Summary
Autodesk's fiscal 2023 third quarter paired double-digit top-line growth with wider profitability. Revenue rose 13.7% to $1.28 billion from the prior-year quarter, and year-to-date revenue reached $3.69 billion, up 16.1%. Gross profit was $1.16 billion, up 13.9%, and gross margin was 90.6%, up 0.2 percentage points. Operating income was $256 million, up 32.6%, and operating margin was 20.0%, up 2.9 percentage points. Net income was $198 million, up 44.5%, while diluted EPS was $0.91, up $0.29. Non-GAAP operating margin was 36%, up 4 percentage points, and non-GAAP diluted EPS was $1.70.
Cash generation stood out. Operating cash flow was $469 million, up 73.1%, and capital expenditures were $9 million, down 35.7%. Free cash flow was $460 million, an increase of $203 million. Current deferred revenue was $2.73 billion, up 6.6%. Total billings increased 16% to $1,360 million. Recurring revenue represented 98% of total revenue, and the net revenue retention rate stayed within the range of 100 to 110 percent. Management said subscription renewal rates remained strong and competitive performance held up in a more challenging macroeconomic environment. Revenue growth was 15% on a constant currency basis. Autodesk also introduced three industry clouds, Fusion, Forma, and Flow, which are meant to connect data, teams, and workflows in the cloud on its platform.
Guidance keeps growth intact but points to a change in contract mix. For the fourth quarter of fiscal 2023, non-GAAP EPS is guided to $1.77 to $1.83. For the full fiscal year, Autodesk guided billings to $5,570 million to $5,670 million, up 16% to 18%, along with non-GAAP operating margin of approximately 36%, non-GAAP EPS of $6.56 to $6.62, and free cash flow of $1,900 million to $1,980 million. The company said its full-year revenue, margin, and earnings guidance remains close to prior mid-points at constant exchange rates. Lower billings and free cash flow guidance mainly reflect less demand for multi-year, up-front contracts and more demand for annual contracts than expected. Excluding an approximately $195 million impact from foreign exchange rates and hedge gains or losses, billings guidance would be $5,765 million to $5,865 million.
The risks are familiar but real. Autodesk cited a challenging macroeconomic environment, foreign exchange headwinds, recessionary fears, supply chain disruptions, inflationary pressures, hiring conditions, and the war in Ukraine along with its exit from Russia. Distributor concentration is another watch item: Tech Data accounted for 37% of total net revenue for the three and nine months ended October 31, 2022, and Ingram Micro accounted for 9%. Autodesk entered transition agreements with Tech Data covering a one-to-two-year period and plans to lean more on value-added resellers and agents. On taxes, the requirement to capitalize and amortize research and development expenditures beginning in fiscal 2023 may raise cash taxes, and the Inflation Reduction Act adds a 15% corporate minimum income tax and a 1% excise tax on corporate stock repurchases.
Capital return remains part of the story. In November 2022, the board authorized repurchases of $5 billion of common stock, on top of approximately 3.8 million shares remaining under prior programs as of October 31, 2022. In the first nine months of fiscal 2023, Autodesk repurchased approximately 4.4 million shares at an average price of approximately $200 per share. The program is designed to offset dilution and reduce shares outstanding over time, though the pace depends on cash generation, acquisition needs, market conditions, and the stock price.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2023 | Q2 FY2023 | QoQ | Q3 FY2022 | YoY |
|---|---|---|---|---|---|
| Revenue | $1.28B | $1.24B | +3.5% | $1.13B | +13.7% |
| Gross profit | $1.16B | $1.12B | +3.8% | $1.02B | +13.9% |
| Gross margin | 90.6% | 90.4% | +0.3 pp | 90.5% | +0.1 pp |
| Research & development | $311.0M | $306.0M | +1.6% | $282.1M | +10.2% |
| Sales & marketing | $454.0M | $433.0M | +4.8% | $419.4M | +8.2% |
| General & administrative | $129.0M | $128.0M | +0.8% | $112.8M | +14.4% |
| Total operating expenses | $904.0M | $876.0M | +3.2% | $825.4M | +9.5% |
| Operating income (loss) | $256.0M | $242.0M | +5.8% | $193.3M | +32.4% |
| Operating margin | 20.0% | 19.6% | +0.4 pp | 17.2% | +2.8 pp |
| Net income (loss) | $198.0M | $186.0M | +6.5% | $136.7M | +44.8% |
| Net margin | 15.5% | 15.0% | +0.4 pp | 12.1% | +3.3 pp |
| Diluted EPS | $0.91 | $0.85 | +$0.06 | $0.61 | +$0.30 |
Risks
MD&A says supply chain disruption and resulting inflationary pressures, a global labor shortage, the ebb and flow of COVID-19, the war in Ukraine, and foreign exchange rate fluctuations may impact the fiscal 2023 outlook. The filing also notes customers may delay or reduce technology purchases, which has been seen recently in certain countries including China.
International net revenue represented 66% and 67% of total net revenue for the nine months ended October 31, 2022 and 2021, respectively. Risks include economic volatility, tariffs and trade barriers, sanctions, tax changes, currency controls, and a recent deceleration in growth in certain geographies including China.
Tech Data accounted for 37% of total net revenue for both the three and nine months ended October 31, 2022, and Ingram Micro accounted for 9% for the same periods. Autodesk entered transition agreements with Tech Data for a one-to-two-year period; a significant disruption or deterioration in these relationships could temporarily negatively impact sales to end users.
The filing states hackers regularly have targeted Autodesk systems, offerings, services, and applications, and that the risk is elevated by work-from-home arrangements and the Russian invasion of Ukraine with possible retaliatory attacks from nation-state actors. A security incident could disrupt services, expose data, and lead to regulatory inquiry, lawsuits, and liability.
Autodesk is increasingly building artificial intelligence into many offerings, and the filing states social and ethical issues relating to AI may result in reputational harm, liability, and additional research and development costs. Potential government regulation of AI ethics may increase the burden and cost of research and development.
As of October 31, 2022, Autodesk had $2.65 billion of aggregate principal debt, with notes due from December 2022 to December 2031, and expects to use cash to retire the 2012 Notes due December 15, 2022. The $1.5 billion revolving credit facility has covenants, and a breach could prevent borrowing or cause outstanding debt under the facility to be declared immediately due.
The Tax Act requires capitalization and amortization of research and development expenditures beginning in fiscal 2023, and if not modified Autodesk may recognize an increase to cash taxes. The Inflation Reduction Act enacted August 16, 2022 includes a 15% corporate minimum income tax and a 1% excise tax on stock repurchases, and Autodesk is assessing the impact.
Autodesk regularly acquires businesses and completed several acquisitions in fiscal 2022 and the first fiscal quarter of 2023. Risks include difficulty integrating solutions, operations, and personnel, inheriting liabilities, failure to realize anticipated revenue and cost synergies, and diversion of management attention.
Combined revenue from AutoCAD and AutoCAD LT family products, excluding collections having AutoCAD or AutoCAD LT as a component, represented 28% and 29% of total net revenue for the nine months ended October 31, 2022 and 2021, respectively. A decline in sales of these products or AutoCAD-based collections without offsetting growth could adversely affect results.
Autodesk states customers are not obligated to renew subscriptions and renewal rates may decline or fluctuate due to pricing, competitive offerings, customer satisfaction, and reduced customer spending. NR3 was within the range of 100% and 110% as of both October 31, 2022 and 2021.
MD&A reports a negative foreign exchange impact on net revenue and a positive foreign exchange impact on total spend for the three and nine months ended October 31, 2022. Changes in the U.S. dollar may significantly affect net revenue, total spend, and income from operations in future periods despite hedging.
SaaS KPIs
All quarters →Non-GAAP Operating Margin
Remaining Performance Obligations (RPO)
Free Cash Flow
Billings
Current Remaining Performance Obligations (cRPO)
Recurring Revenue as % of Net Revenue
Net Revenue Retention Rate
Summary, forecast, risks and KPIs are extracted from Autodesk, Inc.'s SEC filings for Q3 FY2023 (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.