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 | |
99.2 |
AUTODESK, INC. | |
By: /s/ R. SCOTT HERREN | |
R. Scott Herren Senior Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) |
Exhibit No. | Description |
99.1 | |
99.2 |
• | Subscription plan ARR was $1.68 billion, an increase of 115 percent compared to the second quarter last year as reported, and 111 percent on a constant currency basis. Under the prior revenue accounting standard, ASC 605, subscription plan ARR was $1.66 billion, an increase of 112 percent compared to the second quarter last year. |
• | Total ARR was $2.35 billion, an increase of 28 percent compared to the second quarter last year as reported, and 27 percent on a constant currency basis. Under ASC 605, total ARR was $2.32 billion, an increase of 27 percent compared to the second quarter last year. |
• | Subscription plan subscriptions increased 290,000 from the first quarter of fiscal 2019 to 2.86 million at the end of the second quarter. Subscription plan subscriptions benefited from 117,000 maintenance subscribers that converted to product subscription under the maintenance-to-subscription (M2S) program. |
• | Total subscriptions increased 119,000 from the first quarter of fiscal 2019 to 3.94 million at the end of the second quarter. |
• | Deferred revenue was $1.80 billion, an increase of 1 percent compared to the second quarter last year. Total deferred revenue (deferred revenue plus unbilled deferred revenue) was $2.21 billion, an increase of approximately 20 percent compared to the second quarter last year. Under ASC 605, total deferred revenue was $2.28 billion, an increase of approximately 24 percent compared to the second quarter last year. |
• | Revenue was $612 million, an increase of 22 percent compared to the second quarter last year as reported, and 21 percent on a constant currency basis. Under ASC 605, revenue was $611 million, an increase of 22 percent compared to the second quarter last year. |
• | Billings were $605 million, an increase of 27 percent compared to the second quarter last year. Under ASC 605, billings were $592 million, an increase of 24 percent compared to the second quarter last year. |
• | Total GAAP spend (cost of revenue plus operating expenses) was $636 million, an increase of 4 percent compared to the second quarter last year as reported, and 3 percent on a constant currency basis. Absent ASC 340-40, total GAAP spend was $626 million, an increase of 3 percent compared to the second quarter last year. |
• | Total non-GAAP spend was $556 million, an increase of 5 percent compared to the second quarter last year, as reported, and 4 percent on a constant currency basis. A reconciliation of GAAP to non-GAAP results is provided in the accompanying tables. Absent ASC 340-40, total non-GAAP spend was $546 million, an increase of 3 percent compared to the second quarter last year. |
• | GAAP diluted net loss per share was $(0.18), compared to GAAP diluted net loss per share of $(0.66) in the second quarter last year. Under ASC 605 and absent ASC 340-40, GAAP diluted net loss per share was $(0.12). |
• | Non-GAAP diluted earnings per share was $0.19, compared to non-GAAP diluted net loss per share of $(0.11) in the second quarter last year. Under ASC 605 and absent ASC 340-40, non-GAAP diluted net income per share was $0.23. |
Q3 FY19 Guidance Metrics | Q3 FY19 under ASC 606 (ending October 31, 2018) |
Revenue (in millions) | $635 - $645 23% - 25% |
EPS GAAP | $(0.09) - $(0.05) |
EPS non-GAAP (1) | $0.24 - $0.28 |
FY19 Guidance Metrics | FY19 under ASC 606 (ending January 31, 2019) (1) |
Billings (in millions) | $2,580 - $2,640 (2) 16% - 19% |
Revenue (in millions) | $2,485 - $2,505 (3) 21% - 22% |
GAAP spend growth (cost of revenue plus operating expenses) | (2.5)% - (1.5)% |
Non-GAAP spend growth (cost of revenue plus operating expenses) (4) | 1 - 2% |
EPS GAAP | $(0.59) - $(0.51) |
EPS non-GAAP (5) | $0.87 - $0.95 |
Net subscription additions | 500k - 550k |
Total ARR growth | 28% - 30% |
Autodesk, Inc. | |||||||||||||||
Condensed Consolidated Statements of Operations | |||||||||||||||
(In millions, except per share data) | |||||||||||||||
Three Months Ended July 31, | Six Months Ended July 31, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(Unaudited) | |||||||||||||||
Net revenue: | |||||||||||||||
Subscription | $ | 420.6 | $ | 196.1 | $ | 771.0 | $ | 369.5 | |||||||
Maintenance | 166.4 | 261.8 | 347.6 | 525.4 | |||||||||||
Total subscription and maintenance revenue | 587.0 | 457.9 | 1,118.6 | 894.9 | |||||||||||
Other | 24.7 | 43.9 | 53.0 | 92.6 | |||||||||||
Total net revenue | 611.7 | 501.8 | 1,171.6 | 987.5 | |||||||||||
Cost of revenue: | |||||||||||||||
Cost of subscription and maintenance revenue | 54.1 | 52.8 | 104.5 | 107.7 | |||||||||||
Cost of other revenue | 12.3 | 17.8 | 25.1 | 36.4 | |||||||||||
Amortization of developed technology | 3.4 | 4.0 | 7.0 | 8.7 | |||||||||||
Total cost of revenue | 69.8 | 74.6 | 136.6 | 152.8 | |||||||||||
Gross profit | 541.9 | 427.2 | 1,035.0 | 834.7 | |||||||||||
Operating expenses: | |||||||||||||||
Marketing and sales | 289.1 | 257.6 | 565.5 | 513.3 | |||||||||||
Research and development | 180.8 | 193.8 | 353.6 | 381.5 | |||||||||||
General and administrative | 79.1 | 78.0 | 152.0 | 156.3 | |||||||||||
Amortization of purchased intangibles | 3.8 | 4.9 | 7.6 | 10.6 | |||||||||||
Restructuring and other exit costs, net | 13.8 | 0.5 | 36.3 | 0.2 | |||||||||||
Total operating expenses | 566.6 | 534.8 | 1,115.0 | 1,061.9 | |||||||||||
Loss from operations | (24.7 | ) | (107.6 | ) | (80.0 | ) | (227.2 | ) | |||||||
Interest and other income (expense), net | 1.3 | (18.8 | ) | (7.2 | ) | (20.6 | ) | ||||||||
Loss before income taxes | (23.4 | ) | (126.4 | ) | (87.2 | ) | (247.8 | ) | |||||||
Provision for income taxes | (16.0 | ) | (17.6 | ) | (34.6 | ) | (25.8 | ) | |||||||
Net loss | $ | (39.4 | ) | $ | (144.0 | ) | $ | (121.8 | ) | $ | (273.6 | ) | |||
Basic net loss per share | $ | (0.18 | ) | $ | (0.66 | ) | $ | (0.56 | ) | $ | (1.25 | ) | |||
Diluted net loss per share | $ | (0.18 | ) | $ | (0.66 | ) | $ | (0.56 | ) | $ | (1.25 | ) | |||
Weighted average shares used in computing basic net loss per share | 219.0 | 219.5 | 218.8 | 219.7 | |||||||||||
Weighted average shares used in computing diluted net loss per share | 219.0 | 219.5 | 218.8 | 219.7 |
Autodesk, Inc. | |||||||
Condensed Consolidated Balance Sheets | |||||||
(In millions) | |||||||
July 31, 2018 | January 31, 2018 | ||||||
(Unaudited) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 895.4 | $ | 1,078.0 | |||
Marketable securities | 274.4 | 245.2 | |||||
Accounts receivable, net | 234.4 | 438.2 | |||||
Prepaid expenses and other current assets | 194.6 | 116.5 | |||||
Total current assets | 1,598.8 | 1,877.9 | |||||
Marketable securities | 128.1 | 190.8 | |||||
Computer equipment, software, furniture and leasehold improvements, net | 146.8 | 145.0 | |||||
Developed technologies, net | 23.7 | 27.1 | |||||
Goodwill | 1,658.7 | 1,620.2 | |||||
Deferred income taxes, net | 81.5 | 81.7 | |||||
Other assets | 195.4 | 170.9 | |||||
Total assets | $ | 3,833.0 | $ | 4,113.6 | |||
LIABILITIES AND STOCKHOLDERS’ DEFICIT | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 82.2 | $ | 94.7 | |||
Accrued compensation | 163.2 | 250.9 | |||||
Accrued income taxes | 38.8 | 28.0 | |||||
Deferred revenue | 1,491.5 | 1,551.6 | |||||
Other accrued liabilities | 139.4 | 198.0 | |||||
Total current liabilities | 1,915.1 | 2,123.2 | |||||
Long-term deferred revenue | 308.0 | 403.5 | |||||
Long-term income taxes payable | 41.5 | 41.6 | |||||
Long-term deferred income taxes | 88.2 | 66.6 | |||||
Long-term notes payable, net | 1,587.2 | 1,586.0 | |||||
Other liabilities | 134.6 | 148.7 | |||||
Stockholders’ deficit: | |||||||
Preferred stock | — | — | |||||
Common stock and additional paid-in capital | 2,012.5 | 1,952.7 | |||||
Accumulated other comprehensive loss | (150.9 | ) | (123.8 | ) | |||
Accumulated deficit | (2,103.2 | ) | (2,084.9 | ) | |||
Total stockholders’ deficit | (241.6 | ) | (256.0 | ) | |||
Total liabilities and stockholders' deficit | $ | 3,833.0 | $ | 4,113.6 |
Autodesk, Inc. | |||||||
Condensed Consolidated Statements of Cash Flows | |||||||
(In millions) | |||||||
Six Months Ended July 31, | |||||||
2018 | 2017 | ||||||
(Unaudited) | |||||||
Operating activities: | |||||||
Net loss | $ | (121.8 | ) | $ | (273.6 | ) | |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||||||
Depreciation, amortization and accretion | 46.3 | 56.8 | |||||
Stock-based compensation expense | 111.3 | 134.4 | |||||
Deferred income taxes | (0.3 | ) | 8.6 | ||||
Restructuring and other exit costs, net | 36.6 | 0.2 | |||||
Other operating activities | (1.3 | ) | 7.7 | ||||
Changes in operating assets and liabilities, net of acquisitions: | |||||||
Accounts receivable | 204.2 | 185.5 | |||||
Prepaid expenses and other current assets | 7.9 | (2.4 | ) | ||||
Accounts payable and accrued liabilities | (201.3 | ) | (98.6 | ) | |||
Deferred revenue | (66.7 | ) | (9.9 | ) | |||
Accrued income taxes | 11.5 | (36.0 | ) | ||||
Net cash provided by (used in) operating activities | 26.4 | (27.3 | ) | ||||
Investing activities: | |||||||
Purchases of marketable securities | (110.1 | ) | (299.7 | ) | |||
Sales of marketable securities | 27.0 | 110.8 | |||||
Maturities of marketable securities | 119.6 | 420.3 | |||||
Capital expenditures | (36.7 | ) | (26.4 | ) | |||
Acquisitions, net of cash acquired | (34.1 | ) | — | ||||
Other investing activities | (6.0 | ) | (4.3 | ) | |||
Net cash (used in) provided by investing activities | (40.3 | ) | 200.7 | ||||
Financing activities: | |||||||
Proceeds from issuance of common stock, net of issuance costs | 50.4 | 55.9 | |||||
Taxes paid related to net share settlement of equity awards | (53.0 | ) | (49.8 | ) | |||
Repurchase and retirement of common stock | (154.7 | ) | (315.2 | ) | |||
Proceeds from debt, net of discount | — | 496.9 | |||||
Repayment of debt | — | (400.0 | ) | ||||
Other financing activities | — | (5.8 | ) | ||||
Net cash used in financing activities | (157.3 | ) | (218.0 | ) | |||
Effect of exchange rate changes on cash and cash equivalents | (11.4 | ) | 5.6 | ||||
Net decrease in cash and cash equivalents | (182.6 | ) | (39.0 | ) | |||
Cash and cash equivalents at beginning of the period | 1,078.0 | 1,213.1 | |||||
Cash and cash equivalents at end of the period | $ | 895.4 | $ | 1,174.1 |
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, CEO transition costs, restructuring (benefits) charges and other facility exit costs, amortization of developed technology, amortization of purchased intangibles, gain and loss on strategic investments and dispositions, 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 July 31, | Six Months Ended July 31, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(Unaudited) | (Unaudited) | ||||||||||||||
GAAP cost of subscription and maintenance revenue | $ | 54.1 | $ | 52.8 | $ | 104.5 | $ | 107.7 | |||||||
Stock-based compensation expense | (3.1 | ) | (2.8 | ) | (5.8 | ) | (5.6 | ) | |||||||
Non-GAAP cost of subscription and maintenance revenue | $ | 51.0 | $ | 50.0 | $ | 98.7 | $ | 102.1 | |||||||
GAAP cost of other revenue | $ | 12.3 | $ | 17.8 | $ | 25.1 | $ | 36.4 | |||||||
Stock-based compensation expense | (0.9 | ) | (1.0 | ) | (1.7 | ) | (2.1 | ) | |||||||
Non-GAAP cost of other revenue | $ | 11.4 | $ | 16.8 | $ | 23.4 | $ | 34.3 | |||||||
GAAP amortization of developed technology | $ | 3.4 | $ | 4.0 | $ | 7.0 | $ | 8.7 | |||||||
Amortization of developed technology | (3.4 | ) | (4.0 | ) | (7.0 | ) | (8.7 | ) | |||||||
Non-GAAP amortization of developed technology | $ | — | $ | — | $ | — | $ | — | |||||||
GAAP gross profit | $ | 541.9 | $ | 427.2 | $ | 1,035.0 | $ | 834.7 | |||||||
Stock-based compensation expense | 4.0 | 3.8 | 7.5 | 7.7 | |||||||||||
Amortization of developed technology | 3.4 | 4.0 | 7.0 | 8.7 | |||||||||||
Non-GAAP gross profit | $ | 549.3 | $ | 435.0 | $ | 1,049.5 | $ | 851.1 | |||||||
GAAP marketing and sales | $ | 289.1 | $ | 257.6 | $ | 565.5 | $ | 513.3 | |||||||
Stock-based compensation expense | (25.9 | ) | (26.0 | ) | (49.9 | ) | (52.4 | ) | |||||||
Non-GAAP marketing and sales | $ | 263.2 | $ | 231.6 | $ | 515.6 | $ | 460.9 |
GAAP research and development | $ | 180.8 | $ | 193.8 | $ | 353.6 | $ | 381.5 | |||||||
Stock-based compensation expense | (18.7 | ) | (20.4 | ) | (36.5 | ) | (41.6 | ) | |||||||
Non-GAAP research and development | $ | 162.1 | $ | 173.4 | $ | 317.1 | $ | 339.9 | |||||||
GAAP general and administrative | $ | 79.1 | $ | 78.0 | $ | 152.0 | $ | 156.3 | |||||||
Stock-based compensation expense | (8.3 | ) | (8.6 | ) | (17.4 | ) | (16.1 | ) | |||||||
CEO transition costs (1) | 0.1 | (10.6 | ) | 0.1 | (21.6 | ) | |||||||||
Acquisition related costs | (2.5 | ) | — | (2.5 | ) | — | |||||||||
Non-GAAP general and administrative | $ | 68.4 | $ | 58.8 | $ | 132.2 | $ | 118.6 | |||||||
GAAP amortization of purchased intangibles | $ | 3.8 | $ | 4.9 | $ | 7.6 | $ | 10.6 | |||||||
Amortization of purchased intangibles | (3.8 | ) | (4.9 | ) | (7.6 | ) | (10.6 | ) | |||||||
Non-GAAP amortization of purchased intangibles | $ | — | $ | — | $ | — | $ | — | |||||||
GAAP restructuring and other exit costs, net | $ | 13.8 | $ | 0.5 | $ | 36.3 | $ | 0.2 | |||||||
Restructuring and other exit costs, net | (13.8 | ) | (0.5 | ) | (36.3 | ) | (0.2 | ) | |||||||
Non-GAAP restructuring and other exit costs, net | $ | — | $ | — | $ | — | $ | — | |||||||
GAAP operating expenses | $ | 566.6 | $ | 534.8 | $ | 1,115.0 | $ | 1,061.9 | |||||||
Stock-based compensation expense | (52.9 | ) | (55.0 | ) | (103.8 | ) | (110.1 | ) | |||||||
Amortization of purchased intangibles | (3.8 | ) | (4.9 | ) | (7.6 | ) | (10.6 | ) | |||||||
CEO transition costs (1) | 0.1 | (10.6 | ) | 0.1 | (21.6 | ) | |||||||||
Acquisition related costs | (2.5 | ) | — | (2.5 | ) | — | |||||||||
Restructuring and other exit costs, net | (13.8 | ) | (0.5 | ) | (36.3 | ) | (0.2 | ) | |||||||
Non-GAAP operating expenses | $ | 493.7 | $ | 463.8 | $ | 964.9 | $ | 919.4 | |||||||
GAAP spend | $ | 636.4 | $ | 609.4 | $ | 1,251.6 | $ | 1,214.7 | |||||||
Stock-based compensation expense | (56.9 | ) | (58.8 | ) | (111.3 | ) | (117.8 | ) | |||||||
Amortization of developed technology | (3.4 | ) | (4.0 | ) | (7.0 | ) | (8.7 | ) | |||||||
Amortization of purchased intangibles | (3.8 | ) | (4.9 | ) | (7.6 | ) | (10.6 | ) | |||||||
CEO transition costs (1) | 0.1 | (10.6 | ) | 0.1 | (21.6 | ) | |||||||||
Acquisition related costs | (2.5 | ) | — | (2.5 | ) | — | |||||||||
Restructuring and other exit costs, net | (13.8 | ) | (0.5 | ) | (36.3 | ) | (0.2 | ) | |||||||
Non-GAAP spend | $ | 556.1 | $ | 530.6 | $ | 1,087.0 | $ | 1,055.8 | |||||||
Non-GAAP Y/Y spend growth | 4.8 | % | |||||||||||||
Foreign currency exchange impact | (1.1 | )% | |||||||||||||
ASC 340 impact | (2.0 | )% | |||||||||||||
Non-GAAP Y/Y spend growth excluding ASC 340 in constant currency | 1.7 | % | |||||||||||||
GAAP loss from operations | $ | (24.7 | ) | $ | (107.6 | ) | $ | (80.0 | ) | $ | (227.2 | ) | |||
Stock-based compensation expense | 56.9 | 58.8 | 111.3 | 117.8 | |||||||||||
Amortization of developed technology | 3.4 | 4.0 | 7.0 | 8.7 | |||||||||||
Amortization of purchased intangibles | 3.8 | 4.9 | 7.6 | 10.6 | |||||||||||
CEO transition costs (1) | (0.1 | ) | 10.6 | (0.1 | ) | 21.6 | |||||||||
Acquisition related costs | 2.5 | — | 2.5 | — | |||||||||||
Restructuring and other exit costs, net | 13.8 | 0.5 | 36.3 | 0.2 | |||||||||||
Non-GAAP income (loss) from operations | $ | 55.6 | $ | (28.8 | ) | $ | 84.6 | $ | (68.3 | ) |
GAAP interest and other income (expense), net | $ | 1.3 | $ | (18.8 | ) | $ | (7.2 | ) | $ | (20.6 | ) | ||||
(Gain) loss on strategic investments and dispositions, net | (3.9 | ) | 13.5 | (6.6 | ) | 7.8 | |||||||||
Restructuring and other exit costs, net | 0.3 | — | 0.3 | — | |||||||||||
Non-GAAP interest and other expense, net | $ | (2.3 | ) | $ | (5.3 | ) | $ | (13.5 | ) | $ | (12.8 | ) | |||
GAAP provision for income taxes | $ | (16.0 | ) | $ | (17.6 | ) | $ | (34.6 | ) | $ | (25.8 | ) | |||
Discrete GAAP tax items | (8.7 | ) | (0.1 | ) | (8.7 | ) | (7.7 | ) | |||||||
Income tax effect of non-GAAP adjustments | 14.6 | 26.6 | 29.8 | 54.6 | |||||||||||
Non-GAAP (provision) benefit for income tax | $ | (10.1 | ) | $ | 8.9 | $ | (13.5 | ) | $ | 21.1 | |||||
GAAP net loss | $ | (39.4 | ) | $ | (144.0 | ) | $ | (121.8 | ) | $ | (273.6 | ) | |||
Stock-based compensation expense | 56.9 | 58.8 | 111.3 | 117.8 | |||||||||||
Amortization of developed technology | 3.4 | 4.0 | 7.0 | 8.7 | |||||||||||
Amortization of purchased intangibles | 3.8 | 4.9 | 7.6 | 10.6 | |||||||||||
CEO transition costs (1) | (0.1 | ) | 10.6 | (0.1 | ) | 21.6 | |||||||||
Acquisition related costs | 2.5 | — | 2.5 | — | |||||||||||
Restructuring and other exit costs, net | 14.1 | 0.5 | 36.6 | 0.2 | |||||||||||
Gain (loss) on strategic investments and dispositions, net | (3.9 | ) | 13.5 | (6.6 | ) | 7.8 | |||||||||
Discrete GAAP tax items | (8.7 | ) | (0.1 | ) | (8.7 | ) | (7.7 | ) | |||||||
Income tax effect of non-GAAP adjustments | 14.6 | 26.6 | 29.8 | 54.6 | |||||||||||
Non-GAAP net income (loss) | $ | 43.2 | $ | (25.2 | ) | $ | 57.6 | $ | (60.0 | ) | |||||
GAAP diluted net loss per share (2) | $ | (0.18 | ) | $ | (0.66 | ) | $ | (0.56 | ) | $ | (1.25 | ) | |||
Stock-based compensation expense | 0.26 | 0.27 | 0.51 | 0.54 | |||||||||||
Amortization of developed technology | 0.02 | 0.02 | 0.04 | 0.04 | |||||||||||
Amortization of purchased intangibles | 0.01 | 0.02 | 0.03 | 0.05 | |||||||||||
CEO transition costs (1) | — | 0.05 | — | 0.09 | |||||||||||
Acquisition related costs | 0.01 | — | 0.01 | — | |||||||||||
Restructuring and other exit costs, net | 0.06 | — | 0.16 | — | |||||||||||
(Gain) loss on strategic investments and dispositions, net | (0.02 | ) | 0.07 | (0.03 | ) | 0.04 | |||||||||
Discrete GAAP tax items | (0.04 | ) | — | (0.04 | ) | (0.03 | ) | ||||||||
Income tax effect of non-GAAP adjustments | 0.07 | 0.12 | 0.14 | 0.25 | |||||||||||
Non-GAAP diluted net income (loss) per share (2) | $ | 0.19 | $ | (0.11 | ) | $ | 0.26 | $ | (0.27 | ) | |||||
GAAP diluted shares used in per share calculation | 219.0 | 219.5 | 218.8 | 219.7 | |||||||||||
Shares included in non-GAAP net income per share, but excluded from GAAP net loss per share as they would have been anti-dilutive | 3.2 | — | 3.2 | — | |||||||||||
Non-GAAP diluted weighted average shares used in per share calculation | 222.2 | 219.5 | 222.0 | 219.7 |
(1) | CEO transition costs include stock-based compensation of $7.8 million related to the acceleration of eligible stock awards in the three months ended April 30, 2017. CEO transition costs also include severance payments, legal fees incurred with the CEO transition and recruiting costs related to the search for a new CEO. |
(2) | Net income (loss) per share was computed independently for each of the periods presented; therefore the sum of the net income (loss) per share amount for the quarters may not equal the total for the year. |
2Q 2019 under ASC 606 | 2Q 2019 under ASC 605 | Total Y/Y change, as reported (3) | Total Y/Y change under ASC 605 (4) | Management Comments | |||||||
(in millions except per share data) (1) (2) | |||||||||||
Subscription plan ARR | $ | 1,682 | $ | 1,663 | 115 | % | 112 | % | Driven by growth in all subscription plan types, led by product subscriptions. | ||
Maintenance plan ARR | $ | 666 | $ | 661 | (36 | )% | (37 | )% | Driven by the migration of maintenance plan subscriptions to product subscriptions. | ||
Total ARR | $ | 2,347 | $ | 2,325 | 28 | % | 27 | % | |||
Revenue | $ | 612 | $ | 611 | 22 | % | 22 | % | Driven by growth in subscription plan revenue, led by product subscription revenue. | ||
GAAP spend | $ | 636 | $ | 626 | 4 | % | 3 | % | Driven by restructuring costs, the adoption of ASC 340-40, and higher employee-related costs. | ||
Non-GAAP spend | $ | 556 | $ | 546 | 5 | % | 3 | % | Driven by the adoption of ASC 340-40, higher employee-related costs, and the impact of currency. | ||
GAAP diluted net loss per share | $ | (0.18 | ) | $ | (0.12 | ) | 73 | % | 82 | % | |
Non-GAAP diluted net income per share | $ | 0.19 | $ | 0.23 | 273 | % | 309 | % |
(in millions) (1) (2) | ARR Under ASC 605 | Under ASC 606 1Q 2019 | Under ASC 606 2Q 2019 | Under ASC 605 2Q 2019 | Total Y/Y change, as reported (3) | Total Y/Y change under ASC 605 (4) | ||||||||||||||||
2Q 2018 | 3Q 2018 | 4Q 2018 | ||||||||||||||||||||
Subscription plan ARR | $ | 784 | $ | 924 | $ | 1,175 | $ | 1,402 | $ | 1,682 | $ | 1,663 | 115 | % | 112 | % | ||||||
Maintenance plan ARR | 1,046 | 978 | 879 | 725 | 666 | 661 | (36 | )% | (37 | )% | ||||||||||||
Total ARR | $ | 1,830 | $ | 1,902 | $ | 2,054 | $ | 2,126 | $ | 2,347 | $ | 2,325 | 28 | % | 27 | % | ||||||
Recurring revenue | $ | 457 | $ | 476 | $ | 514 | $ | 532 | $ | 587 | $ | 581 | ||||||||||
Recurring revenue as a percentage of total revenue | 91 | % | 92 | % | 93 | % | 95 | % | 96 | % | 95 | % |
• | Subscription plan ARR was $1.66 billion and increased 112 percent year-over-year and 17 percent sequentially. |
• | Maintenance plan ARR was $661 million and decreased 37 percent year-over-year and 11 percent sequentially. |
• | Total ARR was $2.32 billion and increased 27 percent year-over-year and 7 percent sequentially. |
• | Core business ARR was $2.25 billion and increased 27 percent year-over-year and 7 percent sequentially. |
• | Cloud business ARR was $77 million and increased 24 percent year-over-year and 9 percent sequentially. |
(in thousands) (1) | 2Q 2018 | 3Q 2018 | 4Q 2018 | 1Q 2019 | 2Q 2019 | |||||
Subscription plan subscriptions | 1,589 | 1,896 | 2,267 | 2,574 | 2,864 | |||||
Maintenance plan subscriptions | 1,854 | 1,693 | 1,449 | 1,243 | 1,071 | |||||
Total subscriptions | 3,443 | 3,589 | 3,716 | 3,817 | 3,936 |
ARPS Under ASC 605 | Under ASC 606 1Q 2019 | Under ASC 606 2Q 2019 | Under ASC 605 2Q 2019 | Total Y/Y change, as reported (2) | Total Y/Y change under ASC 605 (3) | |||||||||||||||||
(1) | 2Q 2018 | 3Q 2018 | 4Q 2018 | |||||||||||||||||||
Subscription plan ARPS | $ | 493 | $ | 487 | $ | 518 | $ | 544 | $ | 587 | $ | 581 | 19 | % | 18 | % | ||||||
Maintenance plan ARPS | 564 | 577 | 607 | 583 | 621 | 617 | 10 | % | 9 | % | ||||||||||||
Total ARPS | $ | 531 | $ | 530 | $ | 553 | $ | 557 | $ | 596 | $ | 591 | 12 | % | 11 | % |
• | Subscription plan ARPS was $581 and increased $88 year-over-year and $27 sequentially. |
• | Maintenance plan ARPS was $617 and increased $53 year-over-year and $16 sequentially. |
• | Total ARPS was $591 and increased $59 year-over-year and $21 sequentially. |
• | Core ARPS was $650 and increased $79 year-over-year and $26 sequentially. |
Revenue Under ASC 605 | Under ASC 606 1Q 2019 | Under ASC 606 2Q 2019 | Under ASC 605 2Q 2019 | Total Y/Y change, as reported (4) | Total Y/Y change under ASC 605 (5) | |||||||||||||||||
(in millions) (1) | 2Q 2018 | 3Q 2018 | 4Q 2018 | |||||||||||||||||||
Subscription revenue | $ | 196 | $ | 231 | $ | 294 | $ | 350 | $ | 421 | $ | 416 | 114 | % | 112 | % | ||||||
Maintenance revenue | 262 | 244 | 220 | 181 | 166 | 165 | (36 | )% | (37 | )% | ||||||||||||
Other revenue (2) | 44 | 40 | 40 | 28 | 25 | 29 | (44 | )% | (33 | )% | ||||||||||||
Total net revenue (3) | $ | 502 | $ | 515 | $ | 554 | $ | 560 | $ | 612 | $ | 611 | 22 | % | 22 | % | ||||||
Direct revenue | 29 | % | 30 | % | 30 | % | 29 | % | 28 | % | ||||||||||||
Indirect revenue | 71 | % | 70 | % | 70 | % | 71 | % | 72 | % |
• | Subscription revenue for the second quarter was $416 million and increased 112 percent year-over-year and 17 percent sequentially. |
• | Maintenance revenue for the second quarter was $165 million and decreased 37 percent year-over-year and 11 percent sequentially. |
• | Other revenue for the second quarter was $29 million and decreased 33 percent year-over-year and 3 percent sequentially. |
• | Total net revenue for the second quarter was $611 million and increased 22 percent year-over-year and 6 percent sequentially. |
Revenue by Geography Under ASC 605 | Under ASC 606 1Q 2019 | Under ASC 606 2Q 2019 | Under ASC 605 2Q 2019 | Total Y/Y change, as reported (2) | Total Y/Y change under ASC 605 (3) | |||||||||||||||||
(in millions) (1) | 2Q 2018 | 3Q 2018 | 4Q 2018 | |||||||||||||||||||
Americas | $ | 214 | $ | 215 | $ | 232 | $ | 234 | $ | 248 | $ | 249 | 16 | % | 16 | % | ||||||
EMEA | $ | 199 | $ | 205 | $ | 221 | $ | 221 | $ | 248 | $ | 246 | 25 | % | 24 | % | ||||||
Asia Pacific | $ | 89 | $ | 95 | $ | 100 | $ | 106 | $ | 116 | $ | 115 | 31 | % | 30 | % | ||||||
Emerging Economies | $ | 54 | $ | 58 | $ | 64 | $ | 65 | $ | 74 | $ | 73 | 38 | % | 36 | % | ||||||
Emerging as a percentage of Total Revenue | 11 | % | 11 | % | 12 | % | 12 | % | 12 | % | 12 | % |
• | Revenue in the Americas was $249 million, an increase of 16 percent compared to the second quarter last year. |
• | Revenue in EMEA was $246 million, an increase of 24 percent compared to the second quarter last year. |
• | Revenue in APAC was $115 million, an increase of 30 percent compared to the second quarter last year. |
• | Revenue in emerging economies was $73 million and increased 36 percent compared to the second quarter last year. |
Revenue by Product Family Under ASC 605 | Under ASC 606 1Q 2019 | Under ASC 606 2Q 2019 | Under ASC 605 2Q 2019 | Total Y/Y change, as reported (3) | Total Y/Y change under ASC 605 (4) | |||||||||||||||||
(in millions) (1) (2) | 2Q 2018 | 3Q 2018 | 4Q 2018 | |||||||||||||||||||
Architecture, Engineering and Construction (AEC) | $ | 190 | $ | 195 | $ | 217 | $ | 222 | $ | 243 | $ | 240 | 28 | % | 27 | % | ||||||
AutoCAD Product Family and AutoCAD LT | $ | 136 | $ | 143 | $ | 154 | $ | 156 | $ | 177 | $ | 175 | 30 | % | 29 | % | ||||||
Manufacturing | $ | 132 | $ | 132 | $ | 136 | $ | 135 | $ | 146 | $ | 147 | 10 | % | 11 | % | ||||||
Media and Entertainment (M&E) | $ | 38 | $ | 38 | $ | 40 | $ | 42 | $ | 42 | $ | 43 | 10 | % | 13 | % | ||||||
Other | $ | 6 | $ | 8 | $ | 7 | $ | 5 | $ | 4 | $ | 4 | (33 | )% | (30 | )% |
(1) | Due to rounding, the sum of the components may not agree to total revenue. |
(2) | Due to changes in the go-to-market offerings of our AutoCAD product subscription, prior period balances have been adjusted to conform to current period presentation. AutoCAD product family now contains revenue from all AutoCAD vertical products, such as AutoCAD Architecture, AutoCAD Electrical, and AutoCAD Mechanical. |
(3) | Reflects 2Q 2019 under ASC 606 compared to 2Q 2018 under ASC 605. |
(4) | Reflects 2Q 2019 under ASC 605 compared to 2Q 2018 under ASC 605. |
• | Revenue from our AEC product family was $240 million and increased 27 percent year-over-year and 6 percent sequentially. |
• | Revenue from our AutoCAD product family and AutoCAD LT was $175 million and increased 29 percent year-over-year and 9 percent sequentially. |
• | Revenue from our Manufacturing product family was $147 million and increased 11 percent year-over-year and 6 percent sequentially. |
• | Revenue from our M&E product family was $43 million and increased 13 percent year-over-year and 3 percent sequentially. |
Under ASC 605 | Under ASC 606 | ||||||||||||||
(in millions) | 2Q 2018 | 3Q 2018 | 4Q 2018 | 1Q 2019 | 2Q 2019 (1) | ||||||||||
Year-on-Year FX (Impact) Benefit on Total ARR | $ | (18 | ) | $ | (11 | ) | $ | (1 | ) | $ | 9 | $ | 25 | ||
Year-on-Year FX (Impact) Benefit on Total Revenue | $ | (5 | ) | $ | (3 | ) | $ | — | $ | 3 | $ | 7 | |||
Year-on-Year FX Benefit (Impact) on Cost of Revenue and Operating Expenses | $ | 4 | $ | (3 | ) | $ | (12 | ) | $ | (10 | ) | $ | (6 | ) | |
Year-on-Year FX Impact on Operating Income | $ | (1 | ) | $ | (6 | ) | $ | (12 | ) | $ | (7 | ) | $ | 1 |
(1) | 2Q19's year-on-year compares 2Q18 under ASC 605 and 2Q19 under ASC 606. As noted earlier, we adopted ASC 606 under the modified retrospective transition method. |
(in millions) (1) (2) | 2Q 2018 | 3Q 2018 | 4Q 2018 | 1Q 2019 | 2Q 2019 | ||||||||||
Cash Flow from Operating Activities | $ | (73 | ) | $ | (51 | ) | $ | 79 | $ | (17 | ) | $ | 43 | ||
Capital Expenditures | 18 | 13 | 11 | 17 | 20 | ||||||||||
Free Cash Flow | $ | (90 | ) | $ | (64 | ) | $ | 68 | $ | (34 | ) | $ | 23 | ||
Depreciation, Amortization and Accretion | $ | 28 | $ | 25 | $ | 27 | $ | 24 | $ | 22 | |||||
Total Cash and Marketable Securities | $ | 1,944 | $ | 1,718 | $ | 1,514 | $ | 1,464 | $ | 1,298 |
Deferred Revenue Under ASC 605 | Under ASC 606 1Q 2019 | Under ASC 606 2Q 2019 | Under ASC 605 2Q 2019 | Total Y/Y change, as reported (3) | Total Y/Y change under ASC 605 (4) | |||||||||||||||||
(in millions) (1) (2) | 2Q 2018 | 3Q 2018 | 4Q 2018 | |||||||||||||||||||
Deferred Revenue | $ | 1,776 | $ | 1,764 | $ | 1,955 | $ | 1,806 | $ | 1,800 | $ | 1,924 | 1 | % | 8 | % | ||||||
Unbilled Deferred Revenue (5) | 63 | 148 | 326 | 412 | 406 | 352 | 548 | % | 462 | % | ||||||||||||
Total Deferred Revenue | $ | 1,839 | $ | 1,912 | $ | 2,281 | $ | 2,218 | $ | 2,205 | $ | 2,276 | 20 | % | 24 | % |
• | Deferred revenue was $1.92 billion and increased 8 percent year-over-year and decreased 1 percent sequentially. |
• | Total deferred revenue was $2.28 billion and increased 24 percent year-over-year and was flat sequentially. |
Margins and EPS Under ASC 605 | Under ASC 606 1Q 2019 | Under ASC 606 2Q 2019 | Under ASC 605 2Q 2019 | Total Y/Y change, as reported (2) | Total Y/Y change under ASC 605 (3) | |||||||||||||||||
2Q 2018 | 3Q 2018 | 4Q 2018 | ||||||||||||||||||||
Gross Margin | ||||||||||||||||||||||
Gross Margin - GAAP | 85 | % | 85 | % | 87 | % | 88 | % | 89 | % | 89 | % | ||||||||||
Gross Margin - Non-GAAP | 87 | % | 86 | % | 88 | % | 89 | % | 90 | % | 90 | % | ||||||||||
Operating Expenses (in millions) | ||||||||||||||||||||||
Operating Expenses - GAAP | $ | 535 | $ | 538 | $ | 663 | $ | 548 | $ | 567 | $ | 556 | 6 | % | 4 | % | ||||||
Operating Expenses - Non-GAAP | $ | 464 | $ | 472 | $ | 506 | $ | 471 | $ | 494 | $ | 483 | 6 | % | 4 | % | ||||||
Total Spend (in millions) | ||||||||||||||||||||||
Total Spend - GAAP | $ | 609 | $ | 615 | $ | 736 | $ | 615 | $ | 636 | $ | 626 | 4 | % | 3 | % | ||||||
Total Spend - Non-GAAP | $ | 531 | $ | 542 | $ | 571 | $ | 531 | $ | 556 | $ | 546 | 5 | % | 3 | % | ||||||
Operating Margin | ||||||||||||||||||||||
Operating Margin - GAAP | (21 | )% | (19 | )% | (33 | )% | (10 | )% | (4 | )% | (3 | )% | ||||||||||
Operating Margin - Non-GAAP | (6 | )% | (5 | )% | (3 | )% | 5 | % | 9 | % | 11 | % | ||||||||||
Earnings Per Share | ||||||||||||||||||||||
Basic and Diluted Net Loss Per Share - GAAP | $ | (0.66 | ) | $ | (0.55 | ) | $ | (0.79 | ) | $ | (0.38 | ) | $ | (0.18 | ) | $ | (0.12 | ) | ||||
Basic Net (Loss) Income Per Share - Non-GAAP | $ | (0.11 | ) | $ | (0.12 | ) | $ | (0.09 | ) | $ | 0.07 | $ | 0.20 | $ | 0.23 | |||||||
Diluted Net (Loss) Income Per Share - Non-GAAP | $ | (0.11 | ) | $ | (0.12 | ) | $ | (0.09 | ) | $ | 0.06 | $ | 0.19 | $ | 0.23 | |||||||
Weighted Average Shares | ||||||||||||||||||||||
Basic and Diluted Net Loss Share Count - GAAP | 219.5 | 219.6 | 219.1 | 218.6 | 219.0 | 219.0 | ||||||||||||||||
Basic Net Income Share Count - Non-GAAP | 219.5 | 219.6 | 219.1 | 218.6 | 219.0 | 219.0 | ||||||||||||||||
Diluted Net Income Share Count - Non-GAAP | 219.5 | 219.6 | 219.1 | 221.6 | 222.2 | 222.2 |
(1) | A reconciliation of GAAP and non-GAAP results is provided in the tables following the company's earnings release. |
(2) | Reflects 2Q 2019 under ASC 606 compared to 2Q 2018 under ASC 605. |
(3) | Reflects 2Q 2019 under ASC 605 compared to 2Q 2018 under ASC 605. |
Q3 FY19 Guidance Metrics | Q3 FY19 under ASC 606 (ending October 31, 2018) |
Revenue (in millions) | $635 - $645 23% - 25% |
EPS GAAP | $(0.09) - $(0.05) |
EPS non-GAAP (1) | $0.24 - $0.28 |
FY19 Guidance Metrics | FY19 under ASC 606 (ending January 31, 2019) (1) |
Billings (in millions) | $2,580 - $2,640 (2) 16% - 19% |
Revenue (in millions) | $2,485 - $2,505 (3) 21% - 22% |
GAAP spend growth (cost of revenue plus operating expenses) | (2.5)% - (1.5)% |
Non-GAAP spend growth (cost of revenue plus operating expenses) (4) | 1 - 2% |
EPS GAAP | $(0.59) - $(0.51) |
EPS non-GAAP (5) | $0.87 - $0.95 |
Net subscription additions | 500k - 550k |
Total ARR growth | 28% - 30% |
• | We do not conduct foreign currency 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 currency exchange rate 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 in our hedging program include the euro, yen, Swiss franc, British pound, Canadian dollar, and Australian dollar. The euro is the primary exposure for the company. |
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, CEO transition costs, restructuring (benefits) charges and other facility exit costs, amortization of developed technology, amortization of purchased intangibles, gain and loss on strategic investments and dispositions, 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 July 31, | Six Months Ended July 31, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(Unaudited) | (Unaudited) | ||||||||||||||
GAAP cost of subscription and maintenance revenue | $ | 54.1 | $ | 52.8 | $ | 104.5 | $ | 107.7 | |||||||
Stock-based compensation expense | (3.1 | ) | (2.8 | ) | (5.8 | ) | (5.6 | ) | |||||||
Non-GAAP cost of subscription and maintenance revenue | $ | 51.0 | $ | 50.0 | $ | 98.7 | $ | 102.1 | |||||||
GAAP cost of other revenue | $ | 12.3 | $ | 17.8 | $ | 25.1 | $ | 36.4 | |||||||
Stock-based compensation expense | (0.9 | ) | (1.0 | ) | (1.7 | ) | (2.1 | ) | |||||||
Non-GAAP cost of other revenue | $ | 11.4 | $ | 16.8 | $ | 23.4 | $ | 34.3 | |||||||
GAAP amortization of developed technology | $ | 3.4 | $ | 4.0 | $ | 7.0 | $ | 8.7 | |||||||
Amortization of developed technology | (3.4 | ) | (4.0 | ) | (7.0 | ) | (8.7 | ) | |||||||
Non-GAAP amortization of developed technology | $ | — | $ | — | $ | — | $ | — | |||||||
GAAP gross profit | $ | 541.9 | $ | 427.2 | $ | 1,035.0 | $ | 834.7 | |||||||
Stock-based compensation expense | 4.0 | 3.8 | 7.5 | 7.7 | |||||||||||
Amortization of developed technology | 3.4 | 4.0 | 7.0 | 8.7 | |||||||||||
Non-GAAP gross profit | $ | 549.3 | $ | 435.0 | $ | 1,049.5 | $ | 851.1 | |||||||
GAAP marketing and sales | $ | 289.1 | $ | 257.6 | $ | 565.5 | $ | 513.3 | |||||||
Stock-based compensation expense | (25.9 | ) | (26.0 | ) | (49.9 | ) | (52.4 | ) | |||||||
Non-GAAP marketing and sales | $ | 263.2 | $ | 231.6 | $ | 515.6 | $ | 460.9 | |||||||
GAAP research and development | $ | 180.8 | $ | 193.8 | $ | 353.6 | $ | 381.5 | |||||||
Stock-based compensation expense | (18.7 | ) | (20.4 | ) | (36.5 | ) | (41.6 | ) | |||||||
Non-GAAP research and development | $ | 162.1 | $ | 173.4 | $ | 317.1 | $ | 339.9 |
GAAP general and administrative | $ | 79.1 | $ | 78.0 | $ | 152.0 | $ | 156.3 | |||||||
Stock-based compensation expense | (8.3 | ) | (8.6 | ) | (17.4 | ) | (16.1 | ) | |||||||
CEO transition costs (1) | 0.1 | (10.6 | ) | 0.1 | (21.6 | ) | |||||||||
Acquisition related costs | (2.5 | ) | — | (2.5 | ) | — | |||||||||
Non-GAAP general and administrative | $ | 68.4 | $ | 58.8 | $ | 132.2 | $ | 118.6 | |||||||
GAAP amortization of purchased intangibles | $ | 3.8 | $ | 4.9 | $ | 7.6 | $ | 10.6 | |||||||
Amortization of purchased intangibles | (3.8 | ) | (4.9 | ) | (7.6 | ) | (10.6 | ) | |||||||
Non-GAAP amortization of purchased intangibles | $ | — | $ | — | $ | — | $ | — | |||||||
GAAP restructuring and other exit costs, net | $ | 13.8 | $ | 0.5 | $ | 36.3 | $ | 0.2 | |||||||
Restructuring and other exit costs, net | (13.8 | ) | (0.5 | ) | (36.3 | ) | (0.2 | ) | |||||||
Non-GAAP restructuring and other exit costs, net | $ | — | $ | — | $ | — | $ | — | |||||||
GAAP operating expenses | $ | 566.6 | $ | 534.8 | $ | 1,115.0 | $ | 1,061.9 | |||||||
Stock-based compensation expense | (52.9 | ) | (55.0 | ) | (103.8 | ) | (110.1 | ) | |||||||
Amortization of purchased intangibles | (3.8 | ) | (4.9 | ) | (7.6 | ) | (10.6 | ) | |||||||
CEO transition costs (1) | 0.1 | (10.6 | ) | 0.1 | (21.6 | ) | |||||||||
Acquisition related costs | (2.5 | ) | — | (2.5 | ) | — | |||||||||
Restructuring and other exit costs, net | (13.8 | ) | (0.5 | ) | (36.3 | ) | (0.2 | ) | |||||||
Non-GAAP operating expenses | $ | 493.7 | $ | 463.8 | $ | 964.9 | $ | 919.4 | |||||||
GAAP spend | $ | 636.4 | $ | 609.4 | $ | 1,251.6 | $ | 1,214.7 | |||||||
Stock-based compensation expense | (56.9 | ) | (58.8 | ) | (111.3 | ) | (117.8 | ) | |||||||
Amortization of developed technology | (3.4 | ) | (4.0 | ) | (7.0 | ) | (8.7 | ) | |||||||
Amortization of purchased intangibles | (3.8 | ) | (4.9 | ) | (7.6 | ) | (10.6 | ) | |||||||
CEO transition costs (1) | 0.1 | (10.6 | ) | 0.1 | (21.6 | ) | |||||||||
Acquisition related costs | (2.5 | ) | — | (2.5 | ) | — | |||||||||
Restructuring and other exit costs, net | (13.8 | ) | (0.5 | ) | (36.3 | ) | (0.2 | ) | |||||||
Non-GAAP spend | $ | 556.1 | $ | 530.6 | $ | 1,087.0 | $ | 1,055.8 | |||||||
Non-GAAP Y/Y spend growth | 4.8 | % | |||||||||||||
Foreign currency exchange impact | (1.1 | )% | |||||||||||||
ASC 340 impact | (2.0 | )% | |||||||||||||
Non-GAAP Y/Y spend growth excluding ASC 340 in constant currency | 1.7 | % | |||||||||||||
GAAP loss from operations | $ | (24.7 | ) | $ | (107.6 | ) | $ | (80.0 | ) | $ | (227.2 | ) | |||
Stock-based compensation expense | 56.9 | 58.8 | 111.3 | 117.8 | |||||||||||
Amortization of developed technology | 3.4 | 4.0 | 7.0 | 8.7 | |||||||||||
Amortization of purchased intangibles | 3.8 | 4.9 | 7.6 | 10.6 | |||||||||||
CEO transition costs (1) | (0.1 | ) | 10.6 | (0.1 | ) | 21.6 | |||||||||
Acquisition related costs | 2.5 | — | 2.5 | — | |||||||||||
Restructuring and other exit costs, net | 13.8 | 0.5 | 36.3 | 0.2 | |||||||||||
Non-GAAP income (loss) from operations | $ | 55.6 | $ | (28.8 | ) | $ | 84.6 | $ | (68.3 | ) | |||||
GAAP interest and other income (expense), net | $ | 1.3 | $ | (18.8 | ) | $ | (7.2 | ) | $ | (20.6 | ) | ||||
(Gain) loss on strategic investments and dispositions, net | (3.9 | ) | 13.5 | (6.6 | ) | 7.8 | |||||||||
Restructuring and other exit costs, net | $ | 0.3 | $ | — | $ | 0.3 | $ | — |
Non-GAAP interest and other expense, net | $ | (2.3 | ) | $ | (5.3 | ) | $ | (13.5 | ) | $ | (12.8 | ) | |||
GAAP provision for income taxes | $ | (16.0 | ) | $ | (17.6 | ) | $ | (34.6 | ) | $ | (25.8 | ) | |||
Discrete GAAP tax items | (8.7 | ) | (0.1 | ) | (8.7 | ) | (7.7 | ) | |||||||
Income tax effect of non-GAAP adjustments | 14.6 | 26.6 | 29.8 | 54.6 | |||||||||||
Non-GAAP (provision) benefit for income tax | $ | (10.1 | ) | $ | 8.9 | $ | (13.5 | ) | $ | 21.1 | |||||
GAAP net loss | $ | (39.4 | ) | $ | (144.0 | ) | $ | (121.8 | ) | $ | (273.6 | ) | |||
Stock-based compensation expense | 56.9 | 58.8 | 111.3 | 117.8 | |||||||||||
Amortization of developed technology | 3.4 | 4.0 | 7.0 | 8.7 | |||||||||||
Amortization of purchased intangibles | 3.8 | 4.9 | 7.6 | 10.6 | |||||||||||
CEO transition costs (1) | (0.1 | ) | 10.6 | (0.1 | ) | 21.6 | |||||||||
Acquisition related costs | 2.5 | — | 2.5 | — | |||||||||||
Restructuring and other exit costs, net | 14.1 | 0.5 | 36.6 | 0.2 | |||||||||||
Gain (loss) on strategic investments and dispositions, net | (3.9 | ) | 13.5 | (6.6 | ) | 7.8 | |||||||||
Discrete GAAP tax items | (8.7 | ) | (0.1 | ) | (8.7 | ) | (7.7 | ) | |||||||
Establishment of valuation allowance on deferred tax assets | — | — | — | — | |||||||||||
Income tax effect of non-GAAP adjustments | $ | 14.6 | $ | 26.6 | $ | 29.8 | $ | 54.6 | |||||||
Non-GAAP net income (loss) | 43.2 | (25.2 | ) | 57.6 | (60.0 | ) | |||||||||
GAAP diluted net loss per share (2) | $ | (0.18 | ) | $ | (0.66 | ) | $ | (0.56 | ) | $ | (1.25 | ) | |||
Stock-based compensation expense | 0.26 | 0.27 | 0.51 | 0.54 | |||||||||||
Amortization of developed technology | 0.02 | 0.02 | 0.04 | 0.04 | |||||||||||
Amortization of purchased intangibles | 0.01 | 0.02 | 0.03 | 0.05 | |||||||||||
CEO transition costs (1) | — | 0.05 | — | 0.09 | |||||||||||
Acquisition related costs | 0.01 | — | 0.01 | — | |||||||||||
Restructuring and other exit costs, net | 0.06 | — | 0.16 | — | |||||||||||
(Gain) loss on strategic investments and dispositions, net | (0.02 | ) | 0.07 | (0.03 | ) | 0.04 | |||||||||
Discrete GAAP tax items | (0.04 | ) | — | (0.04 | ) | (0.03 | ) | ||||||||
Establishment of valuation allowance on deferred tax assets | — | — | — | — | |||||||||||
Income tax effect of non-GAAP adjustments | 0.07 | 0.12 | 0.14 | 0.25 | |||||||||||
Non-GAAP diluted net income (loss) per share (2) | $ | 0.19 | $ | (0.11 | ) | $ | 0.26 | $ | (0.27 | ) | |||||
GAAP diluted shares used in per share calculation | 219.0 | 219.5 | 218.8 | 219.7 | |||||||||||
Shares included in non-GAAP net income per share, but excluded from GAAP net loss per share as they would have been anti-dilutive | 3.2 | — | 3.2 | — | |||||||||||
Non-GAAP diluted weighted average shares used in per share calculation | 222.2 | 219.5 | 222.0 | 219.7 |
(1) | CEO transition costs include stock-based compensation of $7.8 million related to the acceleration of eligible stock awards in the three months ended April 30, 2017. CEO transition costs also include severance payments, legal fees incurred with the CEO transition and recruiting costs related to the search for a new CEO. |
(2) | Net income (loss) per share was computed independently for each of the periods presented; therefore the sum of the net loss per share amount for the quarters may not equal the total for the year. |
Q2 FY18 | Q3 FY18 | Q4 FY18 | Q1 FY19 | Q2 FY19 | |||||||||||||||
(Unaudited) | |||||||||||||||||||
GAAP gross margin | 85 | % | 85 | % | 87 | % | 88 | % | 89 | % | |||||||||
Stock-based compensation expense | 1 | % | 1 | % | 1 | % | 1 | % | 1 | % | |||||||||
Amortization of developed technology | 1 | % | 1 | % | 1 | % | 1 | % | 1 | % | |||||||||
Non-GAAP gross margin (2) | 87 | % | 86 | % | 88 | % | 89 | % | 90 | % | |||||||||
GAAP operating expenses | $ | 535 | $ | 538 | $ | 663 | $ | 548 | $ | 567 | |||||||||
Stock-based compensation expense | (55 | ) | (61 | ) | (58 | ) | (51 | ) | (53 | ) | |||||||||
Amortization of purchased intangibles | (5 | ) | (5 | ) | (5 | ) | (4 | ) | (4 | ) | |||||||||
CEO transition costs (1) | (11 | ) | — | — | — | — | |||||||||||||
Acquisition related costs | — | — | — | — | (3 | ) | |||||||||||||
Restructuring and other exit costs, net | (1 | ) | — | (94 | ) | (23 | ) | (14 | ) | ||||||||||
Non-GAAP operating expenses | $ | 464 | $ | 472 | $ | 506 | $ | 471 | $ | 494 | |||||||||
GAAP spend | $ | 609 | $ | 615 | $ | 736 | $ | 615 | $ | 636 | |||||||||
Stock-based compensation expense | (59 | ) | (65 | ) | (62 | ) | (54 | ) | (57 | ) | |||||||||
Amortization of developed technology | (4 | ) | (4 | ) | (4 | ) | (4 | ) | (3 | ) | |||||||||
Amortization of purchased intangibles | (5 | ) | (5 | ) | (5 | ) | (4 | ) | (4 | ) | |||||||||
CEO transition costs (1) | (11 | ) | — | — | — | — | |||||||||||||
Acquisition related costs | — | — | — | — | (3 | ) | |||||||||||||
Restructuring and other exit costs, net | (1 | ) | — | (94 | ) | (23 | ) | (14 | ) | ||||||||||
Non-GAAP spend | $ | 531 | $ | 542 | $ | 571 | $ | 531 | $ | 556 | |||||||||
GAAP operating margin | (21 | )% | (19 | )% | (33 | )% | (10 | )% | (4 | )% | |||||||||
Stock-based compensation expense | 12 | % | 13 | % | 11 | % | 10 | % | 9 | % | |||||||||
Amortization of developed technology | 1 | % | 1 | % | 1 | % | 1 | % | 1 | % | |||||||||
Amortization of purchased intangibles | 1 | % | 1 | % | 1 | % | 1 | % | 1 | % | |||||||||
CEO transition costs (1) | 2 | % | — | % | — | % | — | % | — | % | |||||||||
Acquisition related costs | — | % | — | % | — | % | — | % | — | % | |||||||||
Restructuring and other exit costs, net | — | % | — | % | 17 | % | 4 | % | 2 | % | |||||||||
Non-GAAP operating margin (2) | (6 | )% | (5 | )% | (3 | )% | 5 | % | 9 | % | |||||||||
GAAP basic and diluted net loss per share | $ | (0.66 | ) | $ | (0.55 | ) | $ | (0.79 | ) | $ | (0.38 | ) | $ | (0.18 | ) | ||||
Stock-based compensation expense | 0.27 | 0.30 | 0.28 | 0.25 | 0.26 | ||||||||||||||
Amortization of developed technology | 0.02 | 0.02 | 0.02 | 0.02 | 0.02 | ||||||||||||||
Amortization of purchased intangibles | 0.02 | 0.02 | 0.02 | 0.02 | 0.01 | ||||||||||||||
CEO transition costs (1) | 0.05 | — | — | — | — | ||||||||||||||
Acquisition related costs | — | — | — | — | 0.01 | ||||||||||||||
Restructuring and other exit costs, net | — | — | 0.43 | 0.09 | 0.06 | ||||||||||||||
Gain on strategic investments and dispositions | 0.07 | 0.01 | 0.03 | (0.01 | ) | (0.02 | ) | ||||||||||||
Discrete GAAP tax provision items | — | (0.01 | ) | (0.05 | ) | — | (0.04 | ) | |||||||||||
Establishment of valuation allowance on deferred tax assets | — | — | — | — | — | ||||||||||||||
Income tax effect of non-GAAP adjustments | 0.12 | 0.09 | (0.03 | ) | 0.07 | 0.07 | |||||||||||||
Non-GAAP basic and diluted net (loss) income per share | $ | (0.11 | ) | $ | (0.12 | ) | $ | (0.09 | ) | $ | 0.06 | $ | 0.19 | ||||||
GAAP diluted weighted average shares used in per share calculation | 219.5 | 219.6 | 219.1 | 218.6 | 219.0 | ||||||||||||||
Shares included in non-GAAP net income per share, but excluded from GAAP net loss per share as they would have been anti-dilutive | — | — | — | 3.0 | 3.2 | ||||||||||||||
Non-GAAP diluted weighted average shares used in per share calculation | 219.5 | 219.6 | 219.1 | 221.6 | 222.2 |
(1) | CEO transition costs include stock-based compensation of $16.4 million related to the acceleration of eligible stock awards during the fiscal year ended January 31, 2018. CEO transition costs also include severance payments, legal fees incurred with the CEO transition and recruiting costs related to the search for a new CEO. |
(2) | Totals may not sum due to rounding. |