Cloud Computing Arrangements

9 Months Ended

Oct. 31, 2023

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 enterprise business agreements (“EBAs”), (2) renewal fees for existing maintenance plan agreements that were initially purchased with a perpetual software license, and (3) consulting, training, and other products 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, sales channel, and product type is as follows: 

	Three Months Ended October 31,				Nine Months Ended October 31,
	2023		2022		2023		2022
Net revenue by product family:
Architecture, Engineering and Construction	$	675	$	575	$	1,884	$	1,676
AutoCAD and AutoCAD LT	372		354		1,085		1,025
Manufacturing	269		254		771		721
Media and Entertainment	73		78		218		217
Other	25		19		70		48
Total net revenue	$	1,414	$	1,280	$	4,028	$	3,687
Net revenue by geographic area:
Americas
U.S.	$	520	$	447	$	1,461	$	1,269
Other Americas	120		94		321		271
Total Americas	640		541		1,782		1,540
Europe, Middle East and Africa	516		476		1,496		1,398
Asia Pacific	258		263		750		749
Total net revenue	$	1,414	$	1,280	$	4,028	$	3,687
Net revenue by sales channel:
Indirect	$	876	$	827	$	2,546	$	2,412
Direct	538		453		1,482		1,275
Total net revenue	$	1,414	$	1,280	$	4,028	$	3,687
Net revenue by product type:
Design	$	1,192	$	1,087	$	3,432	$	3,155
Make	134		117		385		333
Other	88		76		211		199
Total net revenue	$	1,414	$	1,280	$	4,028	$	3,687

Payments for product subscriptions, cloud subscriptions, and maintenance subscriptions are typically due in annual installments or up front with payment terms of 30 to 45 days. 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 October 31, 2023, Autodesk had remaining performance obligations of $5.24 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 $3.52 billion or 67% of our remaining performance obligations as revenue during the next 12 months. We expect to recognize the remaining $1.72 billion or 33% 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, 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 October 31, 2023. 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 three months ended October 31, 2023 and 2022, that was included in the deferred revenue balances at January 31, 2023 and 2022, was $730 million and $642 million, respectively. Revenue recognized during the nine months ended October 31, 2023 and 2022, that was included in the deferred revenue balances at January 31, 2023 and 2022, was $2.71 billion and $2.46 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 $238 million and $190 million at October 31, 2023, and January 31, 2023, respectively. Accumulated amortization was $69 million and $41 million at October 31, 2023, and January 31, 2023, respectively. Amortization expense for the three months ended October 31, 2023 and 2022, was $10 million and $7 million, respectively. Amortization expense for the nine months ended October 31, 2023 and 2022 was $28 million and $16 million, respectively.