Autodesk revenue rises 13% in fourth quarter

Net income continues to drop with the conversion to subscriptions.

Autodesk (NASDAQ: ADSK) saw revenue rise in the fourth quarter, capping a year which saw AEC sales regain a level not seen for several years.

Revenue was $665 million for the fourth quarter of fiscal 2015 (ended January 31, 2015), up 13% compared to 4Q14; 15% on a constant currency basis.

The interior of Autodesk’s new Pier 9 workshop in San Francisco, a creativity lab that doubles as the new home of its consumer products division. The workshop includes 10 3D printers. (Source: Autodesk)

Fourth quarter net income was down 78% to $11.5 million, the second straight year of significant fourth quarter fall in net income. Autodesk says lower net income is an evitable part of its conversion to subscriptions, which moves much of the revenue from being recognized immediately to being extended through several quarters. Backing up the claim is cash flow from operating activities, which set a quarterly record at $257 million, up 39% from 4Q14, and deferred revenue, up 28% to a record $1.16 billion compared to $901 million a year ago.

Total subscriptions, including maintenance, desktop (rental), and cloud subscriptions, increased by approximately 100,000 from the third quarter of fiscal 2015, including approximately 17,000 subscriptions related to the recent acquisition of Shotgun (Media and Entertainment software for production management). Autodesk now has 2.23 million named subscribers.

Subscriptions are rising rapidly as a percentage of total seat count.

Autodesk CEO Carl Bass said the AEC segment continued to post strong growth throughout the year, making up for several slow years. “Adoption of BIM is still a big thing; it is not nearly fully adopted. We are still in the middle of a very strong AEC technology transition,” said Bass.

4Q15 AEC business segment revenue was $242 million, up 24% from a year earlier. Revenue from the Manufacturing business segment was $190 million, up 23% compared to the fourth quarter last year. Revenue from the Media and Entertainment (M&E) business segment was $43 million, posting a rare increase year-over year, up 5% compared to 4Q14. By comparison, 4Q14 M&E revenue was 12% down in its year-over-year comparison.

Revenue from Flagship products was $298 million (primarily AutoCAD, Revit, Inventor, Maya, and 3ds Max), up 4% from a year ago. Revenue from Suites was $249 million, up 15%. Revenue from New and Adjacent products was $117 million, up 41% from a year ago.

Revenue from suites was up 15% compared to the fourth quarter a year ago.

Fourth quarter revenue by regions:

Americas revenue was $238 million, up 15% compared to 4Q14
EMEA revenue was $273 million, up 19% from a year earlier and up 21% on a constant currency basis
APAC revenue was $154 million, up 2% from a year ago and up 7% on a constant currency basis.

Bass described Asia/Pacific as the weakest regional economy at the moment. Europe varies country by country, with Germany and the Northern European countries doing the best. Bass singled out Japan and Russia as the most worrisome economies.

Revenue from emerging economies was $107 million, up 21% compared to the fourth quarter last year, and up 22% on a constant currency basis. Revenue from emerging economies represented 16% of total fourth quarter revenue.

Revenue from Asia/Pacific was up only 2% from the fourth quarter a year ago.

Overview of fiscal 2015 results

For all of fiscal 2015, revenue was $2.51 billion, up 10% compared to fiscal 2014, and up 12% on a constant currency basis. Revenue contribution from the recent acquisition of Delcam was approximately $48 million for the year. Total subscriptions (maintenance, desktop, and cloud) increased by approximately 385,000 to 2.23 million.

Net income in fiscal 2015 was $81.8 million, down 64% from a year ago.

Other key full-year results:

Total billings increased 18% compared to fiscal 2014 and increased 20% on a constant currency basis
Revenue from Suites increased 17%
Revenue from the AEC business segment increased 19%
Revenue from the Manufacturing business segment increased 17%
Cash flow from operations increased 26% to $708 million.

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L. Stephen Wolfe, P.E., a contributing analyst for Jon Peddie Research, provided research and his usual legendary insights for this article.