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    ADSK
    Earnings call· Jul 2025(Q2 FY26)

    Autodesk, Inc. ADSK

    Aug 28, 2025 Source

    Executive summary

    Autodesk Q2 FY26 — Strong Results Drive Raised Full-Year Guidance and Long-Term Margin Target

    Autodesk delivered strong Q2 FY26 results, exceeding expectations across key financial metrics and leading to a raised full-year outlook. The company is executing on its cloud, platform, and AI strategy, driving operational efficiencies, and committing to a long-term non-GAAP operating margin target of 41% by FY29. Momentum in construction and AECO remains robust, while the new transaction model continues to mature and contribute to direct business.

    Highlights

    5

    • Total revenue grew 17% as reported (18% in constant currency), topping the higher end of guidance ranges.

    • Billings increased 36% as reported (34% at constant currency), exceeding expectations.

    • Non-GAAP operating margin was 39%, reflecting a 140 basis points year-over-year increase.

    • Free cash flow was $451 million, benefiting from earlier timing of billings.

    • Full-year guidance raised for revenue, billings, non-GAAP operating margin, and free cash flow.

    Concerns

    3

    • Macroeconomic uncertainty remains elevated, leading to prudent guidance assumptions for the second half of the year.

    • Tougher comparisons for new transaction model billings and revenue growth are expected in the second half of FY26, particularly in the fourth quarter.

    • Incremental margin headwinds from the new transaction model are anticipated in fiscal '27, suggesting non-linear progress towards long-term margin targets.

    Guidance & targets

    8
    CategoryTargetConfidence
    Full-year Billings
    $7.355 billion to $7.445 billion
    high materiality
    High
    Full-year Revenue
    $7.025 billion to $7.075 billion
    high materiality
    High
    Full-year Non-GAAP Operating Margin
    approximately 37%
    high materiality
    High
    Full-year Underlying Non-GAAP Operating Margin
    approximately 40%
    high materiality
    High
    Non-GAAP Operating Margin
    41%
    high materiality
    High
    Underlying Non-GAAP Operating Margin
    about 45%
    high materiality
    High
    Full-year Free Cash Flow
    $2.2 billion to $2.275 billion
    high materiality
    High
    Full-year Share Buyback
    between approximately $1.2 billion and $1.3 billion
    high materiality
    High

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    AECO
    Customers are benefiting from sustained investment in data centers, infrastructure, and industrial buildings, which is more than offsetting softness in commercial.
    		—strong——
    Construction
    Momentum is unchanged, performing well across the U.S. and internationally, including the payments business. The company continues to see wins at the top of the pyramid and in the mid-market.
    		—strong——

    Operational metrics

    9
    Non-GAAP operating margin
    39%140 bps YoY increase
    Q2 FY26

    Reflected operating leverage, ongoing cost discipline, and some timing benefits from restructuring, partly offset by margin drag from the new transaction model.

    Share buyback executed
    $356 million
    Q2 FY26

    Part of capital allocation strategy.

    Share buyback executed
    $709 million
    YTD FY26

    Year-to-date share repurchases.

    Revenue growth (ex-NTM, constant currency)
    11%
    Q2 FY26

    Excluding the impact of the new transaction model.

    Billings growth (ex-NTM, constant currency)
    26%
    Q2 FY26

    Excluding the impact of the new transaction model.

    New Transaction Model revenue contribution
    $105 million
    Q2 FY26

    Contribution from the new transaction model to total revenue.

    New Transaction Model billings contribution
    $129 million
    Q2 FY26

    Contribution from the new transaction model to total billings.

    GAAP operating margin
    25%240 bps YoY increase
    Q2 FY26

    Reflected operating leverage, ongoing cost discipline, and some timing benefits from restructuring.

    Partner-driven new business
    steady increase
    Q2 FY26

    Expected to continue as customers become more comfortable with renewal motions and internal efficiencies.

    Industry KPIs

    6
    MetricValueDetails
    Revenue growth$7.025B-$7.075BUSD
    Rpo current rpo$7.3B (RPO); $4.7B (Current RPO)USD
    Bookings billings$7.355B-$7.445BUSD
    Operating FCF margin rule of 4039% (non-GAAP operating margin); 41% (FY29 non-GAAP operating margin target); $451M (FCF)%; USD
    Ai product adoption monetization60% (acceptance rate); 90% (sketches fully constrained)%
    Net revenue net dollar retention100%-110%%

    Orderbook & backlog

    2
    Remaining Performance Obligations (RPO)$7.3 billionQ2 FY26 end

    24% YoY growth

    Benefiting from tailwinds from the new transaction model.

    Current Remaining Performance Obligations (cRPO)$4.7 billionQ2 FY26 end

    20% YoY growth

    Benefiting from tailwinds from the new transaction model.

    Product announcements

    2
    ProductTypeDetails
    Project Berninimilestone
    Sketch AutoConstrain in Fusionupdate

    Deals & partnerships

    8
    AtkinsRéalisRenewal and expansion of EBA

    Signed sixth EBA. Autodesk technologies are embedded across its global delivery ecosystem to enhance design quality, reduce rework, and support data-driven decision-making. Autodesk will help streamline workflows, improve quality assurance, and support expanded service offerings through initiatives like automated model validation, enhanced interoperability, and immersive XR-based design reviews.

    Kimley-HornRenewal and expansion of relationship

    Renewed and expanded its relationship with Autodesk to accelerate the adoption of BIM solutions and Autodesk Construction Cloud, fostering collaboration and productivity across the project life cycle.

    Dynamic EnergySelection of Autodesk Construction Cloud

    Selected Autodesk Construction Cloud to replace a competitive solution due to challenges with client billing, inefficient invoice approval workflows, and forecasting difficulties caused by lack of ERP integration. Will leverage mobile app off-line capabilities, multi-user workflows for inspection, and KPI progress tracking.

    European research institution for aerospace, energy and transportationAdoption of Product Design & Manufacturing Collection

    Adopted Autodesk's Product Design & Manufacturing Collection to accelerate innovation and boost sustainability. These tools streamline data management, optimize workflows, shorten development cycles, and enable increased virtual testing and simulation, reducing reliance on physical prototypes.

    MotorScrubberAdoption of Fusion with extensions

    Adopted Fusion with the simulation, design, and data management extensions to replace a competitive CAD solution, aiming to connect disciplines, data, and workflows from design to manufacturing to drive efficiency and accelerate time to market.

    Multinational biopharmaceutical companyAdoption of Fusion

    Adopting Fusion to increase the resiliency of its supply chain to actual and potential disruption and drive operational efficiency. Using Fusion, it can quickly, collaboratively, and securely design, make, and document critical spare parts, minimizing downtime and production delays.

    Anna University, ChennaiStrategic engagement for education

    Signed a strategic engagement with Autodesk to enhance student employability through modern applied engineering education across its 400-plus affiliated colleges. A state-of-the-art Design and Make Innovation Center will be equipped with Autodesk's cloud-based platforms.

    High-performance automotive manufacturerRenewed agreement with hybrid consumption model

    Renewed agreement with Autodesk that included a combination of named user subscriptions and Flex consumption tokens, enabling designers across its ecosystem with unified access to technology while retaining robust user management and scalability.

    Risks & headwinds

    4
    Macroeconomic uncertainty

    uncertain geopolitical, macroeconomic and policy environment

    Mitigation: Maintaining prudent guidance assumptions for the second half of the year.

    Tougher growth comparisonsH2 FY26, Q4 FY26

    tougher new transaction model billings and revenue growth comparisons with last year, particularly in the fourth quarter

    Mitigation: Focusing on controllable factors that drive revenue, operating margin, EPS, and capital allocation.

    New transaction model margin headwindsFY27

    incremental margin headwinds from the new transaction model in fiscal '27

    Mitigation: Acknowledged that annual progress towards long-term margin targets will not be linear; focusing on sales and marketing efficiency and operating leverage.

    Customer exposure to tariff-related pricing pressures

    some of our customers still are struggling with the same things that you're hearing about pricing pressures and some of the things that are associated with higher cost of goods for some of their products

    Mitigation: Customers are coping well; no additional red flags raised by customers.

    What to watch in Q3 FY26

    5

    Full-year Billings

    FY26
    Target$7.355B-$7.445B

    Why it matters

    Key indicator of forward demand and revenue potential, raised guidance reflects improved outlook.

    Reflecting all this, we've raised our billings guidance range to $7.355 billion to $7.445 billion

    Q&A highlights

    7

    Given recent headlines, what is Autodesk's appetite for large, transformative M&A?

    Andrew reiterated Autodesk's capital allocation strategy: prioritize organic investment, then tech tuck-in/targeted acquisitions (hundreds of millions to billions, not tens of billions), and finally share repurchases beyond dilution offset.

    “The other thing, of course, we're doing is, as we have excess capital above and beyond those needs, we are accelerating the deployment of that to shareholders via stock buybacks that move beyond offsetting dilution and accelerate and reduce the share count.”

    asked by Saket Kalia · answered by Andrew Anagnost

    2 min read6 chapters

    Detailed Narrative

    01

    Strategic Priorities & Capital Allocation

    Autodesk continues to focus on its established strategic priorities in cloud, platform, and AI. The company is optimizing sales and marketing to drive higher operating margins and allocating capital to organic investments, targeted and tuck-in acquisitions, and its share repurchase program. This strategy aims to drive long-term shareholder value, with further details to be shared at Autodesk University and Investor Day.

    02

    New Transaction Model (NTM) Impact & Evolution

    The new transaction model contributed approximately $105 million to Q2 revenue and $129 million to Q2 billings. Operational friction from its implementation continues to ease, and the model is driving strength in the Autodesk Store by attracting customers who previously engaged with transactional partners. The company expects this shift to continue, leading to increased efficiency and direct customer engagement.

    03

    AEC & Construction Momentum

    Autodesk saw strong performance in AECO, driven by sustained investment in data centers, infrastructure, and industrial buildings, which more than offset softness in commercial sectors. The construction business maintains its strong momentum, performing well across the U.S. and internationally, including growth in the payments business. The company emphasizes its comprehensive, modern, and connected end-to-end platform as a key driver of this success.

    04

    Manufacturing & AI Innovation

    Customers in manufacturing are increasingly investing in digital transformations and consolidating on Autodesk's Design and Make platform to drive growth and resilience. Fusion is experiencing strong growth, with increasing extension attach rates and higher average sales prices. AI-powered Sketch AutoConstrain in Fusion has achieved a 60% acceptance rate, automatically constraining 90% of sketches, demonstrating significant productivity gains for users.

    05

    Long-Term Margin Expansion & Efficiency

    Autodesk raised its FY26 non-GAAP operating margin guidance to approximately 37% (40% on an underlying basis) and set a long-term target of 41% reported (45% underlying) by FY29. This expansion is primarily expected from sales and marketing efficiency gains, initiated in February, combined with inherent operating leverage. While progress may not be linear due to anticipated NTM margin headwinds in FY27, the company is confident in achieving these goals.

    06

    AI Strategy & Foundation Models

    Autodesk is building industry-specific foundation models, such as Project Bernini for 3D, capable of understanding and reasoning about 2D/3D geometry, Design and Make data, and physical behavior. These adaptive, context-aware AI-driven CAD engines aim to dramatically expand possibilities across the project lifecycle, eliminate repetitive work, and enable customers to build their own AI models on their unique data, ensuring ethical and transparent use.

    AI-generated summary of the company’s earnings call. Not investment advice.