The paragraph is an introduction to Autodesk's Fourth Quarter and Full Year Fiscal 2025 Earnings Conference Call. It is being conducted in a listen-only mode, with an upcoming question-and-answer session. Simon Mays-Smith, the Vice President of Investor Relations, introduces the call and the participants, including CEO Andrew Anagnost and CFO Janesh Moorjani. The call will discuss Autodesk's financial results and forward-looking statements, with the note that actual results may differ due to risks outlined in SEC filings. The company disclaims any obligation to update these statements in the future. All non-GAAP figures mentioned will be reconciled in the press release and other materials on the Investor Relations website. Andrew Anagnost then begins speaking, noting strong results for the quarter and year.

The paragraph outlines Autodesk's recent financial performance, highlighting that billings and revenue exceeded expectations despite foreign exchange challenges. The company announced a restructuring plan with two key components: optimizing its sales and marketing approach and reallocating resources to focus on strategic priorities. The go-to-market (GTM) model is evolving to better address customer and partner needs through streamlined, digital, and automated processes. Current efforts concentrate on marketing, customer success, and operations, aiming to enhance efficiency and sales productivity. Future plans involve deeper integration with channel partners and expanding self-service options. These changes are expected to improve margins and profitability in the coming fiscal years, ultimately achieving industry-leading GAAP margins.

Autodesk is prioritizing the integration of design and production processes in the cloud, leveraging its platform, industry-specific clouds, and AI capabilities to stay ahead of competitors. The company is reallocating resources to focus on these areas to enhance customer solutions, expand its ecosystem, and maintain global expertise distribution. Autodesk emphasizes its position in growth markets, a clear strategy, and a resilient business model to sustain momentum and shareholder value. The introduction of Janesh Moorjani highlights the company's commitment to strengthening its leadership and execution to achieve its strategic objectives.

The paragraph discusses the company's financial performance in the fourth quarter and full fiscal year 2025. Despite headwinds in new business growth, the company saw a 12% increase in total revenue, with strong growth across all product categories and regions. AutoCAD revenue grew by 9%, AECO by 15%, manufacturing by 10%, and M&E by 10%. The Americas, EMEA, and APAC regions experienced revenue growth of 11%, 13%, and 11%, respectively. The new transaction model contributed significantly to both revenue and billings, with direct revenue increasing by 35% and representing 47% of total revenue. Billings rose by 24%, driven by the transition to annual billing for multi-year contracts and the new transaction model. The company's RPO and current RPO grew by 14% and 12%, reaching $6.9 billion and $4.5 billion, respectively.

The paragraph discusses the company's financial performance and outlook. It highlights growth challenges in current RPO due to changes in the transaction model and reduced contributions from multi-year deferred revenue. Nonetheless, the company achieved higher-than-expected GAAP and non-GAAP margins in both the fourth quarter and fiscal 2025, demonstrating strong fiscal discipline. Free cash flow surpassed expectations, and significant share buybacks were conducted. The paragraph also provides guidance for fiscal 2026, excluding impacts from the new transaction model and currency fluctuations. It emphasizes the company's strong market position, driven by leadership in cloud, platform, and AI, and a loyal customer base with substantial recurring revenue.

The company anticipates strong growth and resilience through fiscal 2026, driven by its business model and momentum in areas such as Construction and Fusion. They expect constant currency billings growth of 17% to 19% and revenue growth of 8% to 9%, excluding new transaction model impacts. While accounting for potential disruptions from restructuring and leadership changes, they project a GAAP operating margin of 21% to 22% and a non-GAAP margin of 39% to 40%. The company aims to generate $2.075 to $2.175 billion in free cash flow, with further financial details in their earnings release.

The paragraph discusses Autodesk's financial outlook and strategic plans. After accounting for significant cash outflows and benefits from US deferred tax assets, the company plans to repurchase $1.1 billion to $1.2 billion in shares in fiscal 2026, a notable increase from the previous year, contingent on market conditions and debt refinancing. Autodesk aims to expand its operating margin and deliver sustainable shareholder value, but has adjusted its revenue growth framework, as recent growth has been at the lower end of the previously anticipated 10% to 15%. Despite this, the company sees potential for higher margins and has initiated a go-to-market optimization focusing on marketing, customer success, and operations to drive future growth while minimizing disruptions.

The paragraph outlines Autodesk's plans for fiscal 2026, focusing on operating margin expansion and building capabilities for future optimization. These efforts include enhancing channel partnerships and increasing digital self-service and automation to improve customer satisfaction and productivity. Autodesk aims to optimize its go-to-market strategy to deliver top industry GAAP margins. The company will provide more details on its margin expansion strategy at an upcoming investor day. CEO Andrew Anagnost emphasizes Autodesk's role in the convergence of design and make in the cloud, leveraging platform, industry clouds, and AI to reduce costs, enhance safety, and create more valuable models. An example is given of Mott MacDonald renewing its 6th enterprise business agreement, highlighting the company's continued success.

The paragraph discusses the expansion of Autodesk's partnership with Mott MacDonald to improve project productivity and workflows using Autodesk's digital tools like Revit and Autodesk Build. Power Design and Cleveland Construction have both selected Autodesk solutions to enhance collaboration and optimize construction processes. Power Design uses Autodesk Build to link design and construction efforts, while Cleveland Construction switched to Autodesk Construction Cloud for comprehensive project management. These implementations showcase the integration of people, processes, and data across project lifecycles, aiming to boost efficiency and sustainability and reduce risks. Autodesk's construction revenue grew, and the company is focusing on extending its influence in infrastructure and construction, along with progress in manufacturing initiatives.

Autodesk is facilitating digital transformations across various industries by providing its Design and Make platform to enhance growth and resilience. A leading toy company is using Autodesk's Fusion, Forma, and Flow clouds for manufacturing profitability and new revenue models in Digital Entertainment. Buhler, a Swiss multinational, has expanded its partnership with Autodesk to optimize digital strategies from product design to installation. MSC Industrial Supply is leveraging Autodesk Fusion’s capabilities to enhance its application optimization program, potentially saving its manufacturing customers approximately $500 million in fiscal year 2024. These collaborations highlight Autodesk's role in bridging data and workflows across different sectors, creating significant value for its partners.

The paragraph outlines Autodesk's efforts to enhance innovation and productivity for its customers through tools like the AI-powered AutoConstrain in Fusion, which improves design efficiency. They are also partnering with educational institutions like IIT Bombay to modernize engineering education. Autodesk is working with clients, such as a European railway infrastructure administrator, to ensure compliance and optimize digital transformation. The company is focusing on long-term growth by delivering valuable solutions, maintaining operational efficiency, investing to expand, and returning capital to shareholders, aiming to create sustainable shareholder value in the long run.

The paragraph discusses Autodesk's commitment to its success over the past 40 years, acknowledging team members affected by restructuring. During a Q&A session, Saket Kalia from Barclays questions CEO Andrew Anagnost about Autodesk's revised growth rate of 10% to 15%. Anagnost explains that previous changes within Autodesk and economic uncertainties impacted new business growth. These changes affected partner productivity related to renewals and new business, and overall economic factors led some customers to hesitate in investing further.

The paragraph discusses the factors influencing the company's growth path. It mentions uncontrollable elements like macroeconomic uncertainty impacting customer decisions but highlights areas within the company's control. These include optimizing their go-to-market strategy to boost channel productivity and investing in emerging high-growth businesses, such as the industry cloud, core cloud platform, and AI. These measures aim to enhance momentum and reinforce long-term business growth. Saket Kalia then prompts Janesh to discuss margin potential, noting that margins for 2025 were better than expected and guidance for 2026 is also optimistic.

The paragraph features a discussion led by Janesh Moorjani regarding a company's restructuring announcement and its alignment with fiscal goals. Janesh appreciates how the company's strong fiscal discipline in the last quarter of fiscal '25 led to substantial outperformance. He acknowledges Betsy's contributions to this success and describes the restructuring as part of a multiyear journey aimed at evolving their go-to-market strategy, ultimately contributing to margin expansion goals. The plans include tighter integration, which is expected to enhance customer service, expand market opportunities, and lower customer service unit costs, leading to more efficient future operations. Janesh expresses confidence in the company's ability to drive higher margins over time. The paragraph concludes with acknowledgment from Saket Kalia and a transition to a question from Adam Borg, who extends a welcome to Janesh and asks Andrew about coping with macroeconomic uncertainties beyond their control.

The paragraph involves a conversation between Adam Borg and Andrew Anagnost, addressing customer sentiment amid policy changes and Autodesk's business resilience. Andrew emphasizes that customers seek certainty, as uncertainty causes anxiety. He expresses confidence in Autodesk's ability to adapt to different policies once established. Subsequently, Jay Vleeschhouwer asks about Autodesk's anticipated 10% to 15% growth range, referencing the company's previous analyst meeting. Jay inquires about the growth strategy, particularly focusing on core business renewal and expansion, pricing leverage, and various components of growth, hinting at less emphasis on new or adjacent businesses.

In the paragraph, Andrew Anagnost discusses the focus on enhancing channel productivity and emerging businesses to drive growth and optimization over multiple years. The emphasis is on making ongoing investments to ensure continuous robust growth, particularly in new and existing business sectors. Additionally, Anagnost mentions accelerating roadmaps for the industry cloud, with particular attention to the construction and Forma side of the AEC industry, as well as initiatives related to the Fusion Cloud, to drive further business impact.

In the paragraph, the company discusses its strategic focus on enhancing its platform by expanding granular data and API functionalities for customers, investing in industry cloud services, and developing generative AI features, such as the auto constraint feature in Fusion, which has a 50% acceptance rate. Jay Vleeschhouwer acknowledges these efforts, while Jason Celino questions the financial guidance and potential disruption due to company restructuring and workforce reductions. Janesh Moorjani responds by explaining that the fiscal '26 guidance considers various potential outcomes and includes risk management plans to address these changes.

The paragraph features a discussion during a call, where Jason Celino asks about the renewal opportunities for multiyear customers, particularly the EBA cohort. Janesh Moorjani responds by confirming that these are still opportunities slated for renewal later in the year. Taylor McGinnis from UBS then asks about the drivers behind a 300 basis point margin improvement. Janesh explains that the improvement reflects a commitment to expanding profitability through integrated plans, including cost savings, streamlining sales, and organic hiring, as part of longer-term strategies up to and beyond 2026.

The paragraph discusses the company's financial plans and expectations. For fiscal year 2025, spending grew by 7% year-over-year, excluding a new transaction model, and for fiscal year 2026, spending is expected to increase by only 4% year-over-year, indicating optimization and spending discipline. The company is committed to further margin expansion in fiscal year 2027. They aim to have highly competitive GAAP margins after completing their go-to-market optimization. More details will be shared during the Investor Day in the third quarter. Bhavin Shah from Deutsche Bank questions the timeline for sales and marketing adjustments showing revenue benefits, to which Janesh Moorjani responds that significant benefits are expected in fiscal year 2026, contributing to margin expansion.

The paragraph discusses a company's strategic plans and financial outlook. The company is focusing on integrating tighter channel partner integrations and developing self-service capabilities to reduce future customer service costs. They plan to provide more details during their Investor Day in the third quarter. Bhavin Shah inquires about the company's approach to shareholder returns and mergers and acquisitions (M&A) in fiscal 2026. Andrew Anagnost confirms that their M&A strategy remains unchanged; they're open to acquisitions that align with their strategy or expand into relevant areas. Joe Vruwink asks about the margin assumptions and a 6-point impact on growth due to agency changes. Janesh Moorjani indicates willingness to explain the margin bridging further.

The paragraph discusses the impact of a 6-point revenue headwind, which results in a 3-point margin headwind. The expected margin is 36% to 37%, rising to 39% to 40% when adjusted for a new transaction model and currency. Joe Vruwink inquires about the growth rates, particularly in the AEC (Architecture, Engineering, and Construction) product segments, which remain strong at 14%. Andrew Anagnost attributes this to the robust performance in the construction segment, highlighting the addition of 400 new customers and the overall positive outlook for the construction business. The demand is driven by customers' interest in a comprehensive solution for their future needs.

The paragraph discusses Autodesk's focus on enhancing self-service capabilities to drive efficiency and business growth. It highlights the importance of self-service in making transactions easier for customers, enabling them to manage and expand their software usage with less need for direct sales or partner interactions. By improving self-service options, Autodesk aims to facilitate upselling and cross-selling opportunities. The discussion suggests that this approach can impact nearly every aspect of the company's operations, emphasizing the significance of self-service in supporting business performance and expansion.

The paragraph discusses the focus on enhancing self-service systems to handle low-value customer transactions, allowing human resources to concentrate on higher-value tasks. Elizabeth Porter inquires about the optimization phase for sales and marketing, which Andrew Anagnost explains as a planned multiyear effort stemming from changes in the past two years. The optimization aims to improve processes, enhance self-service, boost efficiency, and strengthen partner relationships, initially concentrating on marketing efficiency.

The paragraph discusses the company's focus on strengthening relationships with partners and optimizing productivity, particularly through self-service advancements. This approach aims to improve long-term margins and operating income. Elizabeth Porter and Operator facilitate a Q&A session, where Matt Hedberg from RBC congratulates Janesh and highlights the positive forecast for free cash flow. He asks Andrew Anagnost about the role of generative AI in product development and pricing strategy. Andrew responds that the company aims to enhance customer productivity with AI tools and plans to monetize highly productive AI features by sharing productivity benefits with customers while capturing some value for the company.

The paragraph discusses advancements in technology aimed at increasing productivity in 3D modeling and building information modeling (BIM). Early features are helping customers create 3D models faster and more efficiently, enhancing competitiveness in the market, especially within the Fusion ecosystem. The paragraph also highlights the potential of AI capabilities in the Architecture, Engineering, and Construction (AEC) sector, specifically through the Forma product, which makes BIM more accessible to smaller companies that might find Revit too expensive or complex. AI is expected to improve productivity and competitiveness while expanding the market reach. A question was posed to Janesh about the company's midterm growth model and guidance range, seeking more clarity, which may be provided during the Q3 Analyst Day.

The paragraph features a conversation in which Janesh Moorjani discusses their company's growth outlook and financial performance. He mentions guiding for an 8% to 9% growth in constant currency for fiscal 2026, excluding the effect of the new transaction model, and notes this is consistent with the growth in fiscal 2025. Janesh emphasizes the focus on sustainable growth through new businesses, especially in construction and manufacturing. Following this, Joshua Tilton from Wolfe Research asks two questions: First, he inquires about the Net Revenue Retention (NRR) for the year compared to the revenue guidance for next year. Second, he asks about how much recent restructuring and reduction in force benefit is factored into the current operating margin guidance. Janesh Moorjani acknowledges the questions and is set to address them.

The paragraph discusses the financial modeling and guidance for fiscal years '25 and '26. The net retention rate is projected to be between 100% and 110%, with guidance for 8% to 9% growth. This range accounts for potential quarterly fluctuations. Regarding operating margins, savings from recent cost-cutting actions, such as layoffs, are included in the current guidance. However, spending growth for fiscal '26 is anticipated to slow to 4%, down from 7% the previous year. Joshua Tilton asks about the impact of recent announcements on operating margins, and Janesh Moorjani explains that these are integrated into the plan. Michael Turrin of Wells Fargo Securities asks for additional perspective on long-term targets as part of the decision process.

Janesh Moorjani explains that the business has consistently performed towards the lower end of its expected range over the past few years, and the forecast for fiscal '26 is similar. To avoid unrealistic expectations, the company has decided to adjust its range to better reflect their performance history. Despite external challenges and a business model transition, the company remains resilient with strong products and a loyal customer base. Michael Turrin then asks Andrew Anagnost about recent headcount reductions, seeking insights into how the company balances short-term risks with long-term benefits to maintain business momentum. Anagnost emphasizes that their approach is carefully considered over a long timeframe to ensure continuity and efficiency.

The paragraph discusses the company's efforts to optimize and reinvest in future systems and capabilities, aiming to balance ongoing growth with potential risks. Michael Turrin and Ken Wong engage in dialogue about the company's growth targets, specifically the 10% to 15% range. Andrew Anagnost explains that while there is no reduction in long-term growth potential, the focus is on improving channel productivity to support new business and drive future revenue growth. These changes are intended to enhance the company's long-term success and growth trajectory.

In the article's paragraph, Autodesk expresses enthusiasm about expanding their design and make solutions for customers, highlighting this as a key driver for long-term growth and confidence in the company's future. Ken Wong inquires about the agency transition across three regions, noting progress in the Americas and asking for updates on the recently launched APAC region. Andrew Anagnost confirms that the transition is largely proceeding as planned, acknowledging some productivity challenges during the rollouts but emphasizing ongoing efforts to assist partners in managing the systems. The conference then concludes with gratitude from Simon Mays-Smith.

The paragraph indicates that the speaker is looking forward to engaging with participants in the coming weeks and invites them to email any questions. They mention an upcoming Q1 earnings call and express gratitude to someone named Latif and the team before concluding the conference call. Participants are thanked and informed that they can now disconnect.

This summary was generated with AI and may contain some inaccuracies.