ADSK Earnings: What to look for when Autodesk reports Q2 results

Design software company Autodesk, Inc. (NASDAQ: ADSK) will be publishing results for its most recent quarter on Wednesday after the closing bell amid expectations for earnings and revenue growth. In an effort to better align the business with new trends in the market, the company is working to shift from products to the capabilities model.

The San Francisco, California-based tech firm’s stock has gone through a series of ups and downs in recent years. At present, the value is almost where it was a year earlier, after trading mostly sideways during that period. The stock has been trailing the market for quite some time, and the low valuation looks favorable from the long-term investment perspective.

AI Power

A key strength of Autodesk is its continued focus on innovation — the company has been investing in generative AI for a long time, creating high-tech tools that would make the job of construction workers, architects, and engineers a lot easier. Revit, the firm’s architectural design product; its engineering program Fusion 360; and the Autodesk Construction Cloud, which offers an array of construction productivity tools, are widely used across the globe.

Autodesk is preparing to report second-quarter results on Wednesday at 4:00 PM ET. Market watchers forecast earnings of $1.72 per share for Q2 2024, on an adjusted basis, compared to $1.65 per share the company reported in the corresponding period of 2023. It is estimated that July-quarter revenues increased 6.7% annually to $1.32 billion.

Guidance

While discussing the prior-quarter results a few months ago, Autodesk executives said they were looking for second-quarter revenues of $1.31-1.32 billion, the mid-point of which is slightly below analysts’ consensus. The company expects adjusted income per share to be in the range of $1.70 to $1.74 in Q2. For the full fiscal year, revenue is expected to be in the $5.35-5.45 billion range and earnings per share between $7.07 and 7.41.

From Autodesk’s Q1 2024 earnings call:

“While macroeconomics are unpredictable in the short-term, we are executing our strategy through the economic cycle with disciplined and focused capital deployment, underpinned by one of the best growth margin and balance sheet profiles in the industry. This enabled Autodesk to remain well-invested to realize the significant benefits of the strategy while mitigating the risk of happy to make expensive catch-up investments later. Discipline and focus also means making sure we are investing in the right places.”

Q1 Numbers

In the first three months of fiscal 2024, total revenues increased 8% year-over-year to $1.27 billion. Consequently, net income moved up to $161 million or $0.75 per share from $146 million or $0.67 per share in the first quarter of the prior year. Adjusted EPS, excluding special items, moved up 8% to $1.55. Total billings increased 4% from last year to $1.17 billion. Both earnings and revenues matched analysts’ estimates.

After many short-livered recoveries, Autodesk’s shares are currently trading sharply below their 2021 peak. Though ADSK ended the last session slightly lower, it traded higher in the early hours of Monday.