Last week, Autodesk reported financial results for the second quarter of fiscal 2014. Yes, that’s right, 2014. Although I’ve had this funky financial calendar explained to me, I still don’t quite get it. It’s sort of like cars that are introduced in January 2013, but they are 2014 models.
Anyway, Autodesk had some pretty mixed financial results company-wide for the quarter.
Carl Bass, Autodesk’s president and CEO said, “Our second quarter was marked by strength in our Architecture, Engineering and Construction (AEC) business segment and continued growth in suites”. “Growth in these vital areas was offset by mixed contributions from other parts of the business. On the product side, we strengthened and expanded our leading product portfolio with new desktop, cloud and mobile offerings.”
What we take that to mean is AEC is doing well, but other major market segments, such as mechanical is doing OK, while media/entertainment continues to go down, with no prospect for real improvement in these segments anytime soon.
For example, revenue from the AEC business segment increased 9 percent to $177 million compared to the second quarter last year. On the other hand, revenue from the Manufacturing business segment increased just 2 percent to $144 million compared to the second quarter last year. Finally, revenue from the Media and Entertainment business segment decreased 11 percent to $43 million compared to the second quarter last year. Ouch on the last one.
For flagship products (such as standalone AutoCAD), revenue decreased 11 percent to $289 million compared to the second quarter last year, while revenue from suites increased 18 percent to $193 million. Suites are sweet for Autodesk.
For something a little more inspiring, check out the following video that shows some interesting “Behind the scenes” 3D printing news from Autodesk’s perspective.
Now back to Autodesk financial results . . .
Looking ahead to the future, Mark Hawkins, Autodesk executive vice president and CFO said, “With the recent introduction of more flexible license and service offerings that have ratable revenue streams, such as cloud-based and rental license offerings, Autodesk’s business model is evolving. We are currently refining our plans around the pace and time frame for this business model transition”
Admittedly, with the way Autodesk has changed internally, what it offers, and the way it offers its products, these results are not all that bad. The company is into a lot of things for the long haul, such as low-priced, cloud-based apps and subscription software that do not now and may never contribute greatly to the bottom line. Of course, this can’t go on forever, but the company has shown a higher degree of patience than in the past – good for customers, not so good for investors.
For many reasons, and these financial results notwithstanding, Autodesk fully acknowledges that it cannot afford to slip into any state of complacency or stagnation. The company has gambled on a number of technologies for “creators” through in-house development, as well as acquisitions. Autodesk seems to be financially willing and able to continue down this path, realizing that there will be some winners and some losers. In the end, though, Autodesk will have to remain at the forefront of innovation if it wants to maintain the status and stature it has in the many market segments it serves.