of earnings. At this stage of the business model transition, small shifts in geographic profitability significantly impact the annual effective tax rate.
Earnings Conference Call and Webcast
Autodesk will host its second quarter conference call today at 5:00 p.m. ET. The live broadcast can be accessed at http://www.autodesk.com/investor. 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.
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.
Glossary of Terms
Annualized Recurring Revenue (ARR): Represents the annualized value of our average 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.
ARR is currently one of our key performance metrics to assess the health and trajectory of our business. ARR should be viewed independently of revenue and deferred revenue as ARR is a performance metric and is not intended to be combined with any of these items.
Annualized Revenue Per Subscription (ARPS): Is calculated by dividing our annualized recurring revenue by the total number of 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.
Enterprise Business Agreements (EBAs): These represent 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 between one and three years.
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 our discontinued perpetual licenses.
Product Subscription: Provide 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 SaaS 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.
Subscription Plan: Comprises our term-based product subscriptions, cloud service offerings, and enterprise business agreements (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 enterprise business agreements (EBAs).
Total Deferred Revenue: Is calculated by adding together total short term, long term, and unbilled deferred revenue.
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 enterprise business agreements (EBAs), subscriptions represent the monthly average activity reported within the last three months of the 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 the 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, license and maintenance for which the associated deferred revenue has not been recognized. Under ASC 606, unbilled deferred revenue is not included as a receivable or deferred revenue on our Consolidated Balance Sheet.
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 ARR growth acceleration and maintenance to subscription conversions, other statements about our short-term and long-term targets, statements regarding the impacts and results of our business model transition, expectations regarding the transition of product offerings to subscription and acceptance by our customers and partners of subscriptions, expectations for billings, revenue, subscriptions, spend, EPS and ARR, statements about the impact of ASC 606, 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; the success of our restructuring activities; 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; failure to achieve sufficient sell-through in our channels for new or existing products; 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 and the impact of the Tax Cuts and Jobs Act on our business are based on current tax law, including current interpretations of the Tax Cuts and Jobs Act, and could be affected by changing interpretations of the Act, as well as additional legislation and guidance around the Act.
Further information on potential factors that could affect the financial results of Autodesk are included in Autodesk's Annual Report on Form 10-K for the fiscal year ended January 31, 2018, which is 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, 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.
© 2018 Autodesk, Inc. All rights reserved.
Autodesk, Inc.
Condensed Consolidated Statements of Operations
(In millions, except per
share data)
Three Months Ended April 30,
2018 2017
---- ----
(Unaudited)
Net revenue:
Maintenance $181.2 $263.6
Subscription 350.4 173.4
----- -----
Total maintenance and
subscription revenue 531.6 437.0
Other 28.3 48.7
---- ----
Total net revenue 559.9 485.7
Cost of revenue:
Cost of maintenance and
subscription revenue 50.4 54.9
Cost of other revenue 12.8 18.6
Amortization of
developed technology 3.6 4.7
--- ---
Total cost of revenue 66.8 78.2
---- ----
Gross profit 493.1 407.5
Operating expenses:
Marketing and sales 276.4 255.7
Research and development 172.8 187.7
General and
administrative 72.9 78.3
Amortization of
purchased intangibles 3.8 5.7
Restructuring charges
(benefits) and other
facility exit costs,
net 22.5 (0.3)
---- ----
Total operating expenses 548.4 527.1
----- -----
Loss from operations (55.3) (119.6)
Interest and other
expense, net (8.5) (1.8)
---- ----
Loss before income taxes (63.8) (121.4)
Provision for income
taxes (18.6) (8.2)
----- ----
Net loss $(82.4) $(129.6)
====== =======
Basic net loss per share $(0.38) $(0.59)
====== ======
Diluted net loss per
share $(0.38) $(0.59)
====== ======
Weighted average shares
used in computing basic
net loss per share 218.6 219.9
===== =====
Weighted average shares
used in computing
diluted net loss per
share 218.6 219.9
===== =====
Autodesk, Inc.
Condensed Consolidated Balance
Sheets
(In millions)
April 30, 2018 January 31, 2018
-------------- ----------------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $1,093.0 $1,078.0
Marketable securities 199.9 245.2
Accounts receivable, net 206.7 438.2
Prepaid expenses and other
current assets 198.4 116.5
Total current assets 1,698.0 1,877.9
------- -------
Marketable securities 171.5 190.8
Computer equipment, software,
furniture and leasehold
improvements, net 158.2 145.0
Developed technologies, net 23.1 27.1
Goodwill 1,604.9 1,620.2
Deferred income taxes, net 67.0 81.7
Other assets 188.7 170.9
----- -----
Total assets $3,911.4 $4,113.6
======== ========
LIABILITIES AND STOCKHOLDERS'
DEFICIT
Current liabilities:
Accounts payable $103.5 $94.7
Accrued compensation 127.5 250.9
Accrued income taxes 24.6 28.0
Deferred revenue 1,469.2 1,551.6
Current portion of long-term
notes payable, net - -
Other accrued liabilities 127.8 198.0
----- -----
Total current liabilities 1,852.6 2,123.2
------- -------
Long-term deferred revenue 337.2 403.5
Long-term income taxes payable 41.7 41.6
Long-term deferred income taxes 84.8 66.6
Long-term notes payable, net 1,586.6 1,586.0
Other liabilities 137.1 148.7
Stockholders' deficit:
Preferred stock - -
Common stock and additional
paid-in capital 2,001.0 1,952.7
Accumulated other comprehensive
loss (133.8) (123.8)
Accumulated deficit (1,995.8) (2,084.9)
-------- --------
Total stockholders' deficit (128.6) (256.0)
------ ------
Total liabilities and
stockholders' deficit $3,911.4 $4,113.6
======== ========
Autodesk, Inc.
Condensed Consolidated Statements of
Cash Flows
(In millions)
Three Months Ended April 30,
2018 2017
---- ----
(Unaudited)
Operating activities:
Net loss $(82.4) $(129.6)
Adjustments to reconcile net loss to
net cash (used in) provided by
operating activities:
Depreciation, amortization and
accretion 24.1 28.4
Stock-based compensation expense 54.4 66.8
Deferred income taxes 13.3 (0.4)
Restructuring charges (benefits) and
other facility exit costs, net 22.5 (0.3)
Other operating activities 10.5 7.3
Changes in operating assets and
liabilities, net of acquisitions:
Accounts receivable 231.4 220.9
Prepaid expenses and other current
assets (1.4) 6.2
Accounts payable and accrued
liabilities (227.7) (133.1)
Deferred revenue (58.5) 13.3
Accrued income taxes (3.1) (34.3)
Net cash (used in) provided by
operating activities (16.9) 45.2
----- ----
Investing activities:
Purchases of marketable securities (9.9) (119.4)
Sales of marketable securities 6.2 100.0
Maturities of marketable securities 68.6 282.6
Capital expenditures (16.7) (8.6)
Acquisitions, net of cash acquired - -
Other investing activities (0.6) 3.9
---- ---
Net cash provided by investing
activities 47.6 258.5
---- -----
Financing activities:
Proceeds from issuance of common
stock, net of issuance costs 49.1 50.1
Taxes paid related to net share
settlement of equity awards (38.8) (33.0)
Repurchase and retirement of common
stock (22.0) (195.9)
Net cash used in financing activities (11.7) (178.8)
----- ------
Effect of exchange rate changes on
cash and cash equivalents (4.0) 2.2
---- ---
Net increase in cash and cash
equivalents 15.0 127.1
Cash and cash equivalents at beginning
of the period 1,078.0 1,213.1
------- -------
Cash and cash equivalents at end of
the period $1,093.0 $1,340.2
======== ========
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 gross margin, non-GAAP operating expenses, non-GAAP
operating margin, non-GAAP net income, non-GAAP net income per share, and non-GAAP diluted shares used in
per share calculation. These non-GAAP financial measures are adjusted to exclude certain costs, expenses,
gains and losses, including stock-based compensation expense, CEO transition costs, restructuring
(benefits) charges and other facility exit costs, amortization of developed technology, amortization of
purchased intangibles, gain and loss on strategic investments and dispositions, and related 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
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 GAAP 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 April 30,
2018 2017
---- ----
(Unaudited)
GAAP cost of
maintenance and
subscription
revenue $50.4 $54.9
Stock-based
compensation
expense (2.7) (2.8)
Non-GAAP cost of
maintenance and
subscription
revenue $47.7 $52.1
===== =====
GAAP cost of other
revenue $12.8 $18.6
Stock-based
compensation
expense (0.8) (1.1)
Non-GAAP cost of
other revenue $12.0 $17.5
===== =====
GAAP amortization of
developed
technology $3.6 $4.7
Amortization of
developed
technology (3.6) (4.7)
Non-GAAP
amortization of
developed
technology $ - $ -
=== === === ===
GAAP gross profit $493.1 $407.5
Stock-based
compensation
expense 3.5 3.9
Amortization of
developed
technology 3.6 4.7
--- ---
Non-GAAP gross
profit $500.2 $416.1
====== ======
GAAP marketing and
sales $276.4 $255.7
Stock-based
compensation
expense (24.0) (26.4)
----- -----
Non-GAAP marketing
and sales $252.4 $229.3
====== ======
GAAP research and
development $172.8 $187.7
Stock-based
compensation
expense (17.8) (21.2)
----- -----
Non-GAAP research
and development $155.0 $166.5
====== ======
GAAP general and
administrative $72.9 $78.3
Stock-based
compensation
expense (9.1) (7.5)
CEO transition costs
(1) - (11.0)
--- -----
Non-GAAP general
and administrative $63.8 $59.8
===== =====
GAAP amortization of
purchased
intangibles $3.8 $5.7
Amortization of
purchased
intangibles (3.8) (5.7)
---- ----
Non-GAAP
amortization of
purchased
intangibles $ - $ -
=== === === ===
GAAP restructuring
charges (benefits)
and other facility
exit costs, net $22.5 $(0.3)
Restructuring
charges (benefits)
and other facility
exit costs, net (22.5) 0.3
Non-GAAP
restructuring
charges (benefits)
and other facility
exit costs, net $ - $ -
=== === === ===
GAAP operating
expenses $548.4 $527.1
Stock-based
compensation
expense (50.9) (55.1)
Amortization of
purchased
intangibles (3.8) (5.7)
CEO transition costs
(1) - (11.0)
Restructuring
charges (benefits)
and other facility
exit costs, net (22.5) 0.3
----- ---
Non-GAAP operating
expenses $471.2 $455.6
====== ======
GAAP spend $615.2 $605.3
Stock-based
compensation
expense (54.4) (59.0)
Amortization of
developed
technology (3.6) (4.7)
Amortization of
purchased
intangibles (3.8) (5.7)
CEO transition costs
(1) - (11.0)
Restructuring
charges (benefits)
and other facility
exit costs, net (22.5) 0.3
Non-GAAP spend $530.9 $525.2
====== ======
GAAP loss from
operations $(55.3) $(119.6)
Stock-based
compensation
expense 54.4 59.0
Amortization of
developed
technology 3.6 4.7
Amortization of
purchased
intangibles 3.8 5.7
CEO transition costs
(1) - 11.0
Restructuring
charges (benefits)
and other facility
exit costs, net 22.5 (0.3)
---- ----
Non-GAAP income
(loss) from
operations $29.0 $(39.5)
===== ======
GAAP interest and
other expense, net $(8.5) $(1.8)
Gain on strategic
investments and
dispositions (2.7) (5.7)
---- ----
Non-GAAP interest
and other expense,
net $(11.2) $(7.5)
====== =====
GAAP provision for
income taxes $(18.6) $(8.2)
Discrete GAAP tax
items - (7.6)
Income tax effect of
non-GAAP
adjustments 15.2 28.0
---- ----
Non-GAAP
(provision) benefit
for income tax $(3.4) $12.2
===== =====
GAAP net loss $(82.4) $(129.6)
Stock-based
compensation
expense 54.4 59.0
Amortization of
developed
technology 3.6 4.7
Amortization of
purchased
intangibles 3.8 5.7
CEO transition costs
(1) - 11.0
Restructuring
charges (benefits)
and other facility
exit costs, net 22.5 (0.3)
Gain on strategic
investments and
dispositions (2.7) (5.7)
Discrete GAAP tax
items - (7.6)
Income tax effect of
non-GAAP
adjustments 15.2 28.0
---- ----
Non-GAAP net income
(loss) $14.4 $(34.8)
===== ======
GAAP diluted net
loss per share (2) $(0.38) $(0.59)
Stock-based
compensation
expense 0.25 0.27
Amortization of
developed
technology 0.02 0.02
Amortization of
purchased
intangibles 0.02 0.03
CEO transition costs
(1) - 0.04
Restructuring
charges and other
facility exit
costs, net 0.09 -
Gain on strategic
investments and
dispositions (0.01) (0.03)
Discrete GAAP tax
items - (0.03)
Income tax effect of
non-GAAP
adjustments 0.07 0.13
---- ----
Non-GAAP diluted
net income (loss)
per share (2) $0.06 $(0.16)
===== ======
GAAP diluted shares
used in per share
calculation 218.6 219.9
Shares included in
non-GAAP net
income per share,
but excluded from
GAAP net loss per
share as they would
have been anti-
dilutive 3.0 -
Non-GAAP diluted
weighted average
shares used in per
share calculation 221.6 219.9
===== =====
(1) CEO transition
costs include
stock-based
compensation of
$7.8 million
related to the
acceleration of
eligible stock
awards in the
three months ended
April 30, 2017.
CEO transition
costs also include
severance
payments, legal
fees incurred with
the CEO transition
and recruiting
costs related to
the search for a
new CEO.
(2) Net income (loss)
per share was
computed
independently for
each of the
periods presented;
therefore the sum
of the net loss
per share amount
for the quarters
may not equal the
total for the
year.
CONTACT: Investors: David Gennarelli, 415-507-6033, david.gennarelli@autodesk.com; Press: Stacy Doyle, 971-238-5722, stacy.doyle@autodesk.com
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SOURCE Autodesk, Inc.
