The paragraph is from a transcript of Autodesk, Inc.'s earnings conference call for the first quarter of fiscal year 2026. The operator introduces the call, mentioning it is in listen-only mode, and a question-and-answer session will follow the presentation. Simon Mays-Smith, Vice President of Investor Relations, thanks participants for joining and introduces CEO Andrew Anagnost and CFO Janesh Moorjani. Simon notes that the call will include forward-looking statements, referencing potential risks outlined in SEC filings. He clarifies that information is current as of the call's date and provides guidance on the nature of numeric comparisons. The call is then turned over to CEO Andrew Anagnost.

The paragraph discusses Autodesk, Inc.'s strong performance in the first quarter of fiscal 2026, surpassing guidance for revenue and earnings per share, with billings, margins, and free cash flow exceeding expectations. The company is focused on long-term shareholder value through strategic investments in cloud, platform, and AI, optimizing sales and marketing, and enhancing margins. It is increasing share repurchases as its free cash flow rebuilds post-transition to annual billing for most multiyear contracts. With new board appointments, Autodesk aims for growth. The company emphasizes three certainties: a new transaction model that enhances customer integration and business growth, increased capacity for share repurchases, and simplified analysis as business model transitions conclude. Janesh Moorjani will discuss the financial performance and guidance.

In the first quarter, the company's revenue experienced significant growth, with a 15% increase as reported and 16% in constant currency, partly driven by a new transaction model contributing $78 million. Billings also saw a notable rise of 29% as reported and 30% in constant currency, mainly due to the shift to annual billings and the new transaction model, which contributed $105 million. Operating margins were impacted by restructuring charges and a noncash charge related to stock-based compensation, reducing GAAP margins by seven percentage points. Overall business momentum remained consistent with previous quarters, and detailed financial data is available in the company's press release and related materials.

The company is focused on reducing stock-based compensation to below 10% of revenue and has integrated this goal into its long-term executive plans. Non-GAAP operating margins improved due to cost discipline and restructuring benefits, despite some negative effects from a new transaction model. First quarter free cash flow was $556 million. The company invested in strategic priorities and repurchased 1.3 million shares for $353 million. Guidance excludes impacts of the new transaction model and currency effects to clarify business dynamics. The business momentum remains consistent, but foreign exchange movements and macroeconomic uncertainty have led to adjusted guidance ranges. These ranges assume that new business growth may slow similarly to the pandemic period, and EBA renewal rates may decline.

The paragraph discusses Autodesk, Inc.'s unchanged revenue growth guidance due to stable business performance and a reduced risk outlook for the year. The guidance ranges for billings, revenue, and free cash flow have increased. Despite exchange rate movements affecting margins, the company has raised the lower end of its non-GAAP guidance range due to operating leverage and cost discipline. GAAP earnings per share guidance factors in one-time first-quarter charges, while non-GAAP earnings per share guidance has increased. The paragraph also highlights Autodesk's focus on the convergence of design and making through platforms, industry clouds, and AI. It mentions a significant partnership with a leading infrastructure consulting firm to enhance digital delivery through Autodesk Construction Cloud.

The paragraph outlines Hitachi Energy's efforts to enhance growth, efficiency, and profitability by transforming its design and delivery approaches, leveraging digital solutions, and expanding the use of Autodesk Construction Cloud, Revit, and Fusion. This transformation supports sustainable energy transition through innovative solutions like digital twin and predictive maintenance. A general contractor chose Autodesk for an integrated solution to handle project complexity, improving data unification and collaboration. The overarching theme is the convergence of people, processes, and data to boost efficiency and sustainability while minimizing risk, contributing to strong revenue and customer growth in construction. Additionally, Hitachi Energy is advancing strategic initiatives in manufacturing, focusing on digital transformation and resilience.

The paragraph describes how three companies—Waldner, George P Johnson (GPJ), and Grain Handler—are using Autodesk, Inc.'s solutions to modernize and improve their operations. Waldner is transitioning from 2D to 3D solutions to enhance collaboration and design management. GPJ is partnering with Autodesk for a digital transformation to improve collaboration, scheduling, and production visibility by consolidating its systems into Fusion managed operations. Grain Handler is adopting Fusion to integrate its design and manufacturing workflows, addressing inefficiencies from previously using disparate solutions. Overall, the paragraph highlights the trend of companies seeking unified workflows and Autodesk's role in facilitating modern, integrated manufacturing processes.

The paragraph highlights Autodesk's advancements with Fusion, driving strong growth and higher sales through AI-driven features that enhance productivity. The AI-powered auto constraint tool has significantly automated sketch geometry tasks, with user acceptance rates exceeding 50% thanks to ongoing improvements. Autodesk's partnership with Austin University equips future engineers with its comprehensive product suite and shifts to Fusion for first-year engineering modules. The company also tailors solutions for customers, like helping a Taiwanese engineering firm comply with software licensing and enabling flex consumption for Jones Engineering to efficiently manage project demands.

The paragraph discusses a company's strategy focused on long-term growth, enhanced operational efficiency, and value creation, which is expected to provide sustainable shareholder value. It transitions into a story about the devastating wildfires in Los Angeles, highlighting the community's resilience and efforts to rebuild with more resilience. Autodesk, Inc. is supporting these efforts by collaborating with volunteer architects to create a preapproved catalog of home designs, speeding up reconstruction processes. The success of similar methodologies is evidenced by Autodesk’s involvement in Singapore's Coronet X initiative, demonstrating faster and more coordinated building processes.

The paragraph describes a Q&A session following a statement of support for federal initiatives aimed at addressing labor, money, and material shortages to support future community development. It centers on a question from Saket Kalia of Barclays about business stability amid economic uncertainties. Andrew Anagnost, presumably an executive, responds that such uncertainties, particularly trade policy issues, are impacting customers by increasing costs and supply chain complications, which affects their bidding processes. However, he notes that customers are more concerned about the second half of the year than the immediate situation.

In the paragraph, the speakers discuss positive developments within the company. The construction backlog and monthly active users have increased, and bid activity is strong. Despite feelings of uncertainty, the company and its customers aren't currently seeing negative impacts. Janesh Moorjani highlights better-than-expected Q1 margins, attributing the improvement to strong revenue performance and disciplined expense management. The ongoing restructuring and sales and marketing optimization plan are progressing well, setting up favorable conditions for Q2 and the rest of the year. Saket Kalia and Andrew Anagnost acknowledge these points before moving on to the next question from Jay Vleeschhouwer of Griffin Securities.

In the paragraph, Jay Vleeschhouwer asks Andrew Anagnost about the acceleration of product roadmaps, particularly in relation to industry clouds and integrating ACC with Forma. Anagnost explains that they are accelerating development in Fusion, focusing on data management issues based on customer feedback to improve bond and product data management in the cloud. This acceleration involves reallocating funds to meet customer priorities, with new developments expected in Q1 and throughout the year to drive multi-seat deals for Fusion. Additionally, Anagnost hints at future enhancements for Forma to facilitate better cross-discipline collaboration, which will be further discussed at AU.

The paragraph discusses a strategic shift towards consolidating channel partners, particularly in the US, with Autodesk reducing the number of named partners by half over the past decade. The focus is on fostering fewer but more solution-oriented and IP-focused partners rather than transactional ones. This consolidation has led larger partners to absorb smaller ones, while many non-contracted and lower-tier partners are disappearing from the ecosystem. The aim is to enhance collaboration tools like FormaBoard and integrate AI features, accelerating connections with tools like Revit.

The paragraph discusses the company's business strategy and recent performance, highlighting the benefits of their new transaction model. In Q1, they experienced robust store growth due to better price realization and capturing business from transactionally focused partners. This trend brings customers closer to them, offsetting negative impacts of the new transaction model, which they expect to continue. However, concentrating partners introduces risks, such as ensuring they focus on renewals and new business, which the company manages through commission controls. During a Q&A, Andrew Anagnost is asked about progress in addressing past issues with the transaction model and potential for growth with channel partners focusing on new business.

In the paragraph, Andrew addresses Adam's question by explaining that the disruptions seen last year in channel productivity are no longer an issue. Channel partners are adapting to a new transaction model, improving productivity as the year progresses. Janesh Moorjani adds that in the Americas and EMEA, the first renewals under the new model are expected in June and September, respectively. The focus remains on delivering more valuable and connected products to customers. Adam Borg follows up, asking about the Net Revenue Retention (NRR), which is above the usual range. Janesh attributes this to the new transaction model's mechanical effects.

In this paragraph, Jason Celino from KeyBanc Capital Markets asks about an increase in revenue growth from Q1, adjusted for constant currency and a new model transition. Janesh Moorjani explains that the growth was driven by strength across various sectors, including AEC (Architecture, Engineering, and Construction), upfront revenue from EVAs, and improvements in the Autodesk store. He notes the resilience of their business due to its diversification and highlights that Q1 had an easier comparison due to the timing of acquisitions in the previous fiscal year. Even without this timing advantage, the performance was strong overall.

In the paragraph, Janesh Moorjani discusses the company's full-year guidance and explains that while the macroeconomic environment had not changed when the guidance was initially set in February, there have been two changes since then. First, the US dollar has weakened, providing currency benefits. Second, there is increased macroeconomic uncertainty, which the company has now factored into its forecasts. Despite this uncertainty, there has been no impact yet on the business, but the company has prudently included potential impacts in their guidance to prepare for slower revenue growth in the second half of the year. Following Moorjani's remarks, Elizabeth Porter from Morgan Stanley asks about AI innovations related to auto constraint usage and inquires about future opportunities for launching more AI functionality and the expected pace of such deployments.

Andrew Anagnost discusses the company's strategy to enhance their products with AI by focusing on features that improve productivity for customers. These AI enhancements target repetitive and time-consuming tasks, exemplified by features like auto constraint and drawing automation. The company aims to incorporate these sophisticated tools to simplify grunt work, particularly in mechanical design with their AI-powered Fusion tool and in AEC with new capabilities in Forma. These innovations are expected to increase market share and open up new opportunities.

The paragraph discusses the opportunities presented by Forma's enhanced capabilities, such as making sophisticated 3D technology more accessible and strengthening the overall solution, potentially increasing revenue in the future. Elizabeth Porter asks about the potential disruption from restructuring plans related to the CRO transition mentioned in previous guidance. Andrew Anagnost responds by acknowledging some disruptions, but notes that mitigation plans were in place and some areas of the business improved, offsetting the impacts. He mentions that the new CRO is already in place, with Elizabeth Zoren having served as acting CRO to bridge the transition.

The paragraph is part of a conversation during a financial results discussion. Andrew, Janesh, and Elizabeth are addressing questions from Bhavin Shah of Deutsche Bank. Andrew acknowledges they have managed risks but are not completely through all challenges. Bhavin asks about the company's guidance and whether it's influenced by current business conditions. Janesh confirms there are no negative signs yet, but they are being cautious due to macroeconomic factors. Bhavin also inquires about industry labor constraints. Andrew acknowledges the ongoing issues of insufficient labor, materials, and capital, highlighting the necessity for digital solutions, which could be exacerbated by the current economic climate.

The company is experiencing strong adoption of its expanded design and make portfolios due to their ability to help customers increase productivity in a labor-constrained market. This situation is pushing industries like Architecture, Engineering, and Construction (AEC) to adopt technology as a key productivity tool. Andy, the new revenue officer from Microsoft, brings strong enterprise sales skills, which is essential as the company becomes a more strategic partner to customers by offering comprehensive solutions and delving deeper into their businesses. The leadership's understanding of this strategic approach is seen as beneficial for future opportunities.

The paragraph discusses Autodesk, Inc.'s strategic focus on expanding its expertise in cloud solutions and AI to enhance customer workflows, particularly in the context of CAD (Computer-Aided Design) technologies. The company is actively developing next-generation tools to simplify geometry creation and improve productivity. Autodesk is also closely monitoring emerging technologies and startup innovations like Text to CAD and Scan to CAD. Additionally, Autodesk's involvement in the media and entertainment industry is highlighted through their work with Wonder Studio, now known as Flow Studio. The company is committed to positioning itself effectively for future advancements in CAD technology.

The paragraph discusses the company's strategy for operating income margin guidance. Taylor McGinnis from UBS asks about the reinvestment of savings from a recent restructuring and the potential for reducing redundant spending. Janesh Moorjani responds, stating that the company is on track with its fiscal 2026 plan, which includes reinvesting some savings, particularly in sales and marketing to build tighter partnerships and expand the self-serve motion. He mentions that despite a strong revenue performance in Q1, the overall spending plan for the year remains unchanged from previous projections.

The paragraph discusses expectations and strategies for financial and operational growth. The company anticipates its spending, excluding a new transaction model, to grow by about 4% year-over-year through 2025, and compares this to a 7% growth between fiscal 2024 and 2025. This financial strategy is believed to be a key factor in operational margin expansion. Andrew Anagnost highlights ongoing efforts to enhance productivity in sales and marketing, which are expected to lead to margin growth over time. Michael Turrin from Wells Fargo Securities inquires about geographical differences in business momentum. Andrew Anagnost notes that overall momentum aligns with expectations but mentions some softness in the Asia Pacific region, specifically Japan, due to adjustments to a new transaction model.

The paragraph discusses the impact of macroeconomic challenges and trade discussions on the Asia Pacific region, particularly in China and Korea, leading to some softness in growth. It contrasts this with Japan, where conditions are as expected. Michael Turrin and Janesh Moorjani then discuss the company's strategic focus, emphasizing consistent guiding philosophies and growth opportunities, particularly in industry clouds, platforms, and AI. Moorjani highlights a strong start to Q1, maintaining operational focus, and seeking margin expansion while capturing growth opportunities. The paragraph concludes with congratulations to Janesh on a successful quarter by Siti Panigrahi from Mizuho.

In the paragraph, Siti Panigrahi discusses the company's quarterly performance with CFO Janesh Moorjani, who expresses confidence in the quarter's consistent momentum and in their future guidance despite uncertainties like tariffs and price changes. Moorjani mentions that May has continued the positive trend seen in earlier months. Additionally, Siti inquires about the benefits of a model transition, specifically the cross-sell opportunities. CEO Andrew Anagnost explains that cross-sell and upsell efforts are long-term strategies and are being integrated into their business rhythm rather than being tied to specific renewal cycles, allowing for more flexible customer interactions.

The paragraph is an excerpt from a discussion involving Ken Wong, Janesh Moorjani, and Andrew Anagnost. Ken Wong asks about the cost reductions associated with the company's go-to-market transition and whether there are future goals for further expense reductions. Janesh Moorjani responds by saying it's too early to discuss specifics but mentions that ongoing capabilities building will unlock more opportunities for optimization. Ken also inquires about a slight reduction in the billings guidance adjusted for currency and transaction model changes. Janesh clarifies that no specific headwind was encountered that impacted this adjustment.

The paragraph discusses the impact of a new transaction model on billing guidance, with an explanation from Janesh Moorjani. He clarifies that the core business is projected to grow by 16% to 18% in constant currency terms, excluding the new transaction model's effects. This growth projection accounts for additional macroeconomic uncertainty, which was not factored in earlier. Despite this uncertainty, there has been no observed impact on the business. The new transaction model is providing a positive boost, as greater adoption of it creates a favorable effect on billing numbers.

In the paragraph, Janesh Moorjani addresses a question from Joshua Tilton regarding the transition of multi-year deals to annual ones, clarifying that this was not specifically mentioned in their prepared remarks. He explains that the company is continuing to see the final stages of a billing transition, where customers are moving from fully prepaid contracts to annual billing. Tyler Radke from Citi then asks about the Expected Benefit Agreements (EVAs) and higher upfront revenue, to which Janesh replies that while upfront revenue contributed to strong performance, it was not outsized and was one of several factors positively impacting the overall revenue for the quarter. The company also experienced strong billings linearity.

The paragraph discusses consistent performance and strong revenue across February, March, and April in the context of billing linearity. The company has seen steady renewal rates and uplift on Enterprise Business Agreements (EBAs), with no significant issues evident. Although an occasional contract deviates, overall business momentum remains strong. The company has included prudence in future projections, should the scenario change. Tyler Radke asks about the company's pricing philosophy, highlighting a historical transition where customers received annual price locks capped at 3%-4% increases to migrate them to subscriptions. CEO Andrew Anagnost explains that this maintenance-to-subscription cohort was assured of ten-year price visibility, and this plan will end soon as the period draws to a close.

In the paragraph, it is mentioned that price increases will be aligned with the value provided to a specific group, though it's too early to discuss specifics. The program related to these adjustments hasn't ended yet but will soon. Tyler Radke expresses thanks, and the operator closes the Q&A session. Simon Mays-Smith thanks the participants and encourages them to reach out with questions, indicating they'll reconnect during a Q2 conference call. The conference concludes, and participants are informed they can disconnect.

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