Autodesk Shows Strong First Quarter RevenuesAutodesk announced financial results for its first fiscal quarter ended April 30, 2004. For the first quarter, Autodesk reported net revenues of $298 million, a 41 percent increase over $211 million reported in the first quarter of the prior year.
First quarter net income was $43 million, or $0.36 per diluted share on a GAAP basis, and $49 million, or $0.41 per diluted share on a pro-forma basis. Pro-forma net income excludes an $8 million restructuring charge. Net income in the first quarter of the prior year was $8 million, or $0.07 per diluted share on a GAAP basis. There were no pro-forma adjustments in the prior year.
"I am pleased with the company's outstanding performance during the quarter," said Carol Bartz, Autodesk chairman and CEO. "Strong new releases of our AutoCAD 2005 family of products, led to outstanding results in all markets and divisions. Customers are responding enthusiastically to the improved performance and increased functionality in the new versions."
Autodesk's strong performance was driven by increases in revenue from new seats and upgrades, the continuing success of the company's subscription program, and the company's commitment to improving profitability.
During the quarter, the company launched its AutoCAD 2005 family of products, demonstrating the company's continued commitment to delivering lifecycle management solutions to customers. AutoCAD 2005 improves productivity and collaboration by providing the functionality needed for efficient workflow processes and allowing users to create, manage and share complex data and design information.
Subscription revenues, called Maintenance on the financial statements, increased 56 percent over the prior year, to $37 million, as customers continue to recognize the value of the subscription program and the quick return on investment of Autodesk products.
During the quarter, Autodesk continued to deliver on its commitment to improve profitability. Operating margins improved 15 percentage points over the first quarter of fiscal 2004, to 18 percent on a GAAP basis. Pro-forma operating margins, which exclude the $8 million restructuring charge, were 21 percent in the quarter. These results demonstrate the significant leverage in the company's operating margin.
"We got off to a great start in Fiscal Year 2005," said Bartz. "We introduced the AutoCAD 2005 family of products, one of our strongest product offerings ever, just two months after the retirement of AutoCAD 2000. In addition to the successful launch of AutoCAD 2005 family of products, we plan to release significant new versions of all of our other major products this year, including Autodesk Inventor Series, Autodesk Inventor Professional and 3ds max. Our refreshed product line and our focus on increasing profitability combined with the improved global economy, position the company for strong future growth."
As for future business outlook
Net revenues for the second quarter of fiscal 2005 are expected to be in the range of $260 million to $270 million. Earnings per diluted share for the second quarter of fiscal year 2005 are expected to be in the range of $0.22 to $0.26 on a GAAP basis and $0.26 to $0.30 on a pro-forma basis.
For 2005, annual revenue is expected to be in the range of $1.1 billion to $1.125 billion. Earnings per diluted share for the full year are expected to be in the range of $1.29 to $1.36 on a GAAP basis and $1.44 to $1.51 on a pro-forma basis. Fourth quarter fiscal 2005 operating margins are expected to be in the high-20 percent range.
So Autodesk continues on a positive revenue roll. While the company was able to report a significant revenue increase compared to the revenue reported in last year's first quarter, revenue for this most recent quarter was about the same as the most recent previous quarter. Revenue for Autodesk's manufacturing division was just under $45 million of the quarter, or about 15% of total revenue. Also, while the manufacturing division grew substantially over last year's same quarter, revenue was down slightly from the previous quarter. The company still garners the lion's share of its revenue from what it calls its platform technology group - basically AutoCAD and AutoCAD LT. The platform group had revenues totaling ~$156 million, or just over 52% of total revenue. The company also stated that its total AutoCAD-based installed base is just under 3.5 million. Not bad for a 2D product line that a lot of industry mavens and pundits have declared dead. I've said it before, and I'll say it again, for certain types of design work, 2D is and will remain the "ticket" for some time to come.
Jeffrey Rowe is the editor and publisher of MCADCafé and MCAD Weekly Review. He can be reached at Email Contact or 408.850.9230.
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