Key Highlights
- Q2 adjusted earnings per share reached $3.30, surpassing analyst expectations of $3.12
- Quarterly revenue climbed 16% annually to $2.05 billion, exceeding the $2.01 billion forecast
- Fiscal 2027 adjusted EPS guidance midpoint of $12.56 fell below the $12.60 Wall Street consensus
- Shares plunged over 4% during premarket hours following the guidance disappointment
- Guggenheim analysts lifted their price objective to $283 from $277 while reaffirming a Buy stance
The design software provider delivered impressive second-quarter results, yet Wall Street’s attention shifted to future projections. Shares tumbled more than 4% in Friday’s premarket session after the company’s forward guidance for fiscal 2027 came in below analyst expectations.
The software maker announced Q2 adjusted earnings of $3.30 per share, topping the Street’s $3.12 projection. Quarterly sales reached $2.05 billion, marking a 16% year-over-year increase and exceeding the anticipated $2.01 billion.
Subscription revenue expanded 17%, outpacing Wall Street’s 14.5% forecast. Both customer renewal metrics and deal timing throughout the quarter performed above projections.
However, challenges emerged in certain areas. The growth rate for current remaining performance obligations decelerated to 12% in Q2, compared to the 18% to 20% range seen in prior quarters. The slowdown stems from the company’s decision to eliminate multi-year pricing discounts, prompting certain clients to opt for annual agreements instead. Management anticipates this pressure to persist for multiple upcoming quarters.
Cash flow from operations increased 24% to $561 million. The adjusted operating margin widened by 2 percentage points to reach 41%. Billings totaled $1.85 billion, representing a 10% annual gain.
Annual Forecast Falls Short of Expectations
The company’s fiscal 2027 adjusted earnings guidance range of $12.52 to $12.60 per share came in marginally below the $12.60 analyst consensus. The midpoint figure of $12.56 proved sufficient to trigger investor disappointment.
For the third quarter, Autodesk projected revenue between $2.125 billion and $2.140 billion with adjusted earnings of $3.04 to $3.09 per share.
Looking at the complete fiscal year, management forecasts billings ranging from $8.575 billion to $8.650 billion and revenue between $8.295 billion and $8.345 billion. The annual revenue outlook received an approximately $135 million boost at the midpoint, with roughly $60 million attributed to the recently completed MaintainX acquisition.
Bank of America characterized the results as “mixed 2Q27 performance with conservative second-half assumptions,” while maintaining its Buy recommendation and $300 price target. The investment bank emphasized that renewal trends support sustainable growth at or above current guidance levels.
Wall Street Raises Price Targets Despite Share Decline
Guggenheim elevated its price objective on the stock to $283 from $277 while preserving a Buy rating. Analysts noted that Q2 revenue and billings surpassed consensus estimates by approximately 1.7% and 2%, respectively. Both free cash flow and non-GAAP earnings also exceeded forecasts.
UBS took a more bullish stance, increasing its price target to $325 from $290 while maintaining a Buy rating. UBS emphasized the company’s low-teens organic expansion, citing a 12% improvement in both revenue and billings on a constant currency basis.
Breaking down performance by division, Design segment revenue advanced 16% to $1.71 billion. Make segment revenue surged 26% to $244 million. The AECO product portfolio generated $1.03 billion in revenue, up 17%, while AutoCAD revenue climbed 14% to $500 million.
CFO Janesh Moorjani indicated the ongoing sales organization restructuring is “progressing as planned” and noted that the elevated billings and revenue guidance incorporates both stronger fundamental growth expectations and the MaintainX acquisition contribution.
Shares of Autodesk were changing hands at $270.58, giving the company a market capitalization of $57.13 billion according to the latest available data.
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