Two years ago, we began this journey to move away from multi-year contracts billed upfront to multi-year contracts billed annually. I know that created some clouds for all of you on the outlook of Autodesk for 18 months. But look -- look at the results, okay. Two years ago the number of multi-year contracts billed upfront was measured in the billions. Today, you heard from Betsy, it's immaterial, right? Now the great thing about that is that billions from the past comes back to you, but it comes back to you in a nice smooth build up over time.
— Andrew Anagnost
03Detailed Report
ADSK
Company ADSK
Period
Q2 2025
CurrencyUSD
Report TypeQuarterly Earnings
GeneratedJun 5, 2026
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Executive Summary
Autodesk reported a solid Q2 2025, delivering 13% revenue growth in constant currency and 12% reported growth, supported by broad-based momentum in AEC and manufacturing. Billings rose 13% YoY with a modest tailwind from the shift to annual billings and a mechanical lift of ~2% from the new transaction model, even as co-terming and geography rollout effects introduced timing headwinds. Free cash flow in the quarter was $203 million, contributing to a cash balance of $1.513 billion and total liquidity that supports ongoing buybacks and selective capex. Management reiterated a disciplined investment stance aimed at margin expansion and higher sales and marketing productivity through the transition to the new transaction model, while acknowledging near-term margin headwinds as channel payments move from contra-revenue to S&M expense and as Western Europe launches in September.
Guidance was raised for fiscal 2025: billings now expected to be $5.88–$5.98 billion and revenue to $6.08–$6.13 billion, with non-GAAP operating margins at 35–36% and free cash flow guidance raised to $1.45–$1.50 billion. Management also signaled stronger free cash flow growth into fiscal 2026, with an expected midpoint around $2.05 billion, driven by renewal cohorts returning, the annual-billing transition, and a larger EBA base. The company maintains a target to achieve Rule of 40 discipline, aiming for 45%+ in the long run, underpinned by cloud/AI investments, product convergence, and a scalable go-to-market model.
Strategically, Autodesk continues to monetize secular trends in AEC, manufacturing, and media/entertainment through end-to-end, cloud-enabled platforms (Autodesk Construction Cloud, Fusion, and industry clouds). The management emphasis on earnings quality (non-GAAP profit as a primary metric during the transition) and capital returns (active buybacks) highlights a focus on durable value creation even as the company navigates the transition to annual billings and the new transaction model.
Key Performance Indicators
Revenue
Increasing
1.51B
QoQ: 6.21% | YoY: 11.90%
Gross Profit
Increasing
1.37B
90.70% margin
QoQ: 6.64% | YoY: 12.07%
Operating Income
Increasing
343.00M
QoQ: 14.72% | YoY: 30.92%
Net Income
Increasing
282.00M
QoQ: 11.90% | YoY: 27.03%
EPS
Increasing
1.31
QoQ: 11.97% | YoY: 25.96%
Revenue Trend
Margin Analysis
Financial Highlights
Revenue and Growth:
- Total revenue: $1.505 billion in Q2 2025, YoY growth 11.9%, QoQ growth 6.21%.
- Revenue by segment (constant currency): AutoCAD/AutoCAD LT up ~8%; AEC up ~15%; Manufacturing up ~low- to mid-teens (excluding upfront revenue); M&E up ~5%.
- Revenue by geography: 13% YoY growth in all regions at constant currency; Direct revenue up 21% and representing 40% of total revenue, up 3 percentage points.
Gross, Margin and Profitability:
- Gross margin: GAAP and non-GAAP gross margins broadly flat versus prior period (reported as ~90.7% gross margin).
- Operating income: GAAP operating income ~$343 million; non-GAAP operating income margin ~22.7% (GAAP 22.8% implied by reported data).
- Net income: ~$282 million; net income margin ~18.7%; Earnings per share (diluted): $1.30–$1.31.
- Stock-based compensation: expected to fall by >1 percentage point as a share of revenue in FY25, contributing to margin trajectory.
Cash Flow and Balance Sheet:
- Free cash flow (quarter): ~$198 million; operating cash flow: $212 million.
- Cash and cash equivalents: $1.513 billion; total cash and short-term investments: $1.878 billion.
- Share repurchases: ~471k shares repurchased for ~$115 million (avg price ~$245).
- Deferred revenue: down 13% to $3.7 billion; RPO: $5.9 billion; current RPO: $3.9 billion (growth +12% and +11%, respectively).
- Net debt: ~$1.09 billion; total debt: ~$2.603 billion; liquidity remains solid to support buybacks and capex.
Capital Allocation and Outlook:
- Fiscal 2025 guidance: billings $5.88–$5.98B; revenue $6.08–$6.13B; non-GAAP operating margin 35–36%; free cash flow $1.45–$1.50B.
- Fiscal 2026 outlook (approximate): FCF around $2.05B at the midpoint; revenue growth near 11% in 2025 with higher revenue tailwinds in 2026 due to renewals and annual billing, offset by margin headwinds from the new transaction model and continued investment in people/process automation.
- Management emphasizes Rule of 40 framework with a long-term target of 45%+.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
1.51B
11.90%
6.21%
Gross Profit
1.37B
12.07%
6.64%
Operating Income
343.00M
30.92%
14.72%
Net Income
282.00M
27.03%
11.90%
EPS
1.31
25.96%
11.97%
Key Financial Ratios
Gross Profit Margin
Excellent
90.70%
Gross profit margin is exceptional, indicating strong pricing power and operational efficiency
Operating Profit Margin
Good
22.80%
Operating margin is healthy and competitive within industry standards
Net Profit Margin
Good
18.70%
Net profit margin is healthy and competitive within industry standards
Return on Assets
Weak
2.83%
Return on assets suggests inefficient capital allocation
Return on Equity
Fair
11.40%
Return on equity is acceptable but below top-tier companies
Current Ratio
Concern
0.64
Current ratio below safe levels, potential liquidity risk
Debt to Equity
High Risk
1.05
Debt-to-equity indicates high leverage and elevated financial risk
P/E Ratio
High Growth
47.40x
Very high P/E indicates aggressive growth expectations, higher risk
Price to Book
High Premium
21.61x
Very high premium suggests asset-light business model or lofty expectations
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