Document
false0000769397 0000769397 2020-08-25 2020-08-25
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
 

 
FORM 8-K
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported)
 
August 25, 2020
 
 
Autodesk, Inc.
(Exact name of registrant as specified in its charter)
 
Delaware
 
000-14338
 
94-2819853
(State or other jurisdiction of
incorporation)
 
(Commission File Number)
 
(IRS Employer
Identification No.)

111 McInnis Parkway
 
 
San Rafael,
California
94903
(Address of principal executive offices)
 
(Zip Code)

 
(415) 507-5000
(Registrant’s telephone number, including area code)
 
(Former name or former address, if changed since last report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): 
[☐] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[☐] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[☐] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[☐] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))


Securities registered pursuant to Section 12(b) of the Act:
Title of each class
 
Trading Symbol(s)
 
Name of each exchange on which registered
Common Stock, par value $0.01 per share
 
ADSK
 
The Nasdaq Global Select Market
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).



Emerging growth company [☐]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [  ]




Item 2.02. Results of Operations and Financial Condition.
 
On August 25, 2020, Autodesk, Inc. (“Autodesk” or the “Company”) issued a press release reporting financial results for the second quarter ended July 31, 2020.  The press release is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.
 
The exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
 
Key Performance Metrics

In order to help better understand Autodesk’s financial performance, Autodesk uses several key performance metrics including billings, recurring revenue, net revenue retention rate ("NR3"), and subscriptions. These metrics are key performance metrics and should be viewed independently of revenue and deferred revenue as these metrics are not intended to be combined with those items. Autodesk uses these metrics to monitor the strength of its recurring business. Autodesk believes these metrics are useful to investors because they can help in monitoring the long-term health of Autodesk’s business. Autodesk’s determination and presentation of these metrics may differ from that of other companies. The presentation of these metrics is meant to be considered in addition to, not as a substitute for or in isolation from, Autodesk financial measures prepared in accordance with GAAP.

Non-GAAP Financial Measures
 
To supplement Autodesk’s condensed consolidated financial statements presented on a GAAP basis, the press release furnished herewith as Exhibit 99.1 provides investors with certain non-GAAP measures, including but not limited to historical non-GAAP net earnings and historical and future non-GAAP net earnings per diluted share. For Autodesk’s internal budgeting and resource allocation process and as a means to evaluate period-to-period comparisons, Autodesk uses non-GAAP measures to supplement its condensed consolidated financial statements presented on a GAAP basis. These non-GAAP measures do not include certain items that may have a material impact upon Autodesk’s reported financial results. Autodesk uses non-GAAP measures in making operating decisions because Autodesk believes those measures provide meaningful supplemental information for management regarding the Company's earning potential and performance by excluding certain expenses and charges that may not be indicative of the Company’s core business operating results. For the reasons set forth below, Autodesk believes that these non-GAAP financial measures are useful to investors both because (1) they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making and (2) they are used by Autodesk’s institutional investors and the analyst community to help them analyze the health of the Company's business. This allows investors and others to better understand and evaluate Autodesk’s operating results and future prospects in the same manner as management, compare financial results across accounting periods and to those of peer companies, and to better understand the long-term performance of its core business. Autodesk also uses some of these measures for purposes of determining company-wide incentive compensation.
 
As described above, Autodesk may exclude the following items, as applicable, from its non-GAAP measures:
 
A. Stock-based compensation expenses. Autodesk excludes stock-based compensation expenses from its non-GAAP measures primarily because they are non-cash expenses and management finds it useful to exclude certain non-cash charges to assess the appropriate level of various operating expenses to assist in budgeting, planning and forecasting future periods. Moreover, because of varying available valuation methodologies, subjective assumptions and the variety of award types that companies can use under FASB ASC Topic 718, Autodesk believes that excluding stock-based compensation expenses allows investors to make meaningful comparisons between its recurring core business operating results and those of other companies.
 
B. Amortization of developed technologies and purchased intangibles.  Autodesk incurs amortization of acquisition-related developed technology and purchased intangibles in connection with acquisitions of certain businesses and technologies. Amortization of developed technologies and purchased intangibles is inconsistent in amount and frequency and is significantly affected by the timing and size of Autodesk's acquisitions. Management finds it useful to exclude these variable charges from our cost of revenues to assist in budgeting, planning and forecasting future periods. Investors should note that the use of intangible assets contributed to our revenues earned during the periods presented and will contribute to Autodesk's future period revenues as well. Amortization of developed technologies and purchased intangible assets will recur in future periods.

C. CEO transition costs. Autodesk excludes amounts paid to the Company's former CEOs, upon departure under the terms of their transition agreements, including severance payments, acceleration of restricted stock units and continued vesting of performance stock units, and legal fees incurred with the transition. Also excluded from Autodesk's non-GAAP measures are recruiting costs related


to the search for a new CEO. These costs represent non-recurring expenses and are not indicative of Autodesk's ongoing operating expenses. Autodesk further believes that excluding the CEO transition costs from its non-GAAP results is useful to investors in that it allows for period-over-period comparability.

D. Goodwill impairment. This is a non-cash charge to write-down goodwill to fair value when there was an indication that the asset was impaired. As explained above, management finds it useful to exclude certain non-cash charges to assess the appropriate level of various operating expenses to assist in budgeting, planning and forecasting future periods.
 
E. Acquisition-related costs. Autodesk excludes certain acquisition-related costs, including due diligence costs, professional fees in connection with an acquisition, certain financing costs, and certain integration-related expenses.  These expenses are unpredictable, and dependent on factors that may be outside of Autodesk's control and unrelated to the continuing operations of the acquired business, or Autodesk.  In addition, the size and complexity of an acquisition, which often drives the magnitude of acquisition-related costs, may not be indicative of such future costs.  Autodesk believes excluding acquisition-related costs facilitates the comparison of its financial results to the Autodesk's historical operating results and to other companies in its industry.

F. Restructuring and other exit costs, net. These expenses are associated with realigning Autodesk's business strategies based on current economic conditions. In connection with these restructuring actions or other exit actions, Autodesk recognizes costs related to termination benefits for former employees whose positions were eliminated, the closure of facilities and cancellation of certain contracts. Autodesk excludes these charges because these expenses are not reflective of ongoing business and operating results. Autodesk believes that it is useful for investors to understand the effects of these items on its total operating expenses.

G. Loss (gain) on strategic investments and dispositions. Autodesk excludes gains and losses related to its strategic investments and dispositions from its non-GAAP measures primarily because management finds it useful to exclude these variable gains and losses on these investments and dispositions in assessing Autodesk's financial results. Included, but not limited to, in these amounts are non-cash unrealized gains and losses on the derivative components, dividends received, realized gains and losses on the sales or losses on the impairment of these investments and dispositions. Autodesk believes that excluding these items is useful to investors because these excluded items do not correlate to the underlying performance of its business and these losses or gains were incurred in connection with strategic investments and dispositions which do not occur regularly.
 
H. Establishment (release) of a valuation allowance on certain net deferred tax assets.  This is a non-cash charge to record or to release a valuation allowance on certain deferred tax assets. As explained above, management finds it useful to exclude certain non-cash charges to assess the appropriate level of various cash expenses to assist in budgeting, planning and forecasting future periods.

I. Discrete tax items. Autodesk excludes the GAAP tax provision, including discrete items, from the non-GAAP measure of income, and includes a non-GAAP tax provision based upon the projected annual non-GAAP effective tax rate. Discrete tax items include income tax expenses or benefits that do not relate to ordinary income from continuing operations in the current fiscal year, unusual or infrequently occurring items, or the tax impact of certain stock-based compensation. Examples of discrete tax items include, but are not limited to, certain changes in judgment and changes in estimates of tax matters related to prior fiscal years, certain costs related to business combinations, certain changes in the realizability of deferred tax assets or changes in tax law. Management believes that this approach assists investors in understanding the tax provision and the effective tax rate related to ongoing operations. Autodesk believes the exclusion of these discrete tax items provides investors with useful supplemental information about the Company's operational performance.

J. Income tax effects on the difference between GAAP and non-GAAP costs and expenses. The income tax effects that are excluded from the non-GAAP measures relate to the tax impact on the difference between GAAP and non-GAAP expenses, primarily due to stock-based compensation, amortization of purchased intangibles and restructuring charges and other exit costs (benefits) for GAAP and non-GAAP measures.

There are limitations in using non-GAAP financial measures because non-GAAP financial measures are not prepared in accordance with GAAP and may be different from non-GAAP financial measures used by other companies. The non-GAAP financial measures are limited in value because they exclude certain items that may have a material impact upon our reported financial results. In addition, they are subject to inherent limitations as they reflect the exercise of judgments by management about which charges are excluded from the non-GAAP financial measures. Autodesk compensates for these limitations by analyzing current and future results on a GAAP basis as well as a non-GAAP basis and also by providing GAAP measures in our public disclosures. The presentation of non-GAAP financial information is meant to be considered in addition to, not as a substitute for or in isolation from, the directly comparable financial measures prepared in accordance with GAAP. Autodesk urges investors to review the reconciliation of its non-GAAP financial measures to the comparable GAAP financial measures included in Exhibit 99.1 and not to rely on any single financial measure to evaluate its business.



Item 7.01. Regulation FD Disclosures

On August 25, 2020, Autodesk posted supplemental investor materials on its investors.autodesk.com website. Autodesk uses its investors.autodesk.com website as a means of disclosing material non-public information, announcing upcoming investor conferences and for complying with its disclosure obligations under Regulation FD. Accordingly, investors should monitor Autodesk’s investor relations website in addition to following Autodesk’s press releases, SEC filings and public conference calls and webcasts.

The information in this current report on Form 8-K and the exhibit attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing.
Item 9.01.  Financial Statements and Exhibits.
 
(d)  Exhibits.
 
Exhibit No.
Description
 
99.1
104
Cover Page Interactive Data File (embedded within the Inline XBRL document)



SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
AUTODESK, INC.
 
 
 
By:  /s/  STEPHEN W. HOPE
                                                              
 
Stephen W. Hope
Vice President and Chief Accounting Officer (Principal Accounting Officer)
 
Date:  August 25, 2020


Exhibit



AUTODESK, INC. ANNOUNCES FISCAL 2021 SECOND QUARTER RESULTS
- Revenue and Current Remaining Performance Obligations Grew by 15 Percent Year Over Year
- Expanded GAAP and Non-GAAP Operating Margin by 7 and 5 Percentage Points, Respectively


SAN RAFAEL, Calif., AUGUST 25, 2020-- Autodesk, Inc. (NASDAQ: ADSK) today reported financial results for the second quarter of fiscal 2021.
All growth rates are compared to the second quarter of fiscal 2020 unless otherwise noted. A reconciliation of GAAP to non-GAAP results is provided in the accompanying tables. For definitions, please view the Glossary of Terms later in this document.


Second Quarter Fiscal 2021 Financial Highlights
•
Total revenue increased 15 percent to $913 million;
•
GAAP operating margin was 16 percent, up 7 percentage points;
•
Non-GAAP operating margin was 29 percent, up 5 percentage points;
•
GAAP diluted EPS was $0.44; Non-GAAP diluted EPS was $0.98;
•
Cash flow from operating activities was $91 million; free cash flow was $64 million.

“We delivered a strong second quarter as a result of our resilient business model and strategic nature of our products," said Andrew Anagnost, Autodesk president and CEO. "Our cloud-based solutions are helping our customers stay productive in the current environment, and have resulted in expanded relationships and usage of our products. I am very proud of our team as we continue to deliver on our long-term strategic goals, and remain confident in our growth drivers and fiscal 2023 targets."

“With solid performance across all key metrics, our second quarter results demonstrated the strength of our business,” said Scott Herren, Autodesk CFO. “As a result of our adaptability, outstanding execution in a difficult environment, and healthy renewal rates, we delivered 15 percent year-over-year growth in revenue, expanded our operating margin by 5 percentage points, and delivered robust free cash flow.” 

Additional Financial Details
•
Total billings decreased 12 percent to $787 million.
•
Total revenue was $913 million, an increase of 15 percent as reported, and 16 percent on a constant currency basis. Recurring revenue represents 98 percent of total.
•
Design* revenue was $821 million, an increase of 15 percent as reported, and 16 percent on a constant currency basis. On a sequential basis, Design revenue increased 3 percent as reported and on a constant currency basis.
•
Make* revenue was $71 million, an increase of 37 percent as reported, and 38 percent on a constant currency basis. On a sequential basis, Make revenue increased 5 percent as reported, and 6 percent on a constant currency basis.
•
Subscription plan revenue was $841 million, an increase of 27 percent as reported, and 28 percent on a constant currency basis. On a sequential basis, subscription plan revenue increased 5 percent as reported and on a constant currency basis.
•
Maintenance plan revenue was $51 million, a decrease of 51 percent as reported, and 49 percent on a constant currency basis. On a sequential basis, maintenance plan revenue decreased 18 percent as reported, and 17 percent on a constant currency basis.
•
Net revenue retention rate was within the range of 100 to 110 percent.

*Please refer to appendix for definitions.

1



•
GAAP operating income was $146 million, compared to $74 million in the second quarter last year. GAAP operating margin was 16 percent, up 7 percentage points.
•
Total non-GAAP operating income was $262 million, compared to $187 million in the second quarter last year. Non-GAAP operating margin was 29 percent, up 5 percentage points.
•
GAAP diluted net income per share was $0.44, compared to $0.18 in the second quarter last year.
•
Non-GAAP diluted net income per share was $0.98, compared to $0.65 in the second quarter last year.
•
Deferred revenue increased 28 percent to $2.88 billion. Unbilled deferred revenue was $469 million, a decrease of $95 million compared to the second quarter of last year. Remaining performance obligations (RPO) increased 19 percent to $3.3 billion. Current RPO increased 15 percent to $2.3 billion.
•
Cash flow from operating activities was $91 million, a decrease of $128 million compared to the second quarter last year. Free cash flow was $64 million, a decrease of $140 million compared to the second quarter last year.


























2



Second Quarter Fiscal 2021 Business Highlights

Net Revenue by Geographic Area
 
Three Months Ended July 31, 2020
 
Three Months Ended July 31, 2019
 
Change compared to
prior fiscal year
 
Constant currency change compared to prior fiscal year
(In millions, except percentages)
 
 
$    
 
%    
 
%    
Net Revenue:
 
 
 
 
 
 
 
 
 
Americas
 
 
 
 
 
 
 
 
 
U.S.
$
309.5

 
$
267.9

 
$
41.6

 
16
%
 
*

Other Americas
62.0

 
58.0

 
4.0

 
7
%
 
*

Total Americas
371.5

 
325.9

 
45.6

 
14
%
 
14
%
EMEA
354.7

 
316.2

 
38.5

 
12
%
 
16
%
APAC
186.9

 
154.7

 
32.2

 
21
%
 
21
%
Total Net Revenue
$
913.1

 
$
796.8

 
$
116.3

 
15
%
 
16
%
 
 
 
 
 
 
 
 
 
 
Emerging Economies
$
113.7

 
$
97.4

 
$
16.3

 
17
%
 
17
%
____________________ 
* Constant currency data not provided at this level.


Net Revenue by Product Family

Our product offerings are focused in four primary product families: Architecture, Engineering and Construction ("AEC"), AutoCAD and AutoCAD LT, Manufacturing ("MFG"), and Media and Entertainment ("M&E").
 
Three Months Ended July 31, 2020
 
Three Months Ended July 31, 2019
 
Change compared to
prior fiscal year
(In millions, except percentages)
 
$    
 
%    
AEC
$
397.0

 
$
334.2

 
$
62.8

 
19
 %
AutoCAD and AutoCAD LT
271.9

 
231.3

 
40.6

 
18
 %
MFG
185.5

 
174.6

 
10.9

 
6
 %
M&E
53.3

 
50.8

 
2.5

 
5
 %
Other
5.4

 
5.9

 
(0.5
)
 
(8
)%
 
$
913.1

 
$
796.8

 
$
116.3

 
15
 %


3



Business Outlook

The following are forward-looking statements based on current expectations and assumptions, and involve risks and uncertainties, some of which are set forth below under "Safe Harbor Statement." Autodesk's business outlook for the third quarter and full-year fiscal 2021 takes into consideration the current economic environment and foreign exchange currency rate environment. A reconciliation between the fiscal 2021 GAAP and non-GAAP estimates is provided below or in the tables following this press release.

Third Quarter Fiscal 2021
Q3 FY21 Guidance Metrics
Q3 FY21
(ending October 31, 2020)
Revenue (in millions)
$930 - $945
EPS GAAP
$0.42 - $0.48
EPS non-GAAP (1)
$0.91 - $0.97
_______________
(1) Non-GAAP earnings per diluted share excludes $0.45 related to stock-based compensation expense, $0.07 for the amortization of acquisition-related intangibles, $0.01 for acquisition-related costs, and ($0.04) related to GAAP-only tax charges.

Full Year Fiscal 2021
FY21 Guidance Metrics
FY21
(ending January 31, 2021)
Billings (in millions) (1)
$4,070 - $4,170
Down (3.0%) - (0.5%)
Revenue (in millions) (1)
$3,715 - $3,765
Up 13.5% - 15.0%
GAAP operating margin
14.5% - 16.0%
Non-GAAP operating margin (2)
27.5% - 29.0%
EPS GAAP
$1.63 - $1.81
EPS non-GAAP (3)
$3.72 - $3.90
Free cash flow (in millions) (4)
$1,300 - $1,400
_______________
(1) Excluding the approximately $20 million impact of foreign currency exchange rates and hedge gains/losses, billings guidance would be $4,090 - $4,190 million and revenue guidance would be $3,735 - $3,785 million.
(2) Non-GAAP operating margin excludes approximately 11% related to stock-based compensation expense, approximately 2% for the amortization of acquisition-related intangibles, and less than 1% related to acquisition-related costs.
(3) Non-GAAP earnings per diluted share excludes $1.80 related to stock-based compensation expense, $0.30 for the amortization of acquisition-related intangibles, $0.14 related to losses on strategic investments and dispositions, $0.04 related to acquisition-related costs, partially offset by ($0.19) related to a GAAP-only tax benefit.
(4) Free cash flow is cash flow from operating activities less approximately $95 million of capital expenditures.

The third quarter and full-year fiscal 2021 outlook assume a projected annual effective tax rate of 23 percent and 16 percent for GAAP and non-GAAP results, respectively. Shifts in geographic profitability continue to impact the annual effective tax rate due to significant differences in tax rates in various jurisdictions. Therefore, assumptions for the annual effective tax rate are evaluated regularly and may change based on the projected geographic mix of earnings.


4



Earnings Conference Call and Webcast

Autodesk will host its second quarter conference call today at 5 p.m. ET. The live broadcast can be accessed at autodesk.com/investor. A transcript of the opening commentary will also be available following the conference call.

A replay of the broadcast will be available at 7 p.m. ET at autodesk.com/investor. This replay will be maintained on Autodesk's website for at least 12 months.

Investor Presentation Details

An investor presentation providing additional information can be found at autodesk.com/investor.

Contacts
Investors:
Abhey Lamba
415-547-3502
abhey.lamba@autodesk.com
        
Press:    
Stacy Doyle
503-330-6115
stacy.doyle@autodesk.com    


5



To help better understand our financial performance, we use several key performance metrics including billings, recurring revenue and net revenue retention rate ("NR3"). These metrics are key performance metrics and should be viewed independently of revenue and deferred revenue. These metrics are not intended to be combined with those items. We use these metrics to monitor the strength of our recurring business. We believe these metrics are useful to investors because they can help in monitoring the long-term health of our business. Our determination and presentation of these metrics may differ from that of other companies. The presentation of these metrics is meant to be considered in addition to, not as a substitute for or in isolation from, our financial measures prepared in accordance with GAAP.

Glossary of Terms

Billings: Total revenue plus the net change in deferred revenue from the beginning to the end of the period.

Constant Currency (CC) Growth Rates: We attempt to represent the changes in the underlying business operations by eliminating fluctuations caused by changes in foreign currency exchange rates as well as eliminating hedge gains or losses recorded within the current and comparative periods. We calculate constant currency growth rates by (i) applying the applicable prior period exchange rates to current period results and (ii) excluding any gains or losses from foreign currency hedge contracts that are reported in the current and comparative periods.

Design Business: Represents the combination of maintenance, product subscriptions, and all EBAs. Main products include, but are not limited to, AutoCAD, AutoCAD LT, Industry Collections, Revit, Inventor, Maya and 3ds Max. Certain products, such as our computer aided manufacturing solutions, incorporate both Design and Make functionality and are classified as Design.

Enterprise Business Agreements (EBAs): Represents programs providing enterprise customers with token-based access to a broad pool of Autodesk products over a defined contract term.

Free Cash Flow: Cash flow from operating activities minus capital expenditures.

Maintenance Plan: Our maintenance plans provide our customers with a cost effective and predictable budgetary option to obtain the productivity benefits of our new releases and enhancements when and if released during the term of their contracts. Under our maintenance plans, customers are eligible to receive unspecified upgrades when and if available, and technical support. We recognize maintenance revenue over the term of the agreements, generally one year.

Make Business: Represents certain cloud-based product subscriptions. Main products include, but are not limited to, Assemble, BIM 360, BuildingConnected, PlanGrid, Fusion 360 and Shotgun. Certain products, such as Fusion 360, incorporate both Design and Make functionality and are classified as Make.

Net Revenue Retention Rate (NR3): Measures the year-over-year change in subscription and maintenance revenue for the population of customers that existed one year ago (“base customers”).  Net revenue retention rate is calculated by dividing the current quarter subscription and maintenance revenue related to base customers by the total corresponding quarter subscription and maintenance revenue from one year ago. Subscription and maintenance revenue is based on USD reported revenue, and fluctuations caused by changes in foreign currency exchange rates and hedge gains or losses have not been eliminated. Subscription and maintenance revenue related to acquired companies, one year after acquisition, has been captured as existing customers until such data conforms to the calculation methodology. This may cause variability in the comparison. Beginning with the first quarter of fiscal

6



2021, Autodesk modified its definition of NR3 to the definition above.  The effect of this change is not material for the periods presented.

Other Revenue: Consists of revenue from consulting, training and other services, and is recognized over time as the services are performed. Other Revenue also includes software license revenue from the sale of products that do not incorporate substantial cloud services and is recognized up front.

Product Subscription: Provides customers the most flexible, cost-effective way to access and manage 3D design, engineering, and entertainment software tools. Our product subscriptions currently represent a hybrid of desktop and SaaS functionality, which provides a device-independent, collaborative design workflow for designers and their stakeholders.

Recurring Revenue: Consists of the revenue for the period from our traditional maintenance plans and revenue from our subscription plan offerings. It excludes subscription revenue related to consumer product offerings, select Creative Finishing product offerings, education offerings, and third-party products. Recurring revenue acquired with the acquisition of a business is captured when total subscriptions are captured in our systems and may cause variability in the comparison of this calculation.

Remaining Performance Obligations (RPO): The sum of total short-term, long-term, and unbilled deferred revenue. Current remaining performance obligations is the amount of revenue we expect to recognize in the next twelve months.

Spend: The sum of cost of revenue and operating expenses.

Subscription Plan: Comprises our term-based product subscriptions, cloud service offerings, and EBAs. Subscriptions represent a combined hybrid offering of desktop software and cloud functionality which provides a device-independent, collaborative design workflow for designers and their stakeholders. With subscription, customers can use our software anytime, anywhere, and get access to the latest updates to previous versions.

Subscription Revenue: Includes subscription fees from product subscriptions, cloud service offerings, and EBAs.

Unbilled Deferred Revenue: Unbilled deferred revenue represents contractually stated or committed orders under early renewal and multi-year billing plans for subscription, services and maintenance for which the associated deferred revenue has not been recognized. Under FASB Accounting Standards Codification ("ASC") Topic 606, unbilled deferred revenue is not included as a receivable or deferred revenue on our Condensed Consolidated Balance Sheet.

7



Safe Harbor Statement

This press release contains forward-looking statements that involve risks and uncertainties, including quotations from management, statements in the paragraphs under “Business Outlook” above and other statements about our short-term and long-term goals, and other statements regarding our strategies, market and product positions, performance and results. There are a significant number of factors that could cause actual results to differ materially from statements made in this press release, including: failure to achieve our revenue and profitability objectives; failure to successfully manage transitions to new business models and markets; failure to maintain cost reductions or otherwise control our expenses; difficulty in predicting revenue from new businesses and the potential impact on our financial results from changes in our business models; developments in the COVID-19 pandemic and the resulting impact on our business and operations; general market, political, economic, and business conditions, including from an economic downturn or recession in the United States or in other countries around the world; any imposition of new tariffs or trade barriers; the impact of non-cash charges on our financial results; fluctuation in foreign currency exchange rates; the success of our foreign currency hedging program; our performance in particular geographies, including emerging economies; the ability of governments around the world to meet their financial and debt obligations, and finance infrastructure projects; weak or negative growth in the industries we serve; slowing momentum in subscription billings or revenues; difficulties encountered in integrating new or acquired businesses and technologies; the inability to identify and realize the anticipated benefits of acquisitions; the financial and business condition of our reseller and distribution channels; dependence on and the timing of large transactions; pricing pressure; unexpected fluctuations in our annual effective tax rate; significant effects of tax legislation and judicial or administrative interpretation of tax regulations, including the Tax Cuts and Jobs Act; the timing and degree of expected investments in growth and efficiency opportunities; changes in the timing of product releases and retirements; and any unanticipated accounting charges. Our estimates as to tax rate are based on current tax law, including current interpretations of the Tax Cuts and Jobs Act, and could be affected by changing interpretations of that Act, as well as additional legislation and guidance around that Act.

Further information on potential factors that could affect the financial results of Autodesk are included in Autodesk's Form 10-K and subsequent forms 10-Q, which are on file with the U.S. Securities and Exchange Commission. Autodesk disclaims any obligation to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made.

About Autodesk

Autodesk makes software for people who make things. If you’ve ever driven a high-performance car, admired a towering skyscraper, used a smartphone, or watched a great film, chances are you’ve experienced what millions of Autodesk customers are doing with our software. Autodesk gives you the power to make anything. For more information, visit autodesk.com or follow @autodesk.

Autodesk uses its investors.autodesk.com website as a means of disclosing material non-public information, announcing upcoming investor conferences and for complying with its disclosure obligations under Regulation FD. Accordingly, you should monitor our investor relations website in addition to following our press releases, SEC filings and public conference calls and webcasts.


8



Autodesk, AutoCAD, AutoCAD LT, BIM 360 and Fusion 360 are registered trademarks of Autodesk, Inc., and/or its subsidiaries and/or affiliates in the USA and/or other countries. All other brand names, product names or trademarks belong to their respective holders. Autodesk reserves the right to alter product and service offerings, and specifications and pricing at any time without notice, and is not responsible for typographical or graphical errors that may appear in this document.

© 2020 Autodesk, Inc. All rights reserved.

9




Autodesk, Inc.
 
 
 
 
 
 
 
Condensed Consolidated Statements of Operations
 
 
 
 
(In millions, except per share data)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended July 31,
 
Six Months Ended July 31,
 
2020
 
2019
 
2020
 
2019
 
(Unaudited)
 
(Unaudited)
Net revenue:
 
 
 
 
 
 
 
Subscription
$
841.2

 
$
663.7

 
$
1,644.2

 
$
1,259.5

Maintenance
51.2

 
103.5

 
113.3

 
215.5

    Total subscription and maintenance revenue
892.4

 
767.2

 
1,757.5

 
1,475.0

Other
20.7

 
29.6

 
41.3

 
57.3

Total net revenue
913.1

 
796.8

 
1,798.8

 
1,532.3

Cost of revenue:
 
 
 
 
 
 
 
Cost of subscription and maintenance revenue
58.5

 
53.0

 
115.9

 
112.7

Cost of other revenue
15.0

 
17.9

 
32.1

 
31.7

Amortization of developed technology
7.4

 
8.6

 
14.8

 
17.8

Total cost of revenue
80.9

 
79.5

 
162.8

 
162.2

Gross profit
832.2

 
717.3

 
1,636.0

 
1,370.1

Operating expenses:
 
 
 
 
 
 
 
Marketing and sales
350.9

 
316.8

 
692.2

 
630.1

Research and development
232.5

 
215.4

 
449.9

 
421.0

General and administrative
93.2

 
101.4

 
198.0

 
200.5

Amortization of purchased intangibles
9.5

 
9.7

 
19.2

 
19.5

Restructuring and other exit costs, net
—

 
0.2

 
—

 
0.4

Total operating expenses
686.1

 
643.5

 
1,359.3

 
1,271.5

Income from operations
146.1

 
73.8

 
276.7

 
98.6

Interest and other expense, net
(17.1
)
 
(7.3
)
 
(57.2
)
 
(23.5
)
Income before income taxes
129.0

 
66.5

 
219.5

 
75.1

Provision for income taxes
(30.8
)
 
(26.3
)
 
(54.8
)
 
(59.1
)
Net income
$
98.2

 
$
40.2

 
$
164.7

 
$
16.0

Basic net income per share
$
0.45

 
$
0.18

 
$
0.75

 
$
0.07

Diluted net income per share
$
0.44

 
$
0.18

 
$
0.74

 
$
0.07

Weighted average shares used in computing basic net income per share
219.2

 
219.6

 
219.2

 
219.6

Weighted average shares used in computing diluted net income per share
222.2

 
222.4

 
222.0

 
222.3





10



Autodesk, Inc.
 
 
 
Condensed Consolidated Balance Sheets
 
 
 
(In millions)
 
 
 
 
 
 
 
 
July 31, 2020

January 31, 2020
 
(Unaudited)
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
1,439.8

 
$
1,774.7

Marketable securities
79.7

 
69.0

Accounts receivable, net
490.1

 
652.3

Prepaid expenses and other current assets
194.3

 
163.3

Total current assets
2,203.9

 
2,659.3

Computer equipment, software, furniture and leasehold improvements, net
177.8

 
161.7

Operating lease right-of-use assets
416.2

 
438.8

Developed technologies, net
61.0

 
70.9

Goodwill
2,459.1

 
2,445.0

Deferred income taxes, net
51.5

 
56.4

Long-term other assets
377.8

 
347.2

Total assets
$
5,747.3

 
$
6,179.3

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
99.2

 
$
83.7

Accrued compensation
193.6

 
272.1

Accrued income taxes
32.5

 
21.2

Deferred revenue
2,102.1

 
2,176.1

Operating lease liabilities
53.8

 
48.1

Current portion of long-term notes payable, net
—

 
449.7

Other accrued liabilities
138.4

 
168.3

Total current liabilities
2,619.6

 
3,219.2

Long-term deferred revenue
776.8

 
831.0

Long-term operating lease liabilities
393.3

 
411.7

Long-term income taxes payable
20.2

 
19.1

Long-term deferred income taxes
89.9

 
82.5

Long-term notes payable, net
1,636.1

 
1,635.1

Long-term other liabilities
144.1

 
119.8

Stockholders’ equity (deficit):
 
 
 
Common stock and additional paid-in capital
2,492.7

 
2,317.0

Accumulated other comprehensive loss
(154.5
)
 
(160.3
)
Accumulated deficit
(2,270.9
)
 
(2,295.8
)
Total stockholders’ equity (deficit)
67.3

 
(139.1
)
Total liabilities and stockholders' equity (deficit)
$
5,747.3

 
$
6,179.3




11



Autodesk, Inc.
 
 
 
Condensed Consolidated Statements of Cash Flows
 
 
 
(In millions)
 
 
 
 
 
 
 
 
Six Months Ended July 31,
 
2020
 
2019
 
(Unaudited)
Operating activities:
 
 
 
Net income
$
164.7

 
$
16.0

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation, amortization and accretion
60.0

 
64.8

Stock-based compensation expense
194.1

 
163.4

Deferred income taxes
14.5

 
35.8

Restructuring and other exit costs, net
—

 
0.4

Other
36.0

 
(4.2
)
Changes in operating assets and liabilities
 
 
 
Accounts receivable
162.7

 
125.8

Prepaid expenses and other assets
(52.0
)
 
27.4

Accounts payable and other liabilities
(42.8
)
 
(138.1
)
Deferred revenue
(130.0
)
 
158.3

Accrued income taxes
11.3

 
(9.1
)
Net cash provided by operating activities
418.5

 
440.5

Investing activities:
 
 
 
Purchases of marketable securities
(17.0
)
 
(19.9
)
Sales of marketable securities
—

 
22.4

Maturities of marketable securities
11.0

 
5.0

Capital expenditures
(46.7
)
 
(29.5
)
Purchases of developed technologies
(4.8
)
 
—

Other investing activities
(54.3
)
 
(10.5
)
Net cash used in investing activities
(111.8
)
 
(32.5
)
Financing activities:
 
 
 
Proceeds from issuance of common stock, net of issuance costs
58.5

 
49.7

Taxes paid related to net share settlement of equity awards
(39.6
)
 
(31.2
)
Repurchases of common stock
(209.0
)
 
(134.6
)
Repayment of debt
(450.0
)
 
(250.0
)
Other financing activities
(2.5
)
 
—

Net cash used in financing activities
(642.6
)
 
(366.1
)
Effect of exchange rate changes on cash and cash equivalents
1.0

 
(4.0
)
Net (decrease) increase in cash and cash equivalents
(334.9
)
 
37.9

Cash and cash equivalents at beginning of period
1,774.7

 
886.0

Cash and cash equivalents at end of period
$
1,439.8

 
$
923.9

 
 
 
 
Supplemental cash flow disclosure:
 
 
 
Non-cash financing activities:
 
 
 
Fair value of common stock issued to settle liability-classified restricted stock units
$
28.7

 
$
—




12



Autodesk, Inc.
 
 
 
 
 
 
 
Reconciliation of GAAP financial measures to non-GAAP financial measures
(In millions, except per share data)
 
 
 
 
 
 
 
 
 
 
 
 
To supplement our condensed consolidated financial statements presented on a GAAP basis, we provide investors with certain non-GAAP measures including non-GAAP net income per share, non-GAAP operating margin, non-GAAP spend, non-GAAP EPS and free cash flow. For our internal budgeting and resource allocation process and as a means to evaluate period-to-period comparisons, we use non-GAAP measures to supplement our condensed consolidated financial statements presented on a GAAP basis. These non-GAAP measures do not include certain items that may have a material impact upon our future reported financial results. We use non-GAAP measures in making operating decisions because we believe those measures provide meaningful supplemental information regarding our earning potential and performance for management by excluding certain expenses and charges that may not be indicative of our core business operating results. For the reasons set forth below, we believe these non-GAAP financial measures are useful to investors both because (1) they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making and (2) they are used by our institutional investors and the analyst community to help them analyze the health of our business. This allows investors and others to better understand and evaluate our operating results and future prospects in the same manner as management, compare financial results across accounting periods and to those of peer companies and to better understand the long-term performance of our core business. We also use some of these measures for purposes of determining company-wide incentive compensation.
There are limitations in using non-GAAP financial measures because non-GAAP financial measures are not prepared in accordance with GAAP and may be different from non-GAAP financial measures used by other companies. The non-GAAP financial measures are limited in value because they exclude certain items that may have a material impact upon our reported financial results. In addition, they are subject to inherent limitations as they reflect the exercise of judgments by management about which charges are excluded from the non-GAAP financial measures. We compensate for these limitations by analyzing current and future results on a GAAP basis as well as a non-GAAP basis and also by providing GAAP measures in our public disclosures. The presentation of non-GAAP financial information is meant to be considered in addition to, not as a substitute for or in isolation from, the directly comparable financial measures prepared in accordance with GAAP. We urge investors to review the reconciliation of our non-GAAP financial measures to the comparable GAAP financial measures included in this presentation, and not to rely on any single financial measure to evaluate our business.
 
 
 
 
 
 
 
 
The following table shows Autodesk's non-GAAP results reconciled to GAAP results included in this release.
 
 
 
 
 
Three Months Ended July 31,
 
Six Months Ended July 31,
 
2020
 
2019
 
2020
 
2019
 
(Unaudited)
 
(Unaudited)
 
 
 
 
 
 
 
 
GAAP cost of subscription and maintenance revenue
$
58.5

 
$
53.0

 
$
115.9

 
$
112.7

Stock-based compensation expense
(4.2
)
 
(3.4
)
 
(7.8
)
 
(7.0
)
Acquisition-related costs
(0.1
)
 
—

 
(0.3
)
 
—

Non-GAAP cost of subscription and maintenance revenue
$
54.2

 
$
49.6

 
$
107.8

 
$
105.7

 
 
 
 
 
 
 
 
GAAP cost of other revenue
$
15.0

 
$
17.9

 
$
32.1

 
$
31.7

Stock-based compensation expense
(1.6
)
 
(1.4
)
 
(3.1
)
 
(2.7
)
Non-GAAP cost of other revenue
$
13.4

 
$
16.5

 
$
29.0

 
$
29.0

 
 
 
 
 
 
 
 
GAAP amortization of developed technologies
$
7.4

 
$
8.6

 
$
14.8

 
$
17.8

Amortization of developed technologies
(7.4
)
 
(8.6
)
 
(14.8
)
 
(17.8
)
Non-GAAP amortization of developed technologies
$
—

 
$
—

 
$
—

 
$
—

 
 
 
 
 
 
 
 
GAAP gross profit
$
832.2

 
$
717.3

 
$
1,636.0

 
$
1,370.1

Stock-based compensation expense
5.8


4.8


10.9


9.7

Amortization of developed technologies
7.4


8.6


14.8


17.8

Acquisition-related costs
0.1


—


0.3


—

Non-GAAP gross profit
$
845.5

 
$
730.7

 
$
1,662.0


$
1,397.6

 
 
 
 
 
 
 
 
GAAP marketing and sales
$
350.9

 
$
316.8

 
$
692.2

 
$
630.1

Stock-based compensation expense
(43.4
)
 
(36.0
)
 
(84.1
)
 
(68.5
)
Acquisition-related costs
(1.6
)
 
(0.1
)
 
(3.3
)
 
(0.1
)

13



Non-GAAP marketing and sales
$
305.9

 
$
280.7

 
$
604.8

 
$
561.5

 
 
 
 
 
 
 
 
GAAP research and development
$
232.5

 
$
215.4

 
$
449.9

 
$
421.0

Stock-based compensation expense
(35.2
)
 
(30.8
)
 
(68.2
)
 
(57.5
)
Acquisition-related costs
(0.4
)
 
(0.4
)
 
(0.4
)
 
(0.4
)
Non-GAAP research and development
$
196.9

 
$
184.2

 
$
381.3

 
$
363.1

 
 
 
 
 
 
 
 
GAAP general and administrative
$
93.2

 
$
101.4

 
$
198.0

 
$
200.5

Stock-based compensation expense
(11.5
)
 
(16.6
)
 
(30.9
)
 
(27.7
)
Acquisition-related costs
(1.4
)
 
(5.5
)
 
(1.4
)
 
(18.2
)
Non-GAAP general and administrative
$
80.3

 
$
79.3

 
$
165.7

 
$
154.6

 
 
 
 
 
 
 
 
GAAP amortization of purchased intangibles
$
9.5

 
$
9.7

 
$
19.2

 
$
19.5

Amortization of purchased intangibles
(9.5
)
 
(9.7
)
 
(19.2
)
 
(19.5
)
Non-GAAP amortization of purchased intangibles
$
—

 
$
—

 
$
—

 
$
—

 
 
 
 
 
 
 
 
GAAP restructuring and other exit costs, net
$
—

 
$
0.2

 
$
—

 
$
0.4

Restructuring and other exit costs, net
—

 
(0.2
)
 
—

 
(0.4
)
Non-GAAP restructuring and other exit costs, net
$
—

 
$
—

 
$
—

 
$
—

 
 
 
 
 
 
 
 
GAAP operating expenses
$
686.1

 
$
643.5

 
$
1,359.3

 
$
1,271.5

Stock-based compensation expense
(90.1
)
 
(83.4
)
 
(183.2
)
 
(153.7
)
Amortization of purchased intangibles
(9.5
)
 
(9.7
)
 
(19.2
)
 
(19.5
)
Acquisition-related costs
(3.4
)
 
(6.0
)
 
(5.1
)
 
(18.7
)
Restructuring and other exit costs, net
—

 
(0.2
)
 
—

 
(0.4
)
Non-GAAP operating expenses
$
583.1

 
$
544.2

 
$
1,151.8

 
$
1,079.2

 
 
 
 
 
 
 
 
GAAP spend
$
767.0

 
$
723.0

 
$
1,522.1

 
$
1,433.7

Stock-based compensation expense
(95.9
)
 
(88.2
)
 
(194.1
)
 
(163.4
)
Amortization of developed technologies
(7.4
)
 
(8.6
)
 
(14.8
)
 
(17.8
)
Amortization of purchased intangibles
(9.5
)
 
(9.7
)
 
(19.2
)
 
(19.5
)
Acquisition-related costs
(3.5
)
 
(6.0
)
 
(5.4
)
 
(18.7
)
Restructuring and other exit costs, net
—

 
(0.2
)
 
—

 
(0.4
)
Non-GAAP spend
$
650.7

 
$
610.3

 
$
1,288.6

 
$
1,213.9

 
 
 
 
 
 
 
 
GAAP operating margin
16
%
 
9
%
 
15
%
 
6
%
Stock-based compensation expense
11
%
 
11
%
 
11
%
 
11
%
Amortization of developed technologies
1
%
 
1
%
 
1
%
 
1
%
Amortization of purchased intangibles
1
%
 
1
%
 
1
%
 
1
%
Acquisition-related costs
—
%
 
1
%
 
—
%
 
1
%
Non-GAAP operating margin (1)
29
%
 
23
%
 
28
%
 
21
%
 
 
 
 
 
 
 
 
GAAP income from operations
$
146.1

 
$
73.8

 
$
276.7

 
$
98.6

Stock-based compensation expense
95.9

 
88.2

 
194.1

 
163.4

Amortization of developed technologies
7.4

 
8.6

 
14.8

 
17.8

Amortization of purchased intangibles
9.5

 
9.7

 
19.2

 
19.5

Acquisition-related costs
3.5

 
6.0

 
5.4

 
18.7

Restructuring and other exit costs, net
—

 
0.2

 
—

 
0.4

Non-GAAP income from operations
$
262.4

 
$
186.5

 
$
510.2

 
$
318.4


14



 
 
 
 
 
 
 
 
GAAP interest and other expense, net
$
(17.1
)
 
$
(7.3
)
 
$
(57.2
)
 
$
(23.5
)
Loss (gain) on strategic investments and dispositions, net
14.3

 
(2.2
)
 
30.9

 
2.8

Non-GAAP interest and other expense, net
$
(2.8
)
 
$
(9.5
)
 
$
(26.3
)
 
$
(20.7
)
 
 
 
 
 
 
 
 
GAAP provision for income taxes
$
(30.8
)
 
$
(26.3
)
 
$
(54.8
)
 
$
(59.1
)
Discrete GAAP tax items
0.6

 
3.3

 
1.1

 
1.0

Income tax effect of non-GAAP adjustments
(11.4
)
 
(8.9
)
 
(23.8
)
 
4.5

Non-GAAP provision for income tax
$
(41.6
)
 
$
(31.9
)
 
$
(77.5
)
 
$
(53.6
)
 
 
 
 
 
 
 
 
GAAP net income
$
98.2

 
$
40.2

 
$
164.7

 
$
16.0

Stock-based compensation expense
95.9

 
88.2

 
194.1

 
163.4

Amortization of developed technologies
7.4

 
8.6

 
14.8

 
17.8

Amortization of purchased intangibles
9.5

 
9.7

 
19.2

 
19.5

Acquisition-related costs
3.5

 
6.0

 
5.4

 
18.7

Restructuring and other exit costs, net
—

 
0.2

 
—

 
0.4

Loss (gain) on strategic investments and dispositions, net
14.3

 
(2.2
)
 
30.9

 
2.8

Discrete GAAP tax items
0.6

 
3.3

 
1.1

 
1.0

Income tax effect of non-GAAP adjustments
(11.4
)
 
(8.9
)
 
(23.8
)
 
4.5

Non-GAAP net income
$
218.0

 
$
145.1

 
$
406.4

 
$
244.1

 
 
 
 
 
 
 
 
GAAP diluted net income per share
$
0.44

 
$
0.18

 
$
0.74

 
$
0.07

Stock-based compensation expense
0.43

 
0.40

 
0.87

 
0.74

Amortization of developed technologies
0.03

 
0.04

 
0.07

 
0.08

Amortization of purchased intangibles
0.04

 
0.05

 
0.09

 
0.09

Acquisition-related costs
0.03

 
0.02

 
0.03

 
0.09

Loss (gain) on strategic investments and dispositions, net
0.06

 
(0.01
)
 
0.14

 
0.01

Discrete GAAP tax items
—

 
0.01

 
—

 
—

Income tax effect of non-GAAP adjustments
(0.05
)
 
(0.04
)
 
(0.11
)
 
0.02

Non-GAAP diluted net income per share
$
0.98

 
$
0.65

 
$
1.83

 
$
1.10

____________________
(1)     Totals may not sum due to rounding.



15



Reconciliation of GAAP net cash provided by operating activities to non-GAAP free cash flow (unaudited)
(In millions)
Net Cash Provided by Operating Activities

Capital Expenditures

Free Cash Flow
Six months ending July 31, 2020
$
418.5

 
$
(46.7
)
 
$
371.8

Less three months ending April 30, 2020
327.3

 
(19.9
)
 
307.4

Three months ending July 31, 2020
$
91.2

 
$
(26.8
)
 
$
64.4




16
v3.20.2
Cover Page
Aug. 25, 2020
Cover [Abstract]  
Document Type 8-K
Document Period End Date Aug. 25, 2020
Entity Registrant Name Autodesk, Inc.
Entity Incorporation, State or Country Code DE
Entity File Number 000-14338
Entity Tax Identification Number 94-2819853
Entity Address, Address Line One 111 McInnis Parkway
Entity Address, City or Town San Rafael,
Entity Address, State or Province CA
Entity Address, Postal Zip Code 94903
City Area Code 415
Local Phone Number 507-5000
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Stock, par value $0.01 per share
Trading Symbol ADSK
Security Exchange Name NASDAQ
Entity Emerging Growth Company false
Entity Central Index Key 0000769397
Amendment Flag false