Autodesk Reports Strong Fourth Quarter Results Led By Annualized Recurring Revenue (ARR)
SAN RAFAEL, Calif., Feb. 28, 2019 /PRNewswire/ -- Autodesk, Inc. (NASDAQ: ADSK) today reported financial results for the fourth quarter of fiscal 2019.
Fourth Quarter Fiscal 2019
-- Total ARR was $2.75 billion, an increase of 34 percent compared to the
fourth quarter last year as reported, and 32 percent on a constant
currency basis. Included in total ARR is a $27 million contribution from
the fourth quarter acquisitions, or 1 percentage point of the increase.
Under the prior revenue accounting standard, ASC 605, total ARR was
$2.72 billion, an increase of 32 percent compared to the fourth quarter
last year.
-- Subscription plan ARR was $2.20 billion, an increase of 87 percent
compared to the fourth quarter last year as reported, and 85 percent on
a constant currency basis. Included in subscription plan ARR is a $27
million contribution from the fourth quarter acquisitions, or 2
percentage points of the increase. Under ASC 605, subscription plan ARR
was $2.16 billion, an increase of 84 percent compared to the fourth
quarter last year.
-- Total subscriptions increased 252,000 from the third quarter of fiscal
2019 to 4.33 million at the end of the fourth quarter. Included in
subscription additions this quarter is a 127,000 contribution from the
fourth quarter acquisitions.
-- Subscription plan subscriptions increased 418,000 from the third quarter
of fiscal 2019 to 3.53 million at the end of the fourth quarter.
Subscription plan subscriptions benefited from 110,000 maintenance
subscribers that converted to product subscription under the
maintenance-to-subscription program. Included in subscription plan
subscriptions is a 127,000 contribution from the fourth quarter
acquisitions.
-- Deferred revenue was $2.09 billion, an increase of 7 percent compared to
the fourth quarter last year. Total deferred revenue (deferred revenue
plus unbilled deferred revenue) was $2.68 billion, an increase of
approximately 18 percent compared to the fourth quarter last year.
Included in deferred revenue was a $36 million contribution from the
fourth quarter acquisitions, or 2 percentage points of the
year-over-year increase. Included in total deferred revenue was a $97
million contribution from the fourth quarter acquisitions, or 4
percentage points of the year-over-year increase. Under ASC 605, total
deferred revenue was $2.76 billion, an increase of approximately 21
percent compared to the fourth quarter last year.
-- Revenue was $737 million, an increase of 33 percent compared to the
fourth quarter last year as reported, and 31 percent on a constant
currency basis. Included in revenue was a $7 million contribution from
the fourth quarter acquisitions, or 1 percentage point of the increase.
Under ASC 605, revenue was $713 million, an increase of 29 percent
compared to the fourth quarter last year.
-- Billings were $1.04 billion, an increase of 39 percent compared to the
fourth quarter last year. Billings includes $43 million from the fourth
quarter acquisitions, accounting for 6 percentage points of the
increase. Under ASC 605, billings were $1.05 billion, an increase of 41
percent compared to the fourth quarter last year.
-- Total GAAP spend (cost of revenue plus operating expenses) was $697
million, a decrease of 5 percent compared to the fourth quarter last
year. Absent ASC 340, total GAAP spend was $710 million, a decrease of 3
percent compared to the fourth quarter last year.
-- Total non-GAAP spend was $598 million, an increase of 5 percent compared
to the fourth quarter last year. A reconciliation of GAAP to non-GAAP
results is provided in the accompanying tables. Absent ASC 340, total
non-GAAP spend was $611 million, an increase of 7 percent compared to
the fourth quarter last year.
-- GAAP diluted net income per share was $0.29, compared to GAAP diluted
net loss per share of $(0.79) in the fourth quarter last year.
-- Non-GAAP diluted net income per share was $0.46, compared to non-GAAP
diluted net loss per share of $(0.09) in the fourth quarter last year.
-- Cash flow from operating activities was $312 million, an increase of
$232 million compared to the fourth quarter last year. Free cash flow
was $294 million, an increase of $226 million compared to the fourth
quarter last year.
"We achieved multiple milestones in fiscal 2019 and are entering fiscal 2020 with strong momentum," said Andrew Anagnost, Autodesk president and CEO. "With less than 20 percent of our revenues coming from maintenance, we are effectively finished with our business model transition and now look forward to executing on our multi-year growth strategy. Our core design offerings and cloud-based solutions for construction, manufacturing and production are benefiting our customers as they undergo their own digital transformations, which offers an ongoing tailwind to our business. We are particularly excited about entering the new fiscal year with an unrivaled portfolio of cloud-based solutions for construction."
"With over $300 million in free cash flow for the year, we delivered well above our target and are demonstrating the cash generating power of our model," said Scott Herren, Autodesk CFO. "Fiscal 2019 was a year of solid execution as we accomplished multiple financial milestones that have positioned us well to keep driving growth in fiscal 2020 and beyond. We're exiting the business model transition with a much more predictable business at 95 percent recurring revenue and feel confident about our free cash flow goal for fiscal 2020."
For definitions, please view the Glossary of Terms later in this document.
Fourth Quarter Operational Overview
Total ARR for the fourth quarter increased 34 percent to $2.75 billion compared to the fourth quarter last year as reported, and 32 percent on a constant currency basis. Subscription plan ARR was $2.20 billion, an increase of 87 percent compared to the fourth quarter last year as reported, and 85 percent on a constant currency basis. Subscription plan ARR includes $470 million related to the maintenance-to-subscription program. Included in total ARR and subscription plan ARR is a $27 million contribution from the fourth quarter acquisitions. Maintenance plan ARR was $549 million, a decrease of 38 percent compared to the fourth quarter last year as reported, and 39 percent on a constant currency basis.
Total subscriptions were 4.33 million, a net increase of 252,000 from the third quarter of fiscal 2019. Subscription plan subscriptions (product, EBA, and cloud) were 3.53 million, a net increase of 418,000 from the third quarter of fiscal 2019, led by new product subscriptions and 110,000 product subscriptions that migrated from maintenance plan subscriptions. Included in total subscription additions and subscription plan additions this quarter is a 127,000 contribution from the fourth quarter acquisitions. Maintenance plan subscriptions were 796,000, a net decrease of 166,000 from the third quarter of fiscal 2019, which includes the 110,000 that migrated to product subscription.
Total recurring revenue in the fourth quarter was 93 percent of total revenue, consistent with the fourth quarter last year.
Revenue in the Americas was $300 million, an increase of 29 percent compared to the fourth quarter last year. Revenue in EMEA was $299 million, an increase of 35 percent compared to the fourth quarter last year as reported, and 31 percent on a constant currency basis. Revenue in APAC was $138 million, an increase of 38 percent compared to the fourth quarter last year as reported, and on a constant currency basis.
Financial Highlights for Fiscal 2019*
-- Total ARR increased 34 percent as reported, and 32 percent on a constant
currency basis.
-- Included in total ARR is a $27 million contribution from the fourth
quarter acquisitions, or 1 percentage point of the increase.
-- Total ARPS increased 15 percent to $635.
-- Included in total ARPS is the negative impact of $13 from the fourth
quarter acquisitions, or negative 2 percentage points of the
increase.
-- Billings increased 22 percent to $2.71 billion.
-- Billings includes a $43 million contribution from the fourth quarter
acquisitions, or 2 percentage points of the increase.
-- Total revenue increased 25 percent to a record $2.57 billion.
-- Total revenue includes a $7 million contribution from the fourth
quarter acquisitions, and had no impact on the growth percentage.
-- Migrated 452,000 maintenance customers to subscription.
-- Reached milestone of over 4 million active subscriptions.
-- Total deferred revenue increased 18 percent to $2.68 billion.
-- Total deferred revenue includes a $97 million contribution from the
fourth quarter acquisitions, or 4 percentage points of the increase.
-- Free cash flow increased to $310 million, compared to $(50) million in
fiscal 2018.
-- Recurring revenue increased to 95 percent, compared to 92 percent at the
end of fiscal 2018.
*All numbers are compared to fiscal 2018. Starting in the first quarter of fiscal 2020, Autodesk will discontinue quarterly reporting of subscriptions and ARPS.
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 2020 assumes, among other things, a continuation of the current economic environment and foreign exchange currency rate environment. A reconciliation between the fiscal 2020 GAAP and non-GAAP estimates is provided below or in the tables following this press release.
First Quarter Fiscal 2020
Q1 FY20 Guidance Metrics Q1 FY20
(ending April 30,
2019)
---
Revenue (in millions)
$735 - $745
EPS GAAP
$0.06 - $0.10
EPS non-GAAP (1)
$0.44 - $0.48
(1) Non-GAAP earnings per diluted
share excludes $0.34 related to
stock-based compensation expense,
$0.07 for the amortization of
acquisition-related intangibles,
$0.04 for acquisition related
costs, and ($0.07) related to
GAAP-only tax charges.
Full Year Fiscal 2020
FY20 Guidance Metrics FY20
(ending January 31,
2020)
---
Total ARR (in millions)
$3,500 - $3,550
Up 27% - 29%
Billings (in millions)
$4,050 - $4,150
Up 50% - 53%
Revenue (in millions) (1)
$3,250 - $3,300
Up 26% - 28%
GAAP spend growth (cost of
revenue + operating
expenses) Approx. 10%
Non-GAAP spend growth (cost
of revenue + operating
expenses) (2) Approx. 9%
EPS GAAP
$1.12 - $1.31
EPS non-GAAP (3)
$2.71 - $2.90
Free cash flow Approx. $1.35 billion
(1) We do not expect foreign currency
exchange rates or hedge gains/
losses to materially impact our
revenue guidance.
(2) Non-GAAP spend excludes $310
million related to stock-based
compensation expense, $64 million
for the amortization of
acquisition-related intangibles,
and $31 million for acquisition
related costs.
(3) Non-GAAP earnings per diluted
share excludes $1.39 related to
stock-based compensation expense,
$0.28 for the amortization of
acquisition-related intangibles,
$0.13 related to acquisition
related costs, and ($0.21) related
to GAAP-only tax charges.
Tax Rates and Foreign Currency Hedging
The first quarter and full year fiscal 2020 outlook assume a projected annual effective tax rate of 25 percent and 18 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.
The majority of the Euro, Yen, British pound and Australian dollar denominated billings for our first quarter fiscal 2020 have been hedged. This hedging, along with deferred revenue locked-in through prior period billings hedges, will reduce the impact of currency fluctuations on our fourth quarter results. However, over an extended period of time, currency fluctuations may increasingly impact our results. We also hedge certain expenses. We hedge our net cash flow exposures using a four quarter rolling layered hedge program. As such, a portion of the projected Euro, Yen, British pound and Australian dollar denominated billings for the remainder of fiscal 2020 have been hedged. The closer to the current time period, the more we are hedged.
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. 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 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, and EBA.
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.
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 which 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 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 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 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 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 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 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, other statements about our short-term and long-term goals and 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, ARR and free cash flow, 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 markets; failure to maintain cost reductions or otherwise control our expenses; failure to continue to innovate to meet competitive offerings; difficulty in predicting revenue from new businesses; 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 Annual Report on Form 10-K for the fiscal year ended January 31, 2018 and Quarterly Report on Form 10-Q for the fiscal quarters ended April 30, 2018, July 31, 2018, and October 31, 2018, 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, 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.
© 2019 Autodesk, Inc. All rights reserved.
Autodesk, Inc.
Condensed Consolidated Statements of Operations
(In millions, except per share data)
Three Months Ended Fiscal Year Ended
January 31, January 31,
2019 2018 2019 2018
---
(Unaudited)
Net revenue:
Subscription $
550.0 $
293.7 $
1,802.3 $
894.3
Maintenance 137.4 219.8 635.1 989.6
Total subscription and
maintenance revenue 687.4 513.5 2,437.4 1,883.9
Other 49.9 40.3 132.4 172.7
Total net revenue 737.3 553.8 2,569.8 2,056.6
Cost of revenue:
Cost of subscription and
maintenance revenue 56.7 52.8 216.0 214.4
Cost of other revenue 15.4 16.6 54.4 72.6
Amortization of developed
technology 4.9 3.7 15.5 16.4
Total cost of revenue 77.0 73.1 285.9 303.4
Gross profit 660.3 480.7 2,283.9 1,753.2
Operating expenses:
Marketing and sales 320.8 301.5 1,183.9 1,087.3
Research and development 190.4 182.2 725.0 755.5
General and administrative 100.7 80.1 340.1 305.2
Amortization of purchased
intangibles 6.2 4.9 18.0 20.2
Restructuring and other exit
costs, net 1.9 93.9 41.9 94.1
Total operating expenses 620.0 662.6 2,308.9 2,262.3
Income (loss) from operations 40.3 (181.9) (25.0) (509.1)
Interest and other expense,
net (7.3) (16.4) (17.7) (48.2)
Income (loss) before income
taxes 33.0 (198.3) (42.7) (557.3)
Benefit (provision) for
income taxes 31.7 24.8 (38.1) (9.6)
Net income (loss) $
64.7 $
(173.5) $
(80.8) $
(566.9)
Basic net income (loss) per
share $
0.30 $
(0.79) $
(0.37) $
(2.58)
Diluted net income (loss) per
share $
0.29 $
(0.79) $
(0.37) $
(2.58)
Weighted average shares used
in computing basic net
income (loss) per share 219.2 219.1 218.9 219.5
Weighted average shares used
in computing diluted net
income (loss) per share 221.3 219.1 218.9 219.5
Autodesk, Inc.
Condensed Consolidated Balance
Sheets
(In millions)
January 31, 2019 January 31, 2018
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $
886.0 $
1,078.0
Marketable securities 67.6 245.2
Accounts receivable, net 474.3 438.2
Prepaid expenses and other
current assets 192.1 116.5
Total current assets 1,620.0 1,877.9
Marketable securities 190.8
Computer equipment, software,
furniture, and leasehold
improvements, net 149.7 145.0
Developed technologies, net 105.6 27.1
Goodwill 2,450.8 1,620.2
Deferred income taxes, net 65.3 81.7
Other assets 337.8 170.9
Total assets $
4,729.2 $
4,113.6
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Accounts payable $
101.6 $
94.7
Accrued compensation 280.8 250.9
Accrued income taxes 13.2 28.0
Deferred revenue 1,763.3 1,551.6
Other accrued liabilities 142.3 198.0
Total current liabilities 2,301.2 2,123.2
Long-term deferred revenue 328.1 403.5
Long-term income taxes
payable 21.5 41.6
Long-term deferred income
taxes 79.8 66.6
Long-term notes payable, net 2,087.7 1,586.0
Other liabilities 121.8 148.7
Stockholders' deficit:
Common stock and additional
paid-in capital 2,071.5 1,952.7
Accumulated other
comprehensive loss (135.0) (123.8)
Accumulated deficit (2,147.4) (2,084.9)
Total stockholders' deficit (210.9) (256.0)
Total liabilities and
stockholders' deficit $
4,729.2 $
4,113.6
Autodesk, Inc.
Condensed Consolidated Statements of
Cash Flows
(In millions)
Fiscal Year Ended January 31,
2019 2018
(Unaudited)
Operating activities:
Net loss $
(80.8) $
(566.9)
Adjustments to reconcile net loss to
net cash provided by operating
activities:
Depreciation, amortization and
accretion 95.2 108.4
Stock-based compensation expense 249.5 261.4
Deferred income taxes (6.8) (39.1)
Restructuring and other exit costs,
net 31.7 94.1
Other operating activities 2.2 7.3
Changes in operating assets and
liabilities, net of acquisitions:
Accounts receivable (25.4) 13.3
Prepaid expenses and other current
assets 7.5 (9.9)
Accounts payable and accrued
liabilities (58.5) (13.9)
Deferred revenue 197.0 168.3
Accrued income taxes (34.5) (22.1)
Net cash provided by operating
activities 377.1 0.9
Investing activities:
Purchases of marketable securities (138.2) (514.0)
Sales of marketable securities 319.6 489.0
Maturities of marketable securities 211.4 594.3
Acquisitions, net of cash acquired (1,040.2)
Capital Expenditures (67.0) (50.7)
Other investing activities 4.0 (12.2)
Net cash (used in) provided by
investing activities (710.4) 506.4
Financing activities:
Proceeds from issuance of common
stock, net of issuance costs 90.9 94.4
Taxes paid related to net share
settlement of equity awards (143.4) (143.1)
Repurchase and retirement of common
stock (293.5) (699.0)
Proceeds from debt, net of discount 500.0 496.9
Repayment of debt (400.0)
Other financing activities (2.1) (5.8)
Net cash provided by (used in)
financing activities 151.9 (656.6)
Effect of exchange rate changes on
cash and cash equivalents (10.6) 14.2
Net decrease in cash and cash
equivalents (192.0) (135.1)
Cash and cash equivalents at beginning
of the period 1,078.0 1,213.1
Cash and cash equivalents at end of
the period $
886.0 $
1,078.0
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 (loss), non-GAAP net income (loss) per share, non-GAAP diluted shares used in per share calculation and free cash flow. These non-GAAP financial measures are adjusted to
exclude certain costs, expenses, gains and losses, including stock-based compensation expense, CEO transition costs, restructuring charges and other facility exit costs, acquisition related 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 management and investors a more complete understanding of Autodesk's underlying
operational results and trends and our marketplace performance. For example, 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 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 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 Fiscal Year Ended January
January 31, 31,
2019 2018 2019 2018
---
(Unaudited)
(Unaudited)
GAAP cost of
maintenance and
subscription
revenue $
56.7 $
52.8 $
216.0 $
214.4
Stock-based
compensation
expense (3.7) (3.4) (13.1) (11.9)
Non-GAAP cost of
maintenance and
subscription
revenue $
53.0 $
49.4 $
202.9 $
202.5
GAAP cost of license
and other revenue $
15.4 $
16.6 $
54.4 $
72.6
Stock-based
compensation
expense (1.5) (0.9) (4.5) (4.0)
Non-GAAP cost of
license and other
revenue $
13.9 $
15.7 $
49.9 $
68.6
GAAP amortization of
developed
technology $
4.9 $
3.7 $
15.5 $
16.4
Amortization of
developed
technology (4.9) (3.7) (15.5) (16.4)
Non-GAAP
amortization of
developed
technology
$
$
$
$
GAAP gross profit $
660.3 $
480.7 $
2,283.9 $
1,753.2
Stock-based
compensation
expense 5.2 4.3 17.6 15.9
Amortization of
developed
technology 4.9 3.7 15.5 16.4
Non-GAAP gross
profit $
670.4 $
488.7 $
2,317.0 $
1,785.5
GAAP marketing and
sales $
320.8 $
301.5 $
1,183.9 $
1,087.3
Stock-based
compensation
expense (31.7) (27.2) (109.4) (107.3)
Non-GAAP marketing
and sales $
289.1 $
274.3 $
1,074.5 $
980.0
GAAP research and
development $
190.4 $
182.2 $
725.0 $
755.5
Stock-based
compensation
expense (25.4) (21.2) (82.5) (82.9)
Non-GAAP research
and development $
165.0 $
161.0 $
642.5 $
672.6
GAAP general and
administrative $
100.7 $
80.1 $
340.1 $
305.2
Stock-based
compensation
expense (11.7) (9.4) (40.0) (38.9)
CEO transition costs
(1) - 0.2 0.1 (21.4)
Acquisition related
costs (11.9) (16.2)
Non-GAAP general
and administrative $
77.1 $
70.9 $
284.0 $
244.9
GAAP amortization of
purchased
intangibles $
6.2 $
4.9 $
18.0 $
20.2
Amortization of
purchased
intangibles (6.2) (4.9) (18.0) (20.2)
Non-GAAP
amortization of
purchased
intangibles
$
$
$
$
GAAP restructuring
and other exit
costs, net $
1.9 $
93.9 $
41.9 $
94.1
Restructuring and
other exit costs,
net (1.9) (93.9) (41.9) (94.1)
Non-GAAP
restructuring and
other exit costs,
net
$
$
$
$
GAAP operating
expenses $
620.0 $
662.6 $
2,308.9 $
2,262.3
Stock-based
compensation
expense (68.8) (57.8) (231.9) (229.1)
Amortization of
purchased
intangibles (6.2) (4.9) (18.0) (20.2)
CEO transition costs
(1) - 0.2 0.1 (21.4)
Acquisition related
costs (11.9) (16.2)
Restructuring and
other exit costs,
net (1.9) (93.9) (41.9) (94.1)
Non-GAAP operating
expenses $
531.2 $
506.2 $
2,001.0 $
1,897.5
GAAP Spend $
697.0 $
735.7 $
2,594.8 $
2,565.7
Stock-based
compensation
expense (74.0) (62.1) (249.5) (245.0)
Amortization of
developed
technology (4.9) (3.7) (15.5) (16.4)
Amortization of
purchased
intangibles (6.2) (4.9) (18.0) (20.2)
CEO transition costs
(1) - 0.2 0.1 (21.4)
Acquisition related
costs (11.9) (16.2)
Restructuring and
other exit costs,
net (1.9) (93.9) (41.9) (94.1)
Non-GAAP Spend $
598.1 $
571.3 $
2,253.8 $
2,168.6
GAAP income (loss)
from operations $
40.3 $
(181.9) $
(25.0) $
(509.1)
Stock-based
compensation
expense 74.0 62.1 249.5 245.0
Amortization of
developed
technology 4.9 3.7 15.5 16.4
Amortization of
purchased
intangibles 6.2 4.9 18.0 20.2
CEO transition costs
(1) - (0.2) (0.1) 21.4
Acquisition related
costs 11.9 16.2
Restructuring and
other exit costs,
net 1.9 93.9 41.9 94.1
Non-GAAP income
(loss) from
operations $
139.2 $
(17.5) $
316.0 $
(112.0)
GAAP interest and
other expense, net $
(7.3) $
(16.4) $
(17.7) $
(48.2)
(Gain) loss on
strategic
investments and
dispositions (3.0) 7.0 (12.5) 16.5
Restructuring and
other exit costs,
net (4.7) (10.2)
Non-GAAP interest
and other expense,
net $
(15.0) $
(9.4) $
(40.4) $
(31.7)
GAAP benefit
(provision) for
income taxes $
31.7 $
24.8 $
(38.1) $
(9.6)
Discrete GAAP tax
items (19.1) (10.5) (31.4) (20.7)
Income tax effect of
non-GAAP
adjustments (36.1) (7.3) 17.2 67.7
Non-GAAP
(provision) benefit
for income tax $
(23.5) $
7.0 $
(52.3) $
37.4
GAAP net income
(loss) $
64.7 $
(173.5) $
(80.8) $
(566.9)
Stock-based
compensation
expense 74.0 62.1 249.5 245.0
Amortization of
developed
technology 4.9 3.7 15.5 16.4
Amortization of
purchased
intangibles 6.2 4.9 18.0 20.2
CEO transition costs
(1) - (0.2) (0.1) 21.4
Acquisition related
costs 11.9 16.2
Restructuring and
other exit costs,
net (2.8) 93.9 31.7 94.1
(Gain) loss on
strategic
investments and
dispositions (3.0) 7.0 (12.5) 16.5
Discrete GAAP tax
items (19.1) (10.5) (31.4) (20.7)
Income tax effect of
non-GAAP
adjustments (36.1) (7.3) 17.2 67.7
Non-GAAP net income
(loss) $
100.7 $
(19.9) $
223.3 $
(106.3)
GAAP diluted net
income (loss) per
share (2) $
0.29 $
(0.79) $
(0.37) $
(2.58)
Stock-based
compensation
expense 0.33 0.28 1.12 1.11
Amortization of
developed
technology 0.02 0.02 0.08 0.08
Amortization of
purchased
intangibles 0.03 0.02 0.08 0.09
CEO transition costs
(1) - 0.09
Acquisition related
costs 0.05 0.07
Restructuring and
other exit costs,
net (0.01) 0.43 0.14 0.43
(Gain) loss on
strategic
investments and
dispositions (0.01) 0.03 (0.05) 0.08
Discrete GAAP tax
items (0.08) (0.05) (0.14) (0.09)
Income tax effect of
non-GAAP
adjustments (0.16) (0.03) 0.08 0.31
Non-GAAP diluted
net income (loss)
per share (2) $
0.46 $
(0.09) $
1.01 $
(0.48)
GAAP diluted shares
used in per share
calculation 221.3 219.1 218.9 219.5
Shares included in
non-GAAP net
income per share,
but excluded from
GAAP net loss per
share as they would
have been anti-
dilutive - 3.1
Non-GAAP diluted
weighted average
shares used in per
share calculation 221.3 219.1 222.0 219.5
Cash flow from
operating
activities $
311.5 $
79.3 $
377.1 $
0.9
Capital expenditures 17.6 11.4 67.0 50.7
Free cash flow $
293.9 $
67.9 $
310.1 $
(49.8)
(1) CEO transition costs include stock-
based compensation of ($0.2)
million and $16.4 million related
to the acceleration of eligible
stock awards for the three months
and fiscal year ended January 31,
2018, respectively. 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 were
computed independently for each of
the periods presented; therefore
the sum of the net income (loss)
per share amount for the quarters
may not equal the total for the
year.
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SOURCE Autodesk, Inc.
