Autodesk, a design software company, has reported Q1 FY2024 results that met analysts’ expectations. Its revenue increased by 8.46% YoY to reach $1.27 billion. However, the company’s projection for the next quarter was less impressive, with a midpoint estimate of $1.32 billion, which is 1.11% below analysts’ estimates. Despite this, Autodesk achieved a GAAP profit of $161 million in Q1, an improvement from last year’s Q1 profit of $146 million.
If you’re interested in buying Autodesk stock, check out our free analysis of the company’s earnings results here.
Autodesk (ADSK) Q1 FY2024 Highlights:
- Revenue: $1.27 billion vs analyst estimates of $1.27 billion (small beat)
- EPS (non-GAAP): $1.55 vs analyst expectations of $1.56 (small miss)
- Revenue guidance for Q2 2024: $1.32 billion at the midpoint, below analyst estimates of $1.33 billion
- The company reconfirmed revenue guidance for the full year, at $5.41 billion at the midpoint
- Free cash flow of $714 million, down 20.9% from the previous quarter
- Gross Margin (GAAP): 90%, down from 91.2% in the same quarter last year
“We are deploying next-generation technology and services and end-to-end digital transformation within and between the industries we serve and shifting Autodesk from products to capabilities,” said Andrew Anagnost, Autodesk president and CEO.
Autodesk, founded in 1982 by John Walker, is a leading computer-aided design (CAD) software provider for engineering, construction, and architecture companies.
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Sales Growth
Autodesk’s revenue growth has been mediocre over the last two years, growing from quarterly revenue of $989 million in Q1 FY2022 to $1.27 billion. For Q1, the company’s quarterly revenue was only up 8.46% year on year, which may disappoint some shareholders. However, Autodesk’s sales seem to have a seasonal pattern, and management is confident that revenue will rebound in the coming quarter.
Guidance for the next quarter suggests that Autodesk is expecting revenue to grow by 6.71% YoY to reach $1.32 billion, which is a slowdown from the 16.7% YoY increase in revenue recorded in the same quarter last year. Analysts were estimating that sales would rise by 8.97% over the next twelve months.
In these volatile times, it’s essential to look for stable companies with strong pricing power. Autodesk is one such company, with its software products being the default standard in critical industries for decades. With a market capitalization of $42.1 billion, more than $2.13 billion in cash, and positive free cash flow over the last twelve months, we’re confident that Autodesk has the resources to pursue a high-growth business strategy.
Profitability
Autodesk’s gross profit margin, a critical metric measuring how much money there is left after paying for servers, licenses, technical support, and other necessary running expenses, was 90% in Q1, a great gross margin that allows the company to fund investments in product and sales during periods of rapid growth and be profitable when it reaches maturity.
Key Takeaways from Autodesk’s Q1 Results
Autodesk achieved strong billings and free cash flow in the quarter. However, the company’s revenue and EPS guidance for the next quarter missed analysts’ estimates, and gross margin deteriorated slightly. Despite these issues, Autodesk remains a stable company capable of pursuing a high-growth business strategy, currently trading at $198 per share.
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The author has no position in any of the stocks mentioned.
