Autodesk (ADSK) 27 May 222023 Q1 Earnings call transcript

Thank you for standing by and welcome to Autodesk First Quarter Fiscal 2023 Earnings Call. [Operator Instructions] I would now like to hand the call over to your host, VP, Investor Relations, Simon Mays-Smith. Please go ahead.

Thanks, operator and good afternoon. Thank you for joining our conference call to discuss the first quarter results of our fiscal ‘23.

me CFO. Anagnost, with Debbie CEO line our Clifford, the are our Andrew and On call being conference Today’s is webcast. broadcast live via

In call the replay available a autodesk.com/investor. will at addition, be of

slide find presentation commentary earnings our website Relations this Investor will You press on and of today’s the transcript opening call. following release,

factors. statements in filings, Please make on our today’s our statements acquisitions, to capabilities product risks XX-K differ may products refer our our call, Form events for actual reflect best future those based outlook, Actual and release, Form These judgment SEC our and this known forward-looking could During with forward-looking including filed results results we statements. our most that currently factors to cause and X-K and may about recent other important differ and assumptions, or the strategies. related results press materially. from

as is to the Forward-looking being or are revise statements If made contain obligation not Autodesk during after accurate forward-looking statements. today, any today. or during reviewed current information. call disclaims the made information call may or any of update this the presented call replayed

Investor financials each year-on-year Andrew. other our in numeric During as the call reference discuss changes quote website. and available otherwise to are reconciled now, financial Relations call our such today’s over And release comparison. a noted, Excel the supplemental performance. press several or represents All or we non-GAAP Unless I referenced call, will will we growth numbers on our turn in materials

our strong digital our further to confidence that revenue, support we increase non-GAAP drivers cash us strategy. and customers’ Simon The robust These reported play in drivers Today, everyone first Thank flow demand our and quarter business performance we for and competitive our during elevated continue and geopolitical uncertainty. a free pandemic, flexibility and growth during growth transformation the performance. the propel call. critical policy important margin and cement structural macroeconomic, welcome, such were to in agility, you, fueled by to operating and our as the role record

in and more platform workflows are Innovyze those The infrastructure planning the our and next through it. are century This can planning delivers strategy, investing A transportation owners bring and Our additional do and deeper And Autodesk. combination customers of Autodesk. products, globe governments the industries extend strong and example construction broader capabilities meet design equals accelerating we partnerships industry-leading and capabilities end-to-end geospatial needs with with societal convergence creating and we Collaborate customers opportunity because XD, environmental Aurigo new BIM recently, customers the innovation, and our existing Cloud and By to in between Civil Construction from is industry-leading create capital partnerships Navisworks, opportunities Revit, and amounts and sustained That ESRI in is retooling for our Autodesk this and operations. to InfraWorks, asset next-generation mapping. water steady in important to the into across growing focused Autodesk of and the now within business infrastructure. for of and execution Pro, ecosystem. of investment, serve, prime and are model

to in for EBA that ways to all will and skills transform neutrality design we focused we to the doing footprint. included customers for For signed deal can ever delight equitable better of quarter, and efficient Autodesk, and Across are the for more carbon first example, cloud second by global more a and Innovyze more unifying and working. data connecting customers’ common more in we a we carbon our make the access workflows move ourselves infrastructure in the the that largest world our on Build them sustainable a our first company new, Together, in lead time. of in-demand And ways with beyond fluidly future. that large that, advances Autodesk

Before made through on of our details to outlook, I in to financial important performance want update and the you to Debbie the decisions I about our turn take call you Russia. over we business

new our was though which Debbie We comes even the at do our You Russia it of this will a business Ukraine detail it that that right we in decision hours occurred invasion recall of the will light in conflict, halted earnings in moment. thing of X. believe strongly March to on all long-term before In call. last the and renewal our is and cost, interest, a

our course, immediate safety the the and the closely. monitor region situation Of continue remains employees focus our of on and we in to well-being

other Russia, in impact immediate the indicators leading trend positive. Beyond

through remained For America example, Europe record during optimistic. Debbie, everyone partner in strategic in will connected to again details our an of quarterly quarter year. to guidance the initiatives. I up and afterwards channel you steady region; over the and Asia-Pacific building update momentum year, well sets the bid usage levels; performance for us growth the to strong our the remains of and back grew hit and The on for remainder now take provide financial come our activity

the revenue regions. By XX% Direct up EBA, guidance, result X Thanks, APAC. as Americas, a LT and constant upfront AEC grew the and strength that quarter strength e-commerce. and currency. of XX% revenue year. XX%. revenue a revenue, from Andrew. was If total and grew driven in Total was product, to in strength the year versus point both Manufacturing By the XX% in later XX% to we and would enterprise close EMEA, XX% which represented large QX by grew revenue AutoCAD last increased XX% XX%; in in in revenue AutoCAD revenue across revenue XX%; in percentage and region, due M&E grew strong XX%; grew had grew compare XX% outperformance and revenue revenue well due broad-based as we products the forecasted

comfortably rate remained $X.X to increased subscription robust reflecting our deferred Total XXX% billion, Billings highs range. to renewal within record $X.X target and to XXX% product Our rates XX% revenue revenue XX% demand. at and grew our net current billion. on underlying was of last retention XX% RPO contracts, respectively, growth, are reflecting flagged X-year cycle. the of I RPO typically XX% $X.X strong Total which billion billings timing $X.X multiyear and grew quarter, and and of as a billion volume

and to to margin Turning X non-GAAP revenue by cost remained while X reflecting gross margin strong non-GAAP approximately XX%. to by GAAP percentage level percentage P&L, the operating increased at XX%, margins growth broadly increased discipline. approximately points operating ongoing XX%, points

growth reflecting record cash free delivered both quarter we of up strong $XXX and QX. in QX mentioned, billings Andrew flow million, first XX% As year-over-year,

for million average equity and we reduction in outstanding strong at during shares of QX the average broad in our price purchased pullback $XXX approximately per $X million cash $XXX repurchasing our million. the approximately With share market X.X We to position, our again shares of an share, weighted accelerated which a quarter. contributed

our strategy can organically While invest expect drive and continue to you allocation remains capital will growth. unchanged, inorganically that we to

quarters, for two proactively continue to accelerate have liquidity we allow last so used in market to strong our be conditions repurchasing when doing it. the Over opportunistic and will

the dollar. save finish conditions that for headline me guidance. business of U.S. is been unchanged the continued underlying strengthening Now, are we’ve Russia seeing overall let and the that The with

to post well ahead and continues Our business to growth of top peers. line perform our

renewal policy a eye the But expectations; environments. momentum. multiyear billings remain QX, line are exited in keeping on with our we you and As geopolitical, backdrop macroeconomic imagine, and with close strong the in against that strong; rates were we quarter can

renewal ‘XX free million in with are fiscal million. to by on outlook. we flow assuming As $XX cash are consistent in business and market a that quarters, our look previous new revenue conditions by had ahead approximately million, and The direct decision Billings our quarters. decreased Russia and we $XXX with recent as by impact halt $XX

channel Of not satisfied evolution, we impact hard initiatives like course, and by mitigate outcome, successes on Innovyze. growth recent will digital accelerating with and that early customer by and down retention to the acquisitions are doubling we from work our

continued Beyond QX. during to U.S. dollar Russia, strengthen the

a our ‘XX billion. we outlook, million, fiscal and free billion $X.XX revenue million fiscal program, these robust an by from revenue hedging billings, expect factors ‘XX has be having rapid, reducing of together, respectively. volatility cash to Bringing impact the and $XX While million, $XX pace between it’s and on $X.XX been incredibly we approximately benefit flow FX and $XX

non-GAAP of impact to point reflecting operating increase removing from margin to approximately expect XXX X forecast. from We XX%, basis our points Russia year-over-year

and billion. full The our We drivers cash year $X.XX reinforced expect details QX confidence ‘XX. free flow modeling on the between us give to more billion The growth on slide fiscal $X.X environment website long-term our for structural potential. assumptions underpinning strategy in has has growth global volatile our and be deck

a growth flow to growth margins in XX% metrics target ceiling to basis. free are to to our to a continue back cash growth annual on and double-digit revenue double-digit We Andrew, range, our the floor a revenue non-GAAP intended provide to spend operating you. These and expectations. XX% compound growth, ambitions

you, Thank Debbie.

Our is to cloud-based our with and we drive that solutions the serve customers. transform strategy end-to-end industries sustainability for efficiency

ecosystem. bringing extensible workloads into owners; broader customers construction management adjacent into product with verticals It new we and the extensible and industries and By like and within data partnerships engineering we is between XR. into between industrialized product deeper and scalable is verticals: and architecture with scalable construction through business and convergence from of creating from are workflows Our accelerating customers also engineering, also the and manufacturing. and serve, our existing to product new

water For are and goals as that of consulting further with construction and sustainability workflows. infrastructure, and professional example, carbon, with and extends of increasingly further impact net increased AECOM This delivers connect design closely AECOM services world’s Autodesk’s bridges the in the with Autodesk throughout program planning, and standardization engineering, renewed values with globe, Construction of most to lifecycle firm design from aligns and the QX, to and safety. seeking zero In promotes AEC, seeking With their trusted life, Cloud the growing streamline are from customers and AECOM Across into renewal both build its and Innovyze. is efficiency addition its ESG infrastructure platform resiliency, management. to from Autodesk. to and capabilities. and in customers our the customers investment quality The tunnels EBA meet addition now such social project

distribute enable to we network Construction demand. our that growing more Autodesk we Cloud, of partner As serve

The connect of is fire service is AEC technical systems of which for it seamlessly design Autodesk in largest the sprinklers, build dioxide Sweden, Bravida, and was Sweden’s in looking region, significant installation and in carbon in project, a ventilation, effectively and sustainability. consulting Autodesk’s the history. track procurement system efficiently. the office safety the Revit savings field using workflows to across For of in and the Bravida and provider and leading and cost standardize adopted collection installation and reduction the realizing XX% and example, solutions cost cloud, tunnels in and a Stockholm and based and end-to-end logistics, efficiency focusing a on the more to Adopting Bypass data manage the design, responsible for Having enable phase. phase Project, Build connect accurately electrics safety complementary and projects project of Nordic infrastructure is health It

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a to excited are to partner Donohoe with future together. build sustainable We

We are investing in Autodesk more. do Construction even Cloud to

of to in example, instance their business a their their to enable have launched subcontractors critical own For Bridge factor processes. data, improving we

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through delivered in Turning Fusion and manufacturing, XXX our design new to our momentum as strong more workflows tools functionality developed powerful we more platform, we and manufacturing this portfolio sustained manufacturing beyond connected Extensions. on-ramps quarter to studio, the

legacy As our opportunity customers more we we have provide renew of our in connect and develop with the products, cloud use some new to engagement for the and workflows to ways customers.

was high-tech using team software purchased manufacturer manufacturing a license Inventor a perpetual will from with QX, and alleviate By existing example, and in software which design the which to been these immediately has XXXX, benefit and For Autodesk XXXX. using since Autodesk, a from mechanical migration. collection significant enabled in Germany, updating in familiarity subscription and engineering without IP improvements, periods. improvements its leveraged process high better performance serve its Because customer its of demand the product bottlenecks

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connect Our powerful that workflows functionality platform enables needed extensions. Fusion and seamlessly approach XXX also those to customers to while through tools delivering

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For for XXX’s pre-built the stage generative commercial exceptional our manage quarter use, of with future. example, XXX,XXX data Extension an continuing using subscribers education any unlocks nesting workflows. demand are students click the subscribers and including fabrication, design and with of skills helping changes learn in-demand Fusion of to button design management Outside at production additional functionality grew with the the Fusion at the machining, new to grow XXX a commercial our ending of extensions, steadily, pace. partnerships Manage

firm such Government XX institution die making Fusion & example, students it to students tool For campuses. with additive QX for design Tool vocational or conceptual GTTC and Revit environment. spanned Docs printing simulation projects generative in support BESIX To adopted machine through continue gave India, Pro Collaborate in secure Center, group the level through data GTTC, ecosystem BESIX more is multidisciplinary learn, generation was and BIM fabrication, to its And regions, a license X,XXX collaborate design, finally, of XXX from Room standardization to because outputs. of for across common complexity. a all digital is and business bring into in a innovation Training model entire hands-on and course high across the often manufacturing to its we premier a G-code with easy students simulation have experience projects our compliance uses initiatives. as of users next and and infrastructure whose courses, generation effort and XD and on workflows construction, contracts works

users our better realizing can premium For now within it global premium functions through and sign-on the its employee security plant, benefits plan the single Flex occasional leverages additional in By enhanced reporting through to efficiency, usage provide its base. across security Flex. understanding while of access additional our it

maximize work software. with versions our our access secure and their to current to continue to We of customers

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our deals over which eight million. quarter, During license $XXX,XXX of over we closed two of compliances, $X the were

posed interactive The finish Autodesk it this the area Communities Washington. the recently Let partnered exploration guest using of a transportation with space I green Smithsonian mid-July. of technology considerations, I building-wide modular economic if availability Future services that designed important. diverse first make about all share exhibit But goal-driven to world, takes access to factors, of the achieve for of I trade-offs Autodesk that design share different lightweight, carbon, reality, deem social, the and me is is Operator, may into block to questions. together. are low-carbon before exhibition the displayed they community meets showcases by future story. and like and helping and construction in only innovators persona and Smithsonian better the summer data was each can story for assembled made necessary in one in and accomplish goal thing The strong of empower and all, and of with exhibit using vision at makes visiting would most very we water and technology. gives Guests day, input recommend a to It be The called in components materials vision future cloud this now you Every collaborative not design Autodesk unfold. and from space that visited structure and generally of to and sustainable represents the because that ecological together visions an all. various the our for turns of that the with represents and the the possible. the reach future. addition, achieve new outcomes. Autodesk the them the advances a the connected to which of sustainable design experience equity generative be community Institution the is can Smithsonian’s highly in future. world opportunities. of Each for our closes workflows to and ranging exhibit is minimum how evolving confidence with in FUTURES sense brings employment for easily both the specific and their AI, design that call real-time, to and future, they of disassembled in it open skills vision technology on with and the build an block to analytics optimism waste, public a and that what great waste. The goals visitors create include adjusting frame with challenges collaborate a and other me the input in-demand we better designs set types unwavering

comes [Operator Thank from Suisse. the Phil Our first of of Winslow Credit you. Instructions] question line

Your is open. line

and taking a for question congrats Thanks great strong my the to on year. start

Construction new growth Now best delivered quarter its Cloud ever. business

largest EBA vendor exposure, second have these about You But manufacturing subscription ever example when Autodesk’s cyclical you end specifically with impact this, from business. potential current to And concerned a lapsed obviously been infrastructure think an a I license. your perpetual the signed of investors about your getting company. and to the loved moving to markets

numbers you report, just highlighted show clearly the don’t deals you However, this. large the

is hearing why what seeing are, from you are in customers my So these demand? questions sustained drivers? Autodesk confidence of gives And durability what the you about

Yes.

can’t was. it anymore. not report I being So I business us a wrote remember cyclical a think somebody who about Phil,

[indiscernible] analyst, yes. probably,

an incredibly Probably bright analyst.

not and I’ll that important and of also those our projecting the model geographical business a a forward the couple And talk of of it’s year on of quarter, notion spread this I disciplined couple business, about spread spread. things think through kind just diversification about happened of in only And but factors. talk of we’re just to look, consistently. So

that part a highlighted Yes, pullback absolutely the that the talk the to entire up quarter let’s but off, continued what during strengthen in Throughout of invasion the business. resiliency continue we to about around track rebounded right usage the the progressed. first of monthly regularly quarter, It the So in early to kind just our end. of saw Europe, Ukraine throughout strengthen as quarter. we active

demand strong well and So one, building environment demand environment, we multiple have as we’re into infrastructure selling from vectors, that construction, design as manufacturing. and general a

So new our rates invasion the the same way, what was we’re things. started, health in resilience during and which, we I quarter Ukraine at the underlying is progressed, just as about and when Europe recovered the this of business, business working time, saw across as think in the renewal dips our growth an is in in by point happening the kind important And even broadly. – strengthened these

broad in rates. we renewal saw a So strengthening

actually able to that slowness offset in in some businesses. rate strengthening broad of So the the was renewal new

the things to All these for year expect continue see of we provide business. durability and and stability throughout are that things our

see by of sensitive COVID-effective year you some on Now China, the was the But we saw the effects. regions indicated take most early or Japan We overall was because specifically, softness U.S. than the strong during currency out well. as much in to APAC it did are in results. some if and the just higher APAC growth rates Japan like

new this between and from of impacts is renewal a offsetting balance All businesses. business

at weaker rates business, renewal diversity design, diversity us where our spaces, for geographic construction, in kind between offsetting we’re infrastructure, we the that vectors So increasing in of – rates and some distributed of selling across the terms manufacturing really of the renewal – even durability year. into or around the rest in of new gives confidence of of core of areas the multiple least have strong weakness the diversity

Awesome, great thanks. Keep up the work.

you, Thank Phil.

you. Thank

Our next Jay Griffin from comes question Securities. of Vleeschhouwer

Your question please.

evening. Good

year, with flow, and into the sure upgrades, upfront, you’re channel next forth. as channel terms a in maintenance the the so in changes X get ago cash got were when model, the that, years all through transition very work your to conscientious through you you’ve making about you or ahead question through Looking first X went to ‘XX going to how first multiphase of fiscal

and their cash and of beyond, as go that recurring you channel about into And cash your the through fiscal how year are so ‘XX? their flow next That’s managing you valley first own flow, revenue through thinking when year margins, preserving look then or next rebound look a in streams you question.

Yes. Alright.

Okay.

with start that, Jay. let’s So

back up this. from upfront talk We So to deals don’t None these annualized multiyear of trying high-level about here, right? towards that and first we’re let’s off, billings. move to the lumpiness it flow. like way cash like closed. cash the partners our get discounting and don’t creates their like well, Frankly, our it in lumpiness a way upfront don’t in multiyear want the away working as the principle just us flow deals We’re they creates to

at a So to cash we’re this, reliable – and beyond you and look ‘XX trying build-out create flow more predictable stable, FY beyond.

Okay.

‘XX trough. fast And the what enough. grow is FY enough. after forward, going frankly, can’t our you We out predictably yes, there But So we’re be digits will consistently moving what get which we more and can’t fast double partners want. that, there much want, get to

we So help there. get them programs integrate do to

transition then we they One the to of they our are into encouraging a have. upfront on us that’s the going early the cash from core conserving because directly flow And do programs can to business do collecting incentives here cash of some basis that – to right ensure them now on alright? some partner’s be adjust work is work we’re of they and cash that pockets, continue and flow with back-end to support their way to smoothly for

and through reliable all different all that But buildup it. what this this nice going have business cash dip, and support not it’s So you’re we’re we’ve it’s this to stronger dip. a more They through right, once want like flow predictable done durable more we’re like to we is create We and them previously. from it. But we it. And them business. helping that through

far usage? by including, versus and mentioned which you You rate, you is apps terms that, markets? Shorter-term Could but particular, in you times about. call so in that. it speak AEC standalone hear terms of useful usage of terms about the vertical couple question, are and Andrew, you end or speak you always to Thank even for geo seeing a Okay. of generally, on in manufacturing what ACC could of perhaps collection in it about about spoke

Yes.

monthly And was one about of that’s alright? place usage stronger wasn’t broad-based. interesting, the There or that saw saw right? great is active just in particular active nice all Cloud other, So in fact, than in things side. increase in a what’s is a another active really which we Here is Fusion. Construction portfolio weaker of this monthly in surge we is And XX% our on really usage, Revit, usage year-over-year monthly Construction was increases the AutoCAD, the Inventor, Cloud, these any increase

So in standout broad there were wasn’t They spectrum. the any or holdout numbers. those monthly usage really across active particular

differently over really And We thing usage necessarily it collection been that about we actually, But slicing talk time. – we one consistently you when adoption it is environment. the according to be I at usage, saw data a have with collection. collection multi-product Now of way. continues don’t to robust flag we’ve the in at we products. adoption look look that mean just individual don’t

sense it how moving a So forward. And we got better looks pretty for usage solid. was multi-product

spots invaded the as are industry-wise. multi-product but I in quarter geographic who back engaged in usage, slowdown there people collections a hot the monthly usage or buy was Ukraine, Russia came when of this terms or really So cold progressed. no growth spots remember active it but

Understood. Thank you, Andrew.

you, Thank Jay.

Thank you.

comes Our from Saket next question of Kalia Barclays.

Your line is open.

great. my Russia. for start point to for great Autodesk Hi, I’ll the did see. out guide with The taking of this we’re I Thanks here. Debbie, that quarter, operating margin Okay, maybe questions for XX% guys. XX% a year. for know you. taking is

the it’s we question nonetheless. that a So year, through but ramp it’s get a huge not

everyone’s environment. go margin the this moving you inflationary parts So I’m for just the expansion year, wondering around of one particularly just could in benefit, level some deeper into this

Saket. Thanks, Sure.

to know terrible cold. gravelly. want let say I this because know I I I my before anything, that So I a of guys voice sounds have say now all you

don’t there with. any I’m I’d lack I I not that – just weren’t I sounding cold, a garden unusual So struggling want as just questions. voice to you about be my it’s interpret figured it, so COVID upfront also Unfortunately, variety a enthusiasm. of

it. be anyway, So about wanted to just upfront

I appreciate that.

day, revenue combined leverage. the to discipline And biggest improvement our of over to continued the spend be driver it’s growth. that revenue On to end deliver that your the is with time going that’s going growth question, of margin at with

XX% For the little impact top we are to had and guide, that this the that we line through Russia, is less ramp to flow a from of to the want saw year’s peak the margin. that impact pressures think We because to to to important inflationary reaction strategy. of there. doing invest mentioned don’t Russia. be further Yes, of on kind our continue We spend any knee-jerk you because it’s to the

now, point But we improvement year-over-year. represents a percentage them XX% out margin We’re closely. point that also manageable. X feel it’s the at I’d monitoring right target all

So considerable we’re leverage scale. operating at margin our delivering

through the continue progress ‘XX. to pattern That’s revenue a a improvement tightly manage we assuming ‘XX, we As in spend. to fiscal grows what gradual similar as in and saw we as we’re fiscal our margin

rates that Very at Thanks follow-up. you monthly Got it. macro just commentary. the helpful. maybe for And could guide? the increase if talk if for a of my and Andrew, lens Great wondering different of wondering look you for about was the as in renewal sort qualitatively, and the your to consistent you see users. could in I active trended you’re thinking full year that how how just of about from business, part course? it new QX

Yes.

as pretty beginning the slowdown go trended at complete after now throughout we’re progressed. Obviously, at doing the new forward Russia we’re the the after some is It throughout looking quarter invasion during them Europe recovered trends, There business carrying the I the was right expecting the APAC and the that fairly business of trended new in So U.S. what like those quarter. Ukrainian in new of progressed. essentially at consistently impact consistently in And business we’re quarter. a in as kind similar recovered it But we – year. Belarus. we to through a shortly levels continue into year, the evaporation saw said, and the invasion

year. that’s the the these. played assuming way performance So viewing way similar we’re the quarter, we’re and out the throughout they throughout That’s

Got it. guys. helpful, Very Thank you.

a good Thank you, Have Saket. one.

you. Thank

question from Stifel. next comes Our of Borg Adam

open. line Your is

about talking of just of EBA infrastructure, Great. the Maybe your largest a time question. including deal much for a Andrew, good prepared your in taking you the portfolio. Thanks remarks as the so breadth for – matter and just spent

the timing update upfront the the an infrastructure any I’d and love bill, impact thoughts the get you’re thinking such there? latest the impact of on industry, just to So existing ultimately conversations the about on how Autodesk, your to industry with or

Yes.

Transportation it So make other proposal passed. no, This takes that Departments a of system. Most has It into money things mode. in bill what places to and are of probably read now. the not customers the made for their in these originally way of our is you are lot recently proposal we told when right out you mode time yet.

money Some soon. will been start flowing awarded, grants have the and

So we some expect to see show projects related the spending to build of to up. infrastructure

they expect a processes. actually But some in their some lot the lot coming that’s of showing AECOM interested they infrastructure a when to we But renewals be And see to we’re with kind deal of renewals their on. some processes. of departments their money Water of flowing and contracts transportation instance, us to of talking infrastructure utilize the deal their digital as to we to EBA Department that of AECOM how bidding on, a people they that of are ahead things being and layering the ahead is the what get We kind help specifically I of cloud customers to going of been to with of of of that we’ve money buy, deal out head their going are best awarded saw big Innovyze are targeted instance, that this. big $XXX it’s the the million actually for be on for some up yet. probably to and seeing Department and the and get spending, drive continue Innovyze change in are we in Washington, particularly – DOT seen in into discussions will can going haven’t to places. the U.S. to that some deal so into technologies on drive the trend like, be in getting that actually what of we construction Transportation is into a Transportation capability,

mid-end saw end obviously, base differentiation small about again. installed or past, ask just employees new diversity sizes, end you just looking guys both strength a of there? market, different the curious, the business follow-up question by talked In the larger and the slightly I’m about just that Thanks installed the macro, maybe real of base, by are you And and the any customer you’ve very seats. across I’ll That’s really the in the the way terms a And maybe on the that helpful. of clear you quick diversity seen. macro, differently.

see have of actually. the a Yes. held customer been business. have come quite before, from quarter the we we new The and change. speaking, actually. our our low acquisition held differentiation, acquisition, customer generally up new steady And about No of didn’t that end It never of end database our significant to that the the in customers It clip generally well, standard business. low business every manage just

So well. the up end held low

pressure revenue well. You regards There installs, saw retention with of was the high end growing rate. their some up kind net held people to

of inside actually, improved accounts So pressure, well. And that not some new existing lot. but as a saw

strong discernible between worth no segments. the various So, noting difference

Excellent. Thanks the for time. again

you. Thank

next Our go Matt ahead. Capital from question Hedberg Please RBC of Markets. comes

that Hey, that’s Great. transition understand all And for clear we Obviously, first. as think through at subscription cyclical I old. business of not I Thanks, think guys. this as least the Andrew, is you Autodesk here. maybe

why subscriptions really is to your if is lot could Now even slow, be there on renewal and just rates a value better wanted if of economy the investors global perceive works of the slowing. I a than double-click these

to and software jobs, of our to and Well, some at at these look first and customers – the you book am the – you right. some if there. to indicators to to you need out our build I things have They talk off And do business, looked foremost, of are sure and their customers, do of their right. their that they the subscriptions they need

business. fairly of a robust have customers Our book

are challenge time. them, biggest year, with have having their In you a backlog. conversation inflationary a trouble up am bids. to into I likely told on fact, price showing I can’t aren’t materials last hiring, And you hire, Like most were they their pressure our if up building of customers right now I is

do they of cost them between with has compression a with bid materials So, backlog that None and for talking It to in dealing the to much are price. it’s business. and of soon seeing price are not lot anytime their the labor are because cost back access delivery. they so more about pulling

they need They now. need So, it. the need They it software.

it. this keep order And people. more are They in looking are now. renew hire going find So, to they to software to continue can’t they right using to them just

That’s wondering, anything unfolds? super for helpful. here. that Debbie, but there a hold year Obviously, that big renewals Thank will you I how your then, if year surprised billings maybe for year, see am duration throughout might you about the ramps in can was that. up we And as voice that progress the XQ? multiyear And

Hi. QX fiscal Thanks through and we to that of course, closely. proportional volume in the of ‘XX. expectations And have multiyear track Matt. also for surprising, our ‘XX multiyear line the was in continue, cohort been with Nothing all of we fiscal for seeing

confidence our outlook. us So, ‘XX that in gives fiscal

guys. Got it. Well done

Joe question comes next of Vruwink Our Baird. from

line open. Your is

get have in business new to the formats of like initiatives up this trends growth stood partner been general the front with of opposed Great. much opening recent the you Cloud that some to customers of in channel. of Hi you the accelerating was some the quarter thing out able from kind the credit commercial or as about? would How that talking everyone. being just Construction One

Yes. excellent answer give can’t question. a particularly That’s you there. an deep I

that light did Cloud we channel, is we us in our Construction mid-market with see Cloud, Construction business. significant important partner in and the However, really of growth the in terms are starting which to for up channel of expansion

certain business are you was that. related much within give an how channel exact fidelity business? traditional about detail can’t of partners. at do on business the Debbie, really But on an had regards to you the to – versus the their on key turning that new over, effect probably it with any So, to give that all they channel breakdown we I exact have the

for course, say. would channel broad-based we we the quarter And Europe success whole, on the Not is about then our mean of then explosive – exited of QX. us, in QX. But And a as back up strengths Certainly we picked that outside, saw the it’s highlight our see remember, as through point, of this Russia. at slowdown we that I the seeing we that business. helping. talked I channel momentum Construction that I partners part But we are did that immediate area it’s anything during through Construction, specific. smaller wouldn’t exited in while an still growth

strength So, as seeing also that our of overall contributing partner to business is broad-based core strength are through well. we just strength, the but

Okay. It Obviously, business another been Great. Contrast have in contrast And then been fall. around. stable. last we pressures macro ask I trends can They question. abated. onward? will the inflationary But have haven’t ultimately, maybe still late environment sounds you like, that and with February good

last fall, recently. We macro maybe incremental are to the as more things, stability stability layering some it’s now you is some moderation opposed to differences contributing on but or see what

the and our Well, about a being customers chain fall, caught I in by back talked remember supply lot the Yes. difficulties. if of inflation you off-guard some rapid

when bid going of on cost And contracts, our So are fixed serious really their your are issue fixed contracts. up, businesses. customers some a for were bid of goods

to Manufacturers less So, their businesses pinch. the able cost AEC customers were feeling a pass lot to were their through customers so. directly, of

now more the chain know So, some contract. supply bid they manufacturers not – how you What to from the by suffered seeing of this. is are are customers surprised things. They

bidding and their into inflationary their So, of in parity bids impacts there, kind are there people is general building out projects. and into a

better to projects having environment stable margins more and deteriorate much with a them have you regards for creates some that their a to of that that that having to are margins. – book So, get rapidly want

across is right key one projects. now seeing sense? make that are the stability. of they contributes the margins that what Does So, a better That’s just thing spectrum to

It does. you. Yes. Thank

do And expected that. to we them fully

you. Thank

Our next of Stanley. question Keith comes from Weiss Morgan

is Your open. line

demand talking about the taking doesn’t It like quarter. about the of are it last Hi. just Congrats and Debbie, anticipation question, following question. are for for trends. guidance, we when for weakness forecast like or further nice Very us it. weakening a currency. One, really thanks we to the year sound on full any you macro that adjusting down two-parter. Maybe any That’s of adjusting are seems

it how for investment equation. growth, or the balance view philosophy flows, kind that trying what’s and catching of sheet clarify the wanted your free on are do competitors? side of investing to macro to slowdown. see the to advantage side land, of sort up spending market equation? protect that the and opportunity software the just get really that demand of to is take philosophy need two, keep I is of of all if impacts the too Is big – And be then cash one, you So, in you. and able to sustain your to sustain kind does Thank are on and we the ahead going weaken we with looking we reaction to look and to of potential your am understand I demand you

there. lots Keith, Thanks. unpack to

little on I please me a lost got I go, if it. as keep So, bit

with start Russia. FX today that Let’s guidance to and about we are impact the The talking relates to guidance. the

to the seen underlying rest change assumptions our for and rest change also because a haven’t that’s environment it business business. the There but of is FX, in the we for the includes Russia. said demand business, our You of no

with the we a saw bounce on fact, bit As the of saw exited at onset of slowdown we a we invasion back, a really QX and mostly a Europe although of focused momentum. matter of Ukraine,

a of business make was And And that adjustment guidance the so through we flow it total to with QX. that deteriorate operating the we to sure pressure at manage for that our think because – we we sure margin, point the only revenue that a our Russia, to because see that model. very were business spend. if gives are the possible. have remember doing business us that to a that going think the we can let economy Even we I don’t invest margins confidence see built this we the But not further substantial scenario are way continue model, exited as demand of on important think further strategy. to that resilient about subscription our on revenue, don’t our or then to as the it’s want have into this resilient where look – course, operating reaction to we we with to about even business year. margins saw of knee-jerk when best world And we we I reflect make rest We would any to kind of we of that model. further in assumptions point

you against And of this size challenged competitors, our smaller, up the footprint, right you is less a time the business. with When absolutely in are business are more invest our our and to resilience you invest. resilient, and

invest. You

the of ahead pull You competition.

keep You focused things on the you trying are to do.

You expand category leadership. your

places. You solidify leadership in category other

which very AEC. category for a in XD growth important have We segment in BIM, leadership got is

deals already deals buy for We and have through Bravida, leadership through all Construction, to this Construction we These construction the category like of are the connected got space, design trying are we cloud-based AI-driven kind in, That’s environment. the in into people are king. design AECOM, like BESIX. category

will able to invest this perfect degree. same lap to be It competition The to So, continue the competition. to is helps you the invest. time the

I not pull is strength the especially underlying you It’s solid. time right, think this back, given business. of our the

it. You can see

am mindset investment resiliency definitely got for that options here the the and of of that we I of multiple vectors leverage. kind have good a We us. nice portfolio can is in

clear think super makes sense. and long-term it. I that Got That’s

Thank you.

from Steve of comes question SMBC Koenig next Nikko. Our

line open. is Your

and Hey it’s question. COVID. not Debbie, too, Debbie. cold, I have Thanks taking Andrew. a Hey for my

boat. are same in the we So,

I then a the I before? back got week little of get soon on more bounce us a did. apologize have So, here. I at you, to But Debbie. EMEA, – one can the it – it if wanted when little more saw missed end may have it to was I better for it in you and specifics hope right yes quarter? you And and Was start a business give you Was after?

as like again fell It long wasn’t weeks, and Yes. it was then It the It fairly was up a within It Actually, to within back after a the And weeks, alright. had back initial thing. invasion. it was off. bit slowed it started. short-term where it few a down up invasion rising was started.

So, it that us, take didn’t It surprised long. honestly.

it renewals, other? of between kind of your was statements. parse to one business and kind balanced was – more new it I was trying And it or the Was earlier or

throughout Renewal alright. entire stayed strength – strong the cycle,

fact, saw the matter renewal renewals There progressed. So, part post was of kept if in business never the slowdown a it strengthening, invasion momentum. as alright. recovered. new in kept that anything, only we strengthening just It slowdown a was that and building quarter A

renewals just kept no, So, building.

Yes. Got it.

you my for actually you either and are then this answer And Great. welcome fit. as Okay. of follow-up, see to

And there? So, it I and high am doing – very employee retention, also the trajectory your you you to compensation raised and March, the what does about allows do and internal you prices of are embedded at finesse rates. you to invest with think all have your you you have that’s tweak or margins get to What have partners? affect do end And very in to environment how inflation you you plans good appropriately your want. guidance. in this How sure inflationary

So, how appreciate that? you and Thanks my maintain do questions. taking I

Yes.

there. two questions because So is let – there me

suppressed world artificially The the yen-denominated targeted price parts having highly First, pricing. the price page of me price and euro, certain we on had goal to long-term that let increases comment so same we all our here. increases are the on the were U.S. of below standard where

in are get raising this go-to-market we we that pricing kind seeing simplifies so some standard-based places, that is, of practices. you So, can are to our equalize to certain prices what of

some going our in is okay. suppressed regions, was had there change – pricing we what prices no standard artificially policy. there, on in So, and that’s It’s

places In like increase, not alright. fact, a price see Europe did

want all with pricing just to clear, we that. and the on I regards are to the things same page be So, with associated

stock-based to employment different, inflationary with employee pressures but our alright. and in of an are We area navigate terms pressure compensation, see probably compensation and are continue [ph], this important, help raised our increase pool. increased no we year. increased to employee in And will us to for uncertainty we base. trying our our Now, environment. equally employees our bonus you stock-based increasing inflationary We our We regards compensation see increasingly and

moves the baked our look pay were to at. least meet ahead certainly our year to start will the try we ensure we employees continue to these employees were able well of into were or position. made at So, of to at where meet the year they and our that But

pressure probably competitive. will continue to of We some see staying in there terms

high retaining employees rates. at are We

good to for will company, employees. which investors use stock-based continue compensation We for and the more also more good robustly think broadly within we is for organization, the good and

sounds It much very good. Thanks Andrew.

you. Thank

next from comes of Bhavin Deutsche Bank. Our Shah question

Your open. line is

this? driving taking and focus some and Can call, say or will Great. success the competitive just are what’s of to questions What to Andrew, or quarter. my elaborate robust maybe noted seeing the And I of even Debbie the for my during get win performance both on question this? you you just hoping products rates? course. Andrew Thanks to better improved verticals

Yes. sector. I are we Well, mean competitors, it’s industries, one basically growing every every alright. our our faster than of

taking we seats we competitive share as industries. So, more are highly some selling are in

So, in doing AEC. you are seeing well us

counts you I because and is in did seeing those doing us really revenue media on to both of in seat both We are quite manufacturing, nicely think year-over-year. important entertainment You counts, which performances. watch even want well

one to I opportunity of that make the counted numbers, raw Construction, of But in all you actually of are make performance. obviously, we you So, too. the year-over-year. In look EBAs, remember, grew Construction, seeing that we is if some the we places are design. which absolutely watch broad-based XX% at is kind got the mean competitive a that construction

of is slightly Cloud quarter. its competitive regular new XX%. our we business And significantly growth – Construction total EBA the kind of we into and – that the when growth Construction active where grew north So, for great, look best growth. AEC EBAs, make all Cloud put you performance. grew components higher make Cloud International usage into This mid-XXs. than Construction performance impacts taking its at was those monthly of solid –

the mid-market. We channel lighting in up are the

our outside category, design in through anybody leader move them. are position space We for category that of past on construction – they kind position. this solidifying this else the or are to in is industry niche and waiting being kind of this player is there very move Essentially,

a So, now. think I strong are competitive in very we position right

to maintain across it job was our we to it’s continue all the think that. serve. I industries But

And EBA plans are you one this thanks and And looking helpful. you terms large that things color. as of are for here? of just just interesting integration good Super are evolving really the of well. product Innovyze, see products? your follow-up. quick It on customers include And water-based in And that was to deal to how about your Where here we just where who with the do pipeline think set leverage solution? are some these

them. Look, Yes. similar when Innovyze we to made in. have integrating The us great was company progress really we fairly bought

rapidly a getting So, there of are lot is things that integrated.

pieces are we some right working to not where of Innovyze. product through and are that’s the integration, now of there still a But course, are that some Of barrier systems with integrations. of at back-office some in kind terms integration

to operators, It way operate. the put operations. facilities manage what they to And tools manufacturing. construction cloud-based sewage exciting infrastructure allow that infrastructure goes everywhere end-to-end into for Innovyze from other about once it design for has actually been all kind things water One of treatment them some water of that fairly does it’s the operators, vision have fulfill the that’s and have water sophisticated operators the we for is already

solution. and So, it’s frankly, motion-wise. incredibly broad of fits very it, piece it covers into and It both portfolio, a very robust story-wise, sales nicely our a strategy-wise,

have you call. And Thank participating. all for time we is This for the that ladies gentlemen, conference Q&A today’s today. concludes and

You may now disconnect.