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$ADSK Earnings Review - Q2’24


Source: Koyfin (affiliate link with a 15% discount for StockOpine readers)

Revenues of $1.34B, a 9% increase YoY and 6.0% QoQ, exceeding management’s guidance of $1.32B (mid-point) mainly due to early billings for EBAs (Enterprise Business Agreements).

Subscription revenue accounts for 94.4% of revenues and increased 9.5% YoY and 6.5% QoQ.

Billings of $1.1B down by 8% reflecting the transition from up-front billings to annual billings for multi-year contracts.


Source: Autodesk Q2’24 earnings presentation

GAAP Operating Margin of $262M up by 8.3% YoY while margin declined by 100bps to 19%.

Non-GAAP Operating Margin of $489M up by 10% YoY while margin remained flat at ~36%. In Q1 margin was 32% and it’s currently behind the mid-term goal of 38%-40%.

Net Income increased to $222M (up by 19.4%) compared to $186M in Q2’23. Net margin of 16.5% Vs 15% in Q2’23.


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Balance sheet

Cash flow from operating activities of $135M (Vs $257M in Q2’23) – Margin of 10% (20.8% in Q2’23).
Free cash flow of $128M (Vs $246M in Q2’23) – Margin of 9.5% (19.9%).

Free cash flow of $128M was slightly higher than management expectations whereas the material drop is vastly affected by the transition of upfront to annual billings for multi-year contracts. Headwind is expected to be significant in FY24 and decline in FY25.

Strong balance sheet with Cash, Cash equivalents and marketable securities of $2.1B compared to debt and lease liabilities of $2.6B.


Management expects FY24 revenue to be between $5.405B and $5.455B (up 8%-9% YoY), increasing the lower end of estimates by $50M. Q3’FY24 Revenue estimate assumes a growth of 8%-9%.

Management expects FY24 billings to be between $5.075B and $5.175B (down by 12%-11%).

FY24 Non-GAAP operating margin is expected to remain flat at ~36%.

FY24 Free Cash Flow is expected to be between $1.17B and $1.25B.


Source: Autodesk Q2’24 earnings presentation

Other highlights

Net revenue retention rate remained within the range of 100 to 110 percent.

Direct sales accounted for 37% of sales, the highest in the last 6 quarters.

Remaining performance obligations comprised of $4.23B deferred revenue and $991M unbilled revenue, increased by 11% to $5.22B.

In Q2’24, 400,000 shares were purchased for $87 million at an average price per share of $199.7, partly offsetting stock based compensation (“SBC”) dilution. SBC remains high at 15% of revenue, with yearly estimates standing at ~13%.

“We will continue to offset dilution from our stock-based compensation program and to opportunistically accelerate repurchases when it makes sense to do so.” Debbie Clifford, CFO

Andrew Anagnost, CEO explained how Autodesk Construction Cloud is gaining traction (reporting a +100% increase in MAU in the quarter) as customers aim to streamline their workflows by having an end-to end solution.

Seen some improvements in dealing with non-compliant users.

Final thoughts


Strong performance across all sectors and products.

Forecasts revised upwards.

Transition to annual billings goes well and the number of customers reverting back to annual contracts was within expectations.


We want to see more on the profitability front but as long as the company grows we are pleased.

Disclaimer__: _Not_ a financial advice__. _The_ pos__t contains affiliate _links._

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