Autodesk (ADSK) 23 Aug 232024 Q2 Earnings call transcript

Thank you for standing by, and welcome to Autodesk's Second Quarter 2024 Earnings Call. [Operator Instruction]

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

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

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

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

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

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

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

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

financial growth During changes will numeric quote discuss our the call, several performance. as we or we

Excel Unless or website. in financials such All Relations and today's available otherwise comparison. supplemental our our reference referenced Investor release, noted, other each non-GAAP call in numbers represents year-on-year a press are on reconciled materials

turn will I over Andrew. now And call to the

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

Make from technology economic built and deliver capital customers our for and model our diversification focus and cycle services strategy performance our and provided all. and in and customer headwinds. competitive enable of despite business discipline opportunity transformation continued and strong the and which by policy and discipline our executing again geopolitical better financial and and a designed developing Design through world Resilience, next-generation macroeconomic Resilience opportunity product end-to-end digital and Autodesk's deploying underpinned subscription

committed with quarter the leveraging bid more shortages growing and and to labor last chains. from on with BuildingConnected optimism consistent remained transformation from indicators cautious where seeing activity remain record Autodesk usage leading headwinds economy, Our to Customers and and are partners. they supply automation channel

token Business delighted performance, and by That commitment growing recently strong that a and was renewal reflected Agreement our within Company. remains a relentlessly with for Enterprise in rates. Innovators QX Autodesk adoption innovate. propensity and to Best Workplace desire consumption were We Autodesk was highlighted as curious evolve Fast and

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

Thanks, Andrew.

acquisition remained momentum Overall subscriber do underlying so. momentum to the and new business the the a few the backdrop overall and macroeconomic continue on of rate market quarters. similar of that the business continues last of Despite drag to conditions the forward may tough and to

of has performance second that quarter years start the We financial that second and the the pandemic cohort the of strong renewing quarter of been last half in in that said at ago we adoption Our a last year subsequent strong. three had renewed EBAs and was usage the strong.

Manufacturing subscription constant that currency. and X% of expecting free which double were XX%. boosted LT in the came than in M&E earlier upfront X% AutoCAD grew revenue revenue grew grew and digits, second AEC from flow constant grew we in products cash currency, XX% XX%, revenue, in Some quarter, revenue excluding variances and a which through was headwind grew X%, strength and revenue and billings, Total in By revenue. AutoCAD and revenue

rate in increased APAC. year, of in percentage total EMEA both up Net in and XX% billings impact exchange constant strong full is the X% to and in from billings EBAs in multiyear rates. retention constant declining transition revenue The last Direct quarter, second proceeding within and X contracts revenue, XXX% X%. from in annual revenue points the region growth resulted upfront a the at We XX% By grew XX% the for quarter had which range XX% XXX% broadly to in remained currency, eStore. as represented revenue benefiting expected. Americas, from

revenue $X.X increased of Total XX% deferred $X.X billion. XX% billion Total XX%, current of RPO and respectively. grew $X.X RPO to billion and

growth and Non-GAAP P&L. the of discipline, offsetting XX%. the operating broadly level movements. GAAP to with Turning remained remained non-GAAP rate at impact margin exchange revenue level and broadly margin gross cost

primarily EBAs, than $XXX Free in-quarter better to the also was flow of been linearity. the to was expecting, due timing bit favorable due a we've but cash million in which second quarter, some

to allocation. capital Turning

actively continue capital within to framework. We manage our

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

vigilant are being period of this uncertainty. macroeconomic during We

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

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

The the with finish overall, in for the guidance. the range remains with me guidance momentum underlying business our consistent embedded full year. in expectations is that let headline the Now

second the likelihood early of more cautious our ranges. momentum expected reduce some to forecast scenarios year, end of our sustained guidance EBAs raising expansion renew that, lower the Our and of the the given quarter in we're later in

earlier year. summarize highlighted key Let me some in factors the we

I cohort second was although, billed benefit as that strong a mentioned half the some have quarter. renewing of the of EBAs of in the earlier, in year, we First, second

movements margins headwind half 'XX. of Second, will growth and foreign bit headwind in year. second the in the revenue The will exchange to revenue a fiscal a moderate be

significant cash headwind smaller headwind Switching from a fiscal 'XX. in for upfront most and 'XX fiscal Third, annual free in creates billings to flow customers multiyear to a

unchanged. transition are Our the billings for expectations

we're negatively evidence it. as during customers might the enough of annual multiyear quarter. reduce updated growth RPO if but wasn't of rates. the an to days, we trend, proportionately remaining and a annual and progresses. would be our early keeping impact contracts you eye happen, to portion equal, big still total the unbilled switching it as saw we'll thought keep total Fourth, switch else year on we It's All obligations some second performance called It customers to contracts,

remain margins create to contracts. revenue, more price without adoption remaining free are broadly the multiyear current billings, lock drive us would renewals and flow and cash obligations, in embedded and for opportunities upsell Annual revenue, performance unchanged. Deferred

shift the quarter, first flow. storms payment cash tax will we XX% expect in the tax a California the reducing means profit return from normalized We our tax free from federal of of after cash the cash half before fifth, tax payments year more 'XX, 'XX. the to approximately rate third to up winter quarter And of level extension GAAP XX% in fiscal third fiscal in

therefore, flow to weighted quarter. fourth significantly free be cash generation the half Second will,

still all our 'XX upfront fiscal multiyear cash to we transition We annual flow to Putting that will anticipate revenue the 'XX fiscal be for billion. expect $X.XX now contracts. together, be between billion trough $X.XX billings during and from

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

We expect flow to free $X.XX be cash between and billion billion. $X.XX

fiscal range assumptions scenarios. of for to cautious guidance and income the $X.XX our higher per on more deck earnings modeling between for $X.XX reduced interest to balances website reflect increasing forecast has be more share year on The 'XX. our on the slide likelihood to non-GAAP and in cash full We're QX details addition our

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

revenue the line said backdrop. we profit linear, from free right cash between this it in contracts drag of the business intend metric paid on back But or regardless As path and me managing new be cash and we're toward February, XX% more to rate macroeconomic transition will over We our multiyear upfront. the growth. strikes from flow let disciplined feel to time growth make clear, we flow of and steps top and subscriptions drag XX% goal to driving meaningful growth growth not balance achieving the the delivering the as the be macroeconomic given away to

Andrew, back you. to

you, Debbie. Thank

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

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

We through continue customers and February, And consolidating by momentum is digital optimize AEC, also cloud. workflows in growth asset about good to on the connect previously solutions among siloed other building fueled our in areas. owners to as and in see we talked infrastructure

to our second increase more truth a driving cloud impact. social and transformation seamless single efficiency, expected accelerate which the engineering embracing Digital Design infrastructure architecture, is of is Cannon It momentum operational forward encompassing design U.S. a and quarter. enable its and This to experience, collaboration. practice enhance end-to-end Construction during the security, establish digital point global programs System like Management Advanced strategy, launched with program, investment is

with partner a Forma investment Docs the XR presence to from by international During common our its quarter, established exploring and Outside integrate to and platform is Autodesk the network. strong portfolio. Autodesk's opportunities its leveraging expanded U.S. capabilities Autodesk asset data management construction our design is adopting benefiting it environment as and channel

and workflows operator of projects its wide to many simplify truth across quarter, single with project it the streamline During in infrastructure needed a this single way operations its complexity, data transit a a platform. a contractors property of manage subcontractors. range to network To and for and developer source based needed Asia on

platform one portfolio local adding subcontractors gain support from by into Construction to existing leveraged its and contractors Autodesk Cloud it and standardize gains. visibility on Autodesk design and breakthrough the potential of unlock channel QX, productivity In AEC to tools to our partner workflow

standardized the Shook Construction, workflows. for eliminating the many high-impact Cloud with streamline competitive as collaboration their to Shook evaluating based chose construction consistent best and Construction Autodesk Construction partners made Ohio decision cumbersome workflows. on XXX to their contractor options, an fit ENR manual Cloud After driving Autodesk general operational in creating better workflows, Construction

managing time, decreasing lifecycle complete transition sustainability end-to-end design, enabling we benefit across all encompass focused handover which our to Over a have and people, digital Again, stories to the solutions, transformation. We of operations. these through be and continue increase through while theme: that and projects expect managed and we data to execution from the common way, into field remain majority efficiency process and on risk. this preconstruction

expand We the the complete talked Encouragingly, business, and cycle. serve believe customers second the I'm the to that construction pleased sales integrating teams. ability customer Cloud two project reach allow teams quarter. to the Construction things XXX% our from us design MAUs particularly combining last scale up began We construction the our disruption to base over and and Autodesk that quarter. our about worldwide will to in our across in quarter life of were settle in our report short-term

Moving manufacturing. on to

it make We made Make consolidate and their platform Design digital transformations more Customers continue grow in excellent progress invest resilient. and to initiatives. our on our their to and strategic on business

which product example, manufacturer a manufacturer For through connect on been workflows leveraging tools and Autodesk to the and building both and construction a has multinational industry serves AEC across manufacturing portfolio industries. the processes the construction

commitment BIM and has efficient services. maintenance its customer to using and enabled and which design, across It's projects. Revit, more clashes rework expanded and to and which Construction Navisworks culminates data-driven minimizes building approach and in the adopt construction a collaborative successful Cloud,

QX grew quarter, the accelerate customer EBA Autodesk models. its the of MEP to renewal date adoption the within materials the In with directly its products its and facilitate design of and second ahead BIM of

new AutoCAD user on seats an additional rate manufacturer into design. for manufacturing to and PCB for ecosystem In existing mechanical, appliance Fusion our existing Fusion Europe, easy of collection already of an and our an was continues purchased cloud who provide customers.

capabilities seamlessly to division its connect quickly design heating leverage drive more to It's automation electronic to will of workflow greater design Fusion's manufacturing systems efficiency. and

experience convergence connect strongly, about more our with the the better growth key grow our quarter business provide sustainability between to customers. resilience. to industries more more cloud Investor efficiency, workflows ending and customers and enablers, evolution, XXX,XXX I model customer subscribers talked continues At including to Fusion in Day, for drive and leveraging as choices evolution

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

quarter, the we signed more During million Flex X dollar deals.

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

And to finally, begin will broadly secure they and our users new to testing our ensure work with year. software. Australia model using more transaction in are that continue the We this latest later versions noncompliant we of most

challenges from noncompliant year about subscriptions. and despite working to identifying committed designer pandemic, the automobile after three and a eventually the Chinese-based example, to usage For alerting ongoing and Alias VRED customer

precision in-product drove named our incremental reach user tighten concurrent to the our growth expand quarter. the of usage of and during subscription and expected, initiatives As messaging

Now let finish story. me with the

most National Coral the valuable Oceanic earth. some reefs are to Service, diverse on According of and ecosystems the

up While support than ocean fisheries they jobs tourism XX% less and extraordinary the life. their and all marine X% biodiversity of about coral floor, businesses as take reefs through as of recreation. well supports Healthy

against XXXX. XX% weeks since by bleach of buffer XX% storms loss of living property XX% Half Rising and reefs of and and the die. shorelines form, floods, to die. reefs on to coral XX,XXX to the Without can cause we're take also lose just life, helping of energy coral tens waves, to erosion. ocean XXXXs. It from of to damage intervention, remainder our millions the for it and can died It have temperatures to to years for of prevent coral track

That is, team with to we scale back Autodesk connected a and zones. and and from a the artificial collaboration faster digital core tools, called to the robotics cloud using restoration keep brink. way at to find company across Foundation, Maker from global intelligence, reefs is our coral deliver support oceans With bring unless Autodesk the Coral time

at restoration coral Foster, per few Autodesk Karen to sectors augmented possible projects develop restore new partnership hectare powered of about to With says, the Dr. oceans a has customers to From better by faster a can per to go will As us years coral makers to design, the to portal Autodesk Sky makers reef year. the all. technology, founder design and Current our technology ago. a unimaginable XXX deploy rate earth and with further for enable and it's deploy make year. empowered world

We've curious services, and partnerships. propensity in connected Autodesk to remains AI enterprise build extensible workflows been trusted desire and and laying business data, teams platform immersive with shared for evolve a and cloud. the years relentlessly models real time foundation level experiences, innovate. innovative trusted industry and and to with

future We optimism. the building are with and purpose focus,

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

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

Hi, questions for Great. here. doing? my guys Debbie. Okay. you How Thanks are taking Hi Andrew.

We're doing How great. are you Saket?

particularly Debbie, great. Great housekeeping revenue. range maybe of just you, here. Doing a great, doing for on revised see to quick the question a lot metrics,

great this by first of maybe start million, when guide underlying I to going some impact brush business? fundamentals about you But the to broad in of how raise think midpoint the the see on revenue so, And to versus maybe lighten. FX revenue $XX is walk a the from could much up about year's of all, of just us through FX

Yes.

the of our So, small tough the in with The it's immaterial really we dollar was us guide. get the a that midpoint mix guidance come a range. of had increase assumptions up of end to change low to previous

our expectations. mix a with line tracking midpoint is in of the increase both reflects FX the and business So, assumptions. generally Overall, organic

it. of the quarter how as billing open-ended there to are Okay. But first new ended? you, question. now Got maybe this you partners open Is you've behaving, Got for surprising about that's completed again, a or an customers transition it. I guess of anything Andrew, how model. maybe

see really contracts that. No real back quarter out annual Nothing change. surprising. see I zone, Saket surprises. do reverting add some to to might of We of flagged details - you Yes. the want we or... result big the bound a did mean last as Debbie that anything to really nothing customers Debbie,

going are behavior I expected. partner as billings pretty say initial customer the working, well. we model the new systems much is of The Yes. is would rollout and

contracts and been seeing expected annual of As we line contracts if versus Andrew And P&L. are remember, we the expectations. but our annually, bit impact has billed customers a generally, performance doesn't choose choose multiyear that, annual of the proportion our it contracts, small a mentioned, with customers in

to example finally, want. to flow expect it And and It cash that I no impact our say reducing We're the volatility It's good about flow how days. think It's to of And the unbilled of our a change how working in pattern monitoring that the just purchasing then customers, optimize still our while only they transition I'd impacts total cash continues we giving simultaneously closely. business. we're RPO. the outlook. there's it early be

very guys. clear. it. Got All Thanks

our comes Thank you. which Please from Jay stand Griffin by question the of Vleeschhouwer next for line of Securities.

X.X you're Got Andrew, business. in aware, AEC it. ferment for going comments terms more just made references on evening. you're as AUC BIM specification launched in to know, seeing broadly, that a you about Good Thank quite new you and customer you what bit called a at market the group now you. months first, there's some a software. constructive of to well conference, a But of what's of as an design for in come be right couple ago customer-developed

enhancing You format. a yourselves working on are of on revenue, dual track but focusing

on going thinking on in or different follow-up. of And all going those lots a part Help you're dynamics about industry for how in currents the that of industry. managing understand that industry. us So various AEC terms in then the are

Yes.

Jay of customers have types have much inside lots three people data threats files that worried around workflows of we So as the At we to and Jay, of files Revit a and of this, lubricant to turned This is sure locked need platform are to possible, threat right? gets APIs wherever that that the data this, kind the make data there's One other thanks. about. of into our right? core is all root the flow. of

concept really part what the whole of underpins BIM one That's I things. of the X.X. And a think of

more in-depth to detailed kind piece up, faster. in complicated, ability we're more significant that to is which ways, building got BIM you've absolutely do Revit improving of sophisticated second looking some sure and at. core gets and models productive The their performant, to That's make

we third is is But or needs BIM. shift you I with big so only that focusing call whatever the you is more can to outcome-based to BIM being need the which being use, also to on like design-enabled needs augmented way that's and what that we're shift, reimagine being how things of of done. change really point, in to it do important think not language And world one we really paradigm The Forma. the cloud-enabled actually to but people the

outcome-based It's competitors. improvements, the revenue the data And types that's what we line But is call the thrust in very - doing than what and talk we to different when to industry the customers. from trying terms BIM? of about augmented design you with certain have or in move the do spec to are Those a design. way what big of of better bring we're to

Okay.

Second new refers comments a in about be a to and the model transactional Australia. going question undertaking you're you to made pilot

you change So to that. going When maybe I on elaborate channel hear like further potentially to economics. be that, could it to sounds some there's me

You've taking move looking with to model Or rest thinking what just to exactly you perhaps the of the you're that? broadly completed margins. the business? the commission accomplish about back-end-only flex across Are more

let's things the and you I - were think last. experiment with doing So Flex about talk the Flex with

offering. to First it's incredibly because of have involves relationship much direct different various off, regards really the customer to consumption-based it's with be us really - a the a helpful for like it - model, usage with and that customer it able more to for Flex products

using how they're most it, visibility way lot they're of Because more get the using, the when offer much the they're to and using to out actually consuming, help a that what offering, offer. able how they're them we're

transaction Flex, out supporting model and more year over is much that regions a out rolling So, is a new various model. working is done and direct proved transaction the what partners, across we've our with we've last that

exactly a model with both We've lot. We've greater Flex. to a that Through and we gained of in issues with start knowledge. that Flex expanding a we've position learned and lot what's growing, systems-wise happening lot process, volume. And greater are now process-wise. of And addressed a that's and at

we model in Flex. transaction now. that's increasing, these for watch repeatedly And we've depends we to open Flex what on of things and and us. in positive from how on is it pretty the the We've benefits a doing of volume solely but go we done Where all and The evolve us increasing, we're the are future, are right perfected way. reliably, options where this here what

you. Thank Okay.

Thank you.

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

questions. I Awesome. even you've opportunity. calling in And traction on with in out quarter Transportation, much and thanks been the grants just Maybe State for the Department you infrastructure Andrew so script. for know increasing of the some the taking referenced

infrastructure all So after maybe And little bit more how from the just it? competitors in about going of talk that what about really overall? opportunity you separates a think

Yes.

advanced So out, the with that's that of the processes rolled is their of look, of at department digital about their a at a their related really management around processes, to look excited system high program government thing long name. level, money transportation The the I'm program at modernizing one that infrastructure, designed really construction construction look the things digital help infrastructure. and to the start U.S. design and

to of important with challenges these about and how spend have a serious we lot do. getting thinking infrastructure, ready That's do it we step an Department and to money to get and more regards they have Transportations manpower, the address to what capacity dollars better materials, on around really start of in

an So things. pretty departments with about that's how having because to door they open these about, excited that new do conversations

changed. not focus Our has

on We are and drive very to improvements and rail, those continue we in road water and much and innovate focused areas.

a is to we think modern as cloud-based owner-based bring our just that solutions, We managing architecture. it, infrastructure what sits more differentiator you have and I for technology once more to solutions really together market different more market the ways. in biggest bring

next and years. I those going the to So, Department to see Transportation real think And in we're organizations. months of to start coming change you're looking with some discussion forward of the over that having

And EBA pool really earlier-than-expected quarter. just my in on just maybe the follow-up, the helpful. That's as renewal

the no checks what's choose renew our to talk But you real just maybe just leading much. expansion given for So - quick to about change suggesting, maybe Thanks type follow-up embedded just we customers opportunity obviously, EBA? about and have guidance just the to way any that, and macro to as as about - sequentially. year, so of been think talked softer to quantify the the that early the a from

coming saying. and little a were I I what you think, in but of were - out Adam, I the think you got bit, bulk

stop in So missing what me behavior. I'm them. the something. But of we terms driven if just EBA Really, was by saw

Our their customers budgets cash managing and flow. were own

so, by real for tokens And their engaging billings of to their enterprise higher driven which early in sign get frankly, was for - with desire behavior, own usage their those a we customers. see positive as us

seeing the continuing and invest billings, those revenue, They're our strong their cash portfolio, our and in of during us. total usage they're free to with boosted relationship quarter. billings flow And

overall, So question. win-win. your I a think, second part, a was think There I it's to

Yes.

curious. Just

curious, of guidance? was full kind think expansion way opportunity year thanks. so about the you I any back as the quantify EBA renewal year type of just pool from to And the the of in half

we year-to-date see but quantify Not seeing would for usage, Adam, can first as something positive quarters the a do fact that's you, the that that leading strong of early to billings. for just and that we we're already it I the reiterate two real

So overall. standpoint our a from positive

so much. Thanks Awesome.

Thank you.

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

and Great. in exposure. pressure, discussed see revisit to you've I I there's your past offsets, the market so Hi, wanted everyone. better. commercial as this Maybe institutional know infrastructure or just far AEC

a reliance on the guess a like in any model about versus would think business down or you cycle dynamic of and faring, have cloud worse than a I you create versus and nature business things subsectors think past been case the more past when or the past. the model asking better less Autodesk different And there. adoption are subscription as cycles? different now and composition, the down about do I'm about Autodesk in So current AEC cycles. how And just might the license you this is the Revit diversification which for Autodesk have

it, not - I that in. game. are diversified it's things. just we're want film we making it's said, all involved reinforce gets sectors to And the car, it's bridges, think it's Everything and one course, AUC, things and across you electronics. that that of of buildings, it's I is It's made, of

So to all different just remember, segments. of we're recognize I and this. diversified What's it's important think those now, across

AEC industry gains, whole every as between, things all Is digitization associated through with process the that in from of the the a in design engineering entire the the and chasing part way to and is industry, all construction, that. productivity any

that way. fundamental what and So industry highly And doing we're is creating connecting unique change the we're that make for we're long-term is together and in cloud across pull design, in what the processes doing. integrated

that's for a few do So that outcomes. people can than sustainably be shift we've And things shift greater different fundamental is - better quite more we're lower years. seen risk That before. faster, and fundamental and with - going what to with very to going that riding

And suppose, comment customers end see writers what's of new then towards a and particularly are finishing can wondering if in year? on and for and I on what how media might the second helpful. while coming in, potentially impacting strike business you actors, things entertainment, a your Okay. Andrew, goes lack you the that's with, mean of the question, that post-production if this Great. in

Yes.

likely will see one hit right? It's in but right still definitely continue growing. right still we increased and slowed will end, you've QX, growing impact on months on So post-production in down entertainment it's an strike for business. media thing are continues now. the It post that our If the little overhang there, People for production a now still while. existing for book

look of there's relatively small on. the impact no remind compared have do doubt our about we is that as that But is your as could But good So business. to you exposure I our mine extended strike how to forward, as will media go business. guess long strike an an this other on entertainment parts

much. very Thank Okay. you

you. Thank

the comes of line question Radke Citi. Our next from Tyler of

taking question. the for Thanks Yes.

So wanted the to quarter. to I commentary the puts go the on in back takes just kind of and

as nitpicky XX% was I just that So revenue question. clarify, more a factor? it currency seeing expansion? plus change some just the versus some And of XX% look EBAs. timing think sure end of Debbie, the bit quarter. I on Or early constant there. expansions says multiyear a to a at was be there this the high might guide of I also wanted last about But guidance, then the And a was you just wasn't if talked of stronger I

the If puts you just on Thank too? you. that, on kind takes could of comment and

Thanks, Tyler. Sure.

usage however. the been stronger tracking and expectations, necessarily was for it wasn't EBA It the our So strong, than we've year-to-date.

had to the So We and are using contracts in tracking that the it. that is clarify, just our It's they it fact revenue just saw But expecting that year-to-date, QX really it's invoices a QX. difference. it's more the good thing. the about of for than QX the and We've in in more customers anticipated we been would than were timing onset hit hit it versus known a anything the we've QX.

In of with impacted expectations. constant change the line terms is the really was by dollar immaterial. generally our overall, range, rounding. it business guide, the currency tracking And The was in

follow-up for Andrew. Okay. Great. And

see remind us hoping changes? you. you accelerate in. were of You to signs the talked the rest big to some And revenue just of we on encouraging given the about what of Autodesk kind should talked - to make the kind reorg, start year? the What you the are accomplish? How side, about Thank maybe settling throughout construction begin it

to Happy clarify Tyler. that. Yes,

particularly accelerating Solutions Construction we long-term with did the of the So objective sales we was area, accounts. design-centric our Autodesk that growth sales QX force. the in force in with look, business in mainline This is merged what

as design ACS with the team So of some well. contractor it to power that accounts teams focused of our on subcontractor we wanted the and are the combine keep and

expected in charge realign you We those bumps realign that in who's to out a have bumps smoothed what. you because into to seen players account some have doing and assignments, lot of We've get QX. of

So patents. the We've lost we're seeing process. return no a to business during expected

like earlier continuing I we're general the the commentary, win about you in As - Ohio. I in I Shook, when - contractors. talked when these We're told talked things we opening to - winning told contractor as you about

really offering and integration the see alternative predictability lot show to stable offers, path sales force to pricing is ACS design ability strong and to the which of to Primarily, project business one but associated work as we pricing we forward the them our consolidation continue a further the between I to terms model, customers accelerate hear a this and a construction the of a viable what not like in is the of increasingly and management moving only banking. with things continue expect the also through. to and

can right in progress expect see progress. direction, So we to more the and

hear. Great Thank you. to

Thank you.

Markets. Jason question Our from comes KeyBanc Capital line next of the of Celino

help percentage and on just beat was the Can of us quarters. there question. maybe if my Saket's the spin and necessarily taking but quarter it look relates a unpack strength for benefits, the EBA it's when question, is what quarter, Thanks to at the first not on you basis were guide. a outperformance an This FX kind in biggest very Great. the many absolute we seen the of But in we've or magnitude the the any?

EBAs. The biggest beat driver from of the the came

the for on And At Perfect. on the and the was funding think of hadn't to projects updates water Andrew, beginning this I sewer year, Okay. view projects that quite there half then, started curious Innovyze. but pun up open see to you yet, seeing? I no things start we flow, the second what Is would that year. case? guess still unintended or in are next that maybe

infrastructure. both look most and a reevaluate increasing is get at right, the and regions that level mean, all look, level I a you evidence news, at to their water need municipalities sewage treatment Yes. management,

fundamentally And yet has of projects buying what seen But people we that project is we area. haven't ahead actually seeing that starting changed. in increase demand. are So in not the

EBAs might an precursor So pun strength efforts But no our see larger the large which important no in the exact we to our some opened accounts, lot about. same we is from of floodgates in of saw that my yet, have go we've forward. intended actually Innovyze side. up still moving with talked a on pattern But

I puns. the Okay. Great. Appreciate it. like and

Thank you.

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

all the I Thank you Yes. could. couple tonight. for A questions if

you like. sense contract, change looked whether the not give of the duration or what of increasing on that that the the on us made EBA earlier, like-for-like So renewal you balance comments can upsizing, there, customers a or

QX the our ahead were have clarify, per of We're contracts not What in these original these were using expecting renewed. happened that built normal to contracts. contracts, be So contracts usage they renewed that will these into been that customers that was cycles. their is

billings what so the And QX. versus we expect still QX the the was overuse in But we for saw original contracts. in will renewals occur

miss have earlier. must I Understood. heard you

of think the use? driving what you the remainder then, do over that do trend expect you for year? And the is overview continue that to for So

anticipated, positive that, see billings portfolio. asking they're than products our because We early it trend the the broad our a We're as using certainly they customers hopeful that they're very for that more sign of using breadth are continues. and

these the was is were thing the years three would contracts say the Remember, was at signed. they other onset that when into The that pandemic. originally usage built this ago, I of

might given usage in the were so bit the been in just have environment contracts those And a those which renewed. contracts lower

come have in you of back signs to hopeful crystal the And certainly could tell in pandemic, for speaking usage being go we're all indicator, We've being talked usage to EBAs sure that leading I so as and the continues usage and good the Autodesk, did. I our broadly to but the increase. Michael. more that continue don't half out we of wish start leading seeing a up usage. that we're I and year, also more I about would a for ball, are but for direction.

Okay.

consistent of So, with to this XQ? in date so are terms quarter trends far

Sorry, hear. I didn't

quarter the continuing Your has that the interpretation continued - last comment from usage. of increased into is XQ there about in this trends trend

we continue. that from point. the is in we're hopeful that on QX commenting will performance and this really it our at QX not saw Overall, strong, We're EBAs

Great. Debbie. Thank you,

Thank you.

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

on was Thanks I taking it, guide know the quarter. thought you, stability better quarterly. free don't you missed cash Congrats - good significantly questions. for my this really maybe was but flow Debbie, we Great. see. Maybe, I cash here. than to flow Really, for

bit again, just on QX So of the And linearity XQ little kind full a think flow about split - about kind so of maybe as of little maybe more I sort How this year you low cash QX, XQ? that bit. the up sort there, missed of and why is quarter? it, we but free strong think a the we of end should between took

Yes.

of So QX some billings favorable of as linearity. because about that in-quarter timing as was strong, EBA well the primarily the I've been talking

So second will the be was half half flow, the out the quarter. and the free flow will that tax free of we at it impact positively the better saw weighted look significantly cash linearity And I've payment fourth the than QX. we to federal we had that year, cash impacted back half then when expected. called extension negatively first

Overall, cash we going this to free 'XX upfront anticipate is during trough from that billings. annual still fiscal flow the transition be

to to questions we extremely real you, Autodesk Autodesk's an Great. get category. guess CRE your Andrew, the the speaking, then, And what's Thanks. know for split kind asked an of market? But we time, should up broadly give exposure in of exact think on kind obviously, there. of difficult How the following just on the But percentage exposure about of I all exposure, estate commercial model. your I regarding earlier diversified business, it's

ginormous, during amount how shouldn't, like, housing. to is, all some shouldn't, have our be you To crisis, should conversations the through going to of all actually and is capacity, people-wise, right? either right? And we the customer about all things relative rebuilt This of we you built had be things to that is current honest, the are or the housing work in need Autodesk dollar-wise question on. They the okay? that don't think capability-wise, The base

other the momentum of industry the areas. to So pivots

within That either and shrinking about you estate or space to to to exposure other got it attractive traditionally that make else. other of done more goes projects. money are always lot bidding on Now There's commercial on somewhere projects overblowing bidding were be of repurpose of people other even real real But engaging a careful always be that pool estate look that real reconfiguring sectors. renters work in terms uses. that order Autodesk, the the if to at of people are to commercial to commercial estate, to you still means in now because a segment types just in

you Thank for helpful. that. Super

you. Thank

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

Great. it's my your customers and Thanks to maybe learned we from to prior regarding many we philosophy. us continue the views lessons et M&A of And things taking hear assets, your good ability question. enhance Innovyze, of your some acquired Can whether innovate you of PlanGrid, M&A and partners Andrew, for what cetera. and remind just kind your of on deals? go-forward are your from

Yes.

company. an we are acquisitive So

to bringing either place. weren't it's an we currently potential company. working effort we're that continue but attractive an for always that acquisitions, always more us gets that means that will acquisitive That attractive environment into is strategically priorities. our with adjacency we a make looking working We acquisition or are an like to We sure be but accelerating see aligned an on as when the we that on

don't to to at us that Timing terms of business do right flow matters and is things things keep for we're are in and that do continue focused on and will important once, sheet do forward. we reasonably acquisitive, terms juggle moving try what expansion XX need we ability in as the But the balls of whatever timing well interested these we we here to balance cash right? fit be and to have to the in strategic that

So don't expect any change.

back always a faster. back In and some integrate these of the all you office There's all quicker you infrastructure is learning, faster, you terms integrate look, things go [indiscernible] right? can and sales learn, of office and

there. helpful Super

over another so Thanks of terms these years. many got talk easing other as hiring it A&E you're any Are know general topic, my customers. customers just in here A&E you seeing of for commentary kind seeing have with about talent of on you shortages can or customers few hiring. much the relates within past to taking what any Just question. I

they're but construction the But It you're depends not qualified seeing things talent, sector. It's to honestly, and them one - talent. especially retain of the challenges with right? in is on still Yes. seeing hiring, their from big we ability hear only manufacturing, find

towards primarily our the an customers, execution on of the to continues hiring side. side mix issue be So

Thank you.

the Our & Oppenheimer Ken question Company. next of of Wong from comes line

Great. Thank taking you my for question.

Just one for quick a me.

sure, you think But relative to just I of adding with consistent way about mentioned is - out kind you we should are new last make terms this Debbie, think about an that seeing. new normalized. the we quarter, customer As in what to played guys wanted had I think called air out think of you guys quarter that bit a How of subs? pocket softness

with being momentum new BuildingConnected on quarter. in record consistent subs, the conditions, optimism partners. leading indicators quarter, bid channel about to business our We similar overall from ,cautious talked usage, last The was activity market last growing

well the including similar just what add was bright as performance several broadly quarters. tougher seen eStore to I we like regional softer well that some for direct spots business, as and offset as about would as that, enterprise our talked were in patches India by we've were us, that Beyond for but performance M&A. China they actually

full then of quarter, last and Got in recovered guys it. a little when dynamic it that new ads. quarter, be a or with very more saying saw kind you're it's out consistent But small maybe a averaged And lighter than you maybe quarter realize I would think anticipated. where bit exit terms then I I nuance. sub it's of it consistent dip, little a of last with guess

after quarter as we what we got early we recovered that saw we then QX. contracts remember QX, as quarter into So multiyear selling upfronts, exited that we stopped a dip slight but it the was throughout said saw and last and the consistently we

Okay. Perfect. Thank you, Debbie.

standby. Thank Please you.

from next Berenberg. question comes Nay line of Our Naing, Soe the

for you Thank in. Hi. squeezing me

or question in seen if we the would of the growth we've AEC, an wondering what is past inflection because the growth the of quarter, quarters decline renewals was in Coming terms expected have levels the we seen better rates. couple gradual was in in in expected performance that back than me. than to a exclude got Just I the quick were impact to EBA from early earlier

wondering easy early was Or would if compared would you. see of we an have and rates? further Thank a didn't I bit an to QX? deceleration be growth So would EPAs seen this segment we in a uptick renewals have

in revenue drove what when billings that about So for think are comparison that larger. is guide. dollar of the vastly to our we EBAs business, early totality But about you on AEC beat business the a AEC the beat talked the basis versus our

the a the it's in EBA. overall big driver of it that seeing but was driver AEC, So trend of not we're

you. Thank

you. Thank

comes ahead, from Our line Baumann go of Please Patrick question Patrick. the of next JPMorgan.

This Pat is for you. Steve. Thank on

just a probably So couple for Debbie.

EPS, then income. there? cash there's the driver of the was of raise You only other the the that - in flow touched number, Is was the adjusted the that the preamble? of was benefit on - from moving there. on of know like but on rate $XX I cash terms I million it EPS the guide guess And what what in a guidance raise - parts sales raise, you of midpoint, terms it in the small interest free simply mentioned was the

Yes.

in QX. starting the saw due we that with to performance it's cash, So

that So QX as little a I in about linearity. favorable well billings core the bit the EBA we in as talked Q&A session in saw earlier this

balances. EPS, So other cash those difference our to of you income terms flow interest saw from cash in of that higher were guidance. in then due drivers And income the our is the

flow? through flow that Does the Good. cash

well, yes. In part, yes,

or then to And second you one third my for be on positive sorry, the the is free think negative cash Is on Okay. quarter do flow going flow. more question. - cash

cash thought I the quarter. I similar you think second could in I item that quarter to think impact that pushed the significantly your the commentary in to quarter from quarter? is was also quarter third You maybe from negative view Is cash that free this the weighted third think, fourth third the at will be that flow last time said first given be the half, prior of your second negative. half But to quarter which and

reiterate for free be guide to on to I'll comments. to cash going not basis of try We're the a just helpful. quarterly I but some want flow,

impact driver a on had half QX. are half of quarter. remember the payments federal the second biggest going weighted that So to of flow going that fourth first but negatively is free the to our into tax is the extension cash significantly And be that positive impact

So your together. think about that model as you put

so Thanks Best of luck. much. Okay.

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

Thanks, look on you thank you much. and on forward everyone, updating to Thank look call. I to November QX progress then. earnings joining speaking today. so to our in you, forward We our for you

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

may You now disconnect.