Autodesk, Inc. Q4 FY2025 earnings call

• Autodesk delivered strong fourth quarter and full year results with billings and revenue topping expected ranges despite foreign exchange headwinds, and margins and free cash flow exceeding expectations.
• Restructuring announcement includes optimization of sales and marketing plan and reallocating internal resources to accelerate strategic priorities. The go-to-market model is being optimized for tighter channel partnerships and increased self-service capabilities.
• In the fourth quarter, construction revenue growth accelerated and 400 net new logos were added. In manufacturing, customers are investing in digital transformations and consolidating on the Design and Make platform. Examples of customer success include Mott MacDonald renewing and expanding usage, Power Design selecting Autodesk Build, and Cleveland Construction replacing a solution with Autodesk Construction Cloud.
• Investments in cloud, platform, and AI are ongoing to drive growth and convergence across design and make processes.

In constant currency, for the fourth quarter and full year fiscal 2025: AutoCAD and AutoCAD LT revenue grew 9%; AECO revenue grew 15%; manufacturing revenue grew 10% (low teens excluding up-front revenue); M&E revenue grew 10%. By region, revenue grew 11% in the Americas, 13% in EMEA, and 11% in APAC. Direct revenue increased 35% in constant currency, representing 47% of total revenue, up 8 percentage points from the previous year. Billings increased 24% in the quarter at constant currency, with the new transaction model contributing $155 million to billings in the fourth quarter and $262 million for the full year. RPO was $6.9 billion and current RPO was $4.5 billion, growing 14% and 12% respectively.

• For fiscal 2026, constant currency billings growth is expected to be 17%-19%, constant currency revenue growth 8%-9%, GAAP operating margin 21%-22%, non-GAAP operating margin 39%-40%, free cash flow $2.075 billion-$2.175 billion, and share buyback $1.1 billion-$1.2 billion.
• The 10%-15% revenue growth framework is no longer appropriate given recent performance, but margins are expected to improve further once go-to-market optimization is complete.
• Guidance for fiscal 2026 accounts for potential disruption from restructuring plans and CRO transition but includes mitigation plans.

• Geopolitical and macroeconomic uncertainties that can impact customer spending and investment decisions.
• Potential disruption to business momentum from the ongoing sales and marketing optimization and CRO transition.
• Impact of foreign exchange headwinds on financial performance.

Q: Saket Kalia asked about the 10%-15% medium growth rate and what drives new business growth higher over time.

A: Andrew Anagnost responded that factors include enhancing channel productivity through go-to-market optimization and investing in emerging and high-growth businesses like industry clouds, core cloud platform, and AI.

Q: Adam Borg asked about macro sentiment and policy impact on customers.

A: Andrew Anagnost said customers want certainty, and uncertainty is a concern, but Autodesk can navigate policies once they are in place.

Q: Jason Celino asked if the revenue guide assumes extra conservatism due to restructuring disruption.

A: Janesh Moorjani responded that the guidance for fiscal 2026 considered a range of possible outcomes from the sales forecast and factored in risk from restructuring plans and CRO transition but includes mitigation plans.

Q: Elizabeth Porter asked about self-service and its application to Autodesk's business.

A: Andrew Anagnost said self-service can touch every transactional aspect of the business, with ongoing investments to improve self-service capabilities for customers.

Q: Matt Hedberg asked about generative AI rollouts and midterm model color.

A: Andrew Anagnost discussed how AI provides productivity, competitive value, and potential market expansion, while Janesh Moorjani said fiscal 2026 guidance is consistent with recent performance and the business is resilient.

Q: Michael Turrin asked about headcount reduction and balancing efficiency with business momentum.

A: Andrew Anagnost said a balanced approach was taken, with reinvestment in future systems and capabilities to ensure the business moves in the right direction.