Delaware | 000-14338 | 94-2819853 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Exhibit No. | Description |
99.1 | Press release dated as of May 19, 2016. |
99.2 | Prepared remarks dated as of May 19, 2016. |
AUTODESK, INC. | |
By: /s/ PAUL UNDERWOOD | |
Paul Underwood Vice President and Corporate Controller (Principal Accounting Officer) |
Exhibit No. | Description |
99.1 | Press release dated as of May 19, 2016. |
99.2 | Prepared remarks dated as of May 19, 2016. |
• | Total subscriptions increased 132,000 from the fourth quarter of fiscal 2016 to 2.71 million at the end of the first quarter. New model subscriptions increased 140,000 from the fourth quarter of fiscal 2016 to 567,000. |
• | Total annualized recurring revenue (ARR) was $1.44 billion, an increase of 9 percent compared to the first quarter last year as reported, and 12 percent on a constant currency basis. New model ARR was $308 million and increased 71 percent compared to the first quarter last year as reported, and 76 percent on a constant currency basis. |
• | Deferred revenue increased 32 percent to $1.52 billion, compared to $1.15 billion in the first quarter last year. |
• | Revenue was $512 million, a decrease of 21 percent compared to the first quarter last year as reported, and 17 percent on a constant currency basis. During Autodesk's business model transition, revenue is negatively impacted as more revenue is recognized ratably rather than up front and as new offerings generally have a lower initial purchase price. |
• | Total GAAP spend (cost of revenue plus operating expenses) was $667 million, an increase of 7 percent compared to the first quarter last year. A charge of $52 million for a previously announced restructuring was recorded in the first quarter of fiscal 2017. |
• | Total non-GAAP spend was $539 million, a decrease of 2 percent compared to the first quarter last year. A reconciliation of GAAP to non-GAAP results is provided in the accompanying tables. |
• | GAAP diluted net loss per share was $(0.77). GAAP diluted net income per share was $0.08 in the first quarter last year. |
• | Non-GAAP diluted net loss per share was $(0.10), compared to non-GAAP diluted net income per share of $0.30 in the first quarter last year. |
Q2 FY17 Guidance Metrics | Q2 FY17 (ending July 31, 2016) | |
Revenue (in millions) | $500 - $520 | |
EPS GAAP | ($0.73) - ($0.63) | |
EPS non-GAAP (1) | ($0.18) - ($0.11) |
FY17 Guidance Metrics | FY17 (ending January 31, 2017) | |
Revenue (in millions) (1) | $1,950 - $2,050 | |
GAAP spend growth (cost of revenue plus operating expenses) | 3% - 4% | |
Non-GAAP spend growth (cost of revenue plus operating expenses) (2) | (1%) - flat | |
EPS GAAP | ($3.25) - ($2.87) | |
EPS non-GAAP (3) | ($0.95) - ($0.70) | |
Net subscription additions | 475,000 - 525,000 |
Autodesk, Inc. | |||||||
Condensed Consolidated Statements of Operations | |||||||
(In millions, except per share data) | |||||||
Three Months Ended April 30, | |||||||
2016 | 2015 | ||||||
(Unaudited) | |||||||
Net revenue: | |||||||
Subscription | $ | 326.0 | $ | 319.8 | |||
License and other | 185.9 | 326.7 | |||||
Total net revenue | 511.9 | 646.5 | |||||
Cost of revenue: | |||||||
Cost of subscription revenue | 39.7 | 38.7 | |||||
Cost of license and other revenue | 52.8 | 53.1 | |||||
Total cost of revenue | 92.5 | 91.8 | |||||
Gross profit | 419.4 | 554.7 | |||||
Operating expenses: | |||||||
Marketing and sales | 242.9 | 253.9 | |||||
Research and development | 195.5 | 194.5 | |||||
General and administrative | 75.8 | 75.9 | |||||
Amortization of purchased intangibles | 7.9 | 8.9 | |||||
Restructuring charges and other facility exit costs, net | 52.3 | — | |||||
Total operating expenses | 574.4 | 533.2 | |||||
(Loss) income from operations | (155.0 | ) | 21.5 | ||||
Interest and other (expense) income, net | (3.6 | ) | 0.3 | ||||
(Loss) income before income taxes | (158.6 | ) | 21.8 | ||||
Provision for income taxes | (14.4 | ) | (2.7 | ) | |||
Net (loss) income | $ | (173.0 | ) | $ | 19.1 | ||
Basic net (loss) income per share | $ | (0.77 | ) | $ | 0.08 | ||
Diluted net (loss) income per share | $ | (0.77 | ) | $ | 0.08 | ||
Weighted average shares used in computing basic net (loss) income per share | 224.4 | 227.2 | |||||
Weighted average shares used in computing diluted net (loss) income per share | 224.4 | 231.7 |
Autodesk, Inc. | |||||||
Condensed Consolidated Balance Sheets | |||||||
(In millions) | |||||||
April 30, 2016 | January 31, 2016 | ||||||
(Unaudited) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 1,223.4 | $ | 1,353.0 | |||
Marketable securities | 1,043.9 | 897.9 | |||||
Accounts receivable, net | 256.4 | 653.6 | |||||
Prepaid expenses and other current assets | 105.3 | 88.6 | |||||
Total current assets | 2,629.0 | 2,993.1 | |||||
Marketable securities | 538.9 | 532.3 | |||||
Computer equipment, software, furniture and leasehold improvements, net | 174.9 | 169.3 | |||||
Developed technologies, net | 70.0 | 70.8 | |||||
Goodwill | 1,580.5 | 1,535.0 | |||||
Deferred income taxes, net | 9.8 | 9.2 | |||||
Other assets | 202.5 | 205.6 | |||||
Total assets | $ | 5,205.6 | $ | 5,515.3 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 107.2 | $ | 119.9 | |||
Accrued compensation | 132.8 | 243.3 | |||||
Accrued income taxes | 25.1 | 29.4 | |||||
Deferred revenue | 1,091.8 | 1,068.9 | |||||
Other accrued liabilities | 117.6 | 129.5 | |||||
Total current liabilities | 1,474.5 | 1,591.0 | |||||
Long term deferred revenue | 431.9 | 450.3 | |||||
Long term income taxes payable | 153.8 | 161.4 | |||||
Long term deferred income taxes | 78.1 | 67.7 | |||||
Long term notes payable, net | 1,488.4 | 1,487.7 | |||||
Other liabilities | 143.0 | 137.6 | |||||
Stockholders’ equity: | |||||||
Preferred stock | — | — | |||||
Common stock and additional paid-in capital | 1,865.6 | 1,821.5 | |||||
Accumulated other comprehensive loss | (121.5 | ) | (121.1 | ) | |||
Retained earnings | (308.2 | ) | (80.8 | ) | |||
Total stockholders’ equity | 1,435.9 | 1,619.6 | |||||
Total liabilities and stockholders' equity | $ | 5,205.6 | $ | 5,515.3 |
Autodesk, Inc. | |||||||
Condensed Consolidated Statements of Cash Flows | |||||||
(In millions) | |||||||
Three Months Ended April 30, | |||||||
2016 | 2015 | ||||||
(Unaudited) | |||||||
Operating activities: | |||||||
Net (loss) income | $ | (173.0 | ) | $ | 19.1 | ||
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | |||||||
Depreciation, amortization and accretion | 37.4 | 37.8 | |||||
Stock-based compensation expense | 56.9 | 50.2 | |||||
Deferred income taxes | 6.2 | (5.3 | ) | ||||
Restructuring charges and other facility exit costs, net | 52.3 | — | |||||
Other operating activities | 8.3 | (3.5 | ) | ||||
Changes in operating assets and liabilities, net of acquisitions: | |||||||
Accounts receivable | 397.4 | 143.1 | |||||
Prepaid expenses and other current assets | (14.9 | ) | (22.4 | ) | |||
Accounts payable and accrued liabilities | (197.2 | ) | (110.8 | ) | |||
Deferred revenue | 4.1 | (3.4 | ) | ||||
Accrued income taxes | (13.1 | ) | (18.3 | ) | |||
Net cash provided by operating activities | 164.4 | 86.5 | |||||
Investing activities: | |||||||
Purchases of marketable securities | (577.5 | ) | (485.2 | ) | |||
Sales of marketable securities | 107.6 | 97.5 | |||||
Maturities of marketable securities | 322.6 | 192.4 | |||||
Capital expenditures | (22.3 | ) | (12.5 | ) | |||
Acquisitions, net of cash acquired | (59.6 | ) | (34.5 | ) | |||
Other investing activities | (1.0 | ) | (10.6 | ) | |||
Net cash (used in) investing activities | (230.2 | ) | (252.9 | ) | |||
Financing activities: | |||||||
Proceeds from issuance of common stock, net of issuance costs | 51.2 | 57.2 | |||||
Taxes paid related to net share settlement of equity awards | (18.3 | ) | (23.1 | ) | |||
Repurchase and retirement of common stock | (100.1 | ) | (95.4 | ) | |||
Net cash (used in) financing activities | (67.2 | ) | (61.3 | ) | |||
Effect of exchange rate changes on cash and cash equivalents | 3.4 | (0.2 | ) | ||||
Net (decrease) in cash and cash equivalents | (129.6 | ) | (227.9 | ) | |||
Cash and cash equivalents at beginning of the period | 1,353.0 | 1,410.6 | |||||
Cash and cash equivalents at end of the period | $ | 1,223.4 | $ | 1,182.7 |
Autodesk, Inc. | |||||||
Reconciliation of GAAP financial measures to non-GAAP financial measures | |||||||
(In millions, except per share data) | |||||||
To supplement our consolidated financial statements presented on a GAAP basis, Autodesk provides investors with certain non-GAAP measures including non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating margin, non-GAAP net income, non-GAAP net income per share, and non-GAAP diluted shares used in per share calculation. These non-GAAP financial measures are adjusted to exclude certain costs, expenses, gains and losses, including stock-based compensation expense, restructuring charges and other facility exit costs, amortization of purchased intangibles, gain and loss on strategic investments, and related income tax expenses. See our reconciliation of GAAP financial measures to non-GAAP financial measures herein. We believe these exclusions are appropriate to enhance an overall understanding of our past financial performance and also our prospects for the future, as well as to facilitate comparisons with our historical operating results. These adjustments to our GAAP results are made with the intent of providing both management and investors a more complete understanding of Autodesk's underlying operational results and trends and our marketplace performance. For example, non-GAAP results are an indication of our baseline performance before gains, losses or other charges that are considered by management to be outside our core operating results. In addition, these non-GAAP financial measures are among the indicators management uses as a basis for our planning and forecasting of future periods. | |||||||
There are limitations in using non-GAAP financial measures because the non-GAAP financial measures are not prepared in accordance with generally accepted accounting principles and may be different from non-GAAP financial measures used by other companies. The non-GAAP financial measures are limited in value because they exclude certain items that may have a material impact upon our reported financial results. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the directly comparable financial measures prepared in accordance with GAAP in the United States. Investors should review the reconciliation of the non-GAAP financial measures to their most directly comparable GAAP financial measures as provided in the tables accompanying this press release. | |||||||
The following table shows Autodesk's non-GAAP results reconciled to GAAP results included in this release. | |||||||
Three Months Ended April 30, | |||||||
2016 | 2015 | ||||||
(Unaudited) | |||||||
GAAP cost of subscription revenue | $ | 39.7 | $ | 38.7 | |||
Stock-based compensation expense | (1.7 | ) | (1.4 | ) | |||
Amortization of developed technology | (0.3 | ) | (1.1 | ) | |||
Non-GAAP cost of subscription revenue | $ | 37.7 | $ | 36.2 | |||
GAAP cost of license and other revenue | $ | 52.8 | $ | 53.1 | |||
Stock-based compensation expense | (1.8 | ) | (1.5 | ) | |||
Amortization of developed technology | (10.6 | ) | (12.4 | ) | |||
Non-GAAP cost of license and other revenue | $ | 40.4 | $ | 39.2 | |||
GAAP gross profit | $ | 419.4 | $ | 554.7 | |||
Stock-based compensation expense | 3.5 | 2.9 | |||||
Amortization of developed technology | 10.9 | 13.5 | |||||
Non-GAAP gross profit | $ | 433.8 | $ | 571.1 | |||
GAAP marketing and sales | $ | 242.9 | $ | 253.9 | |||
Stock-based compensation expense | (23.6 | ) | (21.7 | ) | |||
Non-GAAP marketing and sales | $ | 219.3 | $ | 232.2 | |||
GAAP research and development | $ | 195.5 | $ | 194.5 | |||
Stock-based compensation expense | (20.9 | ) | (17.6 | ) | |||
Non-GAAP research and development | $ | 174.6 | $ | 176.9 | |||
GAAP general and administrative | $ | 75.8 | $ | 75.9 | |||
Stock-based compensation expense | (8.9 | ) | (8.0 | ) | |||
Non-GAAP general and administrative | $ | 66.9 | $ | 67.9 | |||
GAAP amortization of purchased intangibles | $ | 7.9 | $ | 8.9 | |||
Amortization of purchased intangibles | (7.9 | ) | (8.9 | ) | |||
Non-GAAP amortization of purchased intangibles | $ | — | $ | — | |||
GAAP restructuring charges and other facility exit costs, net | $ | 52.3 | $ | — | |||
Restructuring charges and other facility exit costs, net | (52.3 | ) | — | ||||
Non-GAAP restructuring charges and other facility exit costs, net | $ | — | $ | — | |||
GAAP operating expenses | $ | 574.4 | $ | 533.2 | |||
Stock-based compensation expense | (53.4 | ) | (47.3 | ) | |||
Amortization of purchased intangibles | (7.9 | ) | (8.9 | ) | |||
Restructuring charges and other facility exit costs, net | (52.3 | ) | — | ||||
Non-GAAP operating expenses | $ | 460.8 | $ | 477.0 | |||
GAAP (loss) income from operations | $ | (155.0 | ) | $ | 21.5 | ||
Stock-based compensation expense | 56.9 | 50.2 | |||||
Amortization of developed technology | 10.9 | 13.5 | |||||
Amortization of purchased intangibles | 7.9 | 8.9 | |||||
Restructuring charges and other facility exit costs, net | 52.3 | — | |||||
Non-GAAP (loss) income from operations | $ | (27.0 | ) | $ | 94.1 | ||
GAAP interest and other (expense) income, net | $ | (3.6 | ) | $ | 0.3 | ||
(Gain) on strategic investments | (0.5 | ) | (1.0 | ) | |||
Non-GAAP interest and other (expense), net | $ | (4.1 | ) | $ | (0.7 | ) | |
GAAP (provision) for income taxes | $ | (14.4 | ) | $ | (2.7 | ) | |
Discrete GAAP tax (provision) items | (1.9 | ) | (3.1 | ) | |||
Income tax effect of non-GAAP adjustments | 24.4 | (18.5 | ) | ||||
Non-GAAP benefit (provision) for income tax | $ | 8.1 | $ | (24.3 | ) | ||
GAAP net (loss) income | $ | (173.0 | ) | $ | 19.1 | ||
Stock-based compensation expense | 56.9 | 50.2 | |||||
Amortization of developed technology | 10.9 | 13.5 | |||||
Amortization of purchased intangibles | 7.9 | 8.9 | |||||
Restructuring charges and other facility exit costs, net | 52.3 | — | |||||
(Gain) on strategic investments | (0.5 | ) | (1.0 | ) | |||
Discrete GAAP tax benefit (provision) items | (1.9 | ) | (3.1 | ) | |||
Income tax effect of non-GAAP adjustments | 24.4 | (18.5 | ) | ||||
Non-GAAP net (loss) income | $ | (23.0 | ) | $ | 69.1 | ||
GAAP diluted net (loss) income per share | $ | (0.77 | ) | $ | 0.08 |
Stock-based compensation expense | 0.25 | 0.21 | |||||
Amortization of developed technology | 0.05 | 0.06 | |||||
Amortization of purchased intangibles | 0.04 | 0.04 | |||||
Restructuring charges and other facility exit costs, net | 0.23 | — | |||||
(Gain) on strategic investments | — | — | |||||
Discrete GAAP tax (provision) items | (0.01 | ) | (0.01 | ) | |||
Income tax effect of non-GAAP adjustments | 0.11 | (0.08 | ) | ||||
Non-GAAP diluted net (loss) income per share | $ | (0.10 | ) | $ | 0.30 | ||
GAAP diluted shares used in per share calculation | 224.4 | 231.7 | |||||
Shares included in non-GAAP net income per share, but excluded from GAAP net loss per share as they would have been anti-dilutive | — | — | |||||
Non-GAAP diluted weighted average shares used in per share calculation | 224.4 | 231.7 | |||||
1Q 2017 | QoQ Change | Management Comments | ||||
New model subscriptions* | 567,000 | 140,000 | Increase driven by strong growth in all new model subscription types. | |||
Maintenance subscriptions | 2,143,000 | (8,000 | ) | Decrease related to the discontinuation of new perpetual license sales for most individual products at the end of Q4 FY2016. | ||
Total subscriptions | 2,710,000 | 132,000 | Increase driven by new model subscription additions. |
(in millions) | 1Q 2017 | YoY % | YoY CC % | Management Comments | |||||
New model ARR | $ | 308 | 71 | % | 76 | % | Increase driven by strong growth in all new model subscription types. | ||
Maintenance ARR | $ | 1,128 | (1 | )% | 2 | % | Decrease driven by changes in foreign currency valuations and the discontinuation of new perpetual license sales for most individual products. | ||
Total ARR | $ | 1,436 | 9 | % | 12 | % | Increase driven by growth in new model ARR. | ||
Deferred revenue | $ | 1,524 | 32 | % | N/A | Increase driven by the growth in subscription billings over the past four quarters. | |||
Revenue | $ | 512 | (21 | )% | (17 | )% | Decrease driven, as planned, by the business model transition. | ||
GAAP spend | $ | 667 | 7 | % | 8 | % | Increase driven by a $52 million charge related to the restructuring action announced in February 2016. | ||
Non-GAAP spend | $ | 539 | (2 | )% | (1 | )% | Decrease driven by lower employee-related costs related to the restructuring action. |
(in thousands) | 1Q 2016 | 2Q 2016 | 3Q 2016 | 4Q 2016 | 1Q 2017 | |||||
New model subscriptions* | 270 | 319 | 366 | 427 | 567 | |||||
Maintenance subscriptions | 2,058 | 2,070 | 2,104 | 2,151 | 2,143 | |||||
Total subscriptions | 2,328 | 2,389 | 2,469 | 2,578 | 2,710 |
(in millions) | 1Q 2016 | 2Q 2016 | 3Q 2016 | 4Q 2016 | 1Q 2017 | ||||||||||
Subscription revenue | $ | 320 | $ | 319 | $ | 319 | $ | 320 | $ | 326 | |||||
License and other revenue | 327 | 291 | 281 | 329 | 186 | ||||||||||
Total net revenue (1) | $ | 647 | $ | 610 | $ | 600 | $ | 648 | $ | 512 | |||||
New model ARR | $ | 180 | $ | 204 | $ | 221 | $ | 255 | $ | 308 | |||||
Maintenance ARR | 1,141 | 1,133 | 1,133 | 1,121 | 1,128 | ||||||||||
Total ARR* | $ | 1,321 | $ | 1,337 | $ | 1,354 | $ | 1,376 | $ | 1,436 | |||||
Recurring revenue | 51 | % | 55 | % | 56 | % | 53 | % | 70 | % |
1Q 2016 | YoY $ | YoY % | 1Q 2017 | ||||||||
(in millions) | |||||||||||
Subscription revenue | $ | 320 | $ | 6 | 2 | % | $ | 326 | |||
Add: License and other revenue from new model subscription offerings (1) | 19 | 21 | 111 | % | 40 | ||||||
Less: other adjustments (2) | (9 | ) | 2 | (22 | )% | (7 | ) | ||||
Total Recurring Revenue | $ | 330 | $ | 29 | 9 | % | $ | 359 |
(1) | License revenue from subscription offerings includes an allocated portion of the consideration transferred for our product subscriptions as well as flexible enterprise business agreements. |
(2) | Other adjustments include remaining subscription revenue related to education offerings, select Creative Finishing product offerings, Autodesk Buzzsaw, Autodesk Constructware, and third party products. |
(in millions) | 1Q 2016 | 2Q 2016 | 3Q 2016 | 4Q 2016 | 1Q 2017 | ||||||||||
Americas | $ | 244 | $ | 236 | $ | 236 | $ | 257 | $ | 218 | |||||
EMEA | $ | 245 | $ | 226 | $ | 225 | $ | 238 | $ | 203 | |||||
Asia Pacific | $ | 157 | $ | 148 | $ | 139 | $ | 153 | $ | 92 | |||||
Emerging Economies | $ | 93 | $ | 92 | $ | 88 | $ | 94 | $ | 55 | |||||
Emerging as a percentage of Total Revenue | 14 | % | 15 | % | 15 | % | 14 | % | 11 | % |
(in millions) | 1Q 2016 | 2Q 2016 | 3Q 2016 | 4Q 2016 | 1Q 2017 | ||||||||||
Architecture, Engineering and Construction | $ | 237 | $ | 233 | $ | 225 | $ | 254 | $ | 219 | |||||
Manufacturing | $ | 185 | $ | 171 | $ | 175 | $ | 194 | $ | 158 | |||||
Platform Solutions and Emerging Business | $ | 185 | $ | 164 | $ | 161 | $ | 160 | $ | 100 | |||||
Media and Entertainment | $ | 40 | $ | 41 | $ | 39 | $ | 40 | $ | 35 |
(in millions) | 1Q 2016 | 2Q 2016 | 3Q 2016 | 4Q 2016 | 1Q 2017 | ||||||||||
FX Impact on Total ARR | $ | (13 | ) | $ | (30 | ) | $ | (36 | ) | $ | (33 | ) | $ | (46 | ) |
FX Impact on Total Revenue | $ | (22 | ) | $ | (25 | ) | $ | (28 | ) | $ | (35 | ) | $ | (24 | ) |
FX Impact on Cost of Revenue and Operating Expenses | 22 | 25 | 24 | 20 | 10 | ||||||||||
FX Impact on Operating Income | $ | — | $ | — | $ | (4 | ) | $ | (15 | ) | $ | (14 | ) |
(in millions) | 1Q 2016 | 2Q 2016 | 3Q 2016 | 4Q 2016 | 1Q 2017 | ||||||||||
Cash Flows from Operating Activities | $ | 87 | $ | 77 | $ | 80 | $ | 170 | $ | 164 | |||||
Capital Expenditures | $ | 13 | $ | 17 | $ | 12 | $ | 31 | $ | 22 | |||||
Depreciation, Amortization and Accretion | $ | 38 | $ | 36 | $ | 36 | $ | 36 | $ | 37 | |||||
Total Cash and Marketable Securities, net of long-term debt | $ | 1,528 | $ | 1,466 | $ | 1,388 | $ | 1,296 | $ | 1,318 | |||||
Days Sales Outstanding | 44 | 59 | 55 | 92 | 46 | ||||||||||
Deferred Revenue | $ | 1,154 | $ | 1,236 | $ | 1,212 | $ | 1,519 | $ | 1,524 |
1Q 2016 | 2Q 2016 | 3Q 2016 | 4Q 2016 | 1Q 2017 | |||||||||||
Gross Margin | |||||||||||||||
Gross Margin - GAAP | 86 | % | 85 | % | 85 | % | 85 | % | 82 | % | |||||
Gross Margin - Non-GAAP | 88 | % | 87 | % | 87 | % | 88 | % | 85 | % | |||||
Operating Expenses (in millions) | |||||||||||||||
Operating Expenses - GAAP | $ | 533 | $ | 512 | $ | 524 | $ | 563 | $ | 574 | |||||
Operating Expenses - Non-GAAP | $ | 477 | $ | 466 | $ | 469 | $ | 502 | $ | 461 | |||||
Total Spend (in millions) | |||||||||||||||
Total Spend - GAAP | $ | 625 | $ | 605 | $ | 615 | $ | 658 | $ | 667 | |||||
Total Spend - Non-GAAP | $ | 552 | $ | 544 | $ | 545 | $ | 582 | $ | 539 | |||||
Operating Margin | |||||||||||||||
Operating Margin - GAAP | 3 | % | 1 | % | (2 | )% | (1 | )% | (30 | )% | |||||
Operating Margin - Non-GAAP | 15 | % | 11 | % | 9 | % | 10 | % | (5 | )% | |||||
Earnings Per Share | |||||||||||||||
Diluted Net Income (Loss) Per Share - GAAP | $ | 0.08 | $ | (1.18 | ) | $ | (0.19 | ) | $ | (0.17 | ) | $ | (0.77 | ) | |
Diluted Net Income (Loss) Per Share - Non-GAAP | $ | 0.30 | $ | 0.19 | $ | 0.14 | $ | 0.21 | $ | (0.10 | ) |
Q2 FY17 Guidance Metrics | Q2 FY17 (ending July 31, 2016) |
Revenue (in millions) | $500 - $520 |
EPS GAAP | ($0.73) - ($0.63) |
EPS non-GAAP (1) | ($0.18) - ($0.11) |
FY17 Guidance Metrics | FY17 (ending January 31, 2017) |
Revenue (in millions) (1) | $1,950 - $2,050 |
GAAP spend growth (cost of revenue plus operating expenses) | 3% - 4% |
Non-GAAP spend growth (cost of revenue plus operating expenses) (2) | (1%) - flat |
EPS GAAP | ($3.25) - ($2.87) |
EPS non-GAAP (3) | ($0.95) - ($0.70) |
Net subscription additions | 475,000 - 525,000 |
• | We do not conduct foreign currency exchange hedging for speculative purposes. The purpose of our hedging program is to reduce risk to foreign denominated cash flows and to partially reduce variability that would otherwise impact our financial results from currency fluctuations. |
• | We utilize cash flow hedges on projected billings and certain projected operating expenses in major currencies. We hedge our net exposures using a four quarter rolling layered hedge. The closer to the current time period, the more we are hedged. |
• | We designate cash flow hedges for deferred and non-deferred billings separately, and reflect associated gains and losses on hedging contracts in our earnings when respective revenue is recognized in earnings. |
• | On a monthly basis, to mitigate foreign exchange gains/losses, we hedge net monetary assets and liabilities recorded in non-functional currencies on the books of certain USD functional entities where these exposures are purposefully concentrated. |
• | From time to time, we hedge strategic exposures which may be related to acquisitions. Such hedges may not qualify for hedge accounting and are marked-to-market and reflected in earnings immediately. |
• | The major currencies we hedge include the euro, yen, Swiss franc, British pound, Canadian dollar, and Australian dollar. The euro is the primary exposure for the company. |