Autodesk (NASDAQ:ADSK) Beats Q4 Sales Targets, Stock Soars

Max Juang /
2024/02/29 4:06 pm EST

Design software company Autodesk (NASDAQ:ADSK) reported Q4 FY2024 results topping analysts' expectations, with revenue up 11.5% year on year to $1.47 billion. The company expects next quarter's revenue to be around $1.39 billion, in line with analysts' estimates. It made a non-GAAP profit of $2.09 per share, improving from its profit of $1.86 per share in the same quarter last year.

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Autodesk (ADSK) Q4 FY2024 Highlights:

  • Revenue: $1.47 billion vs analyst estimates of $1.43 billion (2.6% beat)
  • EPS (non-GAAP): $2.09 vs analyst estimates of $1.95 (7.3% beat)
  • Revenue Guidance for Q1 2025 is $1.39 billion at the midpoint, roughly in line with what analysts were expecting (however, non-GAAP EPS guidance for the period below Wall Street's expectations)
  • Management's revenue guidance for the upcoming financial year 2025 is $6.04 billion at the midpoint, beating analyst estimates by 1% and implying 9.9% growth (vs 9.8% in FY2024) (however, non-GAAP EPS guidance for the period below Wall Street's expectations)
  • Free Cash Flow of $427 million, up from $13 million in the previous quarter
  • Gross Margin (GAAP): 91.2%, in line with the same quarter last year
  • Market Capitalization: $54.6 billion

"We are undertaking a multi-year process to develop lifecycle solutions, powered by shared platform services, and with Autodesk's Data Model at its core. Together, these will enable Autodesk, its customers, and partners, to create more valuable, data-driven, and connected products and services," said Andrew Anagnost, Autodesk president and CEO.

Founded in 1982 by John Walker and growing into one of the industry's behemoths, Autodesk (NASDAQ:ADSK) makes computer-aided design (CAD) software for engineering, construction, and architecture companies.

Design Software

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Sales Growth

As you can see below, Autodesk's revenue growth has been unremarkable over the last two years, growing from $1.21 billion in Q4 FY2022 to $1.47 billion this quarter.

Autodesk Total Revenue

This quarter, Autodesk's quarterly revenue was once again up 11.5% year on year. However, its growth did slow down compared to last quarter as the company's revenue increased by just $55 million in Q4 compared to $69 million in Q3 2024. While we'd like to see revenue increase by a greater amount each quarter, a one-off fluctuation is usually not concerning.

Next quarter's guidance suggests that Autodesk is expecting revenue to grow 9.7% year on year to $1.39 billion, improving on the 8.5% year-on-year increase it recorded in the same quarter last year. For the upcoming financial year, management expects revenue to be $6.04 billion at the midpoint, growing 9.9% year on year compared to the 9.8% increase in FY2024.

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Cash Is King

If you've followed StockStory for a while, you know that we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can't use accounting profits to pay the bills. Autodesk's free cash flow came in at $427 million in Q4, down 52.7% year on year.

Autodesk Free Cash Flow

Autodesk has generated $1.28 billion in free cash flow over the last 12 months, an impressive 23.3% of revenue. This high FCF margin stems from its asset-lite business model and strong competitive positioning, giving it the option to return capital to shareholders or reinvest in its business while maintaining a cash cushion.

Key Takeaways from Autodesk's Q4 Results

It was a good quarter, with revenue and non-GAAP EPS beating expectations. Revenue guidance was also solid for both next quarter and the full year. One negative was that guidance for non-GAAP EPS was below for both next quarter and the full year. Overall, this quarter's results seemed fairly solid. The stock is shrugging off the EPS guide and is up 7% after reporting and currently trades at $276.2 per share.

So should you invest in Autodesk right now? When making that decision, it's important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it's free.