Autodesk Increases Profitability in Third Quarter Fiscal 2010

SAN RAFAEL, Calif. — (BUSINESS WIRE) — November 17, 2009Autodesk, Inc. (NASDAQ: ADSK) today reported financial results for the third quarter of fiscal 2010.

  • Revenue was $417 million, flat sequentially, and a decrease of 31 percent compared to the third quarter of fiscal 2009.
  • GAAP diluted earnings per share were $0.13, compared to GAAP diluted earnings per share of $0.05 in the second quarter of fiscal 2010, and $0.45 in the third quarter of fiscal 2009.
  • Non-GAAP diluted earnings per share were $0.27, compared to non-GAAP diluted earnings per share of $0.24 in the second quarter of fiscal 2010, and non-GAAP diluted earnings per share of $0.56 in the third quarter of fiscal 2009. A reconciliation of the GAAP and non-GAAP results is provided in the accompanying tables.

“Our business appears to be increasingly stable,” said Carl Bass, Autodesk president and CEO. “We posted sequential increases in a number of important metrics including revenue from commercial new seat licenses, revenue from our Americas and EMEA geographies, revenue from our 2D horizontal solutions, and revenue from our 3D animation solutions. These results reflect the business environment that began stabilizing in the second quarter of this fiscal year.

“In addition, our efforts to reduce operating expenses resulted in a sequential increase in profitability for the second consecutive quarter,” continued Bass. “While there are several data points in our business that are encouraging and represent positive indicators for our business, the health of the global economic environment remains mixed and the continued job losses in our core markets represent ongoing challenges to a swift recovery in our business.”

Operational Overview

Revenue in the Americas increased 2 percent sequentially to $164 million and decreased 25 percent compared to the third quarter of fiscal 2009. EMEA revenue increased 1 percent sequentially as reported, to $159 million, and declined 3 percent on a constant currency basis. EMEA revenue decreased 38 percent compared to the third quarter of fiscal 2009 as reported, and 35 percent on a constant currency basis. Revenue in Asia Pacific was $94 million, a decrease of 4 percent sequentially as reported, and 7 percent on a constant currency basis. Revenue in Asia Pacific decreased 29 percent compared to the third quarter of fiscal 2009 as reported, and 33 percent on a constant currency basis.

Revenue from emerging economies was $62 million, a decline of 2 percent sequentially as reported and 3 percent on a constant currency basis. Revenue from emerging economies decreased 46 percent compared to the third quarter of fiscal 2009 as reported and 45 percent on a constant currency basis. Revenue from emerging economies represented 15 percent of total revenue in the quarter.

Combined revenue from Autodesk's model-based 3D design solutions was $122 million, flat sequentially and a decline of 25 percent compared to the third quarter of fiscal 2009. Revenue from 2D horizontal and vertical products was $189 million, a slight decrease sequentially and a decline of 37 percent compared to the third quarter of fiscal 2009. Combined revenue from our AutoCAD and AutoCAD LT products increased 2 percent sequentially and decreased 39 percent compared to the third quarter last year.

“With more than $1 billion in cash and investments, no debt, and positive cash flows, Autodesk remains in solid financial condition,” continued Bass. “We are on track to deliver more than $300 million in pre-tax cost savings in fiscal 2010 compared to fiscal 2009. We will continue to strive to increase our efficiencies and profitability while making essential investments for the future.”

During the current quarter, Autodesk determined that the way in which its third-party software application accounted for estimated forfeitures in stock-based compensation calculations was incorrect. As a result, fiscal third quarter 2010 GAAP results include a one-time adjustment to increase stock-based compensation expense by $7.9 million net of tax, or approximately $0.03 per diluted share. This is a cumulative adjustment from prior periods. For the nine month period ended October 31, 2009 the cumulative adjustment from prior periods was $6.8 million net of tax or $0.03 per diluted share.

Business Outlook

The following are forward-looking statements that are based on current expectations that involve risks and uncertainties, some of which are set forth below.

Fourth Quarter Fiscal 2010

For the fourth quarter, Autodesk expects revenue to be in the range of $420 million to $440 million. GAAP earnings per diluted share are expected to be in the range of $0.07 and $0.12. Non-GAAP earnings per diluted share are expected to be in the range of $0.19 and $0.24, excluding $0.06 related to stock-based compensation expense and $0.06 for amortization of acquisition related intangibles.

Full Year Fiscal 2010

Net revenue for fiscal 2010 is expected to be in the range of $1.68 billion and $1.7 billion. GAAP earnings per diluted share are expected to be in the range of $0.11 and $0.16. Non-GAAP earnings per diluted share are expected to be in the range of $0.88 and $0.93 and exclude $0.29 related to stock-based compensation expense, $0.18 for the amortization of acquisition related intangibles, $0.15 for restructuring charges, $0.06 related to goodwill impairment, and $0.09 related to the establishment of a valuation allowance on deferred tax assets.

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