Earnings call: Autodesk Reports Strong Q3 2024 Results, Unveils New Transaction Model

Autodesk, Inc. (NASDAQ:ADSK) reported robust financial performance in the third quarter of fiscal 2024, with total revenue growing 10% and 13% in constant currency. The company also unveiled a new transaction model, Flex (NASDAQ:FLEX), aimed at strengthening its direct relationship with customers and channel partners. Autodesk also reaffirmed its commitment to developing next-generation technologies, including AI and data services, to drive digital transformation for its customers.

Key takeaways from the call include:

Autodesk’s revenue growth was driven by its subscription business model and product diversification across different regions and industries.
The company plans to transition its indirect business to the new Flex model globally by fiscal years 2025 and 2026.
Autodesk provided guidance for fiscal year 2024, expecting revenue between $5.45 billion and $5.47 billion, and non-GAAP operating margins similar to fiscal year 2023 levels.
The company raised its guidance for non-GAAP earnings per share and free cash flow, forecasting free cash flow between $1.2 billion and $1.26 billion.
For fiscal 2025, Autodesk anticipates revenue growth of about 9% or more, with a transition to annual billings and a reduction in free cash flow compared to fiscal 2024.
Autodesk highlighted partnerships with companies such as WSP, TCE, LFD, and various educational institutions, showcasing the growth and adoption of their solutions in different industries.
During the earnings call, Autodesk’s CEO, Andrew Anagnost, highlighted the significance of the company’s new transaction model and its aim to move all customers to cloud-based life cycle solutions powered by AI. CFO Debbie Clifford noted that the transition to annual billings is expected to be a three-year journey, with a mechanical rebuild of free cash flow in fiscal years 2025 and 2026.

Anagnost also emphasized the company’s commitment to ethical and high-trust use of customer data in its AI and automation approach. Despite challenges in some sectors, Autodesk’s construction business has seen strong growth, particularly in manufacturing, industrial, data centers, healthcare, and infrastructure.

The company also discussed its partnerships and the trust built with partners to grow their businesses over time. Autodesk anticipates revenue growth acceleration with the transition to the Flex model, informed by learnings from the Australia rollout. The company also mentioned pricing adjustments for Fusion 360 to increase the base offering value and drive extension adoption. Autodesk affirmed its long-term goals and commitment to making smart decisions for the business and shareholders.