Cloud Computing Arrangements

6 Months Ended

Jul. 31, 2020

Capitalized Contract Cost [Abstract]

Cloud Computing Arrangements

Revenue Recognition

Revenue Disaggregation

Autodesk recognizes revenue from the sale of (1) product subscriptions, cloud service offerings, and EBAs, (2) renewal fees for existing maintenance plan agreements that were initially purchased with a perpetual software license, and (3) consulting, training and other goods and services. The three categories are presented as line items on Autodesk's Condensed Consolidated Statements of Operations.

Information regarding the components of Autodesk's net revenue from contracts with customers by product family, geographic location, and sales channel is as follows: 

	Three Months Ended July 31,				Six Months Ended July 31,
(in millions)	2020		2019		2020		2019
Net revenue by product family:
Architecture, Engineering and Construction	$	397.0	$	334.2	$	779.7	$	638.5
AutoCAD and AutoCAD LT	271.9		231.3		534.1		444.5
Manufacturing	185.5		174.6		368.4		342.1
Media and Entertainment	53.3		50.8		105.9		96.3
Other	5.4		5.9		10.7		10.9
Total net revenue	$	913.1	$	796.8	$	1,798.8	$	1,532.3
Net revenue by geographic area:
Americas
U.S.	$	309.5	$	267.9	$	610.1	$	517.0
Other Americas	62.0		58.0		123.6		104.7
Total Americas	371.5		325.9		733.7		621.7
Europe, Middle East and Africa	354.7		316.2		699.5		613.4
Asia Pacific	186.9		154.7		365.6		297.2
Total net revenue	$	913.1	$	796.8	$	1,798.8	$	1,532.3
Net revenue by sales channel:
Indirect	$	639.3	$	560.2	$	1,262.7	$	1,076.6
Direct	273.8		236.6		536.1		455.7
Total net revenue	$	913.1	$	796.8	$	1,798.8	$	1,532.3

Payments for product subscriptions, industry collections, cloud subscriptions, and maintenance subscriptions are typically due up front with payment terms of 30 to 45 days. As a result of the COVID-19 pandemic, we extended contract payment terms for up to 60 days through August 7, 2020, for all customers and partners for new orders and renewals placed directly with Autodesk. Payments on EBAs are typically due in annual installments over the contract term, with payment terms of 30 to 60 days. Autodesk does not have any material variable consideration, such as obligations for returns, refunds, warranties or amounts due to customers for which significant estimation or judgment is required as of the reporting date.

Remaining performance obligations consist of total short-term, long-term and unbilled deferred revenue. As of July 31, 2020, Autodesk had remaining performance obligations of $3.35 billion, which represents the total contract price allocated to remaining performance obligations, which are generally recognized over the next three years. We expect to recognize $2.31 billion or 69% of our remaining performance obligations as revenue during the next 12 months. We expect to recognize the remaining $1.04 billion or 31% of our remaining performance obligations as revenue thereafter.

The amount of remaining performance obligations may be impacted by the specific timing, duration and size of customer subscription and support agreements, varying billing cycles of such agreements, the specific timing of customer renewals, and foreign currency fluctuations.

Contract Balances

We receive payments from customers based on a billing schedule as established in our contracts. Contract assets relate to performance completed in advance of scheduled billings. Contract assets were not material as of July 31, 2020. Deferred revenue relates to billings in advance of performance under the contract. The primary changes in our contract assets and deferred revenues are due to our performance under the contracts and billings.

Revenue recognized during the six months ended July 31, 2020 and 2019, that was included in the deferred revenue balances at January 31, 2020 and 2019, was $1.43 billion and $1.19 billion, respectively. The satisfaction of performance obligations typically lags behind payments received under revenue contracts from customers.

Cloud Computing Arrangements Autodesk enters into certain cloud-based software hosting arrangements that are accounted for as service contracts. Costs incurred for these arrangements are capitalized for application development activities, if material, and immediately expensed for preliminary project activities and post-implementation activities. Autodesk amortizes the capitalized development costs straight-line over the fixed, non-cancellable term of the associated hosting arrangement plus any reasonably certain renewal periods. The capitalized costs are included in "Prepaid expenses and other current assets" and "Long-term other assets" on our Condensed Consolidated Balance Sheets. Capitalized costs were $44.3 million and $22.3 million at July 31, 2020, and January 31, 2020, respectively. Accumulated amortization was $2.9 million and $1.2 million at July 31, 2020, and January 31, 2020, respectively. Amortization expense for the three months ended July 31, 2020 and 2019, was $0.8 million and none, respectively. Amortization expense for the six months ended July 31, 2020 and 2019, was $1.7 million and none, respectively.