Surpassing Estimates and Strengthening Year Over Year
Autodesk, the innovative software company, has dazzled investors with its second-quarter fiscal 2025 performance. Their non-GAAP earnings of $2.15 per share outshone the Zacks Consensus Estimate by 7.5%, marking a 12.6% improvement year over year. The company’s revenues of $1.5 billion exceeded the consensus mark by 1.54%, exhibiting an 11.9% growth compared to the previous year.
Their success was attributed to widespread growth across products and regions in AEC and manufacturing, albeit softened by challenges in the media and entertainment sector due to the long-lasting impacts of the Hollywood strike.
Visual Representation: Autodesk, Inc. Price, Consensus and EPS Surprise
Autodesk, Inc. price-consensus-eps-surprise-chart | Autodesk, Inc. Quote
Revenue Breakdown of Autodesk
Autodesk’s subscription revenues, accounting for 93.6% of total revenues, surged 10.9% year over year to $1.4 billion. Maintenance revenues experienced a slight dip, while other revenues grew by 41% to reach $86 million in the reported quarter.
Recurring revenues made up 97% of Autodesk’s Q2 fiscal 2025 revenues, with the net revenue retention rate comfortably within the company’s targeted range of 100-110% on a constant currency basis.
Geographically, revenues from the Americas, EMEA, and Asia-Pacific surged by double digits, with billings soaring to $1.24 billion, showing a solid 13% increase compared to the previous year.
Product Revenue Highlights
Autodesk’s four product families – Architecture, Engineering and Construction, AutoCAD and AutoCAD LT, Manufacturing, and Media and Entertainment, all contributed to the company’s overall success. AEC revenues increased by 13.7%, AutoCAD and AutoCAD LT revenues rose by 6.9%, Manufacturing revenues surged by 15.6%, and Media and Entertainment revenues grew by 4.1%.
Impressive Operating Performance
Reflecting the company’s operational efficiency, Autodesk reported a non-GAAP operating income of $560 million, a commendable 14.5% increase year over year. The non-GAAP operating margin also improved by one percentage point to reach 37%.
Financial Fortitude and Outlook
Autodesk showcased a robust financial position with $1.87 billion in cash and cash equivalents. Additionally, the company provided optimistic guidance for fiscal 2025, with revenue estimates indicating an approximately 11% growth. Billings are anticipated to rise by 13-15% year over year, with non-GAAP earnings per share projected between $8.18 and $8.31.
The company anticipates strong free cash flow in the $1.45-$1.5 billion range, setting a solid foundation for future growth.
For the third quarter of fiscal 2025, Autodesk expects a healthy revenue range of $1.555-$1.57 billion, accompanied by anticipated non-GAAP earnings per share in the range of $2.08-$2.14.
Investor Insights and Future Prospects
As Autodesk garners a Zacks Rank #3 (Hold), investors continue to show interest in the company with shares returning 6.1% year to date. Additionally, some noteworthy picks from the broader Computer and Technology sector include Arista Networks (ANET), Badger Meter (BMI), and Audioeye (AEYE), each boasting a Zacks Rank #1 (Strong Buy) at present.
These picks come with impressive growth rates and gains, reflecting the resilience and potential for substantial returns in the future.