Low Autodesk forecast causes 5% share dip despite 16% revenue growth in Q4 2021 financials

3D design software developer Autodesk has seen its share price decline by 5% despite reporting 16% annual revenue growth in its Q4 2021 financial results. 

The firm, which reports its financials across calendar years, generated revenue of $1.04 billion during Q4 2021, a rise of 16% on the $899 million turned over in Q4 2020. However, Autodesk also issued guidance of $955-970 million for Q1 2022, falling short of the expected $1.12 billion cap, causing its shares to drop by 5%.

On a call with analysts and investors, Andrew Anagnost, President and CEO of Autodesk, emphasized that the firm’s established business model had put it on a course for future growth. “Our strong fiscal 2021 results reflect the increasing importance of a cloud-based platform to our customers and the resilience of our subscription business model,” said Anagnost.  

“With a record number of enterprise agreements in Q4, and recently announced intention to acquire Innovyze, we are looking to the future with optimism and remain confident in our fiscal 2023 targets and double-digit growth thereafter,” he added. 

Autodesk's Californian HQ.
Even though Autodesk achieved 16% Q4 2021 revenue growth, its share price fell by 5%. Photo via Wikimedia Commons.

Autodesk’s Q4 2021 results

Autodesk mainly reports its financial results across two core segments: Subscription revenue and Maintenance Plan revenue. While Subscription revenue includes the company’s income from product subscriptions, cloud service offerings, and EBAs, its Maintenance plan revenue comprises income generated from long-term plans such as client upgrades. 

During Q4 2021, Autodesk’s Subscription segment generated $950 million in revenue, 22% more than the $777 million reported in Q4 2020, and a 7% increase on a sequential quarterly basis. By contrast, the firm’s Maintenance plan revenue continued to fall, declining from $80 million in Q4 2020 to $30 million in Q4 2021, representing a collapse of 62%. 

Geographically, Autodesk’s annual revenue increased across every region, with the EMEA area remaining its highest earner at $409 million. Elsewhere, the company’s APAC and Americas businesses experienced the highest revenue rises, growing by 23% and 21% respectively between Q4 2020 and Q4 2021. 

The firm also released data regarding its bestsellers during Q4 2021, showing that AutoCAD remained its biggest sales success, bringing in $287 million in revenue, 11% more than the $258 million reported in Q4 2020. Over the same period, Autodesk’s manufacturing package grew the most, increasing from $202 million to $236 million, a jump of 17%. 

Revenue (millions $)Q4 2020Q4 2021Variance (%)
Subscription777m 950m+7
Total net revenue899m1.104bn+16

Fusion360 key to revenue rise

During the earnings call, Anagnost explained that the firm’s Maintenance plan renewal rates were expected to decline, because clients are being transferred to subscriptions instead. In fact, the company intends to scrap the plan altogether by Q2 2022, and has so far converted over 1.3 million maintenance clients into subscriptions, with just 126,000 remaining. 

Although Anagnost claimed that “billings were broadly level with last year,” he conceded that the firm had seen fewer multi-year sales over Q4 2021, and this caused an annual drop of 1% to $1.47 billion. This decline didn’t originate in Autodesk’s 3D printing software business though, as Fusion 360 continued to grow, reaching the 140,000 user milestone. 

The company’s other CAD program, TinkerCAD, also expanded its footprint in the education sector, attracting new adopters like mechanical engineers from University College London. While Anagnost acknowledged that the software was free to students, thus the deal won’t yield immediate gains, he said that “graduates bring Fusion 360 with them into the workplace,” making them future clients. 

In terms of potential upgrades to its program portfolio, Autodesk forged close ties with Swedish tooling manufacturer Sandvik Coromant in Q4, which could yield improvements to the CAM element of Fusion 360. As part of a multi-year deal, the firms aim to optimize the software’s print preparation phase, reducing part lead times in the process.

A part being modelled using Autodesk's Fusion360 software.
Autodesk’s Fusion360 software (pictured), now has over 140,000 subscribers. Photo via Autodesk.

Autodesk charts steady course for Q1 2022 

Looking ahead, Autodesk expects increased COVID vaccine availability to improve client confidence in H2 2022. The company also believes that its acquisition of water modeling firm Innovyze will yield revenue growth (although this wasn’t factored into guidance), and hiring Debbie Clifford and Raji Arasu as its new CFO and CTO, could provide fresh perspectives that lead to new opportunities. 

With regards to subscription renewal, Anagnost told analysts that he anticipates rates will “continue to be very healthy,” remaining in the 100-110% range. As a result, for FY 2022, the company has set revenue guidance at an annual increase of 13-15%. While still constituting strong growth, this figure only allows for an EPS of $0.91-0.96, which is less than the $1.12 anticipated, hence the firm’s shares fell 5%. 

In his closing remarks, Anagnost suggested that although changes in taxation law could dent Autodesk’s profit margins in Q1 2022, he expects revenue to grow rapidly in the second half of the year. “We continue to build a stronger Autodesk for the long term,” concluded Anagnost. 

“Our early and sustained organic and strategic investment in critical capabilities, give us significant competitive advantages and confidence to grow in the double-digit range,” he added. “We expect to have accelerating momentum during fiscal 2022, and we have multiple drivers that make us confident in our fiscal 2023.”

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