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Autodesk posts upbeat Q3 results, to buy PlanGrid

Autodesk (ADSK) reported a narrower loss in the third quarter as demand strength was balanced across all major geographies and product families. The results exceeded analysts’ expectations. The design software company lifted the guidance for the full year while guiding fourth-quarter revenue and earnings above consensus view. Following this, the stock inched up over 7% in the after-market session.

Separately, Autodesk agreed to buy PlanGrid, a provider of construction productivity software, for $875 million net of cash. This acquisition will enable Autodesk to offer a more comprehensive, cloud-based construction platform. The transaction is expected to close during Autodesk’s fourth quarter of fiscal 2019.

Autodesk expects the acquisition to contribute slightly to revenue and be modestly negative for profitability and cash flows for the fourth quarter. For fiscal 2020, the company expects PlanGrid to contribute about $100 million in annualized recurring revenue and be slightly dilutive to profitability and cash flow.

Autodesk third quarter 2019 Earnings Infographic
Autodesk Q3 2019 Earnings Infographics

For the third quarter, net loss narrowed to $23.7 million or $0.11 per share from $119.8 million or $0.55 per share in the previous year quarter. Adjusted earnings were $0.29 per share compared to a loss of $0.12 per share a year ago. Revenue for the quarter grew 28% year-over-year to $661 million.

For the fourth quarter, the company guides revenue in the range of $700 million to $710 million and adjusted EPS in the range of $0.40 to $0.44 per share. GAAP earnings were predicted to be $0.18 to $0.22 per share.

For the full year 2019, Autodesk lifted revenue outlook to the range of $2.533 billion to $2.543 billion from the prior range of $2.485 billion to $2.505 billion. Adjusted earnings guidance was raised to the range of $0.95 to $0.99 per share from the prior range of $0.87 to $0.95 per share. GAAP loss outlook was narrowed to the range of $0.49 to $0.45 per share from the previous estimate range of $0.59 to $0.51 per share.

The company now predicts billings in the range of $2.61 billion to $2.64 billion for the full year 2019. Net subscription additions are anticipated to be 500,000 to 550,000 and total annualized recurring revenue (ARR) growth is projected to be 30% to 31%.

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For the third quarter, ARR jumped 33% as reported and 31% on a constant currency basis from the previous year quarter. Subscription plan ARR soared 108% year-over-year as reported and 105% on a constant currency basis. Total subscriptions grew by 143,000 from the second quarter of fiscal 2019 to 4.08 million at the end of the third quarter.

Subscription plan subscriptions increased by 252,000 sequentially to 3.12 million at the end of the third quarter. This benefited from 71,000 maintenance subscribers that converted to product subscription under the maintenance-to-subscription program.

Total deferred revenue increased about 17% year-over-year to $2.24 billion. Billings climbed 30% to $654 million. Revenues in the Americas increased 25% while that in the EMEA and APAC jumped 30% and 32% respectively.

Shares of Autodesk ended Tuesday’s regular session down 2.14% at $123.05 on the Nasdaq. The stock has risen over 17% in the year so far while it has fallen over 2% in the past year.

 

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