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 $5.88â$5.98 billion and revenue to $6.08â$6.13 billion, with non-GAAP operating margins at 35â36% and free cash flow guidance raised to $1.45â$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.