Autodesk (ADSK) 23 Feb 232023 Q4 Earnings call transcript

Thank you for standing by and welcome to the Autodesk Fourth Quarter and Full Year Fiscal 2023 Results Conference Call. At this time all participants are in a listen-only mode. [Operator Instructions].

I would now like to hand the call over to Simon Mays-Smith, Vice President, Investor Relations. Please go ahead.

afternoon. good and operator Thanks, Thank you fourth to our conference joining and full our quarter results. call year discuss for fiscal ’XX

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

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

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

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

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

During materials in are our and website. available Financials year-on-year the comparison. call non-GAAP release changes financial call, All supplemental each today’s growth we reference press Investor discuss will reconciled a represents on quote referenced or Relations performance. we other noted, as several numerical such Unless otherwise our numbers our XL in

over call And turn to now, the will Andrew. I

fiscal pandemic despite and to strengths: a the to headwinds, macroeconomic, opportunity, three competitive and policy, welcome performance Autodesk’s call. Thank and discipline. everyone strong and you, resilience, testament enduring is geopolitical financial XXXX, in Simon,

fiscal and of a quarter GAAP world, full-year flow. and product, deliver and non-GAAP we record the The sum enabled valuable flow fourth revenue, free resilient model of our business customer goals the in XX% we was margin, and and companies report to the strong and and year. hallmark ‘XX most of growth cash revenue cash growth our geographic, set the operating XXXX, for short margin, free in diversification fell While us

towards workflows manufacturing, and design connected seeing engineering, the we next-generation transformation the and then cloud owners. in within in our And are As significant between in growing Autodesk. construction. serve followed by seeing generating recently to digital industries the services growth we product shift with accelerate, and we technology deliver now building opportunities will customers, architecture, more We the and new started for momentum

For example, Department this, in In of led XX Transportation, the for to the XD QX infrastructure and our project are states, of Iowa by delivery of of reimagining a partner, also BLA-BIM more selected involved the and projects. efficient which migration BIM by from Launch sustainable. legacy anticipation facilitate Alliance, are data-rich delivery processes to departments open U.S. was completely all standards delivery transportation project processes, developing consortium

the Over U.S. more globe, we more cloud. more to expect XX and states than across XX% these more encompass the states, population. owners the Together, in connect workflows of time,

strategy future. is strategy expensive significant capital make catch-up economic focused to to of well invested sufficiently Autodesk having by underpinned in our Finally, of This to cycle. disciplined deployment enables through benefits the remain its investments risk mitigating the and realize the while

but only constant levels also discipline investment to course, our largest and ensure directed proportionate and focus consistent mean opportunities. investment, optimization Of not remain at

in public Autodesk efficient enables which United To Pro much example, civil Autodesk support the projects, further For XD, for with sector our Civil more saw on infrastructure QX. States, Collaborate significant enhancements collaboration BIM owners in work

leading cloud able U.S. FedRAMP partnership the be to meet Administration, with our Government document our and for tools customers for through General that, Moderate Services collaboration Government industry soon, projects. management standards will expects achieve Authorization key to start that meaning security using

driven million a record also deals. Innovyze a had in adoption by contributed that in a dollars over report growing pleased four Enterprise proportion to I’m quarter accounts of which our

of an to some tell one Autodesk. quarter, opportunity personas the EBA our March opportunity drive many that so of fruits XX. the There the is them efficiency Infrastructure for in can signed on more. our about connecting see And of already. and fourth workflows you cloud in expanding But Day you are but part Investor and more largest-ever more sustainability. at We we’ll encompassing

for back financial turn now strategic quarterly year. will provide over you initiatives. come and growth I’ll update call guidance the then the our an Debbie performance to to through our I to take on

Thanks, Andrew.

and fourth consistent large demand and with results from QX. multi-year to QX environment renewal were provided contracts, quarter a remained Overall, free annual cash transition approaching the billings in Our a and The for full-year tailwind up-front billings strong. to cohort, flow.

our As financials deal nine-digit The quarter. impact and a largest develop deal Andrew the quarter. commitment, during meaningful date we strategic during mentioned, continue partnerships not customers multi-year billed broader annually, to our closed on our did with and a the is have to

constant year, XX%. was and was Total X% QX included down growing product, which grew up X%, XX% upfront revenue Recall Manufacturing and revenue LT in revenue. its but won currency. foreign reported mid-teens movements revenue reported by AEC revenue. with revenue exchange X% M&E AutoCAD grew largest-ever excluding as M&E last significant that EBA, as and and revenue AutoCAD XX% constant upfront XX%. grew By and currency, XX% in in subscription revenue grew

exchange APAC. and M&E and the Across At X% up-front the XX% in respectively. constant Excluding grew revenue, grew revenue grew in and globe, XX% XX% X%. APAC Americas, rates, EMEA in X% EMEA

enterprise represented foreign percent revenue by total up-front and e-commerce partly XX% was and revenue. offset Direct X% growth revenue. movements revenue lower Strong of and increased exchange underlying

remained Our remained product exchange comfortably to subscription rates. range our target and XXX% at renewal rate our net retention rates within revenue XXX% strong, constant

from removal the a our for multi-year XX% front. increased multi-year and pending up and $X quarter over billed renewal billion, $X.X largest underlying contracts tailwind Billings both to solid discount continued of cohort reflecting demand first our billion, the

revenue respectively. points XX% RPO deferred About grew RPO of early $X.X $X.X that from XX% percentage current billion. $X.X of current Total Total XX% growth renewals. billion two to and grew RPO billion was and of

Turning the approximately broadly percentage at XX%, level margin non-GAAP to by partly margin headwinds offset ongoing operating P&L, Non-GAAP X exchange movements. with revenue discipline cost point from XX%. increased to foreign remained gross by growth

For the points, fiscal percentage increased year, non-GAAP by cost discipline. growth X and strong operating ongoing margin revenue reflecting

our in increased by reduce effort $XXX QX our approximately points workforce strategy. operating million. to XX%. a year, That of GAAP further margin footprint and charge last of our Recall lease-related percentage real-estate took we was part X to approximately hybrid to

increased fiscal margin points. GAAP year, by X operating percentage the For

our billings record year the free growth. of delivered flow than and billion, for strong We $XXX and cash quarter in the $X more respectively, reflecting full million

to Turning within capital allocation, continue actively we our framework. to capital manage

economic Andrew through As our said, is capital focused strategy the cycle. by deployment underpinned disciplined and

dilution and repurchases will to program We opportunistically from stock-based it compensation offset when sense. makes our to continue accelerate

we share. purchased QX, During average million X.X an of million $XXX $XXX for per at price approximately shares

year, X share, the billion an $X.X of full we by and approximately $XXX for shares million purchased shares outstanding per total X.X million. For at reduced price average

when $XXX-million in October we that a in bond we at rates refinanced sustainability this bond. We low XXXX issued historically Recall retired our first effectively December. bond

seven is now bond years. almost average duration Our

guidance. to turn me let Now,

QX in BuildingConnected Our partners optimistic, end-market broadly grew bid us ‘XX the consistent and QX to robust. cautiously with ‘XX. Russia ‘XX modestly, fiscal usage remained remained fiscal activity sets strong up for fiscal well excluding China, year finish on Channel demand and rates ahead. Overall remained

‘XX. in to we fiscal growth a be quarter, foreign headwind exchange said and revenue As last margins movements will

to expect We X-percentage drag FX be point revenue. on about reported a

from will to recognized continue We absence be revenue Russia point to revenue X expect the percentage a about deferred of growth. drag

we’ve to a billings most in highlighted significant flow call, ‘XX headwind customers for headwind creates in earnings QX multi-year before, fiscal cash a switch our from ‘XX. As fiscal and on most up-front smaller for recently free annual the

earnings fiscal ‘XX see slide You in deck. our can on the eight of impact

deferred the fiscal strong annual the revenue customers of will benefiting free cash The to for billings. XX approximately affect cash also our $XXX The switch the increased flow swing. million, reduce in smaller million. cash drivers free key fiscal flow to switch $X.X but ‘XX, in and a year, linearity QX free multi-year ‘XX billings this by by ‘XX are renewal and cohort $XXX will transition by more of cash proportionately annual fiscal the multi-year billion QX quarters the flow flow year second half during in free billings with the billings the from largest of fiscal impacted Change

annual equal, total choose the many switch annually, may While were else if it RPO of to All multi-year performance proportionately negatively reduce obligations rates. customers occur, and contracts some we remaining expect total would our unbilled instead. contracts to portion would billed impact growth to this

unchanged broadly scenario. in current would margins, billings, and revenue, revenue, flow remaining Deferred cash remain free obligations, performance this

price Annual We'll are as us upsell, progresses. adoption lock multi-year embedded the renewals this keep contracts. in on and drive for the more create but you year opportunities to updated without

cash of Growing will Our model a result a profitability attributes. in our the more range XX% and, to future. the in tax cash return the approximately normalized losses from XX% ‘XX. fiscal we up generated tax We assets in ‘XX, as fiscal of significant rate transition. during of in level tax accrued to operating business the Absent those across foreseeable tax we a rates changes around more recently, globe, for policy, rate XX% tax our rising have remain expect accelerated effective consumption tax

up revenues we X% be to the $X.XX together, from the about about and at mid-point, ‘XX Putting billion, at impact XX% rates that constant all between expect or $X.XX Russia. fiscal excluding and exchange billion

to constant improvement operating FX to We margins expect non-GAAP be by with offset levels currency ‘XX margin headwinds. fiscal similar

billion We billion, cash range, expect ‘XX. between XX The $X.XX mid-point implies a to flow compared billion. free that in reduction to fiscal free and $X.XX flow cash be of $X.X

long-term multi-year and As multi-year cash reduction changes the billings renewal a cohort, and shift I drivers our of tax as customers rate. deferred are: the FX, to revenue annual that for key in of result a earlier, outlined smaller

the details fiscal The our modeling on website for full-year ‘XX. and fiscal ‘XX Excel financials slide results deck assumptions have more on and

At investor day, looking beyond we’ll year. this be

early in As platforms the we for to we down innings generating Andrew services, cloud industries relatively between a the and which silos within shift and to break sustainability. remain the cloud-based of drive This and is transformational noted earlier, demand the efficiency serve.

well-positioned invest focus realize to potential. that is to and these with to opportunities continue we growth discipline Autodesk will uniquely seize and

other policy, business predictable companies, compared generational more in While mindful many when give our volatile climate, past. we’re world that geographic, model make than uncertainty macroeconomic, the resilience product, diversification and and geopolitical, to subscription the health customer and us less and

volatile Our will less in and somewhat grow more somewhat business slower in faster environments environments. volatile

we're just do. And an have to we and industry-leading have are although to looking industry-leading looking over and margins. often On growth do. between are although we balance margins, to we looking often Nor average not often do. have we industry-leading Finally, just time, we growth

cash free to ‘XX that not strong free the in XX% flow range deferred them. cash the the range generate revenue of multi-year flow will to hallmark and "Rule or most XX% free from growth several We the one of of the ‘XX reaching intend we XX% given time. goal this shift think XX% and with the ratio compounding cash margins, parameters the companies a grow in XX" will target ratio annual fiscals this of and is linear XX% in the And all balance in between margins valuable XX% to path to more a over contracts. rule-of-XX be in be and to billings in revenue years of drag flow planning mind, framework, our of long-term captured to world. the to next With over The remain

strikes macroeconomic top improvement line rule-of-XX time and steps to profit The of business cash macroeconomic between be be the to of make balance regardless backdrop. flow by We this growth. achievement metric on me right determined growth goal, somewhat the the of it driving delivering will meaningful the and let also and we’re toward clear, rate feel intend obviously managing disciplined over this backdrop. But,

XX% disciplined to margin range FX half and by continue now expect that likely to lower macroeconomic sustained the headwinds, fiscal operating range. will XX% slow the improvement, more ‘XX, of with along be in albeit non-GAAP rate in in our platforms, but investment While to margins of we the products and

We continue growth further margin to for thereafter. see scope

trending revenue margins GAAP and percent towards over beyond benefit time. further from compensation XX% of will stock-based as a down

you. to back Andrew,

Thank you, Debbie.

on more efficiency that March Our long-term for to at me the on and our serve with let the day cloud-based we our plans end-to-end, strategy you sustainability solutions tell vision We’ll customers. drive updating transform is by quarter. our and But our you finish about industries progress in fourth XX. investor

to cloud. to is solutions portfolio and on We Autodesk by connecting in Revit transparency streamline growth to energy Sweco, AEC, of engineering and siloed lifecycle. to everything continued consultancy, the the products, strong and lighting through transport workflows Innovyze, our see Europe's leading flows to usage Construction to better water from fueled connect and and customers our project ensure in previously Cloud consolidating Spacemaker from architecture

practice. Sweco digital buildings. Autodesk on has customers built service, is footprint new of the helps of a thriving Carbon its which model cost and Its sustainability calculate types Platform Compass, Cost carbon different Services, and

our solutions end-to-end encompass and benefit BIM our For from complete preconstruction construction we customers, to design, field continue execution. which

In Autodesk processes. mid-market Build conflict their with California, replace further to QX, in integration to design-build it chose with competitive a looked project contractor in specializing general a minimize as design management projects, offering improve and

on vision chose future While because functionality highlighting partnership Build’s cost customer of construction. ultimately management of Autodesk long-standing a trusted and shared differentiator, our and the the as

on of again, which growth platform. our We thousand almost new one which multiple growth rapid Cloud. construction and continued enable in drove Autodesk initiatives excellent Construction standardize our MAUs, added rapidly quarter-on-quarter We on and Build’s generated strategic to accelerating continue progress more customers Construction solutions Autodesk driving make bundles, in Autodesk Cloud logos adoption Xx is a to combine

continues to Outside remains the U.S., potential construction well international it. channel still We see to to growth our positioned drive strong Autodesk sell growth. capture portfolio and strong uniquely enabling our construction in partners

a Steel one reduce AEC infrastructure civil, has Steel, operations. uses up in its manufacturing, of efficiency plant steel teams, optimize leading In To manufacturers, Autodesk increase solutions Tata equipment, to setting Tata and if used and and they world’s between the Tata conflicts new effectively structural, our potential clash data costs and installation. environment, various in have Through during platform, a integration of Vault. Manufacturing single Steel occur detection virtual leverages vendors from simulation huge collections the and on physical a that impact eliminating can

continue EBA the in and both we is its A the expand transform vehicles, QX, to studio, and on and as leveraging executive manufacturer its connect controls flow own cutting-edge the its reach effectively Autodesk U.S. beyond design Automotive, to technology partnerships, factories. quickly. in the customer now the process our leading design its reviews partnering of fleet and and for in new more Pro standardizing VRED factories In Construction strengthen visualization OEMs within data electric Autodesk renovates ensuring owns construction expanded final designs as it Cloud. it with by more

Prodsmart. tool management for Customers manufacturing the U.K., their than to the merge with has manufacturer In opportunities. XXX based to part a time are in of customer higher-value workflows months, Fusion a also QX, from inventories, design, after more which competitor’s platform, in design beginning With doubled work and production and CAD instantly integrated can link tedious and size CAD switched Fusion to CAM and a directly extensions capabilities. in saving the last creating its materials for XX a bill its of connected and Prodsmart generate eliminating as and

where XXX% year-over-year. not units number extensions include the ended Fusion more with does increased XXX We a subscribers, quarter XXX,XXX which than

powered we Ansys, designers During their a costs. to compliant Extension ensure PCB enables Signal Integrity Fusion, at power electromagnetic which cycle development lower quarter, launched products for by the and performance, faster analyze the

in to PLM, largest-ever We growing continue XX in see the deal data signing quarter. than management strength our and percent more cloud

students are across platform projects of In within Industry” switch prestigious and At primarily many to modernize now will learn to industry skills design its their down their education, the of of use “Design with Their ensuring the University, real-world use and along availability. XXX their by program's to partners. led process live cross is leading modules universities future. Fusion Northumbria courses the for students in-demand choosing continue ease

XXX for remains leaders design to educators tomorrow's and bringing new are Fusion manufacturers. our While software established and students, free

to customer model users to will to business participate our in enable and offerings evolve We continue ecosystem needs productively. match our more

technical R&D a operates improved Plan from in our enhanced with For six Premium XXX which sign-on XX/X support. Named European efficiency example, worldwide, from to User and over manufacturer and countries providing model security transitioned facilities single

partners software the with requiring analysis in for and providing behavior, supported with of users; token Our the without and customer Maschine ongoing access resulting usage an Mensch full-time flex subscription. occasional them its a knowledge optimized transition detailed at package

find with that ensure finally, users most continue to current we the compliant access to and to flexible And work non-compliant have and secure solutions they software.

deals XX the with million nine $X quarter, over closed compliance our we and over $XXX,XXX During initiatives. deals license

I opportunity, started to to resilience, – of and the where Returning future key important discipline and success. results contributors were fiscal ‘XX will our remain drivers our

with plans on to day investor excited March at you share We’re XX. our our

to like the call up for now questions. would we Operator, open

[Operator Instructions] Saket Barclays. comes of Our first line from of question Kalia the

Your question Saket. please,

wondering give maybe 'XX guys. you. context thinking Good questions guidance Thanks more and was about if little about afternoon a Okay, for taking from just bit a for you're perspective? you Debbie, my beyond I here. could how us great. fiscal

Sure. Thanks, Saket.

consistent into overall in the was what transition, The multiyear frequency. of guide relatively first, we environment change in demand to the a transition So revenue. course, I QX a creating on that's If headwind expected. doesn't just impact QX. in annual saw billings have the we first with It's drill an as for billings have billings, specifics on

On of revenue, would If exit. impact growth we and last for represents we're to Russia a points FX outlined revenue the range be Together, low the the we that, as seeing normalize teens. quarter, growth. in from headwind that X negative

an on the as-reported margin, managing we basis last On margins what we're the consistent year-over-year. call. with flat on That's said

balance strong We have a sheet.

We our conviction strategy. in have

represents that detriment I but so margin so improvement year-on-year. out point we want that momentum, margin that And to not much our to continue can basis the a our outlook. So guide we we to a constant so to want maintain invest our cycle during currency on see

headwind transition flow, on annual And to downstream to from of cash has billings a flow, effect the then the finally, billings course. on cash

revenue negative $X.X headwind for billings to a annual opening having 'XX switch the long-term in is flow. multiyear of the primarily deferred That by mentioned I $X.X billion impact swing in to fiscal is billion to As commentary, cash around that driven customers.

factors $X.X higher And with to that if taxes, a midpoint. that get we like cohort lower other cash and we multiyear guidance take billion renewal

thinking ourselves long how to is sort it's and longer-term that's for goal financial And term. fiscal set of that the same up in we're Our thinking driving the 'XX success model. for about

fiscal said XX% that our think XX% range that to it's On FX territory. the of be targeting of in 'XX On remains in range now to XX% the target likely double-digit in margin range. to revenue, XX%, margin, we're to we planning window. more a headwinds it it's the lower we're But the that macro we of seeing, in and that because that going half 'XX

work And 'XX, double-digit 'XX looks the fiscal less cash cash and impact then a given on towards but FX stronger-than-expected fiscal CAGR finish. we'll though, growth volatility of still flow, through it likely taxes,

look we to we XX focused As to disciplined Rule we ratio we're and through managing profit billings on after or strikes the think driving this get better, on ahead, top delivering cash transition, and business growth the balance right line which of flow. a multiyear annual between

very I of little may. will. you Debbie, you, of it. guess multiyear just now Could annual through on for contracts? detail to walk finally bit if Got I upfront it. arrived, fiscal Got for those from helpful. follow-up has a billings just you Maybe a impact That's that switching that XXXX if maybe the

these It's conversations, Saket. be to Yes. finally finally It having has nice arrived.

is billings, the rollout So to schedule. happening annual transition on the

March And the partners. be the and XX sell a at XX. of will with countries in majority go-live We're gold systems we upfront population. annual for multiyear significant That then only terms mature assuming that March represents that sell eligible Our through platinum multiyear our ready. billing we

that and in populations flow is That's primarily multiyear It's going move some volume relatively but opening beyond billings, March 'XX. saw linear. what eStore fiscal we'll And going commentary it's the as be the that the small follow-on those to to countries, be we past forecast I be see in the emerging fiscal remaining to There's in going not to free cash consistent a annual from upfront said with headwind comparison to in in coming we XX. to 'XX.

been impact We're lock the that inflationary you price multiyear remains entice in customers of get impact the multiyear. 'XX, choose contracts buy with multiyear other That assuming in course, billings especially customers in multiyear, some negatively think proportion business growth but in. it will to rate. continue same metrics of would environment our contract fiscal most multiyear that We or to that that that's we're the a annual annual our it's financial But than the contracts total possible that of our rather RPO billings. wouldn't

of rates to and go an for our end a the contracts, If the gives renewal to upsell drive it with us At strong. renewal choose them annual opportunity our customers us. day, engage adoption and to with win-win upon it's are

progresses. posted So you something this the is we'll keep as on year

Very clear. it. Got

Analyst guys. the Thank to forward you. Looking Day,

the Our of Vleeschhouwer next Griffin question of comes Securities. from line Jay

line is open, Jay. Your

Thank evening. you. let you. Andrew, with Good start me

in XX-Q with and the Your evolution lot and there. the relationship model, third there's complexities for language new regard sales with intriguing your of specifically, foresee your quarter of language you some VARs had and to how the a VADs

goes could number perhaps how the or of in over about mix the of follow-up. indirect? that over And you envision time versus So a business effects your or or your you Then of license ultimately think direct over terms of effects next time. the the evolution foresee operational sales you years you margin management where terms fulfillment talk in

Okay. Great.

kind we've a been a driving enterprise of plan. things growth and of these lot direct growth the way you channels. direct the all mix of evolving in about lot driving a in longer-term like evolution. years highlighted. of over and back, direction I of several a in XX-XX This We've and I been talked is indirect business, weave direct We've particular So together Obviously, like into an time. been

is our value-added And of lot with driving more doing a is seeing you're engagement now resellers. direct we're what some

between the fewer on we've our there that the of direction direct which engagement and staging changes engagements smaller going. preset executing value-added resellers and and total resellers, engagements more been the sense systems more in we're some evolutions and with our you between in are saw makes So value-added less intermediates

models same of So still driving looking of we're But we're our that engagement towards repower about. as term, that improve, we've been talking with systems channel. types value-added different long balance our type for

Okay.

the for question, increase subscription. the net The net installed about us annual year, your gives deck the was of Second slide on base update of $XXX,XXX trade-ins.

long-term growth of more Looking the model and perhaps effect year. richness foresee and mix, volume growth about the contribution of manufacturing, end particularly volume perhaps the new as of so volume ahead, your market. by per your maybe you And collections When that XXth does well the improving think how to forth? of looks like it's net

to you So of outside a has from manufacturing. have lot segments that of volume come other

So perhaps you talk about could that.

Sure, take Jay. I'll that one,

So to business we given accounts a want however, models that play, at so I things such wide grew a there's variability of Flex, pricing lot start that have healthy on way. top. metric, so like Yes, of in subscriptions that and just a forth. and we in in remind, diversity the EBAs,

us and for less manage relevant less a to metric does So it business of make it performance.

ACV. We're on more They growth in posted both solid and renewal focused new QX.

up As we equally of historically, on or we've flexes new roughly ACV. sources, in. across both margins. and it environment come things unit We I of the depending seen That's spirit and mix demand from the question. that generated partner across In volume your down it kind like think economics, the for, also price proxy stronger think, and general, those about we're

we to hit. growth might we're the price. see COVID more more hit, we at we when obviously, when were from because sensitive more could in at then versus And price increases from growth takes that volume We coming like situation change time and volume the because price saw pandemic where puts a see we prices all, some

long-term think I ASP split we're roughly we growth of as price about all, about talked in about, that achieving volume, the a all But thinking over equal time. as parameters it some across mix,

did want you segment? comment to on the Andrew,

in we comment deeply you make your statements, getting the you're customers' our the as know of at right? we're various situation where design segments we're Jay, and business. moving business I both in know, As look in, you all do and entrenched on a side aware, Thanks.

the reinforce and So which going be the an of the even you even I going process, we discussed. AEC of you're also to it engine lot a important attention some that segments I we're some of And that. a downstream of subscribers more aware that in little fact within to these to all processes manufacturing is just to things, pay adding the know wanted be bit. within in other parts and

you, Very both. good. Thank

question next line the Borg Our comes Adam on of Stifel. of

please, question Adam. Your

Thanks taking and about question. We Innovyze, quarter. our Great. Andrew, to interesting for hear so traction some check. growing on up Maybe the the picked in to much, it record great And hear was hear to love migration a model? I the legacy and have more in more more follow-up. then we subscription, where its this are little bit business about driving to a what's broadly given I'd

Yes.

guess of that largest quarter. incorporated our of lot engagement So our for can enterprise thing that into biggest hunger our it's what, and a very is growth early now of was be in agreements And record with in some record a driving some the the that a migration. But had in there's And general, the business solution. Innovyze Innovyze accounts.

customers Innovyze that's around the more propelling with engagement right growth now. lot a there's direct really So

early activating We're in very of the still stages much channel. our

team, we're still and we'll you activated and starting, on we've activate the that early subscription that major on. And our working So transition, to goes our as time give accounts stages channel. updates super just

quick a the follow-up just on macro. Maybe

point from are clear step interest switching much. try to to RT or I'd guys You to around observations or just maybe the in love customers so perhaps more even around Thanks seem solutions more go deeper. quarter-over-quarter. collections macro? that anything Any down one consistent be given things Flex

Yes.

consistent pretty sizes So segments across customer behavior customers. actually, there's and of

downgrading behavior. of business its to be to measure, any to and with tends business. behavior our or than Flex, a our detrimental to switching So to kind early there's large not be incremental Flex And days very rather tends

changes kind larger So of in grew, a the than customers faster not will ones, seeing all everybody grew mix in was our our as on. but go general, I growing. we're smaller segments from things while any perspective, say, segment

Great. Thanks again.

of line the Joe Our of comes Vruwink question from RW Baird. next

is line open, Joe. Your

wanted delivery. with your the the around more the I'm to and commercial of And public this sector curious of you're back what give side evolution I doing on I compares to project guess business. detail go how

So analogy to and and Or has in the or announcing the of with kind is here in got conversations having you're to it maybe now use, XXXX further more BIMXXX you're are I kind and along potential Cloud think, we closer of the what space XXXX, owners the XXXX? launched Construction it today is we quickly? public and progress

I of you're very And sector in astute public the we're things pointing about think question. general. important Joe, a what with to I think that's doing some

commentary, probably our opening things in You noticed about FedRAMP comments with that. associated the

All with FedRAMP, infrastructure more communicator, department of the partner federal are all as of engagement in about that owners, larger opening infrastructure, owners part are these European laying modernization of transportation and and I the the and DOTs more of for groundwork these talked terms parcel of in things, owners these inside well. and of

out entering will It's way All terms described to of time. that into It of to will similar a in in take longer-term very a you what construction. continue build play.

a Department specifications coming of you it's of activity still But So to stacks. can things. Transportation more see and out desire early modernize more and these community the all within the innings increasing in

infrastructure lot era in Europe. this but on also just into of in It's a to BIM of still their that's they're in solutions Union infrastructure kinds A in discussions solutions, want engage European going have different stuck to more how more looking true they're trying software now. they're right the compounding drive the big of different the standards engaging and isn't We're some a a DOTs modernize the about true that's in and And to projects. early And push space, journey. these U.S. countries and and with in with effect of people to

Yes, closer think, I I then, helpful. great. And the XX% guidance, parameter, about the That's calls as growth yet And just guess, it XX% fiscal think in as backdrop something to wouldn't I to on the easy. label I XX% organic. XXXX, for

outcome? plausible XX% the planning becomes what growth happens a relative of a in in So I challenging question guess is XXXX, scenario where kind backdrop a type incrementally to

Yes.

off, within year, margin we that how can to targets. last we've of over rest any downward we we ensure aligned business expectations everything that hit the and resilient that first pretty believe of nothing of that saw comment years. an right carefully. few put pressure levers we about tech the we the demonstrate scope, have you're things with things kind we let's on the has If environment to the we could and resilience seeing the is in in our we've pull saw those that look, We do pull company our So where sector for layoffs or how the

out So pretty what and in confident we about economic environment. changes it the we how laid feel if we've could even were there hit

some add Debbie, want to do commentary? you

of couple things A I say. would sure. Yes,

was was I said I overall, First, closely, and that a watching backdrop mean, we're better broadly a it the worse. unchanged. or U.S., macro Europe bit bit

Asia, about the same.

environment strong. The the broadly So reflected that our We've demand guidance. similar. remain overall, whole, leading all indicators the on was of into

that implied be would growth think in to our you if is 'XX rate QX about it look the at way fiscal revenue, X%. another of And

headwind, squarely fiscal point extend you you're currency that guidance 'XX. fiscal the at at of for If midpoint 'XX into another

So that we we're And at guidance of kind the set. comfortable rate. that we've with already feel

much. Thank very Great. you

from of of the question comes next Our Michael Bank America. of Funk line

question Your Michael please,

for I A you questions Thank couple today. Yes. if could.

than a transition noncompliant quarter very expected, the strong the First, we So rate. during was greater

change be kind beyond? curious fiscal type of push there? pull of additive in strategy versus in then that growth 'XX how to and And might Just

Yes.

in I've right? to As continue change and no I keep efficiencies. non-compliance, times, there's develop reinforcing, we approach to So in many to want our said

be forward. looking who we're is as we steady actually actually But to to isn't accelerate to in a drive or non-compliant harder direction. push building up of move base any precision, identify who and business particular and to it We not we're continue it higher or able it

the time think We're it's just for right continue that and other entire gives do incremental do be our our thing a the levers to of compliant kind business is to there to and people encourages if the It year that be growth the we kind to themselves better year compliance we this ecosystem. should the And within because for carefully here. the business the to out do compliant we're we the be the to thing to strategy. our deliver after right allowing continue year. of customers One, And for after in it themselves company, outcome engine there's customers. our steady just more they do ask more get activity engaged incrementally, fact this, will

So no real change in how we're approaching that.

annual. And think might the the about how multiyear environment inflationary customers then Debbie, you shift that mentioned to affect for

that for the the it you for upfront how rate annual change think payment to from shift bill. rising about affects you? curious multiyear Does environment Just math if

really our for upsell to It given a there and rate there's win-win customers is with any with contracts, said. of that multiyear contracts, renewal meaningful opportunity on drive customers price upon any an lock we a to a It's way, sure doesn't period, make and get annual in the because XXX% signing have opportunity less I that we us to engage. our Obviously, with in adoption. but renewal as engage

standpoint, So from our it's a win-win.

Great. Thank you, both.

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

for questions. one Great. a Thanks taking kind high-level of you. for my Andrew,

Autodesk focused guys while to can perspective wondering AI with you all been on news for on of now. how us have the You a give your design if sort leverage recently, plans AI on generative And and design? kind I'm impact of on the

Yes.

solution that given the we is horizontal obviously has horizontal and solutions. leverage some ChatGPT our of particular So amount a validation massive of to intend to a AI. of It potential solution, in

it for provide a language customers. works things Microsoft that that our fact, tool for processing my manuscripts are aware to you're himself Fios, natural In and and both real Nadela fabulously, right? These Satya probably to generating and leverage demoed direct for

you level. develop generative potential we like of company do in way, unlock as to user a ecosystem really to directions. particular the by or the vertical lot or customers something. things customers Matt, productivity However, design, do when that what want training the used design all that's the of productivity productivity going start And I probably comes data that level and be on is the our our build even comes aware but level, And heading value one things that we of, at of by the real things is other that directly to can across cut

with And opportunities take doing going you of their to using going horizon take us want to revolution data. I real the which that's long-term to customer customers be to on training data, in It's But that time where comes will engage some to on pay terms develop. from. of for attention to

us on it. I a that forecast. a And today sort question getting the it's little like And sales building from rates? more discount the Got Debbie, little folks on guide? maybe you the sort levels I'm But lot a provide think of it. that color thinking productivity, based in is then you're what are conservatism is Anything Got of bit the see granularity on about just there? of how sort pipeline you're more how of bit sure

Thanks, much that said Matt. to I've what remain leading indicators say The versus I'd I don't Look, macro strong. unchanged. broadly have add Those already. is

somewhat worse going and environment. is business and to lower Our grow and better environments faster

long success up term. to in is for set for goal fiscal and Our ourselves 'XX the

Thank you.

Celino question line next Capital. Our from comes Please go of ahead, of Jason. KeyBanc Jason the

me. you hear Great. Thanks. Can

on question quarter. one actually, the So

well, at the I in after business there it January? like I'm just away -- went the you that at trying sounds guess, of how see did end business strength month. the discount multiyear was the to So understand was of beginning

seen dissimilar in of was to business what linearity previous the not our we've periods. Yes,

cash free was Perfect. And the gave, to include the cetera? headwinds XX% et commentary does about, 'XX that to period you for flow of XX% talked 'XX. period, And That the the cash then XXXX including you FX, on taxes, the margin. the

margin, said ratio XX% all growth target to rule of in free pursuit I over time. our of XX% specific. not parameters we planning of It's what and goal a was of XX% achieving have XX-plus to time So XX% revenue cash flow

progress look we of that annual of from fiscal macroeconomic go to at as that's time towards normalize against to that that going saying low over multiyear intend backdrop. 'XX, the meaningful in achieving XX% what we're for you the trough If at and the our transition be of XXs. that our to we'd plus is we're for the goal guidance billings, we And the make regardless achieving low XXs goal

Perfect. learn in we'll of Day at No, helpful. couple more that's weeks. guess Thanks. And Analyst very I the a

question next the Steve of JPMorgan. line Tusa comes of Our from

is line Your Steve. open,

Yellen Sam Tusa. on it's for Hi, Steve

maybe for cash revenue we is the So anything have capital terms the working taxes. I year, that of deferred bridge? around flow next the and know cash free moving in should bridge in guys there But you considering else

multiyear on is if the look Slide you yes, upfront put from website at cohort. is that If at -- the billings X the you deck of we look move annual our lower

X cohort come and It's lower a just renewal, have up decline. 'XX. contracts that drivers multiyear it's We of the cyclically cash are fiscal in of taxes. FX movements for Those the

the it. revenue high Got year, then Thanks. And how next by much driven price? of in is for terms guidance single-digit that of

it type as volume I I to as asking margin look We're our Jay price growth. of contributions kind I of at when not and mentioned mean, that to of level a mix, was get specificity, goal we earlier, would mix partner to the going question into drive say. be

be too. look so growth about that, would thinking that next And you consider we at loosely it how can we're as year,

Thank you.

of the SVB comes Sterling line question MoffetNathanson. next Our of from Auty

sir. please, question Your

guys. Thanks

the question guidance? from And you. market manufacturing architecture, understand Just into help Can end guys did which today? you you cyclical one on my cetera, me versus what the in impact et factor trends are biggest seeing those side. segments, Thank you

Look, answer is segments of right? it's growing, those question to because segments. new all a hard business are And in growing all all the those

seeing. One terms what a of each from nuanced in thing will question. there's different character say of a it's pushback I those they're one of is So segments

to costs can't are trouble they are demand it seeing have going manufacturing the going of some to we're up, my the They deliver, with ability on pass up, the my frankly, on up What and kind costs that going their are all costs because fulfilling the impacting cost factor. right? demand in is is customers. And impact

environment say would ADC pressure is customers more now, manufacturing right inflationary I So it the our customers. on on than putting is our

So that's just one color. piece of

shortages, of an of now, with But for costs the capacity which space, an big and them. struggle overhang the business great are are material AEC is right because there's kind business, labor overhang they clear problems, there's ability continuing obviously, to still to out issue the In of is. them for there a book the

too. as well. repaired an months, and manufacturing, has There's my All a part overhang plenty been car part. it's There's right. challenges of has can't delivery still in true of my from I'm that there cars happen. that's waiting bus still for capacity the maybe get And to

some in getting of But capacity the business, backlog a way. companies institute in of there's these generally, AEC, labor is within shortages, architecture still firms, book of construction firms, and

out. happy. pressures segment So problems continue the to way, more digital the much the clear will AEC hear capacity all time. customers. and capacity our in going Eventually, I manufacturing I they're anyway. inflationary M&A, are it's care, more don't is hear And by more People into which, much from watching they

you. Thank

Our comes SMBC Nikko of next Koenig of line question America. Steve the from

Your question please, Steve.

you here. and a Thanks industrial can design Great. in us bit questions. I'm Sterling's complexion kind to construction? Thank you upstream hey of related little more commercial and versus you. versus taking for Hey just What's residential want my across Andrew, question Debbie. AEC, build your to downstream. I look remind wondering, on if

of then kind interesting And sub-segments? you comments those that when clear begin capacity of had, Andrew, kind out you're really problems down? could And that and as intense about just affect seeing how unfold one given rates those to over about how interest demand segment. the slowed that see it AEC I'm 'XX What you you could capacity time? in Was those Is activity more just of curious, did think broadly? do that in and how sector is in

Yes.

I question. what now related -- question, first was? about remind which to me that multilayer of part the the remember A a And your was to So was part have

Yes.

little a long was of it AEC. The complexion your winded. Sorry,

Yes.

Okay.

sensitive is always always thing, always the the go and the the somewhere, are about here's the way. all And question parts I The dollars -- to. which this answer of AEC we right? So in question to ecosystem very about what's X.X I commercial to getting commercial is lots commercial ago, about people exposure So real estate, estate real what of happened going estate? questions were was your slow concerned down real years this

reconfigure. in retrofit completely that. on economy And inside also, retrofit and going a is it's with right? involved associated to and in estate and reconfigure architecture things due a residential that And moved lot commercial to all of the A pressures are spend lot in multifamily It is municipalities. firms other and of real inside moved

segment So lit shifts of around And the the getting in money all up. is time, which terms right?

get all So particular out There's and right? the out are the attention. about of of of seeing or the way the on we're of any moving shifts, built built worked is on not always ecosystem. else just or when somewhat exposure that getting particular starts terms other because in it's And things of to the space any segment of out more this queue into to all one way, the something is and things worked interesting activity it's office something And slowdown queue the one it's commercial that of queue, right? the -- getting wasn't

Now type of a to it 'XX, with regards different very situation. was

slowdown recall the at what low with get of being our you firms a end precipitous slowdown we thought of end business the in our smaller matter fact, a in a it work. was And of was If low to enough business. 'XX massive not able

people more things because now, of that wanting there of right to than that the just the don't We horizon get get ecosystem. backlog like in anything see thing looks there on the the that's out done business capacity is done there's to

very was backlog, there kind bleed to which through. So was of shut There it's off. no situation valve is different like a where a the

where a in was you saw not and lot of lot world a the just it's we've of very a very 'XX. in world. a pent-up different company. project situation got we're demand, that It backlog, different we're And Now same

Thanks color. helpful. really so Yes, That’s I for sure. appreciate the much.

the That to for turn for closing conference today. is Sir? Q&A would like now all Simon back Mays-Smith remarks. time we have I the to

Thanks, everyone.

having trouble finding button. about Sorry that, my

time. Day to in the Investor all seeing month's Looking a forward just in you

to any you soon. again simon@autodesk.com. questions, please up e-mail at If forward Look Bye-bye. have catching me

conference call. today's concludes this And Thank you participating. for

disconnect. now may You