Schnitger Corporation

Autodesk sees tough times ahead

Autodesk reported good results for the quarter ended October 31, 2008 but spoke of
uncertainty ahead. Since the earnings release happened at the same time as the Autodesk
Manufacturing group’s industry analyst event described below, I was unable to participate in
the financial analyst call so all of the following is based on the press release issued by the
company. I’ll update with more color after I listen to the analyst call replay.

The details:

– Total revenue for the quarter was $607 million an increase of 13% over the third quarter of
fiscal 2008

– The company says that this growth was driven by sales of model-based 3D design
solutions (up 26% to $163 million), revenue generated in emerging economies and increased
maintenance revenue from a growing customer base

– Autodesk defines its “model-based 3D design solutions” as including Inventor, Revit, Civil
3D, Moldflow, NavisWorks, and Robobat; these accounted for 27% of total revenue for the

– Moldflow, which was acquired earlier this year, contributed $12 million. Given that
Moldflow’s revenue typically was about $14 million for the summer quarter, this is a solid

– Excluding Moldflow, revenue from “model-based 3D design solutions” was up 16% over the
year-ago quarter, and now amount to $151 million

– Autodesk reports shipping 41,000 commercial seats of “model-based 3D design” products:
9,000 commercial seats of Inventor and Moldflow and 32,000 seats of Revit, Civil 3D,
NavisWorks, and Robobat

– It’s interesting to note that revenue from 2D vertical solutions, as defined by Autodesk,
actually decreased 6% from a year ago. No color was provided in the press release, but this
could be due to adoption of 3D solutions or reflect the way Autodesk bundles 2D and 3D
solutions in the 3D packages. Hard to tell.

– On a geographic basis, Autodesk reports that revenue from emerging economies increased
25% from a year ago to $114 million, representing 19% of total revenue. Revenue from
EMEA was $258 million, up 27% as reported and up 20% at constant currencies. Revenue
from Asia Pacific was $133 million, an increase of 12% as reported, and up 9% at constant
currencies. Finally, revenue from the Americas was down 1% to $216 million.

In the earnings press release, CEO Carl Bass is quoted as saying: "The sharp downturn in
the global economy had a substantial impact on our results for the quarter. Our business in
the United States slowed as a result of the economic climate. In addition, we started to
experience headwinds in some of our international markets. While we realize that there is no
quick or easy response to the current economic environment, we are focused on serving our
customers and helping our channel partners in these challenging times. We are taking
actions to stimulate demand and are making appropriate adjustments to our cost structure.
In the process we intend to balance these cost reductions with investing in our future.
Investment focus areas continue to be increasing channel capacity and developing
technology that will help Autodesk better serve our customers."

Given the economic uncertainty, Autodesk believes revenue for the fourth quarter of fiscal will
be between $525 million and $550 million, a marked 10-12% decrease from the $599 in
revenue reported for F4Q08.

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