Autodesk Inc. (NASDAQ:ADSK), a software company, released its financial results for the second quarter of fiscal 2018 Aug. 24.
Autodesk produces and sells its software to several industries, including architecture, construction, engineering, manufacturing, entertainment and media industries.
The software company closed the second quarter of fiscal 2018 with a loss – non-GAAP measure and on a diluted basis – of 11 cents, a substantial negative turnaround from the comparable of fiscal 2017 when the company reported an EPS of 5 cents.
For the quarter, 17 analysts forecast Autodesk would report a loss of 15 cents. Therefore, the beat generated a positive surprise of 26.70%.
Source: Yahoo Finance
Second quarter of fiscal 2018 earnings were backed on revenue that came in at $502 million. Despite the company beating expectations by $6.9 million, revenue for the second quarter was nearly 9% lower than the comparable quarter of 2017 due to Autodesk's business model transition. Autodesk’s first-half results increase the company’s confidence about the business model transition, said Scott Herren, Autodesk's chief financial officer.
A quick look at revenue figures for the second quarter of fiscal 2018:
Total annualized recurring revenue increased by 21% year over year to $1.83 billion, of which $784 million was for a subscription plan, a 94% increase year over year, and $1.05 billion was for a maintenance plan, a 5% decrease year over year. The company says that “subscription plan subscriptions benefited from 63,000 maintenance subscribers that converted to product subscription under the maintenance-to-subscription program.”
In the second quarter of fiscal 2018, total subscriptions increased 153,000 to a total number of 3.44 million and subscriptions for the subscription plan increased 270,000 to a total number of 1.59 million from the first quarter of 2018. The company says that the increase in the number of subscriptions for the subscription plan “benefited from 63,000 maintenance subscribers converting to product subscriptions in the maintenance-to-subscription program that launched mid-quarter.”
Deferred revenue was $1.78 billion in the second quarter of fiscal 2018, which is a 17% increase year over year.
While for the third quarter of fiscal 2018 the company expects revenue coming in at between $505 million and $515 million, analysts forecast an average revenue of $516.48 million. Concerning earnings, the company guides an EPS – non-GAAP measures – ranging between a loss of 16 cents and a loss of 12 cents. Analysts forecast a loss of 13 cents.
Autodesk has also provided shareholders with the following expectations on revenue, earning and subscription numbers for full fiscal 2018:
- Revenue ranging between $2.03 billion and $2.05 billion.
- Bottom line – non-GAAP measures –Â ranging between a loss of 61 cents and a loss of 54 cents per share.
Net subscription additions are ranging between 625,000 and 675,000.
The total Annualized Recurring Revenue is expected to grow according to a rate ranging between 24% and 26%.
Let's have a quick look at the most prominent figures on the company’s balance sheet:
The company closed the second quarter of fiscal 2018 with approximately $1.71 billion in cash and securities, or about $7.75 per share. The total debt amounts to $1.58 billion, and the total debt-to-equity ratio is 502.35 versus an industry average of 57.54, indicating the company’s business is highly leveraged.
GuruFocus gives Autodesk a financial strength rating of 4 out of 10.
Autodesk is currently trading at $114.97 per share with a market capitalization of $25.34 billion, a price-book (P/B) ratio of 80.29, a price-sales (P/S) ratio of 12.97 and an EV/EBITDA ratio of -64.89.
For Autodesk, analysts set and average target price of $114.67 per share and a recommendation rating of 2 out of 5.
Disclosure: I have no positions in Autodesk.
