Autodesk raises full-year guidance to $4.4BN after revenue leaps 16% in Q2

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3D design software developer Autodesk (Nasdaq: ADSK) has raised its revenue guidance for the remaining financial year after its income rose 16% during Q2 2022. 

Autodesk’s revenue results, which are unorthodoxly published across financial years, show that it brought in $1.06 billion over the course of Q2 2022, 16% more than the $913 million it reported in Q2 2021. As a result, the company has raised its FY 2022 guidance from $4.345 billion to $4.385 billion, which if realized, would constitute 15-16% annual growth. 

According to the firm’s President and CEO Andrew Anagnost, its rapid rise in income is the result of “unwinding uncertainty” as the pandemic begins to dissipate, which in turn has led to “strong product usage.” Autodesk’s impressive Q2 results see it build on what was already an encouraging start to the year, although this hasn’t exactly inspired investors, as its shares have fallen 10% since its results came out. 

“Sustained and purposeful innovation to enable digital transformation in the industries we serve, is changing our relationship with customers from software vendor to strategic partner,” said Anagnost. “This is enabling us to create more value through end-to-end, cloud-based solutions, that connect data and workflows and power business model evolution.”

“By helping our customers grow, we will grow too, giving us confidence in our FY 2023 goals and beyond.”

Autodesk's Californian HQ.
Autodesk’s Q2 2022 revenue rise was primarily down to an increase in its billings income. Photo via Wikimedia Commons.

Autodesk’s Q2 2022 results

While Autodesk still reports its financials under its traditional Subscription and Maintenance Plan segments, as of FY 2021, it also began splitting its earnings into ‘Design’ and ‘Make’ divisions. During Q2 2022, the company’s Design arm, including its maintenance, product subscriptions and EBAs, as well as its AutoCAD sales, generated $944 million. 

This figure, which represents a 15% improvement on the $821 million reported in Q2 2021, was primarily the result of a 29% increase in the firm’s billings over the period. Likewise, Autodesk’s Subscription Plan revenue jumped 21% between Q2 2021 and 2022 for similar reasons, bringing in $1.017 billion, while its Maintenance Plan income fell to $17 million, ahead of plans to scrap the division altogether. 

Interestingly though, the company’s Make segment was its fastest-growing in Q2 2022, bringing in $90 million, 27% more than it had done in Q2 2021. Speaking on the firm’s earnings call, Anagnost attributed this rise to the “convergence of design and make,” which is increasingly seeing its larger clients combine its Fusion 360 and Moldflow offerings, to correct part issues before entering production. 

Revenue ($) Q2 2021Q2 2022Difference (%) Q2 2020 Q2 2022 Difference (%) 
Design 821m944m+15N/A944m
Make 71m90m+27N/A90m
Total Revenue 913m1.06bn+16797m1.06bn+33

Elsewhere, Autodesk’s sales data shows that its Architecture, Engineering and Construction or ‘AEC’ offering, was its highest earner during Q2 2022, generating $479 million. However, the company’s figures also show that the income of its entire range rose between Q2 2021 and 2022, with its AutoCAD and Manufacturing lines sales jumping 12%, and those of its Media and Entertainment offering rising 10%. 

Finally, in terms of geographical area, the firm’s Americas business remained its biggest revenue-driver in Q2 2022, bringing in $423 million, 14% more than it did last year. Despite this, Autodesk’s EMEA income grew more quickly over the same period, rising from $355 million to $410 million, while its APAC division was its fastest-growing overall, jumping to $227 million, or a 21% increase on Q2 2021. 

Regional Revenue  ($) Q2 2021Q2 2022Difference (%) Q2 2020 Q2 2022 Difference (%) 
APAC 187m227m+21155m227m+46
Total 913m1.06bn+16797m1.06bn+33

Autodesk’s extension plan 

Like many software businesses, Autodesk’s revenue is highly-dependent on the success of its subscription model, and it saw strong renewal rates of 100-110% during Q2 2022. This was also reflected in the uptake of the company’s popular Fusion 360 3D modelling platform, which now has more than 165,000 paying subscribers, and its paid-for extensions continue to drive the value of each of these users upwards. 

To help bring this about, Autodesk slashed the price of its Generative Design Extension by 80% in June 2021, reducing its annual cost from $8,000 to $1,600. In doing so, the firm has not only made its software more accessible to clientele, but raised the profile of Fusion 360’s extensions, which Anagnost believes will become a “significant revenue driver” by 2023. 

Already, in Q2 2022, the company saw a U.S. woven wire mesh manufacturer make Fusion 360 its main design tool by investing in an extension, which allowed it to automate new parts of its workflow. Likewise, Autodesk has reported that a rising number of German firms are using its software to train their apprentices, with Energie Baden-Wuerttemberg (EnBW) starting to do just that during the quarter. 

“A lot of the customers we’re talking about now, are people that’ve rolled out Fusion across the entire process,” added Anagnost. “One of the exciting aspects here is that our billings growth is actually growing faster than our subs growth. This is a result of our new extension strategy, which is continually adding more advanced capabilities, that people can buy on a pay-per-use or subscription basis.”

An engineer using Autodesk's Fusion 360 software.
Autodesk continues to invest in improving the functionality of its software portfolio. Photo via Autodesk.

Aiming for double-digit growth 

Looking ahead to H2 2022 on Autodesk’s earnings call, the firm’s CFO Debbie Clifford said that she expects to see an “improving economic environment,” resulting in a “strong growth in new business.” As a result, Clifford added that she’s “anticipating revenue growth to accelerate” in Q3, while setting a non-GAAP operating margin outlook of 31%. 

Although the company is expecting its net revenue retention rate to remain between 100% and 110% for the remainder of the year, it has now set its sights on expanding within its core construction and infrastructure markets, as part of its wider strategy to deepen its offerings and drive up the value of each client. 

“Our long-term strategic growth drivers and our flexible subscription business model give us confidence we can achieve our goal of sustainable double-digit revenue beyond FY 2024,” concluded Clifford. “On the whole, we believe that we have many exciting opportunities to drive growth by further expanding our addressable market, as well as by deepening the monetization of our user base.” 

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Featured image shows Autodesk’s Californian HQ. Photo via Wikimedia Commons.