Autodesk (ADSK) 25 May 232024 Q1 Earnings call transcript

Thank you for standing by, and welcome to Autodesk First Quarter Fiscal 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions]

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

good call and Autodesk's you joining for 'XX. Thanks, discuss afternoon. the conference to of first our operator, Thank quarter fiscal results

On our Andrew our me the Debbie CFO. and Clifford, Anagnost, line with CEO; are

conference webcast. live call is Today's broadcast via being

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

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

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

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

reconciled comparison. website. will year-on-year the our investor our All performance. we press discuss non-GAAP available Unless other on or referenced During our in we supplemental quote a financials growth and numbers call, today's financial reference release such otherwise numeric several changes relations are call represents materials as or noted, Excel in each

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

welcome call. and the Simon, you, Thank to everyone

of discipline, a to and and competitive three performance enduring quarter fiscal is XXXX again resilience, financial testament Autodesk's opportunity. strengths: in the strong first

resilient us record deliver healthy policy and and more business margins, currency, enabled product revenue geographic, challenging our a and XX% to growth In constant customer diversification, model, in environment, geopolitical and again usage on modestly, quarter first last bid quarter Leading product with BuildingConnected indicators channel at and partners. optimism continued cash consistent cautious record with growing from flow. free macroeconomic, levels, activity remained

reflected and strategic consistent momentum, America subscription net XX% we retention, transformation growth improving economic as RPO. remain XX% commitment chains. economy in Consistent is leveraging our North renewal within committed saw and partnerships, from with EMEA. EBAs; in decelerate in Autodesk, headwinds growth supply RPO see growing current to broader the helped growth all accelerate usage which larger, more total adoption more new automation of rates, products and year-over-year revenue That and in and they But our of drive to in and customers and

uncertainty its process and invested right vigilance expensive sure short-term, well Discipline we investments a one While recruitment. focused remain macroeconomics significant prioritize by benefits realize industry. while deployment, with improvement is periods unpredictable are margin, and growth, enables Autodesk of underpinned of and constant the the balance sheet This focus and cycle making macroeconomic places. best the in through investment later. strategy, profiles mitigating catch-up in during to mean of strategy are the in investing of risk having we increased the to the capital to the This of are with optimization also our disciplined executing economic make to and

in are heard capabilities. products the between deploying and end-to-end at from Autodesk we to doing, and recent Day, industries you Investor our and so digital within we As and, transformation next-generation services shifting technology serve

launched cloud, is example on Our Forma, a our AEC industry great vision. X, of May

value delivered Revit; environment enabled while AI, enhanced Autodesk intuitive single, and clearly products enhanced the by user and During modeling customers. by pre-release cloud, how new the how in how rapid times interface saw a other to value customers Forma's like and response trials, users; integrated Autodesk its flows CUBE accelerated bi-directional like adoption existing X significantly data the enhancing of

While its designs or concept CUBE its phase customers more reducing the X more. by delivered valuable design using Forma and during to while XX% trial, creative

and I more evolution, better customers. Day, industries, also evolution, model Investor to between enablers, leveraging talked At our convergence and about including choices our for key provide experience customer growth business

good Our Flex example of consumption this. model is a

consumption new can of lion's come less also Flex's Not try with serve relationship expanding existing Autodesk Autodesk. friction, new from and their business products customers pricing and or surprisingly, means existing has customers the enables users. better with new to share customers infrequent the

a channel Investor more our transaction Autodesk our give for introduced closely a time. model integrate and As which we've more Day, Steve will relationship our partners Flex, customers new over said at with direct also with

e-store, Flex quarter, XX into top first our signed the the and moved million-dollar During our up we deal. products on Flex

to curious relentlessly and desire remains innovate. evolve with a propensity and Autodesk

all. enable flow Our durable broader, to transformation growth better built world more products forge capabilities longer to trusted for designed will and a free cash generation; Autodesk from more customers; with runway partnerships gives and us and and enables a of

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

Thanks, Andrew.

more was bit was a current quarter. strong. currency as rates remaining and overall Russia, growth subscriber similar a of improving and that and the challenging macroeconomic The new a last growth last quarter-over-quarter QX momentum obligation with bit Amidst same was such environment decelerating ongoing from quarter to the performance headwinds business renewal

rates investing demonstrate customers renewal Autodesk. partnerships Strong in, strategic committed with are their existing and long-term to,

revenue renewal can a also saw with to timing for their quarterly top as adjusted companywide. QX co-termed multiple would in revenue. happens, expect now Autodesk revenue QX, some in for of date. When year. an expected from contracts that the the if up-front guidance are up-front it QX of a differences subsidiaries to the We we customers renewal as later this elevating we been this of relationships instance sometimes to the hit cause single have Some toward are result, our and, range in end

revenue currency. revenue Americas, manufacturing and and in XX% in region in grew revenue grew constant By product grew LT By XX% in constant grew currency: in XX%, XX%, AutoCAD and XX%, grew X%, and EMEA, X%. M&E XX% the APAC. Total revenue currency: in AutoCAD grew revenue X% constant AEC revenue

increased XX% and from revenue, enterprise revenue in year, to point last in XX% Direct and currency due ecommerce. represented up both of percentage X strength total constant

as rate revenue last and XXX% within the remained retention at Net same quarter rates. to exchange XXX% constant

on flagged month most X% this billion guidance to multi-year transition contracts. given headwind last by growth our month billings As our That annual we and so March one first impacts in deferred to Billings billion in transition up-front for of renewal reflecting $X.X XX, annual of annual quarter, current billion, revenue respectively. billings growing quarter. partly and multi-year the $X.X we billings primarily one RPO rates from offset XX% had increased XX% contracts XX%, Total for RPO Total about to year. $X.X grew early $X.X increased started of and of renewals, about our billion.

roles priorities, approximately movements. exchange XXX to Turning rate to in approximately non-GAAP of XX% P&L, ongoing the This cost X margin cost broadly by discipline, well point including the level reflects while QX margin percentage by expected remained operating non-GAAP as points the at same for impact to gross as to approximately repurposing reasons. XX%, GAAP the our percentage decreased decreased strategic XX%. invest operating X margin of

was Free the $XXX in up first cash flow million year-over-year. quarter, XX%

collections a the the winter early there in the strong; tailwind up-front month of and the cash fiscal momentum by in storms saw linearity in program; of were 'XX were after received we federal addition provided quarter. In factors quarter: that the the third quarter, second, business, we first three favorable multi-year first, our renewals the first last from and billings underlying the tax a third, extension billed in to driven end payment to of California,

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

and cycle. by disciplined underpinned through focused is deployment economic strategy capital Our the

and said, are being the Andrew attrition paying from As pressure and attention this costs macroeconomic on recruitment vigilant a during increased weakening period upward close to we dollar. of uncertainty, rates,

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

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

Now, let guidance. me finish with

year we the overall the embedded are: renewed half and usage guidance in adoption of second the the underlying in The consistent momentum the headlines and, tailwind of full Business remain for a These last strong. range Enterprise EBAs subsequent at the Agreements. in business; expect been expectations our cohort ago years the and a three strong year has from pandemic, the of start with

Let highlighted me summarize last we some key quarter. factors

fiscal the year. year. Russia in movements growth Margin headwind half first throughout margins headwinds peak from persist will in of headwinds and be to 'XX. the from and exchange foreign FX Revenue the First, will a revenue FX

headwind smaller for headwind from up-front in creates flow to in fiscal billings customers 'XX. significant switching and multi-year for 'XX a Second, most free cash fiscal annual a

quarter this from onward. will transition become March started on more second this apparent Given XX, the

Our the unchanged. are billings expectations for transition

And that billed during instead. some customers third, it's possible choose annually, contracts transition multi-year the may annual to contracts

the seen in our March portion to adoption haven't negatively unchanged opportunities free as to Annual remaining reduce updated lock this of embedded price annual performance remaining year create much but impact early All started time revenue, more in total in contracts. occur, but rates. We since it would flow broadly else are equal, obligations, scenario. evidence on the keep and unbilled obligations XX, you limited would upsell, program would and the if days this and growth the total us and without billings we'll performance the current remain of revenue, RPO billings, drive margins, this cash multi-year it's renewals Deferred proportionately progresses. were for

approximately GAAP reasons XX% profit 'XX will our for of in expect fiscal tax outlined quarter. return last we up normalized more still rate 'XX, of cash the before XX% in to We level tax a from fiscal

storms the free payment quarter, flow. from cash earlier, half reducing the third to means the first cash will extension year shift As in quarter after federal I a of winter mentioned California tax the payments tax third

cash generate tax change year, of free a little cash The second still bit. roughly cash half in half/second payment linearity will we But we'll half of flow flow the the free think the our our first half be extension 'XX the to from to transition fourth contracts. significantly billings with trough anticipate second flow free half still weighted generation We annual multi-year the up-front for during free flow fiscal cash quarter. to

Putting half the that between agreements last rates at half headwinds of revenue to $X.XX still in up and billion, mean in aftermath ago the billion immediate accelerate we revenue and and, a currency impact Normal and from mid-point, earlier, XX% at quarter enterprise second the the 'XX year. seasonality, I excluding of years three all reported onset the of the the strong growth mentioned exchange as of expect be fiscal second peak renewed pipeline X% constant we pandemic, $X.XX Russia Russia. together, second or about to about expect

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

earlier, said a I environment, vigilant sustain our proactive and are challenging macroeconomic As being to in margins. more we

We to $X.X free our expect the FX, compared that flow and flow billings, $X.XX billion, mid-point multi-year shift free due in a cash tax $X.XX and smaller reduction billion implies range, billion. cash be to a annual fiscal XX% rate. primarily 'XX, cohort, cash to to of The between

website slide on assumptions QX The more 'XX. fiscal for year modeling details our deck on full has and

to cash framework, business We companies the we XX% is balance flow world. of rule-of-XX the compounding the in of over and hallmark reaching rule-of-XX of valuable strong most to manage think using intend remain in them. between this We captured our or one free goal And growth continue time. a framework more the a margins, with

profit obviously quarter, last time growth the and macroeconomic over disciplined managing said make me on driving will to determined clear, balance right cash metric XX% we're between to strikes be goal, be meaningful As the toward and feel the the delivering backdrop. growth. rate or of top-line the intend more let macroeconomic this somewhat of improvement steps We achieving But, flow regardless our backdrop. and business we by it

Andrew, you. back to

you, Debbie. Thank

Let by in our on quarter. you updating first finish me the progress

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

in on the to see our previously AEC, customers in good siloed by consolidating workflows solutions cloud. growth connect We continue fueled to

EBA serves that goals its design achieve HNTB contractors, and means EBA digital to firm easily solutions. that private help expanded owners provided ability an and with infrastructure The workflows Autodesk public can Autodesk. to digital transformation HNTB, consolidate solutions employee-owned our infrastructure its by more and modernization, around

work the and agencies busy platform. HNTB teams as integrating complex HNTB departments potential to on and collaboration, with of of sees in to like it addition immersive as on instead and across the has transportation well has in to Build its facility responder transportation use example, safety their collaboration state highways. further twins been VR real-life been applications Turnpike Autodesk Enterprise train the Autodesk's For airports Innovyze, scenarios country. work of its digital prototyping offices By of tunnels, leveraging able bridges from management on interstate and first and Florida's help adopting

In end-to-end execution, and through construction, we encompass preconstruction handover continue field solutions to operations. benefit into from and our which complete design,

management and construction the platform aims operations is project our that moving data and point in and to and quarter, DPR workflows, Autodesk on connects Autodesk centralize the solutions and extended contractors DPR its general site. across the In sustainable technically from the complex stakeholders firms among onto Autodesk's all management and environment lifecycle. away connect improve and Construction throughout and the communications, In specializes top in job project and DPR common expanded construction office U.S. unified cloud, XX first Cloud, and projects. with partnership largest

the to from was opportunities will platform presence Singapore, reputation. Autodesk When reduce competitive risk three centralized to because international generated over be selected clash grow construction strong skyscraper. Singapore's the construction and processes and it contract what see management construction. tallest the platform connected Autodesk to We in U.S., significant project make cloud, design continue Harbour, our and during chose our the our offerings as Build the schedules, benefiting for project the reports Build owners outside In automated awarding to China partner,

all theme: Over to the stories means demand. today and with that we're these to decreasing efficiency a have be renewing customers scale of projects expect managing ready majority this common their to our are managed risk. And the project way course, expanding lifecycle we and serve Of to while and us. sustainability, relationships time, getting across increase this

Jim us talked expansion, step our quarter, integrating Day at helping about sales sales innovation, construction how get In worldwide the our our Investor took are into go-to-market product another customer team. force first and ready. we by success important

particularly disruption, of customer combining this design our teams construction short-term project lifecycle. customers ability of the two and base, our inevitably us allow the in scale reach to our While the integrations business, and cause expand some will scale serve to our across

their more we on and to digital Moving in their strategic continue and consolidate to Platform on our grow initiatives. business on Make made manufacturing, Customers transformations to and Design it our resilient. invest excellent progress make

focused with in integrated Rittal automatically to Fusion its drive serve and supply route and accelerate thousands days. two its resilient customized chain, and is manufacturer orders to its enclosure its its EBA manufacturing quicker market advantage example, Vault system, daily. Rittal as customer Moldflow to product be it maximizing It and turnaround to or Using one data will to to systems. demand. Rittal little automation configured cabinets electrical more and and uses increased through In For and central speed internal a leading Inventor, of management nimbly as in engineers make able optimize produce manage to more to of a times. switch Fusion, on is through respond production to competitive line Autodesk changes deliveries online include QX, build as

firm its provider precision update from the and also customer was U.K., efficiency breakthrough simple evaluation, a Fusion. its workflow and a Platform, to of single engineering by the Make Fusion's existing its UI, to and the drive looking is CAM customer because to all of efficiency After consolidating Machining Realizing Design with CAD and the competitive migration the to a intuitive from opportunities evaluating machines. integrations workflows competitor Extension its a the on costs. cloud migrated software to Fusion now workflows increase capabilities, engineering optimize In with existing

to to sustainability in the and more cloud the subscribers, grow drive connect more ending strongly, XXX,XXX with as resilience. continues workflows efficiency, Fusion quarter customers

Fusion it the workforce to Anna data on its in education to and higher easy class and Development courses management Nadu projects. the with in providers Fusion showcase with of invest XX engineering the cloud-based recently of future. continue across and the UI learn In make Fusion's globe, integrate launched Challenge students We skills the we collaborate India students. University and mandatory intuitive Tamil partnered to partnership Skill XX,XXX for product Design the Corporation into to

at Serving a engineering build workforce. and interdisciplinary aims new also diverse in Northridge, will a and Technology in Engagement and is the programs Global State Institution Equity Innovation inclusive investing University, promote computer Autodesk collaboration Hispanic which to Hub, that academic Center house more engineering California

systems precision by tightening to of finally, users of first on our Day: the messaging. work made expanding at non-compliant further concurrent significantly in-project secure continue software. with usage versions substantial initiatives we our hardening named Investor reach two the And subscriptions, -- progress are ensure to of using we and user we and most significantly and our product the quarter, they latest In outlined

both expect the drive growth year second half conversion further to and initiatives and the beyond. in We of

where transition And and breakthrough will and Investor AI me started. I remains to sets Autodesk clouds, Let infused beyond at sustainability models will our the specific, gains. desire Day. finish to to that to Flow, domain inter- to language propensity models able productivity, customers evolve models, Platform curious on operations, able be a and data deliver and and that capabilities be innovate. application we AI leverage intuitive with about With industry accurate Autodesk our their reality our talked into XD multi-modal recent Services, relentlessly intra-industry products directly large, Forma, the of I further Fusion, UIs from capture to accelerate move sketches with and and scaled

a growth and products broader, cash trusted world better more from will more built designed generation; enable to give free transformation with customers; forge and flow partnerships for to longer a of Autodesk and enable capabilities and Our durable us all. runway

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

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

Saket. Your question please,

for questions the you macro taking Thanks helpful. for Andrew. doing? you. just commentary, Andrew, my maybe Hey, Appreciate Great. very Okay. here. Debbie. How Hey,

all least I speak the those we the or quarter. well. the that right, to subset as for think And some macro. whether maybe to soft, have that your did, some here of if those you quarter, albeit of quarter? if Maybe is, partners were checks, limited, of trends saw through was question through continued second frankly, you the I through wondering the mixed try I a reflecting And at of course, you have

to by Good the Yes, Saket. to way. you. see Good to you talk

what the let tell we people heard consistent with you me yes, partners. saw So, what and from

is their It's like pull event deal, forward this. when up even these events they happens event, conversations so that large close a try things partners into deals teams up of have around to trued the have we pipeline get so happens that whenever tend consistently pack to one ending reasons quarter-end, event, get into multi-year, event. why what So, we the kind to to every they and don't have of the This with like this. can try like we we event align time it

So, end exactly the what of and was have kind would It's that the levels of we're back quarter post expect to business [indiscernible]. would would [indiscernible] if the is exactly of seeing case, what happened. what rebound quarter, be you the at which beginning is expected we're what expected we that the to to

any want understand environment anything add might help that said progressed? or anything -- we you haven't macro commentary to Debbie, already quarter the how the that about

Sure.

on saw indicators remain what We leading record our last grow overall, same saw modestly. we We the BuildingConnected. activity usage saw broadly So, bid as quarter.

our see partners. cautious from to channel continue We optimism

like quarter, New better, a bit was last subscriber Asia same. bit renewal improved. Europe was a decelerated the the growth bit was rates a Also U.S. worse, but about quarter-over-quarter,

be saw you. same It goal RPO is And for uncertain guidance business takes. it's up good was in the beyond. to our business growth. said overall somewhat of in grow macro growth and Current for in So, some 'XX ourselves and at quarter going with but year forward all as momentum the last slower success we for expectations to as XX% to environments, puts the faster net-net, set a similar environments the indicator last continues It's we've consistent and is and quarter in fiscal the the with before, to better trends. what with was more line

trough just really Debbie. ahead flow helpful, maybe I of if thinking this my expecting. looking this into for And the for 'XX? where you about here wondering Does Great what follow-up zoom just fiscal sort drove you. maybe make in That's could flow shape cash that. Got were see Debbie, you're the of was forward, that year, how it. cash quarter, of sense? well strength what just particularly to we we

Yes.

a for QX So, reasons. free strong cash couple flow was of

billings collections cash the 'XX of fiscal from month First, strong. were last in

saw federal the in end third, in were also early we build that the favorable And a I California, winter upfront. of then, quarter. Second, payment after by the multi-year as received extension driven QX linearity mentioned storms we the on renewals call, and for third tax

in flow for expectations unchanged. that on to half expect of We generate with to cash the cash year, of free year, second Our heavier about we're going including free weighting are still the QX. our overall linearity, flow half the

QX, were QX. to cash pulled the impact offset to and And we QX. remember in that has positive QX, that tax had flow to a billings QX about switch then renewal some negative early with that extension but free QX, the in a across impact payment to into and from that think factors of we In QX, full Some billings. have the QX annual QX, quarter

generate half expect half But the of that the that overall, unchanged of free and in are I second just that expectations to flow would our reiterate we cash about year.

you. Got it. helpful, Very Thank guys.

you. Thank

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

Your question please, Jay.

the on back channel fulfillment certainly as elements either change doing or in perhaps of terms with but some of the comp Good through the of generation, Thank the wondering that not QX how risks of And you'll demand the result about also there are I'm as of evolutions with effect thinking which change. the your behavior execution end sales associated VADs. which is going you. change. evolution in that the referenced beyond billing just more the operational they own, more Andrew, you're other your quarter But goes evening. you channel affecting VARs on model be a broadly, perhaps

some to my vis-à-vis Then, those model. about So maybe talk right let's just sales ongoing executables that you get the follow-up. of need I'll ask

question. Yes, a Jay, great that's

about local visibility how of types we with one of great a that doing that things of usage say through exploring we things. bonus are people some that VARs. much self-service our the like example So, also patterns upfront instant supports what kind Flex customers of in product, these and also And things is like and of their of to it's that of first from It doing the their are, with we're really transactions. the connected I'll why a them allows share our us on support They We're experience get visibility from to get what other other get these experience so But customers can more and service an added partners a and using better. because get locally. VARs also more they're like lot understand their e-store their these they particular. all then

there's So, things of about great lots it.

offering changes and quite like But things something of through of kinds more like lower of rolling to now, learn lot importantly, out us these and those Flex, a volume and lot exploring opportunity a is a which that gives kind doing well, work models of right lot a new of things.

learning from things you these of models. that of don't as some the we've been talk all working why Debbie, through been Flex new we've about specifically transaction

Sure. Yes.

QX. model in agency Andrew this as Flex So, we launched mentioned,

lot. We a have learned

and as the with vendor to having vendor are we've able a a access These to will opposed forecast Some we're to that data, having partner. and situations that things getting seamless to We're of data. as Autodesk -- driving process. setup around are of been things access learnings learning have importance insights where up better a like to by better more set the customers

all Andrew testing want and for anything We that focused like learning this continue as have So, go. on make to mentioned, stakeholders and we and we doing we'll in ecosystem, scalable keep that. sure as the to with we're area, processes

Okay.

the slide your to ago with those double-digit what out business? the you to perhaps two volume sustainable the of the over or Debbie, might As you or of growth. had do regard items your component line two months called growth eight as volume follow-up, you meeting double-digit at what the drivers referring be growth, year, When you balance different important three look most to of think in

much, long an But I mean, question, that very from talked our ago, Investor changed all volume Day about we a drive from vectors Jay. granted excellent we're or so thing. continue wasn't be to that's different to That's I hasn't going that to Day have. areas growth Investor good view the looking the

So, BIM, of driving growth the construction. our expansion proliferation infrastructure, investments AEC, things more in like and from

volume excellent teams, driving important really I think really rate, a Autodesk. what job part customers, net for renewal becomes making rates this us. with at because, investments the that's our that those continued doing that driver was up, success going in higher because keeping been really that driving goes interesting rates, for of seeing strengthening an who the renewal engine of volume are customer we've a our us quarter with And of was success ultimately, renewal really down to our

Jay. So, thoughts, those initial some are

both. you, Thank Great. Okay.

Jay. Thank you,

Thank you.

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

Your Adam. is line open,

operations. so know for at market I not for Day, thanks the in Analyst Great, during a conceptual opportunity around taking you, the but and Maybe Andrew, much lot owner you and design, serving questions. broadening just about talked the

obviously it's know and how to journey. that and in expand Maybe as message [indiscernible]? into early could So, AEC I look you with share this us still is resonating you

Yes.

that that. using have through usage active the right assets in space that to into -- is way increase the now the monthly modeling more in rates best vector we Tandem the Tandem. And way talk and that So about people is their requirements development of the that starting are engaging to to terms going has associated a owner-level additional see needs. series with serve some with of where Tandem needs, direct how it of serves that, customers We're on very collaborations some in with pickup we're nice

So, we've got to the is this customer at engagement, where a you'd point expect really good definitely in which process. lot be of

of lot things level focus also interest with here of with happy owners, really vendors. visibility, with with twins but a people of we're that and owners types of lot progress the serve digital engaging that a and is and other getting a with the say, So, of happy from, Tandem. want twins associated lot Tandem we're with digital

helpful. Debbie, a that. maybe, That's Thanks for as follow-up. really quick And

mentioned about Maybe you've you detail repurposing provide XXX a think again. quarter. more in roles script little in Thanks, can the bit there? I the

Sure.

So, really new is normal. just uncertainty the

a of discussions we're major think this. The ceiling bunch reported few economy, to didn't the those goal. happen. last things very just boat. was they on debt but how. Fed, weeks in I our about acknowledged deliver regional margin seen a ago, impact stuff an But we living same all important There We're we've bank have it's seeing earnings, on to deadlock could that the We're Since us know a in Congress. so crisis. the

we're the that we manage how backdrop against it's So, that business, tightening that to a taking bit. a means the prudent belt approach

repurposing get steps pace spending be success ensure flexibility did slowing proactively slow that and Again, the ourselves of the we that earlier onward, to to more provides for in 'XX continues ourselves of roles ahead in continued term. our versus macro hiring the year. spending we to to So, of later think set long investment in in And us year goal the our fiscal QX, uncertainty. some up to And to since light of QX we trying taken spend allow this slow in don't we to and reinvest. on

again. Thanks Excellent.

Thank you.

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

Your please, Joe. question

just just clarification everyone. comment. on a Hi, and reconciling, bit Maybe near-term of the Great. performance

growth think I predict around decelerating then, I that. consistent. of indicators leading guess, leading kind that's But think, Americas. fairly the new the I product usage, sub normally, the indicators in

something that in popped around new the this of was So up kind just subs quarter?

were of trends. user consistent Americas active monthly predictive was in the so with increase in how good seeing what user it we monthly slight and No, trends an decrease of kind active behavior. more Europe. our are in We velocity a expected in That's the at

see moving indicators consistent well. and we consistent as with indicators it's So, the forward it's the with

AI Okay. the just, And I I question. Great. then, get that. Thanks for guess,

on maybe Fusion, there uplift have anything based see media like start as of specifically studying all the on road are Space kind of product around capabilities you more or kind terms in an out? where to innovation already pace interest maps, content about started Maker just Just of that thinking platform, this Extension things adoption the AI? in Generative on industries maybe exist the seen to that's around coming And just about point is you you've thinking changing or of video,

clear. So, while learning our And We've a models machine talking about been building for a very long time, we've into application now. yes, right? let's first all been for be AI

a created significant conversations. changed AI of version that already is ChatGPT everybody there's So, velocity of Autodesk understood. inside What's

these now cannot functions a So, in common co-creator what and an processes. do we're about a all conversation AI and a or assistant or having can as [indiscernible] how it

bones no course working isn't change to clear speed a about And while. it, super things be and a been make This for us. we've So, these about on for want that. I

more rolled which machine enhanced in out, Now, no said, now, Construction even is or learning. it's underpinnings which been has we product with IQ. we've Space Maker I like Forma associated anymore, a longer

fairly You what our probably representations do XD do Lab, around can of a of AI things models you and with machine you large follow if and work learning. advanced published using we creating on models kind lot things we -- that in

been there for we've this So, while. out a with

language things getting and it seeing do, the large decisions, of that going things some does this inside you're -- evolved we've had there design, with information see of building complex a Take "Look, models, with in you what a telling technology. was to been and of very customers things models, you're it customers allow about be from look XD conversation at to OpenAI sustainability meaningful cocreation out can a the seeing complex about What us creating be the Forma." you're kind this optionality, the all more models to associated that how our

think the super future, do now connection get kind it of that I powerful. what was here it. going to there's the between we So, we're that's and And doing They said customers because get what example everybody the an understands. in

course speed is of and with be speeding on it's a we've current doing our So, while. up for probably some a going us. models, bit and more complex little but larger We're been something for work to this

Okay. Thank you, Andrew.

you. Thank

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

Michael. open, is line Your

the you questions. Yes, thank for

help Can you due simply sub the mentioned you more belts And if uncertain something you highlighted that? growth other that times, growth or has relationship the strong. and sub So, been the -- Debbie, is those a me else you factor customers the two? between usage macro behind slowing tightening understand few of any their to there a highlighted is some

thanks. Yes,

sale in we factor of multi-year the the contracts. sub upfront end the of that saw was So, QX biggest driving actually the growth

quarter impacted remember demand mentioned of saw session, So, but Q&A Andrew the at the that end of pattern we the during was that it by this top sale. that

And market. new we the was Before we it see on when launch this higher launch, out decelerated launch, But of to volume. our saw headed we as meant the business net a we piece lighter. programs what what the that, the was post then, That's of typical like quarter. basis, of demand

this bounce our seen it's line mentioned also last several at that expectations weeks that a Andrew over the back generally in And So, demand with in point. we've May, bit.

then Is changes, it just some tailwind the Debbie, in adoption second has Okay. half mentioned been EBA Can one pattern, the Great. the be there, contract us will year also the half, being you And around noted. changes, the of detail one you and around think in tailwind more. moving renewal more what pieces I that usage EBA give strong pricing on you the driving second renewals? renewals?

Sure.

then take and just double maybe linearity click revenue back about EBAs. into I'll and a So, overall a talk step bit

growth patterns recap, consistent start. seasonal historical it QX, annual we're the with revenue the for guidance back expecting acceleration our Autodesk. deceleration to that's built from of into followed growth was So, And in the year in half by

deals we that beginning renewed primarily the ago, have particularly are years in at cohort revenue look QX, year quarter, deal and we on been away, at from and that have usage And seasonal second goes drag flow QX, peak and that FX that subsequent we it's And strong. acceleration impact three progresses. growth by growth. of of adoption reduces Russia negative drives QX. their and in drag as have that FX those When the EBAs, in exiting the the from then, big Russia things In that of half, the the where pandemic,

for We commentary opening at be about those you a -- can in to our deals tended thought back QX in where look they go 'XX bit fiscal the we and talked back auto space.

will expected. that and And in that behavior going the to QX had usage indicator they've anticipating through a good that is happen so, we're we deals good come see that we're as fact adoption think and those

business, I been So, we consistent and continue we've for remain the beyond. set try in mean, have achieve that our we've to is while and the with And overall, full goals. what momentum now up ourselves fiscal while reflect, for for we we seeing embedded here that a but a success I pretty seen assumptions can't guidance year enough 'XX financial to our track on and in and reiterate our

for you questions. Thank Great. the

Thank you.

from Our RBC. next line of question the of Hedberg Matt comes

Your line is open, Matt.

some laggard so? cloud. know field as the a is taking catalyst Great. you that's talk like we're technology But are my area of obviously your at see in incremental an a that further generational about is questions, talked this The Is of on us of cloud starting about like, starting I the been of evolution? behind these Can sort sort of more where you you and Just Thanks all to sort of like folks in adoption? it construction to AEC for now, some pandemic scenes sort thing? think. This for sort behind we any remarks, construction guys. SaaS embrace lot the are Andrew, and construction. of sort obviously adopt of workers, prepared to

phrased it's incremental good the question Yes, catalysts. a way you around that

precision, I significant better many cost with have see to And in seeing to effect, that better of start during that. seeing better lead a cost to able solid the margins. continuing in We're because construction. to adoption to bid manage and your adoption you're that's execute we're adoption, project more the things effectively the an becoming adoption. to on manage and all technologies adopt tend adoption estimate obviously, is We're the able I that project, higher rising people to account. these you're accuracy, projects, able technologies think our tend growth who these flywheel more mean, actually And the and associated the a bid to be in good bid preserves on envelope its project, own if because EBA next win higher really respect. tends regular using basis catalysts

out thing now is the flywheel of in that effect. right the So kind is the on biggest there going that's industry

their other level able technology, the tell in all There's one here. catalyst to people, they their there they fully I there's in no coming kind hire and more, they thing More out of towards and that's can't it's staff will people yet sites generational the persistently are that But driving right? that's look to and you past. to jobs not that's were

the between of momentum down. So, of slowing see competition, And kind they there's flywheel from these technology. a productivity it's don't I that here need that gains and

Thanks for again great. time insightful. No, that's Super the tonight, guys.

Thank you.

ahead, Tyler Our Citi. line of go question Please Tyler. of Radke next from comes the

Yes, question. thanks the for taking

the levels of sign the a bid BuildingConnected. you about strong as a tailwinds? should Andrew, thinking of couple that activity you on of indicators we a markets just in or quarter. about talked in connected, and questions function be record position I competitive end So, the guess, in that more of saw digitization health at buildings

deceleration then, about segment slowdown that? the you And where or the -- AEC just or Was more end in you curious saw or new talk could if where that the subscriptions any side you that saw. on market

Okay.

There's all part question. the your that active. going to the let me next matters. right? the of it's BuildingConnected activity of Kind the address remember, both, on certainly answer BuildingConnected But kind question trend lots of there. of So,

in large ecosystem. if a the means of trends So, bid activity, bid a that degree there's the continue indicate out large to degree activity of

to and pace look every the of forth. or people And AEC it, on working trouble at through moving enough talk what important opportunity, their still to have is in so the land, issue our and work backlogs. to mean, projects they're I has backlog, getting customer still same kind the recognize customers is, I also right want that they through at to having the same however get still you to and so they're especially

So the in bid going market trend there's the But on U.S. real and it particular. absolutely there. is backlog still in out on a represents what's activity

particular regards with of Now was across right? was right? So, hotspot, no rather rebound dynamics board, of the kind it in to hotspot. was the QX than same volume, there kind of the uniformly It business kind any deceleration and of around more

to then, given you renew on expecting different for half, company? renewals EBA the just of anything kind see second And at you Great. just the are are that those environment? Or you expansion the broader net the expecting for typical rate the

then. I'll of renewed these things was Well, I time one that this. she Debbie let that at their the on where activity were things on pressure and was EBAs have and a the there obviously during that that ones were downward since [indiscernible], pandemic highlighted coming But follow-up are mean, significantly of their changed a lot due usage

average with versus the do to] cohort relative company? within to -- kind Debbie, comment want you [direct So, these on of difference (ph)

reasonable that I'm that guidance, assuming Yes, that baking I customers mean, our renew these key performance we're back about I What's to going into get has cohort specifics an unusual also beyond fact in levels. point. that good at they terms that. EBAs. been renew economic not was we say we're and 'XX. is We of equally happening at that saw and feel more these into what across usage given that the a us. in for fiscal that there big It adoption time It's high would

don't as different. any so, And situation this I see

at think I set a we've the reasonable point. guidance

very you Thank right. All much.

Thank you.

Our Bank. from Deutsche comes Shah next Bhavin of line of question the

Bhavin. please, question Your

an think pace the into we then, taking for the of we sort what's XXX, update are and impact Collaborate where about point, debt that on the Andrew, Thanks related Moderate give Great. should And BIM regarding kind ceiling, my of deals on FedRAMP given us can with that Docs going federal just business? and any for question. you of Pro?

Yes.

So little here. let talk about bit (ph) me a [FedRAMP]

our So all paperwork. we've submitted

We're systems already Our waiting the come government move forward. are ready. give approval just Autodesk to back and systems the us and for FedRAMP. are for

for We're us. this for ahead point. proceeding now all waiting that's at the So, government to respond

ceiling. debt the priorities. with things all ceiling, associated both that With the I speculate that, parties that These Infrastructure want are not this. I'm us things debt would that really going think regards bipartisan things to the I they on impact are to and say the want.

would to to D.C. Autodesk by the I things be suspect So, in the matter Autodesk all going now. are business probably not on and activity lot a to impacted that going right

bit Helpful [be there. how about some in Construction Cloud. the for merged] terms of just you when I elaborate disruption, in in And combining then little know (ph). quick you pivot on just maybe [within talked and of assumptions a And terms of productivity? a performance to maybe sales then Can what maybe long? organization] that expecting should you're drive (ph) better

Yes.

clarify did. let exactly we first, what of kind me So,

and few sales independent territory a And more the get on goals mind of So, construction but all a that little the and advantage wanted make sure we emphasis we there's of we there. we to a accounts, pretty team construction focused have our significant were business. pure with opportunity. the in of covers actually not to One, team business kind wanted had mainline on we company. where that bit we only inside the construction design lot competitive merged accounts And

sales new all get. accounts, getting one course, that, of sharpened get accounts, way pretty concerted new the so going this confident get exactly the people pursuing responsibilities. that, to And you what kind when opportunities So get do they'll a But reps behind moved we're and of in of on that's those we're from of pencil just kind kind of effort. kind energy

of little moving to we next its work over a of us absolutely two. We creates compound And doing disruption. it it short-term quarter benefits that expect or So the expect from way bit kind to out forward.

Thanks sense. for taking great Makes a questions. my

Thank you.

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

Your question please, Steve.

business the office an -- guys? trends is or exposure of like just decline of isolated you The those to kind exposed evening. just us a in in enough just Good that of of, to the part remind ABI even will, big you were if your a is we us see matter guys. macro. decline can on new markets, if remind things Or to what for the you kind Hey, continued just

And then cash free just I implies Is quarter secondly, negative half-over-half cash if year. of second the the math get it right for flow, that of free to construct? that the the to simple Thanks. do half the flow back on kind

decline in one right? going broadly let that, of I'll you some puts on Debbie seeing. goes other people the And And in building takes, in office give what exactly let classic second cases, talk sector sector. on whatever. sectors, I'll about the activity. there's environment. And new more kind increases what nobody some everything activity, what buildings AEC that's of and is is in are With in we're always or sees me this but see example of seeing a these you answer half what's in

space So, space. what's leases office to now, significantly people there's more people office their that downsizing getting for a right new is are from pulling as sign back pretty offices. competition result, for And happening

look other ways that's And are money our of to best the spending that, into places. accommodate to throughout on taken business of attract is offsetting a people renters. kind which as being money And leading what is in new we've we modernization this spent all space year. So the of to forward working of account into office or

around of lot shift they about, active how happen indicators why happened, indicators leading relative sense of attention to like what what's of what's pay of of you to billings That's kind around around money and going and So these our a monthly to things. you how sensitivity of necessarily. to that A our these the gives tell moves we talked products. already not kind kind as some for you usage

your it to I'll part question. Debbie other to discuss the Now, over turn of

negative Yes, thinking to a guidance I with about just payment QX. things, I'm tax get into in in going QX, say I would remember, also have directionally, you're to specific we'll think by not some reasonable to it cash of recap And terms in flow, free of but quarter, the a the way. extension

in of outlined terms on the things flow you thinking should free year cash of about. be linearity of that the I the that And the things are some

recommend by I to that quarter. back flow those help of free some So, going and points cash listening because will model you

details. the you. for Thanks great. Yes, Thank

you. Thank

next comes question of of from Sterling the Auty Our line MoffettNathanson.

Your Sterling. question please,

guys. Yes, thanks. Hi,

given mean changes of impact just the that some on half peak really of Or acceleration the quarter? improvement the wondering, next the execution that is that of acceleration, comments to in to the about some that the you're mentioned So, does expecting prepared had due macro more second just based remarks? hit Autodesk you during

any So, Sterling, what trough I would say not in we're peak is assuming macro. or

in our guidance X% our for range range for a revenue. X% have We to

rest ability see And saw as on macroeconomic we've year. see. with our about what our general situation the we QX continued you have and is the in for in We outlook that expectations year, we to the address think can of was expectations that the consistent we whatever outlook our line. those And

acceleration about, so year, seasonality, the I the EBAs linearity is growth revenue not of Russia the the from impact in the FX, of our we talked driving drag expect really What's in exit change back things that half that and the the the anymore. some of in having from from

to changes is it So macro. about it's in any related things those assumptions fundamental about our more than underlying

that's raise prices you as share? makes differentiation cetera. Or just for going so the think you. conversational That for to AI, interfaces, Do LLMs, you at Andrew, price it is then drive sense. to the more value current the something And ultimately Autodesk long-term given you one and/or the solutions, add? be view ARPU market generative this for When about et additional more can levels going opportunity

expect cases, are Autodesk. more that get of it's competitive going be to delivering it's for and we're both, charge for right? more and little to of be a and value. cases, customers use In a will bit to business, massive some other those customers think to be their of going to a book business going customers, I enhancement types value to be increase certain for that to going productivity it all productivity In significantly we advantage

either mix So design creative areas be of other it's we're helping and lot they be customers both, need designing area efficient going how more way, to to much in need bit all of do one and a to in right? in things. be more they little what of But terms a a

Got you. it. Thank

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

call. everyone, quarter. with for Thank to joining us you, on next Latif, thanks, and the catching up forward you We look

any simon@autodesk.com. have e-mail to you back us If questions, on you. just Latif, please

Thank call. This concludes conference for you today's participating.

disconnect. You may now