Autodesk Reports Strong Q2 Results, Boosted by AI Integration and Data Center Demand

Autodesk's stock jumps 9%+ on strong second quarter results - SiliconANGLE

Shares of Autodesk Inc. jumped more than 9% in after-hours trading today after it posted second quarter results that topped expectations across the board. The company also raised its full-year guidance. Autodesk's flagship product is an application called AutoCAD that engineers use to design buildings and machines. The software, which was originally released in 1982, has received numerous artificial intelligence upgrades over the past few years. AutoCAD can now explain project details for users and automatically generate drawings. AutoCAD is often used in data center design projects. The software lends itself to architecting not only a data center's structure, or shell, but also some of the equipment inside. That includes the power management modules responsible for delivering electricity to servers. The tech industry's investments in new AI data centers had a positive impact on Autodesk's financials during the second quarter. "We saw strength in AECO, where our customers are benefiting from sustained investment in data centers, infrastructure, and industrial buildings, which is more than offsetting softness in commercial," Autodesk Chief Financial Officer Janesh Moorjani told investors. AECO is an acronym for the architecture, engineering, construction and operations sectors. Construction projects are not Autodesk's sole revenue source. The company also makes software tools for designing mechanical systems such as manufacturing equipment. For the media and entertainment sector, it provides a suite of applications that can be used to produce computer-generated imagery. Autodesk's revenue rose 17.1% year-over-year in the second quarter to $1.76 billion. That's about 2% better than the $1.72 billion predicted by analysts. Much of the growth was driven by the company's AECO business, which saw sales climb 23% to $878 million. Autodesk says that a recently launched revamp of its go-to-market strategy contributed $105 million in revenue during the second quarter. The company historically sold its software through a network of partners. Earlier this year, Autodesk switched to billing customers directly. The move was accompanied by job cuts in the company's go-to-market organization. Autodesk laid off about 1,350 employees, or 9% of its workforce, as part of the initiative. "We initiated the optimization phase of our sales and marketing efficiency plan in February," Moorjani said. "We are making good progress and are on track to realize its expected benefits. These efficiency gains, combined with inherent operating leverage, set us up well to expand our operating margin over time." Autodesk achieved a 39% adjusted operating margin in the second quarter. That allowed it to deliver adjusted earnings of $2.62 per share, well above the $2.45 forecasted by analysts.

Autodesk Revenue Jumps 17% in Fiscal Q2 | The Motley Fool

Autodesk (ADSK 11.92%), a global design software leader serving industries from construction to manufacturing, reported solid fiscal 2026 second-quarter results on Thursday, Aug. 28. The headline news is clear: the quarter beat most analyst expectations, with revenue hitting $1.76 billion and adjusted earnings per share reaching $2.62. Strong cash flow and steady margin expansion further supported management's raised guidance for the full year. Compared to Wall Street targets, the results were notably ahead, helped by sustained demand in the Architecture, Engineering, Construction & Operations segment and ongoing gains from its subscription business model. Source: Autodesk. Note: Fiscal 2026 second quarter ended July 31, 2025. Autodesk provides software tools for design, engineering, construction, manufacturing, and media industries. Its most well-known product, AutoCAD, is a computer-aided design application used by architects and engineers. Over the past decade, Autodesk has expanded into building information modeling, manufacturing collaboration, cloud-based design, and media production workflows. Recent focus areas for the company include the continued development of cloud-native software, integrating artificial intelligence into product workflows, and shifting customers to recurring subscription contracts. The transition toward a subscription-based business model is central to Autodesk's strategy, making revenues more predictable and aligning closely with customer needs. Key success factors for the business include innovation in software capabilities, smooth execution of this subscription transition, and managing global sales through a direct and partner-driven distribution network. Revenue in Q2 jumped 17% compared to the previous year, reaching $1.76 billion. Growth was broad, led by the AECO (Architecture, Engineering, Construction & Operations) product family, which posted a 23% increase to $878 million. This segment benefited from ongoing investments in data centers, infrastructure, and industrial buildings, which offset weakness in commercial project demand. Second quarter billings rose 36% to $1.68 billion, well above the growth rate for recognized revenue. Billings is defined as total revenue plus the net change in deferred revenue from the beginning to the end of the period. Higher billings growth is supported by up-front revenue recognition and a strong performance in the Autodesk Store. Another major contributor was subscription revenue, making up approximately 94% of all revenue in Q2. Adjusted operating margin reached 39% in Q2 FY2026, up 2 percentage points from the prior year, while free cash flow rose 122% to $451 million. This growth in profitability is linked to higher sales and operational cost control, with a notable reduction in one-time restructuring costs. Autodesk's investments in artificial intelligence (AI) stood out this quarter. The company made further progress deploying AI in its core design and make products. In particular, its "Make" line -- which provides tools for manufacturing planning and execution -- grew 20% year over year in Q2. In management commentary, CEO Andrew Anagnost referenced "industry-specific foundation models and products capable of understanding and reasoning about 2D and 3D geometry, design and make data, complex structures, and even physical behavior" as a source of current and future growth. Geographically, the Americas and EMEA (Europe, Middle East, and Africa) regions continued to perform well in Q2, each delivering 19% constant currency growth. The APAC (Asia-Pacific) region was softer, up 11% year over year in Q2. Management attributes this mainly to Japan's slower transition to the new transaction model earlier in the year and wider economic challenges in China and Korea. A notable milestone for the quarter was the resolution of prior government investigations by the U.S. Securities and Exchange Commission and U.S. Attorney's Office. With these inquiries now closed as of August 2025, a key overhang for investors has been removed. Management raised full-year FY2026 guidance following these results. For fiscal 2026, Revenue is now projected at $7.03 billion-$7.08 billion, up from the prior range of $6.93 billion-$6.99 billion. Billings outlook for FY26 was also lifted to $7.355 billion-$7.445 billion, and free cash flow is expected between $2.10 billion and $2.20 billion. For the third quarter, Revenue is forecast at $1.80 billion-$1.81 billion for Q3 FY2026, with adjusted EPS targeted between $2.48 and $2.51. The company cited ongoing business strength and favorable foreign exchange movements as key reasons behind these increases. Looking into the next quarters, areas for investor attention include the continued global adoption of Autodesk's subscription platform, further roll-out of AI-powered features, and trends in key regions, especially APAC, where growth remains behind the rest of the company. Any major shifts in billings, backlog, or recurring revenue metrics are also important signals for the sustainability of current growth rates.

Autodesk Lifts Outlook After Q2 Beat | The Motley Fool

Autodesk(ADSK 1.19%) reported second quarter fiscal 2026 results on August 28, 2025, exceeding guidance across revenue, non-GAAP operating margin, billings, and free cash flow, and subsequently raised full-year guidance for fiscal 2026 (ending Jan. 31, 2026). Total revenue (GAAP) grew 17% year-over-year, non-GAAP operating margin reached 39% (up 140 basis points YoY), free cash flow reached $451 million, and share repurchases totaled $709 million year-to-date; management provided updated targets on long-term margin and capital allocation, including full-year billings guidance of $7.355 billion to $7.445 billion, and articulated concrete progress on cloud, AI, and go-to-market strategic initiatives. Autodesk implemented a cost discipline and restructuring plan at the beginning of the year. Optimization in sales and marketing contributed to operating leverage. The new transaction model is expected to increase operating margin drag in fiscal 2027, with management targeting long-term expansion through controllable efficiency levers despite non-linear progress. "Assuming no material change in the external environment, we expect reported non-GAAP operating margin to be 41% in fiscal 2029, or about 45% on an underlying basis, which excludes the mechanical impact of the new transaction model as it fully scales next year. This would represent a reported and underlying improvement of approximately 500 basis points and approximately 900 basis points, respectively, since we started to scale the new transaction model at the start of 2024." -- Janesh Moorjani, CFO Long-term profit expansion will be driven predominantly by improved sales and marketing efficiency and inherent operating leverage, positioning Autodesk for substantially higher margin structure as temporary transition headwinds subside. Autodesk repurchased 2.5 million shares year-to-date for $709 million, and increased fiscal 2026 share buyback targets to $1.2 billion-$1.3 billion. Management confirmed excess free cash flow dedicated to capital returns after funding product and AI initiatives, while clarifying the scale and focus of M&A activity. "First and foremost, Saket, you know, we invest organically in the business to drive our strategy around AI and all the things related to our product strategy. The second thing we look to do is we look at M&A as the next option, and we look at it for tech tuck-in reasons, really things that accelerate our existing roadmap and move us forward. And we look at it through the lens of targeted acquisitions that extend our adjacency strategy, things like construction operations. These kinds of acquisitions tend to be in the hundreds of thousands to the billions of dollars range, not in the tens of billions of dollars range. The other thing, of course, we're doing is as we have excess capital, above and beyond those needs, we are accelerating the deployment of that to shareholders via stock buybacks that move beyond offsetting dilution and accelerate and reduce the share count." -- Andrew Anagnost, CEO This disciplined approach keeps capital allocation flexible but focused, with limited appetite for large-scale transformative deals and a clear preference for extending competitive strengths in core adjacencies through smaller acquisitions and buybacks. AI-powered features such as Fusion's Sketch Auto Constraint have achieved an acceptance rate of more than 60%, with over 1.2 million dimensions delivered since launch in 2025, demonstrating measurable productivity gains among commercial users. Data model and API adoption is rising among large and mid-market customers, with foundation models and adaptive AI engines under development across 2D/3D workflows. "For more than a decade, Autodesk, Inc. has been at the forefront of innovation. In BIM, SaaS, generative design, and now in generative AI. We have been building industry-specific foundation models and products capable of understanding and reasoning about 2D and 3D geometry, design and make data, complex structures, and even physical behavior. For example, last year, we introduced Project Bernini. A generative AI model for 3D, as part of a broader initiative to create professional-grade foundation models that will disrupt long-standing technology paradigms and redefine what we mean by software, platforms, and products. By combining our own spatial and physical reasoning with deep industry-specific knowledge, Autodesk AI will move beyond traditional, deterministic, and rule-based parametric CAD kernels to deliver adaptive and context-aware AI-driven CAD engines." -- Andrew Anagnost, CEO Rapid integration of AI across flagship platforms strengthens Autodesk's long-term competitive moat, improves value proposition for enterprise accounts, and attracts third-party partnership opportunities. Management raised full-year guidance, projecting billings of $7.355 billion to $7.445 billion, revenue of $7.025 billion to $7.075 billion, non-GAAP operating margin of approximately 37% (or 40% on an underlying basis), and free cash flow of $2.2 billion to $2.275 billion for fiscal 2026 (ending Jan. 31, 2026). Autodesk reiterated its expectation of a 41% reported non-GAAP operating margin for fiscal 2029 (45% underlying), along with continued elevated capital return via $1.2 billion to $1.3 billion in share repurchases. No material change was made to macroeconomic or policy risk assumptions embedded in the guidance; additional details on long-term strategy and AI initiatives will be provided at Autodesk University in September and Investor Day on October 7.