Key takeaways from Autodesk’s (ADSK) Q1 2024 earnings report

After making a successful transition to the subscription-based business model, design software maker Autodesk, Inc. (NASDAQ: ADSK) is currently on a mission to shift from products to capabilities. The San Francisco-based company, a leading provider of software related to computer-aided design including the popular AutoCAD, continues to add new subscribers despite economic uncertainties. In the most recent quarter, subscriber growth accelerated in the EMEA region but slowed down in North America.

The company reported first-quarter 2024 results last week but the market was not impressed by the mixed outcome, and the stock experienced weakness following the announcement. Extending the downtrend, the shares slipped below the $200 mark this week. The average price over the last 52 weeks is 200.41, while experts predict a 20% gain this year.

Mixed Q1

In the first quarter, both revenues and adjuster profit increased from last year and matched the consensus estimates, after beating in the preceding quarter. At $1.27 billion, revenues were up 8%, reflecting continued strong performance by the company’s subscription business and sales growth across geographical regions. Total billings rose 4% to $1.17 billion, while remaining performance obligations, a measure of revenues expected to be recognized in the next twelve months, increased in double digits to $3.5 billion.

Commenting on the recent financial performance, Autodesk’s CEO Andrew Anagnost said, “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 the 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.”

April-quarter net profit, excluding special items, moved up to $1.55 per share from $1.43 per share in the prior-year quarter. Unadjusted profit was $161 million or $0.75 per share, compared to $146 million or $0.67 per share last year.

Outlook

For the second quarter of 2024, the management expects revenues to be in the range of $1.315 billion to $1.325 billion, and adjusted earnings per share between $1.70 and $1.74. The revenue forecast for fiscal 2024 is $5.355-$5.455 billion. Full-year adjusted profit is estimated to be between $7.07 per share and $7.41 per share.

Shares of Autodesk traded down 3% on Tuesday afternoon. However, the stock is up 4% from where it was five months ago.