Autodesk’s Q1 beats expectations, sets up for strong fiscal 2023

May 26, 2022 | Hot Topics

You know me: cynical. When I saw that Autodesk had scheduled its earnings release for the Thursday before Memorial Day weekend, in a year that’s reputed to be “revenge vacation”-heavy, I expected bad news. After all, if it’s good news, you want people paying attention. Well, silly me.

Autodesk beat Wall Street expectations for revenue by $20 million in a pile of other positive news.

The details:

  • Total FQ1 revenue was up 18% (up 17% in constant currencies, cc) to a record $1,170 million, in part because one large deal closed earlier than expected
  • Revenue from the Design products was $1,004 million, up 16% (up 15% cc) — solid even though down1% sequentially from what is typically a very strong fourth quarter
  • Make revenue was $103 million, up 27% (up 26% cc); this was up 4% sequentially
  • By product family // vertical, revenue from AEC products was $518 million, up 17%. The company said it saw customers adopting more of the AEC offer, with one major account adding Innovyze and Autodesk Build for the first time, Construction Cloud “reported its best-ever new business growth quarter, with growing contract size” and strength in EMEA and Asia –and in the channel, which “lit up the mid-market” in FQ1
  • Manufacturing product revenue was $225 million, up 14%. Fusion 360 now has 198,000 subscribers. “with strong demand for Machining, Generative Design, and Nesting & Fabrication extensions”
  • And not to be overlooked, because so many people I speak with now know Autodesk for the verticalized brands, AutoCAD and AutoCAD LT are still very significant, with revenue of $346 million in FQ1, up 21%
  • By geo, revenue from the Americas was $484 million, up 24% (up 23% cc). The makes up the largest proportion, with $398 million
  • Revenue from EMEA was $449 million, up 17% (up 15% cc)
  • Revenue from Asia and Pacific Rim was $237 million, up 10% (up 12% cc)
  • Direct revenue was 34% of total revenue, up 22%. Last year in FQ1, direct revenue was 33% of total; the company says that this is due to strong direct enterprise and e-commerce sales — but CEO Andrew Anagnost did say that the channel did really well in FQ1. (And though no one said this, it’s possible that the 1% change is dues to the large AEC enterprise deal mentioned above)
  • Autodesk says it closed 8 deals over $500,000, including 3 over $1 million. That’s impressive considering that these are likely mostly/all subscription-based deals. Can’t remember the last time Autodesk shared that metric

Mr. Anagnost told investors that, basically, he sees Autodesk firing on all cylinders: flexibility, agility, “steady execution, industry-leading products and platforms, and resilience through elevated times of uncertainty,” led to the FQ1 results. CFO Debbie Clifford added, “We exited the first quarter with strong momentum, save for Russia and currency movements during the quarter, for which we’ve adjusted our outlook.”

For the second quarter, Autodesk upped guidance slightly, to revenue between $1,220 million and $1,235 million. For the year, the company now expects total revenue of $4,960 million and $5,060 million, which would be up 13% to 15%.

On Russia: Mr. Anagnost told investors that Autodesk halted all new and renewal business in Russia on March 1. Ms. Clifford said that revenue in Q1 was down $40 million due to the exit and that this lost revenue will ripple through the year, affecting the total by maybe 1%. Interestingly, product usage metrics showed that usage in Europe shrank a bit in Q1 after the invasion but rebounded within a few weeks, as did new business and other metrics. Since Autodesk’s fiscal year is 1 month off from the calendar — its FQ1 runs from February to April — this might hint at other companies’ Q2 results.

One thing Autodesk didn’t talk about? Annual contract value or other metrics that companies create to help investors understand the business. Perhaps revenue is back in fashion?