Autodesk (ADSK) Up 10.8% Since Last Earnings Report: Will It Continue?

It’s been a month since Autodesk’s (ADSK) last reported earnings, with shares up about 10.8% in that time, outperforming the S&P 500.

Will the recent positive trend continue into its next earnings release, or is Autodesk headed for a pullback? Before we dive into how investors and analysts have reacted recently, let’s take a quick look at the latest earnings report to better understand the important catalysts.

Autodesk’s first-quarter revenue and sales exceeded expectations

Autodesk reported first-quarter fiscal 2025 net income of $1.87 per share (non-GAAP), beating the Zacks Consensus Estimate by 5.06% and improving 20.6% year over year.

The company reported revenue of $1.42 billion, topping consensus estimates by 1.46%. The figure was up 11.7% year over year. The growth was driven by steady subscription renewal rates, new business growth, and strong competitiveness.

Details about the most important products

Autodesk subscription revenue (93.9% of total revenue) increased 11.5% year over year to $1.33 billion. Maintenance revenue (0.8% of total revenue) decreased to $11 million from $14 million in the year-ago quarter. Other revenue (5.4% of total revenue) increased 22.6% to $76 million in the reported quarter.

Recurring revenue accounted for 97% of Autodesk’s revenue in the first quarter of fiscal 2025. Net revenue retention was within the company’s target range of 100% to 110%.

By region, revenue from the Americas (43.7% of total revenue) increased 11.9% from the prior-year quarter to $619 million. Revenue from the EMEA region, which accounted for 37.7% of revenue, increased 12.7% to $534 million. Revenue from the Asia Pacific region (18.6% of revenue) increased 9.1% to $264 million.

In the reported quarter, invoices of $1.11 billion were down 5% year-over-year.

Details about main products

Autodesk offers four primary product families—Architecture, Engineering, and Construction (AEC), AutoCAD and AutoCAD LT, Manufacturing (MFG), and Media and Entertainment (M&E).

AEC revenue (47.6% of total revenue) increased 15.8% year over year to $674 million. AutoCAD and AutoCAD LT revenue (26.5% of total revenue) increased 7.7% to $376 million. MFG revenue (18.9% of total revenue) increased 8.9% to $268 million. M&E revenue (5% of total revenue) was unchanged at $71 million.

Operating results

Autodesk reported non-GAAP operating income of $490 million, an increase of 21.3% year over year.

Non-GAAP operating margin increased 270 basis points from the prior-year quarter to 34.6%.

The story continues

Balance sheet and cash flow

As of April 30, 2024, Autodesk had cash and cash equivalents (including marketable securities) of $1.99 billion, compared to $2.2 billion at January 31, 2024.

Deferred revenue decreased 12% to $3.96 billion. Outstanding deferred revenue was $1.93 billion, an increase of $1.03 billion compared to the same quarter last year. Remaining obligation payable (RPO) increased 9% to $5.89 billion. Current RPO increased 12% to $3.92 billion.

Cash flow from operating activities was $494 million, down $229 million from the year-ago quarter. Free cash flow was $487 million, down $227 million from the year-ago quarter.

Forecasts for fiscal year 2025

Autodesk is forecasting fiscal 2025 revenue of $5.99 billion to $6.09 billion, indicating 9% to 11% growth. Billings are estimated at $5.81 billion to $5.96 billion, suggesting 12% to 15% year-over-year growth.

Non-GAAP earnings per share are expected to be in the range of $7.99 to $8.21. ADSK expects non-GAAP operating margin to be in the range of 35% to 36% year over year.

Free cash flow is expected to be between $1.43 billion and $1.5 billion.

For the second quarter of fiscal 2025, Autodesk expects revenue to be between $1.475 billion and $1.49 billion. Non-GAAP earnings are expected to be between $1.98 and $2.04 per share.

How have estimates changed since then?

It turns out that over the past month, estimates have shown an upward trend.

VGM Results

Autodesk currently has a strong Growth Score of A, though it lags behind in terms of its Momentum Score with a grade of C. Similarly, the company has a grade of D for Value, placing it in the bottom 40% for this investment strategy.

Overall, the stock has a Composite VGM Score of B. If you’re not focused on a single strategy, this rating should interest you.

Perspectives

The stock’s estimates are trending higher, and the scale of these revisions looks promising. Interestingly, Autodesk has a Zacks Rank #3 (Hold). We expect the stock to have a similar return in the next few months.

Industry Player Performance

Autodesk is a part of the Zacks Computer – Software industry. Over the past month, Salesforce.com (CRM), a stock in the same industry, has gained 7.1%. The company announced its results for the quarter ended April 2024 over a month ago.

Salesforce.com reported revenue of $9.13 billion in the last reported quarter, a year-over-year change of 10.7%. Earnings per share of $2.44 for the same period are up from $1.69 a year earlier.

Salesforce.com is expected to report earnings of $2.36 per share for the current quarter, which would represent a year-over-year change of +11.3%. Over the past 30 days, the Zacks Consensus Estimate has changed by +0%.

Salesforce.com has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.

Want the latest recommendations from Zacks Investment Research? Today you can download the 7 best stocks for the next 30 days. Click to get this free report

Autodesk, Inc. (ADSK): Free Stock Analysis Report

Salesforce Inc. (CRM): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research