News

A month has gone by since the last earnings report for Autodesk (ADSK). Shares have added about 10.8% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Autodesk due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Autodesk Q1 Earnings and Sales Surpass Expectations

Autodesk reported first-quarter fiscal 2025 non-GAAP earnings of $1.87 per share, which beat the Zacks Consensus Estimate by 5.06% and improved 20.6% year over year.

The company reported revenues of $1.42 billion, which beat the consensus mark by 1.46%. The figure grew 11.7% year over year. The upside was driven by steady subscription renewal rates, new business growth and strong competitive performance.

Top-Line Details

Autodesk’s subscription revenues (93.9% of total revenues) increased 11.5% year over year to $1.33 billion. Maintenance revenues (0.8% of total revenues) declined to $11 million compared with $14 million in the year-ago quarter. Other revenues (5.4% of total revenues) increased 22.6% to $76 million in the reported quarter.

Recurring revenues contributed 97% to Autodesk’s first-quarter fiscal 2025 revenues. The net revenue retention rate was within the company’s 100-110% targeted range.

Region-wise, revenues from the Americas (43.7% of total revenues) increased 11.9% from the year-ago quarter’s levels to $619 million. Revenues from the EMEA, which accounted for 37.7% of revenues, climbed 12.7% to $534 million. Revenues from the Asia-Pacific (18.6% of revenues) increased 9.1% to $264 million.

Billings of $1.11 billion decreased 5% year over year in the reported quarter.

Product Top-Line Details

Autodesk offers primarily four product families — Architecture, Engineering and Construction (AEC), AutoCAD and AutoCAD LT, Manufacturing (MFG) and Media and Entertainment (M&E).

AEC revenues (47.6% of total revenues) climbed 15.8% year over year to $674 million. AutoCAD and AutoCAD LT revenues (26.5% of total revenues) rose 7.7% to $376 million. MFG revenues (18.9% of total revenues) increased 8.9% to $268 million. M&E revenues (5% of total revenues) remained unchanged at $71 million.

Operating Results

Autodesk reported a non-GAAP operating income of $490 million, up 21.3% year over year.

The non-GAAP operating margin expanded 270 basis points from the year-ago quarter’s levels to 34.6%.

Balance Sheet & Cash Flow

As of Apr 30, 2024, Autodesk had cash and cash equivalents (including marketable securities) of $1.99 billion compared with $2.2 billion as of Jan 31, 2024.

Deferred revenues decreased 12% to $3.96 billion. Unbilled deferred revenues were $1.93 billion, representing an increase of $1.03 billion from the year-ago quarter’s figure. Remaining performance obligations (RPO) increased 9% to $5.89 billion. Current RPO increased 12% to $3.92 billion.

Cash flow from operating activities was $494 million, representing a decrease of $229 million from the year-ago quarter’s figure. Free cash flow was $487 million, representing a decline of $227 million from the year-ago quarter’s actuals.

Fiscal 2025 Guidance

Autodesk projects fiscal 2025 revenues between $5.99 billion and $6.09 billion, indicating 9-11% growth. Billings are estimated in the $5.81-$5.96 billion band, suggesting growth of 12-15% year over year.

Non-GAAP earnings per share are expected between $7.99 and $8.21. ADSK expects a non-GAAP operating margin between 35% and 36% year over year.

Free cash flow is anticipated in the $1.43-$1.5 billion band.

For the second quarter of fiscal 2025, Autodesk expects revenues between $1.475 billion and $1.49 billion. Non-GAAP earnings are anticipated in the range of $1.98-$2.04 per share.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended upward during the past month.

VGM Scores

Currently, Autodesk has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Autodesk has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Autodesk is part of the Zacks Computer - Software industry. Over the past month, Salesforce.com (CRM), a stock from the same industry, has gained 7.1%. The company reported its results for the quarter ended April 2024 more than a month ago.

Salesforce.com reported revenues of $9.13 billion in the last reported quarter, representing a year-over-year change of +10.7%. EPS of $2.44 for the same period compares with $1.69 a year ago.

Salesforce.com is expected to post earnings of $2.36 per share for the current quarter, representing a year-over-year change of +11.3%. Over the last 30 days, the Zacks Consensus Estimate has changed +0%.

Salesforce.com has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.