"Autodesk had a very solid quarter," said Carl Bass, Autodesk president and CEO. "Customers around the world increasingly recognize the innovation and productivity that Autodesk products provide. Customer adoption of Autodesk's industry-leading 3D products is increasing and customer demand for our 2D solutions remains very strong. Revenues from emerging economies increased to 15 percent of total revenue. Long term market trends favor Autodesk and we continue to gain share as we execute our key strategies."
Autodesk's performance was driven by strong increases in revenues from 3D products, products for the media and entertainment market and strong increases in revenue from AutoCAD new seats and subscriptions. In addition, total revenues from new seats, subscriptions and emerging economies showed strong growth.
The company's 3D products, Inventor, Revit and Civil 3D, continue to increase their market penetration. Combined revenues from these model-based design products increased 36 percent over the third quarter of fiscal 2006 to a record $98 million. 3D revenues reached 22 percent of total revenues in the quarter. In total, Autodesk shipped more than 38,000 commercial seats of 3D in the quarter including 18,200 seats of Revit, 13,000 seats of Inventor and 6,900 seats of Civil 3D.
Revenues from the Media and Entertainment segment increased 50 percent over the third quarter of fiscal 2006 to a record $64 million. Animation revenues were $33 million in the quarter, an increase of nearly 160 percent over the third quarter of fiscal 2006 and 14 percent sequentially. 3ds Max revenues increased 28 percent compared to the third quarter of fiscal 2006. Revenues from Autodesk Maya reached a record level, increasing 33 percent sequentially. Advanced Systems revenues increased 5 percent both sequentially and compared to the third quarter of fiscal 2006. Over 80 percent of Advanced Systems product revenue in the quarter was Linux-based.
Revenues from new seats increased by 20 percent compared to the third quarter of last year. Revenues from new seats of Revit and Civil 3D increased 94 percent and 44 percent, respectively, compared to the third quarter of fiscal 2006. Revenues from new seats of AutoCAD increased by 24 percent compared to the third quarter of last year. In addition, revenues from Buzzsaw increased 79 percent compared to the third quarter of last year. Revenues from new seats and emerging businesses continue to represent approximately two-thirds of total revenues.
Subscription revenues increased 50 percent compared to the third quarter of fiscal 2006 to $111 million or 24 percent of total revenues. Continued strength in subscription attach rates and renewal rates drove a $12 million sequential increase in deferred subscription revenues. Although upgrade revenues declined, as expected, combined subscription and upgrade revenues increased 17 percent compared to the third quarter of fiscal 2006 and continue to represent approximately one-third of total revenues.
Once again, emerging economies contributed robust growth in revenues. Revenues from the emerging economies in Asia Pacific, Eastern Europe, Latin America and the Middle East increased 38 percent over the third quarter of fiscal 2006 and represented 15 percent of total revenues in the third quarter.
OTHER FINANCIAL HIGHLIGHTS * Cash, cash equivalents and marketable securities increased by $129 million sequentially to $597 million as of October 31, 2006. * Total backlog was $352 million as of October 31, 2006, including $333 million of deferred revenues. Deferred subscription revenues increased $12 million sequentially to $275 million. In addition, there was $19 million of unshipped product orders at quarter end. * Channel inventory was slightly below the normal range of three to four weeks. * DSO decreased by one day sequentially to 51 days. * Capital expenditures were $7 million. * The company received $10 million from employee stock plans. As a result of the voluntary review of the company's historical stock option granting practices and the related accounting, no shares were repurchased during the quarter. * There were approximately 231 million total shares outstanding and 242 million diluted shares outstanding in the third quarter. * Revenues in the Americas increased 21 percent over the third quarter of fiscal 2006 to $194 million. * Revenues in EMEA increased 20 percent over the third quarter of fiscal 2006 to $160 million. * Revenues in Asia Pacific increased 22 percent over the third quarter of fiscal 2006 to $103 million. Revenues in Japan increased three percent compared to last year. Excluding Japan, revenues in Asia Pacific increased 36 percent compared to last year. * In the third quarter of fiscal 2007, spending for total costs and expenses -- which include cost of license and other revenue, cost of maintenance revenues, marketing and sales, research and development, and general and administrative - increased by $22 million sequentially, as expected. This increase includes a $3 million write-down of Advanced Systems inventory, $3.6 million in legal, tax and accounting fees relating to the voluntary stock option review and a previously disclosed $8.8 million one-time cash bonus to non- executive employees enrolled in the company's Employee Stock Purchase Plan. This bonus was approved by the Board to compensate for the benefits lost by non-executive employees because Autodesk did not issue shares through the Employee Stock Purchase Plan due to the ongoing review. * Interest and other income increased by $3 million sequentially to $6 million. Business Outlook
The following statements are forward-looking statements which are based on current expectations and which involve risks and uncertainties some of which are set forth below. As a result of the voluntary stock option review, the company is not providing EPS guidance at this time.
Fourth Quarter Fiscal 2007
Net revenues for the fourth quarter of fiscal 2007 are expected to be between $490 million and $500 million. Spending for total costs and expenses in the fourth quarter is expected to be approximately flat with the third quarter. Estimates of fourth quarter spending for total costs and expenses include approximately $5M in legal, tax and accounting fees related to the voluntary stock option review and do not take into account other charges, if any, likely to result from the voluntary stock option review.
Full Year Fiscal 2007
For fiscal year 2007, net revenues are expected to be between $1.832 billion and $1.842 billion.