Summary
Autodesk reported fiscal 2026 third-quarter revenue of $1.85 billion, up 18 percent from the prior-year quarter, with constant currency growth also at 18 percent. Recurring revenue was 97 percent of net revenue, and the net revenue retention rate was above 110 percent on a constant currency basis as of October 31, 2025, against a range of 100 percent to 110 percent a year earlier. AECO led the product families at $921 million, up 23 percent, ahead of AutoCAD and AutoCAD LT at $458 million, up 15 percent, MFG at $355 million, up 16 percent, and M&E at $86 million, up 4 percent. EMEA grew fastest by region, up 23 percent to $715 million, while the Americas contributed $820 million, up 16 percent, and APAC $318 million, up 12 percent. Nine-month revenue was $5.25 billion, up 17 percent.
Profitability improved faster than the top line. Gross margin was 91.1%, up 0.5 percentage points, and gross profit rose 18.6 percent to $1.69 billion. Operating income climbed 35.8 percent to $470.0 million, lifting operating margin to 25.4%, a gain of 3.3 percentage points. Net income was $343.0 million, up 24.7 percent, and diluted EPS was $1.60, up $0.33. Non-GAAP diluted EPS was $2.67. The nine-month picture was less even. Net income of $808.0 million was flat against the prior-year period, operating margin of 21.9% slipped 0.1 percentage points, and diluted EPS of $3.76 rose $0.03.
Cash flow was the standout. Operating cash flow for the quarter was $439.0 million, up 110 percent, while capital expenditures were $9.0 million, down 10 percent. Free cash flow, which the company defines as operating cash flow less capital expenditures, was $430 million, up 116 percent. Nine-month operating cash flow reached $1.46 billion, up 59.9 percent. Current deferred revenue stood at $3.58 billion at October 31, 2025, up 9.2 percent from a year earlier. Remaining performance obligations were $7.36 billion, up 20 percent, and current RPO was $4.83 billion, up 20 percent. The 10-Q frames that same RPO balance as a 6 percent increase over the fourth quarter of the prior fiscal year. Unbilled deferred revenue was $3.52 billion, up 43 percent.
The mix of sales keeps tilting toward direct channels as the new transaction model moves more business to the Autodesk store and direct customer relationships. TD Synnex accounted for 12 percent of total net revenue, down from 33 percent a year earlier. Marketing and sales expense rose 17 percent to $612 million, partly because incentives paid to Solution Providers now sit in operating expenses rather than reducing revenue under the new transaction model, and research and development rose 10 percent to $416 million. Restructuring, other exit costs, and facility reductions tied to the 2026 Plan were $5 million in the quarter and $116 million for the first nine months.
Guidance points to more growth. For the fourth quarter of fiscal 2026, Autodesk guided to non-GAAP EPS of $2.59 to $2.67. For the full fiscal year, the outlook calls for billings of $7,465 million to $7,525 million, a non-GAAP operating margin of 37.5 percent, non-GAAP EPS of $10.18 to $10.25, and free cash flow of $2,260 million to $2,290 million. That free cash flow target absorbs roughly $115 million of restructuring and other related cash outflows and includes an anticipated discrete cash benefit of about $160 million from the utilization of US deferred tax assets. The company assumes a non-GAAP tax rate of 19 percent for both the fourth quarter and the full year.
Management described the macroeconomic environment as broadly stable while noting that uncertainty remains elevated. The biggest structural risk is the shift from multi-year contracts billed up front to annual billing installments. Some customers may choose annual contracts, which the company says would shrink the unbilled portion of RPO and weigh on total RPO growth, even though deferred revenue, billings, current RPO, revenue, non-GAAP operating margin, and free cash flow would be broadly unchanged in that scenario. The risk list also names foreign exchange headwinds, geopolitical tension and armed conflicts, tariffs and trade wars, supply chain disruptions, and competition. The new transaction model cuts both ways. It has helped calculated revenue growth and NR3 while adding a negative impact to calculated operating margin.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2026 | Q2 FY2026 | QoQ | Q3 FY2025 | YoY |
|---|---|---|---|---|---|
| Revenue | $1.85B | $1.76B | +5.1% | $1.57B | +18.0% |
| Gross profit | $1.69B | $1.60B | +5.2% | $1.42B | +18.6% |
| Gross margin | 91.1% | 91.0% | +0.1 pp | 90.6% | +0.5 pp |
| Research & development | $416.0M | $413.0M | +0.7% | $378.0M | +10.1% |
| Sales & marketing | $612.0M | $559.0M | +9.5% | $525.0M | +16.6% |
| General & administrative | $172.0M | $168.0M | +2.4% | $161.0M | +6.8% |
| Total operating expenses | $1.22B | $1.16B | +5.0% | $1.08B | +13.1% |
| Operating income (loss) | $470.0M | $444.0M | +5.9% | $346.0M | +35.8% |
| Operating margin | 25.4% | 25.2% | +0.2 pp | 22.0% | +3.3 pp |
| Net income (loss) | $343.0M | $313.0M | +9.6% | $275.0M | +24.7% |
| Net margin | 18.5% | 17.8% | +0.8 pp | 17.5% | +1.0 pp |
| Diluted EPS | $1.60 | $1.46 | +$0.14 | $1.27 | +$0.33 |
Risks
Global economic and political conditions, including tariffs and trade protectionism, could reduce customer demand. The filing notes U.S. tariffs implemented since March 2025, including an additional 20% tariff on most goods from China and 25% tariffs on Canada and Mexico, and says international net revenue represented 64% of net revenue during the nine months ended October 31, 2025.
Competitors or third parties may incorporate AI into their products more quickly or successfully, and AI offerings may expose Autodesk to lawsuits, regulatory investigations, and reputational harm. The EU AI Act and proposed U.S. state laws impose obligations, and MD&A says restructuring reallocates resources to cloud, platform, and AI.
The expected continued transition to annual billings for multi-year contracts may impact timing of billings and cash collections into fiscal 2026. MD&A states that if customers choose annual contracts instead of multi-year upfront contracts, total RPO growth rates could be negatively affected.
The 2026 Plan, initiated in the first quarter of fiscal 2026, aims to optimize go-to-market and reallocate resources to cloud, platform, and AI. Risks include not achieving expected benefits, disruption, higher than forecast costs, lower than forecast savings, and personnel attrition beyond planned headcount; restructuring charges were $116 million for the nine months ended October 31, 2025.
The Audit Committee internal investigation into free cash flow and non-GAAP operating margin practices has been time-consuming and expensive and resulted in shareholder litigation. Although the SEC and USAO closed their matters in August 2025, the filing states future inquiries, claims, or proceedings remain possible and could consume significant resources.
Changes in tax rules and a U.S. election to align timing of revenue taxation with GAAP increased income tax expense. Income tax expense rose to $125 million in Q3 FY2026 from $76 million in Q3 FY2025, and to $350 million for the nine months ended October 31, 2025 from $203 million in the prior-year period, partly due to reduced FDDEI and NCTI benefits and the OBBBA.
A substantial portion of net revenue comes from AutoCAD and AutoCAD LT family products, which represented 25% of total net revenue for the nine months ended October 31, 2025, down from 26% in the prior-year period. Any factor adversely affecting sales of these offerings would likely harm financial results.
The new transaction model records sales incentives to Solution Providers as operating expenses rather than contra revenue, which positively impacts calculated revenue growth but negatively impacts operating margin. Indirect revenue decreased 31% and 24% for the three and nine months ended October 31, 2025, while direct revenue increased 85% and 78%, increasing execution risk as Autodesk transacts directly with more end customers.
SaaS KPIs
All quarters →Non-GAAP Operating Margin
Remaining Performance Obligations (RPO)
Free Cash Flow
Billings
Net Revenue Retention Rate (NR3)
Recurring Revenue as a Percentage of Net Revenue
Summary, forecast, risks and KPIs are extracted from Autodesk, Inc.'s SEC filings for Q3 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.