In the first quarter under new leadership, you might have expected to see a turnaround in Autodesk’s predicament. Andrew Anagnost has been sole CEO since June. What is he waiting for?
Seriously, Andrew has taken control of a rather large ship and turning a large ship around –without capsizing it – it going to take time.
And that presumes a turnaround is in order. Those who know more about financial matters (many at Autodesk and in the financial community) have stated the company is on the right tack and sailing towards eventual riches. It's just a matter of time before everyone converts from perpetual to term licensing.
9 straight quarters in the red. The profit curve is oscillating and appears to be leveling off below $100 million in net loss (last 6 quarters average loss of $143 million). Chart based on Autodesk data, created by TenLinks.
For the 2nd quarter of FY 2018, the company barely upticked in revenue (up 3%) and continued losing money, this time $144 million, even more that of the previous quarter ($130 million).
Autodesk lists $2.1 billion in assets, $1.2 billion in cash or “cash equivalents,: a burn rate of $140 million per quarter puts the company’s life expectancy at 2.1 years. Last year at this time, Autodesk listed $2.5B in cash or its equivalent.
To explain Autodesk’s continued optimism, a new financial mathematics has been developed by Autodesk, called New Metrics, uses terms like M2S (maintenance to subscription) and ARR (annualized recurring revenue) to prove Autodesk is on the right course. One industry observer struggling to attempts to reconcile general accounting practices to Autodesk math here. Worrisome to another industry observer is the decline in bastions of Autodesk: manufacturing (down 17%) and AEC (down 18%) while low cost AutoCAD LT was up 32%.
While the new math has industry observers -- and engineers -- scratching their heads, financial analysts admit to no such confusion.
“Good quarter,” says a financial analyst on the call, buoyed by losses not as much as expected. Investors raised stock price to a record high of $119.73 in midday trading the day of the Q2 announcement, though it fell back as by as much as $6 the following business day.