The downturn other CAD companies warned about seems to have arrived; April results led to the drop in revenue and net income.
Autodesk (NASDAQ: ADSK) today reported a downturn in revenue and net income in its first fiscal quarter, compared to the same quarter a year ago. It seems the downturn other CAD/PLM vendors were warning about in their first quarter results has arrived. April was the first full month of availability for the 2014 editions of Autodesk suites, at slightly higher prices than the 2013 versions, and it turned out to be a very weak quarter for their introduction.
Wall Street reacted calmly to the Autodesk report; the stock was trading at 39.78, up $0.35 (0.89%) right after the earnings release.
Revenue for the quarter (ending April 30, 2013) was $570 million, down 3% compared to the first quarter of fiscal 2013 as reported; it was flat on a constant currency basis. Net income was $55.6 million, down 29% from a year ago. During the fourth quarter of fiscal 2013 Autodesk conducted a promotion; the company estimates the successful sales promotion pulled approximately $24 million in revenue away from Q1 and Q2.
“A mixed global economy weighed heavily on our first quarter results,” said Carl Bass, Autodesk president and CEO. “There were positive areas in the quarter but overall, a weak April led to a disappointing finish to the quarter.” He also said the company recorded “strong” deferred revenue and subscriptions billing growth, and record cash flow from operations in the quarter. A record in cash flow indicates both strong sales activity—even if it must be booked in future quarters—but also improvements in operations that lead to lower costs.
Autodesk is lowering its revenue forecast for all of fiscal 2014, which ends January 31, 2014. The company now expects revenue to increase by approximately 3% compared to fiscal 2013; the Wall Street consensus before today’s report was Autodesk revenue would grow by 5.5%.
First quarter in detail
- EMEA revenue was $216 million, down 4% from a year ago; up 1% on a constant currency basis.
- Americas revenue was $202 million, down 3% from a year ago.
- Asia Pacific was $152 million, down 3% from a year ago and up 1% on a constant currency basis.
The basket of nations Autodesk refers to as Emerging Economies reported revenue of $75 million, down 8% from a year ago. Revenue from emerging economies represented 13% of total revenue in the first quarter, its lowest contribution to Autodesk revenue in (by percentage) in six years. Emerging economies revenue was down 6% on a constant currency basis.
By product segments:
- Platform Solutions and Emerging Business segment revenue was $213 million, down 6% from a year ago.
- AEC business segment revenue was $172 million, up 4% compared to the first quarter last year.
- Manufacturing business segment revenue was $139 million, down 4% compared to last year.
- Media and Entertainment business segment revenue was $47 million, down 8% compared a year ago.
Other product revenue metrics:
- Flagship products revenue was $312 million, down 9%.
- Suites revenue was $176 million, up 8% from a year ago.
- Revenue from New and Adjacent products was $82 million, flat compared to the first quarter last year.
- Deferred revenue at the end of the first quarter was a record $851 million, up 17% compared to the first quarter last year.
Cash per share on April 30, 2013 was $7.39, continuing an upward trend going back four quarters. To compare:
- Cash per share on April 30, 2013: $7.39
- Cash per share on January 31, 2013: $7.17
- Cash per share on October 31, 2012: $5.84
- Cash per share on July 31, 2012: $4.04.
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L. Stephen Wolfe, P.E., a contributing analyst for Jon Peddie Research, provided research for this report.