Q2 2023 Autodesk Inc Earnings Call

August 24, 2022

Okay.

Thank you for standing by and welcome to Autodesk second quarter fiscal 2023 earnings Conference call. At this time, all participants are in a listen only mode.

After the speaker presentation, there will be a question and answer session.

To ask a question during the session you will need to press star one one on your telephone.

I'd now like to hand, the call over to Simon Mays Smith, Vice President Investor Relations. Please go ahead.

Thanks, operator, and good afternoon. Thank you for joining our conference call to discuss the second quarter results of our fiscal 'twenty three.

On the line with me are Andrew agnostic, CEO and Debbie Clifford our CFO .

Today's conference call is being broadcast live via webcast. In addition, a replay of the call will be available at Autodesk Dot com for flash investment.

You can find the earnings press release slide presentation and transcript of today's opening commentary on our Investor Relations website. Following this call.

During this call we may make forward looking statements about our outlook future results and related assumptions acquisitions products and product capabilities and strategies.

These statements reflect our best judgment based on currently known factors.

Actual results could differ materially.

Please refer to our SEC filings, including our most recent Form 10-K, and our form 8-K filed with today's press release for important risks and other factors that may cause our actual results to differ from those in our forward looking statements.

Forward looking statements made during the call are being made as of today.

If this call is replayed or reviewed after today the information presented during the call may not contain current or accurate information.

<unk> disclaims any obligation to update or revise any forward looking statements.

During the call, we will quite several numeric or growth changes as we discuss our financial performance.

Unless otherwise noted each such reference represents a year on year comparison.

All non-GAAP numbers referenced in today's call are reconciled in our press release or XL financials, and supplemental materials available on our Investor Relations website.

Now I will turn the call over to Andrew.

Thank you Simon and welcome everyone to the call today, we reported record second quarter revenue non-GAAP operating margin and free cash flow.

End market demand remained strong during the quarter, resulting in robust new business activity.

Renewal rates were again excellent all of this and our strong competitive performance more than offset the direct and indirect impact of geopolitical macroeconomic policy and COVID-19 related factors.

Growing commercial usage outside China, Russia, and Ukraine record bid activity on building connected and continued channel partner optimism leave us well placed to achieve our FY 'twenty three volts.

As I said last quarter, the structural growth drivers for our business that were critical to our performance during the pandemic such as flexibility and agility continue to support and propel us during this period of elevated uncertainty.

These growth drivers further cement the important role we play in our customers' digital transformations and increase our confidence in our strategy.

Our steady strategy industry, leading product platform and business model innovation sustained focused investment and strong execution are creating additional opportunities for autodesk.

Accelerating the convergence of workflows within and between the industries, we serve we create broader and deeper partnerships with existing customers and bring new customers into our ecosystem.

In pursuit of these goals, we announced at Autodesk University last year that we were moving from products to platform and capabilities and bringing these capabilities to any device anywhere through the cloud over the coming weeks months and years, you will hear a lot more from us about our plans and progress to build a world.

Customer experience catalyze our customers' digital transformation and established industry, leading platforms for design and make.

As evidence of the progress we have made already fusion 360 blew past 200000 subscribers during the second quarter and signed its first million dollar contract.

Both important milestones and indications of the opportunities ahead.

I will now turn the call over to Debbie to take you through the details of our quarterly financial performance and guidance for the year I will then come back to provide an update on our strategic growth initiatives.

Thanks, Andrew.

Q2 was a strong quarter across products and channels.

Our end markets were broadly consistent with last quarter with our strongest growth in North America and growth in Europe , and APAC impacted by the war in Ukraine, and Covid Lockdowns in China.

Total revenue grew 17%, both as reported and at constant currency.

By product.

<unk> and <unk> LTE revenue grew 13%.

<unk> revenue grew 18%.

Manufacturing revenue grew 16%.

<unk> revenue grew 20%.

By region revenue grew 22% in the Americas, 15% in EMEA, and 10% in APAC or 13% at constant currency.

By channel direct revenue increased 18%, representing 34% of total revenue.

Indirect revenue grew 16%.

Our product subscription renewal rates remained strong.

And our net revenue retention rate was comfortably within our 100% to 110% target range.

Billings increased 17% to $1 2 billion, reflecting robust underlying demand.

Total deferred revenue grew 12% to $3 7 billion.

Total <unk> of $4 7 billion and current RPI of $3 1 billion grew 13, and 10%, respectively, reflecting strong billings growth and as we've highlighted in the last two quarters, the timing and volume of multiyear contracts, which are typically on a three year cycle.

Multiyear contract volume remained strong during the quarter as expected and as you can see from the uptick in long term deferred as a percent of total deferred.

Turning to the P&L.

non-GAAP gross margin remained broadly level at 92%, while non-GAAP operating margin increased by five percentage points to approximately 36%, reflecting strong revenue growth and ongoing cost discipline.

GAAP operating margins increased by six percentage points to approximately 20%.

We delivered record second quarter free cash flow of $246 million up 32% year over year, reflecting strong billings growth in both Q1 and Q2.

We continued our accelerated share repurchasing during the quarter.

Purchased one 4 million shares for $257 million at an average price of approximately $182 per share, which when compared to last year contributed to a reduction in our weighted average shares outstanding by approximately $3 million to 217 million shares.

While our capital allocation strategy remains unchanged you can expect that we will continue to invest organically and inorganically to drive growth.

We proactively used our strong liquidity to repurchase three 5 million shares in the first half of this year Frontloading the offset of next year's dilution.

Now, let me finish with guidance.

The underlying business conditions, we've been seeing are broadly unchanged as I mentioned earlier, we're seeing strength in North America and continued healthy growth in Europe , and Asia outside of Russia, and China due to the geopolitical situation in both regions as well as the Covid Lockdowns in China.

Our renewables business continues to be a highlight reflecting the ongoing importance of our software and helping our customers achieve their goals.

As we look ahead and as with previous quarters, our fiscal 'twenty three guidance assumes that market conditions remain consistent for the remainder of fiscal 'twenty three.

The strengthening of the U S dollar during the quarter generated slight incremental FX headwinds.

Reduced full year billings revenue and free cash flow by approximately $20 million five.

$5 million and $5 million respectively.

Bringing these factors together the overall headline for guidance is that it is unchanged at the midpoint across all metrics with the underlying momentum of the business offsetting those incremental FX headwinds.

We are narrowing the fiscal 'twenty three revenue range to be between $4 99, and $5 4 billion.

We continue to expect non-GAAP operating margin to be approximately 36% and free cash flow to be between two and $2 8 billion.

The slide deck and updated <unk> financials on our website has more details on modeling assumptions for Q3 and full year fiscal 'twenty three.

While the challenges our customers face are changing the growth drivers underpinning our strategy has only been reinforced which gives us confidence in our long term growth potential.

We continue to target double digit revenue growth non-GAAP operating margins in the 38% to 40% range and double digit free cash flow growth on a compound annual basis.

These metrics are intended to provide a floor to our revenue growth ambitions and a ceiling to our spend growth expectations Andrew back to you.

Thank you Debbie our strategy is to transform the industries, we serve with end to end cloud based solutions that drive efficiency and sustainability for our customers.

Our business is scalable and extensible into adjacent vertical from architecture, and engineering to construction and operation from product engineering to product data management and product manufacturing. It is also a scalable and extensible between vertical with industrialized construction and into new workflows like XR.

By accelerating the convergence of workflows within and between the industries. We serve we are also creating broader and deeper partnerships with existing customers and bringing new customers into our ecosystem.

For example, Kimberly Horn, one of the nation's premier planning and design consultants expanded its EBITDA in Q2, broadening and deepening its longstanding partnership with Autodesk. In addition to increasing its utilization of civil <unk> in rabbit and driving further operational efficiency gains through Bim and.

Cloud collaboration it also chance chose to expand use of <unk> and its rapidly growing water practice to help drive more growth opportunities and productivity gains.

As we highlighted last quarter digital workflows are being adopted across the infrastructure lifecycle from asset owners architects and engineers to construction to drive improved efficiency and sustainability.

The Indiana Department of Transportation, which was looking for an efficient solution to simplify document management and fueled collaboration is another good Q2 example.

Adopting autodesk bills and ACC connect it will improve communication and coordination throughout the construction process and streamline the documentation of citizen issues, resulting in less waste and more return per taxpayer dollars.

Across construction the industry continues to look to connect workflows from planning and design to pre construction construction and ultimately operations and maintenance and we are enabling our customers to connect those workflows on a single platform for.

For example, our commercial real estate and property management company focused on owners investors and occupants with tired of having multiple platforms across the project lifecycle, resulting an inconsistency rework and poor handoffs in Q2, it adopted the full autodesk construction cloud.

Connect Preconstruction with project management, it added quantification estimating to building connected and beam collaborate pro in Preconstruction and Autodesk build for project management to give themselves a competitive advantage and increased profitability through improved collaboration and data management.

Across the globe, our customers seek to connect and streamline their construction workflows, and we are enabling and accelerating that through our partner network launching artist build in new markets like Japan, enabling more data formats on more devices and delivering more value to our customers to account based pricing, we're also giving our customers.

Control of their data through bridge leveraging the power of machine learning to anticipate project risk and seamlessly connecting workflows like takeoff estimating and budgeting to delight, our customers and improve their productivity.

With monthly active users growing more than 45% quarter over quarter Autodesk build is being rapidly adopted by existing and new customers to connect and streamline their construction workflows.

Turning to manufacturing, we sustained strong momentum in our manufacturing portfolio. This quarter as we connected more workflows beyond the design studio develops more on ramps to our manufacturing platform and delivered new powerful tools and functionality <unk> fusion 360 extension.

Our customers continue to expand their adoption of the fusion platform beyond design and engineering.

This quarter, our U S supplier of metal cutting tools chose to create a state of the art collaboration tool infusion to enable its sales organization to demonstrate digital manufacturing technology to customers.

By enabling customer comps customization to be immediately reflected in factory manufacturing instruction the tool will be a competitive advantage during the selling process.

At a desk it adds a significant new persona group to fusion's addressable market opportunity.

In automotive, we continue to grow our footprint beyond the design studio in the manufacturing as automotive Oems seek to breakdown the work silos and shorten the handoff in design cycles.

For example, a top.

Top tier commercial vehicles manufacturer, a renewed and increased its partnership with Autodesk as part of its strategic focus on building, a sustainable product and service portfolio, which leverages, new technologies and digital innovation to accelerate electrical vehicle solutions and.

In addition to alias which is which had already uses for surfacing markup all its vehicles. It is utilizing VR technology from the wild and combination with V Red and nervous works to drive innovation and visualization from design and engineering to factory design.

Our fusion 360 platform approach enables customers to seamlessly connect workflows and push the boundaries of innovation through the advanced design and manufacturing technologies and extension.

For example, a global leader in seat manufacturing, which works with many major automakers worldwide engaged August consulting to develop a blended workflow across design product engineering and manufacturing.

The result was a seat that improves passenger comfort and safety, while reducing the weight and number of parks.

Using autodesk design tools like aliens conceptual design and fusion 360 generative design.

Was able to redefine the seat design with thinner seats sections and improved comfort and safety.

Fusion 360 commercial subscribers grew steadily ending the quarter with 205000 subscribers and demand for our new extensions, including machining generative design and nesting and fabrication continuing to grow at an exceptional pace.

And education engineering students are using fusion 360 to learn the skills of the future and institutions like group center of store <unk>.

The largest further education College group in Wales students there are applying their studies to benefit local industry partners and businesses for.

For example, students recently used fusion 360, <unk> cloud based data management and advanced <unk> machining to help a local RV manufacturer and prove its output by about 50%.

The college is now planning to integrate fusion 360 across 11 campuses due to its ease of use modern user interface accessibility across devices and ability to collaborate on key projects and share data.

Finally, we continue to bring more users into our ecosystem through business model innovation and license compliance initiatives.

When one of our EMEA customers realize that some usage from our international offices with Noncompliant it needed time and data to better understand its users before purchasing prescription.

By purchasing our first ever 100000 pack of flex tokens, the customer gains instant access to autodesk portfolio of products and usage data to make informed decisions on its future subscription purchases. While also opening up new competitive opportunities for August during the quarter, we closed seven deals over.

$500000 with with our license compliance initiatives three of which were over $1 million.

Flex and premium are also helping customers transition from multi user to named user contracts, a leading supplier of concrete form work and scaffolding systems in Europe has been unifying internally around <unk> to accelerate its digital transformation. It added premium plan through its transition the names trade ins to centralized software management.

<unk> enable user based analytics and license optimization and benefit from single sign on security. It can also purchase flex tokens to cover its occasional user needs.

Let me finish where I started.

Strong demand and robust competitive performance delivered excellent Q2 results.

Our subscription business continues to demonstrate its growth potential and resilience by accelerating the convergence of workflows within and between the industries. We serve we are accelerating the digital transformation of our customers and creating broader and deeper partnerships with them.

And by moving from products to platform and capabilities and bringing those capabilities to any device anywhere through the cloud we are expanding our opportunity to horizon.

Look for us to talk more about that over the coming weeks months and years, we look forward to seeing many of you at <unk> University in a few weeks operator, we would now like to open the call for questions.

As a reminder to ask a question you will need to press star one one on your telephone please standby, while we compile the Q&A roster.

Our first question comes from the line of <unk> Kalia of Barclays.

Thank you Kelly your line is open.

Okay, Great, Hey, Andrew Hey, Debbie Thanks for taking my questions here.

Hey, Eric.

Excellent Yeah same here, Andrew maybe maybe first for you and maybe we will start to ship more.

Okay.

If you could expand a little bit on the comment around moving from products to platforms.

That we can all talk about.

Yes.

The platform has evolved but maybe you could just walk us through what that looks like in the future in terms of our platform from your perspective.

Yes.

Hi, I want to be careful not to give away all the all the U K.

Are those discussions, but you know it's important it's an important question and second.

Put in perspective, right now we saw literally hundreds of products and the challenges for our customers is trying to find out which one of these products all of which problems for them and also the fact that a lot of these products don't talk to each other very easily so when youre selling a one hundreds of products, it's really difficult to connect data flows across all of those capabilities. It's also really difficult to uniformly deliver.

Our multi platform support multi device support.

Cloud computing and AI automation, it's really challenging so what we're doing is we're moving away from this kind of disconnected portfolio of products to really a set of platform as a target each one of our industries with some underlying core technology to support all that.

That will enable us to actually deploy capability to our customers as they need them for particular types of problems for instance, advanced manufacturing capabilities on a time bound basis, our consumption basis.

Relation capabilities on a time bound basis, where consumption basis, so they get access to what they need when they need it and it's all unified from a data flow point of view. This is kind of going to be revolutionary for a lot of our customers in terms of the evolutionary where we're taking them. So it's really valuable for our customers in terms of connecting how they work.

The value they get from each one of our products and it's really important to us in terms of delivering more layers of automation and power to them to the cloud. So it is a journey, it's not going to happen overnight, but fusion is an excellent example of.

Where we're going and how we could deploy some of these things to our customers, especially when you look at the way extensions of our consumption of working with a future platform. It's a good model for where we're taking industry platforms for each one of our industry.

Got it got it that's really helpful and it sounds like it'll be exciting at au.

Okay.

A follow up for you.

Can you just talk a little bit about the multiyear.

Great.

How are those renewals I know theyre starting to trickle in from three years ago in a bigger way how are those renewals kind of coming in versus your expectations.

And maybe looking forward, how do you plan on phasing that option out.

I think sorry.

Sure. So we continue to track the multiyear cohort closely.

Our proportional volume for multi years.

It has been in line with our expectations for the first half of fiscal 'twenty, three and so that gives us confidence in our fiscal 'twenty three outlook.

We also saw in long term deferred revenue as a percent of total deferred revenue kick off that June was in line with our expectation.

As we look ahead to the transition from upfront to annual billing well it hasn't started yet.

Dissipate that the transition is going to start in early fiscal 'twenty four and we continue to work through and programmatic and operational detail you got there. Thanks.

Thanks, Mike.

Transition plans back office system upgrades.

I'll say again, our bias to go as quickly as possible in the meantime.

We're focused on closing out this year, making sure that those multiyear has come in.

Historical patterns.

And the fact that they are giving us that confidence.

To achieve our goals for this year.

Got it very clear thanks, guys.

Thank you. Our next question comes from the line of Phil Winslow of Credit Suisse.

Phil Winslow your line is open.

Hey, guys. Thanks for taking my question and congrats on another quarter reinforcing how autodesk growth is simply not a cyclical anymore and.

I wanted to focus on the AUC.

Andrew I just wanted to focus on the <unk> segment. Because this is the area that I get the most questions on in terms of cyclicality with two questions for you. Firstly what are you hearing from design customers. In this segment about what continues to drive your incremental spending on autodesk. Despite the cloudier macro and then secondly, the 45% quarter to quarter growth.

Artists build and they used in the slide deck and your commentary on just a building connected volumes also really stood out to us. Similarly, what are you hearing from these construction customers about why they also continue to lean in on digitizing their workflows in spite of the macro or is this becoming because of the macro volatility that they are digitizing.

Yes.

Okay that was a multipart question.

So first off let's talk about what we're hearing from design customers. That's the number.

The number one thing we're hearing from the design segment is the backlog.

Alright, they have they have more business right now and they are able to effectively execute on.

The requirements of that business are increasing in terms of what kind of tools they need to use how the annual approach the problems owners.

All of these all sorts of customers they deal with are putting more and more requirements on how they have to work. So they're all looking to kind of up their game and digital tools. The biggest challenge we hear from these customers is hiring frankly.

We were hearing last year, a lot of conversations about Oh boy, you know fixed bid contracts.

Place Neri pressures in all of these things as Ive said previously they bake these things now.

Isn't it bids and theyre able to capture those costs in their contracts, but what theyre struggling with its hiring we're still growing even if they even if they struggled to hire because theyre getting people in but they have more demand or manpower and person power than they actually are able to capture at this point. Okay. So that's something we're hearing really robustly now let's go.

The growth in construction first off I wanted to give you my my quarterly disclaimer. When you look at the construction business. The make number does not capture the full story on our construction business.

The EBITDA growth attendant design bucket. So when you count how we're doing with our enterprise business agreements in the overall territory.

We grew close to 30% in that in that business. So that's really quite quite nice growth and what we're hearing and I'm glad you picked up on the 45% growth in active users were hearing a couple of things.

One first off.

Lit up our territory business our partners in the territory and this is driving a lot of really nice growth in the U S and in Europe , and it's going to continue to drive that growth, that's bringing us closer to certain customers.

Lower down in the market the mid market and below which I think a really important point.

Point in our journey okay.

The only thing I want to talk about it when customers are starting to realize they need a lot more than just a <unk>.

<unk> management or a construction site management tool a really are looking to their future where theyre trying to connect the design and build all the way together continuously and one of the big lynchpin, but all of that is Preconstruction planning.

Vast majority of the cost and complexity of a construction project is built in during the Preconstruction planning phase you get that wrong bid wrong.

Come in with lower margins, you have more more churn and complexity in your project. So this connection between design Preconstruction all the way to build is increasingly really important to their customers. So customers are taking a lot more time to evaluate what they are trying to invest in and I think you also probably noticed at least a little bit any introductory commentary.

That infrastructure is a big play for US here, So department of Transportation and you saw Indiana, The Indiana Department of transportation.

Into our portfolio for looking at their future needs.

Hearing more and more for department of transportation that are really looking to upgrade and modify their stack to be much more designed to build on a much more modern cloud infrastructure. So there's a lot going on in construction Bill and it's coming at us from multiple directions and right now it's all positive.

Awesome I appreciate all the details thank you Greg.

Great work.

Thanks Bill.

Our next question comes from the line of Jay <unk> Griffin Securities Jetblue Shar. Your line is open.

Hello, Good evening, Andrew Debbie and Simon.

Andrew.

You have by our calculation the largest R&D budget in your peer group that you don't necessarily have the largest head count in R&D.

And so the question is particularly given your earlier comment about the large number of products, which are currently developing and having to manage.

How would you see or how you are working on.

Proving you were already R&D productivity or east activity, if you will.

In terms of your core platform Youre applications technology, and ultimately products use the ability to drive.

<unk> and.

Further we're launching the installed base.

And then for Debbie you commented earlier with respect to your back office as part of your.

Initiatives over the next number of years on that point could you comment on where you are in terms of pure.

Operational capacity for the new licensing model and deliverables that youre going to have as you have been increasingly complex offering to customers in terms of flex and everything else Youre doing the platform Andrew mentioned.

Are you in fact going to have the requisite back office to handle all of that.

Alright, So Jay let me start with your question. Yes, you are correct, we have the largest R&D budgets, but we don't necessarily have the largest head count on R&D part of that is because of where we concentrate on R&D and what kind of talent. We're pursuing we're pursuing a lot of cloud talent a lot of cloud native call. It full scale.

SaaS development talent that allows us to build out the core cloud capabilities continue to expand that talent resides in certain places and it has certain costs associated with it and we think thats. The right strategy, we don't hire a lot of R&D.

Head count that's associated specifically with customer specific development in say other parts of the world. So we do hire in specific areas because of what we're trying to do and when it comes to developer productivity you hit on a really important aspect of why do we have.

Platform services why are we extending the depth and breadth of the things that we built in the platform services. One of the reasons. We're doing that is to lift the burdens away from some of these development teams on things like data flow and things like visualization capabilities that should be uniform across every platform of product that we have a capability that we deploy it so.

More and more as you see these this portfolio of platform capability, not only mature, but expand its going to increase the productivity of the teams are looking at features that are facing particular industries and capabilities that are facing particularly in this industry. It's a big part of why we have these services and we're already starting to see some of those benefits.

Especially with regards to data flow, which is a an initiative driven primarily by the platform organization within Autodesk and it's being aligned across the various industries to make sure that we get the right kind of synergies and lift from our data API and our data connectivity. So yes, you will see increasing productivity associated with it.

We are definitely spending on quality overconfident over quantity and I think thats the right strategy for where we're at right now.

And then Jamie to answer your question about operational capacity for things like New business model I would say that we are.

Well on our way on this journey, but we still have.

Ground to cover and we're going to be where it needs to be and I think that that's an appropriate place to be.

At this stage of the journey now of course, we we don't launch new business models and about the ability.

Which is why I asked one example, we are delaying the shift to annual billings until next year. So that we can spend the time that we need to be able to invest in our back office systems to make sure that we havent been customer experience that we have the right controls and automation capabilities in the back office I mean, ultimately this is something that we focus on.

Not only to make sure that we've got the capacity to support new business models, but also so we can scale. If we wanted to achieve our long term growth aspirations, we need to continue to invest in our back office infrastructure in order to be able to scale.

Currently effectively and in an automated way to do it.

Okay.

Thank you very much.

Thank you Jay.

Thank you. Our next question comes from the line of Matt Hedberg of RBC capital markets. Your question. Please Matt Hedberg.

Hey, Thanks, guys Andrew for you the growth in <unk>.

<unk> hundred 60 was really fantastic to hear can you can you talk about sort of where those where those subs are coming from are.

Are these greenfield or they replacements and maybe just a little bit more on sort of with a lot of options with a lot of alternatives.

360.

Yeah. So first off it's a bit of a mix right a lot of these a lot of these are greenfield in that they're acquiring design software connected to manufacturing software for the first time, but theres a lot of rip and replace going on I think you've probably heard me talk many times about how we're going into.

Accounts, where people might have a seat of solid work in the Cedar Master Cam or some kind of other cam software understand well.

Fusion is all I need.

We've been consistently creating and growing subscribers from that type of business, but what we're seeing more and more and I think this is one of the things that is important about the user growth Youre seeing is that where we got where we've gone in and we started in some department are part of part of a particular company, we're starting to grow.

So the installed base within those companies so we're still bringing in new customers primarily.

Long is designed to make vector, but we're starting to grow within the accounts. We've captured this is the kind of flywheel youll you'd like to see as you start to mature business and we're starting to see some of that.

The reason people buy is there is there is there is there.

There's three kind of vectors here that people pay attention to one of course is the price the pricing model for fusion is disruptive.

It's native subscription base, it's not a re imagining of an existing perpetual business. Its a native subscription based business. It has it has extensions and things that cause something models that allow people to pay for what they use and manage how much it cost from you the software they loved that too they love the design through make integration and debt and <unk>.

Greater from the design process, all the way to actually programming and driving the machines on the shop floor.

This kind of merger and convergence of design and make us something that's really valuable to a lot of people and the third thing might surprise you a little bit.

Our Youtube community.

It's the amount of content that's out there on Youtube, which by the way exceed even much more mature products that are out there in the market where people can not only learned how to do something infusion. They can learn how to do it exceptionally infusion is a very passionate very engaged and really very knowledgeable community pub.

Wishing all of this content and people really buy for those reasons they buy for the disruptive business model. They buy for the design make integration and they buy for the fact that they can find just tutorial about just about anything you can think of to get really an expert level and the product.

Super Super helpful. Thank you for that and then Debbie.

The consistency is obviously really good to see that the macro environment. This is not easy clearly, but the consistency was great. I'm wondering if you can talk a little bit about the linearity in the quarter and maybe what are you seeing thus far in August .

So the linearity that we saw during the quarter is consistent with what we've seen in previous periods I would say nothing newsworthy.

And obviously at this point, we're not commenting on what we're seeing in August .

Thank you.

Sure.

Thank you. Our next question comes from Adam Borg of Stifel.

Your line is open Adam Borg.

Got it thanks, so much for taking the question.

Just first for Andrew on the infrastructure Bill I know, that's something we've talked about in the past and you know the positive tailwind second half for Autodesk. So look maybe just a quick update here and then as I think about the recently passed inflation reduction at Theres a lot of language in there about clean energy and sustainability and love to hear how you think about that impacting on a desktop type as well.

Yes.

And so first let's talk about the infrastructure Bill as with any of these calls and like I said in the past the money is slowly trickling out alright, and what Youre seeing is people are actually starting to begin the process of planning around particular types of projects, but more importantly, what's happening is a lot of the recipient of some of these funds.

Particularly departments of transportation are starting to rethink how they're approaching their design processes and by the way energy efficiency and sustainability play into how they think about some of these things.

Remember there was a steep seed money in that bill to enable departments of transportation to explore and expand digital transformation in their processes. This is bringing about a lot of introspection and thought within these departments and theyre starting to look at their next 10 year portfolio of tools and Theyre looking to buy ahead.

Their ability to plan and execute some of these infrastructure projects. We are absolutely seeing that early activity with regards to our relationship with large firms like AE com that engage in the infrastructure and how they are going to engage over the next 10 years and departments of transportation.

A similar challenges at similar needs over the next 10 year period. Okay. So that's something we're seeing what now with regards to the inflation reduction Act.

The jury is out on that alright.

Any anything that drive energy efficiency and sustainability is ultimately going to trickle down into what the requirements are for some of our customers, especially when electrification is becoming so important so youre going to see a lot more electrification of efficiency specs for our customers, but unclear where that where that will fall.

So an impact on our business.

That's great and maybe just a quick follow up even on last question on <unk> just on manufacturing more broadly would love to hear more about octane and how that fits into the broader strategy you've been talking about here without excuse me 460, <unk>. Thanks again.

Yes, so uptake is the data management layer that cloud native that allows us to actually not only manage the flow of fusion information of environment, but any other heterogeneous data that might exist in the environment all of our customers live in a heterogeneous world will never have a customer that is uniformly using just an autodesk.

Product or just autodesk portfolio, so not only did up chain bring us cloud native data management, but it also brings us heterogeneous management of this data and enabling the ability to manage this flow and reconcile things in the cloud, which has huge power for how people use data management in the future. If you look at the evolution above chain, it's going to more and more just merged.

With some of the fusion lifecycle infusion managed capabilities, we already have and will become the native cloud data management platform for fusion.

That's where up chain play, it's basically a deep and wide data, it's data management platform in the cloud for us.

Excellent. Thanks again.

Youre very welcome.

Thank you. Our next question comes from drove room, Inc. A Baird. Your question. Please <unk> Inc.

Great. Thank you I guess I'll stick on manufacturing, because I think to get 16% growth there.

Desktop products have to be contributing at a pretty high level, what's been the driver of success. There and then you shared the interesting anecdote just in automotive and seeing broader usage, how much can that same playbook be used in process or some of your other discrete sectors, where you have exposure.

Yeah. So you picked up on something we're growing faster than any of our competitors. So we continue to take share in manufacturing and yes, you are right, it's our whole portfolio.

Continuing to grow share in manufacturing and why is that.

There's a couple of reasons, one we keep introducing new technologies, alright, and we bring these new technologies to our customers in a way that if you buy the present you get the future right. So if you're buying a better future.

And that data allows you to not only feel good about the product you get today, but knowing that you are hooked up to where the company is going over the next 510 years and I think that's a real competitive advantage for us in terms of how we bring technology to market, but you're also seeing us blend new types of technologies into the workflows that our customers are trying to do in automotive and other.

I think one of the things that was interesting about what I said in my opening commentary with the blending of both the wild and N V Red which is.

While it was a very early acquisition and then we have DRAM, which is an existing mature technology people are exploring the intersection of the various technologies that we have and you probably picked up on the fact that our strength in manufacturing has extended more into facilities management with large large manufacturers and looking to manage their actual factory assets. So there is overlap.

<unk> associated with those things and there is some overlap with our <unk> business with regards to that but those are the things that are kind of driving our growth in manufacturing and you're right. It's the whole portfolio. The whole portfolio is moving forward and Youre also seeing obviously tremendous growth with fusion right. We have to maintain that we like what we see but customers like what we're <unk>.

Yeah.

Okay, that's great.

And then just trying to put the pieces together with guidance, so you're raising the organic forecast by a bet.

Still sounds like it assumes the same underlying macro.

You're raising the organic forecast by a bet.

Still sounds like assumes the same underlying macro assumptions. So ultimately it's autodesk execution, that's driving the organic rice.

What is the driver of better than expected performance there.

Like the performance there.

Ultimately it is about execution, but as the momentum in the business.

Particularly as we exited Q2, so here's how we're thinking about guidance, we had that slight beat in Q2 and of course, we kept our full year guidance flat none of the currency headwinds the guidance does reflect the demand environment that we saw as we exited Q2, that's consistent with what we've done with previous quarters. The business continues.

<unk> performed strongly.

That resilient subscription business model, which is durable during a potential economic downturn and we exited Q2 as I said with strong momentum. So these are all the factors that are baked into our guidance I also want to point out that we did retain a range of $50 million on revenue that gives us some flex.

The ability, especially with that subscription business model, which is more predictable and a significant portion of our future revenues already on the balance sheet.

Great. Thank you.

Thank you. Our next question comes from Jason <unk> of Keybanc capital markets, Jason Celaeno. Your line is open.

Thanks.

It's good to hear the strong bidding activity through building connected.

Customer backlogs still lengthened and these hiring challenges that you keep hearing about is there any change to the lead time on the projects being bid on I guess, what I'm asking is is the business strong activity youre seeing for next year following year.

How does that kind of pan out.

That is an excellent question.

Im not sure I can answer it in a satisfying way, but here's what I will say.

Current bidding activity as a predictor of future build activity right bidding and with contractors and other things.

In early process and actually executing a project. So when you see an increase in bid activity on building connected what youre actually seeing is an increase in the book of business that have projects that will actually get executed downstream right. So this is a good predictor of.

Ongoing activity as you've been down when you close a bit you actually then moving to execution with that particular sub contractor and some of things associated with that so it does give us a forward indication of how much buying activity is going to be happening and how much actual.

Building is going to be going on and that's one of the wider one of the reasons why we highlighted one of the reasons, we value that connection bid activity. So much not exactly what you asked but that's that's the depth that I can answer at this point.

Perfect and then on in advice I think you mentioned that kind of in one deal on your prepared remarks, but.

How is it performing any change to win rates since you've acquired it and then I think at some point there was going to be some sort of subscription effort transition for the existing base.

Any worthwhile update there.

Yes, so antibodies continues to perform well, it's doing particularly well in terms of our EBITDA businesses a lot of our enterprise business agreement customers are looking to incorporate <unk> into their contracts with us, which I, which is exactly one of the thing what are the big synergies we expected when we when we acquired <unk> device they have begun.

Their business model transformation there in the in the throes of that right now it's growing it's growing quite well, while we expect to finish that in a reasonable amount of time, so that's going quite well, but the business is doing well and we continue to get a lot of interest not only in water in general from our customers, but also the.

<unk>.

The owner side of advise where they're building solutions that actually manage the operation of the water facilities.

Perfect. Thanks, Andrew.

Thank you Jamie.

Thank you. Our next question comes from Michael Funk of Bank of America Microphones. Your line is open.

Yeah. Okay. Thank you for the question Steve name a couple if I if I could in respect to the comments by the uniformity of products.

If you move to a platform or say you don't want to tip your hand here, but.

How heavy of a lift.

Yes.

And what is the timing involved and then addition to the increased attractiveness for customers other efficiencies that will accrue to autodesk as well bye.

By adding more uniformity.

Cross platforms.

Yes, so so first off let's be Super clear this isn't something that we're just suddenly starting out of the blue right. It's been going on for quite some time in various forms. It is the most mature in its journey in the manufacturing space with what we're doing with fusion 360, and that gives you a lot of visibility to what happens and how the portfolio.

We are a consolidator over time, a lot of capabilities that exist as separate products are showing up as extension the native capabilities in the infusion environment and that absolutely gives us long term synergies, where we're where we're building on one environment versus trying to support the multiple products in their multiple needs. So you actually do get a lot of things right now of course, we are.

<unk> spending on a lot of things that we know double spend for some time, but the journey. The journey is not new to us fusions quite mature auc's. Beginning this journey started with some of the cloud native acquisitions, we did particularly around what we did with space Baker a team that had been very much focused on the future.

Of how people do building information model on our cloud platform building information modeling on our cloud platform and we have other things that will be showing up in the media and entertainment space again, not wanting to tip my hand, or some of the discussions we'll have later, but yes. There are long term synergies here, we are absolutely and we'll continue to double spend.

For a period of five to 10 years, and 75 product product overlap for a long time, we've been through several transformation the product autocad and rabbit.

Mechanical desktop and adventure in the past for those of you who are familiar with some of those names and yes. The overlap takes a while but eventually what happens is most of the engineering effort and capability goes to the new platform.

We have all the way in that direction.

Understood, Yes long term complex project and then the earlier comments on the on the delay in the shift to annual billing just wanted to make sure I completely understood what was the comment that you.

You wanted to make sure that the processes.

We're better than they are now in the back office or it's better than it is right now and if that's correct I guess what would the issues that you were seeing that you wanted to streamline just to make that a more enjoyable process for the customer.

Yeah, So first let's let's level set.

Our intention to move from a multiyear upfront annual billings is always intended to start at the beginning of next year. So that's not any change that we've made on our side and the reason why we did that was twofold, one we needed to invest in our back office systems and infrastructure to make sure that we can execute on this.

<unk> at scale in an automated way.

Such that our customers would have customer experience and we would have the controls and automated processes in place that we need at our back so that's point number one.

More importantly, as point number two our partners are really important part of our ecosystem and so it was important to us to give them.

Advance notice.

I think back to our last Investor day that we intended to embark on this journey. So that we could work together with them to build the programs policies that all of the things that we needed to do to make sure that they were along with us on the journey and that the entire ecosystem and benefit from the shift to annual billings, because just like it will.

Predictable for us to have an annual billing cycle, so too will it be for our customers and our partners are needed.

Needed time to plan.

We wanted to make sure that we were collaborating with them in a healthy by SPD moves towards this transition.

That's great that's credit for color. Thank you.

Thank you. Our next question comes from Bob <unk> of Deutsche Bank.

Bobby Your line is open.

Sure Andrew we continue to hear very good things about think collaborate pro within the architecture and engineering customer base can you give any better help us understand where we are in terms of adoption of collaborate pro within like the revenue customer base and how we should think about the adoption curve going forward.

Yeah.

Excellent question.

It's still actually really early I mean didn't collaborate pro continues to grow robustly.

As you recall when we were during the pandemic, we saw quite the surge in the cable and the adoption of that product and the adoption of it as continued post the pandemic period as more and more people become aware of the capabilities of the collaborate pro in terms of total penetration into the Rebit base. It's still really early days in terms of penetrating.

The vast majority of the revenue base in fact, interestingly enough one of the biggest request we get is to make beam collaborate pro work as robustly with civil <unk> as it does with rabbit and Thats something that were addressing which is another vector where the collaborate pro is going to be able to penetrate the infrastructure space as well still really early.

Early days, though in total penetration of the revenue base continues to grow it's an on ramp to.

But digital Preconstruction and Autodesk construction cloud in many ways and we.

We're really happy with the way customers are adopting that it was one of the.

One of the unexpected silver linings of the turmoil in tragedy, the pandemic that customers. Finally realized that that is a utility that is valuable to them now and in the future.

Thanks, Ken.

I guess, along those lines and you kind of integrate that there's a little bit like in terms of adoption here have you seen that accelerate customer journeys toward some.

Some of your other cloud based solutions that you guys offer.

Oh it absolutely does.

It has been.

I hesitate to call it an on ramp to two our full portfolio of cloud solutions, but what it does is it gives our customers a lot of confidence in how the cloud actually changing their processes. They actually start to understand that while this isn't just better it's actually different and better and it allows them and empower them and encourage them to explore.

Some of the other capabilities Oh, maybe I should be doing a preconstruction planning in the cloud Oh, if im doing preconstruction planning in the cloud I should be doing.

Mine site management in the cloud as well so it absolutely demystify the cloud for them and shows some of the core benefits. It really does educate a lot of our customer base on why the cloud matters and why it's so important to their distributed highly collaborative future.

Thank you Bob.

Okay.

Alright, well go to our next question, which comes from the line of Golf Monday.

Both research Gal Munda your line is open.

Okay. Thank you for taking my questions, maybe Andrew just for you to start.

You are calling out the noncompliant users again.

It seems like you are running roughly at the run rate that you were pre pandemic again.

How much of that is just having a flex model as well as being able to do.

Being able to grow more effectively towards your accounts they already pay you, but maybe not.

And now we have a tool in order to monetize that and maybe just how big it could be in the future as you embark on that opportunity.

Yes, so actually Gal youre picking up on something that was implied in the opening commentary that flex is a highly valuable tool. When you go and you reach the Noncompliant users and a lot of cases, what youre whats youre finding in a noncompliant usage situation is it a multi user situation gone bad alright, where they have over <unk>.

<unk> software or they have tried to use our software and unlicensed ways and what they are what they are really trying to do is distribute usage.

Enable occasional usage in some of the things associated with that flex is an excellent way to walk into some of those accounts and in a collaborative manner get them exploring other ways.

Aging with Autodesk and absolutely will have some positive impacts on how we do license compliant business now as we look broadly at flex again, it's still really early days reflects we continue to see growth and we continue to see a lot of new users coming in with flex one of the growth factors for flex that I'm, particularly excited about it and the long tail of our business.

Because what flex allows you to do if you're in a smaller company say youre in a five person company and you want to occasionally use rebate for some of the projects you built bid on but the vast majority of your projects or autocad or you want to engage with structural stimulation for particular product the flex model less people download it lets people engage.

With advanced functionality and advanced capabilities.

On a pay per use basis, and they don't have to commit to an annual subscription or a multi year subscription to get some of these capabilities. So I think there is a lot of long term growth capability built into the long tail of our business at flexible likely unlock the jury is still out where early on the journey.

So, we'll see where that heads that's one of the areas that I think is very interesting.

Okay.

And as that is all the time, we have for questions I'd like to turn the call back over to Simon Mays Smith for any closing remarks.

Thanks, everyone for joining us.

We'll look forward to saying, we hope many of you at au.

But I think the best in a few weeks' time in New Orleans.

Sure.

Thanks, Mike.

Rob fertility.

Thanks, everyone.

Yeah.

This concludes today's conference call. Thank you for participating you may now disconnect.

Goodbye.

Conference will begin shortly to raise your hand during Q&A you can dial one one.

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Okay.

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Yes.

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Yeah.

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Thank you for standing by and welcome to Autodesk second quarter fiscal 2023 earnings Conference call. At this time, all participants are in a listen only mode.

After the speaker presentation, there will be a question and answer session.

To ask a question during the session you will need to press star one one on your telephone.

I'd now like to hand, the call over to Simon Mays Smith, Vice President Investor Relations. Please go ahead.

Thanks, operator, and good afternoon. Thank you for joining our conference call to discuss the second quarter results of our fiscal 'twenty three.

On the line with me are Andrew Agnosterol, CEO , and Debbie Clifford our CFO .

Today's conference call is being broadcast live via webcast. In addition, a replay of the call will be available at Autodesk Dot Com fourth flash investor.

You can find the earnings press release slide presentation and transcript of today's opening commentary on our Investor Relations website. Following this call.

During this call we may make forward looking statements about our outlook future results and related assumptions acquisitions products and product capabilities and strategies.

These statements reflect our best judgment based on currently known factors.

Actual results could differ materially please.

Please refer to our SEC filings, including our most recent Form 10-K, and the form 8-K filed with today's press release for important risks and other factors that may cause our actual results to differ from those in our forward looking statements.

Forward looking statements made during the call are being made as of today.

If this call is replayed or reviewed after today the information presented during the call may not contain current or accurate information.

<unk> disclaims any obligation to update or revise any forward looking statements.

During the call, we will quite several numeric or growth changes as we discuss our financial performance.

Unless otherwise noted each such reference represents a year on year comparison.

All non-GAAP numbers referenced in today's call are reconciled in our press release for XL financials in supplemental materials available on our Investor Relations website.

And now I will turn the call over to Andrew.

Thank you Simon and welcome everyone to the call today, we reported record second quarter revenue non-GAAP operating margin and free cash flow.

End market demand remained strong during the quarter, resulting in robust new business activity.

Renewal rates were again excellent.

All of this and our strong competitive performance more than offset the direct and indirect impact of geopolitical macroeconomic policy in COVID-19 related factors.

These growth drivers further cement the important role we play in our customers' digital transformations and increase our confidence in our strategy.

Our steady strategy industry, leading product platform and business model innovation sustained its focused investment and strong execution are creating additional opportunities for autodesk.

Accelerating the convergence of workflows within and between the industries, we serve we create broader and deeper partnerships with existing customers and bring new customers into our ecosystem.

In pursuit of these goals, we announced at Autodesk University last year that we were moving from products to platforms and capabilities and bringing these capability to any device anywhere through the cloud over the coming weeks months and years, you will hear a lot more from us about our plans and progress to build a world class.

<unk> customer experience.

Catalyze our customers' digital transformation and established industry, leading platforms for design and make.

As evidence of the progress we have made already fusion 360 blew past 200000 subscribers during the second quarter and signed its first million dollar contract.

Both important milestones and indications of the opportunities ahead.

Thanks, Andrew.

Q2 was a strong quarter across products and channels.

Our end markets were broadly consistent with last quarter with our strongest growth in North America and growth in Europe , and APAC impacted by the war in Ukraine, and Covid Lockdowns in China.

Total revenue grew 17%, both as reported and at constant currency.

Byproduct.

Okay, and Autocad LT revenue grew 13%.

<unk> revenue grew 18%.

Manufacturing revenue grew 16%.

<unk> revenue grew 20%.

By region revenue grew 22% in the Americas, 15% in EMEA, and 10% in APAC or 13% at constant currency.

By channel direct revenue increased 18%.

Presenting 34% of total revenue, while indirect revenue grew 16%.

Our product subscription renewal rates remained strong.

And our net revenue retention rate was comfortably within our 100% to 110% target range.

Billings increased 17% to $1 2 billion, reflecting robust underlying demand.

Total deferred revenue grew 12% to $3 7 billion.

Total <unk> of $4 7 billion and current RPI of $3 1 billion grew 13% and 10%, respectively, reflecting strong billings growth and as we've highlighted in the last two quarters, the timing and volume of multiyear contracts, which are typically on a three year cycle.

Multiyear contract volume remained strong during the quarter as expected and as you can see from the uptick in long term deferred as a percent of total deferred.

Turning to the P&L.

non-GAAP gross margin remained broadly level at 92%.

non-GAAP operating margin increased by five percentage points to approximately 36%, reflecting strong revenue growth and ongoing cost discipline.

GAAP operating margins increased by six percentage points to approximately 20%.

We delivered record second quarter free cash flow of $246 million up 32% year over year, reflecting strong billings growth in both Q1 and Q2.

We continued our accelerated share repurchasing during the quarter.

We purchased one 4 million shares for $257 million at an average price of approximately $182 per share, which when compared to last year contributed to a reduction in our weighted average shares outstanding by approximately $3 million to 217 million shares.

While our capital allocation strategy remains unchanged you can expect that we will continue to invest organically and inorganically to drive growth.

We have proactively used our strong liquidity to repurchase three 5 million shares in the first half of this year front loading the offset of next year's dilution.

Now, let me finish with guidance.

Our renewables business continues to be a highlight reflecting the ongoing importance of our software and helping our customers achieve their goals.

As we look ahead and as with previous quarters, our fiscal 'twenty three guidance assumes that market conditions remain consistent for the remainder of fiscal 'twenty three.

The strengthening of the U S dollar during the quarter generated slight incremental FX headwinds.

Which reduced full year billings revenue and free cash flow by approximately $20 million 5 million and $5 million respectively.

We are narrowing the fiscal 'twenty three revenue range to be between $4 99, and $5 4 billion.

We continue to expect non-GAAP operating margin to be approximately 36%.

And free cash flow to be between two and $2 8 billion.

The slide deck and updated <unk> financials on our website has more details on modeling assumptions for Q3 and full year fiscal 'twenty three.

While the challenges our customers face are changing the growth drivers underpinning our strategy has only been reinforced which gives us confidence in our long term growth potential.

We continue to target double digit revenue growth non-GAAP operating margins in the 38% to 40% range and double digit free cash flow growth on a compound annual basis.

These metrics are intended to provide a floor to our revenue growth ambitions and a ceiling to our spend growth expectation Andrew back to you.

Thank you Debbie our strategy is to transform the industries, we serve with end to end cloud based solutions that drive efficiency and sustainability for our customers are.

Our business is scalable and extensible into adjacent vertical from architecture and engineering to construction and operations from product engineering to product data management and product manufacturing. It is also scalable and extensible between vertical with industrialized construction and into new workflows like XR.

For example, Kimberly Horn, one of the nation's premier planning and design consultants expanded as the EPA in Q2, broadening and deepening its long standing partnership with Autodesk. In addition to increasing its utilization of civil <unk> in rabbit and driving further operational efficiency gains through Bim and <unk>.

How'd collaboration it also chose to expand use of <unk> and its rapidly growing water practice to help drive more growth opportunities and productivity gains.

The Indiana Department of Transportation, which was looking for an efficient solution to simplify document management and fueled collaboration is another good Q2 example by.

By adopting Autodesk bills and ACC connect it will improve communication and coordination throughout the construction process and streamline the documentation of citizen issues, resulting in less waste and more return per taxpayer dollars.

For example, our commercial real estate and property management company focused on owners investors and occupiers with tired of having multiple platforms across the project lifecycle, resulting an inconsistency rework and poor handoffs in Q2, it adopted the full autodesk construction cloud.

Connect Preconstruction with project management.

Added quantification estimating to building connected and beam collaborate pro and Preconstruction and Autodesk build for project management to give themselves a competitive advantage and increased profitability through improved collaboration and data management.

We're also giving our customers control of their data through bridge leveraging the power of machine learning to anticipate project risks and seamlessly connecting workflows like takeoff estimating and budgeting to delight, our customers and improve their productivity.

With monthly active users growing more than 45% quarter over quarter Autodesk build is being rapidly adopted by existing and new customers to connect and streamline their construction workflows.

Turning to manufacturing, we sustained strong momentum in our manufacturing portfolio. This quarter as we connected more workflows beyond the design studio developed more on ramps to our manufacturing platform and delivered new powerful tools and functionality to fusion 360 extension.

Customers continue to expand their adoption of the fusion platform beyond design and engineering this quarter, a U S supplier of metal cutting tools chose to create a state of the art collaboration tool infusion to enable its sales organization to demonstrate digital manufacturing technology to customers.

By enabling customer comps customization to be immediately reflected in factory manufacturing instruction. The tool will be a competitive advantage during the selling process for autodesk. It adds a significant new persona group to fusion's addressable market opportunity.

In automotive, we continue to grow our footprint beyond the design studio in the manufacturing as automotive Oems seek to breakdown the work silos and shorten the handoff in design cycles for.

For example, <unk>.

In addition to alias which is which is already uses for surfacing mark of all its vehicles. It is utilizing VR technology from the wild and combination with V Red and networks to drive innovation and visualization from design and engineering to factory design.

Our fusion 360 platform approach enables customers to seamlessly connect workflows and push the boundaries of innovation through the advanced design and manufacturing technologies and extension for.

For example, a global leader in seat manufacturing, which works with many major automakers worldwide engaged autodesk consulting to develop a blended workflow across design product engineering and manufacturing.

The result was a seat that improves passenger comfort and safety, while reducing the weight and number of parts.

Using autodesk design tools like alias conceptual design and fusion 360 generative design it was able to redefine the seat design with dinner seats sections and improved comfort and safety.

Fusion 360 is commercial subscribers grew steadily ending the quarter with 205000 subscribers and demand for our new extensions, including machining generative design and nesting and fabrication continuing to grow at an exceptional pace.

In education engineering students are using fusion 360 to learn the skills of the future and institutions like group Center installment.

The largest further education College group in Wales students there are applying their studies to benefit local industry partners and businesses.

For example, students recently used fusion 360, <unk> cloud based data management and advanced <unk> machining to help our local RV manufacturer improve its output by about 50%.

And finally, we continue to bring more users into our ecosystem through business model innovation and license compliance initiatives when one of our EMEA customers realize that some usage from its international offices with Noncompliant it needed time and data to better understand its users before purchasing subscription by.

By purchasing our first ever 100000 pack of flex tokens, the customer gained instant access to autodesk portfolio of product and usage data to make informed decisions on its future subscription purchases. While also opening up new competitive opportunities for August during the quarter, we closed seven deals over five.

$500000 without with our license compliance initiatives three of which were over a $1 million.

Flex and premium are also helping customers transition from multi user to named user contracts, a leading supplier of concrete form work and scaffolding systems in Europe has been unifying internally around <unk> to accelerate its digital transformation. It added premium plan through its transition to the names trade ins to centralized software management.

Enable user based analytics and license optimization and benefit from single sign on security.

Can also purchase flex tokens to cover its occasional user needs.

Let me finish where I started.

Strong demand and robust competitive performance delivered excellent Q2 results.

And by moving from products to platform and capabilities and bringing those capabilities to any device anywhere to the cloud we are expanding our opportunity to horizon.

For us to talk more about that over the coming weeks months and years, we look forward to seeing many of you at <unk> University in a few weeks operator, we would now like to open the call for questions.

As a reminder to ask a question you will need to press star one one on your telephone please standby, while we compile the Q&A roster.

Our first question comes from the line of <unk> Kalia of Barclays.

Thank you Kelly your line is open.

Okay, Great, Hey, Andrew Hey, Debbie Thanks for taking my questions here.

Hey, Eric.

Excellent Yeah same here, Andrew maybe maybe first for you and maybe we will start to ship more.

Okay.

If you could expand a little bit on the comment around moving from products to platforms.

So that we can all talk about.

Yes.

As a platform has evolved but maybe you can just walk us through what that looks like in the future in terms of our platform from your perspective.

Yes.

Hi, I want to be careful not to give away all the all the au tidbits.

Are those discussions, but it's an important it's an important question and second.

Put in perspective, right now we saw literally one hundreds of products and the challenges for our customers is trying to find out which one of these products all of which problems for them and also the fact that a lot of these products don't talk to each other very easily so when youre selling one hundreds of product, it's really difficult to connect data flows across all of those capabilities. It's also really difficult to uniformly deliver.

Multiplatform support multi device support.

That will enable us to actually deploy capability to our customers as they need them from particular types of problems for instance, advanced manufacturing capabilities on a time basis, our consumption basis cumulation capabilities on a time bound basis, where consumption basis. So they get access to what they need when they need it and it's all you.

Unified from a data flow point of view this is kind of going to be revolutionary for a lot of our customers in terms of the evolution and where we're taking them. So it's really valuable for our customers in terms of connecting how they work and the value they get from each one of our products and it's really important to us in terms of delivering more layers of automation and power to them.

So it is a journey, it's not going to happen overnight, but fusion is an excellent example of where we're going and how we could deploy some of these things to our customers, especially when you look at the way extension to work consumption to work at the top of the fusion.

Platform, it's a good model for where we're taking industry platforms for each one of our industry.

Got it got it that's really helpful and it sounds like it'll be exciting at au.

From a follow up for you.

Can you just talk a little bit about the multiyear.

How are those renewals I know theyre starting to trickle in from three years ago in a bigger way how are those renewals kind of coming in versus your expectations and maybe looking forward. How do you plan on phasing that option out.

Sorry.

Sure. So we continue to track the multiyear cohort closely.

Our proportional volumes for multi years.

Been in line with our expectations for the first half of fiscal 'twenty three so that gives us confidence in our fiscal 'twenty three outlook.

Long term deferred revenue as a percent of total deferred revenue kick off that June was in line with our expectations.

As we look ahead to the transition from upfront to annual billing well it hasn't started yet we anticipate that the transition is going to start.

In early fiscal 'twenty, four and we continue to work through a programmatic and operational detail you got there.

The partner transition plan back office system upgrades.

Say again, our bias to go as quickly as possible in the meantime, obviously, we're focused on closing out this year, making sure that those multiyear has come in.

Circle pattern.

And the fact that they are giving us that confidence.

To achieve our goals for this year.

Yeah.

Got it very clear thanks, guys.

Thank you. Our next question comes from the line of Phil Winslow of Credit Suisse.

Winslow Your line is open.

Hey, guys. Thanks for taking my question and congrats on another quarter reinforcing how autodesk growth is simply not a cyclical anymore.

Andrew I wanted to focus on the AUC.

Andrew I just wanted to focus on the east side.

Because this is the.

Area that I get the most questions on in terms of cyclicality with two questions for you. Firstly what are you hearing from design customers. In this segment about what continues to drive your incremental spending on autodesk. Despite the cloudier macro and then secondly, the 45% quarter to quarter growth in our does build Emma used in the slide deck and your commentary on just the building connected volumes also released.

Stood out to us Similarly, what are you hearing from these construction customers about why they also continue to lean in on digitizing their workflows in spite of the macro or is this becoming because of the macro volatility that they are digitizing.

Thanks.

Okay.

Part question.

So first off let's talk about what we're hearing from design customers number.

The number one thing we are hearing from the design segment has a backlog of business.

Alright, thank they have they are.

Have more business right now and they are able to effectively execute on.

The requirements of that business are increasing in terms of what kind of tools they need to use how the annual approach the problems owners.

We were hearing last year, a lot of conversations about Oh boy fixed bid contracts.

Place Neri pressures in all of these things as Ive said previously they bake these things now into there.

Isn't it bids and theyre able to capture those costs in their contracts, but what theyre struggling with its hiring we're still growing even if they even as they struggled to hire because theyre getting people in but they have more demand or manpower in person power than they actually are able to capture at this point. Okay. So that's something we're hearing really robustly now let's go.

The growth in construction first off I wanted to give you my my quarterly disclaimer. When you look at the construction business to make number does not capture the full story on the construction business.

EBITDA growth attention the design bucket. So when you count how we're doing with our enterprise business agreements in the overall territory.

We grew close to 30% in that in that business. So that's really quite quite nice growth and what we're hearing and I am glad you picked up on the 45% growth in active users were hearing a couple of things.

One first off we've lit up.

Our territory business our partners in the territory.

<unk> is driving a lot of really nice growth in the U S and in Europe , and it's going to continue to drive that growth, that's bringing us closer to certain customers lower down in the market the mid market and below which I think a really important.

Point in our journey okay.

The only thing I want to talk about it when customers are starting to realize they need a lot more than just a <unk>.

Vas majority of the cost and complexity of a construction project is built in during the Preconstruction planning phase you get that wrong did wrong.

Come in with lower margins, you have more have more churn and complexity in your project. So this connection between design Preconstruction all the way to build is increasingly really important to their customers. So customers are taking a lot more time to evaluate what they are trying to invest in and I think you also probably noticed at least a little bit in the introductory commentary.

That infrastructure is a big play for US here, So department of Transportation and you saw Indiana, Virginia Department of transportation.

<unk> into our portfolio for looking at their future needs.

Hearing more and more of our departments of transportation that are really looking to upgrade and modify their staff to be much more designed to build on a much more modern cloud infrastructure. So there is a lot going on in construction, Phil and it's coming at us from multiple directions and right now it's all positive.

Awesome I appreciate all the details. Thank you keep up the great work.

Thanks Bill.

Thank you. Our next question comes from the line of Jay Alicia.

Griffin Securities Jetblue shower your line is open.

Hello, Good evening, Andrew Debbie and Simon.

Andrew.

You have <unk>.

Our calculation the largest R&D budget in your peer group.

You don't necessarily have the largest head count in R&D.

And so the question is particularly given your earlier comment about the large number of products, which are currently developing and having to manage.

How would you see or how you are working on.

Improving R&D.

R&D productivity or east activity, if you will.

In terms of your core platform Youre applications technology, and ultimately product usability to drive.

And they use and.

Further we're large in the installed base.

And then for Debbie you commented earlier with respect to your back office as part of your.

That's over the next number of years on that point could you comment on where you are in terms of your <unk>.

Operational capacity for the new licensing model and deliverables that youre going to have as you have been increasingly complex.

<unk> to customers in terms of flex and everything else Youre doing the platform and we mentioned.

Are you in fact going to have the requisite back office to handle all of that.

Full SaaS development talent that allows us to build out the core cloud capabilities continue to expand that talent resides in certain places and it has certain costs associated with it and we think thats. The right strategy, we don't hire a lot of R&D.

Head count it's associated specifically with customer specific development in say other parts of the world. So we do hire in specific areas because of what we're trying to do and when it comes to developer productivity you hit on a really important aspect of why do we have.

More and more as you see these this portfolio of platform capability, not only mature, but expand its going to increase the productivity of the teams that are looking at features that are facing particular industries and capabilities that are facing particularly in this industry. It's a big part of why we have these services and we're already starting to see some of those benefits.

Especially with regards to data flow, which is a an initiative driven primarily by the platform organization within Autodesk and it's being aligned across the various industries that make sure that we get the right kind of synergies and lift from our data API and our data connectivity.

Yes, you will see increasing productivity associated with it were definitely spending on quality overconfident over quantity and I think thats the right strategy for where we're at right now.

And then Jamie to answer your question about operational capacity for things like New business model I would say that we are.

Well on our way on this journey, but we still have.

Ground to cover in order to be wherever it needs to be and I think that thats, an appropriate place to be.

At this stage of the journey now of course, we we don't launch new business models and about the ability.

Which is why I asked one example, we are delaying the shift to annual billings until next year. So that we can spend the time that we need to be able to invest in our back office systems to make sure that we havent been customer experience and then we have the right controls and automation capabilities in the back office.

Lee This is something that we focus on not only to make sure that.

Pasadena to support new business models, but also so we can scale. If we wanted to achieve our long term growth aspirations, we need to continue to invest in our back office infrastructure in order to be able to scale efficiently effectively and in an automated way to do it.

Okay.

Thank you very much.

Thank you Jay.

Thank you. Our next question comes from the line of Matt Hedberg of RBC capital markets. Your question. Please Matt Hedberg.

Hey, Thanks, guys Andrew for you the growth in fusion 360 was really fantastic to hear can you can you talk about sort of where those where those subs are coming from are these greenfield or they replacements and maybe just a little bit more on sort of with a lot of obviously with a lot of alternatives fusion 360.

Yeah. So first off it's a bit of a mix a lot of these a lot of these are greenfield and that theyre acquiring design software connected to manufacturing software for the first time, but theres a lot of rip and replace going on I think you've probably heard me talk many times about how we're going into a channel.

Where people might have a seat of solid work in the Cedar Master Cam or some kind of other cam software understand fusion is all I need.

And where we've been consistently creating and growing subscribers from that type of business, but what we're seeing more and more and I think this is one of the things that is important about the user growth Youre seeing is that where we'd go where we've gone in and we started in some department are part of part of a particular company, we're starting to grow.

So the installed base within those companies so we're still bringing in new customers primarily.

Longest designed to make vector, but we're starting to grow within the accounts. We've captured this is the kind of flywheel you'd like to see as you start to mature business and we're starting to see some of that the reason people buy is there is there is there is.

There's three kind of vectors here that people pay attention. One of course is the price the pricing model for fusion is disruptive.

<unk>.

<unk> subscription base, it's not a re imagining of an existing perpetual business. Its a native subscription based business. It has it has extensions and things and consumptive model that allow people pay for what they use and manage how much it costs from the use of software they loved that too.

Love the designed to make integration and the and integration from the design process, all the way to actually programming and driving the machine on the shop floor.

Kind of merger and convergence of design and make something that's really valuable to a lot of people and the third thing might surprise you a little bit it's our Youtube community.

If the amount of content that's out there on Youtube, which by the way exceed even much more mature products that are out there in the market where people can not only learned how to do something infusion. They can learn how to do it exceptionally infusion is a very passionate very engaged and really very knowledgeable community that.

Publishing all of this content and people really buy for those reasons. They buy for the disruptive business model a bias of the design make integration and they buy for the fact that they can find just tutorial about just about anything you can think of to get really an expert level and the product.

Super Super helpful. Thank you for that and then Debbie.

Consistency is obviously really good to see the macro environment. This is not easy clearly, but the consistency was great I am wonder if you could talk a little bit about the linearity in the quarter and maybe what are you seeing thus far in August .

So the linearity that we saw during the quarter is consistent with what we've seen in previous periods I would say nothing newsworthy.

Obviously at this point, we're not commenting on what we're seeing in August .

Thank you.

Sure.

Thank you. Our next question comes from Adam Borg of Stifel.

Your line is open Adam Borg.

Got it thanks, so much for taking the question.

Just first for Andrew on the infrastructure Bill I know Thats, something we talked about in the past and you know the positive tailwind second half for Autodesk.

Just a quick update here and then as I think about the recently passed inflation reduction out there. So a lot of language in there about clean energy and sustainability of love to hear how you think about that impacting on the desktop and time as well.

Yes.

Remember there was a.

Seed money in that bill to enable departments of transportation to explore and expand digital transformation in their processes. This is bringing about a lot of introspection and thought within these departments and theyre starting to look at their next 10 year portfolio of tools and Theyre looking to buy ahead.

We need to plan and execute some of these infrastructure projects. We are absolutely seeing that early activity with regards to our relationship with large firms like AE com that engage in the infrastructure and how they're going to engage over the next 10 years and departments of transportation that have similar challenges at similar needs over the next 10 year period Okay.

That's something we're seeing what now with regards to the inflation reduction Act.

The jury is out on that alright.

Any anything that drive energy efficiency and sustainability is ultimately going to trickle down into what the requirements are for some of our customers, especially when electrification is becoming so important so youre going to see a lot more electrification of inefficiency spec for our customers, but unclear where that where that will fall.

Regards to impact on our business.

That's great and maybe just a quick follow up even on last question. Obviously, the 360 just on manufacturing more broadly would love to hear more about obtain and how that fits into the broader strategy you've been talking about here with us excuse me 460, <unk>. Thanks again.

Yes, so uptake is the data management layer that cloud native that allows us to actually not only manage the flow of fusion information of environment, but any other heterogeneous data that might exist in the environment all of our customers live in a heterogeneous world. We will never have a customer that is uniformly using just an autodesk.

Product or just autodesk portfolio, so not only did up chain bring us cloud native data management, but it also brings us heterogeneous management of this data and enabling the ability to manage this flow and reconcile things in the cloud, which has huge power for how people use data management in the future. If you look at the evolution of our chain, it's going to more and more just merge.

With some of the fusion lifecycle infusion managed capabilities, we already have and will become the native cloud data management platform for fusion.

That's where <unk> plays it's basically a deep and wide data data management platform in the cloud for us.

Excellent. Thanks again.

Youre very welcome.

Our next question comes from drove room, Inc.

Baird. Your question please <unk>.

Great. Thank you I guess I'll stick on manufacturing, because I think to get 16% growth there.

Yeah. So you picked up on something we're growing faster than any of our competitors. So we continue to take share in manufacturing and yes, you are right, it's our whole portfolio.

Continuing to.

<unk> share in manufacturing and why is that.

And that allows you to not only feel good about the product you get today, but know that youre hooked up to where the company is going over the next 510 years and I think that's a real competitive advantage for us in terms of how we bring technology to market, but you're also seeing a blend new types of technologies into the workflows that our customers are trying to do in automotive and other.

I think one of the things that was interesting about what I said in my opening commentary with the blending of both the wild and V Red which is.

The wild with a very early acquisition and then we have DRAM, which is an existing mature technology people are exploring the intersections of various technologies that we have and you probably picked up on the fact that our strength in manufacturing has extended more into facilities management with large large manufacturers and looking to manage their actual factory assets. So there is overlap.

<unk> associated with those things and there is some overlap with our <unk> business with regards to that but those are the things that are kind of driving our growth in manufacturing you're right. It's the whole portfolio. The whole portfolio is moving forward and Youre also seeing tremendous growth with future right. We have to maintain that we like what we see but customers like what we're doing.

<unk>.

Okay, that's great.

And then just trying to put the pieces together with guidance, so you're raising the organic forecast by a debt.

Still sounds like assumes the same underlying macro.

You're raising the organic forecast by a bet.

Still sounds like assumes the same underlying macro assumptions. So ultimately it's autodesk execution, that's driving the organic raise I guess, what is the driver of better than expected performance there.

That good performance there.

Ultimately it is about execution, but as the momentum in the business.

Particularly as we exited Q2, so here's how we're thinking about guidance, we had that slight beat in Q2.

We kept our full year guidance flat net of the currency headwinds the guidance does reflect the demand environment at least as we exited Q2, that's consistent with what we've done with previous quarters. The business continues to perform strongly we have that resilient subscription business model, which is durable during a potential.

Paul economic downturn, and we exited Q2 as I said with strong momentum. So these are all the factors that are baked into our guidance.

Also want to point out that.

We did retain a range of $50 million on revenue that gives us some flexibility, especially with that subscription business model, which is more predictable.

A significant portion of our future revenues already on the balance sheet.

Great. Thank you.

Thank you. Our next question comes from Jason <unk> of Keybanc capital markets, Jason Celaeno. Your line is open.

Great. Thanks.

It's good to hear the strong bidding activity through building connected.

With customer backlogs still lengthened and these hiring challenges that you keep hearing about is there any change to the lead time on the projects being bid on I guess, what I'm asking is is the business strong activity youre seeing for next year following year.

How does that kind of pan out.

That is an excellent question.

Im not sure I can answer it in a satisfying way, but here's what I will say.

Current bidding activity as a predictor of future build activity bidding and with contractors and other things.

An early process and actually executing a project. So when you see an increase in bid activity on building connected what Youre actually seeing is an increase in the book of business that are projects that will actually get executed downstream right. So this is a good predictor of.

Ongoing activity as you've been down when you close a bit you actually then move into execution with that particular sub contractor and some of things associated with that so it does give us the forward indication of how much spike activity is going to be happening and how much actual.

Building is going to be going on and that's why they're one of the reasons why we highlighted one of the reasons, we value that connection bid activity. So much not exactly what you asked but that's that's the depth that I can answer at this point.

Perfect and then on an advice I think you mentioned that kind of in one deal in your prepared remarks, but.

How is it performing any change to win rates since you've acquired it and then I think at some point there was going to be some sort of subscription effort transition for the existing base.

Any worthwhile update there.

Yes, so antibodies continues to perform well, it's doing particularly well in terms of our EMEA businesses a lot of our enterprise business agreement customers are looking to incorporate <unk> into their contracts with us, which which is exactly what are the thing what are the big synergies we expected when we when we acquired <unk> device they have begun.

<unk>.

The owner side have been advised where they're where they're building solutions that actually manage the operation of the water facilities.

Perfect. Thanks, Andrew.

Thank you Jason.

Thank you. Our next question comes from Michael Funk of Bank of America Microphones. Your line is open.

Yes. Thank you for the question, Steve maybe just a couple if I if I could in respect to the comments on the uniformity of products.

If you move to a platform or to say you don't want to tip your hand here, but.

How heavy of a lift.

Yes.

What is the timing involved and then addition to the increased attractiveness for customers other efficiencies that will accrue to autodesk as well bye.

By adding more uniformity.

Cross platforms.

<unk> spending on a lot of things go double spend for some time, but the journey. The journey is not new to us fusions quite mature auc's. Beginning this journey started with some of the cloud native acquisitions, we did particularly around what we did with space maker a team that had been very much focused on the future.

Some of the discussions we will have later, but yes. There are long term synergies here, we are absolutely and we'll continue to double spend for a period of five to 10 years.

Product product overlap for a long time, and we've been through several transformation the product Autocad and rabbit.

Mechanical desktop and adventure in the past for those of you who are familiar with some of those names and yes. The overlap it takes a while but eventually what happens is most of the engineering effort and capability goes to the new platform.

We have all the way in that direction.

Understood, Yes long term complex project.

The earlier comments on the on the delay in the shift to annual billing just wanted to make sure I completely understood. The comment that you wanted to make sure that the processes.

We're better than they are now in the back office Thats better than it is right now and if that's correct I guess what were the issues that you were seeing that you wanted to streamline just to make that a more enjoyable process for the customer.

Yeah, So first slips once levels.

Our intention to move from a multiyear upfront annual billings was always intended to start at the beginning of next next year. So that's not any change that we've made on our side and the reason why we did that was twofold, one we needed to invest in our back office systems and infrastructure to make sure that we can execute on this.

<unk> mission at scale in an automated way such that our customers would have customer experience and we would have the controls and automated processes in place that we need in our back so that's point number one.

Maybe more importantly, as point number two our partners are really important part of our ecosystem and so it was important to us to give them.

Advance notice.

Turning back to our last Investor day that we intended to embark on this journey. So that we could work together with them to build the programs policies and all the things that we needed to do to make sure that they were along with us on the journey and that the entire ecosystem benefits from the shift to annual billings because just like it.

I'll be predictable for us to have an annual billing cycle, so too will it be for our customers and our partners.

Needed time to plan and so.

We wanted to make sure that we were collaborating with them in a healthy manner as we move towards this transition.

That's great that's great color. Thank you.

Thank you. Our next question comes from Bob <unk> of Deutsche Bank.

Bobby Your line is open.

Sure Andrew we continue to hear very good things that I think collaborate pro within the architecture and engineering customer base can you give me a better help us understand where we are in terms of adoption of collaborate pro within like the revenue customer base and how we should think about the adoption curve going forward.

Yes, so excellent question.

It's still actually really early I mean, Jim collaborate pro continues to grow robustly.

As you recall when we were during the pandemic, we saw quite the surge and the camera and the adoption of that product and the adoption of it as continued post the pandemic period as more and more people become aware of the capabilities of the collaborate pro in terms of total penetration into the revenue base. It's still really early days in terms of penetrating.

The vast majority of the revenue base in fact, interestingly enough one of the biggest request we get is to make them collaborate pro work as robustly with civil <unk> as it does with rabbit and Thats something that were addressing which is another vector where the collaborate pro is going to be able to penetrate the infrastructure space as well still really early.

Early days, though in total penetration of the revenue base continues to grow it's an on ramp to.

But digital Preconstruction and Autodesk construction cloud in many ways and we.

We're really happy with the way customers are adopting that it was one of the.

One of the unexpected silver linings of the turmoil in tragedy, the pandemic that customers. Finally realized that that is a utility that is valuable to them now and in the future.

Thanks, Jonathan.

I guess, along those lines any kind of estimate that this a little bit like in terms of adoption here have you seen that accelerate customer journeys toward.

Some of your other cloud based solutions that you guys offer.

Yes, it absolutely does.

It has been.

I hesitate to call it an on ramp through to our full portfolio of cloud solutions, but what it does is it gives our customers a lot of confidence in how the cloud actually changes their processes. They actually start to understand that while this isn't just better it's actually different and better and.

It allows them and empower them and encourages them to explore some of the other capabilities, maybe I should be doing a preconstruction planning in the cloud. So if im doing preconstruction planning in the cloud I should be doing online site management in the cloud as well so it absolutely demystify the cloud for them and shows some of the core benefits.

It really does educate a lot of our customer base on why the cloud matters and why it's so important to their distributed and highly collaborative future.

Thank you Bob.

Okay.

Alright, well go to our next question will come from the line of Gal Munda of <unk>.

Research Gal Munda your line is open.

Okay. Thank you for taking my questions, maybe Andrew just for you to start.

You are calling out the noncompliant users again.

Seems like you are running roughly at.

The run rate that you were pre pandemic again.

How much of that is just having a flex model being able to.

Being able to go more effectively towards your accounts they already pay you, but maybe not.

And now we have a tool in order to monetize that and maybe just how big it could be in the future as you embark on that opportunity.

Yes, so actually Gal youre picking up on something that was implied in the opening commentary that flex is a highly valuable tool. When you go and you reach the Noncompliant users and a lot of cases, what's your what's your finding in a noncompliant usage situation is it a multi user situation gone bad alright, where they've over install.

<unk> software or they have tried to use software and unlicensed ways and what they are what they are really trying to do is distribute usage.

Enable occasional usage in some of the things associated with that flex is an excellent way to walk into some of those accounts and in a collaborative manner get them exploring other ways of engaging with Autodesk and absolutely will have some positive impacts on how we do license compliant business now as we look broadly at flex again, it's still <unk>.

Really early days reflects we continue to see growth and we continue to see a lot of new users coming in with flex one of the growth factors for flex that I'm, particularly excited about it and the long tail of our business.

What flex allows you to do if you're in a smaller company say youre in a five person company and you want to occasionally use rebate for some of the projects you built bid on but the vast majority of your projects or autocad or you want to engage its structural stimulation for particular product the flex model less people dabble in less people engage with it.

Vance functionality and advanced capabilities.

We'll see where that heads that's one of the areas that I think is very interesting.

And as that is all the time, we have for questions I'd like to turn the call back over to Simon Mays Smith for any closing remarks.

Thanks, everyone for joining us.

Look forward to seeing many of you at au.

As you divest in a few weeks' time in New Orleans.

Good afternoon.

Thanks.

Thanks, everyone.

Yeah.

This concludes today's conference call. Thank you for participating you may now disconnect.

Q2 2023 Autodesk Inc Earnings Call

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