For those who are keeping track, yesterday’s news about Autodesk’s quarter marked the 11th quarter in a row of losses for the CAD, CAM and CAE software giant. However, this includes a $94 million in restructuring costs. Last quarter, Autodesk announced its biggest layoffs ever (13% of its total work force, or 1,150 people). Most of that $94 million may be severance pay.
Take away the $94 million this quarter and the loss would drop to $80 million. Still nothing to brag about.. but if you squint, you can see the trend (from the last 4 quarters) shows diminishing losses.
On the plus side, revenue grew 7.6%, the biggest gain in the last 4 quarters of increasing revenue. A sign that the long-awaited revenue from term licensing is being realized.
Restructuring costs from the layoffs are expected to continue in the next quarter but should be much less.
Understandably bullish on Autodesk’s prospects, CEO Anagnost led the call to investors with “We finished the year with better than expected performance on many of the traditional financial metrics, such as revenue, deferred revenue, EPS and cash flow.”
He goes on to emphasize Autodesk is starting to reap revenue long deferred, accounting practices that make sense to accountants, with dropping “ARR” and “ARPS” enough times to indicate that he knows more about these matters than the typical engineer. ARR, or accounting rate of return, is mentioned 45 times in the transcript. It all seems to play along with the transition from perpetual to term licensing, his plan.
The cloud is pointed at as “having its biggest quarter” “fueled by several large wins.” Could this be a surprise source of profit, similar to Microsoft, riding the cloud with its Azure platform?
While Q4 of FY2018 had a $174 million loss, with one-time restructuring costs, will FY2019 be a whole lot better? Maybe not. Autodesk is moving its European operational center from Neufchatel, Switzerland to Dublin, Ireland, which is expected to cost the company $135 million.