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Autodesk Reports Third Quarter Results

Autodesk reports financial results for the third quarter of fiscal year 2013.

SAN RAFAEL, CA -- Autodesk reported financial results for the third quarter of fiscal year 2013.

Third Quarter Fiscal 2013

  • Revenue was $548 million, compared to$549 million in the third quarter of fiscal 2012.
  • GAAP operating margin was 6 percent,compared to 16 percent in the third quarter of fiscal 2012.
  • Non-GAAP operating margin increased 190basis points to 26 percent, compared to 25 percent in the third quarter offiscal 2012. A reconciliation of GAAP to non-GAAP results is provided inthe accompanying tables.
  • GAAP diluted earnings per share were$0.13, compared to $0.32 in the third quarter of fiscal 2012.
  • Non-GAAP diluted earnings per sharewere $0.47, compared to $0.44 in the third quarter of fiscal 2012.
  • Cash flow from operating activities was$157 million, compared to $138 million in the third quarter of fiscal2012.

"Our revenue results were disappointing and were primarily caused by a weakening demand environment," said Carl Bass, Autodesk president and CEO. "While we experienced pockets of relative strength in the U.S., northern Europe, and Russia, most other markets around the world slowed during the quarter, most notably emerging markets. Despite our overall revenue shortfall, our ongoing focus on cost management delivered meaningful margin expansion and EPS above our guidance range."

Third Quarter Operational Overview

EMEA revenue decreased 3 percent to $196 million, compared to the third quarter last year as reported and increased 3 percent on a constant currency basis. Revenue in the Americas increased 4 percent to $209 million, compared to the third quarter last year. Revenue in Asia Pacific (APAC) decreased 3 percent to $142 million, compared to the third quarter last year as reported and decreased 3 percent on a constant currency basis. Revenue from emerging economies decreased 9 percent to $80 million, compared to the third quarter last year as reported and 5 percent on a constant currency basis. Revenue from emerging economies represented 15 percent of total revenue in the third quarter.

Revenue from the Platform Solutions and Emerging Business (PSEB) segment decreased 2 percent to $205 million, compared to the third quarter last year. Revenue from the Architecture, Engineering and Construction (AEC) business segment increased 7 percent to $163 million, compared to the third quarter last year. Revenue from the Manufacturing business segment decreased 1 percent to $132 million, compared to the third quarter last year. Revenue from the Media and Entertainment business segment decreased 9 percent to $48 million, compared to the third quarter last year.

Revenue from Flagship products decreased 4 percent to $298 million, compared to the third quarter last year. Revenue from Suites increased 10 percent to $166 million, compared to the third quarter last year. Revenue from New and Adjacent products decreased 3 percent to $84 million, compared to the third quarter last year.

In the third quarter last year, Autodesk recognized a $10 million, one-time transaction, related to license compliance. This transaction impacted revenue growth rates for license and other, APAC, PSEB, and Flagship. In addition, Superstorm Sandy negatively impacted our business during the last few days of the quarter.

Deferred revenue increased 15 percent to $714 million, compared to the third quarter last year.

"We achieved strong growth in non-GAAP operating margin, better than expected EPS, strong cash flow from operations, and growth in deferred revenue," said Mark Hawkins, Autodesk executive vice president, chief financial officer. "While our revenue growth target for fiscal 2013 is below our original target, we believe we can still achieve year-over-year non-GAAP operating margin expansion of between 80 and 140 basis points. With over $1.7 billion in cash and marketable securities, our balance sheet remains solid.

"Looking forward, due to the increasing uncertainty in the macroeconomic environment and our slower than planned revenue growth in fiscal 2013, we are reassessing our long-term financial model (through fiscal 2015) and are not providing revenue targets at this time," continued Hawkins. "While revenue growth will be a key determining factor in the years to come, we remain committed to growing our non-GAAP operating margin and believe we can achieve a 30+ percent run rate as we exit our fiscal 2015."

Business Outlook

The following statements are forward-looking statements that are based on current expectations and assumptions, and involve risks and uncertainties some of which are set forth below. Autodesk's business outlook for the fourth quarter and full year fiscal 2013 assumes a continuation of the current economic environment and foreign exchange currency rate environment.

Fourth Quarter Fiscal 2013

4Q FY13 Guidance Metrics                          4Q FY13 (ending January 31, 2013)

Revenue (in millions)                                  $570 - $600

EPS GAAP                                                     $0.18 - $0.26

EPS Non-GAAP                                             $0.43 - $0.51

Non-GAAP earnings per diluted share exclude $0.13 related to stock-based compensation expense, $0.03 related to restructuring charges, and $0.09 for the amortization of acquisition related intangibles, net of tax.

Full Year Fiscal 2013

FY13 Guidance Metrics                                 FY13 (ending January 31, 2013)

Revenue (in millions)                                   $2,275 - $2,305

EPS GAAP                                                      $0.92 - $1.00

EPS Non-GAAP                                              $1.84 - $1.92

Non-GAAP earnings per diluted share exclude $0.50 related to stock-based compensation expense, $0.14 related to restructuring charges, $0.26 for the amortization of acquisition related intangibles and $0.02 for loss on strategic investments, net of tax.

A reconciliation between the GAAP and non-GAAP estimates for fiscal 2013 is provided in the tables following this press release.

Both fourth quarter fiscal 2013 and full year fiscal 2013 outlooks assume annual effective tax rates of approximately 24.5 percent and 25.5 percent for GAAP and non-GAAP results, respectively. These rates do not include the federal R&D tax credit benefit, which expired on December 31, 2011, or one-time discrete items. The assumed effective tax rate will be adjusted if or when there is a renewal of the tax credit.

Source: Autodesk