Autodesk reported surprisingly solid results today, as FQ3 was the first quarter in 5 that showed sequential stabilizing in almost all categories of business, the exceptions being Asia Pac and Manufacturing. The outlook is improving too, as the company gave a modest growth forecast for the January quarter.

The details:

• total revenue was $417 million, flat sequentially and down 31% from a year ago as growth in license revenue offset the decline in maintenance
• license revenue as $236 million, up 2% from the July quarter; even better (although unquantified), the company saw a 4% sequential increase in revenue from new commercial seats
• maintenance revenue was $181 million, down 2% sequentially and 3% from a year ago, while maintenance billings declined 4% sequentially and 10% year/year. That both are down makes sense, given that fewer new seats have been sold in the last year, but the company reports that renewal rates appear to have stabilized in Q3 and that the installed base of commercial maintenance customers was approximately flat sequentially
• the company reported that economic conditions in its core markets were “increasingly stable relative to the conditions experienced in late calendar 2008, and the early part of calendar 2009”. The Americas and Europe appear to have bottomed out, with revenue of $164 million (up 3% sequentially) and $159 million (up 1% sequentially) respectively. Revenue in the U.S., Brazil and Mexico increased while Canada declined sequentially
• Asia Pac revenue declined 5% from the July quarter to $94 million, as strong sequential growth in South Korea and India was offset by sequential declines in most other countries — although “there’s no sign of a recession in China,” according to CEO Carl Bass
• revenue from emerging economies is considered to be a key measure of future success for Autodesk, as it brings pirated copies under license and as those economies grow. That business had been growing nicely but now accounts for 15% of total revenue or $62 million
• the Platform group showed growth of 6% sequentially to $154 million; Building Design held steady at $125 million but the Manufacturing group saw revenue fall to $90 million. CEO Carl Bass said that AEC firms seem to be consolidating around a single vendor, which results in large deals; manufacturers, on the other hand, are embarking on smaller pilot programs — but Autodesk believes that the Manufacturing decline is an anomaly and that “we shouldn’t read too much into it”
• 3D products continue to grow in importance to Autodesk’s overall revenue stream and now account for 29% of its business, or $120.6 million. In dollar terms, that business, too, has fallen off a cliff over the last year, falling from a high of $164 million a year ago. Autodesk reported that sales of Inventor and Revit declined in CQ3 2009 while Civil 3D, Navisworks, Robot Structural Analysis and Moldflow grew on a sequential basis. Civil 3D revenue increased 8% sequentially (but was down 18% year/year) while revenue from Revit declined 2% percent (31% percent year/year). Inventor revenue decreased 6% sequentially and 29% compared to the third quarter last year. Moldflow growth is good news: it means that the products are reaching more customers and that existing accounts are continuing to support Autodesk’s acquisition of the product a year ago
• upgrade revenue was $26 million in the quarter, down 37% from a year ago and flat with FQ2.

Autodesk said that it is now shifting gears from cost reduction to accelerating growth. The company issued guidance for the fiscal fourth quarter of total revenue between $420 million and $440 million, which would be a slight to 6% sequential increase and would lead Autodesk to roughly a 27% revenue decline for the full fiscal year, at $1.69 billion. That’s actually pretty good, when we consider that 70% or so of Autodesk’s customers are small to mid-sized businesses, which are most stressed right now and have likely had to shrink their design departments until end-consumer demand picks up.

It was interesting to hear Mr Bass say that Autodesk is glad that economists are issuing positive news about recessions ending but that “the loss of jobs in [its] primary markets of architecture, construction and manufacturing continues to create a headwind for [its] business.” Essentially, Autodesk revenue is tied to the number of workers — more workers: more seats sold or under maintenance. So until the unemployment numbers decline, Autodesk is wary of predicting the timing of a solid recovery in it business.

Tomorrow: how Autodesk’s results compare to the rest of the engineering software space and what we can expect in Q4.