"Our current focus is on marketing, customer success, and operations with an emphasis on consolidating teams into centers of excellence and investing in systems and processes that increase sales and marketing efficiency at scale." - Andrew Anagnost
Autodesk Inc (ADSK) Q4 2025 Results Analysis: Revenue Growth, Margin Expansion and AI/Cloud Strategy Driving 2026 Outlook
Executive Summary
Autodesk delivered a solid fiscal 2025 fourth quarter, underscored by broad-based product momentum, resilient renewals, and improvements in profitability. Revenue for Q4 2025 was $1.639 billion, up 12% year over year, with a robust gross margin of 90.6% and GAAP operating margin of 22% (non-GAAP 37%). Billings rose 24% in constant currency, aided by the shift to annual billings for multi-year contracts and the incremental contribution from the new transaction model ($46 million in Q4; $71 million for the year). Direct revenue rose 35% in constant currency to 47% of total revenue, reflecting strength in the Autodesk Store and the new model tailwind. RPO hit $6.9 billion with current RPO of $4.5 billion, both up double digits (14% and 12%, respectively).
Management framed the quarter as part of a broader, multi-year strategic shift toward GTM optimization, tighter channel integration, and accelerated investments in cloud, platform, and AI. Autodesk maintains a disciplined approach to margin expansion and free cash flow generation, with fiscal 2026 guidance calling for 17-19% constant-currency billings growth (excluding the new transaction model), 8-9% revenue growth, GAAP margins of 21-22%, and non-GAAP margins of 39-40% (excluding new model effects and currency movements). Free cash flow guidance for 2026 is $2.075–$2.175 billion, with targeted share repurchases of $1.1–$1.2 billion and modest near-term cash outflows related to announced actions. The company also signaled a longer-term view that margins can rise meaningfully as GTM optimization and automation progress, while the growth framework may be re-set to reflect the stronger margin trajectory and higher-quality revenue streams from AI-enabled offerings and industry clouds.
Bottom line: ADSK demonstrated durable recurring revenue, improved profitability, and strategic positioning to monetize AI/cloud-enabled workflows through the Make, Construction, and AECO/M&E segments. The key questions for investors will be the pace and sustainability of the GTM optimization, the rate at which AI-driven features convert into higher monetization, and the execution risk around near-term disruptions from restructuring.
Key Performance Indicators
Revenue
1.64B
QoQ: 4.39% | YoY:11.57%
Gross Profit
1.49B
90.60% margin
QoQ: 4.36% | YoY:9.76%
Operating Income
366.00M
QoQ: 5.78% | YoY:16.19%
Net Income
303.00M
QoQ: 10.18% | YoY:7.45%
EPS
1.41
QoQ: 10.10% | YoY:6.77%
Revenue Trend
Margin Analysis
Key Insights
Q4 2025 revenue: $1.639B, +12% YoY (constant currency). By product (CC): AutoCAD/AutoCAD LT +9%; AECO +15%; Manufacturing +10%; M&E +10%. Make products remain a growth driver, supported by Construction and Fusion. Region CC growth: Americas +11%; EMEA +13%; APAC +11%.
New transaction model: Q4 revenue contribution $46M; full-year $71M. Revenue mix benefited from direct revenue growth, up 35% CC to 47% of total; Autodesk Store momentum aided by the model tailwind.
Billings: +24% CC in Q4; YTD, billings benefited from annual billing transition and the new model.
RPO: Total $6.9B; Current RPO $4.5B, up 14% and 12% YoY respectively; tailwinds from new transaction model noted, with some headwinds from deferred revenue in larger multi-year cohorts ahead of fiscal 2026 renewal.
Margins: Q4 GAAP operating margin 22% (+90 bps YoY); Q4 non-GAAP operating margin 37% (+160 bps). For fiscal 2025, GAAP and non-GAAP margins rose ~220 bps and ~140 bps YoY, excluding new model and currency effects.
Financial Highlights
Revenue and growth:
- Q4 2025 revenue: $1.639B, +12% YoY (constant currency). By product (CC): AutoCAD/AutoCAD LT +9%; AECO +15%; Manufacturing +10%; M&E +10%. Make products remain a growth driver, supported by Construction and Fusion. Region CC growth: Americas +11%; EMEA +13%; APAC +11%.
- New transaction model: Q4 revenue contribution $46M; full-year $71M. Revenue mix benefited from direct revenue growth, up 35% CC to 47% of total; Autodesk Store momentum aided by the model tailwind.
- Billings: +24% CC in Q4; YTD, billings benefited from annual billing transition and the new model.
- RPO: Total $6.9B; Current RPO $4.5B, up 14% and 12% YoY respectively; tailwinds from new transaction model noted, with some headwinds from deferred revenue in larger multi-year cohorts ahead of fiscal 2026 renewal.
- Margins: Q4 GAAP operating margin 22% (+90 bps YoY); Q4 non-GAAP operating margin 37% (+160 bps). For fiscal 2025, GAAP and non-GAAP margins rose ~220 bps and ~140 bps YoY, excluding new model and currency effects.
- Cash flow: Fiscal 2025 free cash flow $1.57B, ahead of guidance; Q4 cash flow from operations $0.692B; capex modest; 4Q share repurchases of ~1.4M shares for $414M; full-year share repurchases ~3.1M shares for $858M.
- Balance sheet: Cash and cash equivalents $1.60B; total debt $2.56B; net debt $0.96B; total assets ~$10.83B; goodwill $4.24B; intangibles $5.74B; total stockholders’ equity $2.62B; liquidity remains solid to fund growth and buybacks.
- Outlook: 2026 guidance emphasizes growth and margin expansion, with 17-19% CC billings growth, 8-9% CC revenue growth, GAAP margins 21-22%, non-GAAP margins 39-40%, and free cash flow of $2.075–$2.175B; capex/discretionary cash outflows estimated at $110–$120M plus a discrete US tax asset benefit of $130–$150M. These targets assume no material macro shocks and assume continued progress on GTM optimization and AI/industry cloud investments.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
1.64B
11.57%
4.39%
Gross Profit
1.49B
9.76%
4.36%
Operating Income
366.00M
16.19%
5.78%
Net Income
303.00M
7.45%
10.18%
EPS
1.41
6.77%
10.10%
Key Financial Ratios
currentRatio
0.68
grossProfitMargin
90.6%
operatingProfitMargin
22.3%
netProfitMargin
18.5%
returnOnAssets
2.8%
returnOnEquity
11.6%
debtEquityRatio
0.98
operatingCashFlowPerShare
$3.22
freeCashFlowPerShare
$3.15
priceToBookRatio
25.54
priceEarningsRatio
55.23
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Key themes from the earnings call:
- GTM optimization and operating efficiency: Andrew highlighted the shift to an optimization phase for marketing, customer success, and operations, aiming for tighter channel partnerships and self-service capabilities that reduce duplication and improve sales productivity. “Our current focus is on marketing, customer success, and operations with an emphasis on consolidating teams into centers of excellence and investing in systems and processes that increase sales and marketing efficiency at scale.”
- Margin expansion and roadmap: Janesh noted that the restructuring aligns with longer-term margin expansion goals, allowing higher underlying non-GAAP margins “as we focus on future opportunities that I touched on in the opening commentary.” He emphasized the link between tighter integration, lower cost-to-serve, and a larger market opportunity to drive higher margins over time.
- AI/cloud and industry clouds as growth engines: Management reiterated a focus on the convergence of design and make in the cloud, enabled by platform, industry clouds, and AI. Andrew described front-line AI capabilities (e.g., AutoConstrain in Fusion) delivering productivity gains and broader AI-driven monetization potential across Forma, Fusion, and Build offerings.
- Resilience amid macro uncertaint y: The executives acknowledged macro uncertainty but stressed Autodesk’s diversified revenue base and high renewals, with customers seeking certainty and the company positioned to navigate policy changes and other external shocks.
- Make construction and manufacturing acceleration: Throughout the transcript, Autodesk cited case studies (Mott MacDonald, Power Design, Cleveland Construction) illustrating accelerated construction adoption and expanding manufacturing usage with Fusion/Forma/Flow ecosystems, highlighting robust customer wins and higher attach rates to AI-enabled features.
Our current focus is on marketing, customer success, and operations with an emphasis on consolidating teams into centers of excellence and investing in systems and processes that increase sales and marketing efficiency at scale.
— Andrew Anagnost
We have conviction in our potential to drive higher margins over time as we execute this plan and as we focus on future opportunities that I touched on in the opening commentary.
— Janesh Moorjani
Forward Guidance
Autodesk’s fiscal 2026 outlook reflects a deliberate move to accelerate profitable growth through GTM optimization, tighter partner ecosystems, and higher-capacity, AI-enabled cloud platforms. Management guidance excludes the new transaction model and currency movements to present a baseline of 8-9% CC revenue growth and 17-19% CC billings growth. They project GAAP operating margins of 21-22% and non-GAAP margins of 39-40%, with free cash flow guidance of $2.075–$2.175B and significant buyback activity ($1.1–$1.2B). The plan assumes continued momentum in the Make and Construction segments and resilience in renewal rates, with some disruption risk from restructuring and CRO transition mitigated by execution plans.
Investment thesis based on guidance: (1) Strong recurring revenue base and high gross margins provide an attractive platform for margin expansion through GTM optimization and cost-to-serve reductions; (2) AI-enabled products and industry clouds (Fusion, Forma, and Build) broaden the total addressable market and raise monetization potential; (3) Free cash flow growth supports a substantial buyback program, which should support EPS accretion even as top-line growth normalizes; (4) Risks include macro policy uncertainty, execution risk from restructuring, and potential volatility in the revenue mix due to the new transaction model. Key metrics to monitor include quarterly billings growth, CC revenue growth excluding the new model, progression of non-GAAP margins toward the 40% target, and ongoing contributions from the AI-enabled product portfolio.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
ADSK Focus
90.60%
22.30%
11.60%
55.23%
INTU
75.40%
-4.74%
-0.11%
-2,265.73%
ZM
75.70%
12.80%
4.12%
18.11%
SNOW
66.20%
-39.20%
-10.60%
-45.93%
NOW
78.70%
12.60%
4.00%
142.06%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
ADSK presents a constructive long-term investment thesis anchored in durable recurring revenue, strong cash generation, and a clear path to operating margin expansion driven by GTM optimization and AI/cloud-centric product strategy. Near-term catalysts include the ongoing optimization of sales/marketing and higher-margin mix from Make/Construction, along with continued monetization of AI-enabled features. Key risks include macro volatility and execution risk related to restructuring. If Autodesk can sustain the 8–9% CC revenue growth (ex-new-model) and deliver 39–40% non-GAAP margin in 2026, while accelerating FCF toward the $2.1–$2.2B range, the stock could re-rate on strengthening profitability and scalable AI-enabled offerings. Investors should watch quarterly billings progression, progression of the new model’s contribution to revenue, renewal dynamics, and the monetization trajectory of AI-powered features.
Key Investment Factors
Growth Potential
High upside from AI-enabled workflows and industry clouds (Fusion/Forma/Build) expanding the Make and AECO markets, with ongoing Make adoption in construction and manufacturing. The shift to self-service and tighter channel partnerships is expected to elevate sales productivity and accelerate new business growth over time.
Profitability Risk
Macro uncertainty and geopolitical risk; execution risk from the restructuring and CRO transition; potential volatility in renewals and EBA cohorts; currency headwinds in a multi-regional revenue base; reliance on the success of the new transaction model in sustaining revenue mix and RPO growth.
Financial Position
Solid liquidity with $1.60B cash and equivalents and a net debt position of $0.96B; free cash flow generation of $1.57B in FY2025 and guided $2.075–$2.175B for FY2026; sizable RPO (~$6.9B) providing revenue visibility; capital returns via substantial share repurchases indicating a commitment to capital discipline and shareholder value.
SWOT Analysis
Strengths
Robust recurring revenue base with high renewals and a large RPO (Total RPO $6.9B; Current RPO $4.5B)
Leading position in cloud, platform and AI within the design/Make ecosystem
Strong cash flow generation (FY2025 FCF $1.57B) and healthy balance sheet (cash $1.60B; net debt $0.96B)
Diversified product portfolio across AutoCAD/AECO/Make (Construction, Fusion) and M&E
Strategic investments in AI-enabled industry clouds (Fusion, Forma, Flow) and self-service capabilities
Weaknesses
Near-term restructuring disruption and CRO transition risk
Reliance on macro conditions affecting new business growth and investment willingness of customers
Transition to new transaction model introduces non-GAAP/perceived model complexity and affects revenue recognition cadence
Opportunities
Monetization of AI features and productivity gains (AutoConstrain, AI-assisted design) with potential pricing power
Expansion of industry clouds and APIs, deeper channel partnerships, self-service to reduce cost-to-serve
Growth in Construction and Manufacturing via Make platforms and broader adjacent markets
Threats
Macroeconomic and geopolitical uncertainty impacting IT/engineering budgets
Competitive dynamics in design software and cloud platforms; currency fluctuations across regions
Execution risk from large-scale GTM optimization and global channel realignment