ADSK - Earnings call transcript Q2 2023

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Operator

Thank you for standing by, and welcome to Autodesk's Second Quarter Fiscal 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation there will be a question-and-answer session. [Operator Instructions] I would now like to hand the call over to Simon Mays-Smith, Vice President, Investor Relations. Please go ahead.

Simon Mays-Smith

afternoon. good and operator, Thanks, Thank you second to the conference joining results of our quarter call our discuss for fiscal XXXX.

with our call On and via line me Anagnost, Andrew the our webcast. Debbie Clifford, being CFO. is conference Today's broadcast live are CEO;

a will available In replay at the of autodesk.com/investor. call addition, be

press slide our following website Investor and find of transcript can You release, today's the Relations this earnings presentation opening on call. commentary

products currently make may and this statements for product to our outlook, the our strategies. other factors we important results statements Form Please SEC actual results judgment our acquisitions, including that XX-K may Actual our During future our cause related assumptions, Form most or to in with These about forward-looking and differ and and known capabilities best filed those our differ from call, materially. recent release events could risks refer X-K results reflect based forward-looking factors. and filings, press statements. today's on

Forward-looking any call is call statements information. any update this information reviewed or today, after may contain today. or presented revise current obligation are as the of disclaims not made or accurate being the replayed forward-looking If call made statements. Autodesk during during to the

over will reconciled comparison. website. will year-on-year call the turn I our Investor our All performance. we press discuss non-GAAP available Unless other on or referenced During our in we supplemental quote a financials growth and numbers call, today's And financial reference the release to such otherwise numeric several changes Relations are call represents materials Andrew. as or noted, Excel in now each

Andrew Anagnost

call. revenue, demand operating robust new and free flow. excellent. margin non-GAAP second reported were market business the welcome, record again we Simon, in Today, you, End rates resulting Renewal activity. everyone, during and cash to strong quarter, remained the Thank quarter

factors. Growing partner continued strong Ukraine, achieve activity geopolitical, competitive Russia China, policy commercial than us related and and performance BuildingConnected goals. leave impact well-placed of usage offset record XXXX this channel macroeconomic, and and and optimism direct All to indirect outside COVID-XX more FY of bid our the our on

last as the strategy. the agility, business to role and in this our for support continue critical such during cement during pandemic, uncertainty. our further digital and propel transformations our to As structural important our of growth quarter, play flexibility the performance that period confidence growth us These I said drivers in elevated our customers' we drivers increase were and

additional ecosystem. and By convergence customers were year the industry-leading and University our within and and broader through model are from execution products, to creating for and with we steady bring create of platforms at any strong anywhere focused Our platform pursuit opportunities products accelerating business the existing Autodesk. we we that into serve, investment In device and announced strategy, sustained last these new Autodesk and partnerships the industries we capabilities between innovation, and deeper bringing workflows cloud. goals, these to customers moving capabilities of

and plans years, make. months from digital our customer catalyze customers' weeks, a experience, you and establish our lot will and a us to platforms progress coming more the hear about and design industry-leading build for Over world-class transformation

on milestones second ahead. made during past we I an signed of to initiatives. performance subscribers of the of have contract, progress quarter million-dollar indications XXX,XXX opportunities already, back I'll call year. you quarterly and both important take will now evidence our XXX the details first As Fusion guidance provide the our and update through then to the Debbie growth strategic its to turn flew over the and come financial the for

Debbie Clifford

across quarter channels. and strong products a was QX Andrew. Thanks,

lockdowns XX%, in grew the and LT currency. quarter, broadly Europe XX% XX% by in constant and as revenue revenue war increased XX% America XX% North and revenue grew currency. By revenue in AutoCAD Total representing APAC revenue EMEA or constant XX%, growth and were markets Our AEC By of and end in APAC AutoCAD XX%, XX%. revenue China. direct grew XX% with COVID our manufacturing product, grew the growth and at grew impacted with By last revenue grew reported revenue in in M&E consistent Americas, in total region, grew revenue both while strongest indirect at and XX% XX%. channel, Ukraine XX%,

to rate our XX% increased RPO uptick and, RPO we've $X.X retention deferred billings $X.X percent product to the target remain Total of contracts, billion as XXX% $X.X grew in Total during and as three-year two XXX% billion. of Our underlying as grew net from billion rates the and total subscription within in multiyear XX% volume and to our range. typically reflecting strong see XX%, the demand. revenue on contract timing are a renewal highlighted strong, billion, was quarters, deferred current as of you a Multiyear Billings which $X.X last the revenue comfortably can robust and XX% reflecting growth long-term deferred. quarter, respectively, volume strong cycle. remained expected of and

both remained discipline. the at reflecting to by revenue ongoing and approximately operating broadly increased to Turning growth percentage X P&L. while GAAP strong non-GAAP margin XX%, cost Non-GAAP level XX%, points gross margin year-over-year, by record flow growth margins reflecting approximately delivered of XX% quarter operating and billings $XXX XX%. increased cash million, up second We to in QX strong QX. points free six percentage

shares accelerated XXX shares average when weighted repurchasing compared million X.X a by price our million million million $XXX during quarter. last approximately share, which, for to shares. per to purchased at in year, to continued the We our an $XXX average share outstanding three approximately contributed of reduction We

invest repurchase half dilution. you we next used front-loading of inorganically of proactively expect in While organically and growth. capital drive to the the year, shares can We've that unchanged, to will remains offset first this strong strategy year's million continue our liquidity allocation our to X.X

Now me we've business conditions guidance. with unchanged. let finish broadly are seeing underlying The been

China, North geopolitical the both continued COVID lockdowns situation in the and of Asia, America seeing healthy due growth strength Russia to and Europe in well earlier, we're as regions, As I China. in mentioned as in and outside

our importance our software highlight, of and business to their the renewals reflecting Our helping customers continues be achieve ongoing goals. a

ahead look we consistent assumes reduced dollar strengthening quarters, with remain of US the year the for generated and slight full XXXX. fiscal of previous remainder As the quarter guidance that is the offsetting by together, those FX billings, which during at is The approximately cash factors $X metrics, market million, flow the conditions it fiscal incremental for $X our of underlying and XXXX unchanged midpoint FX headwinds. revenue that respectively. with headwinds, these across incremental free business $XX overall million and million, the guidance momentum headline all Bringing the as

narrowing range billion be are revenue the XXXX between fiscal We $X.XX billion. to and $X.XX

be expect between assumptions billion continue be QX slide to to and operating and flow on and XXXX. cash more for full We non-GAAP deck free details billion. updated and The have financials year modeling XX% $X fiscal margin Excel on website approximately $X.XX our to

challenges confidence changing, only our While customers have gives in the long-term been our which growth are the our underpinning potential. us face reinforced, growth drivers strategy

our revenue These XX% target expectations. in cash growth, Andrew, growth growth on to growth continue provide to a back to a We our to and annual to double-digit floor compound to margins a flow you. revenue are spend ambitions and range intended ceiling metrics basis. non-GAAP the free double-digit operating XX%

Andrew Anagnost

Debbie. you, Thank

end-to-end based customers. our Our and efficiency cloud solutions sustainability that strategy for drive is to serve we transform with the industries

business and from of workflows product the workflows and and and data convergence construction It operations, into new to with scalable new accelerating we XR. partnerships extensible engineering extensible industrialized deeper serve, customers we scalable and product customers industries within creating is existing By adjacent broader Our like architecture and our into also product ecosystem. with vertical, and the between to and bringing into engineering are management is manufacturing. construction and verticals, also from between

For planning and EBA premier consultants, one in deepening with of QX, Autodesk. long-standing Kimley-Horn, example, and expanded the design its its partnership broadening nation's

its in water increasing more operational Civil driving Innovyze collaboration, utilization of rapidly of BIM to its growing it to gains In practice and chose and help efficiency addition expand opportunities productivity further XD use gains. cloud growth Revit and and through also drive to

a efficiency to workflows will looking those efficient digital improve Connect, and the owners, our in streamline and simplify resulting and QX communication process and workflows look construction ultimately, are waste to platform. less per continues maintenance. coordination another field we And taxpayer document to connect and throughout adopted of construction are and return is management Transportation, collaboration, citizen from of construction, the life workflows cycle preconstruction, an connect from being Autodesk Department customers and on design to improved ACC which As across to industry it the the issues, enabling more single solution dollar. Build and to operations sustainability. Across Indiana good last and engineers planning documentation we drive its and infrastructure was highlighted architects example. adopting to for construction quarter, asset The By

Autodesk real For project on power Autodesk data example, Build like to having launching in It multiple and Construction the cycle, investors active new QX, productivity. and adopted preconstruction anticipate and is and full than learning Autodesk resulting of account-based a project platforms handoffs. seamlessly in it our estate management. our life the commercial was risk formats customers project to owners, Cloud focused property added and their and like enabling our rework company inconsistencies, and and connect quarter-over-quarter, BIM With accelerating value delight leveraging occupants profitability a on through budgeting to and Build XX% give partner customers for poor of connect more management tired being management In Pro competitive customers existing estimating their to connect the and streamline customers across new through with machine are quantification preconstruction themselves globe, and We're advantage network, growing takeoff, management. customers and project streamline users rapidly Across construction their enabling estimating to monthly markets Collaborate to our workflows. connecting to to data to data and Build the collaboration by devices construction more increase their improve we more adopted delivering building and workflows also workflows, and improved connected seek in that Autodesk giving and of our Bridge, Japan, control through more pricing.

Turning functionality continue XXX manufacturing new design beyond manufacturing developed We this and of design platform to quarter and our and to more portfolio to delivered manufacturing. Customers connected beyond adoption our their the extensions. engineering. momentum on-ramps platform the studio, Fusion tools in strong sustained Fusion through expand powerful we more workflows as

enable be tools tool selling to a process. tool create manufacturing quarter, reflected customers. competitive the metal instructions, to By US customer to manufacturing to on Fusion collaboration to enabling a demonstrate customization a factory of state-of-the-art the This in will chose during technology supplier its digital sales organization cutting advantage be immediately its

beyond footprint the it In adds studio to as automotive, group Autodesk, seek significant continue persona handoff the into grow and a manufacturing For design opportunity. OEMs down new the design market break addressable work we and our automotive silos Fusion's shorten to cycles. to

vehicle its portfolio, For strategic electrical manufacturer building product its increased vehicle as a innovation and Autodesk new leverages solutions. commercial technologies digital of partnership accelerate with part example, a and and top-tier service sustainable focus renewed to on which

which Alias, drive is innovation vehicles, design to work visualization and addition combination from of engineering wild its the VR and from in all uses In utilizing factory for and to it with design. it VRED technology through already surfacing Navisworks

advanced Our workflows and and Fusion through boundaries platform extensions. technologies the connect and to enables of manufacturing design approach push seamlessly customers XXX innovation the

engineering the in and works was of product to Consulting and comfort and to sections that was passenger many result redefine the safety. Using across proves leader comfort major global Design parts. a seat a it seat blended while workflow example, and Alias XXX thinner and Autodesk engaged applying automakers Fusion Autodesk a ending exceptional design at extensions, generative seat and are In manufacturing, The demand and are benefit manufacturing. safety Conceptual with Grwp the which and develop grew tools the weight Llandrillo design the an worldwide, design, like like with design businesses. design, thinner in steadily, using largest For improved number able and reducing Fusion with studies seat nesting quarter Students our new XXX's local further group Fusion of fabrication Menai, education skills the XXX in continuing future institutions their including education, learn machining, pace. Wales. and college industry partners subscribers commercial XXX,XXX to grow subscribers to there students for engineering to

planning Flex RV our data continue advanced college ecosystem XXX's output recently due to to to data. projects more by cloud a students XD its now about into bring and some of management it innovation example, across realized For across and local of instant make to XX its we to machining user By ability use, its ease its better tokens, XX%. future users data XXX,XXX-pack through interface, data Fusion of usage campuses and collaborate XXX to up our help purchasing Autodesk's also on on gained our When usage devices modern opportunities Fusion based finally, to and that time portfolio before EMEA And accessibility compliance access business share its understand its and license noncompliant, from competitive to subscriptions. team subscription manufacturer customers purchasing improve purchases The and the integrate customer is while first-ever Autodesk. informed used model products of opening international initiatives. for was needed offices one decisions users new

of its around to its and and systems unifying million. and Flex to enable supplier It user compliance form and management, of added scaffolding to license deals Premium transitions with Premium Europe user to optimization single our its During the concrete cover BIM Flex needs. customers were been from transformation. internally from named named to centralize plan initiatives, also helping token multi-user purchase $XXX,XXX user-based seven digital has quarter, sign-on license in occasional trade-ins we A It security. also and over contracts. over can benefit closed are software accelerate analytics leading three $X work which transition

where finish competitive me results. QX and Strong performance Let excellent I demand started. robust delivered

moving Operator, through We resilience. and them. subscription Autodesk industries months products of a platforms bringing look creating of business we workflows the the opportunity transformation by with horizon. talk weeks, many at demonstrate questions. anywhere to potential expanding in And to to capabilities for between and cloud, customers to call device for Look of about accelerating digital we convergence are to growth and the within like our University now that capabilities By forward from any its partnerships we Our weeks. serve, and would to and broader the the continues are our and deeper those and the you us seeing few more coming years. open we over accelerating

Operator

Barclays. Instructions] from of line the line [Operator first Saket question Our Kalia, Kalia open. your comes Saket of is

Saket Kalia

hey, Okay, here. for taking Andrew, great. Hey, Thanks questions Debbie. my

Andrew Anagnost

Saket you, are How

Saket Kalia

through could the Andrew, to you to Excellent, I that moving a you future in talk can you. wondered first as about [Technical if we'll same just looks walk all what in we expand perspective? for evolved. that Difficulty] maybe [indiscernible] from on can the shift your like has around from little platform the platforms us here. Maybe of start comment products a maybe bit platform But terms

Andrew Anagnost

that talk give those an and of Yes. the of I customers want to of one AU some be products. put now, careful fact not challenges literally easily. the I very in But problems to it's out products our also hundreds right all the perspective, these sell trying for solve each products which in other is And Saket, for them find a which don't lot these to important we away to it of discussions. to question. tidbits --

really multi-platform selling So also which all uniformly across connect those AI support, when and support, flows capabilities. computing really cloud hundreds difficult deliver to difficult automation, you're of data It's products, really is to challenging. multi-device it's

moving capabilities they as basis. need is them this that of doing basis, to or types enable a advanced we're of portfolio or customers a target will us a underlying of on consumption consumption platforms our kind basis industries deploy some accumulation actually what it. each to from a basis disconnected a on capabilities capabilities time-bound one of particular we're process, of right, to all technologies of manufacturing core time-bound for products really with That our So support to set away

taking what point going data of need This a evolution our for flow view. all it's kind lot revolutionary and need, the unified be they get of it, is a and access we're when of from they to terms of customers to they So in them. where

really in the products. more So of important to layers customers to our And and of of work it's for and our cloud. value them one terms it's from in automation how us the delivering get of really each power they they to valuable connecting terms

extensions Fusion excellent platforms especially It's to a of customers, these we're going happen an So industry and to of when could for industries. is where deploy our but things example it good we going how of overnight, model some top on is It's not journey. where consumption one work, you the look our a at Fusion for the works of way platform. taking each we're

Saket Kalia

you a [Technical from trickle versus plan those Got like three renewals business? talk those it, multiyear at [Technical in expectations? forward, in exciting way. follow-up that helpful. Difficulty] really phasing Can looking AU. coming [Technical bigger got for be are Difficulty] will little to you. starting you your in it. of That's renewals? How about bit sounds And it And Difficulty]? a how are I I ago maybe it option think, years just know a kind on they're out, How do the

Debbie Clifford

Sure.

we the closely. So track cohort continue to multiyear

Our gives in first volume for fiscal has outlook. expectations in us fiscal the half proportional XXXX XXXX, line for that confidence of with so our multiyear been our

We also That, total of tick saw in with line a long-term deferred was up. deferred percent revenue revenue our too, expectations. as

to there, we this meantime, consistent we say that that achieve year, bias work focused our system I'll to fact well, continue giving yet. this the come And as As us are for fiscal patterns. go and closing sure it's from we the billings, that making in with things we're transition's partner historical XXXX, to details upgrades. to confidence that year. transition it is out our quickly obviously, look as look to programmatic they In back-office the again, as possible. started on goals through multi-years and to those start annual ahead in We upfront operational going like the anticipate But early the transition to a hasn't get plan,

Saket Kalia

guys. clear. Very it. Thanks Got

Operator

Thank you.

the from Credit your line Winslow, of comes open. is Winslow Phil line question next Suisse. of Our Phil

Phil Winslow

simply for as Thanks quarter, congrats how on is taking cyclical another question, reinforcing grows and anymore. my Autodesk not

Andrew Anagnost

Phil. Thanks

Phil Winslow

focus own just on AEC for you. the area that terms with wanted the my get the I of two this cyclicality, of to I on questions in is most Andrew, side, because questions

then what MAUs drive the macro? what slide Firstly, to Autodesk the and XX% deck from design on quarter-to-quarter Autodesk are on continues about in in despite the you spending Build from customers And the Similarly, your cloudier incremental hearing in their hearing just in digitizing this on growth us. segment commentary becoming your of BuildingConnected stood really of these is continue Thanks. they're customers also that the this are you workloads because lean also about they to in macro, to out volumes what volatility digitizing? why spite the construction macro or secondly,

Andrew Anagnost

I Okay. address That question. will it. was a multi-part

requirements So the about the They hearing is The business, design effectively on. more we're backlog to problems, let's And customers first the to hearing in they from thing what business what right? how need have with that are to than execute we're have work. design approach right use, they customers. of of of how of are able owners, requirements increasing they deal putting to all terms municipalities, business on one sorts off, they talk of from number segment they're need now more kind tools the

and customers lot looking were game to of oh about, digital frankly. We and things. all fixed inflationary challenge boy, a hear from these all The they're biggest in is So tools. we year contracts pressures these bid last hearing conversations up hiring, their

contracts. and costs even So bake things able in okay? demand but robustly. business they getting their these have their struggle really what something at because they are previously, power We're point, hearing they're said they're into capture people is But we're they're hiring. manpower that's actually to and they to more in to person growing struggling hire with still capture bids for than able if they I've now those As this

in the to go let's construction. Now growth

off, bucket. my construction The the the First the you story the want number in design you I capture is business. EBA hidden quarterly full give the When construction disclaimer. does make at to look growth business, not in

overall we're and that you how the that XX% when business business, territory enterprise count business. to close grew with So doing our we agreements in

bringing in partners the below, what lot users, hearing really journey, of we've we're really to business, Europe, And market, quite we're the you certain This drive XX% down growth. hearing, us growth glad of things. nice which lower up And is One, and in I'm to the continue point the in active closer important growth picked driving and that that's and territory monthly is the a up mid-market territory. customers it's a our to nice our and on off, US really our in couple going I growth. okay. a first think on So in lit that's

is construction their all built to linchpins The when the design lot The I cost vast the a is together want are one future, construction project talk of a or planning other all more the preconstruction build tool. need thing complexity they're They and just way are and is planning. is really customers of a to management in And a connect continuously. big preconstruction project the about phase. that in the realize looking to starting than management where during they of to site of trying the majority

wrong, that in wrong, complexity you in margins, you your get have you churn come more and lower with project. You bid

to increasingly design, customers. So is to all their way this connection the between really preconstruction build important

time more probably noticed, play invest little us commentary, evaluate And in. at I customers for to to in the bit a lot introductory big least a taking infrastructure they're is trying what you So that also a are think here.

much modern lean our portfolio saw looking more So the Indiana Transportation, hearing their Indiana, modify to needs. more infrastructure. you are Departments Transportation upgrade their cloud designed future Transportation into to that really Department and and of at of more looking stack much We're build on be of Department more from to a for and

lot a all it's us now, coming going directions, on at and construction, and multiple from Phil, in positive. there's it's right So

Phil Winslow

up Thank the all work. details. great Appreciate you, keep the and Awesome.

Andrew Anagnost

Thanks, Phil.

Operator

you. Thank

of comes Griffin question next the Jay line open. Jay Our Vleeschhouwer line Vleeschhouwer, of is from Securities. your

Jay Vleeschhouwer

but in peer largest R&D you have budget the you our and the Debbie Andrew, your largest calculation, group, don't R&D. Andrew, headcount Good in Simon. by evening, necessarily have,

if of base? increasingly your particularly of R&D capacity have an handle you're to given terms initiatives that you for number the the next and are is, on how to manage, MAUs comment and have will, have question your developing customers your point, productivity over Andrew as respect the currently products for you And of earlier or doing, about effectivity, large as improving the that earlier are in how platform, you're with you or back of number and operational you back-office product where having technology mentioned? Flex so to that see you're comment part And of On you your the everything applications terms deliverables terms to working of to Are offering to complex years. fact, requisite then in your your on further and to ultimately, the could enlarging going the else Debbie, drive new that? in commented licensing in all platform usability your model of core and installed office you going you, you

Andrew Anagnost

All right.

questions. start me with are correct. Yes, So you let Jay, your

content it with D customer-specific don't to We have is allows parts of lot R& build We're to a think that's us out necessarily cloud cloud the where staff talent, don't a and has strategy. of talent kind concentrate of in pursuing the largest them. costs headcount we That talent, the We associated largest R&D on Part right cloud-native the talent we talent and headcount lot have a hire the of what that because that's that in, it continue certain of resides we of world. places, of capabilities other we're say, on development core expand associated pursuing. R&D. with specifically lot certain and R&D and development budget full but

of of we really So have Why comes from we on in be extending platform services? that the developer product data because of to things One or lift on burden of build do we that some it -- like across to services? the in platform the things hit and every doing do. trying capability that depth uniform deploy. is what we capabilities specific we're away to we're breadth visualization we when are should teams the areas platform that or these do like of that development the important aspect And flow, why reasons and we things hire you productivity, a on

productivity our to more right starting and primarily initiative these make -- but which flow, the features various And especially and those data it's that the that regards the already to a data and with of benefits, the to see and the at aligned some particular across we an we're big of that of to get that mature we platform driven is part APIs the kind portfolio you So organization connectivity. from by industries of being platform more, as are sure it's within Autodesk. capabilities synergies industries lift these of our data see are looking expand, services, and have only are industries. particular teams going increase capabilities facing It's not facing why

where will the yes, see and increasing definitely So this. that's for I right spending think you with quantity, now. We're we're productivity right on quality at over associated strategy

Debbie Clifford

business And for like be the stage order at place model, appropriate some have on I to to well I about we new on we to to your be. way we then are our question answer think that that's to this say journey. this things be operational an but capacity ground And still would cover that, Jay, where in journey need of

annual until launch next are year, don't right can sure systems the have which spend that ability capabilities and to be the is why, shift to we need example, our them, we so billings we in we one a business we models support that the to course, have of without delaying that time good in as we and back-office to Now that automated customer the make able to effectively and invest experience not to controls models I aspirations, the our have infrastructure in want scale. on order in way office. our is to mean, If new business it. only to able efficiently, make back this focus an long-term that the in we so need to sure to achieve support we can to that invest do capacity automated we be back-office we scale ultimately, to also continue growth to something but we new

Jay Vleeschhouwer

much. Okay. very Thank you

Andrew Anagnost

Thank you Jay.

Operator

Thank you.

Capital line question next Hedberg RBC comes of of Our Markets. Matt from the

Matt Your please, Hedberg. question

Matt Hedberg

Hey, on greenfield? subs a thanks guys. maybe about to Andrew, alternatives, Can Are Fusion for why hear. a fantastic you, the lot where you are Are XXX from? just of growth these little in more bit was XXX? replacements? they Fusion And those talk coming with really

Andrew Anagnost

Yeah.

investors for So mix, of bit manufacturing connected going a to greenfield lot lot on. a replace of A the first and software right? a are first acquiring there's half time. But is these design rip all connected to of software

where think about me I creating SOLIDWORKS we're And the into consistently type well, some times user and is is of seat we're -- part kind of in that the particular But I department seeing, business. important and one we've base how heard Mastercam a subscribers and from more, CAM probably more is about going is that we're we're and might need. company, installed talk or a companies. and where we've started the of seeing they're a I Fusion within grow people things starting all other those have or seat software many to we've growing that you're of saying, accounts gone what think growth this some of of you've and been

really the It's It's to: end-to-end And where of costs there floor. within is in It's bit. some disruptive. people. programming of and and exceeds in just is native really of to the the thing for by as shop models that. buy is they tutorial actually It and a captured. there's pricing can even something the course, the starting the the on only vectors for of market, existing it they is that's subscription-based. we've that to from how in cannot model, content. The for you love content driving really learn can can learn love do one, very people much do this amount reason process about fact exceptionally the products subscription-based the anything you native buy make of pay level make the business. is to business they and bringing all model the YouTube are design and disruptive of still The on use you'd the perpetual make the people integration design lot that. make what integration which see out way, Fusion. see consumptive people the this use but that's people the grow business, vector, Fusion, And of very there to buy extensions Fusion software. community. valuable the buy they primarily of merger in product. flywheel They YouTube, along a machine expert here the how that very three you Two, and to they kind to get of how more design kind surprise that third something convergence about way all there publishing really we're manage price. design find out a design it to in to might people a to from our an knowledgeable integration, mature attention we're accounts community of they little It's those for we're a think not much to kind pay and mature reimagining just This has start allow things It's like buy They a passionate, business. engaged starting for that's reasons. a to for of It's So and the to This that new and customers,

Matt Hedberg

super, Debbie, good but far I'm the consistency really bit linearity And you wondering was if a in about obviously helpful. And what are clearly, is the this see. in The little quarter. the consistency not could seeing macro That's talk super great. August? to you thus environment, easy, is maybe then the

Debbie Clifford

not we've commenting what nothing I at that on during to linearity is obviously, quarter seen with we're periods. there. say the we're And in this seeing we in the consistent So previous saw August. point, newsworthy what would report

Matt Hedberg

Thank you.

Operator

you. Thank

question of Our Adam Borg next Stifel. from comes

Your line Adam is open, Borg

Adam Borg

the and much something Bill. question. in the I Maybe tailwinds past thanks so first we Autodesk. Andrew the have could and the that for for talked taking Guys, on positive know for just Infrastructure about that's

there's here. how as to there quick sustainability. I of in as lot just hear over Reduction think And recently a a then that passed about time I'd Inflation energy you the Act, love think and impacting clean So maybe language about update well. Autodesk about

Andrew Anagnost

Yes.

Infrastructure talk And about let's first, Bill. the so

recipients around starting of any way, think how lot with begin to efficiency As these projects. particular a are the all of people the design Departments funds, past, sustainability seeing out, these the they planning to play importantly, And these goals I've processes. of of and of rethink right? you're some about But their what of of particularly is by the said is starting approaching slowly some of in they're things. the how process types what's like more and are money into Transportation, is happening energy And actually trickling

of explore lot money Departments thought enable starting their So about and processes. and portfolio of bringing they're their Transportation departments. their these next some these in was transformation plan buy remember, that projects. digital a at bill there to seed of they're to within of This XX-year a ability in of and And execute ahead expand look infrastructure to looking is tools. And to to introspection

over we're challenges our activity to next period, relationship seeing that's how needs engage AECOM regards next early that the live. So like with large the years Transportation they're and of infrastructure have that are okay? We Departments with going over seeing XX in absolutely something to and similar XX-year and that the similar engage firms

electrification Reduction so requirements when and going of the sustainability the into is Act, energy that jury out trickle is down to drives Now with our what ultimately Inflation are is the right? becoming efficiency on regards important. that, customers, for to some especially all Anything

more that to So will for and a customers. efficiency our see But our you're where on spec unclear regards going lot business. impact to electrification with fall

Adam Borg

maybe a Fusion follow-up, even quick XXX. That's Matt's great. question on just on And

more today? Just about we'd been talking broader with Fusion here in on about strategy to XXX fits how that more and broadly, hear the you've Upchain love manufacturing Thank you guys.

Andrew Anagnost

Yeah.

data that's environment. actually data manage the of layer So management other Upchain might information flow is Fusion not us allows heterogeneous but cloud-native in exist only that that environment any to the the

our a customers in world. heterogeneous of live All

Autodesk have just just never customer Autodesk's an a product will or uniformly portfolio. using is We that

heterogeneous us the management how So things of manage but not to power this management, reconcile this and people bring the huge also ability management us for use in in only data flow has future. data cloud-native does data the and Upchain it brings cloud, which

look just Upchain, Fusion native of more the and If will already some it's the more cycle capabilities of managed Fusion and the to data for life we merge Fusion. and have going management you cloud at with evolution become platform

platform data for that's It's wide cloud So in us. basically and Upchain management where the plays. a deep native

Adam Borg

Excellent. Thanks again.

Andrew Anagnost

very You're welcome.

Operator

you. Thank

Our comes of from Vruwink next question Baird. Joe

Joe Vruwink. Your question please,

Joe Vruwink

you then just anecdote process automotive broader exposure? on usage. in discrete of a Thank other What's some I products to XX% success you. you shared be sectors stick have level. used the And much that your can manufacturing and pretty seeing think the I'll growth have desktop because playbook driver Great. contributing an How where to interesting there? been I there; high in guess, or of get be at same

Andrew Anagnost

Yes.

a take technologies portfolio growing in customers share the only buy that's XX So that? And think terms the technology also in using feel to new blend you of next and I to other you're One, bring that technologies, get to competitive So the that a to of you types But And competitors, way And introducing right, reasons. And trying So is right? our any a to all manufacturing. we for share bring that's it's the the up today in us the know Fusion. product keep our hooked better, in whole company so five our buying years. advantage And us you're something, do continue future, right? the places. our workflows market. how to where continuing but of manufacturing. you that grow and couple we there's into you new get of in we you if we're present, that about to faster good to these technologies allows you're we is yes, are not real why you're up picked going new over than seeing customers on you're if automotive

things assets. of I interesting the you've which early have. their Wild a extended has looking I large in into fact have was and The is is Wild existing The of in what of and factory -- manufacturing up manage think said the And strength VRED, our picked was manufacturers exploring with mature technology. that on acquisition and an blending both that very are we probably VRED, People intersections which was the various opening one technologies my we commentary to management facilities about the actual that more then

associated manufacturing. driving So to there's there's the those things and are But our with some regard overlap overlap are business with those in things with that. our AEC growth that

tremendous doing. with the what have like portfolio. We right, you're that. moving but forward customers obviously to whole You're it's maintain The Fusion, also seeing is see, right? we're what like We portfolio growth we whole and

Joe Vruwink

great. that's with the Okay, then together And just trying to guidance. put pieces

This underlying forecast the like the it assumptions. by organic raising assumes you're same macro still bit. a So sounds

raise. better-than-expected So there? is driving organic what the ultimately, it's that's of performance Autodesk's the I execution guess driver

Debbie Clifford

business exited we momentum the as it saw, it's that about Ultimately, but the is particularly in execution we QX.

We flat that here's as thinking But guidance year So full lead currency continues now strongly. course, consistent the what exited guidance. kept QX. previous we're reflect slight we at about business perform quarters. environment QX. does The in had headwinds. demand guidance how that of we've we the done to we That's our with with saw The

said, model, durable and downturn potential We have business with is as strong a during subscription resilient I momentum. economic we QX, exited which that

model, us especially our our predictable flexibility, on with the are factors out that which revenue did more all a is already I business the That guidance. are of million to these revenue. retain of point So future range portion gives on a subscription also some is balance and sheet. want baked into that that $XX significant we

Joe Vruwink

Great. Thank you.

Operator

you. Thank

KeyBanc comes Capital Our Celino, Jason Markets. Celino from Jason next line of is open. question your

Jason Celino

how I'm the that to It's guess is time change hiring thanks. lengthened about, of year, hearing does these hear through the following the on? bidding on activity for keep being next out? With and backlogs any bid is there good projects the pan lead BuildingConnected. strong activity is, asking I you're what seeing year, challenges strong kind still you that Great, to customer

Andrew Anagnost

an I future in what, say. not actually sure predictor other things build way. what But that will and Current know an a answer is in is question. activity here's with of it Bidding early excellent contractors process project. is executing I'm a a You satisfying bidding I right? activity, can

you're of that of seeing what So will is projects the ongoing right? increase see an actually when close an book BuildingConnected, is move activity that. get that activity business as you bid execution on in with then and this bid, actually downstream, of you executed actually in the subcontractor a of you some predictor a particular things into So with good associated increase

connection so at depth exactly that we you Not to but can answer point. bid the is it of activity be So actual we of how why going this going the give how and one us of highlighted does to to indication a activity on. much what reasons much. I reasons that's value happening site the one that much be the that's is real forward building going asked And

Jason Celino

And base. Innovyze, And it perfect. kind at how subscription for in then prepared going of to effort there? acquired think sort point, be some update is I rates you've but Any performing? it? then there you win in change existing the transition one was on it of Any remarks, your think deal mentioned some Okay, I to since worthwhile

Andrew Anagnost

Yes.

of It's So well Innovyze with business Innovyze of EBA synergies terms well. the transformation. well. They're us, of businesses. to the right begun quite continues their our incorporate business It's one particularly that They have acquired going enterprise big doing their we looking throes to customers agreement model are contracts lot into Innovyze. which in in when of our exactly perform now. A expected is we

amount a time. reasonable We of expect finish in to that

facilities. continue well. where Innovyze not doing side interest is actually operation they're but our of the that in in the the business solutions quite general the that's lot owner But manage going well, water building a also of get in and So customers, from only we to of water

Jason Celino

Andrew. Thanks Perfect.

Andrew Anagnost

Thank you, Jason.

Operator

you. Thank

is question Michael Funk, comes Our line from next Michael Funk Bank America. of open. your of

Michael Funk

I if Yeah. evening. Thank the you for A this could. question couple

to uniformity a then as across the the your this? And adding addition hand of of heavy tip you here. you there will involved? want to But is to in the products Just more customers, a efficiencies the back platform lift uniformity what move Autodesk or as the that saying is increased how are to by don't platforms? accrue of attractiveness And timing to for well comments

Andrew Anagnost

Yeah.

and absolutely some This on is that to up of isn't something So their time. super various in we're the in extensions that doing as products journey with first needs. capabilities It's shown and the the off, blue, as lot where environment. a gives clear. just the environment you we're what us for that the over with And in of long-term what lot A versus been synergies the multiple trying multiple building one time capabilities going let's of products how happens mature separate have portfolio forms. manufacturing on to quite and Fusion Fusion be visibility support its is we're space native exist most consolidated in starting that right? suddenly XXX. out It And gives

a seated a focused do later. in showing discussions have and be other the of a up synergies is double platform, AEC lot and we mature. long-term on do information journey with modeling But around double Right building entertainment acquisitions are lot cloud information you of spend we space, now, of tip is how wanting to new a spending some on the to the on hand did will things that quite we're is people for we some a cloud-native So Spacemaker, for particularly future my of some the have journey, been very get And building on actually synergies. that did not us. of much things we'll team has we the of again cloud model with course, time. what media there not Fusion here. we'll platform. beginning yes, But its

Products time. of Desktop transformations products, and five familiar and eventually but in Revit, you with overlap a of and period been who of names. several We've the while, through AutoCAD for those platform of away past are goes most new engineering years overlap that Adventure absolutely on for of effort happens of takes the is for the direction. these. we in those capability the yes, are We to will And long spend XX what and some continue a Mechanical to a some and to double evolve

Michael Funk

and Understood, on annual the project. And the shift billing. delay then yeah. to Long-term earlier comments complex

streamline you to it make back are understood. better better were processes I and want completely sure than sure were just is right I that that And what to guess Was customers? the issues they that now that's the process make than office the that wanted enjoyable the to for that make the seeing is a were if now? you comment more correct, Just wanted to you

Debbie Clifford

Yeah.

start our set So first, year. intended to on billings from let's next of intention move a at level multiyear always upfront the annual was beginning to

in experience, office. made at the we could we that automated and any would and good And on our two-fold; we why would in not customer that need scale controls back a did was that's reason our to So way, such that in we in that the have processes have transition make customers automated an our that this place to execute one, change needed sure we've our side. invest infrastructure on systems back-office we

number point two. Maybe that's one. number So is point importantly more

Our important our really ecosystem. part a partners are of

with they and benefits the needed to shift be But have will partners. advanced entire be the to notice, that annual to program, on our we so to important that from last to were And this an so needed getting build the for intended give time our work could back cycle, to so it predictable make our to us policies embark to do it sure journey just us too journey annual ecosystem together it for will we us all to was like the the with billings along things that Day, that Investor them because our and billing on the them plan. and that customers to partners we

make wanted that we to collaborating transition. we move this healthy in with towards way we as sure them so a were And

Michael Funk

helpful pretty Thank that’s Yes, color. you.

Operator

Thank you.

comes Our Bhavin Bhavin of next question Deutsche Shah your line from open. Bank. Shah, is

Bhavin Shah

Andrew, understand within of should the forward? like help the in things curve Collaborate And about the we customer base? base. terms customer we you going how Collaborate very we BIM better to us architecture maybe good adoption continue are where Pro of Pro think adoption and engineering within hear about Can Revit

Andrew Anagnost

I Collaborate Yes. It's really still early. Pro continues actually an excellent grow BIM robustly. Look, question. mean, it's to

the As pandemic, and during period BIM you saw continued become product, recall, post the people that of of Pro. when aware adoption of in has of the adoption we more capabilities the were -- pandemic a and more as the we surge Collaborate it quite

of terms of penetration into really still Revit the terms the Revit In the penetrating base. total vast in days majority early it's of base,

happy of which that realize now something turmoil in on-ramp as Pro XD as that's Cloud linings fact, to that, that. we of of and Revit is in though the base. and ways. going we're as that days really that It was In pandemic is of Still Civil are the with Continues does able the Autodesk valuable BIM with finally unexpected silver to the the total interestingly to infrastructure to the adopting And Construction addressing, another that enough, and them we're biggest vector is get of the grow. space a Pro penetrate requests tragedy to be way customers in preconstruction digital It's the an many really Revit. one utility to make penetration And Collaborate is well. with customers work where is future. one early robustly it Collaborate

Bhavin Shah

have And some in of like intimated lines this I of customers' along seen bit, adoption towards journeys a terms Makes that solutions other a little and sense. of ton offer? of at you here, you guys your guess accelerate kind you those cloud-based that

Andrew Anagnost

a of does. it It I how an to wow, them to online confidence processes. encourages of them portfolio And a should absolutely the cloud. doing They understand does and changes cloud cloud, better. It's cloud to better. allows cloud doing site and other the some in But that, Oh, this -- on-ramp different planning management It's in start capabilities. I of is actually solutions. gives their Oh, I hesitate Yes. in and what customers well. the call lot planning preconstruction maybe preconstruction as doing be them to just actually it should if empowers be our actually explore it I'm it the the a in isn't full

cloud base It some really the the it's on for customer So educate matters highly why it benefits. collaborative future. cloud of absolutely them to of demystifies a and the why and their does lot shows our so distributed core important and

Operator

question, our next go We'll Wolfe which comes your from to Research. Gal of of line Munda, line the is Gal Munda open.

Gal Munda

And you start. maybe, Thank just you taking for for question. my Andrew, to

just you to it in like go could now big maybe tool a calling a that noncompliant pre-pandemic you're rate you your are in pay able have being that pay embark is were not that on again. opportunity? How users seems monetize at future the how that again, And as the as but just enough much accounts well Flex out You that? already you and and roughly be of having run more a running effectively maybe order Flex towards you to model

Andrew Anagnost

Yeah.

you manner some situation lot on situation actually, do commentary we cases, in collaborative opening really in Autodesk. on trying bad, what you're other have and in when tried of way finding and go a software absolutely some noncompliant do enable how And ways Flex it's a tool they're distribute to them with usage with or is and a that they've a positive to compliance the where right, multi-user all that over-installed a users. accounts, you're gone license get you associated Gal, walk was they've picking will business. some is use the So engaging up implied And impacts In exploring is of usage, highly the ways. those noncompliant usage Flex what valuable of in software it reach into of things unlicensed an to excellent that. is occasional something

at days Flex. broadly early look still Flex, we really with again, as Now it's

to we continue growth continue users new with and lot in see to We a Flex. coming see of

on, in want engage tail a a One they to model you're and in pay-per-use a advanced and lets get projects the your of to don't some about an projects of multiyear particular majority of these to with excited AutoCAD Flex of business. lets Flex of basis. allows company, five-person but what do, some Because bid the I'm for vast simulation for are product, or It functionality subscription to people the And you in structural that Flex occasionally annual a a to long dabble. growth the vectors you're have subscription smaller Revit you commit if in particularly for you say people on capabilities. is to company you capabilities use the our advanced or engage want

see our think So Flex. that We're growth areas early that out. unlock. where That's the of for of so is I think lot business Flex heads. there's very journey a still that jury will The long-term of we'll the capabilities built the likely interesting on into tail is I long one

Operator

to And remarks. any closing for we have as that I'd over Simon back like for is the questions, call all turn to time the Mays-Smith

Simon Mays-Smith

everyone, time pronouncing Thanks, Latif. weeks' look New Thanks, Orleans. sure, seeing, We'll correctly. Autodesk joining in Thank University, name many you, us. everyone. a AU, for forward the at you to hope, we few of I'm in I’m

Operator

Thank call. today's for concludes you conference This participating.

now disconnect. may You

Autodesk (ADSK) 24 Aug 222023 Q2 Earnings call transcript