Autodesk revenue up 11% in Q1

Autodesk reported on Thursday that revenue grew 11% in its fiscal first quarter, led by a 14% increase in sales from the Manufacturing business and by strong sales of its new Autodesk Design Suites, which contributed to 35% growth in Platform suites revenue. On a geo basis, Asia Pacific was the standout, with revenue growth of 15% as reported and 11% in constant currencies.

These good results, however, did not satisfy investors who sent the share price down 4% on Friday. Apparently, investors felt that the suites introduced at the end of FQ1 might have stalled purchases as customers decided whether to go for a suite or solo package. This makes some sense in the short-term, but seriously undervalues the potential of suites over the long-term. Too, investors were looking for stronger growth in maintenance (up 5%) but appear not to realize that the concept of maintenance is new to many of Autodesk’s customers.

But on to the details:
• Total revenue was $528 million, up 11% from a year ago and above the top end of the range the company predicted during its February earnings call.
• Total license revenue was $323 million, up 15% over least year and down 2% from Q4
• Maintenance revenue was $205 million, up 5% over last year and up 4% sequentially. Perhaps important on a psychological level, it broke through the $200 million/quarter barrier for the first time, after hovering in the $180-$190 million range in fiscal 2009 and in the $190-$200 million range last year.
• By business segment, platform revenue was $211 million, up 15%, on the continued strength of AutoCAD LT. AutoCAD and AutoCAD LT combined accounted for $193 million in revenue, up 14% over last year.
• AEC revenue was $141 million,up 3% from last year, but down 13% sequentially. The company sad it saw “softness” in Q1 but hopes that the suites to be launched in Q2 will help spur interest. Revenue from AEC suites increased 25% over last year (to an unspecified amount).
• Manufacturing segment revenue was $123 million, up 14% over last year, and a decline of 7% sequentially. Manufacturing suites revenue was up 10% from last year (again, to an unspecified amount). Blue Ridge Numerics did not contribute “meaningfully” to the results.
• Revenue from the Media and Entertainment business was $53 million, up 15% over last year.
• By geography, EMEA reported total revenue of $215 million, up 8%; the Americas reported revenue of $181 million, up 13%, and Asia Pacific, $132 million, up 15%.
• Revenue from emerging economies was $77 million, up 13%.
• By product type (remember the switch last quarter to Flagship, Suites, New and Adjacent), revenue from Flagship products was $325 million, up 10%; from Suites, $124 million, up 17%; and from New and Adjacent, $79 million, up 9%.

A number of other factoids were also tossed out during the earnings call that I found particularly interesting:
• “Within our Manufacturing segment, revenue from commercial new licenses grew 32% compared to Q1 last year.” We don’t have an exact comparable (no other vendor calls out “commercial new licenses” quite this way), but taken at face value, this is ahead of the 30% growth in total new license revenue reported by DS and behind PTC’s reported CAD new license growth of 41%. These three companies are experiencing tremendous growth in CAD; who said this market is dead?
• “We experienced strong growth in our data management business through broader penetration across industries and geographies. Enterprise and SMB customers choose our data management solution for its state-of-the-art technology, cost effectiveness and ease of use.” I wish Autodesk would talk about Vault more — it is quietly creating a data management solution that is easy to implement and easy to use, across verticals. For many companies outside that traditional auto/aero mainstream, or within those verticals but not needing a full-blown PLM solution, Vault could be very, very interesting.

On the analyst call about the results, CEO Carl Bass characterized Q1 overall as “solid” and “better than expected”, and commented particularly on Japan. He said [my paraphrase] “We saw remarkable resiliency and resourcefulness [after the earthquake and tsunami]. Selling was strong even at the worst times of the crisis. There is a real determination on the part of the entire country to make sure that business continued. Certainly some areas have been devastated and some of the infrastructure has been damaged. You could easily have imagined business falling off a cliff, having watched the pictures and read the newspaper accounts. It didn’t do that, though there was some drag on the business.”

Autodesk also gave guidance for the fiscal second quarter, anticipating revenue of between $530 million and $545 million — an increase of 12% to 15%. For the full year, the company now expects revenue growth of about 12%, to about $2.2 billion. This is an increase of 2% (around $100 million) from the company’s forecast at the end of February and reflects optimism in both the suites selling approach and an economic recovery. And, important for Autodesk’s varied business areas, Mr. Bass sees his customers hiring again: “I no longer hear about any customer who’s continuing to reduce their workforce. Everyone’s hit bottom and most are hiring back. I think the real challenge is that, in some places like United States, there are cases where they don’t intend to hire back to the same levels, which I think has long-term structural implications for the economy, but most of the customers that I’m in contact with are hiring. And particularly, some of the hardest hit segments, like architecture and parts of construction, there are new projects in the works and hiring is happening there.”