Autodesk, Inc. Q3 FY2025 earnings call

Andrew Anagnost noted the strong Q3 performance with 12% revenue growth in constant currency and raised full-year guidance. Autodesk University in San Diego had 12,000 registered attendees and 30,000 online. The new transaction model in Western Europe was implemented smoothly. Betsy Rafael discussed Q3 financials: total revenue grew 11% and 12% in constant currency, billings increased 28%, total deferred revenue decreased, RPO grew. Highlights in segments included strong momentum in AEC, particularly infrastructure and construction; manufacturing progress with customers adopting Fusion; education with universities modernizing courses using Fusion; and ongoing work on software compliance and adoption.

In the third quarter, Autodesk delivered 12% revenue growth in constant currency. By product in constant currency: AutoCAD and AutoCAD LT revenue grew 8%. AEC revenue grew 12% (impacted by absence of true-up revenues). Manufacturing revenue grew 16% excluding upfront revenue. M&E revenue grew 15% boosted by the Pix acquisition. By region in constant currency, revenue grew 11% in the Americas, 13% in EMEA, and 14% in APAC. Direct revenue increased 23% and represented 42% of total revenue, up 4 percentage points from last year.

Betsy raised the midpoint of fiscal ‘25 billings guidance to a range of $5.90 billion to $5.98 billion. Revenue guidance midpoint was raised to $6.12 billion to $6.13 billion. GAAP margin guidance range is now 21.5% to 22% and non-GAAP margin range is 35.5% to 36%. Free cash flow guidance midpoint was raised to $1.47 billion to $1.5 billion. Expect strong free cash flow growth in fiscal ‘26 with midpoint around $2.05 billion.

Macroeconomic, policy, and geopolitical challenges pose headwinds. Co-terming negatively impacted billings ahead of the new transaction model launch in Western Europe. FX movements can act as headwinds to billings and P&L.

Q: Jason Celino asked about Janesh and his background and when the next Investor Day might be.

A: Andrew Anagnost said Janesh brings experience from Elastic, VMware, Cisco, and PTC, joining in December and that Investor Day is unlikely in spring.

Q: Jay Vleeschhouwer inquired about current RPO sustainability and the Chief Revenue Officer position.

A: Betsy Rafael said CRPO was broadly consistent with Q2, and Andrew Anagnost stated the CRO role will remain standalone to drive customer engagement and channel transformation.

Q: Adam Borg asked about learnings from the new transaction model and macro tone.

A: Andrew Anagnost said early days for cross-sell/upsell learnings, and macro issues like infrastructure and manufacturing are bipartisan.

Q: Joe Vruwink asked about free cash flow guidance for fiscal ‘26 and M&A approach.

A: Betsy Rafael said free cash flow guidance for ‘26 remains $2.05 billion midpoint, and Andrew Anagnost said Autodesk will be acquisitive when strategic and financial sense.

Q: Elizabeth Porter asked about new business trends and billings volatility.

A: Betsy Rafael said new business growth is slower due to macro factors, and billings have headwinds from co-terming and FX.

Q: Bhavin Shah asked about interest from owners and margin impact of FX/transaction model.

A: Andrew Anagnost said interest from owners is growing with Tandem, and Betsy Rafael said new CFO will provide margin details in February.

Q: Tyler Radke asked about efficiency from transaction model rollout and free cash flow.

A: Andrew Anagnost discussed self-service, customer understanding, and channel optimization as efficiency drivers.

Q: Michael Turrin asked about macro spend environment and transition with Janesh.

A: Andrew Anagnost said macro is consistent, and Betsy Rafael said involved in Janesh's hiring and will help transition.

Q: Mike Richards asked about Project Bernini and monetization.

A: Andrew Anagnost said Bernini is in development with customer engagement, and AI is embedded in products.

Q: Steve Tusa asked about renewals and variance around them.

A: Betsy Rafael said strong renewals expected but no specific guidance for ‘26 yet.

Q: Joshua Tilton asked about revenue growth outlook with new CFO.

A: Andrew Anagnost said core business near bottom of 10%-15% range, long-term 10%-15% remains, new eyes will evaluate.

Q: Siti Panigrahi asked about operating levers excluding transaction model noise.

A: Betsy Rafael said historical data shows improvement, and Andrew Anagnost mentioned same basis.

Q: Michael Funk asked about renewal range and cost of new transaction model.

A: Betsy Rafael said no specific guidance on renewals, and Simon Mays-Smith pointed to earnings deck for modeling.