EPS of $0.70 decreased by 39.3% from previous year
Gross margin of 82.5%
Net income of 152.00M
"Autodesk, Inc. delivered strong first quarter results. Revenue and non-GAAP earnings per share topped the higher end of our guidance ranges and billings, non-GAAP margins, and free cash flow exceeded our expectations." - Andrew Anagnost
Autodesk Inc (ADSK) QQ1 2026 Earnings Analysis: Revenue Momentum, Margin Expansion, and AI-Driven Growth in a Variable Macro Environment
Executive Summary
Autodesk reported a strong start to fiscal 2026 (QQ1), delivering revenue growth of 15% year over year (16% in constant currency) to $1.625 billion, and reporting meaningful non-GAAP operating margin expansion to 37% despite one-time charges. Management highlighted the impact of the new transaction model, EBAs (enterprise business agreements), and continued strength in AECO and the Autodesk Store as key drivers of topline performance. Free cash flow was robust at $556 million for the quarter, supporting a favorable capital allocation stance including ongoing share repurchases and a push toward a lower stock-based compensation ratio over time. Importantly, Autodesk reaffirmed its strategic emphasis on cloud, platform, and AI, while continuing to optimize its go-to-market and channel architecture to improve efficiency and pricing power.
Looking ahead, the company raised the bottom end of its guidance to reflect ongoing operating leverage and disciplined cost control, while acknowledging macroeconomic and FX headwinds. The full-year guidance implies billings of $7.16–$7.31 billion, revenue of $6.925–$6.995 billion, and free cash flow of $2.1–$2.2 billion, with underlying revenue growth still targeted around the mid-teens in constant currency. Management underscored that FX movements have provided a partial tailwind, while the new transaction model continues to contribute meaningfully to revenue and billings. Investors should monitor the cadence of renewal activity, the execution of the sales and marketing optimization plan, the continued integration of AI into product workstreams (Fusion, Forma, ACC, FormaBoard), and the rate at which channel productivity recovers as onboarding of customers to the new model matures.
Overall, Autodesk’s QQ1 performance reinforces its position as a diversified, AI-enabled software platform provider with a strong backlog, healthy cash generation, and a clear multi-year path to margin expansion through productivity gains, disciplined cost management, and a broadened addressable market in construction, AECO, and manufacturing.
Key Performance Indicators
Revenue
1.63B
QoQ: -0.85% | YoY:14.68%
Gross Profit
1.34B
82.52% margin
QoQ: -9.70% | YoY:4.77%
Operating Income
224.00M
QoQ: -38.80% | YoY:-25.08%
Net Income
152.00M
QoQ: -49.83% | YoY:-39.68%
EPS
0.71
QoQ: -49.62% | YoY:-39.32%
Revenue Trend
Margin Analysis
Key Insights
Revenue: $1.625 billion, up 15% year over year; 16% in constant currency. Revenue growth driven by AECO strength and upfront revenue from EBAs; the new transaction model contributed $78 million to revenue in Q1 (management commentary).
Billings: $7.16–$7.31 billion full-year guidance implied; Q1 billings up 29% as reported (30% CC). The contribution from the new transaction model to billings was $105 million in Q1, supporting a stronger billings trajectory.
RPO and current RPO: RPO $7.2 billion and current RPO $4.6 billion, up 21% year over year, signaling durable demand and long-term visibility.
Margins: GAAP operating margin 14% (down versus prior due to restructuring charges of $105 million and a $54 million one-time noncash stock-based compensation adjustment); non-GAAP operating margin rose to 37% (+3 percentage points YoY) as operating leverage and restructuring timing benefits outweighed margin drag from the new model.
Net income and EPS: Net income $152 million; net income margin ~9.35%; diluted EPS $0.70 (GAAP EPS $0.71).
Financial Highlights
Key QQ1 2026 metrics and context:
- Revenue: $1.625 billion, up 15% year over year; 16% in constant currency. Revenue growth driven by AECO strength and upfront revenue from EBAs; the new transaction model contributed $78 million to revenue in Q1 (management commentary).
- Billings: $7.16–$7.31 billion full-year guidance implied; Q1 billings up 29% as reported (30% CC). The contribution from the new transaction model to billings was $105 million in Q1, supporting a stronger billings trajectory.
- RPO and current RPO: RPO $7.2 billion and current RPO $4.6 billion, up 21% year over year, signaling durable demand and long-term visibility.
- Margins: GAAP operating margin 14% (down versus prior due to restructuring charges of $105 million and a $54 million one-time noncash stock-based compensation adjustment); non-GAAP operating margin rose to 37% (+3 percentage points YoY) as operating leverage and restructuring timing benefits outweighed margin drag from the new model.
- Net income and EPS: Net income $152 million; net income margin ~9.35%; diluted EPS $0.70 (GAAP EPS $0.71).
- Free cash flow and cash position: Free cash flow $549–$556 million (reported $556 million); cash and cash equivalents end of period $1.816 billion; net cash provided by operating activities $564 million; capital expenditures $15 million; free cash flow yield favorably supports ongoing buybacks and shareholder returns.
- Cash flow and capital allocation: Operating cash flow of $564 million; shares repurchased ~1.3 million shares for $353 million; ongoing focus on reducing stock-based compensation as a percentage of revenue to below 10% over time.
Notes: The company emphasizes the ongoing transformation of its business model, the acceleration of AI-enabled product roadmaps (Fusion, Forma, and AI-infused workflows), and the benefit from the sharper focus on value-based pricing through the channel consolidation and store-driven pricing realizations.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
1.63B
14.68%
-0.85%
Gross Profit
1.34B
4.77%
-9.70%
Operating Income
224.00M
-25.08%
-38.80%
Net Income
152.00M
-39.68%
-49.83%
EPS
0.71
-39.32%
-49.62%
Key Financial Ratios
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Management call highlights by theme:
- Strategy and AI-enabled growth: Andrew Anagnost emphasized convergence of design and making via platform and AI, with concrete examples in AECO and manufacturing. Highlights include accelerating Fusion data management, deeper Forma integration with Revit, and enhancing FormaBoard collaboration capabilities, all while increasing investment in cloud-enabled, AI-powered features across products.
- Go-to-market and channel transformation: The team described a deliberate consolidation of channel partners to fewer, more capable, solution-focused firms. This shift contributed to stronger pricing realization and a higher proportion of new business from larger partners. The company is managing channel risk with commission incentives and a focus on renewals as well as new business.
- Financial performance and guidance: The CFO stressed that Q1 momentum was on track with the prior quarters and that the weaker first quarter is not indicative of the full-year trajectory. The new transaction model contributed meaningfully to revenue and billings. FX movements provided a tailwind, leading to an increased bottom-end non-GAAP guidance. They expect billings/revenue/FCF to benefit from operating leverage as volumes scale.
- Macroeconomic backdrop and customer dynamics: Andrew noted broad-based demand but highlighted macro uncertainty (policy and trade discussions) that could influence customer bidding and project timing, with customers focusing on the second half of the year. He also cited increased construction backlog and growing bid activity as evidence of ongoing demand despite macro headwinds.
- AI productivity and pricing: Elizabeth Porter asked about AI deployability; Andrew outlined a roadmap of increasingly sophisticated AI tools that automate repetitive tasks (auto constraint, drawing automation), with Fusion targeting the most AI-powered mechanical design tool position and Forma expanding AI capabilities for multidisciplinary collaboration. Management suggested potential for future price differentiation as AI-driven productivity improves value delivery.
Autodesk, Inc. delivered strong first quarter results. Revenue and non-GAAP earnings per share topped the higher end of our guidance ranges and billings, non-GAAP margins, and free cash flow exceeded our expectations.
— Andrew Anagnost
We are focusing our growth investments on our strategic priorities in cloud, platform, and AI.
— Andrew Anagnost
Forward Guidance
Autodesk’s QQ1 2026 commentary supports a constructive, albeit cautious, outlook given macro uncertainty. Management outlined a multi-point guidance framework:
- Billings: $7.16–$7.31 billion for FY2026, reflecting continued shift to annual billings on multiyear contracts and the new transaction model. The company indicated that the lower end assumes deceleration in new business growth consistent with pandemic-era dynamics and potential EBA renewal uplift deterioration; FX tailwinds offset some macro risk.
- Revenue: $6.925–$6.995 billion, reflecting underlying ratable growth and currency effects. The guidance is framed to be robust to FX swings and macro volatility, with revenue growth projected to be less volatile due to its ratable nature.
- Free cash flow: $2.1–$2.2 billion, reflecting operating leverage and disciplined cost management, plus FX benefits.
- Margin and profitability: Non-GAAP operating margin is guided to expand further, supported by cost discipline and ongoing optimization of the sales and marketing engine. The company noted that the bottom end of the non-GAAP guidance was raised to reflect improving leverage, while GAAP margins may still show pressure from one-time charges.
- Risks and monitoring: Management flagged macro uncertainty, currency movements, and the execution risk related to the transition to annual billings and the new transaction model as key factors to monitor. Investors should watch: (1) the cadence of EBA renewals and upfront revenue from EBAs; (2) customer adoption rates of the new model across regions (APAC, Americas, EMEA); and (3) progression of AI-enabled product deployments and their impact on upsell opportunities and price realization.
Overall, the fundamentals remain favorable with strong backlog (RPO $7.2B) and resilient demand in AECO and manufacturing, but investors should stay alert to macro-driven demand shifts and the ongoing execution of the sales/marketing optimization and channel transformation program.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
ADSK Focus
82.52%
N/A
N/A
N/A
INTU
74.90%
8.25%
1.09%
216.86%
ZM
70.70%
24.20%
2.61%
21.80%
SNOW
65.70%
-41.90%
-6.95%
-40.83%
NOW
78.90%
14.60%
4.54%
89.49%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Autodesk presents a compelling long-term investment thesis driven by its diversified software portfolio, strong free cash flow generation, and a strategic pivot toward AI, cloud platforms, and industry clouds. The QQ1 results demonstrate solid topline growth (revenue +15% YoY) and meaningful margin expansion on a non-GAAP basis (37%), supported by operating leverage and disciplined cost control, even as GAAP margins reflect one-time charges. The company’s backlog (RPO) and current RPO provide durable revenue visibility, while a flexible capital allocation framework (share repurchases funded by robust cash flow) supports shareholder value creation. The transition to annual billings and the new transaction model is a key growth lever, with management signaling that the model is gradually contributing to revenue and billings and that channel productivity should improve as onboarding transitions progress.
Key watch items include: (1) the rate of AI-driven feature adoption and its monetization potential (pricing power and higher attach rates for Fusion/Forma), (2) progress in channel consolidation and the go-to-market optimization plan, (3) the trajectory of EBAs and upfront revenue from EBAs, and (4) macro volatility and FX movements that could influence guidance. Given the favorable FCF generation, a prudent approach would be to monitor quarterly cadence around billings, renewal uplift, and episode-specific AI-driven upsell opportunities as indicators of sustained margin expansion and cash return potential.
Key Investment Factors
Growth Potential
Underscored by a robust product roadmap and data-driven platform strategy: Fusion’s data management enhancements; Forma enhancements linking Forma to Revit and collaborative workflows; FormaBoard expansion; and AI-powered productivity features across Fusion and the Design & Make portfolio. Management cited elevated cross-sell opportunities and the potential for price realization as the AI stack matures and customers monetize productivity gains.
Profitability Risk
Macro uncertainty driving demand timing; ongoing integration risk from the channel consolidation and the transition to the new transaction model; currency volatility; potential uplift deterioration in EBAs; reliance on large, enterprise renewals and multi-year contracts; execution risk in scaling AI features and their monetization to price.
Financial Position
Strong liquidity and cash generation (FCF ~$549–$556m in QQ1; cash at end of period $1.816b; net debt ~$728m). Healthy backlog with RPO $7.2b and current RPO $4.6b. Leverage remains manageable with total debt ~$2.544b and a focus on aligning SBC to below 10% of revenue over time. Share repurchases ongoing as free cash flow stack rebuilds.
SWOT Analysis
Strengths
Diversified software portfolio across design, engineering, and manufacturing (AutoCAD, Revit/AECO, Fusion, Vault, Maya, 3ds Max, ShotGrid).
Strong backlog and visibility: RPO $7.2B; current RPO $4.6B with 21% YoY growth.
Solid cash generation and capital allocation flexibility (FCF ~$0.55B in QQ1; $1.816B cash at period end; ongoing buybacks).
Strategic emphasis on AI, cloud, industry clouds, and platform convergence supports durable competitive advantages.
Weaknesses
Near-term GAAP margin pressure from one-time items (resctructuring charges of $105M and SBC-related noncash charge), though non-GAAP margins improved.
Transition risk associated with the new transaction model and annual billings; channel onboarding and productivity normalization remain incomplete in some regions.
Geographic exposure to macro-sensitive regions (APAC and China/Korea) with mixed momentum.
Opportunities
AI-enabled productivity gains and automation across Fusion, Forma, ACC integration, and FormaBoard; potential to unlock price/mix benefits via stronger cross-sell and upsell.
Expansion of AECO and construction cloud footprint via EBAs, data standards, and digitization of construction workflows.
Accelerated adoption of Forma for cross-disciplinary collaboration and deeper integration with Revit and other discipline tools.
Threats
Macroeconomic and policy uncertainty influencing project timing and customer spend.
Currency volatility and FX headwinds could affect reported growth and guidance realism.
Competition from other CAD/PLM software vendors and risk of slower-than-expected adoption of new transaction model by partners.