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 |
• | Total ARR was $2.75 billion, an increase of 34 percent compared to the fourth quarter last year as reported, and 32 percent on a constant currency basis. Included in total ARR is a $27 million contribution from the fourth quarter acquisitions, or 1 percentage point of the increase. Under the prior revenue accounting standard, ASC 605, total ARR was $2.72 billion, an increase of 32 percent compared to the fourth quarter last year. |
• | Subscription plan ARR was $2.20 billion, an increase of 87 percent compared to the fourth quarter last year as reported, and 85 percent on a constant currency basis. Included in subscription plan ARR is a $27 million contribution from the fourth quarter acquisitions, or 2 percentage points of the increase. Under ASC 605, subscription plan ARR was $2.16 billion, an increase of 84 percent compared to the fourth quarter last year. |
• | Total subscriptions increased 252,000 from the third quarter of fiscal 2019 to 4.33 million at the end of the fourth quarter. Included in subscription additions this quarter is a 127,000 contribution from the fourth quarter acquisitions. |
• | Subscription plan subscriptions increased 418,000 from the third quarter of fiscal 2019 to 3.53 million at the end of the fourth quarter. Subscription plan subscriptions benefited from 110,000 maintenance subscribers that converted to product subscription under the maintenance-to-subscription program. Included in subscription plan subscriptions is a 127,000 contribution from the fourth quarter acquisitions. |
• | Deferred revenue was $2.09 billion, an increase of 7 percent compared to the fourth quarter last year. Total deferred revenue (deferred revenue plus unbilled deferred revenue) was $2.68 billion, an increase of approximately 18 percent compared to the fourth quarter last year. Included in deferred revenue was a $36 million contribution from the fourth quarter acquisitions, or 2 percentage points of the year-over-year increase. Included in total deferred revenue was a $97 million contribution from the fourth quarter acquisitions, or 4 percentage points of the year-over-year increase. Under ASC 605, total deferred |
• | Revenue was $737 million, an increase of 33 percent compared to the fourth quarter last year as reported, and 31 percent on a constant currency basis. Included in revenue was a $7 million contribution from the fourth quarter acquisitions, or 1 percentage point of the increase. Under ASC 605, revenue was $713 million, an increase of 29 percent compared to the fourth quarter last year. |
• | Billings were $1.04 billion, an increase of 39 percent compared to the fourth quarter last year. Billings includes $43 million from the fourth quarter acquisitions, accounting for 6 percentage points of the increase. Under ASC 605, billings were $1.05 billion, an increase of 41 percent compared to the fourth quarter last year. |
• | Total GAAP spend (cost of revenue plus operating expenses) was $697 million, a decrease of 5 percent compared to the fourth quarter last year. Absent ASC 340, total GAAP spend was $710 million, a decrease of 3 percent compared to the fourth quarter last year. |
• | Total non-GAAP spend was $598 million, an increase of 5 percent compared to the fourth quarter last year. A reconciliation of GAAP to non-GAAP results is provided in the accompanying tables. Absent ASC 340, total non-GAAP spend was $611 million, an increase of 7 percent compared to the fourth quarter last year. |
• | GAAP diluted net income per share was $0.29, compared to GAAP diluted net loss per share of $(0.79) in the fourth quarter last year. |
• | Non-GAAP diluted net income per share was $0.46, compared to non-GAAP diluted net loss per share of $(0.09) in the fourth quarter last year. |
• | Cash flow from operating activities was $312 million, an increase of $232 million compared to the fourth quarter last year. Free cash flow was $294 million, an increase of $226 million compared to the fourth quarter last year. |
• | Total ARR increased 34 percent as reported, and 32 percent on a constant currency basis. |
◦ | Included in total ARR is a $27 million contribution from the fourth quarter acquisitions, or 1 percentage point of the increase. |
• | Total ARPS increased 15 percent to $635. |
◦ | Included in total ARPS is the negative impact of $13 from the fourth quarter acquisitions, or negative 2 percentage points of the increase. |
• | Billings increased 22 percent to $2.71 billion. |
◦ | Billings includes a $43 million contribution from the fourth quarter acquisitions, or 2 percentage points of the increase. |
• | Total revenue increased 25 percent to a record $2.57 billion. |
◦ | Total revenue includes a $7 million contribution from the fourth quarter acquisitions, and had no impact on the growth percentage. |
• | Migrated 452,000 maintenance customers to subscription. |
• | Reached milestone of over 4 million active subscriptions. |
• | Total deferred revenue increased 18 percent to $2.68 billion. |
◦ | Total deferred revenue includes a $97 million contribution from the fourth quarter acquisitions, or 4 percentage points of the increase. |
• | Free cash flow increased to $310 million, compared to $(50) million in fiscal 2018. |
• | Recurring revenue increased to 95 percent, compared to 92 percent at the end of fiscal 2018. |
Q1 FY20 Guidance Metrics | Q1 FY20 (ending April 30, 2019) |
Revenue (in millions) | $735 - $745 |
EPS GAAP | $0.06 - $0.10 |
EPS non-GAAP (1) | $0.44 - $0.48 |
FY20 Guidance Metrics | FY20 (ending January 31, 2020) |
Total ARR (in millions) | $3,500 - $3,550 Up 27% - 29% |
Billings (in millions) | $4,050 - $4,150 Up 50% - 53% |
Revenue (in millions) (1) | $3,250 - $3,300 Up 26% - 28% |
GAAP spend growth (cost of revenue + operating expenses) | Approx. 10% |
Non-GAAP spend growth (cost of revenue + operating expenses) (2) | Approx. 9% |
EPS GAAP | $1.12 - $1.31 |
EPS non-GAAP (3) | $2.71 - $2.90 |
Free cash flow | Approx. $1.35 billion |
Autodesk, Inc. | |||||||||||||||
Condensed Consolidated Statements of Operations | |||||||||||||||
(In millions, except per share data) | |||||||||||||||
Three Months Ended January 31, | Fiscal Year Ended January 31, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
(Unaudited) | |||||||||||||||
Net revenue: | |||||||||||||||
Subscription | $ | 550.0 | $ | 293.7 | $ | 1,802.3 | $ | 894.3 | |||||||
Maintenance | 137.4 | 219.8 | 635.1 | 989.6 | |||||||||||
Total subscription and maintenance revenue | 687.4 | 513.5 | 2,437.4 | 1,883.9 | |||||||||||
Other | 49.9 | 40.3 | 132.4 | 172.7 | |||||||||||
Total net revenue | 737.3 | 553.8 | 2,569.8 | 2,056.6 | |||||||||||
Cost of revenue: | |||||||||||||||
Cost of subscription and maintenance revenue | 56.7 | 52.8 | 216.0 | 214.4 | |||||||||||
Cost of other revenue | 15.4 | 16.6 | 54.4 | 72.6 | |||||||||||
Amortization of developed technology | 4.9 | 3.7 | 15.5 | 16.4 | |||||||||||
Total cost of revenue | 77.0 | 73.1 | 285.9 | 303.4 | |||||||||||
Gross profit | 660.3 | 480.7 | 2,283.9 | 1,753.2 | |||||||||||
Operating expenses: | |||||||||||||||
Marketing and sales | 320.8 | 301.5 | 1,183.9 | 1,087.3 | |||||||||||
Research and development | 190.4 | 182.2 | 725.0 | 755.5 | |||||||||||
General and administrative | 100.7 | 80.1 | 340.1 | 305.2 | |||||||||||
Amortization of purchased intangibles | 6.2 | 4.9 | 18.0 | 20.2 | |||||||||||
Restructuring and other exit costs, net | 1.9 | 93.9 | 41.9 | 94.1 | |||||||||||
Total operating expenses | 620.0 | 662.6 | 2,308.9 | 2,262.3 | |||||||||||
Income (loss) from operations | 40.3 | (181.9 | ) | (25.0 | ) | (509.1 | ) | ||||||||
Interest and other expense, net | (7.3 | ) | (16.4 | ) | (17.7 | ) | (48.2 | ) | |||||||
Income (loss) before income taxes | 33.0 | (198.3 | ) | (42.7 | ) | (557.3 | ) | ||||||||
Benefit (provision) for income taxes | 31.7 | 24.8 | (38.1 | ) | (9.6 | ) | |||||||||
Net income (loss) | $ | 64.7 | $ | (173.5 | ) | $ | (80.8 | ) | $ | (566.9 | ) | ||||
Basic net income (loss) per share | $ | 0.30 | $ | (0.79 | ) | $ | (0.37 | ) | $ | (2.58 | ) | ||||
Diluted net income (loss) per share | $ | 0.29 | $ | (0.79 | ) | $ | (0.37 | ) | $ | (2.58 | ) | ||||
Weighted average shares used in computing basic net income (loss) per share | 219.2 | 219.1 | 218.9 | 219.5 | |||||||||||
Weighted average shares used in computing diluted net income (loss) per share | 221.3 | 219.1 | 218.9 | 219.5 |
Autodesk, Inc. | |||||||
Condensed Consolidated Balance Sheets | |||||||
(In millions) | |||||||
January 31, 2019 | January 31, 2018 | ||||||
(Unaudited) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 886.0 | $ | 1,078.0 | |||
Marketable securities | 67.6 | 245.2 | |||||
Accounts receivable, net | 474.3 | 438.2 | |||||
Prepaid expenses and other current assets | 192.1 | 116.5 | |||||
Total current assets | 1,620.0 | 1,877.9 | |||||
Marketable securities | — | 190.8 | |||||
Computer equipment, software, furniture, and leasehold improvements, net | 149.7 | 145.0 | |||||
Developed technologies, net | 105.6 | 27.1 | |||||
Goodwill | 2,450.8 | 1,620.2 | |||||
Deferred income taxes, net | 65.3 | 81.7 | |||||
Other assets | 337.8 | 170.9 | |||||
Total assets | $ | 4,729.2 | $ | 4,113.6 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 101.6 | $ | 94.7 | |||
Accrued compensation | 280.8 | 250.9 | |||||
Accrued income taxes | 13.2 | 28.0 | |||||
Deferred revenue | 1,763.3 | 1,551.6 | |||||
Other accrued liabilities | 142.3 | 198.0 | |||||
Total current liabilities | 2,301.2 | 2,123.2 | |||||
Long-term deferred revenue | 328.1 | 403.5 | |||||
Long-term income taxes payable | 21.5 | 41.6 | |||||
Long-term deferred income taxes | 79.8 | 66.6 | |||||
Long-term notes payable, net | 2,087.7 | 1,586.0 | |||||
Other liabilities | 121.8 | 148.7 | |||||
Stockholders’ deficit: | |||||||
Common stock and additional paid-in capital | 2,071.5 | 1,952.7 | |||||
Accumulated other comprehensive loss | (135.0 | ) | (123.8 | ) | |||
Accumulated deficit | (2,147.4 | ) | (2,084.9 | ) | |||
Total stockholders’ deficit | (210.9 | ) | (256.0 | ) | |||
Total liabilities and stockholders' deficit | $ | 4,729.2 | $ | 4,113.6 |
Autodesk, Inc. | |||||||
Condensed Consolidated Statements of Cash Flows | |||||||
(In millions) | |||||||
Fiscal Year Ended January 31, | |||||||
2019 | 2018 | ||||||
(Unaudited) | |||||||
Operating activities: | |||||||
Net loss | $ | (80.8 | ) | $ | (566.9 | ) | |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||
Depreciation, amortization and accretion | 95.2 | 108.4 | |||||
Stock-based compensation expense | 249.5 | 261.4 | |||||
Deferred income taxes | (6.8 | ) | (39.1 | ) | |||
Restructuring and other exit costs, net | 31.7 | 94.1 | |||||
Other operating activities | 2.2 | 7.3 | |||||
Changes in operating assets and liabilities, net of acquisitions: | |||||||
Accounts receivable | (25.4 | ) | 13.3 | ||||
Prepaid expenses and other current assets | 7.5 | (9.9 | ) | ||||
Accounts payable and accrued liabilities | (58.5 | ) | (13.9 | ) | |||
Deferred revenue | 197.0 | 168.3 | |||||
Accrued income taxes | (34.5 | ) | (22.1 | ) | |||
Net cash provided by operating activities | 377.1 | 0.9 | |||||
Investing activities: | |||||||
Purchases of marketable securities | (138.2 | ) | (514.0 | ) | |||
Sales of marketable securities | 319.6 | 489.0 | |||||
Maturities of marketable securities | 211.4 | 594.3 | |||||
Acquisitions, net of cash acquired | (1,040.2 | ) | — | ||||
Capital Expenditures | (67.0 | ) | (50.7 | ) | |||
Other investing activities | 4.0 | (12.2 | ) | ||||
Net cash (used in) provided by investing activities | (710.4 | ) | 506.4 | ||||
Financing activities: | |||||||
Proceeds from issuance of common stock, net of issuance costs | 90.9 | 94.4 | |||||
Taxes paid related to net share settlement of equity awards | (143.4 | ) | (143.1 | ) | |||
Repurchase and retirement of common stock | (293.5 | ) | (699.0 | ) | |||
Proceeds from debt, net of discount | 500.0 | 496.9 | |||||
Repayment of debt | — | (400.0 | ) | ||||
Other financing activities | (2.1 | ) | (5.8 | ) | |||
Net cash provided by (used in) financing activities | 151.9 | (656.6 | ) | ||||
Effect of exchange rate changes on cash and cash equivalents | (10.6 | ) | 14.2 | ||||
Net decrease in cash and cash equivalents | (192.0 | ) | (135.1 | ) | |||
Cash and cash equivalents at beginning of the period | 1,078.0 | 1,213.1 | |||||
Cash and cash equivalents at end of the period | $ | 886.0 | $ | 1,078.0 |
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 (loss), non-GAAP net income (loss) per share, non-GAAP diluted shares used in per share calculation and free cash flow. These non-GAAP financial measures are adjusted to exclude certain costs, expenses, gains and losses, including stock-based compensation expense, CEO transition costs, restructuring charges and other facility exit costs, acquisition related 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 January 31, | Fiscal Year Ended January 31, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
(Unaudited) | (Unaudited) | ||||||||||||||
GAAP cost of maintenance and subscription revenue | $ | 56.7 | $ | 52.8 | $ | 216.0 | $ | 214.4 | |||||||
Stock-based compensation expense | (3.7 | ) | (3.4 | ) | (13.1 | ) | (11.9 | ) | |||||||
Non-GAAP cost of maintenance and subscription revenue | $ | 53.0 | $ | 49.4 | $ | 202.9 | $ | 202.5 | |||||||
GAAP cost of license and other revenue | $ | 15.4 | $ | 16.6 | $ | 54.4 | $ | 72.6 | |||||||
Stock-based compensation expense | (1.5 | ) | (0.9 | ) | (4.5 | ) | (4.0 | ) | |||||||
Non-GAAP cost of license and other revenue | $ | 13.9 | $ | 15.7 | $ | 49.9 | $ | 68.6 | |||||||
GAAP amortization of developed technology | $ | 4.9 | $ | 3.7 | $ | 15.5 | $ | 16.4 | |||||||
Amortization of developed technology | (4.9 | ) | (3.7 | ) | (15.5 | ) | (16.4 | ) | |||||||
Non-GAAP amortization of developed technology | $ | — | $ | — | $ | — | $ | — | |||||||
GAAP gross profit | $ | 660.3 | $ | 480.7 | $ | 2,283.9 | $ | 1,753.2 | |||||||
Stock-based compensation expense | 5.2 | 4.3 | 17.6 | 15.9 | |||||||||||
Amortization of developed technology | 4.9 | 3.7 | 15.5 | 16.4 | |||||||||||
Non-GAAP gross profit | $ | 670.4 | $ | 488.7 | $ | 2,317.0 | $ | 1,785.5 | |||||||
GAAP marketing and sales | $ | 320.8 | $ | 301.5 | $ | 1,183.9 | $ | 1,087.3 | |||||||
Stock-based compensation expense | (31.7 | ) | (27.2 | ) | (109.4 | ) | (107.3 | ) | |||||||
Non-GAAP marketing and sales | $ | 289.1 | $ | 274.3 | $ | 1,074.5 | $ | 980.0 |
GAAP research and development | $ | 190.4 | $ | 182.2 | $ | 725.0 | $ | 755.5 | |||||||
Stock-based compensation expense | (25.4 | ) | (21.2 | ) | (82.5 | ) | (82.9 | ) | |||||||
Non-GAAP research and development | $ | 165.0 | $ | 161.0 | $ | 642.5 | $ | 672.6 | |||||||
GAAP general and administrative | $ | 100.7 | $ | 80.1 | $ | 340.1 | $ | 305.2 | |||||||
Stock-based compensation expense | (11.7 | ) | (9.4 | ) | (40.0 | ) | (38.9 | ) | |||||||
CEO transition costs (1) | — | 0.2 | 0.1 | (21.4 | ) | ||||||||||
Acquisition related costs | (11.9 | ) | — | (16.2 | ) | — | |||||||||
Non-GAAP general and administrative | $ | 77.1 | $ | 70.9 | $ | 284.0 | $ | 244.9 | |||||||
GAAP amortization of purchased intangibles | $ | 6.2 | $ | 4.9 | $ | 18.0 | $ | 20.2 | |||||||
Amortization of purchased intangibles | (6.2 | ) | (4.9 | ) | (18.0 | ) | (20.2 | ) | |||||||
Non-GAAP amortization of purchased intangibles | $ | — | $ | — | $ | — | $ | — | |||||||
GAAP restructuring and other exit costs, net | $ | 1.9 | $ | 93.9 | $ | 41.9 | $ | 94.1 | |||||||
Restructuring and other exit costs, net | (1.9 | ) | (93.9 | ) | (41.9 | ) | (94.1 | ) | |||||||
Non-GAAP restructuring and other exit costs, net | $ | — | $ | — | $ | — | $ | — | |||||||
GAAP operating expenses | $ | 620.0 | $ | 662.6 | $ | 2,308.9 | $ | 2,262.3 | |||||||
Stock-based compensation expense | (68.8 | ) | (57.8 | ) | (231.9 | ) | (229.1 | ) | |||||||
Amortization of purchased intangibles | (6.2 | ) | (4.9 | ) | (18.0 | ) | (20.2 | ) | |||||||
CEO transition costs (1) | — | 0.2 | 0.1 | (21.4 | ) | ||||||||||
Acquisition related costs | (11.9 | ) | — | (16.2 | ) | — | |||||||||
Restructuring and other exit costs, net | (1.9 | ) | (93.9 | ) | (41.9 | ) | (94.1 | ) | |||||||
Non-GAAP operating expenses | $ | 531.2 | $ | 506.2 | $ | 2,001.0 | $ | 1,897.5 | |||||||
GAAP Spend | $ | 697.0 | $ | 735.7 | $ | 2,594.8 | $ | 2,565.7 | |||||||
Stock-based compensation expense | (74.0 | ) | (62.1 | ) | (249.5 | ) | (245.0 | ) | |||||||
Amortization of developed technology | (4.9 | ) | (3.7 | ) | (15.5 | ) | (16.4 | ) | |||||||
Amortization of purchased intangibles | (6.2 | ) | (4.9 | ) | (18.0 | ) | (20.2 | ) | |||||||
CEO transition costs (1) | — | 0.2 | 0.1 | (21.4 | ) | ||||||||||
Acquisition related costs | (11.9 | ) | — | (16.2 | ) | — | |||||||||
Restructuring and other exit costs, net | (1.9 | ) | (93.9 | ) | (41.9 | ) | (94.1 | ) | |||||||
Non-GAAP Spend | $ | 598.1 | $ | 571.3 | $ | 2,253.8 | $ | 2,168.6 | |||||||
GAAP income (loss) from operations | $ | 40.3 | $ | (181.9 | ) | $ | (25.0 | ) | $ | (509.1 | ) | ||||
Stock-based compensation expense | 74.0 | 62.1 | 249.5 | 245.0 | |||||||||||
Amortization of developed technology | 4.9 | 3.7 | 15.5 | 16.4 | |||||||||||
Amortization of purchased intangibles | 6.2 | 4.9 | 18.0 | 20.2 | |||||||||||
CEO transition costs (1) | — | (0.2 | ) | (0.1 | ) | 21.4 | |||||||||
Acquisition related costs | 11.9 | — | 16.2 | — | |||||||||||
Restructuring and other exit costs, net | 1.9 | 93.9 | 41.9 | 94.1 | |||||||||||
Non-GAAP income (loss) from operations | $ | 139.2 | $ | (17.5 | ) | $ | 316.0 | $ | (112.0 | ) | |||||
GAAP interest and other expense, net | $ | (7.3 | ) | $ | (16.4 | ) | $ | (17.7 | ) | $ | (48.2 | ) | |||
(Gain) loss on strategic investments and dispositions | (3.0 | ) | 7.0 | (12.5 | ) | 16.5 | |||||||||
Restructuring and other exit costs, net | (4.7 | ) | — | (10.2 | ) | — | |||||||||
Non-GAAP interest and other expense, net | $ | (15.0 | ) | $ | (9.4 | ) | $ | (40.4 | ) | $ | (31.7 | ) |
GAAP benefit (provision) for income taxes | $ | 31.7 | $ | 24.8 | $ | (38.1 | ) | $ | (9.6 | ) | |||||
Discrete GAAP tax items | (19.1 | ) | (10.5 | ) | (31.4 | ) | (20.7 | ) | |||||||
Income tax effect of non-GAAP adjustments | (36.1 | ) | (7.3 | ) | 17.2 | 67.7 | |||||||||
Non-GAAP (provision) benefit for income tax | $ | (23.5 | ) | $ | 7.0 | $ | (52.3 | ) | $ | 37.4 | |||||
GAAP net income (loss) | $ | 64.7 | $ | (173.5 | ) | $ | (80.8 | ) | $ | (566.9 | ) | ||||
Stock-based compensation expense | 74.0 | 62.1 | 249.5 | 245.0 | |||||||||||
Amortization of developed technology | 4.9 | 3.7 | 15.5 | 16.4 | |||||||||||
Amortization of purchased intangibles | 6.2 | 4.9 | 18.0 | 20.2 | |||||||||||
CEO transition costs (1) | — | (0.2 | ) | (0.1 | ) | 21.4 | |||||||||
Acquisition related costs | 11.9 | — | 16.2 | — | |||||||||||
Restructuring and other exit costs, net | (2.8 | ) | 93.9 | 31.7 | 94.1 | ||||||||||
(Gain) loss on strategic investments and dispositions | (3.0 | ) | 7.0 | (12.5 | ) | 16.5 | |||||||||
Discrete GAAP tax items | (19.1 | ) | (10.5 | ) | (31.4 | ) | (20.7 | ) | |||||||
Income tax effect of non-GAAP adjustments | (36.1 | ) | (7.3 | ) | 17.2 | 67.7 | |||||||||
Non-GAAP net income (loss) | $ | 100.7 | $ | (19.9 | ) | $ | 223.3 | $ | (106.3 | ) | |||||
GAAP diluted net income (loss) per share (2) | $ | 0.29 | $ | (0.79 | ) | $ | (0.37 | ) | $ | (2.58 | ) | ||||
Stock-based compensation expense | 0.33 | 0.28 | 1.12 | 1.11 | |||||||||||
Amortization of developed technology | 0.02 | 0.02 | 0.08 | 0.08 | |||||||||||
Amortization of purchased intangibles | 0.03 | 0.02 | 0.08 | 0.09 | |||||||||||
CEO transition costs (1) | — | — | — | 0.09 | |||||||||||
Acquisition related costs | 0.05 | — | 0.07 | — | |||||||||||
Restructuring and other exit costs, net | (0.01 | ) | 0.43 | 0.14 | 0.43 | ||||||||||
(Gain) loss on strategic investments and dispositions | (0.01 | ) | 0.03 | (0.05 | ) | 0.08 | |||||||||
Discrete GAAP tax items | (0.08 | ) | (0.05 | ) | (0.14 | ) | (0.09 | ) | |||||||
Income tax effect of non-GAAP adjustments | (0.16 | ) | (0.03 | ) | 0.08 | 0.31 | |||||||||
Non-GAAP diluted net income (loss) per share (2) | $ | 0.46 | $ | (0.09 | ) | $ | 1.01 | $ | (0.48 | ) | |||||
GAAP diluted shares used in per share calculation | 221.3 | 219.1 | 218.9 | 219.5 | |||||||||||
Shares included in non-GAAP net income per share, but excluded from GAAP net loss per share as they would have been anti-dilutive | — | — | 3.1 | — | |||||||||||
Non-GAAP diluted weighted average shares used in per share calculation | 221.3 | 219.1 | 222.0 | 219.5 | |||||||||||
Cash flow from operating activities | $ | 311.5 | $ | 79.3 | $ | 377.1 | $ | 0.9 | |||||||
Capital expenditures | 17.6 | 11.4 | 67.0 | 50.7 | |||||||||||
Free cash flow | $ | 293.9 | $ | 67.9 | $ | 310.1 | $ | (49.8 | ) |
(1) | CEO transition costs include stock-based compensation of ($0.2) million and $16.4 million related to the acceleration of eligible stock awards for the three months and fiscal year ended January 31, 2018, respectively. 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 were 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. |
4Q 2019 under ASC 606 | 4Q 2019 under ASC 605 | Total Y/Y change, as reported (4) | Total Y/Y change under ASC 605 (5) | Management Comments | |||||||
(in millions except per share data) (1) | |||||||||||
Subscription plan ARR (2) | $ | 2,200 | $ | 2,160 | 87 | % | 84 | % | Driven by growth in all subscription plan types, led by product subscriptions. | ||
Maintenance plan ARR | $ | 549 | $ | 559 | (38 | )% | (36 | )% | Reflects the migration of maintenance plan subscriptions to product subscriptions. | ||
Total ARR (2) | $ | 2,749 | $ | 2,719 | 34 | % | 32 | % | |||
Revenue (3) | $ | 737 | $ | 713 | 33 | % | 29 | % | Driven by growth in subscription plan revenue, led by product subscription revenue. | ||
GAAP spend | $ | 697 | $ | 710 | (5 | )% | (4 | )% | Driven by lower restructuring costs. | ||
Non-GAAP spend | $ | 598 | $ | 611 | 5 | % | 7 | % | Driven by employee-related costs. | ||
GAAP diluted net income (loss) per share | $ | 0.29 | $ | 0.06 | 137 | % | 108 | % | |||
Non-GAAP diluted net income (loss) per share | $ | 0.46 | $ | 0.32 | 611 | % | 456 | % |
(in millions) (1) | ARR Under ASC 605 | ARR Under ASC 606 | Under ASC 606 4Q 2019 | Under ASC 605 4Q 2019 | Total Y/Y change, as reported (2) | Total Y/Y change under ASC 605 (3) | ||||||||||||||||
4Q 2018 | 1Q 2019 | 2Q 2019 | 3Q 2019 | |||||||||||||||||||
Subscription plan ARR (4) | $ | 1,175 | $ | 1,402 | $ | 1,682 | $ | 1,925 | $ | 2,200 | $ | 2,160 | 87 | % | 84 | % | ||||||
Maintenance plan ARR | 879 | 725 | 666 | 601 | 549 | 559 | (38 | )% | (36 | )% | ||||||||||||
Total ARR (4) (5) | $ | 2,054 | $ | 2,126 | $ | 2,347 | $ | 2,526 | $ | 2,749 | $ | 2,719 | 34 | % | 32 | % | ||||||
Core ARR | $ | 1,985 | $ | 2,058 | $ | 2,272 | $ | 2,438 | $ | 2,624 | ||||||||||||
Cloud ARR (4) | $ | 69 | $ | 68 | $ | 75 | $ | 88 | $ | 126 | ||||||||||||
Recurring revenue | $ | 514 | $ | 532 | $ | 587 | $ | 631 | $ | 687 | ||||||||||||
Recurring revenue as a percentage of total revenue | 93 | % | 95 | % | 96 | % | 96 | % | 93 | % |
• | Total ARR was $2.72 billion and increased 32 percent year-over-year and 9 percent sequentially. |
• | Subscription plan ARR was $2.16 billion and increased 84 percent year-over-year and 14 percent sequentially. |
• | Maintenance plan ARR was $559 million and decreased 36 percent year-over-year and 6 percent sequentially. |
• | Core business ARR was $2.60 billion and increased 31 percent year-over-year and 8 percent sequentially. |
• | Cloud business ARR was $122 million and increased 76 percent year-over-year and 40 percent sequentially. |
(in thousands) (1) (2) (3) | 4Q 2018 | 1Q 2019 | 2Q 2019 | 3Q 2019 | 4Q 2019 | |||||
Subscription plan subscriptions (4) | 2,267 | 2,574 | 2,864 | 3,116 | 3,534 | |||||
Maintenance plan subscriptions | 1,449 | 1,243 | 1,071 | 962 | 796 | |||||
Total subscriptions (4) | 3,716 | 3,817 | 3,935 | 4,078 | 4,330 | |||||
Core subscriptions | 3,285 | 3,368 | 3,456 | 3,547 | 3,621 | |||||
Cloud subscriptions (4) | 431 | 449 | 479 | 532 | 709 |
ARPS Under ASC 605 | ARPS Under ASC 606 | Under ASC 606 4Q 2019 | Under ASC 605 4Q 2019 | Total Y/Y change, as reported (3) | Total Y/Y change under ASC 605 (4) | |||||||||||||||||
(1) (2) | 4Q 2018 | 1Q 2019 | 2Q 2019 | 3Q 2019 | ||||||||||||||||||
Subscription plan ARPS (5) | $ | 518 | $ | 544 | $ | 587 | $ | 618 | $ | 623 | $ | 611 | 20 | % | 18 | % | ||||||
Maintenance plan ARPS | 607 | 583 | 621 | 624 | 690 | 702 | 14 | % | 16 | % | ||||||||||||
Total ARPS (6) | $ | 553 | $ | 557 | $ | 596 | $ | 619 | $ | 635 | $ | 628 | 15 | % | 14 | % | ||||||
Core ARPS | $ | 604 | $ | 611 | $ | 657 | $ | 687 | $ | 725 | 20 | % | ||||||||||
Cloud ARPS (7) | $ | 161 | $ | 152 | $ | 157 | $ | 165 | $ | 177 | 10 | % |
• | Subscription plan ARPS was $611 and increased $93 year-over-year and $4 sequentially. |
• | Maintenance plan ARPS was $702 and increased $95 year-over-year and $81 sequentially. |
• | Total ARPS was $628 and increased $75 year-over-year and $18 sequentially. |
• | Core ARPS was $717 and increased $113 compared to the fourth quarter last year, and $40 sequentially. |
Revenue Under ASC 605 | Revenue Under ASC 606 | Under ASC 606 4Q 2019 | Under ASC 605 4Q 2019 | Total Y/Y change, as reported (2) | Total Y/Y change under ASC 605 (3) | |||||||||||||||||
(in millions) (1) | 4Q 2018 | 1Q 2019 | 2Q 2019 | 3Q 2019 | ||||||||||||||||||
Subscription revenue (4) | $ | 294 | $ | 350 | $ | 421 | $ | 481 | $ | 550 | $ | 540 | 87 | % | 84 | % | ||||||
Maintenance revenue | 220 | 181 | 166 | 150 | 137 | 140 | (37 | )% | (36 | )% | ||||||||||||
Other revenue (5) | 40 | 28 | 25 | 30 | 50 | 33 | 24 | % | (18 | )% | ||||||||||||
Total net revenue (4) (6) | $ | 554 | $ | 560 | $ | 612 | $ | 661 | $ | 737 | $ | 713 | 33 | % | 29 | % | ||||||
Direct revenue | 30 | % | 29 | % | 28 | % | 28 | % | 30 | % | ||||||||||||
Indirect revenue | 70 | % | 71 | % | 72 | % | 72 | % | 70 | % |
• | Subscription revenue for the fourth quarter was $540 million and increased 84 percent year-over-year and 14 percent sequentially. |
• | Maintenance revenue for the fourth quarter was $140 million and decreased 36 percent year-over-year and 6 percent sequentially. |
• | Other revenue for the fourth quarter was $33 million, a decrease of 18 percent year-over-year and an increase of 15 percent sequentially. |
• | Total net revenue for the fourth quarter was $713 million and increased 29 percent year-over-year and 9 percent sequentially. |
Revenue by Geography Under ASC 605 | Revenue by Geography Under ASC 606 | Under ASC 606 4Q 2019 | Under ASC 605 4Q 2019 | Total Y/Y change, as reported (2) | Total Y/Y change under ASC 605 (3) | |||||||||||||||||
(in millions) (1) | 4Q 2018 | 1Q 2019 | 2Q 2019 | 3Q 2019 | ||||||||||||||||||
Americas | $ | 232 | $ | 234 | $ | 248 | $ | 269 | $ | 300 | $ | 285 | 29 | % | 23 | % | ||||||
EMEA | $ | 221 | $ | 221 | $ | 248 | $ | 267 | $ | 299 | $ | 291 | 35 | % | 32 | % | ||||||
Asia Pacific | $ | 100 | $ | 106 | $ | 116 | $ | 126 | $ | 138 | $ | 136 | 38 | % | 36 | % | ||||||
Emerging economies | $ | 64 | $ | 65 | $ | 74 | $ | 81 | $ | 87 | $ | 86 | 36 | % | 35 | % | ||||||
Emerging as a percentage of total revenue | 12 | % | 12 | % | 12 | % | 12 | % | 12 | % | 12 | % |
• | Revenue in the Americas was $285 million, an increase of 23 percent year-over-year and 8 percent sequentially. |
• | Revenue in EMEA was $291 million, an increase of 32 percent year-over-year and 11 percent sequentially. |
• | Revenue in APAC was $136 million, an increase of 36 percent year-over-year and 9 percent sequentially. |
• | Revenue in emerging economies was $86 million, an increase of 35 percent year-over-year and 9 percent sequentially. |
Revenue by Product Family Under ASC 605 | Revenue by Product Family Under ASC 606 | Under ASC 606 4Q 2019 | Under ASC 605 4Q 2019 | Total Y/Y change, as reported (3) | Total Y/Y change under ASC 605 (4) | |||||||||||||||||
(in millions) (1) (2) | 4Q 2018 | 1Q 2019 | 2Q 2019 | 3Q 2019 | ||||||||||||||||||
Architecture, Engineering and Construction (AEC) | $ | 217 | $ | 222 | $ | 243 | $ | 264 | $ | 293 | $ | 288 | 35 | % | 33 | % | ||||||
AutoCAD Product Family and AutoCAD LT | $ | 154 | $ | 156 | $ | 177 | $ | 191 | $ | 209 | $ | 206 | 36 | % | 34 | % | ||||||
Manufacturing | $ | 136 | $ | 135 | $ | 146 | $ | 159 | $ | 176 | $ | 167 | 29 | % | 23 | % | ||||||
Media and Entertainment (M&E) | $ | 40 | $ | 42 | $ | 42 | $ | 44 | $ | 55 | $ | 47 | 38 | % | 18 | % | ||||||
Other | $ | 7 | $ | 5 | $ | 4 | $ | 4 | $ | 4 | $ | 4 | (39 | )% | (41 | )% |
(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 4Q 2019 under ASC 606 compared to 4Q 2018 under ASC 605. |
(4) | Reflects 4Q 2019 under ASC 605 compared to 4Q 2018 under ASC 605. |
• | Revenue from our AEC product family was $288 million and increased 33 percent year-over-year and 12 percent sequentially. |
• | Revenue from our AutoCAD product family and AutoCAD LT was $206 million and increased 34 percent year-over-year and 9 percent sequentially. |
• | Revenue from our Manufacturing product family was $167 million and increased 23 percent year-over-year and 8 percent sequentially. |
• | Revenue from our M&E product family was $47 million and increased 18 percent year-over-year and 5 percent sequentially. |
Under ASC 605 | Under ASC 606 | ||||||||||||||
(in millions) | 4Q 2018 | 1Q 2019 | 2Q 2019 | 3Q 2019 | 4Q 2019 | ||||||||||
Year-on-year FX (impact) benefit on total ARR | $ | (1 | ) | $ | 9 | $ | 25 | $ | 37 | $ | 38 | ||||
Year-on-year FX benefit on total revenue | $ | — | $ | 3 | $ | 7 | $ | 10 | $ | 10 | |||||
Year-on-year FX (impact) benefit on cost of revenue and operating expenses | $ | (12 | ) | $ | (10 | ) | $ | (6 | ) | $ | 1 | $ | 5 | ||
Year-on-year FX (impact) benefit on operating income | $ | (12 | ) | $ | (7 | ) | $ | 1 | $ | 11 | $ | 15 |
(1) | 4Q19's year-on-year compares 4Q18 under ASC 605 and 4Q19 under ASC 606. As noted earlier, we adopted ASC 606 under the modified retrospective transition method. |
(in millions) (1) | 4Q 2018 | 1Q 2019 | 2Q 2019 | 3Q 2019 | 4Q 2019 | ||||||||||
Cash flow from operating activities | $ | 79 | $ | (17 | ) | $ | 43 | $ | 39 | $ | 312 | ||||
Capital expenditures | 11 | 17 | 20 | 13 | 18 | ||||||||||
Free cash flow | $ | 68 | $ | (34 | ) | $ | 23 | $ | 27 | $ | 294 | ||||
Depreciation, amortization and accretion | $ | 27 | $ | 24 | $ | 22 | $ | 24 | $ | 25 | |||||
Total cash and marketable securities | $ | 1,514 | $ | 1,464 | $ | 1,298 | $ | 1,193 | $ | 954 |
Deferred Revenue Under ASC 605 | Deferred Revenue under ASC 606 | Under ASC 606 4Q 2019 (3) | Under ASC 605 4Q 2019 | Total Y/Y change, as reported (4) | Total Y/Y change under ASC 605 (5) | |||||||||||||||||
(in millions) (1) (2) | 4Q 2018 | 1Q 2019 | 2Q 2019 | 3Q 2019 | ||||||||||||||||||
Deferred Revenue | $ | 1,955 | $ | 1,806 | $ | 1,800 | $ | 1,792 | $ | 2,091 | $ | 2,269 | 7 | % | 16 | % | ||||||
Unbilled Deferred Revenue (6) | 326 | 412 | 406 | 451 | 591 | 492 | 81 | % | 51 | % | ||||||||||||
Total Deferred Revenue | $ | 2,281 | $ | 2,218 | $ | 2,205 | $ | 2,243 | $ | 2,682 | $ | 2,761 | 18 | % | 21 | % |
• | Deferred revenue was $2.27 billion and increased 16 percent year-over-year and was 17 percent sequentially. |
• | Total deferred revenue was $2.76 billion and increased 21 percent year-over-year and 19 percent sequentially. |
Under ASC 605 | Margins and EPS Under ASC 606 | Under ASC 606 4Q 2019 | Under ASC 605 4Q 2019 | Total Y/Y change, as reported (2) | Total Y/Y change under ASC 605 (3) | |||||||||||||||||
4Q 2018 | 1Q 2019 | 2Q 2019 | 3Q 2019 | |||||||||||||||||||
Gross Margin | ||||||||||||||||||||||
Gross Margin - GAAP | 87 | % | 88 | % | 89 | % | 89 | % | 90 | % | 89 | % | ||||||||||
Gross Margin - Non-GAAP | 88 | % | 89 | % | 90 | % | 90 | % | 91 | % | 91 | % | ||||||||||
Operating Expenses (in millions) | ||||||||||||||||||||||
Operating Expenses - GAAP | $ | 663 | $ | 548 | $ | 567 | $ | 574 | $ | 620 | $ | 633 | (6 | )% | (4 | )% | ||||||
Operating Expenses - Non-GAAP | $ | 506 | $ | 471 | $ | 494 | $ | 505 | $ | 531 | $ | 544 | 5 | % | 8 | % | ||||||
Total Spend (in millions) | ||||||||||||||||||||||
Total Spend - GAAP | $ | 736 | $ | 615 | $ | 636 | $ | 646 | $ | 697 | $ | 710 | (5 | )% | (3 | )% | ||||||
Total Spend - Non-GAAP | $ | 571 | $ | 531 | $ | 556 | $ | 569 | $ | 598 | $ | 611 | 5 | % | 7 | % | ||||||
Operating Margin | ||||||||||||||||||||||
Operating Margin - GAAP | (33 | )% | (10 | )% | (4 | )% | 2 | % | 5 | % | — | % | ||||||||||
Operating Margin - Non-GAAP | (3 | )% | 5 | % | 9 | % | 14 | % | 19 | % | 14 | % | ||||||||||
Earnings Per Share | ||||||||||||||||||||||
Basic Net (Loss) Income Per Share - GAAP | $ | (0.79 | ) | $ | (0.38 | ) | $ | (0.18 | ) | $ | (0.11 | ) | $ | 0.30 | $ | 0.06 | ||||||
Diluted Net (Loss) Income Per Share - GAAP | $ | (0.79 | ) | $ | (0.38 | ) | $ | (0.18 | ) | $ | (0.11 | ) | $ | 0.29 | $ | 0.06 | ||||||
Basic Net (Loss) Income Per Share - Non-GAAP | $ | (0.09 | ) | $ | 0.07 | $ | 0.20 | $ | 0.30 | $ | 0.46 | $ | 0.32 | |||||||||
Diluted Net (Loss) Income Per Share - Non-GAAP | $ | (0.09 | ) | $ | 0.06 | $ | 0.19 | $ | 0.29 | $ | 0.46 | $ | 0.32 | |||||||||
Weighted Average Shares | ||||||||||||||||||||||
Basic Net (Loss) Income Share Count - GAAP | 219.1 | 218.6 | 219.0 | 218.9 | 219.2 | 219.2 | ||||||||||||||||
Diluted Net (Loss) Income Share Count - GAAP | 219.1 | 218.6 | 219.0 | 218.9 | 221.3 | 221.3 | ||||||||||||||||
Basic Net Income Share Count - Non-GAAP | 219.1 | 218.6 | 219.0 | 218.9 | 219.2 | 219.2 | ||||||||||||||||
Diluted Net Income Share Count - Non-GAAP | 219.1 | 221.6 | 222.2 | 221.6 | 221.3 | 221.3 |
(1) | A reconciliation of GAAP and non-GAAP results is provided in the tables following the company's earnings release. |
(2) | Reflects 4Q 2019 under ASC 606 compared to 4Q 2018 under ASC 605. |
(3) | Reflects 4Q 2019 under ASC 605 compared to 4Q 2018 under ASC 605. |
• | Total ARR increased 34 percent as reported, and 32 percent on a constant currency basis. |
◦ | Included in total ARR is a $27 million contribution from the fourth quarter acquisitions, or 1 percentage point of the increase. |
• | Total ARPS increased 15 percent to $635. |
◦ | Included in total ARPS is the negative impact of $13 from the fourth quarter acquisitions, or negative 2 percentage points of the increase. |
• | Billings increased 22 percent to $2.71 billion. |
◦ | Billings includes a $43 million contribution from the fourth quarter acquisitions, or 2 percentage points of the increase. |
• | Total revenue increased 25 percent to a record $2.57 billion. |
◦ | Total revenue includes a $7 million contribution from the fourth quarter acquisitions, and had no impact on the growth percentage. |
• | Migrated 452,000 maintenance customers to subscription. |
• | Reached milestone of over 4 million active subscriptions. |
• | Total deferred revenue increased 18 percent to $2.68 billion. |
◦ | Total deferred revenue includes a $97 million contribution from the fourth quarter acquisitions, or 4 percentage points of the increase. |
• | Free cash flow increased to $310 million, compared to $(50) million in fiscal 2018. |
• | Recurring revenue increased to 95 percent, compared to 92 percent at the end of fiscal 2018. |
Q1 FY20 Guidance Metrics | Q1 FY20 (ending April 30, 2019) |
Revenue (in millions) | $735 - $745 |
EPS GAAP | $0.06 - $0.10 |
EPS non-GAAP (1) | $0.44 - $0.48 |
FY20 Guidance Metrics | FY20 (ending January 31, 2020) | |
Total ARR (in millions) | $3,500 - $3,550 Up 27% - 29% | |
Billings (in millions) | $4,050 - $4,150 Up 50% - 53% | |
Revenue (in millions) (1) | $3,250 - $3,300 Up 26% - 28% | |
GAAP spend growth (cost of revenue + operating expenses) | Approx. 10% | |
Non-GAAP spend growth (cost of revenue + operating expenses) (2) | Approx. 9% | |
EPS GAAP | $1.12 - $1.31 | |
EPS non-GAAP (3) | $2.71 - $2.90 | |
Free cash flow | Approx. $1.35 billion |
• | 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, 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 (loss), non-GAAP net income (loss) per share, non-GAAP diluted shares used in per share calculation and free cash flow. These non-GAAP financial measures are adjusted to exclude certain costs, expenses, gains and losses, including stock-based compensation expense, CEO transition costs, restructuring charges and other facility exit costs, acquisition related 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 January 31, | Fiscal Year Ended January 31, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
(Unaudited) | (Unaudited) | ||||||||||||||
GAAP cost of subscription and maintenance revenue | $ | 56.7 | $ | 52.8 | $ | 216.0 | $ | 214.4 | |||||||
Stock-based compensation expense | (3.7 | ) | (3.4 | ) | (13.1 | ) | (11.9 | ) | |||||||
Non-GAAP cost of subscription and maintenance revenue | $ | 53.0 | $ | 49.4 | $ | 202.9 | $ | 202.5 | |||||||
GAAP cost of other revenue | $ | 15.4 | $ | 16.6 | $ | 54.4 | $ | 72.6 | |||||||
Stock-based compensation expense | (1.5 | ) | (0.9 | ) | (4.5 | ) | (4.0 | ) | |||||||
Non-GAAP cost of other revenue | $ | 13.9 | $ | 15.7 | $ | 49.9 | $ | 68.6 | |||||||
GAAP amortization of developed technology | $ | 4.9 | $ | 3.7 | $ | 15.5 | $ | 16.4 | |||||||
Amortization of developed technology | (4.9 | ) | (3.7 | ) | (15.5 | ) | (16.4 | ) | |||||||
Non-GAAP amortization of developed technology | $ | — | $ | — | $ | — | $ | — | |||||||
GAAP gross profit | $ | 660.3 | $ | 480.7 | $ | 2,283.9 | $ | 1,753.2 | |||||||
Stock-based compensation expense | 5.2 | 4.3 | 17.6 | 15.9 | |||||||||||
Amortization of developed technology | 4.9 | 3.7 | 15.5 | 16.4 | |||||||||||
Non-GAAP gross profit | $ | 670.4 | $ | 488.7 | $ | 2,317.0 | $ | 1,785.5 | |||||||
GAAP marketing and sales | $ | 320.8 | $ | 301.5 | $ | 1,183.9 | $ | 1,087.3 | |||||||
Stock-based compensation expense | (31.7 | ) | (27.2 | ) | (109.4 | ) | (107.3 | ) | |||||||
Non-GAAP marketing and sales | $ | 289.1 | $ | 274.3 | $ | 1,074.5 | $ | 980.0 | |||||||
GAAP research and development | $ | 190.4 | $ | 182.2 | $ | 725.0 | $ | 755.5 | |||||||
Stock-based compensation expense | (25.4 | ) | (21.2 | ) | (82.5 | ) | (82.9 | ) | |||||||
Non-GAAP research and development | $ | 165.0 | $ | 161.0 | $ | 642.5 | $ | 672.6 |
GAAP general and administrative | $ | 100.7 | $ | 80.1 | $ | 340.1 | $ | 305.2 | |||||||
Stock-based compensation expense | (11.7 | ) | (9.4 | ) | (40.0 | ) | (38.9 | ) | |||||||
CEO transition costs (1) | — | 0.2 | 0.1 | (21.4 | ) | ||||||||||
Acquisition related costs | (11.9 | ) | — | (16.2 | ) | — | |||||||||
Non-GAAP general and administrative | $ | 77.1 | $ | 70.9 | $ | 284.0 | $ | 244.9 | |||||||
GAAP amortization of purchased intangibles | $ | 6.2 | $ | 4.9 | $ | 18.0 | $ | 20.2 | |||||||
Amortization of purchased intangibles | (6.2 | ) | (4.9 | ) | (18.0 | ) | (20.2 | ) | |||||||
Non-GAAP amortization of purchased intangibles | $ | — | $ | — | $ | — | $ | — | |||||||
GAAP restructuring and other exit costs, net | $ | 1.9 | $ | 93.9 | $ | 41.9 | $ | 94.1 | |||||||
Restructuring and other exit costs, net | (1.9 | ) | (93.9 | ) | (41.9 | ) | (94.1 | ) | |||||||
Non-GAAP restructuring and other exit costs, net | $ | — | $ | — | $ | — | $ | — | |||||||
GAAP operating expenses | $ | 620.0 | $ | 662.6 | $ | 2,308.9 | $ | 2,262.3 | |||||||
Stock-based compensation expense | (68.8 | ) | (57.8 | ) | (231.9 | ) | (229.1 | ) | |||||||
Amortization of purchased intangibles | (6.2 | ) | (4.9 | ) | (18.0 | ) | (20.2 | ) | |||||||
CEO transition costs (1) | — | 0.2 | 0.1 | (21.4 | ) | ||||||||||
Acquisition related costs | (11.9 | ) | — | (16.2 | ) | — | |||||||||
Restructuring and other exit costs, net | (1.9 | ) | (93.9 | ) | (41.9 | ) | (94.1 | ) | |||||||
Non-GAAP operating expenses | $ | 531.2 | $ | 506.2 | $ | 2,001.0 | $ | 1,897.5 | |||||||
GAAP Spend | $ | 697.0 | $ | 735.7 | $ | 2,594.8 | $ | 2,565.7 | |||||||
Stock-based compensation expense | (74.0 | ) | (62.1 | ) | (249.5 | ) | (245.0 | ) | |||||||
Amortization of developed technology | (4.9 | ) | (3.7 | ) | (15.5 | ) | (16.4 | ) | |||||||
Amortization of purchased intangibles | (6.2 | ) | (4.9 | ) | (18.0 | ) | (20.2 | ) | |||||||
CEO transition costs (1) | — | 0.2 | 0.1 | (21.4 | ) | ||||||||||
Acquisition related costs | (11.9 | ) | — | (16.2 | ) | — | |||||||||
Restructuring and other exit costs, net | (1.9 | ) | (93.9 | ) | (41.9 | ) | (94.1 | ) | |||||||
Non-GAAP Spend | $ | 598.1 | $ | 571.3 | $ | 2,253.8 | $ | 2,168.6 | |||||||
GAAP income (loss) from operations | $ | 40.3 | $ | (181.9 | ) | $ | (25.0 | ) | $ | (509.1 | ) | ||||
Stock-based compensation expense | 74.0 | 62.1 | 249.5 | 245.0 | |||||||||||
Amortization of developed technology | 4.9 | 3.7 | 15.5 | 16.4 | |||||||||||
Amortization of purchased intangibles | 6.2 | 4.9 | 18.0 | 20.2 | |||||||||||
CEO transition costs (1) | — | (0.2 | ) | (0.1 | ) | 21.4 | |||||||||
Acquisition related costs | 11.9 | — | 16.2 | — | |||||||||||
Restructuring and other exit costs, net | 1.9 | 93.9 | 41.9 | 94.1 | |||||||||||
Non-GAAP income (loss) from operations | $ | 139.2 | $ | (17.5 | ) | $ | 316.0 | $ | (112.0 | ) | |||||
GAAP interest and other expense, net | $ | (7.3 | ) | $ | (16.4 | ) | $ | (17.7 | ) | $ | (48.2 | ) | |||
(Gain) loss on strategic investments and dispositions | (3.0 | ) | 7.0 | (12.5 | ) | 16.5 | |||||||||
Restructuring and other exit costs, net | (4.7 | ) | — | (10.2 | ) | — | |||||||||
Non-GAAP interest and other expense, net | $ | (15.0 | ) | $ | (9.4 | ) | $ | (40.4 | ) | $ | (31.7 | ) | |||
GAAP benefit (provision) for income taxes | $ | 31.7 | $ | 24.8 | $ | (38.1 | ) | $ | (9.6 | ) | |||||
Discrete GAAP tax items | (19.1 | ) | (10.5 | ) | (31.4 | ) | (20.7 | ) | |||||||
Income tax effect of non-GAAP adjustments | (36.1 | ) | (7.3 | ) | 17.2 | 67.7 |
Non-GAAP (provision) benefit for income tax | $ | (23.5 | ) | $ | 7.0 | $ | (52.3 | ) | $ | 37.4 | |||||
GAAP net income (loss) | $ | 64.7 | $ | (173.5 | ) | $ | (80.8 | ) | $ | (566.9 | ) | ||||
Stock-based compensation expense | 74.0 | 62.1 | 249.5 | 245.0 | |||||||||||
Amortization of developed technology | 4.9 | 3.7 | 15.5 | 16.4 | |||||||||||
Amortization of purchased intangibles | 6.2 | 4.9 | 18.0 | 20.2 | |||||||||||
CEO transition costs (1) | — | (0.2 | ) | (0.1 | ) | 21.4 | |||||||||
Acquisition related costs | 11.9 | — | 16.2 | — | |||||||||||
Restructuring and other exit costs, net | (2.8 | ) | 93.9 | 31.7 | 94.1 | ||||||||||
(Gain) loss on strategic investments and dispositions | (3.0 | ) | 7.0 | (12.5 | ) | 16.5 | |||||||||
Discrete GAAP tax items | (19.1 | ) | (10.5 | ) | (31.4 | ) | (20.7 | ) | |||||||
Income tax effect of non-GAAP adjustments | (36.1 | ) | (7.3 | ) | 17.2 | 67.7 | |||||||||
Non-GAAP net income (loss) | $ | 100.7 | $ | (19.9 | ) | $ | 223.3 | $ | (106.3 | ) | |||||
GAAP diluted net income (loss) per share (2) | $ | 0.29 | $ | (0.79 | ) | $ | (0.37 | ) | $ | (2.58 | ) | ||||
Stock-based compensation expense | 0.33 | 0.28 | 1.12 | 1.11 | |||||||||||
Amortization of developed technology | 0.02 | 0.02 | 0.08 | 0.08 | |||||||||||
Amortization of purchased intangibles | 0.03 | 0.02 | 0.08 | 0.09 | |||||||||||
CEO transition costs (1) | — | — | — | 0.09 | |||||||||||
Acquisition related costs | 0.05 | — | 0.07 | — | |||||||||||
Restructuring and other exit costs, net | (0.01 | ) | 0.43 | 0.14 | 0.43 | ||||||||||
(Gain) loss on strategic investments and dispositions | (0.01 | ) | 0.03 | (0.05 | ) | 0.08 | |||||||||
Discrete GAAP tax items | (0.08 | ) | (0.05 | ) | (0.14 | ) | (0.09 | ) | |||||||
Income tax effect of non-GAAP adjustments | (0.16 | ) | (0.03 | ) | 0.08 | 0.31 | |||||||||
Non-GAAP diluted net income (loss) per share (2) | $ | 0.46 | $ | (0.09 | ) | $ | 1.01 | $ | (0.48 | ) | |||||
GAAP diluted shares used in per share calculation | 221.3 | 219.1 | 218.9 | 219.5 | |||||||||||
Shares included in non-GAAP net income per share, but excluded from GAAP net loss per share as they would have been anti-dilutive | — | — | 3.1 | — | |||||||||||
Non-GAAP diluted weighted average shares used in per share calculation | 221.3 | 219.1 | 222.0 | 219.5 | |||||||||||
Cash flow from operating activities | $ | 311.5 | $ | 79.3 | $ | 377.1 | $ | 0.9 | |||||||
Capital expenditures | 17.6 | 11.4 | 67.0 | 50.7 | |||||||||||
Free cash flow | $ | 293.9 | $ | 67.9 | $ | 310.1 | $ | (49.8 | ) |
(1) | CEO transition costs include stock-based compensation of ($0.2) million and $16.4 million related to the acceleration of eligible stock awards for the three months and fiscal year ended January 31, 2018, respectively. 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 were 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. |
Q4 FY18 | Q1 FY19 | Q2 FY19 | Q3 FY19 | Q4 FY19 | |||||||||||||||
(Unaudited) | |||||||||||||||||||
GAAP gross margin | 87 | % | 88 | % | 89 | % | 89 | % | 90 | % | |||||||||
Stock-based compensation expense | 1 | % | 1 | % | 1 | % | 1 | % | 1 | % | |||||||||
Amortization of developed technology | 1 | % | 1 | % | 1 | % | 1 | % | 1 | % | |||||||||
Non-GAAP gross margin (2) | 88 | % | 89 | % | 90 | % | — | % | 91 | % | |||||||||
Operating Expenses - GAAP | $ | 663 | $ | 548 | $ | 567 | $ | 574 | $ | 620 | |||||||||
Stock-based compensation expense | (58 | ) | (51 | ) | (53 | ) | (59 | ) | (69 | ) | |||||||||
Amortization of purchased intangibles | (5 | ) | (4 | ) | (4 | ) | (4 | ) | (6 | ) | |||||||||
Acquisition related costs | — | — | (3 | ) | (2 | ) | (12 | ) | |||||||||||
Restructuring and other exit costs, net | (94 | ) | (23 | ) | (14 | ) | (4 | ) | (2 | ) | |||||||||
Operating Expenses - Non-GAAP (2) | $ | 506 | $ | 471 | $ | 494 | $ | 505 | $ | 531 | |||||||||
GAAP Spend | $ | 736 | $ | 615 | $ | 636 | $ | 646 | $ | 697 | |||||||||
Stock-based compensation expense | (62 | ) | (54 | ) | (57 | ) | (64 | ) | (74 | ) | |||||||||
Amortization of developed technology | (4 | ) | (4 | ) | (3 | ) | (4 | ) | (5 | ) | |||||||||
Amortization of purchased intangibles | (5 | ) | (4 | ) | (4 | ) | (4 | ) | (6 | ) | |||||||||
Acquisition related costs | — | — | (3 | ) | (2 | ) | (12 | ) | |||||||||||
Restructuring and other exit costs, net | (94 | ) | (23 | ) | (14 | ) | (4 | ) | (2 | ) | |||||||||
Non-GAAP Spend (2) | $ | 571 | $ | 531 | $ | 556 | $ | 569 | $ | 598 | |||||||||
GAAP operating margin | (33 | )% | (10 | )% | (4 | )% | 2 | % | 5 | % | |||||||||
Stock-based compensation expense | 11 | % | 10 | % | 9 | % | 10 | % | 10 | % | |||||||||
Amortization of developed technology | 1 | % | 1 | % | 1 | % | 1 | % | 1 | % | |||||||||
Amortization of purchased intangibles | 1 | % | 1 | % | 1 | % | 1 | % | 1 | % | |||||||||
Acquisition related costs | — | % | — | % | — | % | — | % | 2 | % | |||||||||
Restructuring and other exit costs, net | 17 | % | 4 | % | 2 | % | 1 | % | — | % | |||||||||
Non-GAAP operating margin (2) | (3 | )% | 5 | % | 9 | % | 14 | % | 19 | % | |||||||||
GAAP diluted net loss (income) per share | $ | (0.79 | ) | $ | (0.38 | ) | $ | (0.18 | ) | $ | (0.11 | ) | $ | 0.29 | |||||
Stock-based compensation expense | 0.28 | 0.25 | 0.26 | 0.28 | 0.33 | ||||||||||||||
Amortization of developed technology | 0.02 | 0.02 | 0.02 | 0.02 | 0.02 | ||||||||||||||
Amortization of purchased intangibles | 0.02 | 0.02 | 0.01 | 0.02 | 0.03 | ||||||||||||||
Acquisition related costs | — | — | 0.01 | 0.01 | 0.05 | ||||||||||||||
Restructuring and other exit costs, net | 0.43 | 0.09 | 0.06 | — | (0.01 | ) | |||||||||||||
Gain on strategic investments and dispositions | 0.03 | (0.01 | ) | (0.02 | ) | (0.01 | ) | (0.01 | ) | ||||||||||
Discrete GAAP tax provision items | (0.05 | ) | — | (0.04 | ) | (0.02 | ) | (0.08 | ) | ||||||||||
Income tax effect of non-GAAP adjustments | (0.03 | ) | 0.07 | 0.07 | 0.10 | (0.16 | ) | ||||||||||||
Non-GAAP diluted net (loss) income per share | $ | (0.09 | ) | $ | 0.06 | $ | 0.19 | $ | 0.29 | $ | 0.46 | ||||||||
GAAP diluted weighted average shares used in per share calculation | 219.1 | 218.6 | 219.0 | 218.9 | 221.3 | ||||||||||||||
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 | 2.7 | — | ||||||||||||||
Non-GAAP diluted weighted average shares used in per share calculation | 219.1 | 221.6 | 222.2 | 221.6 | 221.3 |
(1) | CEO transition costs include stock-based compensation of ($0.2) million and $16.4 million related to the acceleration of eligible stock awards for the three months and fiscal year ended January 31, 2018, respectively. 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. |