3D design software developer Autodesk has bucked the industry trend with its Q2 2021 financial results, reporting year-on-year revenue growth of 15 percent.
The company’s total revenue for Q2 2021 was $913 million, a 15 percent increase on the $796 million generated during Q2 2020. Autodesk also achieved a 20 percent rise in revenue during Q1 2021 due to a strong showing from its subscription-based software business.
As a result, the firm’s latest financials reveal that its revenue growth has slowed slightly during Q2 2021. Despite posting strong overall revenue results, Autodesk’s shares dipped 2.3 percent from a high of €213.60 to a low of €208.60, indicating that shareholders had expected better revenue performance.
Autodesk’s positive Q2 2021 results are in stark contrast to those on the hardware and manufacturing side of the industry. 3D Systems, Stratasys, and ExOne each suffered revenue declines during the second quarter, owing to a reduction in customer demand caused by the ongoing COVID-19 pandemic.
On an earnings call with analysts and investors, Andrew Anagnost, President, and CEO of Autodesk credited the firm’s increase in revenue to its cloud-based business model. Given that many people are continuing to work remotely due to the ongoing pandemic, Anagnost said that Autodesk is best positioned to take advantage of this in the coming years.
“We delivered a strong second quarter as a result of our resilient business model and strategic nature of our products,” said Anagnost. “Our cloud-based solutions are helping our customers stay productive in the current environment, and have resulted in expanded relationships and usage of our products.”
“I am very proud of our team as we continue to deliver on our long-term strategic goals, and remain confident in our growth drivers and fiscal 2023 targets,” he added.
Autodesk’s Q2 2021 financial results
Autodesk’s financial results are reported across two main segments: Subscription revenue and Maintenance Plan revenue. Subscription Revenue includes the company’s subscription fee income from product subscriptions, cloud service offerings, and EBAs. Subscriptions cover Autodesk’s combined desktop software and cloud functionality offering.
The Maintenance revenue segment comprises sales generated from plans provided to customers that include an option to upgrade to Autodesk’s new releases once they’re launched.
Subscription revenue accounted for the vast majority of the company’s overall income during Q2 2021. Over the second quarter, Subscription plan revenue rose from $663 million in Q2 2020 to $841 million in Q2 2021, an increase of 26 percent. Contrastingly, during Q2 2021, the Maintenance segment generated $51.2 million, a decline of 50 percent on the $103 million reported in Q2 2020.
| Revenue (millions $) | Q2 2021 | Q2 2020 | Variance (%) |
| Subscription | 841m | 663m | +26.8 |
| Maintenance | 51m | 103.5m | -50.7 |
| Other | 20.7m | 29.6m | -30 |
| Total net revenue | 913.1m | 796.8m | +15 |
In terms of geographical area, the Americas remained the company’s strongest performing region for total net revenue. Over Q2 2021, the Americas generated $371 million in revenue, a 14 percent increase compared to the $325 million reported in Q2 2020. The U.S. contributed the most to this amount, earning $309.5 million in Q2 2021, while the rest of the Americas brought in $62 million.
Autodesk’s revenue generated in the EMEA region also increased, from $316 million in Q2 2020 to $354 million in Q2 2021. This represents an 12 percent improvement over Q2 2020, slightly less than the 14 percent growth experienced in the company’s American business.
Cloud-based success for Autodesk during COVID-19
On the Q2 2021 earnings call, Anagnost explained how a slight economic recovery in the global economy had boosted the company’s revenue performance during the second quarter. “In China, Korea, and Japan, we are seeing usage above pre-COVID levels, and in some areas of Europe, we continue to see a recovery as well,” said Anagnost.
“We are also seeing a positive correlation between usage trends and new business performance, which gives us confidence that the green shoots we see in usage will translate into improved new business performance in subsequent quarters,” added Anagnost.
As cloud-based working becomes a necessity due to the ongoing pandemic, the company’s software offering has seen continued growth. Since Q2 2020, Autodesk’s BIM 360 design collaboration tool has doubled its number of users. The firm’s Fusion 360 platform also had its best-ever quarter for new subscriptions, adding 10,000 more clients.
Although Autodesk did suffer from the impact of COVID-19, the accessibility of its products combined with its execution in recovering countries, allowed it to continue increasing its revenue Additionally, the firm managed to avoid losing many customers during the pandemic, with more than 40 percent of its maintenance clients who came up for renewal, converting to subscriptions.
During the quarter, the company also launched its premium subscription plan, offering added security, with single sign capabilities, and advanced product usage information for admin tasks. A number of construction and infrastructure firms have already signed up to the premium program, including Khatib & Alami and long-term partners Calibre Diona.
Autodesk’s plans for Q3 and Q4 2021
Scott Herren, CFO of Autodesk, said on the earnings call that although the company expected to close a number of large transactions, during Q3 2021, it was remaining cautious with its outlook. “Despite improving multi-year trends, we experienced at the end of the quarter, we’re taking a cautious view of their continued uptake in the second half of the year,” said Herren. “We’re confident in our Fiscal ’23 free cash flow target of $2.4 billion.”
Anagnost took a more optimistic view of the company’s prospects, highlighting the potential of its software within a range of industries. Aerospace business Firefly, medical firm Nobel Biocare and building company Saunders Construction have all recently adopted Autodesk’s BIM and Fusion 360 software. Moving into the second financial half of 2021, Aganost said that the digitization of the construction industry would provide further opportunities for expansion.
“The evolution of manufacturing to a more distributed network and cloud-based workflow is also going to accelerate significantly over the next few years,” said Anagnost. “We have the industry-leading multi-tenant cloud-based solution to address the emerging customer needs that will shape demand.”
Concluding the earnings call, Anagnost told analysts that the company would continue to focus on expanding its software offering, in order to continue driving future revenue growth. “With the investments we’ve made over the last few years, we are in the final stages of becoming a true staff provider and delivering a significant amount of capabilities in the cloud,” summarized Anagnost.
“We can now deliver enhanced value to our users and administrators, and our named user model enables our customers to operate efficiently in a remote work environment,” he added.
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Featured image shows Autodesk’s AutoCAD software. Image via Autodesk.
