Autodesk Reports 11 Percent First Quarter Revenue Growth


Autodesk, Inc.
Condensed Consolidated Statements of Operations
(In millions, except per share data)

	Three Months Ended
	April 30,
	2012			2011
	(Unaudited)
Net revenue:
License and other	$	361.0		$	323.0

Maintenance		227.6			205.3

Total net revenue		588.6			528.3

Cost of revenue:
Cost of license and other revenue		47.1			42.6

Cost of maintenance revenue		11.7			12.0

Total cost of revenue		58.8			54.6

Gross profit		529.8			473.7

Operating expenses:

Marketing and sales		223.2			201.9

Research and development		152.7			136.6

General and administrative		59.9			56.6

Total operating expenses		435.8			395.1

Income from operations		94.0			78.6

Interest and other income, net		3.5			5.9

Income before income taxes		97.5			84.5

Provision for income taxes		(18.6	)		(15.2	)

Net income	$	78.9		$	69.3

Basic net income per share	$	0.35		$	0.30

Diluted net income per share	$	0.34		$	0.29

Weighted average shares used in computing basic net income per share		228.1			228.2


Weighted average shares used in computing diluted net income per share		234.1			237.1

Autodesk, Inc.
Condensed Consolidated Balance Sheets
(In millions)

	April 30,		January 31,
	2012		2012
	(Unaudited)

ASSETS:

Current assets:
Cash and cash equivalents	$	1,074.5	$	1,156.9
Marketable securities		437.5		254.4
Accounts receivable, net		300.6		395.1
Deferred income taxes		38.7		30.1
Prepaid expenses and other current assets		60.8		59.4
Total current assets		1,912.1		1,895.9

Marketable securities		284.1		192.8
Computer equipment, software, furniture and leasehold improvements, net		104.0		104.5
Purchased technologies, net		74.8		84.6
Goodwill		682.9		682.4
Deferred income taxes, net		129.3		135.8
Other assets		129.8		131.8
	$	3,317.0	$	3,227.8


LIABILITIES AND STOCKHOLDERS' EQUITY:

Current liabilities:
Accounts payable	$	88.9	$	89.3
Accrued compensation		127.8		183.9
Accrued income taxes		17.4		14.4
Deferred revenue		584.7		582.3
Other accrued liabilities		56.7		84.2
Total current liabilities		875.5		954.1

Deferred revenue		142.2		136.9
Long term income taxes payable		171.7		174.8
Other liabilities		82.3		79.1

Commitments and contingencies

Stockholders' equity:
Preferred stock		-		-
Common stock and additional paid-in capital		1,496.2		1,365.4
Accumulated other comprehensive income (loss)		3.7		5.9
Retained earnings		545.4		511.6
Total stockholders' equity		2,045.3		1,882.9
	$	3,317.0	$	3,227.8

Autodesk, Inc.
Condensed Consolidated Statements of Cash Flows
(In millions)
	Fiscal Quarters Ended
	April 30,
	2012			2011
	(Unaudited)

Operating activities:
Net income	$	78.9		$	69.3
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		29.2			24.5
Stock-based compensation expense		33.4			25.9
Excess tax benefits from stock-based compensation		(9.9	)		-
Changes in operating assets and liabilities, net of business combinations		7.7			8.7
Net cash provided by operating activities		139.3			128.4

Investing activities:
Purchases of marketable securities		(447.8	)		(169.7	)
Sales of marketable securities		48.8			34.6
Maturities of marketable securities		128.5			96.5
Capital Expenditures		(11.5	)		(23.2	)
Acquisitions, net of cash acquired		-			(76.4	)
Other investing activities		(5.0	)		(14.5	)
Net cash used in investing activities		(287.0	)		(152.7	)

Financing activities:
Proceeds from issuance of common stock, net of issuance costs		153.0			111.3
Repurchases of common stock		(99.2	)		(68.6	)
Excess tax benefits from stock-based compensation		9.9			-
Net cash provided by financing activities		63.7			42.7

Effect of exchange rate changes on cash and cash equivalents		1.6			(2.1	)

Net increase in cash and cash equivalents		(82.4	)		16.3
Cash and cash equivalents at beginning of fiscal year		1,156.9			1,075.1
Cash and cash equivalents at end of period	$	1,074.5		$	1,091.4

Autodesk, Inc.
Reconciliation of GAAP financial measures to non-GAAP financial measures
(In millions, except per share data)

To supplement our consolidated financial statements presented on a GAAP basis, Autodesk provides investors with certain non-GAAP measures including non-GAAP net income, non-GAAP net income per share, non-GAAP cost of license and other revenue, non-GAAP gross profit, non-GAAP operating expenses, non-GAAP income from operations and non-GAAP provision for income taxes. These non-GAAP financial measures are adjusted to exclude certain costs, expenses, gains and losses, including stock-based compensation expense, amortization of purchased intangibles, discrete tax provision items and related income tax expenses. See our reconciliation of GAAP financial measures to non-GAAP financial measures herein. We believe these exclusions are appropriate to enhance an overall understanding of our past financial performance and also our prospects for the future, as well as to facilitate comparisons with our historical operating results. These adjustments to our GAAP results are made with the intent of providing both management and investors a more complete understanding of Autodesk's underlying operational results and trends and our marketplace performance. For example, the non-GAAP results are an indication of our baseline performance before gains, losses or other charges that are considered by management to be outside our core operating results. In addition, these non-GAAP financial measures are among the primary indicators management uses as a basis for our planning and forecasting of future periods.

There are limitations in using non-GAAP financial measures because the non-GAAP financial measures are not prepared in accordance with generally accepted accounting principles and may be different from non-GAAP financial measures used by other companies. The non-GAAP financial measures are limited in value because they exclude certain items that may have a material impact upon our reported financial results. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the directly comparable financial measures prepared in accordance with generally accepted accounting principles in the United States. Investors should review the reconciliation of the non-GAAP financial measures to their most directly comparable GAAP financial measures as provided in the tables accompanying this press release.

The following table shows Autodesk's non-GAAP results reconciled to GAAP results included in this release.

	Three Months Ended
	April 30,
	2012			2011
	(Unaudited)

GAAP cost of license and other revenue	$	47.1		$	42.6
Stock-based compensation expense		(1.3	)		(0.9	)
Amortization of developed technology		(9.8	)		(8.1	)
Non-GAAP cost of license and other revenue	$	36.0		$	33.6

GAAP gross profit	$	529.8		$	473.7
Stock-based compensation expense		1.3			0.9
Amortization of developed technology		9.8			8.1
Non-GAAP gross profit	$	540.9		$	482.7

GAAP marketing and sales	$	223.2		$	201.9
Stock-based compensation expense		(14.6	)		(11.8	)
Non-GAAP marketing and sales	$	208.6		$	190.1

GAAP research and development	$	152.7		$	136.6
Stock-based compensation expense		(11.1	)		(8.9	)
Non-GAAP research and development	$	141.6		$	127.7

GAAP general and administrative	$	59.9		$	56.6
Stock-based compensation expense		(6.4	)		(4.3	)
Amortization of customer relationships and trade names		(7.8	)		(6.5	)
Non-GAAP general and administrative	$	45.7		$	45.8

GAAP operating expenses	$	435.8		$	395.1
Stock-based compensation expense		(32.1	)		(25.0	)
Amortization of customer relationships and trade names		(7.8	)		(6.5	)
Non-GAAP operating expenses	$	395.9		$	363.6

GAAP income from operations	$	94.0		$	78.6
Stock-based compensation expense		33.4			25.9
Amortization of developed technology		9.8			8.1
Amortization of customer relationships and trade names		7.8			6.5
Non-GAAP income from operations	$	145.0		$	119.1

GAAP provision for income taxes	$	(18.6	)	$	(15.2	)
Discrete GAAP tax provision items		(6.3	)		(4.1	)
Income tax effect of non-GAAP adjustments		(13.7	)		(12.0	)
Non-GAAP provision for income tax	$	(38.6	)	$	(31.3	)

GAAP net income	$	78.9		$	69.3
Stock-based compensation expense		33.4			25.9
Amortization of developed technology		9.8			8.1
Amortization of customer relationships and trade names		7.8			6.5
Discrete GAAP tax provision items		(6.3	)		(4.1	)
Income tax effect of non-GAAP adjustments		(13.7	)		(12.0	)
Non-GAAP net income	$	109.9		$	93.7

GAAP diluted net income per share	$	0.34		$	0.29
Stock-based compensation expense		0.14			0.11
Amortization of developed technology		0.04			0.03
Amortization of customer relationships and trade names		0.03			0.03
Discrete GAAP tax provision items		(0.03	)		(0.02	)
Income tax effect of non-GAAP adjustments		(0.05	)		(0.04	)
Non-GAAP diluted net income per share	$	0.47		$	0.40

Autodesk

Other Supplemental Financial Information (a)

Fiscal Year 2013	QTR 1			QTR 2	QTR 3	QTR 4	YTD 2013
Financial Statistics ($ in millions, except per share data):
Total Net Revenue	$	589					$	589
License and Other Revenue	$	361					$	361
Maintenance Revenue	$	228					$	228

GAAP Gross Margin		90	%					90	%
Non-GAAP Gross Margin (1)(2)		92	%					92	%

GAAP Operating Expenses	$	436					$	436
GAAP Operating Margin		16	%					16	%
GAAP Net Income	$	79					$	79
GAAP Diluted Net Income Per Share (b)	$	0.34					$	0.34

Non-GAAP Operating Expenses (1)(3)	$	396					$	396
Non-GAAP Operating Margin (1)(4)		25	%					25	%
Non-GAAP Net Income (1)(5)	$	110					$	110
Non-GAAP Diluted Net Income Per Share (1)(6)(b)	$	0.47					$	0.47

Total Cash and Marketable Securities	$	1,796					$	1,796
Days Sales Outstanding		46						46
Capital Expenditures	$	(12	)				$	(12	)
Cash Flow from Operating Activities	$	139					$	139
GAAP Depreciation and Amortization	$	29					$	29

Deferred Maintenance Revenue Balance	$	648					$	648

Revenue by Geography (in millions):
Americas	$	208					$	208
Europe, Middle East and Africa	$	224					$	224
Asia Pacific	$	157					$	157
% of Total Rev from Emerging Economies		14	%					14	%

Revenue by Segment (in millions):
Platform Solutions and Emerging Business	$	229					$	229
Architecture, Engineering and Construction	$	163					$	163
Manufacturing	$	146					$	146
Media and Entertainment	$	51					$	51

Other Revenue Statistics:
% of Total Rev from Flagship		57	%					57	%
% of Total Rev Suites		28	%					28	%
% of Total Rev New and Adjacent		15	%					15	%
% of Total Rev from AutoCAD and AutoCAD LT		35	%					35	%
Upgrade and Crossgrade Revenue (in millions)	$	47					$	47

Favorable (Unfavorable) Impact of U.S. Dollar Translation Relative to Foreign Currencies Compared to Comparable Prior Year Period (in millions):
FX Impact on Total Net Revenue	$	14					$	14
FX Impact on Cost of Revenue and Total Operating Expenses	$	(2	)				$	(2	)
FX Impact on Operating Income	$	12					$	12

Gross Margin by Segment (in millions):
Platform Solutions and Emerging Business	$	216					$	216
Architecture, Engineering and Construction	$	149					$	149
Manufacturing	$	134					$	134
Media and Entertainment	$	42					$	42
Unallocated amounts	$	(11	)				$	(11	)

Common Stock Statistics (in millions):
Common Shares Outstanding		229.7						229.7
Fully Diluted Weighted Average Shares Outstanding		234.1						234.1
Shares Repurchased		2.5						2.5

(a) Totals may not agree with the sum of the components due to rounding.

(b) Earnings per share were computed independently for each of the periods presented; therefore the sum of the earnings per share amounts for the quarters may not equal the total for the year.

(1) To supplement our consolidated financial statements presented on a GAAP basis, Autodesk provides investors with certain non-GAAP measures including non-GAAP net income, non-GAAP net income per share, non-GAAP gross margin, non-GAAP operating expenses, and non-GAAP operating margins. These non-GAAP financial measures are adjusted to exclude certain costs, expenses, gains and losses, including stock-based compensation expense, amortization of purchased intangibles, discrete tax provision items and related income tax expenses. See our reconciliation of GAAP financial measures to non-GAAP financial measures herein. We believe these exclusions are appropriate to enhance an overall understanding of our past financial performance and also our prospects for the future, as well as to facilitate comparisons with our historical operating results. These adjustments to our GAAP results are made with the intent of providing both management and investors a more complete understanding of Autodesk's underlying operational results and trends and our marketplace performance. For example, the non-GAAP results are an indication of our baseline performance before gains, losses or other charges that are considered by management to be outside our core operating results. In addition, these non-GAAP financial measures are among the primary indicators management uses as a basis for our planning and forecasting of future periods. There are limitations in using non-GAAP financial measures because the non-GAAP financial measures are not prepared in accordance with generally accepted accounting principles and may be different from non-GAAP financial measures used by other companies. The non-GAAP financial measures are limited in value because they exclude certain items that may have a material impact upon our reported financial results. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the directly comparable financial measures prepared in accordance with generally accepted accounting principles in the United States. Investors should review the reconciliation of the non-GAAP financial measures to their most directly comparable GAAP financial measures as provided in the tables accompanying Autodesk's press release.

	QTR 1			QTR 2	QTR 3	QTR 4	YTD 2013
(2) GAAP Gross Margin		90	%					90	%
Stock-based compensation expense		-	%					-	%
Amortization of developed technology		2	%					2	%
Non-GAAP Gross Margin		92	%					92	%

(3) GAAP Operating Expenses	$	436					$	436
Stock-based compensation expense		(32	)					(32	)
Amortization of customer relationships and trade names		(8	)					(8	)
Non-GAAP Operating Expenses	$	396					$	396

(4) GAAP Operating Margin		16	%					16	%
Stock-based compensation expense		6	%					6	%
Amortization of developed technology		2	%					2	%
Amortization of customer relationships and trade names		1	%					1	%
Non-GAAP Operating Margin		25	%					25	%

(5) GAAP Net Income	$	79					$	79
Stock-based compensation expense		33						33
Amortization of developed technology		10						10
Amortization of customer relationships and trade names		8						8
Discrete GAAP tax provision items		(6	)					(6	)
Income tax effect of non-GAAP adjustments		(14	)					(14	)
Non-GAAP Net Income	$	110					$	110

(6) GAAP Diluted Net Income Per Share	$	0.34					$	0.34
Stock-based compensation expense		0.14						0.14
Amortization of developed technology		0.04						0.04
Amortization of customer relationships and trade names		0.03						0.03
Discrete GAAP tax provision items		(0.03	)					(0.03	)
Income tax effect of non-GAAP adjustments		(0.05	)					(0.05	)
Non-GAAP Diluted Net Income Per Share	$	0.47					$	0.47


Reconciliation for Fiscal 2013:
The following is a reconciliation of anticipated fiscal 2013 GAAP and non-GAAP operating margins:

	FISCAL 2013
GAAP operating margin basis point improvement over prior year	120
Stock-based compensation expense	120
Amortization of purchased intangibles	(40		)
Non-GAAP operating margin basis point improvement over prior year		200

Reconciliation for Long Term Operating Margins:

Autodesk is not able to provide targets for our long term (ending with fiscal year 2015) GAAP operating margins at this time because of the difficulty of estimating certain items that are excluded from non-GAAP that affect operating margin, such as charges related to stock-based compensation expense and amortization of acquisition related intangibles, the effect of which may be significant.

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