1/ Thread: $ADSK FY 3Q’22 Update
Just when I thought I escaped the recent carnage relatively unscathed, ADSK happened.
-15% AH, and -25% from ATH. Here are my notes.
2/ 3Q topline beat high end of guidance. Overall growth has accelerated a bit this quarter, but based on guidance, unfortunately the acceleration is unlikely to sustain.
3/ All the recent buzzwords here
"While demand is robust, we believe supply chain disruption and resulting inflationary pressures, a global labor shortage making it harder for our customers to staff new projects and the ebb and flow of COVID are contributing to the deceleration"
4/ Direct revenue, which is higher margin, now ~35% of total revenue. Net revenue retention 100-110%.
Non-GAAP operating margin increased by ~200 bps to ~32%
5/ During 3Q, ADSK bought back 980k shares at an avg $293/share. Total buyback this year $483 Mn.
Don't get too excited; SBC YTD $410 Mn, and shares outstanding mostly flat YoY. So buyback so far just negating the dilution.
6/ ADSK extended debt maturity profile by 2 yrs and decreased weighted avg cost by 40 bps. Also reducing 20% sqft of their facilities which will have $180 Mn GAAP charge, but should be helpful in rationalizing costs in the long term.
7/ I understand market's disappointment as sell side had been somewhat suspicious of ADSK’s FY’23 guide. ADSK now not only guided down 4Q’22 guide, but also acknowledged challenges for FY’23 guide as well.
8/ On Fusion 360
"As one measure of this ecosystem, we ended the third quarter with 1 million monthly active users, up over 50% year-over-year, and they are doing some amazing work."
9/ "Across Autodesk, the number of premium subscribers increased more than 500% year-over-year."
Probably just base effect; would be helpful if they provided actual numbers.
More about premium plan here: autodesk.com/campaigns/prem…
10/ Lots of questions about guide down and more detailed explanations here
11/ ADSK hasn't modeled any uplift from infrastructure bill but expects benefits that can materialize over multi-year period
12/ On new Flex pricing model:
"We're seeing a large percent of Flex business coming in is net new. Another chunk of Flex business coming in as these occasional usage buyers. And another chunk of business where people trying and using more advanced products"
13/ What are the data points investors can track to assess macro impact on ADSK?
I. Cost of freight
II. Cost of core commodities
III. Follow chip shortage situations
Everything is indeed connected.
End/ Paywalled deep dive on $ADSK (March, 2021): mbi-deepdives.com/adsk/
All my twitter threads are here: mbi-deepdives.com/twitter-thread…
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