3D design software maker defers $30 million in sales due to shift to rental model
Autodesk, Inc. is reporting it booked more than 20, fourth-quarter transactions of its cloud-based BIM 360 software platform, including two worth over $1 million each.
The San Rafael, Calif.-based 3D design and engineering software firm said it also closed on its largest transaction ever, worth more than $20 million, during the quarter.
Autodesk shares (Nasdaq: ADSK) hit an all-time high of $58.68 on Feb. 27. The company’s stock is up about 55 percent in the past 52 weeks. Autodesk’s 52-week stock price ranges from a low of $33.01 to a 52-week high of $58.68. The company has a market cap of $11.9 billion and a P/E ratio of 48.52.
Revenue for its fourth quarter, ended Jan. 31, fell 3.3 percent to $586.6 million, compared to the same period last year, due to the company’s shift in its business model from proprietary software to cloud-based software-as-a-service (SaaS) solutions. Fourth-quarter earnings per share of $0.40 was down from $0.53 a year ago but $0.06 higher than analysts’ expectations.
Autodesk reclassified revenues from its cloud-based software services ratably instead of up front payment for licenses in the fourth quarter. Its subscription revenue, up 10 percent to $266 million for the quarter, now consists of two components: maintenance revenue for software products and revenue for cloud-based software services, including Autodesk 360.
Due to the transition to a rental model, Autodesk deferred $30 million in fourth-quarter revenue from enterprise license deals with some customers.
The $30-million deferment had a negative impact on Autodesk’s license revenue in the Americas and its Architecture, Engineering and Construction (AEC) business segment, which posted a 5.8 percent drop in fourth-quarter revenue to $196 million. Without the business model transition, Autodesk’s AEC segment would have posted a revenue increase of 8 percent.
Still, Autodesk CEO Carl Bass was extremely bullish during the fourth-quarter earnings call with analysts about the company’s prospects developing business in the $7 trillion construction market with its BIM software portfolio.
“In just a few quarters, BIM 360 has become one of our fastest growing products ever,” Bass said during the call, according to Seeking Alpha. “Collaboration and mobility are rising in importance for our customers, and that’s what our cloud-based BIM 360 product is all about.”
Autodesk signed its largest BIM 360 enterprise deal worth over $1.5 million during the third quarter.
Overall, fourth-quarter revenue from suites – fueled by a 32 percent jump in sales of AEC suites – increased 15 percent to $216 million and now represents 37 percent of the company’s total revenue.
Suites include the following:
- Revit family suites
- AutoCAD Design Suites
- Building Design Suites
- Educational/academic suites
- Entertainment Creation Suites
- Factory Design Suites
- Infrastructure Design Suites
- Inventor family suites
- Plant Design Suites
- Product Design Suites
Meanwhile, fourth-quarter revenue from its flagship products was down 13 percent mainly due to a decrease in AutoCAD sales that “in part reflects customer migration to our Design and Creation Suites,” the company said.
Flagship products include:
- 3ds Max
- AutoCAD
- AutoCAD LT
- AutoCAD vertical products such as AutoCAD Mechanical and AutoCAD Architecture
- Civil 3D
- Inventor products (standalone)
- Maya
- Plant 3D
- Revit products (standalone)
Geographically, revenue fell in the Americas by 6 percent to $207 million and in EMEA by 4 percent to $229 million. APAC sales grew 2 percent to $150 million and revenue from emerging economies increased 5 percent to $88 million led by growth in India, Autodesk said.
Q1 Outlook
For the first quarter of FY2014, Autodesk said it expects revenues in the range of $560–$575 million, and earnings per share of $0.19-$0.22.
