Autodesk (NASDAQ: ADSK) said its revenue for the third quarter surged 28% to $843 million due to strong performance from all of its products. Adjusted earnings jumped to 78 cents compared to 29 cents reported last year. The Q3 headline numbers came ahead of market estimates.
Annualized recurring revenue (ARR) rose 2%, billings jumped 55% and deferred revenue recorded a 35% jump over the prior year. The revenue retention rate was healthier between 110-120%.
However, once again Autodesk disappointed in terms of guidance. For the Q4 period, Autodesk is expecting revenue in the range of $880 million – $895 million and adjusted EPS of 86 to 91 cents. The fell shy of what the street was anticipating.
For the full year, the company projected a 27% jump in revenues to a range of $3.25 billion to $3.27 billion. Adjusted EPS is forecast between $2.74 and $2.79.
The weak guidance sent the stock tanking 5.4% during after market hours on Thursday.
Autodesk decided to transition from a licensing-based business model towards a software-as-a-service model in 2016. As a follow-up to the transition, the company launched maintenance-to-subscription (M2S) program in 2017, which helps its existing clients to convert from the licensing model to SaaS plan.
In the past two years, the company has converted 875,000 customers to SaaS offering and plans to move the remaining 689,000 in the near future.
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