This summary is based on the first quarter fiscal 2009 earnings call conducted by Autodesk Inc. (ADSK) on May 15, 2008.
Management:
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President, Chief Executive Officer, Director: Carl Bass
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Chief Financial Officer: Alfred Castino
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Director of Investor Relations: David Gennarelli
Key Investors Issues
- Revenue increased 18% over last year to $599 million.
- Net income came in at $95 million or 41 cents a share, down 18.8% from $117 million or 50 cents a share in the prior year
- The firm announced its intent to acquire Moldflow Corporation, a leading provider of simulation software.
First Quarter Highlights
Revenue increased 18% over last year to $599 million as growth in the international geographies continues to underpin overall revenue growth.
- Revenue from outside the United States increased by 24% as reported and 13% at constant currency.
- While favorable currency exchange rates help fuel this growth, even at constant currency the overall business outside of the United States remains healthy and continues to grow.
- Revenue from emerging economies increased by a robust 41% and represented 17% of total revenue, and as the firm broadens its presence in these regions, it will be able to further capitalize on this growth opportunity.
- Revenue from new commercial seats grew 23%, which is a good indicator that the products remain in strong demand.
Net income came in at $95 million or 41 cents a share, down 18.8% from $117 million or 50 cents a share in the prior year as international markets, especially emerging economies, continue to underpin performance.
- Operating expenses were $479 million, including $9 million of cost reduction initiatives, including prioritization of projects and resource reorganization and operating margin came in at 20%.
- Cash and investments were $950 million and the firm issued 1.6 million shares from employee stock plans, generating $35 million in cash.
- It used $257 million to buy back 8 million shares and drew down $40 million on the line of credit, primarily to help fund the stock repurchase.
Cash generated from operating activities decreased 4% to $185 million, due primarily to the payments of commissions and bonuses.
- Total deferred revenues increased 9% or $44 million sequentially to $550 million, while deferred maintenance revenues increased $130 million over the prior year, as the firm successfully drove strong maintenance results.
- Unshipped product orders, or shippable backlog, were up sequentially to $18 million.
- Total backlog, including deferred revenues and unshipped product orders, was $567 million, an increase of $149 million over last year.
Channel inventory remains below three weeks and day sales outstanding was 51 days, an eight day decrease from last quarter due to a smaller increase in the deferred revenue balance, as well as improvements in billings linearity.
- The firm recently announced its intent to acquire Moldflow Corporation, a leading provider of simulation software used to optimize the design of injection molded plastic parts in molds.
- The combination of solutions will enable Autodesk to provide suppliers in the automotive, electronics, healthcare and consumer products markets with a fully digital development process for plastic injection part and mold design.
Another key driver for the business is the growth of the 3D design market, where revenue increased 37% to $146 million and was 24% of total revenue.
- The firm shipped over 35,000 commercial seats of the model-based 3D design products, Inventor, Revit, Civil 3D, and NavisWorks, a 9% increase.
- The 2D solutions are also maintaining very healthy growth rates, led by very strong contribution from AutoCAD LT..
- In the Americas, as expected the U.S. continued to face economic headwinds, posting 4% growth.
- Over the past few months, the firm has have put programs in place to help stimulate demand and is seeing many positive data points stemming from these actions.
Divisional Highlights:
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Platform solutions and emerging businesses had a solid quarter, increasing revenue 11% to $278 million.
- Growth was led by very robust sales of AutoCAD LT, which grew 28% and AutoCAD grew 3%.
- Revenue from the manufacturing solutions division increased 26% to $119 million, once again far exceeding the growth of the entire market.
- The firm shipped more than 11,500 commercial seats of Inventor and approximately 46,000 total seats of the manufacturing products.
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AEC revenue increased 29% to $129 million as revenue from the Revit family of products was very strong with an increase of 61%.
- The firm shipped approximately 24,000 commercial seats of Revit, Civil 3D, and NavisWorks.
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Media and entertainment revenue was $67 million, an increase of 14%, while animation revenue increased 23%.
- The migration of the advanced systems solutions off of SGI hardware to mainstream systems is now largely complete.
- The change had substantially improved the advanced systems gross margin but the firm expects this portion of the M&E business to remain fairly low growth.
