Summary
Autodesk started fiscal 2026 with double-digit top-line growth. Revenue rose 15% to $1.633 billion in the first quarter, and 16% on a constant currency basis. Billings were $1.434 billion, up 29%. Recurring revenue reached $1.592 billion, up 15%, and represented 97% of net revenue. Net revenue retention rate was slightly above 110% on a constant currency basis. The quarter's growth came against an uncertain geopolitical, macroeconomic, and policy backdrop, according to management.
Profitability was mixed. Gross profit was $1.473 billion, up 15.1%, and gross margin was 90.2%, down 0.1 percentage points. Operating income fell 22.1% to $233 million, and operating margin dropped 6.8 percentage points to 14.3%. Net income declined 39.7% to $152 million. Diluted EPS was $0.70, down 39.7%. The GAAP decline reflected restructuring charges tied to the 2026 Plan and a cumulative stock-based compensation adjustment related to the Employee Stock Purchase Program. On a non-GAAP basis, operating margin was 37%, compared with 35% a year earlier, and non-GAAP EPS was $2.29, compared with $1.87.
Cash generation remained solid. Operating cash flow was $564 million, up 14.2%. Capital expenditures were $8 million, up 14.3%. Free cash flow, which is operating cash flow less capital expenditures, was $556 million, up 14%. Current deferred revenue was $3.620 billion, up 7.7%. The company ended the quarter with a $1.5 billion revolving credit facility and repurchased shares during the quarter.
Management guided second quarter fiscal 2026 non-GAAP EPS to $2.44-$2.48. For the full fiscal year 2026, the company guided non-GAAP EPS to $9.50-$9.73, non-GAAP operating margin to 36.5%-37%, billings to $7,160-$7,310 million, and free cash flow to $2,100-$2,200 million. The full-year free cash flow outlook includes restructuring and other related cash outflows of $105-$115 million and an anticipated discrete cash benefit of $130-$150 million from the utilization of US deferred tax assets. The outlook includes currency movements since February, partly offset by additional caution in growth assumptions to reflect greater macroeconomic uncertainty.
Several risks could affect results. Foreign exchange was a headwind: revenue grew 15% as reported but 16% in constant currency, while total spend grew 25% as reported and 26% in constant currency. The transition to annual billings for multi-year contracts could affect the timing of billings and cash collections. The new transaction model shifts sales incentives to Solution Providers from contra revenue to operating expenses, which pressures operating margin. Customer concentration remains a factor. TD Synnex accounted for 20% of total net revenue in the first quarter of fiscal 2026, down from 38% a year earlier. Autodesk is also restructuring its go-to-market organization to reallocate resources to cloud, platform, and artificial intelligence. Management said it has not seen changes in overall business momentum compared with recent quarters.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2026 | Q4 FY2025 | QoQ | Q1 FY2025 | YoY |
|---|---|---|---|---|---|
| Revenue | $1.63B | $1.64B | -0.4% | $1.42B | +15.2% |
| Gross profit | $1.47B | $1.49B | -0.8% | $1.28B | +15.1% |
| Gross margin | 90.2% | 90.6% | -0.4 pp | 90.3% | -0.1 pp |
| Research & development | $394.0M | $393.0M | +0.3% | $346.0M | +13.9% |
| Sales & marketing | $566.0M | $526.0M | +7.6% | $469.0M | +20.7% |
| General & administrative | $162.0M | $173.0M | -6.4% | $155.0M | +4.5% |
| Total operating expenses | $1.24B | $1.12B | +10.8% | $981.0M | +26.4% |
| Operating income (loss) | $233.0M | $366.0M | -36.3% | $299.0M | -22.1% |
| Operating margin | 14.3% | 22.3% | -8.1 pp | 21.1% | -6.8 pp |
| Net income (loss) | $152.0M | $303.0M | -49.8% | $252.0M | -39.7% |
| Net margin | 9.3% | 18.5% | -9.2 pp | 17.8% | -8.5 pp |
| Diluted EPS | $0.70 | $1.40 | -$0.70 | $1.16 | -$0.46 |
Risks
Autodesk initiated the 2026 Plan in FY2026 Q1 to optimize its go-to-market organization and reallocate resources to cloud, platform, and artificial intelligence, incurring $105 million of restructuring, other exit costs, and facility reductions. This contributed to GAAP operating income decreasing 22.1% and net income decreasing 39.7% versus the prior-year quarter, and the plan may not achieve expected benefits or could cause attrition, lower morale, and difficulty retaining skilled employees.
Tariffs and trade protectionism are creating significant uncertainty; since March 2025 the U.S. placed an additional 20% tariff on most goods from China, 25% tariffs on most Canadian and Mexican products, Section 232 steel and aluminum tariffs, and in April 2025 a 125% reciprocal tariff on most imports from China and 10% on most other trading partners. International net revenue represented 64% of net revenue in both FY2026 Q1 and the prior-year quarter, exposing Autodesk to retaliatory trade measures and economic downturns.
AI and machine learning are changing the software market, and competitors may incorporate AI into their products more quickly or successfully, which could impair Autodesk's ability to compete. Autodesk is building AI into many offerings and expects related R&D investment, but AI also brings risks of lawsuits, regulatory investigations, reputational harm, and cybersecurity incidents involving end-user data.
The Audit Committee internal investigation into Autodesk's free cash flow and non-GAAP operating margin practices has been time-consuming and expensive, resulted in shareholder litigation, and led to SEC and U.S. Attorney inquiries. Additional penalties, injunctions, legal costs, and management distraction could adversely affect results.
The new transaction model records sales incentives to Solution Providers as operating expenses rather than contra revenue, which Autodesk expects to positively impact calculated revenue growth but negatively impact operating margin in fiscal 2026. Direct revenue increased 66% while indirect revenue decreased 16% in FY2026 Q1, changing channel mix and increasing direct transaction dependence.
TD Synnex accounted for 20% of total net revenue in FY2026 Q1, down from 38% in the prior-year quarter, as Autodesk reduced indirect channel sales. Distribution partners are not highly capitalized and could suffer financial instability, and the indirect channel still supports a considerable portion of customers, especially in emerging regions.
Customers are not obligated to renew subscriptions, and renewal rates may decline or fluctuate due to pricing, competition, customer satisfaction, or reduced spending. NR3 was slightly above 110% on a constant currency basis in FY2026 Q1, partly due to the new transaction model, and was within 100% to 110% in the prior-year quarter.
Autodesk derives a substantial portion of net revenue from a limited number of offerings, including AutoCAD and AutoCAD LT; combined revenue from those products represented 25% of total net revenue in FY2026 Q1, down from 27% in the prior-year quarter. Rapid technological change, lower barriers to entry, and competitor consolidation could reduce demand, prices, and market share.
Autodesk had $2.30 billion aggregate principal amount of notes outstanding as of April 30, 2025, with $300 million due in the second quarter of fiscal 2026, and entered into the 2025 Credit Agreement providing a $1.5 billion revolver. Covenant breaches could restrict borrowing or accelerate repayment, and credit rating downgrades could increase costs or limit financing.
Autodesk regularly acquires businesses and technologies, including several transactions in fiscal 2025, which creates integration, customer and employee retention, liability assumption, and internal control risks. Acquisitions may negatively impact operating margins and cause quarterly fluctuations from transaction costs, restructuring charges, or impairment write-offs.
A U.S. election for fiscal year 2026 to align taxation of revenue with U.S. GAAP recognition increased cash flow from operations and income tax expense due to reduced FDII benefits and increased GILTI tax. Future effective tax rates may be adversely affected by OECD global minimum tax proposals, changes in tax laws, and challenges to transfer pricing positions.
SaaS KPIs
All quarters →Non-GAAP Operating Margin
Remaining Performance Obligations (RPO)
Free Cash Flow
Billings
Current RPO
Recurring Revenue as % of Net Revenue
Net Revenue Retention (NR3)
Summary, forecast, risks and KPIs are extracted from Autodesk, Inc.'s SEC filings for Q1 FY2026 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.