Autodesk’s ongoing shift to cloud-based subscription from perpetual licenses complements the overall demand growth. The uptick in subscription revenue in the recent quarters underscores the success of the new business model. Meanwhile, the continuing weakness in maintenance revenue is a cause for concern. Also, the top-line could be dragged down by higher costs, mainly those related to acquisitions and talent hiring.
The company is well positioned to benefit from the growing demand for its construction management solution BIM 360
For the third quarter, the company reported a narrower net loss that exceeded estimates even as demand picked up across the board. Loss shrank to $0.11 per share on a 28% rise in revenues to $661 million. Buoyed by the improvement, the management raised the full-year outlook.
Also read: Autodesk Q3 2019 Earnings Conference Call Transcript
The rapid expansion of the company’s digital platform, with the e-store contributing a sizable chunk of sales and product subscription, is estimated to have added to the overall performance in the December quarter. Going forward, profitability could be positively impacted by synergies from the recent acquisition of PlanGrid, a provider of construction productivity software. The transaction was closed in the fourth quarter.
After reaching an all-time high this week, Autodesk shares pared some of the gains and are currently trading just above the $160-mark. The stock has gained about 39% over the past twelve months and 17% since the beginning of the year.