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Autodesk’s Q314 turned out slightly better than recent quarters with an increase in operating margin ( from 6% to 12%) and net profit (up from $29.4m to $57.6m) but much of this was down to lower costs following a reduction in restructuring charges. In the year ago quarter it took a $37m hit, but that dropped to $4.4m in Q314.
Revenue growth is still minimal (up 1% to $555m) but is in positive territory. The backdrop is that licence sales are declining as Autodesk transitions to recurring subscription revenue, which contributed $258m (vs. $238m). Even so, 8% subscription revenue growth is slow. Q4 will see more of a shift and the company expects a $50m impact on revenue in Q4.
The picture was mixed in terms of business activity. Although the Architecture, Construction Engineering and Construction segment continued to grow (up 13%), along with Manufacturing (up 8%), the important Platform and Emerging business is still flailing (down 10%). This has been an issue for much of the past year (see the HotViews archive here). Again, there is a transition effect, with a move to suites over single products but the going looks hard.
Autodesk is investing to find growth areas – which has included acquiring the UK’s Delcam (see here) and two Building Information Modelling (BIM) specialists, Bestech Systems and Savoy Computing Services, also from the UK (see here). But it is lagging more narrowly focussed providers like Aveva, and the signs are that the challenges will continue.
