Autodesk’s Q2 Results Beat Estimates; Shares Fall 7%

Shares of software products and services provider Autodesk, Inc. (ADSK) declined 7% to close at $318.44 in Wednesday’s extended trade even though the company reported better-than-expected results for the second quarter of fiscal 2022.

Quarterly net revenues jumped 16% year-over-year to $1.06 billion, surpassing the Street’s expectations of $1.05 billion.

This increase can be attributed to a 21% year-over-year rise in Subscription revenues, which stood at $1.02 billion and constituted 96.2% of the total net revenues.

The company reported quarterly earnings per share (EPS) of $1.21, up 23.5% from the same quarter last year. Further, the figure comfortably outpaced analysts’ estimates of $1.13 per share.

In other operating metrics, the company’s total billings increased 29% from the prior-year quarter to $1.02 billion. While net revenue retention rate was within the range of 100% to 110%, operating margin stood at 31%, up 2% from the previous year.

For the third quarter, the company expects EPS to be in the range of $1.22 to $1.28, compared to the consensus estimate of $1.26. It expects revenues to be in the range of $1.110 billion to $1.125 billion against the consensus estimates of $1.11 billion.

For Fiscal Year 2022, the company’s EPS forecasts hover in the range of $4.91 to $5.06 against the consensus estimates of $4.90 per share. The company expects to report revenues in the range of $4.34 billion to $4.38 billion. The consensus for the same is pegged at $4.36 billion.

The CFO of Autodesk, Debbie Clifford, said, “Robust growth in new product subscriptions, accelerating digital sales, and improving subscription renewal rates drove our strong second quarter results. Our strong start to the year means we are raising our FY22 revenue and margin guidance and shifting more of our EBA customers from multi-year paid up front to annual billings, benefiting both our customers and Autodesk.” (See Autodesk stock chart on TipRanks)

Prior to the earnings, Barclays analyst Saket Kalia reiterated a Buy rating on the stock. The analyst, however, raised the price target to $370 from $340, implying upside potential of 8.1% from current levels.

Consensus among analysts is a Strong Buy based on 9 Buys and 2 Holds. The average Autodesk price target of $358.70 implies upside potential of 4.8% from current levels.

Autodesk scores a “Perfect 10” from TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations. Shares have gained 37.9% over the past year.