Annualized Recurring Revenue (ARR) Growth Acceleration Highlights Autodesk's Third Quarter Results

SAN RAFAEL, Calif., Nov. 20, 2018 — (PRNewswire) —   Autodesk, Inc. (NASDAQ: ADSK) today reported financial results for the third quarter of fiscal 2019 and announced the signing of a definitive agreement to acquire PlanGrid, a leading provider of construction productivity software.

(PRNewsfoto/Autodesk, Inc.)

Third Quarter Fiscal 2019

  • Total ARR was $2.53 billion, an increase of 33 percent compared to the third quarter last year as reported, and 31 percent on a constant currency basis. Under the prior revenue accounting standard, ASC 605, total ARR was $2.49 billion, an increase of 31 percent compared to the third quarter last year.
  • Subscription plan ARR was $1.93 billion, an increase of 108 percent compared to the third quarter last year as reported, and 105 percent on a constant currency basis. Under ASC 605, subscription plan ARR was $1.89 billion, an increase of 105 percent compared to the third quarter last year.
  • Total subscriptions increased 143,000 from the second quarter of fiscal 2019 to 4.08 million at the end of the third quarter.
  • Subscription plan subscriptions increased 252,000 from the second quarter of fiscal 2019 to 3.12 million at the end of the third quarter. Subscription plan subscriptions benefited from 71,000 maintenance subscribers that converted to product subscription under the maintenance-to-subscription (M2S) program.
  • Deferred revenue was $1.79 billion, an increase of 2 percent compared to the third quarter last year. Total deferred revenue (deferred revenue plus unbilled deferred revenue) was $2.24 billion, an increase of approximately 17 percent compared to the third quarter last year. Under ASC 605, total deferred revenue was $2.32 billion, an increase of approximately 21 percent compared to the third quarter last year.
  • Revenue was $661 million, an increase of 28 percent compared to the third quarter last year as reported, and 27 percent on a constant currency basis. Under ASC 605, revenue was $651 million, an increase of 26 percent compared to the third quarter last year.
  • Billings were $654 million, an increase of 30 percent compared to the third quarter last year. Under ASC 605, billings were $661 million, an increase of 31 percent compared to the third quarter last year.
  • Total GAAP spend (cost of revenue plus operating expenses) was $646 million, an increase of 5 percent compared to the third quarter last year as reported, and on a constant currency basis. Absent ASC 340, total GAAP spend was $640 million, an increase of 4 percent compared to the third quarter last year.
  • Total non-GAAP spend was $569 million, an increase of 5 percent compared to the third quarter last year, as reported, and on a constant currency basis. A reconciliation of GAAP to non-GAAP results is provided in the accompanying tables. Absent ASC 340, total non-GAAP spend was $562 million, an increase of 4 percent compared to the third quarter last year.
  • GAAP diluted net loss per share was $(0.11), compared to GAAP diluted net loss per share of $(0.55) in the third quarter last year. Under ASC 605 and absent ASC 340, GAAP diluted net loss per share was $(0.08).
  • Non-GAAP diluted net income per share was $0.29, compared to non-GAAP diluted net loss per share of $(0.12) in the third quarter last year. Under ASC 605 and absent ASC 340, non-GAAP diluted net income per share was $0.28.

Results include an immaterial contribution from the recent acquisition of Assemble Systems, Inc.

For definitions, please view the Glossary of Terms later in this document.

"We achieved strong third quarter results across the board, punctuated by accelerating ARR growth," said Andrew Anagnost, Autodesk president and CEO. "Demand strength was balanced across all major geographies and product families, which demonstrates how our customers have embraced the value of our subscription and cloud offerings.  We're also excited about our agreement to acquire PlanGrid and the huge opportunity it presents in construction."

"Subscription plan now represents over 75 percent of our ARR base, driven by continued demand for our offerings and a steady stream of existing maintenance customers migrating to product subscription," said Scott Herren, Autodesk CFO. "We also achieved another major milestone in our business model transition by ending the quarter with over 4 million active subscriptions.  We're pleased with our consistent performance and are confident in our ability to drive strong operating results as we close out the fiscal year, which leaves us well-positioned to achieve our fiscal 2020 goals."

Third Quarter Operational Overview

Total ARR was $2.53 billion, an increase of 33 percent compared to the third quarter last year as reported, and 31 percent on a constant currency basis. Subscription plan ARR was $1.93 billion, an increase of 108 percent compared to the third quarter last year as reported, and 105 percent on a constant currency basis.  Subscription plan ARR includes $415 million related to the M2S program.  Maintenance plan ARR was $601 million, a decrease of 39 percent compared to the third quarter last year as reported, and on a constant currency basis.

Total subscriptions were 4.08 million, a net increase of 143,000 from the second quarter of fiscal 2019. Subscription plan subscriptions (product, enterprise business agreements, and cloud) were 3.12 million, a net increase of 252,000 from the second quarter of fiscal 2019, led by new product subscriptions and 71,000 product subscriptions that migrated from maintenance plan subscriptions under the M2S program.  The maintenance migrations reflect a conversion rate that was consistent with the prior quarter at approximately one-third converted.  Maintenance plan subscriptions were 962,000, a net decrease of 109,000 from the second quarter of fiscal 2019, which includes the impact from the M2S program.

Total recurring revenue in the third quarter was 96 percent of total revenue, compared to 92 percent of total revenue in the third quarter last year.

Revenue in the Americas was $269 million , an increase of 25 percent compared to the third quarter last year as reported, and on a constant currency basis.  Under ASC 605, revenue in the Americas was $263 million , an increase of 23 percent compared to the third quarter last year.  Revenue in EMEA was $267 million , an increase of 30 percent compared to the third quarter last year as reported, and 26 percent on a constant currency basis.  Under ASC 605, revenue in EMEA was $263 million , an increase of 28 percent compared to the third quarter last year.  Revenue in APAC was $126 million , an increase of 32 percent compared to the third quarter last year as reported and on a constant currency basis. Under ASC 605, revenue in APAC was $125 million , an increase of 31 percent compared to the third quarter last year.

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