Summary
Autodesk reported fiscal 2026 second quarter results with revenue of $1.76 billion, up 17.1% from the prior-year quarter. Gross profit was $1.60 billion and gross margin was 91.0%, up 0.3 percentage points from the prior-year quarter. Operating income was $444 million, and operating margin was 25.2%, up 2.4 percentage points from the prior-year quarter. Net income was $313 million, and diluted EPS was $1.46. Operating cash flow was $460 million. Free cash flow was $451 million. Non-GAAP diluted EPS was $2.62, and billings were $1,678 million.
The quarter leaned on AECO. Revenue from that product family was $878 million, up from $713 million a year earlier, and management tied the strength to sustained customer investment in data centers, infrastructure, and industrial buildings. That more than offset softness in commercial. AutoCAD and AutoCAD LT revenue was $440 million, up from $389 million. Manufacturing revenue was $334 million, up from $296 million. Media and entertainment revenue was $80 million, up from $77 million. Recurring revenue was 98% of net revenue, and net revenue retention rate was above 110% on a constant currency basis. Deferred revenue (current portion) was $3.55 billion, up 10.0% from the prior-year quarter. Remaining performance obligations were $7,297 million, and current remaining performance obligations were $4,677 million. Management pointed to the Autodesk Store, billings linearity during the quarter, and up-front revenue. Foreign exchange was a negative impact on net revenue in the quarter. Direct sales made up 62% of revenue in the quarter, up from 40% a year earlier, as the new transaction model moved business away from indirect channels. That shift is expected to lift calculated revenue growth in fiscal 2026 while being broadly neutral to calculated operating profit and free cash flow dollars.
Full-year fiscal 2026 guidance was raised to reflect first-half business strength and additional foreign exchange tailwinds, while macroeconomic assumptions stayed unchanged. For the full year, management guided billings of $7,355 to $7,445 million, a non-GAAP operating margin of 37%, non-GAAP EPS of $9.80 to $9.98, and free cash flow of $2,200 to $2,275 million. The free cash flow outlook includes restructuring and other related cash outflows of $105 to $115 million and an anticipated discrete cash benefit of $130 to $150 million from the utilization of U.S. deferred tax assets. For the third quarter of fiscal 2026, guidance includes non-GAAP EPS of $2.48 to $2.51 and revenue in a range that is above the second quarter result.
The first half tells a different story on the bottom line. Year-to-date revenue was $3.40 billion, up 16.2%. Gross profit was $3.08 billion. Operating income was $677 million. Net income was $465 million, down 12.9%, and diluted EPS was $2.15, down 12.6%. Operating margin for the six months was 19.9%, down 2.0 percentage points from the prior-year period. Operating cash flow was $1.02 billion, up 45.0%. Capital expenditures were $17 million, up 6.2%. The drop in profit came mostly from a higher tax provision. The company said the increase reflects a U.S. election on the timing of revenue taxation, lost foreign-derived deduction-eligible income benefits, and tax changes under the One Big Beautiful Bill Act. Autodesk repurchased 3 million shares for $709 million during the six months ended July 31, 2025.
Two government investigations are now closed. The SEC notified the company in August 2025 that it was closing its matter, and the U.S. Attorney's Office for the Northern District of California followed. The internal investigation began in March 2024 and covered free cash flow and non-GAAP operating margin practices. The company's risk list is long: global economic and political conditions, foreign exchange rate fluctuations, tariffs and trade wars, supply chain disruption, inflationary pressures, geopolitical conflicts, competition, security incidents, and the transition to annual billings for multi-year contracts. Autodesk also depends on major distributors. TD Synnex accounted for 16% of total net revenue in the quarter, down from 36% a year earlier. The restructuring plan launched in the first quarter of fiscal 2026 is meant to realign go-to-market roles and free up resources for cloud, platform, and artificial intelligence investments. Management expects most expense lines to increase in the third quarter of fiscal 2026, with general and administrative expenses slightly lower and amortization of purchased intangibles flat.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2026 | Q1 FY2026 | QoQ | Q2 FY2025 | YoY |
|---|---|---|---|---|---|
| Revenue | $1.76B | $1.63B | +8.0% | $1.50B | +17.1% |
| Gross profit | $1.60B | $1.47B | +8.9% | $1.36B | +17.5% |
| Gross margin | 91.0% | 90.2% | +0.8 pp | 90.7% | +0.3 pp |
| Research & development | $413.0M | $394.0M | +4.8% | $368.0M | +12.2% |
| Sales & marketing | $559.0M | $566.0M | -1.2% | $480.0M | +16.5% |
| General & administrative | $168.0M | $162.0M | +3.7% | $161.0M | +4.3% |
| Total operating expenses | $1.16B | $1.24B | -6.5% | $1.02B | +13.5% |
| Operating income (loss) | $444.0M | $233.0M | +90.6% | $343.0M | +29.4% |
| Operating margin | 25.2% | 14.3% | +10.9 pp | 22.8% | +2.4 pp |
| Net income (loss) | $313.0M | $152.0M | +105.9% | $282.0M | +11.0% |
| Net margin | 17.8% | 9.3% | +8.4 pp | 18.7% | -1.0 pp |
| Diluted EPS | $1.46 | $0.70 | +$0.76 | $1.30 | +$0.16 |
Risks
Global economic and political conditions, including new U.S. tariffs, have caused uncertainty. The filing notes since March 2025 the U.S. placed an additional 20% tariff on most goods from China, an additional 25% tariff on most products of Canada and Mexico, and 25% Section 232 tariffs on steel and aluminum. MD&A states material scarcity, supply chain disruption, inflationary pressures, higher interest rates, a global labor shortage, ongoing geopolitical conflicts, economic and regulatory uncertainty, and potential global trade wars may impact its outlook.
Autodesk is increasingly building AI into its offerings and expects to rely on AI to help drive future growth. Competitors may incorporate AI into their products more quickly or successfully. Risks include legal liability, regulatory investigations, reputational harm if AI outputs are deficient, inaccurate, or biased, and obligations under the EU AI Act and proposed or enacted U.S. state AI laws.
The Audit Committee internal investigation regarding Autodesk's free cash flow and non-GAAP operating margin practices has been time-consuming and expensive and resulted in shareholder litigation. The SEC and USAO closed their matters in August 2025, but the company cannot guarantee no future inquiries. Pending litigation and indemnification obligations could result in significant additional expense.
Autodesk is transitioning to a new transaction model and direct sales. Direct revenue was approximately 62% and 40% of revenue in Q2 fiscal 2026 and 2025, and indirect revenue decreased 26% in Q2. MD&A expects the change in recognition of sales incentives to Solution Providers from contra revenue to operating costs to positively impact calculated revenue growth but result in a calculated negative impact to operating margin in fiscal 2026.
International net revenue represented 64% of net revenue during both the six months ended July 31, 2025 and 2024. Net revenue increased 17% in Q2 fiscal 2026 but constant currency net revenue increased 18%, with a negative impact from foreign exchange rate changes. The filing warns of tariffs, sanctions, currency controls, corruption risks, longer collection cycles, and geopolitical conflicts in countries where Autodesk operates.
The 2026 Plan, initiated in the first quarter of fiscal 2026, aims to optimize the go-to-market organization and reallocate resources to cloud, platform, and AI. Restructuring, other exit costs, and facility reductions were $6 million in Q2 and $111 million year to date. MD&A expects remaining charges to increase in Q3 fiscal 2026. Risks include failure to achieve expected benefits, greater costs, lower savings, attrition beyond planned headcount, and reduced morale.
The transition to annual billings for multi-year contracts is expected to continue to impact the timing of billings and cash collections into fiscal 2026. MD&A states that if customers choose annual contracts, it would proportionately reduce the unbilled portion of total RPO and negatively impact total RPO growth rates, although deferred revenue, billings, current RPO, revenue, non-GAAP operating margin, and free cash flow would remain broadly unchanged.
Autodesk derives a substantial portion of net revenue from a limited number of solutions, including AutoCAD and AutoCAD LT family products, which represented 25% of total net revenue in the six months ended July 31, 2025, down from 26% in the prior-year period. It also relies on major distributors; TD Synnex accounted for 16% and 18% of total net revenue in Q2 and year-to-date fiscal 2026, down from 36% and 37% in the prior-year periods.
Income tax expense increased to $143 million in Q2 fiscal 2026 from $70 million in the prior-year quarter, and to $225 million year to date from $127 million. MD&A attributes the increase primarily to a U.S. election regarding the timing of taxation of revenue, which reduced FDDEI benefits, and increased tax expense under the One Big Beautiful Bill Act. Future effective tax rates may be materially impacted by changes in tax laws and valuation allowances.
As of July 31, 2025, Autodesk had $2.50 billion of principal debt outstanding and a new 2025 Credit Agreement providing a $1.5 billion unsecured revolving loan facility. Covenants, potential credit rating downgrades, and interest rate increases could restrict financing and adversely affect cash flows.
SaaS KPIs
All quarters →Non-GAAP Operating Margin
Remaining Performance Obligations (RPO)
Free Cash Flow
Billings
Current RPO
Net Revenue Retention Rate (NR3)
Recurring Revenue as % of Net Revenue
Summary, forecast, risks and KPIs are extracted from Autodesk, Inc.'s SEC filings for Q2 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.