Autodesk, Inc.(NASDAQ: ADSK) stock enhanced 5.7% in the pre-market session on August 25th, 2017 (Source: Google finance) as they reported a strong growth of 94% for their Subscription plan (formerly known as new model) annualized recurring revenue (ARR) to $784 million during the second quarter of 2018. Strong performance across all subscription plan types and geographies drove the overall performance. Autodesk says that products that were first to move to subscription-only are major contributors to the ARR growth Total ARR rose 21%
Autodesk says that products that were first to move to subscription-only are major contributors to the ARR growth. As a result, their total ARR rose 21% yoy to $1.83 billion during the second quarter of 2018 while Subscription plan subscriptions rose 270,000 against the first quarter of fiscal 2018 to 1.59 million at the end of the second quarter. Overall subscriptions rose 153,000 during the period against the first quarter of fiscal 2018 to 3.44 million. As more products are into the transition, the ARR growth rates would be well above their current average. The group’s market opportunities for subscription plans have penetrated even into construction and manufacturing, leading to a better customer lifetime value for Autodesk.
Autodesk Deferred revenue surged 17% to $1.78 billion, while unbilled deferred revenue reached $63 million. But the stock sentiment remained firm despite a revenue fall of 9% yoy to $502 million during the second quarter of 2018. But this pressure is mainly on the back of their business model transition, as more revenue is recognized ratably rather than up front and as new offerings generally have a lower initial purchase price. Autodesk reported a GAAP diluted net loss per share of $(0.66), from GAAP diluted net loss per share of $(0.44) in the prior corresponding period.
For the third quarter of 2018, Autodesk sees their revenues in the range of $505 – $515 million while EPS GAAP is forecasted to be in the range of ($0.64) – ($0.58). Revenue is forecasted to be in $2,030 – $2,050 revenue range for FY18. Total ARR would be in 24% -26% range. Autodesk stock generated an outstanding rally of over 50% in this year to date. (as of August 24th, 2017; Source: Google finance).