Autodesk Inc Q3 2025 Earnings Call Summary

The following is excerpted from the question-and-answer section of the transcript.

Question: Jason Celino - KeyBanc Capital Markets - Analyst : Hey, thanks for taking my questions. Just two for me. The first one, Andrew, some of us are unfamiliar with Janesh. Can you just tell us a little bit more about him and what he brings to Autodesk?

Question: Jason Celino - KeyBanc Capital Markets - Analyst : Okay. Great. Interesting. And then for my second question, now that you do have a CFO, do you have any thoughts on when you might hold the next Investor Day? I think in the past, you usually did it in March. Is that a good time frame? Or is that too soon? Thanks. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 26, 2024 / 10:00PM, ADSK.OQ - Q3 2025 Autodesk Inc Earnings Call

Question: Jay Vleeschhouwer - Griffin Securities - Analyst : Thank you. Andrew, as of the third quarter, your three year CAGR for current RPO is about 12%. How are you thinking about the sustainability, or perhaps improvement, upon that CAGR or CRPO over the next number of years? When we think about the ingredients of that, it looks like, over the last several years, the CAGR for your unit volume for all brands is roughly 6% to 7% in the aggregate. So on top of that, you've had price and other ingredients, but perhaps talk about how you think you might be able to improve upon the most recent trajectory for current RPO, then my follow-up.

Question: Jay Vleeschhouwer - Griffin Securities - Analyst : Okay. Since new management is part of the news this evening, could you talk about how you're thinking about the Chief Revenue Officer position? Would it make sense perhaps to continue to have a separate CRO? Or do you think it might make more sense perhaps to combine CRO and COO?

Question: Jay Vleeschhouwer - Griffin Securities - Analyst : Thank you very much.

Question: Adam Borg - Stifel Financial Corp - Analyst : Awesome. Thanks so much for taking the questions and congrats to Betsy and Janesh. Maybe on the new transaction model, I know it's still early, but I was just curious, are there any learnings from those customers that are on the new model that you're seeing in terms of the adoption of Autodesk technology and the ability to find white space to better upsell and cross-sell different solutions now that you have a more direct relationship?

Question: Adam Borg - Stifel Financial Corp - Analyst : Great. And maybe just as a quick follow-up, just as we think about the new administration coming in, you talked about the macro being broadly consistent. Any change in tone in your conversations with the end markets in terms of optimism or their ability or willingness to expand new projects ahead of the administration? Any pause or just full steam ahead? I'm just curious, any commentary you have there from a macro perspective would be really, really helpful. Thank you so much.

Question: Joe Vruwink - Robert W. Baird & Co - Analyst : On the outlook for next year, $2.050 billion in free cash has, I think, been the expectation for the past year now. Within the last year, you've also seen more co-terming of contracts. And I think that leads to better billings in FY26. So my question is, does that actually create the potential that things are better, and that's why you're qualifying now the $2.050 billion as the midpoint of possibilities?

Question: Joe Vruwink - Robert W. Baird & Co - Analyst : Okay. Fair enough. And then just on the M&A environment, over recent history, Autodesk has been more in a mode of, I would say, strategic tuck-ins. I think there was actually an asset in the CFE simulation space that was announced during AU in the quarter. Is that the right approach for Autodesk, just given this point in time, all the work you've done to build out the cloud platform, the data model and so these tuck-ins make the most sense? And if that's true, how would you maybe compare and contrast some of the larger scale M&A that's happening with your peers in the space?

Question: Joe Vruwink - Robert W. Baird & Co - Analyst : Okay, thank you.

Question: Elizabeth Porter - Morgan Stanley - Analyst : Yes. Thanks for taking my question. As partners are getting customers just up and running on the new transaction model, we picked up that they're spending a little bit more time than usual of time and resources with those existing customers. So I was curious if that had any impact on new business demand kind of more recently and then just more broadly, any change in new business trends that you think you should call out from versus last quarter. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 26, 2024 / 10:00PM, ADSK.OQ - Q3 2025 Autodesk Inc Earnings Call

Question: Elizabeth Porter - Morgan Stanley - Analyst : Great. And then a follow-up just on billings. Understanding there's a lot of volatility around the change from multiyear and the transaction model. But it looks like guidance implies a bigger step down in growth in Q4 just despite an easier year ago compare. So I was hoping that you could help us unpack the balance of those headwinds and tailwinds that would drive kind of a greater downtick in growth in Q4.

Question: Bhavin Shah - Deutsche Bank AG - Analyst : Yes. Thanks for taking my question and congrats on the quarter. Andrew, at university, there appeared to be a noticeable uptick in attendance and sessions geared towards owners and operators. What's been driving the recent interest from this segment? How much of it is product enhancement you guys have made versus really more focusing and emphasizing from a go-to-market perspective? And how long before this segment of buyers kind of becomes more meaningful to the financials?

Question: Bhavin Shah - Deutsche Bank AG - Analyst : Super helpful there. And then, Betsy, one for you, just in terms of the underlying improvement that we've been seeing in the margins. And I know you've called out FX and the transaction model. I know it's very early, but as we think about next year, how do we think about like the impact of FX and the transaction model to kind of the headline operating margins?

Question: Tyler Radke - Citigroup, Inc. - Analyst : Hey, good afternoon, thanks for taking my question. I was going to ask you about a placeholder for next year's guidance, Betsy, but I don't want to waste a question on that, but feel free to answer. But Andrew, I wanted to kind of ask you about some of your comments you made around efficiency, especially as it relates to hiring Janesh, who you pointed out, has a lot of experience at larger companies, VMware, Cisco, et cetera. Now that you're a few quarters into this transaction model rollout, you have kind of better visibility on some of the prior channel relationships, having that direct billing with the customer. What are some of the areas that you've identified as having that efficiency potential? And then as we think about that efficiency unlock, should we think about that as incremental to the free cash flow number you have out for next year? Or is that embedded in that already?

Question: Tyler Radke - Citigroup, Inc. - Analyst : Great, thanks for details and then my follow-up question, Andrew, you talked about some really strong net new customer additions within the construction cloud, I think, doubling year-over-year. We also saw the Make revenue accelerate to 28% constant currency. Can you just help us understand, do you think that reacceleration is durable? And how are you sort of thinking about just your position there? What's been driving that strength in the new customer additions?

Question: Michael Turrin - Wells Fargo - Analyst : Hey, thanks very much, appreciate you taking my question. The commentary on the call sounded consistent, but wondering if there are any added details you can provide for us on just the overall macro spend environment and how that's maybe progressing across either key product segments or geos, whatever split you think is more useful. I think what we're trying to get a sense for is if there are any shades of improvement anywhere or if you'd characterize as mainly just consistent over the past couple of quarters?

Question: Michael Turrin - Wells Fargo - Analyst : Yes, tough for us, too. That's why we keep asking. Betsy, congrats on the transition back. Given you're also on the Board, I think it'd be useful to hear you chime in on the hiring of Janesh and maybe just also comment on how you ensure you're able to hand over the reins and keep progress going on the key transitions the company is working through.

Question: Michael Steven Richards - RBC Capital Markets - Analyst : This is Mike Richards on for Matt. thanks for taking my question. I was wondering if you could provide an update on Project Bernini and maybe how customer reception has been and where we are in developing other foundational models or just the monetization opportunity there?

Question: Steve Tusa - JPMorgan Chase & Co. - Analyst : Hi, good evening or afternoon. Lots of good questions asked. Just a detailed one, what's the change in the billings contribution from the transaction model change, the 5% to 6% to 5% to 5.5%. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 26, 2024 / 10:00PM, ADSK.OQ - Q3 2025 Autodesk Inc Earnings Call

Question: Joshua Tilton - Wolfe Research - Analyst : Can you hear me?

Question: Joshua Tilton - Wolfe Research - Analyst : Great. I have a kind of a high-level one on the incoming CFO. If I heard correctly, we didn't exactly get like an initial outlook for revenue growth for next year. And I'm just trying to understand, in the context of the new CFO coming in, is there anything that could change the calculus of how you guys think about that 10% to 15% growth for the underlying business outside of the agency transition that's ongoing today?

Question: Sitikantha Panigrahi - Mizuho Securities USA - Analyst : Thanks for taking my question. I understand the new business model has some kind of noise in your expense and margin side. But if you exclude that, where do you see some of the operating leverages that you can drive in next year or so?

Question: Michael Funk - BofA Securities, Inc. - Analyst : Hey, guys, thanks for taking my question. Two, if I could. You've mentioned a few times in the last calls about the largest multiyear cohort renewing next year and then also a large EBA cohort. Just wondering if you can give us kind of the range of potential outcomes among the renewals there, whether potential to upsell, risk of down sell and what that variance might look like around those renewals.

Question: Michael Funk - BofA Securities, Inc. - Analyst : Okay. Great. And then, Betsy, one more. You've mentioned a few times also the investment in new transaction model, people, processes and automation, presumably more fixed cost versus variable like commission. Can you quantify that for us to help us with modeling as we try to forecast margin? I know you're not giving us guidance, but a better understanding of what that cost might actually be on an absolute basis would help us to think about our modeling.