Autodesk Inc (NASDAQ:ADSK) Gives Weak Outlook

Autodesk Inc (NASDAQ:ADSK) stock fell 5.55% (As on November 23, 12:31:12 AM UTC-4, Source: Google Finance) after the company issued a lower-than-expected outlook in its latest earnings report. Total billings in the quarter rose 16% year-over-year to $1.36 billion, driven by positive growth in Design revenue, up 14% to $1.087 billion, and Make revenue, up 24% to $117 million. Subscription plan revenue also rose 14%, to $1.188 billion. Net revenue retention remains in the range of 100% to 110%. Total adjusted operating income was $465 million, up from $365 million in the third quarter of last year. Deferred revenue rose 13%, to $3.78 billion. Remaining performance obligations (“RPO”) increased 11 percent to $4.68 billion. Current RPO increased 9 percent to $3.14 billion. Total non-GAAP operating income was $465 million, compared to $365 million in the third quarter last year. Non-GAAP operating margin was 36 percent, up 4 percentage points compared to the third quarter last year. Cash flow from operating activities was $469 million, an increase of $198 million compared to the third quarter last year. Free cash flow was $460 million, an increase of $203 million compared to the third quarter last year.

ADSK in the third quarter of FY 22 has reported the adjusted earnings per share of $1.70, that is inline with the analysts’ estimates for the adjusted earnings per share of $1.70. The company had reported the adjusted revenue growth of 14 percent to $1.28 billion in the third quarter of FY 22, beating the analysts’ estimates for revenue of $1.281 billion.

Additionally, in November 2022, the Board of Directors authorized the repurchase of $5 billion of the Company’s common stock, in addition to the approximately 3.8 million shares remaining, as of October 31, 2022, under previously announced share repurchase programs.

For its fiscal 2023 fourth quarter, Autodesk predicts adjusted earnings per share of $1.77 to $1.83 on revenue of $1.303 billion to $1.318 billion. For the full fiscal year 2023, Autodesk expects earnings per share of $6.56 to $6.62 on revenue of $5.57 billion to $5.67 billion. The full-year outlook was below what Autodesk had previously predicted. In August, the company said it was expecting an EPS of $6.52 to $6.71 on revenue of $5.7 billion to $5.8 billion.

The lower billings and free cash flow guidance primarily reflect less demand for multiyear upfront and more demand for annual contracts than the company had expected.

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