Autodesk Reports Strong First Quarter Results
Delivers Double-digit Billings Growth
Raises Billings and Revenue Outlook for Fiscal Year 2015
First Quarter Fiscal 2015
- Total billings increased 10 percent, compared to the first quarter of fiscal 2014.
- Total subscriptions increased by over 89,000, compared to the fourth quarter of fiscal 2014.
-
Revenue was
$593 million , an increase of 4 percent, compared to the first quarter of fiscal 2014 as reported, and increased 5 percent on a constant currency basis. Revenue contribution from the recent acquisition of Delcam was immaterial to first quarter results. - GAAP operating margin was 7 percent, compared to 14 percent in the first quarter of fiscal 2014.
- Non-GAAP operating margin was 17 percent, compared with 24 percent in the first quarter of fiscal 2014. A reconciliation of GAAP to non-GAAP results is provided in the accompanying tables.
-
GAAP diluted earnings per share were
$0.12 , compared to$0.24 in the first quarter of fiscal 2014. -
Non-GAAP diluted earnings per share were
$0.32 , compared to$0.42 in the first quarter of fiscal 2014. -
Deferred revenue increased 13 percent to a record
$964 million , compared to the first quarter of fiscal 2014. -
Cash flow from operating activities was
$219 million , compared to$224 million in the first quarter of fiscal 2014.
"Our year is off to an encouraging start. We had solid first quarter
results and made meaningful progress on our business model transition
with the addition of over 89,000 subscriptions,” said
“While we experienced strong growth in our cloud and desktop
subscriptions (rental)," Bass continued, "strong growth in maintenance
subscriptions was the primary driver behind the increase in total
subscriptions, as expected. Late in the first quarter we launched
AutoCAD LT as a desktop subscription on a global basis and were pleased
with the initial response. We look forward to building on these early
successes and transitioning
First Quarter Operational Overview
Revenue in the
Revenue from the Platform Solutions and Emerging Business (PSEB) segment
was flat at
Revenue from Flagship products decreased 4 percent to
"We are pleased with the first quarter results," said
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.
Second Quarter Fiscal 2015
| Q2 FY15 Guidance Metrics | Q2 FY15 (ending July 31, 2014) | |||
| Revenue (in millions) | $595-$610 | |||
| EPS GAAP | $0.05-$0.10 | |||
| EPS Non-GAAP (1) | $0.25-$0.30 |
_______________
(1) Non-GAAP earnings per diluted share exclude
Full Year Fiscal 2015
| FY15 Guidance Metrics | FY15 (ending January 31, 2015) | |||
| Billings growth | 7-9% | |||
| Revenue growth | 4-6% | |||
| GAAP operating margin | 3-5% | |||
| Non-GAAP operating margin | 14-16% | |||
| Net subscription additions | 150,000-200,000 |
The second quarter and full year fiscal 2015 outlook assume projected
annual effective tax rates of 25 percent and 25.5 percent for GAAP and
non-GAAP results, respectively. These rates do not include one-time
discrete items or the federal R&D tax credit that expired on
Earnings Conference Call and Webcast
NOTE: The prepared remarks will not be read on the conference call. The conference call will include only brief remarks followed by questions and answers.
A replay of the broadcast will be available at
Safe Harbor Statement
This press release contains forward-looking statements that involve risks and uncertainties, including statements in the paragraphs under “Business Outlook” above, statements regarding the impacts of our business model transition, and other statements regarding our strategies, market and products 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: general market, political, economic and business conditions; failure to maintain our revenue growth and profitability; failure to successfully manage transitions to new business models and markets, including the introduction of additional ratable revenue streams and our continuing efforts to attract customers to our cloud-based offerings and expenses related to the transition of our business model; failure to maintain cost reductions and productivity increases or otherwise control our expenses; 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; difficulty in predicting revenue from new businesses and the potential impact on our financial results from changes in our business models; 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; fluctuation in foreign currency exchange rates; the success of our foreign currency hedging program; failure to achieve sufficient sell-through in our channels for new or existing products; pricing pressure; unexpected fluctuations in our tax rate; 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.
Further information on potential factors that could affect the financial
results of
About
© 2014
| Autodesk, Inc. | ||||||||
| Condensed Consolidated Statements of Operations | ||||||||
| (In millions, except per share data) | ||||||||
| Three Months Ended April 30, | ||||||||
| 2014 | 2013 | |||||||
| (Unaudited) | ||||||||
| Net revenue: | ||||||||
| License and other | $ | 316.2 | $ | 323.5 | ||||
| Subscription | 276.3 | 246.9 | ||||||
| Total net revenue | 592.5 | 570.4 | ||||||
| Cost of revenue: | ||||||||
| Cost of license and other revenue | 49.3 | 44.4 | ||||||
| Cost of subscription revenue | 29.4 | 23.1 | ||||||
| Total cost of revenue | 78.7 | 67.5 | ||||||
| Gross profit | 513.8 | 502.9 | ||||||
| Operating expenses: | ||||||||
| Marketing and sales | 225.4 | 208.8 | ||||||
| Research and development | 170.5 | 150.8 | ||||||
| General and administrative | 73.4 | 61.5 | ||||||
| Restructuring charges, net | 2.3 | 0.4 | ||||||
| Total operating expenses | 471.6 | 421.5 | ||||||
| Income from operations | 42.2 | 81.4 | ||||||
| Interest and other (expense) income, net | (6.6 | ) | (8.8 | ) | ||||
| Income before income taxes | 35.6 | 72.6 | ||||||
| Provision for income taxes | (7.3 | ) | (17.0 | ) | ||||
| Net income | $ | 28.3 | $ | 55.6 | ||||
| Basic net income per share | $ | 0.12 | $ | 0.25 | ||||
| Diluted net income per share | $ | 0.12 | $ | 0.24 | ||||
| Weighted average shares used in computing basic net income per share | 227.0 | 223.8 | ||||||
| Weighted average shares used in computing diluted net income per share | 231.6 | 229.3 | ||||||
| Autodesk, Inc. | ||||||||
| Condensed Consolidated Balance Sheets | ||||||||
| (In millions) | ||||||||
| April 30, 2014 | January 31, 2014 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 1,609.6 | $ | 1,853.0 | ||||
| Marketable securities | 510.1 | 414.1 | ||||||
| Accounts receivable, net | 323.3 | 423.7 | ||||||
| Deferred income taxes | 54.5 | 56.8 | ||||||
| Prepaid expenses and other current assets | 92.8 | 87.4 | ||||||
| Total current assets | 2,590.3 | 2,835.0 | ||||||
| Marketable securities | 268.2 | 277.3 | ||||||
| Computer equipment, software, furniture and leasehold improvements, net | 142.1 | 130.3 | ||||||
| Purchased technologies, net | 89.4 | 63.1 | ||||||
| Goodwill | 1,263.0 | 1,009.9 | ||||||
| Deferred income taxes, net | 93.6 | 131.1 | ||||||
| Other assets | 202.0 | 148.3 | ||||||
| $ | 4,648.6 | $ | 4,595.0 | |||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 90.3 | $ | 84.5 | ||||
| Accrued compensation | 156.6 | 181.2 | ||||||
| Accrued income taxes | 36.4 | 24.3 | ||||||
| Deferred revenue | 749.7 | 696.2 | ||||||
| Other accrued liabilities | 85.7 | 85.3 | ||||||
| Total current liabilities | 1,118.7 | 1,071.5 | ||||||
| Deferred revenue | 213.8 | 204.4 | ||||||
| Long term income taxes payable | 170.5 | 211.8 | ||||||
| Long term notes payable, net of discount | 746.6 | 746.4 | ||||||
| Other liabilities | 110.3 | 99.4 | ||||||
| Stockholders’ equity: | ||||||||
| Preferred stock | — | — | ||||||
| Common stock and additional paid-in capital | 1,683.1 | 1,637.3 | ||||||
| Accumulated other comprehensive income (loss) | 5.6 | (0.6 | ) | |||||
| Retained earnings | 600.0 | 624.8 | ||||||
| Total stockholders’ equity | 2,288.7 | 2,261.5 | ||||||
| $ | 4,648.6 | $ | 4,595.0 | |||||
| Autodesk, Inc. | ||||||||
| Condensed Consolidated Statements of Cash Flows | ||||||||
| (In millions) | ||||||||
| Three Months Ended April 30, | ||||||||
| 2014 | 2013 | |||||||
| (Unaudited) | ||||||||
| Operating activities: | ||||||||
| Net income | $ | 28.3 | $ | 55.6 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation, amortization and accretion | 36.1 | 33.1 | ||||||
| Stock-based compensation expense | 33.6 | 33.5 | ||||||
| Excess tax benefits from stock-based compensation | — | (9.0 | ) | |||||
| Restructuring charges, net | 2.3 | 0.4 | ||||||
| Other operating activities | 8.3 | 6.7 | ||||||
| Changes in operating assets and liabilities, net of business combinations | 110.1 | 103.8 | ||||||
| Net cash provided by operating activities | 218.7 | 224.1 | ||||||
| Investing activities: | ||||||||
| Purchases of marketable securities | (306.4 | ) | (264.6 | ) | ||||
| Sales of marketable securities | 59.2 | 128.1 | ||||||
| Maturities of marketable securities | 163.1 | 68.9 | ||||||
| Capital expenditures | (14.5 | ) | (25.8 | ) | ||||
| Acquisitions, net of cash acquired | (322.3 | ) | (34.7 | ) | ||||
| Other investing activities | (0.8 | ) | (3.6 | ) | ||||
| Net cash (used in) investing activities | (421.7 | ) | (131.7 | ) | ||||
| Financing activities: | ||||||||
| Proceeds from issuance of common stock, net of issuance costs | 62.2 | 70.0 | ||||||
| Repurchase and retirement of common stock | (102.5 | ) | (129.2 | ) | ||||
| Draws on line of credit | — | — | ||||||
| Excess tax benefits from stock-based compensation | — | 9.0 | ||||||
| Net cash (used in) financing activities | (40.3 | ) | (50.2 | ) | ||||
| Effect of exchange rate changes on cash and cash equivalents | (0.1 | ) | 1.4 | |||||
| Net (decrease) increase in cash and cash equivalents | (243.4 | ) | 43.6 | |||||
| Cash and cash equivalents at beginning of fiscal year | 1,853.0 | 1,612.2 | ||||||
| Cash and cash equivalents at end of period | $ | 1,609.6 | $ | 1,655.8 | ||||
| Autodesk, Inc. | ||||||||
| Reconciliation of GAAP financial measures to non-GAAP financial measures | ||||||||
| (In millions, except per share data) | ||||||||
| To supplement our consolidated financial statements presented on a GAAP basis, Autodesk provides investors with certain non-GAAP measures including non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating margin, non-GAAP net income, non-GAAP net income per share and billings. Excluding billings, these non-GAAP financial measures are adjusted to exclude certain costs, expenses, gains and losses, including stock-based compensation expense, restructuring charges, amortization of purchased intangibles, gain and loss on strategic investments, and related income tax expenses. In the case of billings, we reconcile to revenue by adjusting for the change in deferred revenue from the beginning to the end of the period less any deferred revenue balances acquired from business combination(s) during the period and other discounts. See our reconciliation of GAAP financial measures to non-GAAP financial measures herein. We believe these exclusions are appropriate to enhance an overall understanding of our past financial performance and also our prospects for the future, as well as to facilitate comparisons with our historical operating results. These adjustments to our GAAP results are made with the intent of providing both management and investors a more complete understanding of Autodesk's underlying operational results and trends and our marketplace performance. For example, non-GAAP results are an indication of our baseline performance before gains, losses or other charges that are considered by management to be outside our core operating results. In addition, these non-GAAP financial measures are among the primary indicators management uses as a basis for our planning and forecasting of future periods. | ||||||||
| There are limitations in using non-GAAP financial measures because the non-GAAP financial measures are not prepared in accordance with generally accepted accounting principles 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. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the directly comparable financial measures prepared in accordance with GAAP in the United States. Investors should review the reconciliation of the non-GAAP financial measures to their most directly comparable GAAP financial measures as provided in the tables accompanying this press release. | ||||||||
| The following table shows Autodesk's non-GAAP results reconciled to GAAP results included in this release. | ||||||||
| Three Months Ended | ||||||||
| April 30, | ||||||||
| 2014 | 2013 | |||||||
| (Unaudited) | ||||||||
| GAAP cost of license and other revenue | $ | 49.3 | $ | 44.4 | ||||
| Stock-based compensation expense | (0.9 | ) | (0.9 | ) | ||||
| Amortization of developed technology | (11.8 | ) | (9.8 | ) | ||||
| Non-GAAP cost of license and other revenue | $ | 36.6 | $ | 33.7 | ||||
| GAAP cost of subscription revenue | $ | 29.4 | $ | 23.1 | ||||
| Stock-based compensation expense | (0.8 | ) | (0.6 | ) | ||||
| Amortization of developed technology | (1.2 | ) | (1.0 | ) | ||||
| Non-GAAP cost of subscription revenue | $ | 27.4 | $ | 21.5 | ||||
| GAAP gross profit | $ | 513.8 | $ | 502.9 | ||||
| Stock-based compensation expense | 1.7 | 1.5 | ||||||
| Amortization of developed technology | 13.0 | 10.8 | ||||||
| Non-GAAP gross profit | $ | 528.5 | $ | 515.2 | ||||
| GAAP marketing and sales | $ | 225.4 | $ | 208.8 | ||||
| Stock-based compensation expense | (14.0 | ) | (14.1 | ) | ||||
| Non-GAAP marketing and sales | $ | 211.4 | $ | 194.7 | ||||
| GAAP research and development | $ | 170.5 | $ | 150.8 | ||||
| Stock-based compensation expense | (10.9 | ) | (10.9 | ) | ||||
| Non-GAAP research and development | $ | 159.6 | $ | 139.9 | ||||
| GAAP general and administrative | $ | 73.4 | $ | 61.5 | ||||
| Stock-based compensation expense | (7.0 | ) | (7.0 | ) | ||||
| Amortization of customer relationships and trade names | (10.9 | ) | (10.8 | ) | ||||
| Non-GAAP general and administrative | $ | 55.5 | $ | 43.7 | ||||
| GAAP restructuring charges (benefits), net | $ | 2.3 | $ | 0.4 | ||||
| Restructuring (charges) benefits | (2.3 | ) | (0.4 | ) | ||||
| Non-GAAP restructuring charges (benefits), net | $ | — | $ | — | ||||
| GAAP operating expenses | $ | 471.6 | $ | 421.5 | ||||
| Stock-based compensation expense | (31.9 | ) | (32.0 | ) | ||||
| Amortization of customer relationships and trade names | (10.9 | ) | (10.8 | ) | ||||
| Restructuring (charges) benefits | (2.3 | ) | (0.4 | ) | ||||
| Non-GAAP operating expenses | $ | 426.5 | $ | 378.3 | ||||
| GAAP income from operations | $ | 42.2 | $ | 81.4 | ||||
| Stock-based compensation expense | 33.6 | 33.5 | ||||||
| Amortization of developed technology | 13.0 | 10.8 | ||||||
| Amortization of customer relationships and trade names | 10.9 | 10.8 | ||||||
| Restructuring charges (benefits) | 2.3 | 0.4 | ||||||
| Non-GAAP income from operations | $ | 102.0 | $ | 136.9 | ||||
| GAAP interest and other income, net | $ | (6.6 | ) | $ | (8.8 | ) | ||
| Loss (gain) on strategic investments | 3.6 | 1.1 | ||||||
| Non-GAAP interest and other income, net | $ | (3.0 | ) | $ | (7.7 | ) | ||
| GAAP provision for income taxes | $ | (7.3 | ) | $ | (17.0 | ) | ||
| Discrete GAAP tax provision items | (2.1 | ) | (0.5 | ) | ||||
| Income tax effect of non-GAAP adjustments | (15.8 | ) | (15.4 | ) | ||||
| Non-GAAP provision for income tax | $ | (25.2 | ) | $ | (32.9 | ) | ||
| GAAP net income | $ | 28.3 | $ | 55.6 | ||||
| Stock-based compensation expense | 33.6 | 33.5 | ||||||
| Amortization of developed technology | 13.0 | 10.8 | ||||||
| Amortization of customer relationships and trade names | 10.9 | 10.8 | ||||||
| Restructuring charges (benefits) | 2.3 | 0.4 | ||||||
| Loss (gain) on strategic investments | 3.6 | 1.1 | ||||||
| Discrete GAAP tax provision items | (2.1 | ) | (0.5 | ) | ||||
| Income tax effect of non-GAAP adjustments | (15.8 | ) | (15.4 | ) | ||||
| Non-GAAP net income | $ | 73.8 | $ | 96.3 | ||||
| GAAP diluted net income per share | $ | 0.12 | $ | 0.24 | ||||
| Stock-based compensation expense | 0.14 | 0.15 | ||||||
| Amortization of developed technology | 0.06 | 0.05 | ||||||
| Amortization of customer relationships and trade names | 0.05 | 0.05 | ||||||
| Restructuring charges (benefits) | 0.01 | — | ||||||
| Loss (gain) on strategic investments | 0.02 | — | ||||||
| Discrete GAAP tax provision items | (0.01 | ) | — | |||||
| Income tax effect of non-GAAP adjustments | (0.07 | ) | (0.07 | ) | ||||
| Non-GAAP diluted net income per share | $ | 0.32 | $ | 0.42 | ||||
|
Autodesk, Inc. |
|||||||||||||||
| Other Supplemental Financial Information (a) | |||||||||||||||
| Fiscal Year 2015 | QTR 1 | QTR 2 | QTR 3 | QTR 4 | YTD 2015 | ||||||||||
| Financial Statistics ($ in millions, except per share data): | |||||||||||||||
| Total Net Revenue: | $ | 593 | $ | 593 | |||||||||||
| License and Other Revenue | $ | 316 | $ | 316 | |||||||||||
| Subscription Revenue | $ | 276 | $ | 276 | |||||||||||
| GAAP Gross Margin | 87 | % | 87 | % | |||||||||||
| Non-GAAP Gross Margin (1)(2) | 89 | % | 89 | % | |||||||||||
| GAAP Operating Expenses | $ | 472 | $ | 472 | |||||||||||
| GAAP Operating Margin | 7 | % | 7 | % | |||||||||||
| GAAP Net Income | $ | 28 | $ | 28 | |||||||||||
| GAAP Diluted Net Income Per Share (b) | $ | 0.12 | $ | 0.12 | |||||||||||
| Non-GAAP Operating Expenses (1)(3) | $ | 427 | $ | 427 | |||||||||||
| Non-GAAP Operating Margin (1)(4) | 17 | % | 17 | % | |||||||||||
| Non-GAAP Net Income (1)(5) | $ | 74 | $ | 74 | |||||||||||
| Non-GAAP Diluted Net Income Per Share (1)(6)(b) | $ | 0.32 | $ | 0.32 | |||||||||||
| Total Cash and Marketable Securities | $ | 2,388 | $ | 2,388 | |||||||||||
| Days Sales Outstanding | 50 | 50 | |||||||||||||
| Capital Expenditures | $ | 15 | $ | 15 | |||||||||||
| Cash Flow from Operating Activities | $ | 219 | $ | 219 | |||||||||||
| GAAP Depreciation, Amortization and Accretion | $ | 36 | $ | 36 | |||||||||||
| Deferred Subscription Revenue Balance | $ | 848 | $ | 848 | |||||||||||
| Revenue by Geography: | |||||||||||||||
| Americas | $ | 206 | $ | 206 | |||||||||||
| Europe, Middle East and Africa | $ | 226 | $ | 226 | |||||||||||
| Asia Pacific | $ | 161 | $ | 161 | |||||||||||
| % of Total Rev from Emerging Economies | 13 | % | 13 | % | |||||||||||
| Revenue by Segment: | |||||||||||||||
| Platform Solutions and Emerging Business | $ | 212 | $ | 212 | |||||||||||
| Architecture, Engineering and Construction | $ | 196 | $ | 196 | |||||||||||
| Manufacturing | $ | 147 | $ | 147 | |||||||||||
| Media and Entertainment | $ | 38 | $ | 38 | |||||||||||
| Other Revenue Statistics: | |||||||||||||||
| % of Total Rev from Flagship | 50 | % | 50 | % | |||||||||||
| % of Total Rev from Suites | 35 | % | 35 | % | |||||||||||
| % of Total Rev from New and Adjacent | 14 | % | 14 | % | |||||||||||
| % of Total Rev from AutoCAD and AutoCAD LT | 32 | % | 32 | % | |||||||||||
| Favorable (Unfavorable) Impact of U.S. Dollar Translation Relative to | |||||||||||||||
| Foreign Currencies Compared to Comparable Prior Year Period: | |||||||||||||||
| FX Impact on Total Net Revenue | $ | (9 | ) | $ | (9 | ) | |||||||||
| FX Impact on Cost of Revenue and Total Operating Expenses | $ | 2 | $ | 2 | |||||||||||
| FX Impact on Operating Income | $ | (7 | ) | $ | (7 | ) | |||||||||
| Gross Margin by Segment: | |||||||||||||||
| Platform Solutions and Emerging Business | $ | 191 | $ | 191 | |||||||||||
| Architecture, Engineering and Construction | $ | 176 | $ | 176 | |||||||||||
| Manufacturing | $ | 133 | $ | 133 | |||||||||||
| Media and Entertainment | $ | 29 | $ | 29 | |||||||||||
| Unallocated amounts | $ | (15 | ) | $ | (15 | ) | |||||||||
| Common Stock Statistics (in millions): | |||||||||||||||
| Common Shares Outstanding | 227.5 | 227.5 | |||||||||||||
| Fully Diluted Weighted Average Shares Outstanding | 231.6 | 231.6 | |||||||||||||
| Shares Repurchased | 2.0 | 2.0 | |||||||||||||
| Subscriptions (in millions): | |||||||||||||||
| Total Subscriptions (c) | 1.94 | 1.94 | |||||||||||||
| (a) Totals may not agree with the sum of the components due to rounding. | |||||||||||||||
| (b) Earnings per share were computed independently for each of the periods presented; therefore the sum of the earnings per share amounts for the quarters may not equal the total for the year. | |||||||||||||||
| (c) Total Subscriptions consists of subscriptions from our maintenance, desktop, cloud service and enterprise license offerings that are active as of the quarter end date. For certain cloud based and enterprise license offerings, subscriptions represent the monthly average activity within the last three months of the quarter end date. Total subscriptions do not include data from education offerings, consumer product offerings, certain Creative Finishing product offerings, Autodesk Buzzsaw, Autodesk Constructware and Delcam products. Subscriptions acquired with the acquisition of a business are captured once the data conforms to our subscription count methodology and when added, may cause variability in the quarterly comparisons of this calculation. | |||||||||||||||
| (1) To supplement our consolidated financial statements presented on a GAAP basis, Autodesk provides investors with certain non-GAAP measures including non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating margin, non-GAAP net income, non-GAAP net income per share and billings. Excluding billings, these non-GAAP financial measures are adjusted to exclude certain costs, expenses, gains and losses, including stock-based compensation expense, restructuring charges, amortization of purchased intangibles, gain and loss on strategic investments, and related income tax expenses. In the case of billings, we reconcile to revenue by adjusting for the change in deferred revenue from the beginning to the end of the period less any deferred revenue balances acquired from business combination(s) during the period and other discounts. See our reconciliation of GAAP financial measures to non-GAAP financial measures herein. We believe these exclusions are appropriate to enhance an overall understanding of our past financial performance and also our prospects for the future, as well as to facilitate comparisons with our historical operating results. These adjustments to our GAAP results are made with the intent of providing both management and investors a more complete understanding of Autodesk's underlying operational results and trends and our marketplace performance. For example, non-GAAP results are an indication of our baseline performance before gains, losses or other charges that are considered by management to be outside our core operating results. In addition, these non-GAAP financial measures are among the primary indicators management uses as a basis for our planning and forecasting of future periods. There are limitations in using non-GAAP financial measures because the non-GAAP financial measures are not prepared in accordance with generally accepted accounting principles 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. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the directly comparable financial measures prepared in accordance with GAAP in the United States. Investors should review the reconciliation of the non-GAAP financial measures to their most directly comparable GAAP financial measures as provided in the tables accompanying Autodesk's press release. | |||||||||||||||
| QTR 1 | QTR 2 | QTR 3 | QTR 4 | YTD 2015 | |||||||||||
| (2) GAAP Gross Margin | 87 | % | 87 | % | |||||||||||
| Stock-based compensation expense | — | % | — | % | |||||||||||
| Amortization of developed technology | 2 | % | 2 | % | |||||||||||
| Non-GAAP Gross Margin | 89 | % | 89 | % | |||||||||||
| (3) GAAP Operating Expenses | $ | 472 | $ | 472 | |||||||||||
| Stock-based compensation expense | (32 | ) | (32 | ) | |||||||||||
| Amortization of customer relationships and trade names | (11 | ) | (11 | ) | |||||||||||
| Restructuring (charges) benefits, net | (2 | ) | (2 | ) | |||||||||||
| Non-GAAP Operating Expenses | $ | 427 | $ | 427 | |||||||||||
| (4) GAAP Operating Margin | 7 | % | 7 | % | |||||||||||
| Stock-based compensation expense | 6 | % | 6 | % | |||||||||||
| Amortization of developed technology | 2 | % | 2 | % | |||||||||||
| Amortization of customer relationships and trade names | 2 | % | 2 | % | |||||||||||
| Restructuring charges (benefits), net | — | % | — | % | |||||||||||
| Non-GAAP Operating Margin | 17 | % | 17 | % | |||||||||||
| (5) GAAP Net Income | $ | 28 | $ | 28 | |||||||||||
| Stock-based compensation expense | 34 | 34 | |||||||||||||
| Amortization of developed technology | 13 | 13 | |||||||||||||
| Amortization of customer relationships and trade names | 11 | 11 | |||||||||||||
| Restructuring charges (benefits), net | 2 | 2 | |||||||||||||
| Loss (gain) on strategic investments | 4 | 4 | |||||||||||||
| Discrete GAAP tax provision items | (2 | ) | (2 | ) | |||||||||||
| Income tax effect of non-GAAP adjustments | (16 | ) | (16 | ) | |||||||||||
| Non-GAAP Net Income | $ | 74 | $ | 74 | |||||||||||
| (6) GAAP Diluted Net Income Per Share | $ | 0.12 | $ | 0.12 | |||||||||||
| Stock-based compensation expense | 0.14 | 0.14 | |||||||||||||
| Amortization of developed technology | 0.06 | 0.06 | |||||||||||||
| Amortization of customer relationships and trade names | 0.05 | 0.05 | |||||||||||||
| Restructuring charges (benefits), net | 0.01 | 0.01 | |||||||||||||
| Loss (gain) on strategic investments | 0.02 | 0.02 | |||||||||||||
| Discrete GAAP tax provision items | (0.01 | ) | (0.01 | ) | |||||||||||
| Income tax effect of non-GAAP adjustments | (0.07 | ) | (0.07 | ) | |||||||||||
| Non-GAAP Diluted Net Income Per Share | $ | 0.32 | $ | 0.32 | |||||||||||
| Reconciliation for Billings: | |||||||||||||||
| Q115 | |||||||||||||||
| Year over year change in GAAP Net Revenue | 4 | % | |||||||||||||
| Change in deferred revenue in the current period | 7 | % | |||||||||||||
| Change in acquisition related deferred revenue and other in the current period |
(1) |
% |
|||||||||||||
| Year over year change in Billings | 10 | % | |||||||||||||
| Reconciliation for Guidance: | |||||||||||||||
| The following is a reconciliation of anticipated fiscal 2015 GAAP and non-GAAP operating margins: | |||||||||||||||
| Fiscal 2015 | |||||||||||||||
| GAAP operating margin | 3 | % | 5 | % | |||||||||||
| Stock-based compensation expense | 7 | % | 7 | % | |||||||||||
| Amortization of purchased intangibles | 4 | % | 4 | % | |||||||||||
| Restructuring charges | — | % | — | % | |||||||||||
| Non-GAAP operating margin | 14 | % | 16 | % | |||||||||||
| Reconciliation for Long Term Operating Margins: | |||||||||||||||
| Autodesk is not able to provide targets for our long term (ending with fiscal year 2018) GAAP operating margins at this time because of the difficulty of estimating certain items that are excluded from non-GAAP that affect operating margin, such as charges related to stock-based compensation expense and amortization of acquisition related intangibles, the effect of which may be significant. | |||||||||||||||
Source:
Autodesk, Inc.
Investors:
David Gennarelli, 415-507-6033
david.gennarelli@autodesk.com
Press:
Noah
Cole, 415-580-3535
noah.cole@autodesk.com