CIMdata PLM Industry Summary Online Archive
17 May 2007
Financial News
Autodesk Reports Record Revenues of $509 Million
Autodesk, Inc. reported record quarterly revenues of $509 million, an increase of 17 percent over the first quarter of fiscal 2007.
"Autodesk delivered another record quarter of revenue," said Carl Bass, Autodesk president and CEO. "During the quarter, we launched strong new releases of our 2008 family of products which continue to improve our customers' design experience. Customers are responding enthusiastically to the improved performance and scalability across the product line. Additionally, our industry-leading 3D design software solutions are providing customers the ability to experience their ideas through the power of digital prototyping resulting in improved competitive advantage."
Operational Highlights
Autodesk's performance was driven by strong increases in revenue from its model-based 3D design products, maintenance revenue from subscription, revenue in the emerging economies, and revenue from new seats.
The Company's model-based 3D products, Inventor, Revit and Civil 3D software, continue to increase their market penetration. Combined revenues from these model-based design products increased 19 percent over the first quarter of fiscal 2007 to $106 million or 21 percent of total revenues. In total, Autodesk shipped more than 32,000 commercial seats of 3D in the quarter including 14,000 seats of Revit, 10,600 seats of Inventor and 7,400 seats of Civil 3D. During the quarter, Autodesk passed a significant milestone when it shipped the millionth commercial seat of its model-based 3D design solutions.
Installed base revenue, which includes upgrade revenue and maintenance revenue from subscriptions, increased 22 percent over the first quarter of fiscal 2007 to $197 million. Continued strength in subscription attachment and renewal rates drove strong performance on many subscription metrics. Maintenance revenue from subscriptions increased 45 percent compared to the first quarter of fiscal 2007 to $125 million. Deferred maintenance revenue from subscription increased $34 million sequentially and $110 million compared to the first quarter of fiscal 2007. The subscription installed base grew to 1.3 million subscribers. Total upgrade revenues decreased 5% compared to the first quarter of fiscal 2007, as expected.
Once again, emerging economies contributed robust growth in revenues. Revenues from the emerging economies in Asia Pacific, Eastern Europe, the Middle East and Latin America increased 36 percent over the first quarter of fiscal 2007 to $72 million and represented 14 percent of total revenues.
Revenues from new seats increased by 10 percent compared to the first quarter of last year. AutoCAD Mechanical and 3ds Max were particularly strong with revenues from new seats increasing 65 percent and 30 percent, respectively, compared to the first quarter of last year. Revenue from new seats of AutoCAD and AutoCAD LT were robust this quarter, growing 11 percent compared to the first quarter of last year.
OTHER FINANCIAL HIGHLIGHTS
• Cash, cash equivalents and marketable securities increased by $186 million sequentially to $964 million as of April 30, 2007.
• Total backlog increased $23 million compared to January 31, 2007. Total deferred revenue increased $21 million sequentially. Deferred maintenance revenues from subscription increased $34 million sequentially. Unshipped product orders increased by $2 million sequentially to $19 million at April 30, 2007.
• Channel inventory as of April 30, 2007 was below the normal range of three to four weeks.
• DSO decreased to 47 days.
• Capital expenditures were $7 million.
• As a result of the voluntary review of the Company's historical stock option granting practices and the related accounting, the Company did not issue or repurchase any shares during the quarter.
• There were approximately 231 million total shares outstanding and 244 million diluted GAAP basis shares outstanding in the first quarter.
• Revenues in the Americas increased 8 percent over the first quarter of fiscal 2007 to $184 million.
• Revenues in EMEA increased 26 percent over the first quarter of fiscal 2007 to $207 million.
• Revenues in Asia Pacific increased 16 percent over the first quarter of fiscal 2007 to $117 million. Revenues in Japan decreased slightly compared to the first quarter of fiscal 2007, and increased 23 percent sequentially.
• In the first quarter of fiscal 2008, spending on total costs and expenses -- which include cost of license and other revenue, cost of maintenance revenues, marketing and sales, research and development, and general and administrative - increased by $21 million sequentially.
• Spending on legal, tax and accounting fees related to the voluntary stock option review was approximately flat with the fourth quarter of fiscal 2007 at $3 million.
• Interest and other income increased by $5 million sequentially to $10 million.
Business Outlook
The following statements are forward-looking statements which are based on current expectations and which involve risks and uncertainties some of which are set forth below. As a result of the voluntary stock option review, the Company is not providing EPS guidance at this time. Additionally, because accounting related to the restatement of its financial statements is being finalized as a result of the voluntary stock option review, as described below, the Company is not able to provide GAAP operating margins for fiscal 2008 at this time.
Second Quarter Fiscal 2008
Net revenues for the second quarter of fiscal 2008 are expected to be in the range of $520 million to $530 million. Non-GAAP operating margins for the second quarter of fiscal 2008 are expected to be in the range of 24.5 to 25.4 percent. Non-GAAP operating margins do not include SFAS 123R stock-based compensation expenses or reimbursement to employees for tax issues arising from the stock option review, which in total the Company is currently unable to determine but believes will be significant. Non-GAAP operating margins also exclude amortization of acquisition related intangibles of approximately $4 million. Company estimates of non-GAAP operating margins include approximately $1.5 million in the second quarter of fiscal 2008 for legal, tax and accounting fees related to the voluntary stock option review.
Third Quarter Fiscal 2008
Net revenues for the third quarter of fiscal 2008 are expected to be in the range of $520 million to $530 million. Non-GAAP operating margins for the third quarter of fiscal 2008 are expected to be in the range of 26.4 to 26.9 percent. Non-GAAP operating margins do not include SFAS 123R stock-based compensation expenses, which the Company is currently unable to determine but believes will be significant, and amortization of acquisition related intangibles of approximately $4 million.
Full Year Fiscal 2008
For fiscal year 2008, net revenues are expected to be between $2.115 billion and $2.150 billion. Non-GAAP operating margins for fiscal year 2008 are expected to be in the range of 27 to 27.5 percent. Non-GAAP operating margins do not take into account SFAS 123R stock-based compensation expenses and reimbursement to employees for tax issues arising from the stock option review, both of which the Company is currently unable to determine but believes will be significant. Non-GAAP operating margins also exclude amortization of acquisition related intangibles of approximately $16 million. The Company expects its fiscal 2008 tax rate to be between 25 and 26 percent.
Stock Option Review
As announced on May 2, 2007, Autodesk is seeking the advice of the Office of Chief Accountant at the Securities and Exchange Commission (the "OCA") and on May 3, 2007, submitted to the OCA certain financial statement information arising out of adjustments related to accounting for stock-based compensation expense as a result of a voluntary review by the Audit Committee of the Board of Directors regarding timing of past stock option grants and other related issues. Autodesk intends to file its restated financial statements, as well as its delinquent quarterly reports on Form 10-Q for the quarters ended July 31, 2006 and October 31, 2006 and its annual report on Form 10-K for fiscal year ended January 31, 2007, as soon as practicable after receiving the advice of the OCA.
While Autodesk is in the process of restating prior years' financial statements to reflect the additional compensation expense associated with past stock option granting practices, the Company is also recording other minor adjustments related to reseller incentives on its subscription program. These adjustments increase revenue and decrease deferred revenues for fiscal 2006 and fiscal 2005 by approximately $15 million and $5 million respectively.
Earnings Conference Call and Webcast
Autodesk will host its first quarter conference call today at 5:00 p.m. EDT. An audio webcast or podcast of the call will be available at 7:00 pm EDT at http://www.autodesk.com/investors . This replay will be maintained on our website for at least twelve months. An audio replay will also be available for one month beginning at 7:00 pm EDT by dialing 888-286-8010 or 617-801-6888 (passcode: 64067637).
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