Autodesk Reports 15 Percent Third Quarter Revenue Growth

Further information on potential factors that could affect the financial results of Autodesk are included in Autodesk’s report on Form 10-K for the year ended January 31, 2011 and Forms 10-Q for the quarters ended April 30 and July 31, 2011, which are on file with the U.S. Securities and Exchange Commission. Autodesk does not assume any obligation to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made.

About Autodesk

Autodesk, Inc., is a leader in 3D design, engineering and entertainment software. Customers across the manufacturing, architecture, building, construction, and media and entertainment industries – including the last 16 Academy Award winners for Best Visual Effects – use Autodesk software to design, visualize, and simulate their ideas. Since its introduction of AutoCAD software in 1982, Autodesk continues to develop the broadest portfolio of state-of-the-art software for global markets. For additional information about Autodesk, visit www.autodesk.com.

Autodesk and AutoCAD are registered trademarks or trademarks of Autodesk, Inc., and/or its subsidiaries and/or affiliates in the USA and/or other countries. Academy Award is a registered trademark of the Academy of Motion Picture Arts and Sciences. All other brand names, product names, or trademarks belong to their respective holders. Autodesk reserves the right to alter product and service offerings, and specifications and pricing at any time without notice, and is not responsible for typographical or graphical errors that may appear in this document.


Autodesk, Inc.
Condensed Consolidated Statements of Operations
(In millions, except per share data)

	Three Months Ended						Nine Months Ended
	October 31,						October 31,
		2011			2010			2011			2010
	(Unaudited)						(Unaudited)
Net revenue:
License and other	$	331.4		$	282.0		$	987.4		$	842.5

Maintenance		217.2			194.7			635.8			581.6

Total net revenue		548.6			476.7			1,623.2			1,424.1

Cost of revenue:
Cost of license and other revenue		50.5			40.3			138.8			122.0

Cost of maintenance revenue		9.1			8.2			32.8			26.2

Total cost of revenue		59.6			48.5			171.6			148.2

Gross profit		489.0			428.2			1,451.6			1,275.9

Operating expenses:

Marketing and sales		206.2			185.1			609.1			549.1

Research and development		141.2			122.8			417.0			369.3

General and administrative		51.4			51.1			163.0			148.7

Restructuring		-			-			(1.3	)		9.0

Total operating expenses		398.8			359.0			1,187.8			1,076.1

Income from operations		90.2			69.2			263.8			199.8

Interest and other income (expense), net		1.1			2.5			6.2			(0.8	)

Income before income taxes		91.3			71.7			270.0			199.0

Provision for income taxes		(18.5	)		(18.1	)		(56.7	)		(48.6	)

Net income	$	72.8		$	53.6		$	213.3		$	150.4

Basic net income per share	$	0.32		$	0.24		$	0.93		$	0.66

Diluted net income per share	$	0.32		$	0.23		$	0.91		$	0.64

Weighted average shares used in computing basic net income per share		227.1			226.5			228.2			227.9

Weighted average shares used in computing diluted net income per share		230.7			232.4			233.7			233.4


Autodesk, Inc.
Condensed Consolidated Balance Sheets
(In millions)

		October 31,		January 31,
			2011		2011
		(Unaudited)

ASSETS:

Current assets:
	Cash and cash equivalents	$	1,103.3	$	1,075.1
	Marketable securities		240.3		199.2
	Accounts receivable, net		259.2		318.4
	Deferred income taxes		34.2		56.8
	Prepaid expenses and other current assets		61.6		64.8
Total current assets			1,698.6		1,714.3

Marketable securities			190.6		192.6
Computer equipment, software, furniture and leasehold improvements, net			102.1		84.5
Purchased technologies, net			90.4		57.2
Goodwill			653.9		554.1
Deferred income taxes, net			138.7		90.7
Other assets			130.7		94.2
		$	3,005.0	$	2,787.6


LIABILITIES AND STOCKHOLDERS' EQUITY:

Current liabilities:
	Accounts payable	$	81.9	$	76.8
	Accrued compensation		154.3		193.1
	Accrued income taxes		22.3		28.6
	Deferred revenue		499.9		496.2
	Other accrued liabilities		55.2		75.1
Total current liabilities			813.6		869.8

Deferred revenue			120.0		91.7
Long term income taxes payable			161.3		139.1
Other liabilities			82.6		77.7

Commitments and contingencies

Stockholders' equity:
	Preferred stock		-		-
	Common stock and additional paid-in capital		1,359.9		1,267.2
	Accumulated other comprehensive income (loss)		3.4		(0.6	)
	Retained earnings		464.2		342.7
Total stockholders' equity			1,827.5		1,609.3
		$	3,005.0	$	2,787.6


Autodesk, Inc.
Condensed Consolidated Statements of Cash Flows
(In millions)
		Nine Months Ended
		October 31,
			2011			2010
		(Unaudited)

Operating activities:
	Net income	$	213.3		$	150.4
	Adjustments to reconcile net income to net cash provided by operating activities:
	Depreciation and amortization		85.2			79.6
	Stock-based compensation expense		78.8			62.3
	Excess tax benefits from stock-based compensation		(33.0	)		-
	Restructuring charges, net		(1.3	)		9.0
	Changes in operating assets and liabilities, net of business combinations		55.3			63.6
Net cash provided by operating activities			398.3			364.9

Investing activities:
	Purchases of marketable securities		(456.0	)		(425.8	)
	Sales of marketable securities		110.8			85.9
	Maturities of marketable securities		307.0			201.3
	Capital expenditures, including developed technologies		(88.8	)		(18.1	)
	Business combinations, net of cash acquired		(142.6	)		(8.5	)
	Other investing activities		(23.5	)		(4.0	)
Net cash used in investing activities			(293.1	)		(169.2	)

Financing activities:
	Proceeds from issuance of common stock, net of issuance costs		156.3			76.4
	Repurchases of common stock		(263.7	)		(204.1	)
	Excess tax benefits from stock-based compensation		33.0			-
Net cash used in financing activities			(74.4	)		(127.7	)

Effect of exchange rate changes on cash and cash equivalents			(2.6	)		(2.4	)

Net increase in cash and cash equivalents			28.2			65.6
Cash and cash equivalents at beginning of fiscal year			1,075.1			838.7
Cash and cash equivalents at end of period		$	1,103.3		$	904.3


Autodesk, Inc.
Reconciliation of GAAP financial measures to non-GAAP financial measures
(In millions, except per share data)

To supplement our consolidated financial statements presented on a GAAP basis, Autodesk provides investors with certain non-GAAP measures including non-GAAP net income, non-GAAP net income per share, non-GAAP cost of license and other revenue, non-GAAP gross profit, non-GAAP operating expenses, non-GAAP income from operations and non-GAAP provision for income taxes. These non-GAAP financial measures are adjusted to exclude certain costs, expenses, gains and losses, including stock-based compensation expense, amortization of purchased intangibles, restructuring charges, discrete tax provision items and related income tax expenses. See our reconciliation of GAAP financial measures to non-GAAP financial measures herein. We believe these exclusions are appropriate to enhance an overall understanding of our past financial performance and also our prospects for the future, as well as to facilitate comparisons with our historical operating results. These adjustments to our GAAP results are made with the intent of providing both management and investors a more complete understanding of Autodesk's underlying operational results and trends and our marketplace performance. For example, the non-GAAP results are an indication of our baseline performance before gains, losses or other charges that are considered by management to be outside our core operating results. In addition, these non-GAAP financial measures are among the primary indicators management uses as a basis for our planning and forecasting of future periods.

There are limitations in using non-GAAP financial measures because the non-GAAP financial measures are not prepared in accordance with generally accepted accounting principles and may be different from non-GAAP financial measures used by other companies. The non-GAAP financial measures are limited in value because they exclude certain items that may have a material impact upon our reported financial results. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the directly comparable financial measures prepared in accordance with generally accepted accounting principles in the United States. Investors should review the reconciliation of the non-GAAP financial measures to their most directly comparable GAAP financial measures as provided in the tables accompanying this press release.

The following table shows Autodesk's non-GAAP results reconciled to GAAP results included in this release.

	Three Months Ended						Nine Months Ended
	October 31,						October 31,
		2011			2010			2011			2010
	(Unaudited)						(Unaudited)

GAAP cost of license and other revenue	$	50.5		$	40.3		$	138.8		$	122.0
Stock-based compensation expense		(0.9	)		(0.6	)		(2.8	)		(2.1	)
Amortization of developed technology		(11.1	)		(8.4	)		(27.7	)		(23.8	)
Non-GAAP cost of license and other revenue	$	38.5		$	31.3		$	108.3		$	96.1

GAAP gross profit	$	489.0		$	428.2		$	1,451.6		$	1,275.9
Stock-based compensation expense		0.9			0.6			2.8			2.1
Amortization of developed technology		11.1			8.4			27.7			23.8
Non-GAAP gross profit	$	501.0		$	437.2		$	1,482.1		$	1,301.8

GAAP marketing and sales	$	206.2		$	185.1		$	609.1		$	549.1
Stock-based compensation expense		(11.7	)		(7.6	)		(34.8	)		(27.4	)
Non-GAAP marketing and sales	$	194.5		$	177.5		$	574.3		$	521.7

GAAP research and development	$	141.2		$	122.8		$	417.0		$	369.3
Stock-based compensation expense		(8.9	)		(5.7	)		(27.6	)		(21.2	)
Non-GAAP research and development	$	132.3		$	117.1		$	389.4		$	348.1

GAAP general and administrative	$	51.4		$	51.1		$	163.0		$	148.7
Stock-based compensation expense		(4.1	)		(3.1	)		(13.6	)		(11.6	)
Amortization of customer relationships and trade names		(8.2	)		(5.7	)		(24.0	)		(17.8	)
Non-GAAP general and administrative	$	39.1		$	42.3		$	125.4		$	119.3

GAAP restructuring charges	$	-		$	-		$	(1.3	)	$	9.0
Restructuring charges		-			-			1.3			(9.0	)
Non-GAAP restructuring charges	$	-		$	-		$	-		$	-

GAAP operating expenses	$	398.8		$	359.0		$	1,187.8		$	1,076.1
Stock-based compensation expense		(24.7	)		(16.4	)		(76.0	)		(60.2	)
Amortization of customer relationships and trade names		(8.2	)		(5.7	)		(24.0	)		(17.8	)
Restructuring charges		-			-			1.3			(9.0	)
Non-GAAP operating expenses	$	365.9		$	336.9		$	1,089.1		$	989.1

GAAP income from operations	$	90.2		$	69.2		$	263.8		$	199.8
Stock-based compensation expense		25.6			17.0			78.8			62.3
Amortization of developed technology		11.1			8.4			27.7			23.8
Amortization of customer relationships and trade names		8.2			5.7			24.0			17.8
Restructuring charges		-			-			(1.3	)		9.0
Non-GAAP income from operations	$	135.1		$	100.3		$	393.0		$	312.7

GAAP provision for income taxes	$	(18.5	)	$	(18.1	)	$	(56.7	)	$	(48.6	)
Discrete GAAP tax provision items		(4.2	)		0.3			(7.4	)		(1.3	)
Income tax effect of non-GAAP adjustments		(11.4	)		(10.0	)		(35.8	)		(34.3	)
Non-GAAP provision for income tax	$	(34.1	)	$	(27.8	)	$	(99.9	)	$	(84.2	)

GAAP net income	$	72.8		$	53.6		$	213.3		$	150.4
Stock-based compensation expense		25.6			17.0			78.8			62.3
Amortization of developed technology		11.1			8.4			27.7			23.8
Amortization of customer relationships and trade names		8.2			5.7			24.0			17.8
Restructuring charges		-			-			(1.3	)		9.0
Discrete GAAP tax provision items		(4.2	)		0.3			(7.4	)		(1.3	)
Income tax effect of non-GAAP adjustments		(11.4	)		(10.0	)		(35.8	)		(34.3	)
Non-GAAP net income	$	102.1		$	75.0		$	299.3		$	227.7

GAAP diluted net income per share (1)	$	0.32		$	0.23		$	0.91		$	0.64
Stock-based compensation expense		0.11			0.07			0.34			0.26
Amortization of developed technology		0.05			0.04			0.12			0.10
Amortization of customer relationships and trade names		0.03			0.02			0.10			0.08
Restructuring charges		-			-			(0.01	)		0.04
Discrete GAAP tax provision items		(0.02	)		-			(0.03	)		(0.01	)
Income tax effect of non-GAAP adjustments		(0.05	)		(0.04	)		(0.15	)		(0.14	)
Non-GAAP diluted net income per share (1)	$	0.44		$	0.32		$	1.28		$	0.97


(1) Earnings per share were computed independently for each of the periods presented; therefore the sum of the earnings per share amounts for the quarters may not equal the total for the year.

Autodesk
Other Supplemental Financial Information ^(a)

Fiscal Year 2012	QTR 1			QTR 2			QTR 3			QTR 4	YTD 2012
Financial Statistics ($ in millions, except per share data):
Total Net Revenue	$	528		$	546		$	549			$	1,623
License and Other Revenue	$	323		$	333		$	331			$	987
Maintenance Revenue	$	205		$	213		$	217			$	636

GAAP Gross Margin		90	%		89	%		89	%			89	%
Non-GAAP Gross Margin (1)(2)		91	%		91	%		91	%			91	%

GAAP Operating Expenses	$	395		$	394		$	399			$	1,188
GAAP Operating Margin		15	%		17	%		16	%			16	%
GAAP Net Income	$	69		$	71		$	73			$	213
GAAP Diluted Net Income Per Share (c)	$	0.29		$	0.30		$	0.32			$	0.91

Non-GAAP Operating Expenses (1)(3)	$	364		$	360		$	366			$	1,089
Non-GAAP Operating Margin (1)(4)		23	%		25	%		25	%			24	%
Non-GAAP Net Income (1)(5)	$	94		$	104		$	102			$	299
Non-GAAP Diluted Net Income Per Share (1)(6)(c)	$	0.40		$	0.44		$	0.44			$	1.28

Total Cash and Marketable Securities	$	1,526		$	1,553		$	1,534			$	1,534
Days Sales Outstanding		47			49			43				43
Capital Expenditures, Including Developed Technologies	$	23		$	30		$	36			$	89
Cash Flow from Operating Activities	$	128		$	132		$	138			$	398
GAAP Depreciation and Amortization	$	25		$	30		$	31			$	85

Deferred Maintenance Revenue Balance	$	543		$	566		$	553			$	553

Revenue by Geography (in millions):
Americas	$	181		$	191		$	200			$	573
Europe, Middle East and Africa	$	215		$	212		$	202			$	629
Asia Pacific	$	132		$	143		$	146			$	422

Revenue by Segment (in millions):
Platform Solutions and Emerging Business	$	211		$	199		$	210			$	619
Architecture, Engineering and Construction	$	141		$	158		$	152			$	452
Manufacturing	$	123		$	136		$	134			$	393
Media and Entertainment	$	53		$	54		$	53			$	161

Other Revenue Statistics:
% of Total Rev from Flagship Revenue		61	%		56	%		57	%			58	%
% of Total Rev Suites Revenue		23	%		29	%		27	%			27	%
% of Total Rev New and Adjacent Revenue		15	%		15	%		16	%			15	%
% of Total Rev from AutoCAD and AutoCAD LT		37	%		31	%		31	%			33	%
% of Total Rev from Emerging Economies		15	%		16	%		16	%			16	%
Upgrade and Crossgrade Revenue (in millions)	$	53		$	41		$	37			$	131

Favorable (Unfavorable) Impact of U.S. Dollar Translation Relative to Foreign
Currencies Compared to Comparable Prior Year Period ^(b) (in millions):
FX Impact on Total Net Revenue	$	(3	)	$	8		$	12			$	17
FX Impact on Cost of Revenue and Total Operating Expenses	$	(9	)	$	(17	)	$	(12	)		$	(38	)
FX Impact on Operating Income	$	(12	)	$	(9	)	$	-			$	(21	)

Gross Margin by Segment (in millions):
Platform Solutions and Emerging Business	$	199		$	187		$	198			$	584
Architecture, Engineering and Construction	$	128		$	143		$	138			$	409
Manufacturing	$	113		$	124		$	122			$	360
Media and Entertainment	$	43		$	44		$	43			$	130
Unallocated amounts	$	(9	)	$	(10	)	$	(12	)		$	(31	)

Common Stock Statistics (in millions):
Common Shares Outstanding		230.5			228.8			226.6				226.6
Fully Diluted Weighted Average Shares Outstanding		237.1			236.6			230.7				233.7
Shares Repurchased		1.7			2.5			3.5				7.7

Installed Base Statistics:
Maintenance Installed Base (e)		3,004,000			2,985,000			3,116,000				3,116,000

(a) Totals may not agree with the sum of the components due to rounding.
(b) Effective in the second quarter of fiscal 2012, Autodesk changed the way it calculates constant currency growth rates and foreign currency impact on Total Net Revenue, and Cost of Revenue and Total Operating Expenses. Under the new methodology, all hedging gains and losses are removed from the calculation of constant currency growth rates, where previously Autodesk had not excluded hedging gains and losses from the prior period. Autodesk changed the way it calculates foreign currency impact on Total Net Revenue, and Cost of Revenue and Total Operating Expenses to include the impact of Autodesk's hedging program on both the current and prior period. Autodesk believes these changes are more useful to the users of Autodesk's financial information as they more fully reflect the underlying business growth rates and the impact of movements in foreign currency on Autodesk's U.S. dollar financial results. All prior period comparative information has been revised to conform to the new methodology.

	QTR 1			QTR 2			QTR 3			QTR 4	YTD 2012
Constant currency revenue growth		12	%		14	%		12	%			13	%

(c) Earnings per share were computed independently for each of the periods presented; therefore the sum of the earnings per share amounts for the quarters may not equal the total for the year.
(d) Prior period amounts have been changed to conform to current period presentation.
(e) Autodesk will no longer provide Maintenance Installed Base beginning in fiscal 2013.

(1) To supplement our consolidated financial statements presented on a GAAP basis, Autodesk provides investors with certain non-GAAP measures including non-GAAP net income, non-GAAP net income per share, non-GAAP cost of license and other revenue, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP total spend, non-GAAP income from operations and non-GAAP provision for income taxes. These non-GAAP financial measures are adjusted to exclude certain costs, expenses, gains and losses, including stock-based compensation expense, restructuring charges, amortization of purchased intangibles and related income tax expenses. See our reconciliation of GAAP financial measures to non-GAAP financial measures herein. We believe these exclusions are appropriate to enhance an overall understanding of our past financial performance and also our prospects for the future, as well as to facilitate comparisons with our historical operating results. These adjustments to our GAAP results are made with the intent of providing both management and investors a more complete understanding of Autodesk's underlying operational results and trends and our marketplace performance. For example, the non-GAAP results are an indication of our baseline performance before gains, losses or other charges that are considered by management to be outside our core operating results. In addition, these non-GAAP financial measures are among the primary indicators management uses as a basis for our planning and forecasting of future periods. There are limitations in using non-GAAP financial measures because the non-GAAP financial measures are not prepared in accordance with generally accepted accounting principles and may be different from non-GAAP financial measures used by other companies. The non-GAAP financial measures are limited in value because they exclude certain items that may have a material impact upon our reported financial results. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the directly comparable financial measures prepared in accordance with generally accepted accounting principles in the United States. Investors should review the reconciliation of the non-GAAP financial measures to their most directly comparable GAAP financial measures as provided in the tables accompanying Autodesk's press release.

	QTR 1			QTR 2			QTR 3			QTR 4	YTD 2012
(2) GAAP Gross Margin		90	%		89	%		89	%			89	%
Stock-based compensation expense		0	%		0	%		0	%			0	%
Amortization of developed technology		1	%		2	%		2	%			2	%
Non-GAAP Gross Margin		91	%		91	%		91	%			91	%

(3) GAAP Operating Expenses	$	395		$	394		$	399			$	1,188
Stock-based compensation expense		(25	)		(26	)		(25	)			(76	)
Amortization of customer relationships and trade names		(7	)		(9	)		(8	)			(24	)
Restructuring charges		-			1			-				1
Non-GAAP Operating Expenses	$	364		$	360		$	366			$	1,089

(4) GAAP Operating Margin		15	%		17	%		16	%			16	%
Stock-based compensation expense		5	%		5	%		5	%			5	%
Amortization of developed technology		2	%		2	%		2	%			2	%
Amortization of customer relationships and trade names		1	%		2	%		2	%			1	%
Restructuring charges		0	%		0	%		0				0	%
Non-GAAP Operating Margin		23	%		25	%		25	%			24	%

(5) GAAP Net Income	$	69		$	71		$	73			$	213
Stock-based compensation expense		26			27			26				79
Amortization of developed technology		8			9			11				28
Amortization of customer relationships and trade names		7			9			8				24
Restructuring charges		-			(1	)		-				(1	)
Discrete GAAP tax provision items		(4	)		1			(4	)			(7	)
Income tax effect of non-GAAP adjustments		(12	)		(12	)		(11	)			(36	)
Non-GAAP Net Income	$	94		$	104		$	102			$	299

(6) GAAP Diluted Net Income Per Share	$	0.29		$	0.30		$	0.32			$	0.91
Stock-based compensation expense		0.11			0.12			0.11				0.34
Amortization of developed technology		0.03			0.04			0.05				0.12
Amortization of customer relationships and trade names		0.03			0.04			0.03				0.10
Restructuring charges		-			(0.01	)		-				(0.01	)
Discrete GAAP tax provision items		(0.02	)		0.01			(0.02	)			(0.03	)
Income tax effect of non-GAAP adjustments		(0.04	)		(0.06	)		(0.05	)			(0.15	)
Non-GAAP Diluted Net Income Per Share	$	0.40		$	0.44		$	0.44			$	1.28



Reconciliation for Fiscal 2013:

The following is a reconciliation of anticipated fiscal 2013 GAAP and non-GAAP operating margins:

	Fiscal 2013
GAAP operating margin basis point improvement over prior year		150
Stock-based compensation expense		110
Amortization of purchased intangibles		(70	)
Restructuring charges		10
Non-GAAP operating margin basis point improvement over prior year		200

« Previous Page 1 | 2 | 3 | 4 Next Page »