Q1 2025 Autodesk Inc Earnings Call

Okay.

Operator: Thank you for standing by, and welcome to Autodesk's first quarter fiscal year 2025 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 11 on your telephone. To remove yourself from the queue, you may press star 1 1 again.

Speaker Change: And thank you for standing by and welcome to Autodesk first quarter fiscal year 2025 earnings Conference call. At this time all participants are in a listen only mode. After the speaker presentation. There will be a question answer session.

Operator: 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. To remove yourself from the key, you may press star one-one again.

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

Speaker Change: Moves yourself from the queue you May press Star one one again I would now like to hand, the call over to Simon Mays Smith VP Investor Relations. Please go ahead.

Simon Mays: I would now like to hand the call over to Simon Mays Smith, VP, Investor Relations. Please go ahead. Thanks, Operator, and good afternoon. Thank you for joining our conference call to discuss the first quarter results of Fiscal 25. On the line with me is Andrew Anagnost, our CEO. During this call, we will make forward-looking statements, including outlook and related assumptions, products, and strategies. However, actual events or results could differ materially.

Simon Mays: I would now like to hand the call over to Simon Maysmith, VV Investor Relations. Please, please go ahead.

Simon Mays: Please refer to our SEC filings, including our most recent Form 10-K and 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.

Andrew Anagnost: Thanks operator, and good afternoon. Thank you for joining our conference call to discuss the first quarter results of Autodesk fiscal 25. On the line with me is Andrew Anagnost, our CEO. During this call, we will make forward-looking statements, including outlook and related assumptions, products, and strategies. Actual events or results could differ materially. Please refer to our SEC filings, including our most recent Form 10-K and 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.

Thanks, operator, and good afternoon. Thank you for joining our conference call to discuss the first quarter results of orders that fiscal 'twenty five.

Speaker Change: The line with me is Andrew and Ignacio.

Speaker Change: During this call we will make forward looking statements, including outlook and related assumptions products and strategies.

Speaker Change: Actual events or results could differ materially.

Speaker Change: Please refer to our SEC filings, including our most recent Form 10-K and 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.

Speaker Change: 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.

Andrew Anagnost: If this call is replayed or reviewed after today, the information presented during the call may not contain current or accurate information. Or does this discuss any obligation to update or revise any forward-looking statements? We will quote several numerical growth changes during this call as we discuss our financial performance. In this, otherwise noted, each such reference represents a year-on-year comparison.

Simon Mays: Autodesk disclaims any obligation to update or revise any forward-looking statement. We will quote several numerical growth changes during this call as we discuss our financial performance. Unless otherwise noted, each such reference represents a year-on-year comparison.

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

Speaker Change: We will quote several numerical growth changes during this call as we discuss our financial performance.

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

Andrew Anagnost: All non-GAAP numbers referenced in today's call are reconciled in our press release or Excel financials and other supplemental materials available on our Investor Relations website.

Speaker Change: All non-GAAP numbers referenced in today's call are reconciled in our press release, <unk> financials, and other supplemental materials available on our Investor Relations website.

Simon Mays: All non-GATT numbers referenced in today's call are reconciled in our press release or Excel financials and other 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. As I'm sure you can appreciate with legal matters, I'm restricted in what I can say regarding the Audacity investigation, but let me say what I can.

Andrew Anagnost: And now, I will turn the call over to Andrew. Thank you, Simon, and welcome everyone to the call. As I'm sure you can appreciate, what legal matters like this. I'm restricted in what I can say regarding the audit can be investigation, but let me say what I can. The summary findings of the audit committee investigation are in our May 31 press release and recently filed Form 10-K. Please refer to those documents for details. We don't have further commentary beyond what we have described there. Regarding the process, we also covered that in detail in our press release.

Speaker Change: Now I will turn the call over to Andrew.

Andrew Anagnost: The summary findings of the Audit Committee investigation are in our May 31st press release and recently filed Form 10-K. Please refer to those documents for details. We don't have further commentary beyond what we have described there. Regarding the process, we also covered that in detail in our press release. The investigation took time to complete because it was rigorous and covered all three years included in the 10-K. Betsy Raphael has been appointed by the board as interim chief financial officer. We have initiated a selection process for a new chief financial officer. The board and I are very focused on finding the right candidate.

Andrew: Thank you Simon and welcome everyone to the call.

Andrew: I'm sure you can appreciate with legal matters like this I am restricted in what I can say regarding the audit Committee investigation, but let me say what I can the summary findings of the audit Committee investigation or in our May 31 press release, and recently filed Form 10-K. Please refer to those documents for details. We don't have further commentary beyond what we have.

Andrew: Described there.

Andrew: Regarding the process. We also cover that in detail in our press release. The investigation took time to complete because it was rigorous and covered all three years included in the 10-K.

Andrew Anagnost: The investigation took time to complete because it was rigorous and covered all three years included in the 10-K.

Andrew Anagnost: Best few hospitals that are pointed by the board as interim Chief Financial Officer. We have initiated a selection process for a new Chief Financial Officer. The board and I are very focused on finding the right candidate. In the interim, we are in great hands with Betsy, and Debbie will continue to contribute to the business in our new capacity as Chief Strategy Officer. With the conclusion of the investigation, we have determined that there will be no restatement or adjustment of any audit it or unaudited, filed or previously announced a gap or non-gap financial statement. And as we'll discuss in more detail shortly, we are already underway in the transition to annual billing, with the trough and free cash flow behind us.

Andrew: Betsy Rafael has been appointed by the board as interim Chief Financial Officer, We have initiated the selection process for a new Chief Financial Officer, The board and I are very focused on finding the right candidate.

Andrew Anagnost: In the interim, we are in great hands with Betsy, and Debbie will continue to contribute to the business in her new capacity as Chief Strategy Officer. With the conclusion of the investigation, we have determined that there will be no restatement or adjustment of any audited or unaudited, filed or previously announced GAAP or non-GAAP financial statements. And, as we'll discuss in more detail shortly, we are already underway in the transition to annual billing with the trough and free cashflow behind us.

Andrew: In the interim we are in great hands, with Betsy and Debbie will continue to contribute to the business and our new capacity as chief strategy Officer.

Andrew: With the conclusion of the investigation, we have determined that there will be no restatement or adjustment of any audited or unaudited filed or previously announced GAAP or non-GAAP financial statements.

Andrew: And as we'll discuss in more detail. Shortly we are already underway and the transition to annual billing with the trough in free cash flow behind us the mechanical stacking of multiyear contracts are larger enterprise cohort in our largest product subscription cohort will provide a tailwind to free cash flow in fiscal 'twenty six.

Andrew Anagnost: The mechanical stacking of multi-year contracts, a larger enterprise cohort, and our largest product subscription cohort will provide a tailwind of free cash flow in fiscal 26. We appreciate your patience as we work through this important process. We take situations like this very seriously and are grateful to put the investigation behind.

Andrew Anagnost: The mechanical stacking of multi-year contracts, a larger enterprise cohort, and our largest product subscription cohort will provide a tailwind of free cashflow in fiscal 2020. We appreciate your patience as we work through this important process. We take situations like this very seriously and are grateful to put the investigation behind us.

Speaker Change: We appreciate your patience as we work through this important process, we take situations like this very seriously and are grateful to put the investigation behind us.

Unknown Executive: Mindus.

Andrew Anagnost: Now let's move on to our strong first. Autodesk's resilience, discipline, and opportunity again underpinned our robust financial and competitive performance. Our resilience is fortified by our subscription business model and our diversified product and customer portfolio. Renewal rates remain solid, and the momentum of new business growth and key performance indicators is consistent with the previous quarter, evidenced by increased product usage, record bid activity on Building Connected, and cautious optimism from our channel partners.

Andrew Anagnost: Now let's move on to our strong first quarter results. Autodesk resilience, discipline, and opportunity, again, underpinned our robust financial and competitive performance. Our resilience is fortified by our subscription business model and our diversified product and customer portfolio. Renewal rates remain solid, and the momentum of new business growth and key performance indicators are consistent with the previous quarter. Evidence by increased product usage, records bid activity on building connected and cautious optimism from our channel partners. Our discipline and focus approach in executing our strategy and deploying capital throughout the economic cycle in powers ordered us to realize the significant benefits of strategy while mitigating the risk of expensive catch-up investments in the future.

Speaker Change: Now, let's move on to our strong first quarter results.

Speaker Change: Autodesk resilience discipline and opportunity again, underpinned, our robust financial and competitive performance.

Speaker Change: Brilliant this qualified by our subscription business model and our diversified product and customer portfolio renewal rates remained solid in the momentum of new business growth in key performance indicators are consistent with the previous quarter evidenced by increased product usage record bid activity on building connected and cautious optimism from our channel partners.

Andrew Anagnost: Our disciplined and focused approach to executing our strategy and deploying capital throughout the economic cycle empowers Autodesk to realize the significant benefits of its strategy while mitigating the risk of expensive catch-up investments in the future. As our customers migrate to our industry clouds and utilize our high-value AI products... Our investments in the cloud will continue to grow. At the same time, the new transaction model will allow us to optimize our sales and marketing, and we expect Autodesk Platform Services will, over time, boost the velocity and efficiency of our R&D.

Speaker Change: Our.

Speaker Change: Alan and focused approach in executing our strategy in deploying capital throughout the economic cycle and powered audit is to realize a significant benefits of our strategy, while mitigating the risk of expensive catch up investments in the future.

Andrew Anagnost: As our customers migrate to our industry clouds and utilize our high value AI products and services. Our investments in the cloud will continue to grow. At the same time, the new Transaction model will allow us to optimize our sales and marketing. And we expect to order this platform services will over time boost the velocity and efficiency of our R&D. By optimizing the allocation of our resources, we can invest to compound revenue growth and market share gain while also driving margin improvement and free cash flow growth over time. Reductions in stock-based compensation is a proportion of revenue will provide an additional tail-wing to gap margin while our transition to annual billing from multi-year contracts will amplify free cash flow growth over the next few years.

Speaker Change: As our customers migrate to our industry cloud and utilize our high value AI products and services.

Our investments in the cloud will continue to grow at the same time, the new transaction model will allow us to optimize our sales and marketing and we expect the Rguest platform services will over time boost the velocity and efficiency of our R&D.

Andrew Anagnost: By optimizing the allocation of our resources, we can invest in compound revenue growth and market share, while also driving margin improvement and free cash flow growth. Reductions in stock-based compensation as a proportion of revenue will provide an additional tailwind to growth.

Speaker Change: By optimizing the allocation of our resources, we can invest the compound revenue growth and market share gains, while also driving margin improvement and free cash flow growth over time reductions.

Speaker Change: The reduction in stock based compensation as a proportion of revenue will provide an additional tailwind to GAAP margin, while our transition to annual billings for multi year contracts will amplify free cash flow growth over the next few years we.

Andrew Anagnost: While our transition to annual billing from multi-year contracts will amplify free cash flow growth over the next few years, we believe that constant resource optimization and our long-term investment horizon have positioned us ahead of our peers in cloud, platform, and we intend to retain and extend that lead while also driving to an industry-leading rule of 40 ratio of 45 or more. Our Project Bernini announcement on May 8th is a great example of what I mean.

Andrew Anagnost: We believe that constant resource optimization and our long-term investment horizon has positioned us ahead of our peers and cloud platform and AI. We intend to retain and extend that lead while also driving to an industry-leading Rule of 40 ratio of 45 or more.

Speaker Change: We believe the constant resource optimization, and our long term investment horizon and positioned US ahead of our peers and cloud platform and AI.

Speaker Change: We intend to retain and extend that lead while also driving to an industry, leading a rule of 40 ratio of 45 or more.

Andrew Anagnost: Our project Bernini announcement on May 8th is a great example of what I mean. Bernini uses generative AI to quickly generate functional 3D shapes from a variety of inputs, including 2D images, tests, vossoles, and point clouds. Bernini is different from other AI models in five important ways. First, Bernini is trained on 3D data, rather than commoditized external imagery, and it's therefore capable of reasoning on the internal structure of an object. Second, Bernini generates shapes and texture separately and does not confuse or meld those variables. Third, Bernini can be conditioned on multiple types of input data and is therefore applicable across a much greater spectrum of workflows.

Speaker Change: Our project for anemia announcement on May eight is a great example of what I mean.

Andrew Anagnost: Bernini uses generative AI to quickly generate functional 3D shapes from a variety of 2D images, text, voxels, and points. It is different from other AI models in five important ways. First, it is trained on 3D data, rather than commoditized external imagery, and it's therefore capable of reasoning on the internal structure of an object. Second, it generates shape and texture separately and does not confuse or meld those variables.

Speaker Change: The remaining uses generative AI to quickly generate functional <unk> shape from a variety of inputs, including to the images text Vauxhall endpoint cloud.

Andrew Anagnost: Third, Bernini can be conditioned on multiple types of input data and is therefore applicable across a much greater spectrum of work. Four, it generates many design options from a single set of inputs, which better serves the creative process of design. Finally, it can be quickly and cost-effectively fine-tuned on a customer's existing 3D repository to align to the unique creative need. Autodesk AI will enable Autodesk to create more valuable data-driven products and services. It will automate low-value and repetitive tasks, generate more high value complex tasks.

Speaker Change: Bernini is different from other AI models in five important ways.

Speaker Change: First for media trained on three D data, rather than Commoditized external imagery, and therefore capable of reasoning on the internal structure of an object.

Speaker Change: Second bernini generate shape and texture separately and does not confuse our meld those variables.

Speaker Change: Third Bermuda can be conditioned on multiple types of input data and is therefore applicable across a much greater spectrum of workflows.

Andrew Anagnost: Fourth, Bernini generates many design options from a single set of inputs, which better serves the creative process of designers. And fifth, Bernini can be quickly and cost-effectively fine-tuned on a customer's existing 3D repositories to align to the unique creative needs of a particular organization. Art of AI will enable Autodesk, its customers, and partners to create more valuable, data-driven, and connected products and services. It will automate low value and repetitive tasks and generate more high value complex designs more rapidly and with greater consistency. Over time, Autodesk platform services will enable greater engineering velocity and efficiency and support a much broader developer ecosystem in March.

Speaker Change: Four bernini generate many design options from a single set of inputs, which better serve the creative process of designers and fifth <unk> can be quickly and cost effectively fine tuned on our customer's existing three D repository to align to the unique creative needs of a particular.

Speaker Change: Innovation.

Speaker Change: RFP AI will enable autodesk as customers and partners to create more valuable data driven and connected products and services. It will automate low value and repetitive tasks and generate more high value complex design more rapidly and with greater consistency.

Andrew Anagnost: Over time, Autodesk Platform Services will enable greater engineering velocity and efficiency and support a much broader developer ecosystem and market. Autodesk is ahead of its peers in 3D AI, platform, and business model evolution that will be needed to deliver 3D AI products and services at scale. We are well on the way to reasoning about all We will update you as we make further progress. Let's move on to our quarterly financial performance and guidance for the second quarter in a row. Q1 was a strong quarter. We generated broad-based growth across products and regions in AEC and manufacturing, which was partly offset by softness in China and in media, the latter being primarily due to the lingering effects of the Holocaust.

Speaker Change: Overtime.

Speaker Change: This platform services will enable greater engineering velocity and efficiency and support a much broader developer ecosystem and marketplace.

Andrew Anagnost: Marketplace. Autodesk is ahead of its peers in 3D AI and industry clouds, platform and business model evolution that will be needed to deliver 3D AI products and services at scale. We are well on the way to reasoning about all CAD geometry.

Speaker Change: Autodesk is ahead of its peers in <unk>, AI and industry cloud platform and business model evolution that will be needed to deliver <unk> AI products and services at scale.

Speaker Change: We are well underway to reasoning about all CAD geometry, we will update you as we make further progress.

Andrew Anagnost: We will update you if we make further progress.

Andrew Anagnost: Let's move on to our quarterly financial performance and guidance for the second quarter in the full year. Q1 was a strong quarter. We generated broad-based growth across products and regions in AEC and manufacturing, which was partly offset by softness in China and immediate entertainment. The latter being primarily due to the lingering effects of the Hollywood strike. Overall, macroeconomic, policy, and geopolitical challenges and the underlying momentum of the business were consistent with the last few quarters. If we compare first quarter revenue with guidance, the outperformance was mainly due to that broad strength, with the timing of pricing increases also improving revenue linearity during the quarter.

Speaker Change: Let's move on to our quarterly financial performance and guidance for the second quarter and the full year.

Speaker Change: Q1 was a strong quarter, we generated broad based growth across products and regions and ADC in manufacturing, which was partly offset by softness in China and in media and entertainment the latter being primarily due to the lingering effects of the Hollywood strike.

Andrew Anagnost: Overall, macroeconomic policy and geopolitical challenges and the underlying momentum of the business were consistent with the last few quarters. If we compare first quarter revenue with guidance, the outperformance was mainly due to that broad strength with the timing of price increases, also improving revenue linearity during the. The impact of the new transaction model was immaterial in the first instance; total revenue grew 12% and 13% by product and content. AutoCAD and AutoCAD LT revenue grew 10%. AEC revenue grew by 17%.

Speaker Change: Overall macroeconomic policy and geopolitical challenges in the underlying momentum of the business were consistent with the last few quarters.

Speaker Change: If we compare first quarter revenue with guidance. The outperformance was mainly due to that broad strength with the timing of price increases also improving revenue linearity during the quarter.

Andrew Anagnost: The impact of the new transaction model was in material in the first quarter. Total revenue grew 12% and 13% in constant currency. By product in constant currency, AutoCAD and AutoCAD LT revenue grew 10%. AEC revenue grew 17%. Manufacturing revenue grew 11% and M&E grew 3%. By region and constant currency, revenue grew 12% in the Americas, 14% in the MIA, and 14% in APAC. Direct revenue increased 20% and represented 38% of total revenue, up 3 percentage points from last year, benefiting from strong growth in both EBAs and the RDS store. Net revenue retention rate remained within the 100% to 110% range at constant exchange rates.

Speaker Change: The impact of the new transaction model was immaterial in the first quarter.

Speaker Change: Total revenue grew 12% and 13% in constant currency.

Speaker Change: By product and constant currency, Autocad, and Autocad LT revenue grew 10%.

Speaker Change: <unk> revenue grew 17% manufacturing revenue grew 11% and M&A grew 3%.

Andrew Anagnost: Manufacturing revenue grew 11%. M&E Group, three, by region and constant, revenue grew 12% in the Americas, 14% in the MIA, and 14% in April.

Speaker Change: By region in constant currency revenue grew 12% in the Americas, 14% in EMEA and 14% in APAC.

Andrew Anagnost: Direct revenue increased 20% and represented 38% of total revenue, up three percentage points from last, benefiting from strong growth in both EBAs and Autodesk. Net revenue retention rate remained within the 100 to Constant Exchange Rates. Billings declined 5% in the quarter as a result of the transition from upfront to annual billings for multi-year contracts.

Speaker Change: Direct revenue increased 20% and represented 38% of total revenue up three percentage points from last year benefiting from strong growth in both EMEA and the outlet store.

Speaker Change: Net revenue retention rate remained within the 100 to 110 percentage range at constant exchange rates.

Andrew Anagnost: As expected, billions declined 5% in the quarter as a result of the transition from upfront to annual billing from multi-year contracts. For the same reason, total deferred revenue decreased 12% to 4 billion. Total RPO of 5.9 billion and current RPO of 3.9 billion grew 9% and 12% respectively. Which continues to benefit from the EBA strength we saw in the second half of fiscal 24, and current RPO also benefited by about a point from early renewals. According to our P&L, GAP and non-GAP growth margin will broadly level. GAP and non-GAP operating margin increased by 4 and 3 percentage points, respectively.

Speaker Change: As expected billings declined 5% in the quarter as a result of the transition from upfront to annual billing for multiyear contracts for the same reason total deferred revenue decreased 12% to $4 billion.

Andrew Anagnost: For the same reason, total deferred revenue decreased 12% to $4 billion, while total RPO of $5.9 billion and current RPO. 3.9 billion, grew 9% in 12, which continued to benefit from the EBA strength we saw in the second half of fiscal 24, and current RPO also benefited by about a point from early renewal. Turning to our, gap and non-gap growth margin, while gap and non-gap operating margin increased by four and three percentage points per second, part reflecting the absence of costs we encouraged last year to repurpose roles.

Speaker Change: Total <unk> of $5 9 billion in current <unk> of $3 9 billion grew 9% and 12%, respectively, which continued to benefit from the EPA strength. We saw in the second half of fiscal 'twenty four and current <unk> also benefited by about a point from early renewals.

Speaker Change: Turning to our P&L GAAP and non-GAAP gross margin were broadly level, while GAAP and non-GAAP operating margin increased by 4% and three percentage points, respectively in part, reflecting the absence of costs, we incurred last year to repurpose role.

Andrew Anagnost: In part reflecting the absence of cost we incurred last year to repurpose roles. At current course and speed, the ratio of stock-based compensation as a percent of revenue peaked in fiscal 24, will fall by more than a percentage point in fiscal 25, and will be below 10% over time. Free cash flow for the quarter was 487 million, driven by collections of prior quarter billing and strong results in the current quarter. During the capital allocation, we continue to actively manage capital within our framework and deploy it with discipline and focus through the economic cycle to drive long-term shareholder value.

Andrew Anagnost: At current course and speed, the ratio of stock-based compensation as a percent of revenue peaked in fiscal 2020 and will fall by more than a percentage point. Pre-cash flow for the quarter was $487 million, driven by collections of prior quarter billings and strong results in the current year.

Speaker Change: At current course and speed the ratio of stock based compensation as a percent of revenue peaked in fiscal 'twenty four will fall by more than a percentage point in fiscal 'twenty, five and will we be below 10% overtime.

Speaker Change: Free cash flow for the quarter was $487 million driven by collections of prior quarter billings and strong results in the current quarter turning to capital allocation. We continue to actively manage capital within our framework and deploy it with discipline and focus through the economic cycle to drive long term shareholder value in the quarter, we acquire.

Andrew Anagnost: Turning to capital allocation, we continue to actively manage capital within our framework and deploy it with discipline and focus through the economic cycle to drive long-term shareholder value. In the quarter, we acquired payouts and PICs for a total of $653 million, which, with the late filing of our Form 10-K, meant we only purchased approximately 30,000 shares for $9 million at an average price of approximately $255 per share during the quarter. We will continue to repurpose shares opportunistically to offset dilution from stock-based compensation when it makes sense.

Andrew Anagnost: In the quarter, we acquired payouts and picks for a total of $653 million, which, with the late filing of our form 10-K, meant we only purchased approximately 30,000 shares for $9 million. An average price of approximately $255 per share during the sale of $1.255 per share during the sale of $1.255 per share during the sale of quarter, we will continue to repurpose shares opportunistically to offset dilution from stock-based compensation when it makes sense to do so.

Speaker Change: <unk> payout and pitch for a total of $653 million, which with the late filing of our Form 10-K meant we only purchased approximately 30000 shares for 9 million at an average price of approximately $255 per share during the quarter.

Speaker Change: We will continue to repurchase shares opportunistically to offset dilution from stock based compensation when it makes sense to do so.

Andrew Anagnost: Moving on to guide, Overall, end market demand has remained pretty consistent over many quarters; macroeconomic and one-off factors like the Hollywood strike have dragged on new business growth and continue to drag on revenue, but Autodesk's resilient and robust underlying demand for its products reinforces its long-term growth momentum. With regard to revenue guidance, we highlighted some puts and takes last quarter that impact fiscal 25 revenue growth. I refer you back to our comments. The new transaction model implementation is on track. Australia and New Zealand are performing in line with our expectations. North America went live yesterday.

Andrew Anagnost: Moving on to guidance. Overall, end-market demand has remained pretty consistent over many quarters. Macro economic and one-off factors like the Hollywood strike have dragged on new business growth and continued to drag on revenue growth. But our resilience and robust underlying demand for its products and services reinforces long-term growth momentum and potential.

Speaker Change: Moving on to guidance.

Speaker Change: Overall end market demand has remained pretty consistent over many quarters macroeconomic and one off factors like the Hollywood strike have dragged on new business growth and continued to drag on revenue growth, but autodesk resilient and robust underlying demand for its products and services reinforce that long term growth momentum and potential.

Speaker Change: <unk>.

Andrew Anagnost: Once regards the revenue guidance, we highlight some puts and takes left quarter that impacts fiscal 25 revenue growth and refer you back to our comments then. The new transaction model implementation is on track; Australia and New Zealand are performing in line with our expectations. North America went live yesterday. As we said last quarter, our fiscal 25 guidance assumes the new transaction model is deployed in North America and provides about a 1 percentage point tailwind to Autodesk revenue growth and a 3 to 4% tailwind to building a growth. Once the North America launches successfully underway, we will likely start communicating our plans to channel partners and customers in part of the Mia and Japan.

Speaker Change: With regards to revenue guidance, we highlighted some puts and takes last quarter that impacts fiscal 'twenty five revenue growth and refer you back to our comments then the.

The new transaction model implementation is on track, Australia, and New Zealand are performing in line with our expectations North America went live yesterday.

Andrew Anagnost: As we said last quarter, our fiscal 25 guidance assumes the new transaction model is deployed in North America and provides about a 1 percentage point tailwind to Autodesk's revenue growth and a 3 to 4 percent tailwind to Billings. Once the North America launch is successfully underway, we will likely start communicating our plans to channel partners and customers in parts of EMEA and Japan. We modeled various possible scenarios at the start of the year, reflecting different potential launch dates, channel partner behavior ahead of launch, the mechanics of the transition, and a host of other factors.

Speaker Change: As we said last quarter, our fiscal 'twenty five guidance assumes the new transaction model is deployed in North America and provided about a one percentage point tailwind to autodesk revenue growth and a 3% to 4% tailwind to billings growth once the North America launches successfully underway, we will likely start communicating our plans to channel partners and customers in parts of EMEA.

Speaker Change: In Japan, we modeled various possible scenarios at the start of the year, reflecting different potential launch dates channel partner behavior ahead of launch the mechanics of the transition and a host of other factors and we are executing within our modeled scenarios longer term. We remain excited by the benefits that's more direct real.

Andrew Anagnost: We modeled various possible scenarios at the start of the year, reflecting different potential launch dates, channel partner behavior ahead of launch, the mechanic for the condition, and a host of other factors, and we are executing within our model scenarios. Longer term, we remain excited by the benefits of this more direct relationship with our customers and partners offer, an ability to understand and serve them in rich by data with more automation and self-service, and greater predictability. Our fiscal revenue guidance between 599 and 6.09 billion is unchanged and still translates into revenue growth of about 9 to 11% compared to fiscal 24.

Andrew Anagnost: And we are executing within our model scenarios. Longer term, we remain excited by the benefits this more direct relationship with our customers and partners offers, an ability to understand and serve them enriched by data with more automation and self-service and greater predictability. Our fiscal revenue guidance between $599 and $6.09 billion is unchanged and still translates into revenue growth of about $9 to $11. Thank you. Our strong start sets us up well to achieve our goal. Moving on to margins, we still expect non-GAAP operating margins between the range of 35 and 36% in Fiscal 25 and roughly in line with Fiscal 25.

Speaker Change: <unk> shipped with our customers and partners offer and ability to understand and serve them enriched by data with more automation and self service and greater predictability.

Speaker Change: Our fiscal revenue guidance between $5 99, and $6 9 billion is unchanged and still translate into revenue growth of about 9% to 11% compared to fiscal 2000 and for our strong start sets us up well to achieve our goals for the year.

Andrew Anagnost: Our strong start sets us up well to achieve our goals for the year. Moving on to margins, we still expect non-GAAP operating margins between the range of 35 and 36% in fiscal 25 and roughly level with fiscal 24. This includes a roughly one per point underlying margin improvement that we expect will be broadly offset by the margin headwinds from the new transaction model. As a reminder, as we transition to the new transaction model, we'll see operating margin headwinds from the accounting change of moving reseller costs from contra revenue to sales and marketing expense. We'll also have incremental investment in people, processes, and automation.

Moving onto margins, we still expect non-GAAP operating margins between the range of 35% and 36% in fiscal 'twenty, five and roughly level with fiscal 'twenty. Four. This includes a roughly one point underlying margin improvement that we expect will be broadly offset by the margin headwinds from the new transaction model as a reminder.

Andrew Anagnost: This includes a roughly one percent underlying margin improvement that we expect will be broadly offset by the margin headwinds from the new transaction model. As a reminder, as we transition to the new transaction model, we'll see operating margin headwinds from the accounting change of moving reseller costs from contra revenue to sales and market, and will also have incremental investment in people, processes, and automation. But over the long term, we expect that this transition to the new transaction model will enable us to further optimize our business, which we anticipate will provide a tailwind of revenue, operating income, and free cash flow dollars, even after the incremental costs we expect to incur.

Speaker Change: As we transition to the new transaction model, we will see operating margin headwinds from the accounting change of moving reseller costs from Contra revenue to sales and marketing expense will also have incremental investment in people processes and automation.

Andrew Anagnost: But over the long term, we expect this transition to the new transaction model to enable us to further optimize our business, which we anticipate will provide a tailwind to revenue, operating income, and free cash flow dollars, even after the incremental costs we expect to incur. Moving on to free cash flow, we still expect to generate between 1.43 and 1.5 billion of free cash flow in fiscal 25, excluding 200 million from fiscal 24 free cash flow from multi-year upfront buildings, which are now filled annually. In fiscal 25, we expect free cash flow growth of about 35 percent at the midpoint of our guidance.

But over the long term, we expect this transition to the new transaction model will enable us to further optimize our business, which we anticipate will provide a tailwind to revenue operating income and free cash flow dollars, even after the incremental costs, we expect to incur.

Andrew Anagnost: Moving on to precast, we still expect to generate between $1.43 and $1.5 billion of free cash flow in 2020, excluding $200 million from fiscal 24 free cash flow from multi-year upfront fillings which are now filled annually.

Speaker Change: Moving on to free cash flow, we still expect to generate between $1 43, and $1 5 billion of free cash flow in fiscal 'twenty five excluding $200 million from fiscal 'twenty four free cash flow for multi year upfront billings, which are now billed annually in fiscal 'twenty five we expect free cash flow growth of about 35%.

Andrew Anagnost: In fiscal 25, we expect free cash flow growth of about 35% at the midpoint of our growth. We expect faster free cash flow growth in fiscal 26 because of the return of our largest multi-year renewal cohort, the mechanical stacking of multi-year contracts billed annually, and a larger EBA. As discussed last, transition and rollout will create noise, pre-cash flow, the best measure of our performance. With our current trajectory, we estimate free cash flow in fiscal 26 to be around $2.05 billion.

Speaker Change: The midpoint of our guidance, we expect faster free cash flow growth in fiscal 'twenty because of the return of our largest multi year renewal cohort the mechanical stacking of multi year contracts billed annually and a larger EBITDA cohort.

Andrew Anagnost: We expect faster free cash flow growth in fiscal 26 because of the return of our largest multi-year renewal cohorts from a canicle stacking of multi-year contracts go annually and a larger EBA.

Andrew Anagnost: Corps of Works. As discussed last quarter, the transition in rollout will create noise in the P&L, making free cash flow the best measure of our performance. With our current trajectory, we estimate free cash flow in fiscal 20s to be around 2.05 billion at the midpoint. In the context of significant macroeconomic, geopolitical, policy, health, and climate uncertainty, the mechanical rebuilding of our free cash flow as we transition to annual billing for a year contract gives Autodesk an enviable source of visibility and certainty. We continue to manage our business using a Rule of 40 framework with a goal of reaching 45% or more over time.

Speaker Change: As discussed last quarter, the transition to <unk> rollout will create noise in the P&L, making free cash flow the best measure of our performance with our current trajectory, we estimate free cash flow in fiscal 'twenty six to be around $2 5 billion at the midpoint in the context of significant macroeconomic geopolitical policy health and climate and <unk>.

Andrew Anagnost: The context of significant macroeconomic, geopolitical, policy, health, and climate uncertainty, the mechanical rebuilding of our free cash flow as we transition to annual billing for multi-year contracts gives Autodesk an enviable source of visibility and, We continue to manage our business using a rule of 40 framework with a goal of reaching 45% or more over the next five years. We are taking significant steps towards our goal this year. We think this balance between compounding revenue growth and strong free cash flow margins captured in the Rule of Forty framework is the hallmark of the most valuable companies in the world, and we intend to remain one of them. The slide deck on our website has more details on the modeling assumptions for Q2. Full Year Fiscal 25

Speaker Change: Certainty the mechanical rebuilding of our free cash flow as we transition to annual billings for multi year contract gives autodesk and enviable source of visibility uncertainty.

Speaker Change: We continue to manage our business using a rule of 40 framework with the goal of reaching 45% or more over time we.

Andrew Anagnost: We are taking significant steps towards our goal this year and next. We think this balance between compounding revenue growth and strong free cash flow margins captured in the rule of 40 framework is the hallmark of the most valuable companies in the world. And we intend to remain one of them.

Speaker Change: We are taking significant steps towards our goal this year and next we think this balanced between compounding revenue growth and strong free cash flow margin captured in the rule of 40 framework is the hallmark of the most valuable companies in the world and we intend to remain one of them.

Andrew Anagnost: The slide deck on our website has more details on modeling assumptions for Q2 and full year fiscal 25. Let me finish by updating you on our strong progress in the first quarter. We continue to see good momentum at AEC, particularly in infrastructure and construction, fueled by customers consolidating onto our solutions to connect and optimize previously pilot workflows through the cloud. The cornerstone of that growing interest is our comprehensive end-to-end solution, encompassing design, pre-construction, field execution, to hand over and into operation. This breadth of connected capability enabled us to extend our footprint further into infrastructure and construction and also expand our reach into the mid-market.

Speaker Change: The slide deck on our website has more details on modeling assumptions for Q2 and full year fiscal 'twenty five let me finish by updating you on our strong progress in the first quarter.

Andrew Anagnost: Let me finish by updating you on our strong progress. We continue to see good momentum, particularly in infrastructure and construction, fueled by customers consolidating onto our solutions to connect and optimize previously siloed workflows through the cloud. The cornerstone of that growing interest is our comprehensive end-to-end service, comprising design, pre-construction, field execution, to handover and operation. This breadth of connected capability enables us to extend our footprint further into infrastructure and construction and also expand our reach into the mid-market. As a sign of that growing momentum, our construction business had one of its best net new customers. Let me give you a few examples. BL Harvard International provides design, build, construction, management, and general content.

Speaker Change: We continue to see good momentum at AUC, particularly in infrastructure and construction fueled by customers consolidating onto our solutions to connect and optimize previously siloed workflows through the cloud.

Speaker Change: Cornerstone of that growing interest as our comprehensive end to end solution encompassing design preconstruction fueled execution through handover and into operation. This breadth of connected capability enables us to extend our footprint further into infrastructure and construction and also expand our reach into the mid market.

Andrew Anagnost: As a sign of that growing momentum, our construction business had one of its best net new customer quarters.

Speaker Change: As a sign of that growing momentum our construction business had one of its best net new customer quarter.

Andrew Anagnost: Let me give you a few examples. BL Harbor International provides design-build construction management and general contract and services to national and international clients. It leverages advanced technology to maintain its most crucial customer and partner relationships and enhance its in-house capabilities. We have built a trusted partnership with the company over many years and shared its integrated platform vision for the industry. In the first quarter, it decided to standardize an audit-construction cloud across all regions for a design-build process, signing its first DBA and increasing its investment in audit-outs. Miratons' designs developed and built residential apartment towers and is the largest residential apartment developer in Australia.

Speaker Change: Let me give you a few examples.

Speaker Change: BL Harbor International provides design build construction management and general contracting services to National and international clients. It Leverages advanced technology to maintain its most crucial customer and partner relationships and enhance its in house capabilities.

Andrew Anagnost: It leverages advanced technology to maintain its most crucial customer and partner relationships and enhance its in-house capability. We have built a trusted partnership with the company over many years and share its integrated platform vision. Toward that end, in the first quarter, it decided to standardize on Autodesk Construction Cloud across all regions for its design-build process, signing its first DBA and increasing its investment in Autodesk. Mariton Designs develops and builds residential apartment towers and is the largest residential apartment developer in Australia.

Speaker Change: We have built a trusted partnership with the company over many years and Sheriff integrated platform vision for the industry in.

Speaker Change: In the first quarter it decided to standardize on August construction cloud across all regions for its design build process signing its first DBA and increasing its investment in Autodesk <unk>.

Speaker Change: <unk> designs develops and builds residential apartment towers and is the largest residential apartment developer in Australia. After a competitive process. It shows autodesk to replace six point solutions and unify its operation from design through to maintenance and asset management. This comprehensive solution will enable marathon.

Andrew Anagnost: After a competitive process, Marathon chose Autodesk to replace six-point solutions and unify its operations, from design through to Maintenance and Asset Management. This comprehensive solution will enable Marathon to have one common data, streamline its workflows, and have access to real time. State Window Corporation offers complete design, engineering, manufacturing, and installation of custom window walls.

Andrew Anagnost: After a competitive process, it chose audit-outs to replace six-point solutions and unify its operation, from design through to maintenance and asset management. This comprehensive solution will enable Miratons to have one common data environment, three minus workflows, and have access to real-time insights. State Window Corporation offers complete design, engineering, manufacturing, and installation of custom window wall systems. It is standardizing on audit-outs, ATC, and manufacturing products so that it can effectively manage inventory levels, improve cash flow, and reduce waste caused by siloed data and disconnected workflows. Leveraging Revit for three designs, our manufacturing collection for PM and PLNs, and all of this built for installation, State Windows will have an end-to-end solution connecting data and workflow across design, manufacture, and build.

Speaker Change: To have one common data environment, streamlining workflows and have access to real time insights.

Speaker Change: State window Corporation offers complete design engineering manufacturing and installation of custom window wall system.

Andrew Anagnost: It is standardized on Autodesk AEC and manufacturing so that they can effectively manage inventory levels, improve cash flow, and reduce waste caused by siloed data and disconnected work. Leveraging Revit for 3D design, our manufacturing collection for PDM and PLM, and Autodesk Build for installation. State Windows will have an end-to-end solution connecting data and workflow across design, manufacture, and build. Again, these stories are a common theme, managing people, processes, and data across the project life cycle. Increased efficiency and sustainability while decreasing risk

Speaker Change: It is standardizing on Autodesk AUC and manufacturing products. So they can effectively manage inventory levels improved cash flow and reduce waste caused by silo data and disconnected workflows.

Speaker Change: Leveraging rebate for three design or manufacturing collection for Pds, and <unk> and Autodesk build for installation state Windows will have an end to end solution connecting data and workflow across design manufacture and bill.

Andrew Anagnost: Again, these stories are common themes: managing people, processes, and data across the project life cycle to increase efficiency and sustainability while decreasing risk. Over time, we expect the majority of all projects to be managed this way, and we remain focused on enabling that transition through our industry clouds.

Speaker Change: Again these stories of a common theme managing people processes and data across the project lifecycle to increase efficiency and sustainability, while decreasing risk.

Andrew Anagnost: Over time, we expect the majority of all projects to be managed. We remain focused on enabling that transition through our industry. Moving on to manufacturing, we made excellent progress on our strategic, Customers continue to invest in their digital transformations and consolidate our design and make platform for both products and factories to grow their business and make it more resilient. A multi-format packaging solutions manufacturer in Europe has been leveraging our advanced manufacturing portfolio.

Speaker Change: Over time, we expect the majority of all projects to be managed this way and we remain focused on enabling that transition through our industry clouds moving.

Andrew Anagnost: Moving on to manufacturing, we made excellent progress on our strategic initiatives. Customers continue to invest in their digital transformations and consolidate our design and make platforms for both products and factories to grow their business and make it more resilient. A multi-format, packing solutions manufacturer in Europe had been leveraging our advanced manufacturing portfolio, including inventory involved for its machine design and product data management. In the first quarter, it expanded its partnership with Autodesk to include factory design, which digitized the complete factory layout to reduce the potential for delays and rework during the delivery process. As an existing flexing customer for factory simulation, the manufacturer will now have a comprehensive, connected, end-to-end solution that helps increase efficiency, throughput, and quality.

Speaker Change: Moving on to manufacturing, we made excellent progress on our strategic initiatives customers continue to invest in their digital transformations and consolidate our design and make platform for both product and factories to grow their business and make it more resilient.

Speaker Change: Multi format packing solutions manufacturer in Europe had been leveraging our advanced manufacturing portfolio, including in venture involved for its machine design and product data management in the first quarter. It expanded its partnership with Autodesk to include factory design, which did it as high as is complete factory layout to reduce the potential for delay.

Andrew Anagnost: Including InVenture and Vault for its machine design and product data management. In the first quarter, it expanded its partnership with Autodesk to include factory design, which digitizes complete factory layouts to reduce the potential for delays and rework during the delivery process, as an existing Flexin customer for battery. The manufacturer will now have a comprehensive connected end-to-end solution that helps increase efficiency and throughput. A major multiproduct maintenance, repair, and overhaul, or MRO provider, began using Fusion to convert and visualize 3D models of third-party files.

Speaker Change: And rework during the delivery process as.

Speaker Change: As an existing <unk> customer for factory stimulation. The manufacturer will now have a comprehensive connected end to end solution that helps increase efficiency throughput and quality.

Andrew Anagnost: A major multi-product maintenance, repair, and overhaul, our MRO provider, began using Fusion to convert and visualize 3D models of third-party files. With those files now in the fusion ecosystems, it added the fusion manufacturing extension in the first quarter to leverage fusion for light repair and part testing. Fusion remains one of the fastest growing products in the manufacturing industry, with double digit commercial subscriber growth, driven by the growing number of customers who recognize the value of cloud-based workflows in enhancing efficiency, sustainability, and resilience within their organizations. With over a million monthly active users, a vast amount of contextual data is generated within Fusion.

Speaker Change: A major multi product maintenance repair and overhaul or MRO provider began using fusion to convert and visualize <unk> model of third party files.

Andrew Anagnost: Those files now in the Fusion Ecosystem added the Fusion Manufacturing Extension in the first quarter to leverage Fusion for light repair and part. Fusion remains one of the fastest growing products in the manufacturing industry with double-digit commercial subscriber growth, driven by the growing number of customers who recognize the value of cloud-based workflows in enhancing efficiency, sustainability, and resilience within their organizations. With over a million monthly active users, a vast amount of contextual data is generated within. For example, on average 33 million new component designs were being produced in Fusion each month over the last 12 months.

Speaker Change: With those files now in the fusion ecosystem added the fusion manufacturing extension in the first quarter to leverage fusion for light repair and part testing fewer.

Speaker Change: <unk> remains one of the fastest growing products in the manufacturing industry with double digit commercial subscriber growth driven by the growing number of customers, who recognize the value of cloud based workflows and enhancing efficiency sustainability and resilience within their organization.

Speaker Change: With over a million monthly active users a vast amount of contextual data is generated with infusion. For example on average 33 million new component designs were being produced infusion each month over the last 12 months.

Andrew Anagnost: For example, on average 33 million new component designs were being produced in Fusion each month over the last 12 months. This data can help us train the next generation of generative AI products and services. For example, our recently launched growing automation tool in Fusion, which is powered by AI, has generated 2.7 million automatic dimensions since its launch earlier this year.

Andrew Anagnost: This data can help us train the next generation of generative AI products, and, for example, our recently launched drawing automation tool in Fusion, which is powered by AI, has generated 2.7 million automatic dimensions since its launch earlier this month. In education, we are preparing future engineers to drive innovation through next-generation design, analysis, and manufacturing. The Kata Yanagi Institute in Japan is a leading provider of technical education that equips its students with industry-relevant education and helps address the growing skills gap across design and make. In the first quarter, it made Fusion the standard design and make solution for its 5,000-plus students, faculty, and affiliated, and are replacing two legacy solutions to leverage Fusion AI design and cloud collaboration.

Speaker Change: This data can help US train the next generation of generative AI products and services.

Speaker Change: For example, our recently launched growing automation tool infusion, which is powered by AI has generated $2 7 million automatic dimensions since its launch earlier this year.

Andrew Anagnost: In education, we are preparing future engineers to drive innovation through next-generation design analysis and manufacturing solutions. The Kata Yonage Institute in Japan is a leading provider of technical education that equips the students with industry relevant education and helps address the growing skill gap across the design and make industries. In the first quarter, it made Fusion the standard design and make solution for its 5,000 plus students, faculty, and affiliated institutions, replacing two legacy solutions to leverage Fusion AI design and cloud collaboration capabilities. And lastly, we continue to work with our customers to ensure they are using the latest and most secure versions of our software.

Speaker Change: In education, we are preparing future engineers to drive innovation through next generation design analysis and manufacturing solutions.

Speaker Change: Cutting and Nike Institute in Japan is a leading provider of technical education, but equipment students with industry relevant education and helps address the growing skills gap across the design and make industries in.

Speaker Change: In the first quarter. It made fusion the standard design and make solution for its 5000, plus students faculty and affiliated institutions, replacing two legacy solutions to leverage fusion AI design and cloud collaboration capabilities.

Speaker Change: And lastly, we continue to work with our customers to ensure they are using the latest and most secure versions of our software through a collaborative process. We helped a large European infrastructure and railway operator achieve compliance providing visibility into existing usage and by understanding it's true needs delivering a tailored solution that included.

Andrew Anagnost: To a collaborative process, we helped a large European infrastructure and railway operator achieve compliance, providing visibility into existing usage, and by understanding its true needs, delivering a tailored solution that included upgrading to newer versions of our software in the addition of more subscriptions. and Licenses.

Speaker Change: Trading to newer versions of our software and the addition of more subscription licenses.

Andrew Anagnost: Let me finish with a story. The opening ceremony of the Summer Olympic Games will take place from the banks of the River Stain in Paris on the evening of July 26. Over the following months, many of the approximately 10,500 athletes and 8,000 pair of athletes will reside in the athlete's village on the island of the Knee, a suburb of Paris. This is, in part, a story about innovative architects, engineers, and construction professionals collaborating efficiently and effectively in the cloud, enabled by open file formats and using modularized industrial construction techniques to seamlessly span AEC and manufacturing.

Speaker Change: Let me finish with a story.

Andrew Anagnost: And lastly, we continue to work with our customers to ensure they are using the latest and most secure versions of our software. Through a collaborative process, we helped a large European infrastructure and railway operator achieve compliance, providing visibility into existing usage, and by understanding its true needs, delivering a tailored solution that included upgrading to newer versions of our software and the addition of more subscriptions. Let me finish with a story. The opening ceremony of the Summer Olympic Games will take place on the banks of the River Seine in Paris on the evening of July 21st.

Speaker Change: The opening ceremony of the summer Olympic games will take place on the banks of the river, saying in Paris on the evening of July 26.

Andrew Anagnost: Over the following months, many of the approximately 10,500 athletes and 8,000 para-athletes will reside in the Athletes' Village on the Île Saint-Denis suburb. This is, in part, a story about innovative architects, engineers, and construction professionals collaborating efficiently and effectively in the cloud, enabled by open file formats and using modulized industrial construction environments that seamlessly span AEC and many others. It is also a story about embracing complexity, managing wastewater and risk in a sensitive ecosystem of the river, and Change by minimizing embodied carbon today and creating a built environment that embraces a warmer climate.

Speaker Change: Over the following months many of the approximately 10500 athletes and 8000 pair athletes will reside in the athlete's village on the install of the knee.

Speaker Change: Suburb of Paris. This is in part.

Speaker Change: Story about innovative architects engineers, and construction professionals collaborating efficiently and effectively in the cloud enabled by open final formats, and using marginalize industrial construction techniques to seamlessly span AUC and manufacturing.

Andrew Anagnost: It is also a story about embracing complexity, managing waste water and risk in a sensitive ecosystem of the River Stain, and change by minimizing embodied carbon today and creating a built environment that embraces a warmer climate tomorrow. But it's also a story about regeneration and hope. The Song-Sum de Nis suburb of Paris is one of the poorest in France with a young, diverse population, with higher than average unemployment rates. After the games, the village will become a neighborhood with new homes and social housing, offices, neighborhood shops, a student residence in a hotel, enveloped within gardens and parkways.

Speaker Change: It is also a story about embracing complexity, managing wastewater and risk in a sensitive ecosystem of the river Seine and change by minimizing embodied carbon today and creating a built environment that embraces a warmer climate tomorrow.

Andrew Anagnost: But there's also a story about regeneration. Saint-Sans-Denis suburb of Paris is one of the poorest, with a young, diverse population and Higher Than Average Unemployment. After the game, The Village will become a neighborhood with new homes and social housing, offices, neighborhood shops, a student residence, and a hotel, enveloped within gardens and parks.

Speaker Change: But it's also a story about regeneration and hope the saw some Denise suburb of Paris as one of the poorest in France with a young diverse population with higher than average unemployment rates. After the games. The village will become a neighborhood with new homes and social housing offices neighborhood shops a student.

Speaker Change: Residents and our hotel enveloped within gardens and parkland.

Andrew Anagnost: Two years ago, I told you about Autos' role in the reconstruction of Notre Dame Cathedral, which will be completed on schedule later this year. I share the athlete's village story because I will remind you again of Autos' purpose to design and make a better world for everyone. That purpose has never been more important or urgent. Together, we can meet the generational challenges posed by carbon, water, and waste. Our essential role in meeting the challenges underpins my confidence this year and my optimism for the future.

Operator: Two years ago, I told you about Autodesk's role in the reconstruction of Notre Dame, will be completed on schedule later. I share the Athletes Village story because I'm reminded again of Autodesk, to design and make a better world for everyone, purpose has never been more important. Together, we can meet the generational challenges posed by carbon, water, and, Artists' central role in meeting these challenges underpins my confidence this year and my optimism for the future.

Speaker Change: Two years ago, I told you about <unk> role in the reconstruction of Notre Dame Cathedral, which will be completed on schedule later this year.

Speaker Change: I share the athlete's village story, because I'm reminded again of Autodesk purpose to design and make a better world for everyone that purpose has never been more important or urgent together, we can meet the generational challenges caused by carbon water and waste arent a central role in meeting the challenges underpins <unk>.

Speaker Change: Confidence this year and my optimism for the future operator, we would now like to open the call up for questions.

Operator: Operator, we would now like to open the call. Thank you. As a reminder, to ask a question, you will need to press star 11 on your telephone. To remove yourself from the queue, you may press star 11 again.

Operator: Operator, we would now like to open the call up for questions. Thank you. As a reminder to ask a question, you will need to press star 11 on your telephone to remove yourself from the queue. You may press star 11 again. Please limit yourself to one question and one follow-up. Please stand by while we compile the Q&A roster.

Speaker Change: Thank you as a reminder to ask a question you will need to press star one one on your telephone to remove yourself from Mccue you May Press Star one again, please limit yourself to one question and one follow up please standby, while we compile the Q&A roster.

Operator: Please limit yourself to one question and one follow-up. Please stand by while we compile the Q&A. Our first question comes from the line of Jason Celino of KeyBank Capital Markets. Great, Andrew. Good afternoon. Hello, Jason.

Jason Vincent Celino: Our first question comes from the line of Jason Salino of KeyBank Capital Markets. Great. Andrew, good afternoon. Oh, Jason.

Speaker Change: Our first question comes from the line of.

Speaker Change: Jason Celaeno of Keybanc capital markets.

Jason Vincent Celino: You know, I know you said that you couldn't say much about the 10k process, but how would you summarize the key takeaways for investors? Yeah, well, the first thing you know, I've never been more excited about having an earnings call in my entire career at Autodesk. That's not exactly what you're asking, but I am excited to be here.

Andrew: Great Andrew Good afternoon, Jason.

Andrew Anagnost: I know you said that you couldn't say much about the 10K process, but how would you summarize the key takeaways for investors? Yeah, well, the first thing you know, I've never been more excited about having an earnings call in my entire career at Autodesk. But that's not exactly what you're asking, but I am excited to be here. So look, there's a few things I can just put in plain English. The first thing, and I can't state how important this is, is we don't have to restate any of my financial results. The results that happened historically in the company are the results that the business delivered, and that's really important.

Speaker Change: Jason.

Jason Vincent Celino: I know you said that you Couldnt say much about the 10-K process, but how would you summarize the key takeaways for investors.

Speaker Change: Yeah, well the first thing I'd.

Speaker Change: I've never been more excited about having an earnings call in my entire career at Autodesk, but that's not exactly what you are asking but I am excited to be here. So look there's a few things I can just put it in plain English right. The first thing and I can't state. How important. This is as we don't have to restate any of our financial results.

Andrew Anagnost: So look, there are a few things I can just put in plain English, right? The first thing, and I can't state how important this is, is that we don't have to restate any of our financial results. The results that happened historically in the company are the results that the business delivered. And that's really important.

Andrew Anagnost: The second thing I want to highlight is that the company did not obfuscate the underlying strength of the business. Now you take those two things together, and you can trust the integrity of Autodesk financials, all right? And I think that's the lesson I want you to take from all of that language.

Speaker Change: The results that happened historically in the company are the results that the business delivered and that's really important the second thing I wanted to highlight is that the company did not offer escaped the underlying strength of the business now you take those two things together.

Unknown Executive: The second thing I want to highlight is that the company did not obfuscate the underlying strength of the business. Now, you take those two things together, and you can trust the integrity of Autodesk financials, all right? And I think that's kind of the net. I want you to take from all of that language. You know, and personally, from my point of view, I think that doesn't, that means that nobody's investment thesis in Autodesk is fundamentally altered by any of this information.

Speaker Change: And you can trust the integrity of Autodesk financials, Alright, and I think that's that's kind of the net I want you to take some from all of that language and personally from my point of view.

Jason Vincent Celino: You know, and personally, from my point of view, I think that means that nobody's investment thesis in Autodesk is fundamentally altered by any of this information. Okay, yeah, I think that's a good clarification. Maybe the next question, my follow-up.

Speaker Change: I think that doesn't that means that nobody's investment thesis and Autodesk has fundamentally altered by any of this information.

Unknown Executive: David Okay. Yeah. I think that's a good, you know, clarification.

Speaker Change: Okay, Yes, I think thats a good.

Andrew Anagnost: Maybe the next question might follow up. So Q1 performance, you know, strong. If you guys probably a little bit better than consensus expectations, but given the full year revenue guidance isn't really changing, you know, I'm wondering how you're thinking about growth in the second half of the year. Yeah. Well, first off, it's only Q1. So, you know, we've got three more quarters left. All right. So it's only Q1. And we also have a few big things coming in front of us here. Right. We just went live in the U.S. Performance model so far, so good.

Speaker Change: Clarification, maybe the next question my follow up so Q1 performance.

Andrew Anagnost: So Q1 performance, you know, strong, Q2 guidance, probably a little bit better than consensus expectation. But given the full year revenue guidance isn't really changing, you know, I'm wondering how you're thinking about growth in the second half of the year. Yeah, well, first off, it's only Q1.

Speaker Change: Strong guide.

Speaker Change: Guide, probably a little bit better than consensus expectations.

Speaker Change: But given the full year revenue guidance isn't really changing im wondering how youre thinking about growth in the second half of the year.

Speaker Change: Well first off it's only Q1.

Andrew Anagnost: So, you know, we've got three more quarters left. All right. So, it's only Q1. And we also have a few big things coming in front of us here. All right. We just went live with the US transaction model. So far, so good.

Speaker Change: So we've got three more three more quarters left alright, so don't it's only Q1.

Speaker Change: And we also have a few big things coming in front of us here alright.

Speaker Change: Just went live.

Speaker Change: In the U S.

Andrew Anagnost: It's proceeding as we expect. If we learn what we expect to learn from that, we're going to live in Europe as well, but we're waiting to see what happens in the Americas and how it performs. So, those things are some big uncertainties out there that we want to pay attention to. But the great thing about the results in Q1 is that they've really set us up. I feel really confident about the position we have right now in terms of hitting our goal. Okay, great. Thank you very much.

Speaker Change: Model so far so good it's proceeding as we expect.

Andrew Anagnost: It's proceeding as we expect. If we learn what we expect to learn from that, we're going to go live in Europe as well, but we're waiting to see what happens in the Americas and how it performs. So those things, those are some big uncertainties out there. We want to pay attention to. But the great thing about the results in Q1 is it's really set us up strong to hit the role results for the full year. So I feel really confident about the position we have right now in terms of hitting our goals.

Speaker Change: If we learn what we expect to learn from from that we're Gonna go lives in Europe, as well, but we're waiting to see what happens in.

Speaker Change: The Americas and how it performs so those things. So there is some big uncertainties out there if you want to pay attention to but the great thing about the results. In Q1 is it's really set us up strong to hit the results for the full year. So I feel really confident about the position we have right now in terms of hitting our goals.

Unknown Executive: Okay. Great. Thank you very much. Thank you.

Speaker Change: Okay, great. Thank you very much.

Speaker Change: Thank you.

Jay Vleeschhouwer: Our next question comes from the line of Jay Belishauer of Griffin Securities. Please go ahead. Thank you. Good evening.

Jay Vleeschhouwer: Our next question comes from the line of Jay Vleeschhouwer of Griffin Securities. Please go ahead. Thank you. Good evening, Andrew.

Speaker Change: Our next question comes from the line of Jay Lee Shower of Griffin Securities. Please go ahead.

Speaker Change: Thank you good evening.

Andrew Anagnost: Andrew, what would you have to see over the next number of months in the Americas transition that began yesterday to commence the transition in amea as early as, say, mid Q3. And if you don't launch in Q3 and it makes no sense to launch in Q4, should we assume that you would then do amea in, let's say, early fiscal 26 and then Asia, perhaps three to six months after that. Yeah. So the last part, I'll just say yes, that's probably the way it would happen. All right.

Andrew Anagnost: What would you have to see over the next number of months in the Americas transition that began yesterday to commence the transition in EMEA as early as, say, mid Q3? And if you don't launch in Q3 and it makes no sense to launch in Q4, should we assume that you would then do EMEA in, let's say, early fiscal 26, and then Asia perhaps three to six months after that? Yeah, so the last part, I'll just say yes, that's probably the way it would happen, all right, based on the results. But let me tell you what we're looking for in terms of the US.

Andrew what would you have to see over the next number of months in the Americas transition.

Speaker Change: Ken yesterday.

Speaker Change: <unk> commenced the transition in EMEA as early as say mid Q3.

Speaker Change: And if you don't launch in Q3 and it makes no sense to launch in Q4 should we assume that you would then do with let's say early fiscal 'twenty six and then.

Speaker Change: Asia, perhaps three to six months after that.

Speaker Change: So.

Speaker Change: The last part I'll, just say, yes, that's probably the way it would happen alright based.

Andrew Anagnost: Based on the results, but let me tell you what we're looking for in terms of the US. One, we're looking for performance at scale. So when we did the test in Australia and New Zealand, we tested out the functionality, the capability, the processes, and the training we needed to deliver to the channel partners. And frankly, the training we needed to deliver to the customers to make sure they knew how to set themselves up as a, as a set us up as a vendor in their systems. So we learned all of that. We executed on new functionality over the course of the period we tested that functionality in Australia, New Zealand, before going live in the new in the new in the Americas.

Speaker Change: Based on the results, but let me tell you what we're looking for in terms of the U S. One we're looking for performance at scale. So when we did the test in Australia, and New Zealand, we tested out the functionality the capability the processes. The training we needed to deliver to the channel partners and frankly, the training we needed to deliver to the customers.

Andrew Anagnost: One, we're looking for performance at scale. So when we did the tests in Australia and New Zealand, we tested out the functionality, the capability, the processes, the training we needed to deliver to the channel partners, and, frankly, the training we needed to deliver to the customers to make sure they knew how to set themselves up as a set us up as a vendor in their systems. Okay, so we learned all of that. We executed on new functionality. Over the course of the period, we tested that functionality in Australia and New Zealand before going live in the Americas.

Speaker Change: To make sure they knew how to set themselves up as.

Speaker Change: Set us up as a vendor in their systems. Okay. So we learned all of that we executed on new functionality over the course of the period, we tested that functionality, Australia, New Zealand before going live in the new.

Speaker Change: The new IND in in.

Andrew Anagnost: So now we're going to test all that functionality, and we're going to watch and see how it operates at scale and see the issues that get produced or don't get produced. So far, so good.

Speaker Change: Americas. So now we're going to test all of that functionality and we're going to watch and see how it operates at scale and see the issues that get produced or don't get for you. So far so good and one of the things I want to make sure that we all remember is why are we doing this alright, its really important to understand why we're doing. This this is a fundamental shift in how we will have <unk>.

Andrew Anagnost: So now we're going to test all that functionality, and we're going to watch and see how it operates at scale and see the issues that get produced or don't get produced. So far, so good. And one of the things I want to make sure that we all remember is why are we doing this?

Andrew Anagnost: And one of the things I want to make sure that we all remember is why are we doing this. All right. It's really important to understand why we're doing this. This is a fundamental shift in how we will have visibility and connection to our customers. Not only are we going to have full visibility of fully loaded sales and marketing costs of the company, which will allow us to optimize these costs over time, but it's going to enable our customers to engage with us and self-service models that they've, they've never been able to engage with us before.

Andrew Anagnost: All right, it's really important to understand why we're doing this. This is a fundamental shift in how we will have visibility and connection to our customers. Not only are we going to have full visibility of the fully loaded sales and marketing costs of the company, which will allow us to optimize these costs over time, but it's going to enable our customers to engage with us in self-service models that they've never been able to engage with us before.

Speaker Change: Visibility in connection to our customers not only are we going to have full visibility of the fully loaded sales and marketing costs of the company, which will allow us to optimize these costs over time, but it's going to enable our customers to engage with us and self service models that they've never been able to engage with us before and it's going to give us more visibility and insight into our customers. So not only we're going to be looking about how.

Andrew Anagnost: And it's going to give us more visibility and insight into our customers. So not only are we going to be looking about how the systems are working, we're going to be testing out all of those new capabilities that we want to use to engage with our customers more effectively. So that's kind of what we'll be looking at.

Andrew Anagnost: And it's going to give us more visibility and insight into our customers. So not only are we going to be looking at how the systems are working, but we're going to be testing out all of those new capabilities that we want to use to engage with our customers more effectively. So that's kind of what we'll be looking at. And if we see some problems with scale, which we are not anticipating, but you never know, yes, we will delay those rollouts kind of similar to the way you highlighted, Okay, as a follow-up. You used an intriguing comment in your script when you referred to quote, velocity, and efficiency of R&D. What does that mean? How would we see that?

Speaker Change: The systems are working we're going to be testing out all of those new capabilities that we want to use to engage with our customers more effectively so that's kind of what we'll be looking at and if we see some problems with scale, which we are not anticipating but you never know, yes, we will we will delay those rollout kind of similar to the way you highlighted it in your question.

Andrew Anagnost: And if we see some problems with scale, which we are not anticipating, but you know, you never know, yes, we will, we will delay those rollouts, kind of similar to the way you highlighted it.

Speaker Change: Okay.

Speaker Change: Follow up you used an intriguing comment in your script when you referred to quote velocity and efficiency of R&D.

Speaker Change: What does that mean.

Speaker Change: How would we see that manifest for example, first in AUC or otherwise manufacturing and given the scale of your R&D, which still the biggest and your peer group.

Jay Vleeschhouwer: Would it manifest, for example, first in AEC or otherwise manufacturing? And, you know, given the scale of your R&D, which is still the biggest in your peer group, how do you think that plays out over time? What do you mean by that? Yeah, so that goes back to the platform services capability. All right, and as you know, we're continuing to invest in Platform Services to make sure that the teams are using shared services to not only move faster but also move better moving forward.

How do you think that plays out over time.

Speaker Change: By that yes, so that that debt.

Speaker Change: It goes back to the platform services capabilities, Alright, and as you know, we're continuing to invest in the platform services to make sure that the teams are using shared services to not only move faster, but also move better moving forward, we're getting more making more and more progress on this we're getting more and more shared services out there that are shared across.

Jay Vleeschhouwer: We're getting more; we're making more and more progress on this. We're getting more and more shared services out there that are shared across various parts of the company. There are some really interesting ones that'll be coming out in the next year or so that I won't pre-announce, but they're shared services that will allow us to do some things that provide kind of common project visibility across various industries and things like that. These are exciting things that used to get built in individual silos inside the company, so it's really important that we have these large-scale shared services that not only prevent people from rebuilding the same thing multiple times but also allow people to start up and spin up new things quickly, and that includes some of our incubations and other things.

Ross various.

Speaker Change: Parts of the company there is some really interesting ones that'll be coming out.

Speaker Change: In the next year or so that I won't I won't pre announced but theyre shared services that will allow us to do some things that provide kind of common project visibility across various industries and things like that these are exciting things that used to get built in individual silos inside the company. So it's really important that we have these.

Speaker Change: Large scale shared to service debt.

Speaker Change: Prevent people from rebuilding the same thing multiple times, but also allow people to start up and spin up new things quickly and that includes some of our incubation and other things. So so watches this happens youll start to see more and more of these shared services and I think we're starting to hit kind of a sweet spot of momentum in terms of some of the work we're doing on the platform services.

Jay Vleeschhouwer: So, watch as this happens. You'll start to see more and more of these shared services, and I think we're starting to hit kind of a sweet spot of momentum in terms of some of the work we're doing on the platform service. Thank you, Andrew. Thank you, Jay.

Speaker Change: Thank you Andrew.

Speaker Change: Jay.

Speaker Change: Thank you.

Adam Charles Borg: Thank you. Our next question comes from the line of Adam Borg of Stevens. Awesome. Thanks so much for taking the question. Maybe just on the macro, Andrew, you talked about that's a relatively stable backdrop. And I know fiscal 24 was a softer year for net new seed.

Speaker Change: Our next question and.

Speaker Change: When it comes from the line of Adam Borg with Stifel.

Speaker Change: Awesome. Thanks, so much for taking the question.

Speaker Change: Maybe just on the macro Andrew can talk about relatively stable backdrop.

Speaker Change: And I know fiscal 'twenty four it was a softer year that your seats. So just curious if you could talk about how you think about you see growth in 'twenty five relative to 2024.

Andrew Anagnost: So just curious if you could talk about how you think about new seed growth in 25 years. Yeah, you know, it's hard to predict what's going to happen in 2025. But what I can say right now is we've seen broadly consistent performance for many, many quarters now. All right. This whole conversation we've been having about the last quarter was fairly consistent with the previous quarter, with some puts and takes going on through all sorts of manners of changes and vaccinations out there in the macro environment.

Speaker Change: Yes, it's hard to predict what's going to happen in 2025, but I can say right now as we've seen broadly consistent performance for many many quarters now alright.

Speaker Change: This whole conversation, we've been having about last quarter was fairly consistent with the previous quarter with some puts and takes it's been going on through all sorts of manners of changes and machinations out there in the macro environment.

Andrew Anagnost: Right now, I would expect to keep seeing some of those environments with the kind of puts and takes that we're seeing now. Just to remind you about the puts and takes in this quarter, we saw a lot of strength in EMEA, we saw a lot of strength in Australia and Japan, but it was offset by weakness in China and Korea. And in the industries, you know, AEC and manufacturing were strong, and M&E was kind of weak.

Speaker Change: Right now I would anticipate to keep seeing some of those environments are the kind of puts and takes that we're seeing now just to remind you about the puts and takes in this quarter. We saw a lot of strength in EMEA. We saw a lot of strength in Australia, and Japan was offset by weakness in China, and Korea and in the industries AAC and manufacturing were strong in <unk>.

Speaker Change: It was kind of weak.

Adam Charles Borg: These kinds of changes, I expect, will continue throughout the quarter so that we'll kind of continue without them throughout the quarter, so we'll continue to see some of this ongoing kind of stability but just with different puts and takes each quarter, incredibly helpful. Maybe just a quick follow-up on Project super interesting as a long-term opportunity. How should we think about kind of the timing of this across? you know, three industry clouds, and kind of what does the dream to dream look like in terms of the impact it could have for organizations as they look to take advantage of these capabilities?

Speaker Change: These kinds of changes I expect will continue throughout the quarter. So that will kind of continue throughout the quarter. So we'll continue to see some of these ongoing kind of stability, but just with different puts and takes each quarter.

Speaker Change: Incredibly helpful. Maybe just a quick follow up on project with <unk> Super interesting as a long term opportunity how should we think about kind of the timing of this across to three three.

Speaker Change: Three industry cloud and kind of what what is the dream. The dream look like in terms of the impact it could have.

Speaker Change: For organizations as they look to take advantage of these capabilities.

Adam Charles Borg: Yeah, so what I would do is I would think of Project Bernini as our first foundation model, and each foundation model that we do will be providing a certain set of capabilities or automations for our customers. Bernini is a shape interpretation tool.

Speaker Change: Yes, so what I would do is I would think a project Bernini as our first foundation model and each foundation model that we do we will be providing a certain set of capabilities are automation for our customers' Bernini is a shape interpretation tool. It takes two D geometries.

Andrew Anagnost: It takes 2D geometry, voxel geometry, descriptions, pictures, all of these things and creates intelligent 3D geometry that understands 3D geometry. And we're going to be looking to partner with some of our customers to make it even smarter and better. But that tool can become a core tool used across industries to provide preliminary initial geometries of all types. But it's going to be one of several foundation models, because we're going to need multiple types of foundation models to automate the things that are important to our customers.

Speaker Change: Actual geometry descriptions pictures all of these things and create intelligent street, a geometry that understands III geometry, and we're going to be looking to partner with some of our customers to make it even smarter and better but that that tool can become a core tool used across industries to provide preliminary initial geometries of all types.

Speaker Change: But it's going to be one of several foundation models, because we're going to need multiple types of foundation model to automate the things that are important to our customers. What bernini shows is that not only are we ahead of our competitors in this area. We're producing high quality results that are getting attention and helping us engage more tightly with some of our customers on where.

Andrew Anagnost: What Bernini shows is that not only are we ahead of our competitors in this area, but we're producing high-quality results that are getting attention and helping us engage more tightly with some of our customers on where these tools are going to go in the future.

Speaker Change: These tools are going to go into future.

Speaker Change: Awesome. Thanks again.

Speaker Change: Thank you.

Matthew George Hedberg: Thank you. Our next question comes from Matt Hedberg of RBC. Great, thanks for taking my questions. Andrew, maybe just following up on that last one, when we think about these foundational, these Gen-AI foundational models, I know it's still early, but what is the philosophy on pricing?

Our next question comes from the line of Matt Hedberg of RBC.

Andrew Anagnost: And do you suspect there will eventually be a consumption element to maybe offset some additional compute costs? Yeah, so, you know, Matt, it is a little early to speculate on how we make money and how we go to market with. However, you know that I've been a big fan of consumption models for a long time. I think consumption has always been setting us up well for the future of AI-driven automations and outcome-based designs.

Speaker Change: Yes.

Speaker Change: Great. Thanks for taking my questions Andrew maybe just following up on that last one when we think about these foundations. These jennie O foundational models Brittany I know, it's still early but what are you.

What is sort of the philosophy on pricing and do you suspect there eventually to be a consumption element to maybe offset some additional compute costs.

Speaker Change: Yes. So so it is a little early to speculate on how how we make money and how we go to market with some of these things however.

Speaker Change: No that <unk>.

Speaker Change: <unk> been a big fan of consumption models for a long time I think consumption is directionally always been setting us up well for the future of AI, driven automation and outcome based designs I've talked about these things for a long time I definitely see consumption as a critical part of monetizing these models.

Andrew Anagnost: I've talked about these things for a long time, and I definitely see consumption as a critical part of monetizing these models. I also see other critical aspects of it as being able to customize these models for individual customers and individual companies, just like we get a customized version of Autopilot and GitHub for Autodesk. I'm not going to exactly say how it'll be monetized, but I would be very surprised if consumption didn't play an important role in the future of using these generative models to automate a lot of complexity for our customers.

Speaker Change: We also see other critical aspects of it as being able to customize these models for individual individual customers and individual companies just like we get a customized version of <unk>.

Speaker Change: <unk> and Github for Autodesk and Github copilot for Autodesk, Okay, so not going to exactly say, how it'll be monetize but I'd be very surprised if consumption doesn't doesn't play an important role in the future of using these generative models to automate a lot of complexity for our customers.

Matthew George Hedberg: Got it. Thank you for that. That's super helpful.

Speaker Change: Got it. Thank you for that that's Super helpful. And then maybe just.

On the early renewals you saw in Q1 I assume that was mostly in anticipation of the transition the direct transition was that largely a U S.

Speaker Change: But you also.

Simon Mays: And then maybe just on the early renewals you saw in Q1, I assume that was mostly in anticipation of the transition, the direct transition. Was that largely a U.S. function that you all saw? Matt, it's Simon. It had more to do with the timing of the price increase and ahead of that. What we set as flags last quarter is that we'll expect a bit of early renewal, as we saw in Australia, ahead of the implementation in the US of the new transaction model.

Simon: It's Simon.

Simon: There's more to do with the timing of the price increase.

Simon: Ahead of that.

Speaker Change: We flagged last quarter is that we will expect a bit of early renewal as we saw in Australia ahead of implementation in the U S of any transaction model.

Matthew George Hedberg: Thanks a lot, guys. Thank you. Our next question comes from the line of Joe Vrunk of Bayer. Great. Thanks.

Speaker Change: Got it thanks, a lot guys.

Speaker Change: Thank you.

Joseph D. Vruwink: Thanks, everyone. Um, if my hearing is sound, I think I heard Australia, not one of the strongest regions in the corridor at the same time, also subject to this agency transition. So, I guess my question, Oh, yeah, Joe, let's let's correct you. I mean, ask your question, and I'll, yeah.

Our next question comes from the line of Joe <unk> of Baird.

Speaker Change: Great. Thanks.

Speaker Change: Thanks, everyone.

Speaker Change: My hearing is sound I think I heard Australia, not one of the strongest regions in the quarter at the same time.

Speaker Change: Also subject this agency transitions. So I guess my question Oh, Yes, Joe, Let's let's correct you ask your question.

Speaker Change: Yes.

Joseph D. Vruwink: Well, it gets to the point of obviously, it sounds like you have a model in place for this transition, and so far, the assumptions are holding. I'm wondering how you stress tested the model.

Speaker Change: Well.

Speaker Change: It gets to the point of obviously it sounds like you have a model in place for this transition and so far the assumptions are holding I am wondering how you stress tested the model so let's say.

Joseph D. Vruwink: So let's say, here in the States, the macro does suddenly get worse. Does that influence the intended rollout? Does it change some of the strategies you look to employ? Or is it really business as usual in terms of how you're approaching those? Okay, so first, first off, Joe, your ears were not working. Australia is great.

Speaker Change: Here in the states the macro does suddenly get worse does that influence the intended rollout does that change some of the strategy as you look to employ or is it really business as usual in terms of how you're approaching us.

Andrew Anagnost: Australia was one of the strong points. Okay, so Australia is back where it was pre the business model, the new transaction model. So it's going great. So it's a nice proof point of some of the capabilities. Now, in terms of macro, macro is not going to impact our decision in terms of how we move forward with the new transaction model.

Joe: Okay. So first first off Joe your ears were not working Australia's great Australia was one of the strong points. Okay. So Australia, Australia is back where it was pre.

Joe: The business model trends business, the new transaction model. So it's going great. So it's a nice proof point of some of the capabilities. We have now in terms of macro macro is not going to impact our decision in terms of how we move forward with the new transaction model is all about the capability of the systems the capable.

Andrew Anagnost: It's all about the capability of the systems, the capability of our partners, and the ability of our customers to absorb these things and have the systems, the whole system work correctly. That's what's going to be the governor on how we roll these things out. The macro could go all sorts of directions.

Joe: They are our partners and the ability of our customers to absorb these things and have the system. The whole system work correctly, that's what's going to be the governor on how we roll. These things out the macro could go all sorts of directions. We are still going to move forward as long as our systems are functioning the way, we expect them to and like I said, so far so good but it's only been a day.

Joseph D. Vruwink: We're still going to move forward as long as our systems are functioning the way we expect them to. Like I said, so far, so good, but it's only been a day. Okay, my ears aren't working is a common refrain.

Joseph D. Vruwink: So I'll happily move on from that one. Second question: I appreciate Autodesk is a pretty diversified business by M Markets, and so sometimes it's fruitless to ask these questions.

Okay.

Speaker Change: Sure thing is a common refrain.

Speaker Change: Absolutely okay from that one.

Speaker Change: Yes.

Speaker Change: Second question I appreciate it out it is still a pretty diversified business by end markets and so sometimes that Straitlaced asked these questions, but I did want to ask about your data center exposure is specifically because I think it's an example, where you can tackle it through the ADC side of the business.

Joseph D. Vruwink: But I did want to ask you about your data center exposure specifically, because I think it's an example where you can tackle it through the AEC side of the business. You're also very involved with some of the product companies that end up in the data centers, and that's on the manufacturing side of Autodesk. So I'm just wondering if you're seeing more real-time convergence happening, and Autodesk actually has a somewhat consequential role to play in the data center build out that's underway. Joe, I love this question.

Joe: We're also very involved with some of the product companies that ended up in the data centers and that's in the manufacturing side of Autodesk. So I'm just wondering if youre seeing more real time convergence happening in autodesk actually as a somewhat consequential role to play in the data Center Buildout that's underway Joe.

Andrew Anagnost: The answer is yes, yes, yes. Okay. We are actively involved in lots of data centers. I won't say whose data centers we're involved in, but we are involved in data centers. We're helping people build data centers and build multiple data centers that are similar. They're using our construction tools.

I Love. This question, yes. The answer is yes, yes, yes, okay.

Speaker Change: We're actively involved and lots of data centers I won't say, who who is data centers. We're involved in but we are involved in data centers, we are helping people.

Speaker Change: Data centers and build multiple data centers that are similar they are using our construction tools. Some of them are using our manufacturing tools and adjacent to the data centers is also that the factory boom in the U S. We're involved in building out factories with certain customers as well and in all of these you are absolutely seeing a.

Andrew Anagnost: Some of them are using our manufacturing tools. And adjacent to the data centers are also the factory boom in the US. We're involved in building out factories with certain customers as well. And in all of these, you are absolutely seeing a convergence of our manufacturing portfolio and our AEC and construction portfolio. And that is happening in real time, and we expect to see more of it. There was a great article in the New York Times recently about how Europe managed to pull off what America had been talking about for so long, the Scandinavian countries building prefabricated housing and factories using our products, by the way.

Speaker Change: Convergence of our manufacturing portfolio, and our AUC and construction portfolio and that is happening in real time, and we expect to see more of it there was a great article in the New York Times recently about about how Europe managed to pull off with America was talking about for so long in the Scandinavian countries building pre fabricated how.

Speaker Change: Housing in factories, using our products by the way to do that and I'm, hoping that will all come to the U S. Soon as well so that we see the convergence of AUC and manufacturing in terms of building pre fabricated components of houses that day is going to come to but right now youre right Datacenters and factories are very interesting places.

Andrew Anagnost: And I'm hoping that will all come to the US soon as well, so that we see the convergence of AEC and manufacturing in terms of building prefabricated components of houses. That day is going to come, too.

Joseph D. Vruwink: But right now, you're right. Data centers and factories are very interesting places. Great. Thank you very much.

Speaker Change: Great. Thank you very much.

Speaker Change: Thank you.

Ken Wong: Thank you. Our next question comes from Ken Wong of Oppenheimer & Company. All right. Thank you for taking my question. Just a quick question back on the investigation.

Speaker Change: Our next question comes from Ken Wong of Oppenheimer and company.

Ken Wong: Alright, Thank you for taking my question.

Speaker Change: A quick question back on the investigation my reading of your commentary was that obviously you guys completed the audit.

Andrew Anagnost: My reading of your commentary was that obviously you guys completed the audit, and the SEC may or may not investigate. I guess I just wanted to get clarification from you guys whether or not there is any progress on that front. Yeah, so just so you know, when we kicked off the investigation, we voluntarily engaged with the SEC, and we have shared information about the investigation. So if they want more information and they want to engage more, we will cooperate with them to the fullest extent of our ability. Okay, perfect. And then second, just on the, you know, I couldn't help but notice you guys commented on this record construction foot growth. Any color on kind of where you're seeing that?

Speaker Change: And the FCC may or May not investigate I guess I just wanted to get clarification from you guys, whether or not there is any.

Speaker Change: On that front.

Speaker Change: So just when we.

Speaker Change: When we kicked off the investigation, we voluntarily engaged with the SEC and we have shared information about the investigation. So if they want more information and they want to engage more we will cooperate with them to the fullest extent of our ability.

Speaker Change: Okay, Perfect and then second just on the I couldn't help but notice you guys commented on this record construction fee growth.

Speaker Change: Any color on kind of where you're seeing that.

Speaker Change: Obviously, the kind of construction kpis macro why it seems a little mixed but you guys are showing considerable strength there.

Ken Wong: Obviously, the kind of construction KPIs macro-wide seem a little mixed, but you guys are showing considerable strength there. Yeah, first off, one of the things that's important to look at in construction is the backlog. The backlog is still pretty solid in construction. Yeah, the rise in new accounts was broad-based across all the regions that we were working in. So, it's broad-based. We saw strength everywhere.

Speaker Change: Yes.

Speaker Change: First I'll begin with one of the things that is important to look at it construction has the backlog there is still at the backlog is still pretty solid and construction. Yes. We said the ryzen in new accounts was broad based across all the regions that we're working on so it's broad based we saw strength everywhere.

Andrew Anagnost: And we continue to see a great adoption of our tools, and we're continuing to do competitive wins. I mean, I love the Marathon example in Australia because it's a perfect example of how somebody uses our solution to track the entire process, all the way from design through pre-construction down to construction management. It really captures the notion of what our competitive advantage is. We provide an end-to-end solution. We provide it in such a way that it's economically viable for the customer, and we deliver some of the best pre-construction tools in the industry. It's a great example.

Speaker Change: And we continue to see great adoption of our tools and we're continuing to do competitive wins I mean I loved the Marathon example, in Australia, because it's a perfect example of how somebody uses the <unk> solution to track the entire process all the way from design through Preconstruction down to construction management.

Really captures the notion of what our competitive advantage is we provide the end to end solution. We provided in such a way that is economically viable for the customer and we deliver some of the best Preconstruction tools in the industry. It is a great example is a great example of what we're seeing and yes, we see ourselves accelerating not decelerating. So we're feeling.

Ken Wong: It's a great example of what we're seeing. And yeah, we see ourselves accelerating, not decelerating. So, we're feeling fairly bullish about our construction. Great. Thanks for the contact.

Speaker Change: Fairly bullish about our construction business.

Speaker Change: Great. Thanks for the context.

Speaker Change: Thank you.

Speaker Change: Our next question.

Tyler Maverick Radke: Thank you. Our next question comes from the line of Tyler Radke of Citi. Thanks for taking the question. Andrew, could you talk about the EVA performance in the quarter? I think the license and other lines outperformed expectations by quite a bit. Was that related to some EVA strength that you saw?

Speaker Change: Comes from the line of Tyler Radke of Citi.

Andrew Anagnost: And then just given that we've seen some of these EBA contracts come in with multi-year billing. Is that something that you're expecting to see as EBA deals come up for renewal later this year and in the next? Thank you.

Speaker Change: Thanks for taking the question Andrew could you talk about the EBITDA performance of the quarter I think that.

Speaker Change: The license and other line.

Tyler Maverick Radke: Outperformed expectations by quite a bit was that related to some some EBITDA strength that you saw and then just given that we.

Tyler Maverick Radke: We had seen some of these EBITDA contracts come in with multiyear billing is that something that youre expecting to see.

Speaker Change: EMEA deals come up for renewal later this year and into next.

Tyler Maverick Radke: All right, so Tyler, I want to make sure I understood your question. So with regard to the EBAs, all of our EBAs are multi-year, and and we, we, saw, so I just want to make sure I understood what your question was. Yeah, the question was specifically around the invoicing duration and the billing duration. I understand they're contractually multi-years in nature, but do you still plan to invoice them multi-year in advance? But the first part of the question was really just around, was there outsized EBA strength or any true-ups to call out in the quarter? No, no, there was no...

Speaker Change: Thank you alright.

Speaker Change: Alright, so so Tyler I want make sure I understood. Your question so with regards to the E Bay as all of our eds are multiyear contracts.

Speaker Change: We.

We saw.

Speaker Change: So I just want to make sure I understood. What your question was.

Speaker Change: Yes.

Tyler: The question was specifically around the.

Speaker Change: Invoicing duration in the billing duration I understand they're contractually multi years nature, but do you still plan to invoice them.

Speaker Change: Multiyear in advance, but the first part of the question is really just around was there was there outsized EMEA strength or any any true ups to call out there.

Speaker Change #100: No. Okay great. Okay. Thank you that's why I just wanted to clarify there was no outsized EMEA strength in the quarter and.

Andrew Anagnost: Okay, good. Okay, thank you. That's what I just wanted to clarify. There was no outsized EBA strength in the quarter, and the vast majority of EBAs are multi-year contracts that are going to be billed annually. It doesn't mean there aren't some that are done up front, but customers ask for them sometimes, but the vast majority are done multi-year and are billed annually.

Speaker Change #101: The vast majority of EPA is our multiyear contracts that are going to be billed annually. Okay that doesn't mean, there aren't some that are done upfront.

Speaker Change #101: Customers asked for them sometimes.

Speaker Change #101: But the vast majority are done multiyear build annually.

Simon Mays: And Tyler, just for some clarification, remember the true ups appear in the subscription line, and the up front is the non-cloud enabled. Primarily last year, that was from non-cloud enabled automotive products, which goes in the other line. So just to make sure you've got some geography there.

Speaker Change #102: And Todd just to.

Speaker Change #103: So clarification remember the true ups appear in the subscription line.

It's the upfront is the non cloud enabled.

Speaker Change #103: Primarily last year that was from non cloud enabled automotive products.

Speaker Change #103: And the other one so just to make sure you've got sort of geography that but general thing is Q1, we don't guide by sub segment.

Simon Mays: But the general thing is Q1, we don't guide by subsegments, as you know. Q1 was exactly where we expected it to be. Okay, helpful clarification. And the second question, which is, and I realize, maybe more of a CFO question. So apologies if it's a little down the weeds.

Speaker Change #103: Q1 was exactly where I expected it.

Speaker Change #103: Yes.

Speaker Change #104: Okay helpful clarification.

Speaker Change #105: The second question.

Speaker Change #106: Maybe more of a CFO question, so apologies if it's a.

Tyler Maverick Radke: But just as we're looking at the billing number in Q1, certainly can appreciate there's Headwinds, it's a messy number, just given the multi-year strength that you saw a year ago. But if we, investors, are doing the calculation around short-term billings, looking at the change and short-term deferred revenue, which, you know, theoretically doesn't have any impact from the multi-year, that metric, short-term billings growth, looks a lot weaker than many of the other indicators of revenue and bookings.

Speaker Change #106: A little down the weeds, but just as we're looking at the billings number in Q1.

Speaker Change #107: Certainly can appreciate theirs.

Speaker Change #107: Headwind that the domestic number just given the multiyear strength that you saw a year ago, but if investors are doing the calculation around short term billings looking at the change in short term deferred revenue, which.

Speaker Change #107: Theoretically it doesn't have any impact from the multiyear.

Speaker Change #107: That metric short term billings growth looked a lot weaker than many of the other.

Speaker Change #108: Both revenue and bookings is there anything to call out in terms of maybe why that short term.

Tyler Maverick Radke: Is there anything to call out, in terms of maybe why that short-term deferred revenue performance was not as strong any- I'm going to give this one to Simon, Tyler. Okay yeah Tyler we can we can we can this is a slightly inside baseball um but for general point as we've said there's a lot of noise as we switch from multi-year up front uh to multi-year annual um so that's the first thing that's causing noise the second noise is seasonality obviously we have a bigger q3 and q4 than q1 uh and then in addition to that there's a bit of noise from fx as well uh over time, So, what that means is, and the reason we've been pointing you to CRPO is probably the better metric, just on billing specifically, what I'd flag is, and this is primarily the multi-year to annual, we were obviously plus 4% Q1 last year, because we had still two months of multi-year up front in Q1 last year, because we ended it on March 28th. And then billings was down 8% in Q2, down 11% in Q3, and down 19% in Q4.

Speaker Change #108: Deferred revenue performance.

Speaker Change #108: It was not as strong any.

Speaker Change #109: I'm going to give me forward I'm going to give this one assignment Tyler.

Speaker Change #109: Okay.

Speaker Change #110: We can.

Speaker Change #111: Inside baseball, but so general point as we've said, there's a lot of noise as we switch from multi year upfront to multi year annual.

Speaker Change #111: So that's the first thing, let's causing noise. The second noise is seasonality, obviously, we have a big Q3, and Q4 and Q1.

And then in addition to that there is a bit of noise from FX as well.

Speaker Change #111: Todd.

Todd: So what that means is and the reason we've been pointing you to CRP.

Speaker Change #113: <unk> it was probably the better metric just on billings, specifically, what I'd flag is.

Speaker Change #114: This is primarily the multiyear two Daniel we were obviously plus 4% Q1 last year, because we had still two months of multiyear upfront in Q1 last year. Because we ended as of March 28, and then billings was down 8% in Q2 down.

Simon Mays: And so, to put that in context, the Q1 of minus 5%, as we begin to cycle against the easier comparables, gives you context for that. So, it's actually improving. It may be that it wasn't quite where consensus was, but remember, we don't guide to billings.

Speaker Change #114: The 11% in Q3 and down 19% in Q4.

Speaker Change #114: To put that in context, the Q1 of minus 5% as we begin to cycle against the easier Comparables.

Speaker Change #114: The context for that so it's actually improving in Miami and maybe it wasn't quite where consensus was but remember we don't guide to billings, but what you can actually see is the improvement in trend and obviously as we cycle against the easier comps in Q2 and beyond that will then make more sense in the context of our annual guidance.

Tyler Maverick Radke: But what you can actually see is the improvement in trend. And obviously, as we cycle against the easier comps in Q2 and beyond, that will then make more sense in the context of our annual guidance. Thank you very much.

Speaker Change #116: Thank you very much.

No.

Joshua Alexander Tilton: Thank you. Our next question comes from the line of Joshua Tilton of Wolf Research. Hey, guys, can you hear me?

Speaker Change #115: Thank you. Our next question comes from the line of Joshua Tilton of <unk>.

Speaker Change #115: Research.

Speaker Change #117: Hey, guys can you hear me.

Operator: Yep, Joshua, we can hear you fine. Yeah. I apologize for any of the background noise, but I kind of want to go back to the investigation.

Speaker Change #118: Josh we can hear you fine, yes, I apologize for any of the other background noise, but.

Speaker Change #119: I kind of want to go back to the investigation.

Joshua Alexander Tilton: I know I'm definitely not the smartest guy on the call tonight, but if I read through some of the bullet points that you guys put out there for investors, it sounded like there were some choices made around collections and that maybe those choices had to change going forward. And I do really appreciate that you guys reiterated your confidence in that FY25 cash number. But I guess, was there any change around collections or practices related to collections that you previously undertook that you can no longer take going forward that maybe changes your confidence interval around hitting that cash number in FY26?

Speaker Change #120: I'm definitely not the smartest guy in the call Tonight.

Speaker Change #120: But if I read through some of the bullet points that you guys put out there for investors and it sounded like there were some choices made around collections.

Speaker Change #120: Maybe those choices have to change going forward and I do really appreciate that you guys reiterated your confidence in that FY 'twenty is a cash number but I guess was there any change around collections.

Speaker Change #121: Our practices related to collections that you've previously undertook the longer it takes all going forward there may be changes or confidence interval around putting that cash number in FY 'twenty six.

Andrew Anagnost: Yeah, so first off, I just want to make clear that there are no changes in our financials. All right. And there was no obfuscation of the strength in the underlying business.

Yes so.

Speaker Change #122: First off I, just wanted to be clear, there's no changes in our financials alright.

Andrew Anagnost: All right, so any changes or practices that we make do not impact the trajectory of our business at all. All right, there is no change in our confidence in the free cash flow target this year or the free cash flow target for next, which is helpful. And then maybe, maybe just a quick follow-up. And I could just be nitpicking here.

And there was no obvious cases and to strengthen the underlying business alright. So.

Speaker Change #122: Any any changes or practices that we don't make make Nic do not impact the trajectory of our business at all alright. There is no no change in our confidence in the free cash flow target this year or the free cash flow target for next year.

Joshua Alexander Tilton: But you know, you kind of referred to the macro environment as the one-off facets of the business. But as you also mentioned, right, we've kind of been in the States for many quarters now. So I guess, how do you think about the trajectory of the business over the next few years? In the context of what might just be a new norm from a macro perspective, and not necessarily things getting better?

Speaker Change #123: That's helpful. And then maybe just a quick follow up and I could just be nitpicking here, but you kind of referred to the macro environment as the one off assets of the business.

Speaker Change #124: As you also mentioned right, we've kind of been in the state for many quarters now so I guess, how do you think about it.

Speaker Change #124: The trajectory of the business over the next few years.

Speaker Change #124: In the context of what might just be.

Speaker Change #124: A new norm from a macro perspective.

Speaker Change #125: Not necessarily things getting better I guess when you guys think about beyond the next few quarters is the going rate assumption for Autodesk.

Joshua Alexander Tilton: I guess when you guys think about beyond the next few quarters, right? Like is the going rate assumption for Autodesk that, you know, this is a one-off, and things do get better? Or are you guys playing ball in terms of this game that we've been playing for the last few quarters and just assuming the macro is the way it is, and maybe this is more of a new norm? So let me be super clear about something. The long-range plan for our business is completely unchanged.

Speaker Change #126: It is one off and things do get better or are you guys playing ball in terms of this game that we play in for the last few quarters I'm just assuming the macro is the way. It is and maybe this is more of a new norm.

Speaker Change #127: So let me, let me be Super clear about something the long range plan for our business is completely unchanged.

Andrew Anagnost: So, in terms of what we're looking at, you know, 10 to 15% revenue growth, the long-term targets, the business is completely unchanged. And the mechanical business buildup of free cash flow that we're going to see now as a result of the large renewal cohort we have next year, which is the largest renewal cohort of product solutions we have next year, plus the large renewal cohort of EBAs we have next year, all with the mechanical buildup of what will get billed from multi-year subscriptions booked this year, I mean, a recognized order this year. We see a nice buildup in the business. The answer to your question is, things...

Speaker Change #126: Alright.

Speaker Change #126: In terms of in terms of what we what we're looking at 10% to 15% revenue growth.

Speaker Change #126: Long term targets is completely unchanged and the mechanical business buildup of free cash flow that we're going to see now as a result of the large renewal cohort we have next year plus.

Speaker Change #126: Which is the largest renewal cohort of prices here, because we have next year plus the larger neural cohort of <unk>, we have next year.

Speaker Change #126: With the mechanical buildup of what was what will get built.

Speaker Change #126: Multi year subscriptions.

Speaker Change #126: But this year I mean are recognized.

Speaker Change #126: The order of this year, we see a nice buildup in the business. So.

Speaker Change #128: The answer to your question is.

Speaker Change #128: Things.

Joshua Alexander Tilton: Things with regard to our long-range plan are absolutely, Thanks guys, I appreciate the feedback. Thank you. Our next question comes from the line, from Nae So Nang of Berenberg. The line is open.

Speaker Change #128: Things with regard to our long range plan are absolutely unchanged.

Thanks, guys I appreciate the feedback.

Speaker Change #128: Okay.

Speaker Change #128: Hi.

Speaker Change #129: Thank you.

Speaker Change #130: Our next question comes from the line.

Speaker Change #131: So netting a barren bird.

Speaker Change #131: Sure.

Speaker Change #132: Your line is open.

Nay Soe Naing: Thanks so much. Hi Andrew. Thank you for taking my questions. Hi, My first question is around your platform cloud offerings. You've been investing in these offerings, and by the sound of it, you will continue to invest in them as well. If you could speak a little bit more about what sort of R&D commitments that we should expect as a result of that, so taking R&D as a percentage of revenue here, should we expect that intensity, R&D intensity, to remain at FY24 levels in the near future, or should we expect that to tick up as a result of the investments in your cloud offerings, cloud platform offerings specifically?

Speaker Change #133: Hi, Andrew.

Andrew Anagnost: Taking my questions.

Andrew: My first question is around your platform cloud offerings investing in these offerings and but it sounded that you will continue to invest into them as well.

Andrew: If you could speak a little bit more to sort of.

Andrew: R&D commitments that we should expect as a result of that so taking R&D as a percentage of revenue here should we expect that intensity R&D expense to remain at FY 'twenty four levels in the near future or.

Andrew: Okay.

Andrew: Sure.

Speaker Change #135: Should we expect that to tick up as a result of the investments and in the cloud offerings cloud platform offerings, specifically and then Lincoln.

Nay Soe Naing: And then linking to that, when do you expect these offerings, these new offerings to start to contribute meaningfully to your top line growth? All right. So first off, you know, I wouldn't anchor on R&D as a percent of revenue. That will drift where it's going to drift.

Speaker Change #135: Linked to that.

Speaker Change #135: When do you expect these offerings seize new offerings to become.

Speaker Change #136: Do you start to contribute meaningfully in your topline growth place alright.

Speaker Change #137: So first off.

Speaker Change #138: I wouldn't I wouldn't anchor on the R&D as a percent of revenue that will drift, where it's going to drift I would pay more attention overtime to the sales and marketing as a percent of revenue because that's the place where we're going to be looking for optimization and an ongoing kind of performance.

Andrew Anagnost: I would pay more attention over time to sales and marketing as a percent of revenue because that's the place where we're going to be looking for optimization and ongoing kinds of performance and productivity changes moving forward. So I would encourage you to think about that part of the business. As we move forward, because R&D investment is really important to us, and we'll continue to invest in R&D appropriately. With regard to the new offerings, I just want to make sure I understand what the new offerings you're talking about.

Speaker Change #138: Performance and productivity changes moving forward. So I would encourage you to think about that part of the business.

Speaker Change #138: As we move forward because.

Speaker Change #138: R&D investment is really important to us and we'll continue to invest in R&D appropriately with regards to the new offerings I just want to make sure I understand with new offerings are talking about are you talking are you talking about platform services in terms of global platform services, we already actually provide access to some of our services on a on a on a per pay bay.

Andrew Anagnost: Are you talking about platform services in terms of billable platform services? We already provide access to some of our services on a per-pay basis. But there's going to be a whole set of services that continue to roll out over the next couple of years that will be available to our customers on a pay-per-use basis. So I'm just not sure what particular capabilities you are asking about. I was referring to the three cloud offerings, three industry cloud platforms. Oh, Fusion, Form, and Flow. Yes, those ones.

Speaker Change #139: <unk>, but theres going to be a whole set of services that continue to rollout over the next couple of years that will be available to our customers on a per charge basis. So.

Speaker Change #140: I'm just not sure what particular capabilities you were asking about.

Speaker Change #141: I was referring to the three cloud offerings industry cloud platform fusion form in Florida.

Nay Soe Naing: All right. Okay. All right.

Speaker Change #142: Alright, Okay, alright, well fusion's already a growing business for the company and its already accelerating.

Andrew Anagnost: Well, Fusion's already a growing business for the company, and it's already accelerating. I think... Forma and Flow are very nascent. Forma is in the stage where we're focusing on product market fit, user adoption, and getting people excited about outcome-based design and the new paradigms we're going to be pioneering with Forma. And then, of course, integrating it tightly with Revit, so it's the best Revit companion out there in the market, so that it provides not only next-gen cloud-based capabilities and AI capabilities, but it works incredibly well with Rev

Speaker Change #143: I think forma former and flow our very nascent alright, former is in the stage, where we're focusing on product market fit user adoption and getting people excited about outcome base design in the new paradigm, we're going to be pioneering with with pharma and then of course integrating it.

Speaker Change #143: Tightly with rabbit. So it's the best Rabbit companion out there in the market. So that it provides not only next gen cloud based capabilities and AI capabilities, but it works incredibly well with rabbit. So the focus on form of right now as adoption.

Nay Soe Naing: So the focus on Forma right now is adoption. The focus on flow right now is actually getting flow out the door, and the initial capabilities are going to be focused more on asset management and the capabilities of managing assets in the media and entertainment space, but they're not yet generating the revenue growth that we care about. Fusion, on the other hand, is a growing franchise, continues to grow, it's taking share from our competitors, and I continue to encourage you to watch that space. Industry Clouds are going to start contributing meaningfully to Autodesk's growth strategy. That's really helpful. Thank you very much.

Speaker Change #143: The focus on flow right now is actually getting flow out the door.

Speaker Change #143: The initial capabilities are going to be focused more on asset management and the capabilities of managing assets in the media and entertainment place, but they are not yet generating the revenue growth that we hear about fusion on the other hand as a growing franchise continues to grow as taking share from our competitors and I can I can.

Speaker Change #143: To encourage you to watch that space, but over the next three years all of these.

Speaker Change #143: Industry clouds are going to start contributing meaningfully to autodesk growth strategy.

Andrew Anagnost: And on R&D, I just wanted to make sure that I've understood you correctly here. So the R&D as a percentage of revenue as an intensity, that should remain at the current level because R&D is really important for the business. But, Should we expect that to take up given that you're obviously investing in platform services and also complementing your HTC offering overall as well? I'm not going to speculate on the future trajectory of R&D as a percent of revenue.

Speaker Change #144: That's really helpful. Thank you very much and on R&D just wanted to make sure that.

Speaker Change #145: You correctly here.

Speaker Change #146: R&D as a percentage of revenue is an intensity that should remain at current level because R&D is really important for the business but.

Speaker Change #147: Should we expect that to take up given that you're obviously investing in the platform services and also complementing ACC offering overall as well.

Andrew Anagnost: I think I would really encourage you to focus more on the sales and marketing numbers at this point. Right now, we're definitely a product company, and R&D is very important to us. So we're going to continue to invest, but we're going to invest prudently and appropriately. And I want to make sure that you understand that we're going to keep these things within reasonable bounds. But sales and marketing might be something you want to pay attention to in the future. Right, okay, understood. Thank you very much.

Speaker Change #148: I'm not going to expense speculate on the future trajectory.

Speaker Change #148: R&D as a percentage of revenue I think I'd really I would really encourage you to focus more on the sales and marketing numbers at this point alright, right now we're definitely a product company in R&D is very important to us. So we're going to continue to invest but we're getting that prudently and appropriately alright. So I want to make sure that you understand that we're going to we're going to keep these things within reason.

Speaker Change #148: We'll balance, but sales and marketing might be something you want to pay attention to in the future.

Speaker Change #149: But okay understood. Thank you very much.

Speaker Change #150: Thank you.

Nay Soe Naing: Thank you. The next question comes from the line of Keith Weiss of Morgan Stanley. Hi, this is Elizabeth Porter on behalf of Keith Weiss.

Speaker Change #151: Our next question comes from the line of.

Speaker Change #152: Keith Weiss of Morgan Stanley.

Elizabeth Mary Elliott Porter: I wanted to ask about just the cadence of M&A; we've seen some recent activity with Wonder Dynamics and PIX adding payment apps. So how should we think about this as a lever in driving faster innovation in the portfolio? And then related, I think the prior guidance assumed about a half point tailwind from acquisitions. Is it fair to still think about that number, just given some of the more recent announcements? Thank you.

Peter: Hi, This is Peter on for Keith Weiss I wanted to ask on just the cadence of M&A. We've seen some recent activity with wonder dynamics packs, adding to payouts.

Speaker Change #154: How should we think about this as a lever in driving faster innovation in that portfolio and then related I think the prior guidance that assumed about a half point tailwind from acquisitions is it fair to still think about that number just given some of the more.

Speaker Change #154: Recent announcements thank you.

Andrew Anagnost: Yeah, so look, our acquisition strategy is unchanged. We always pursue interesting adjacencies and tech tuck-ins according to our strategy, and we do it in a prudent and disciplined way.

Speaker Change #155: Yes, so our acquisition strategy is unchanged, we always pursue interesting adjacencies and tech tuck ins. According to our strategy and we do it in a prudent and disciplined way I'm very excited about payouts because it's an important extension of our construction portfolio is an industry leading payment solution.

Elizabeth Mary Elliott Porter: I'm very excited about PayApps because it's an important extension of our construction portfolio and it's an industry-leading payment solution. And it helps us integrate all the way through the process and add payment capabilities. PIX PIX is exciting because it puts us on the set and puts us in the business of capturing data on the set and interacting with the directors and furthering our script-to-screen vision for the media and entertainment industry.

Speaker Change #155: It helps us integrate all the way through the process and have the payment capabilities.

Speaker Change #155: <unk> picks is exciting because it puts us on the set and puts us in the business of capturing data on the set and interacting with the directors and furthering our script to screen vision for the media and entertainment vision and wonder.

Andrew Anagnost: And Wonder Dynamics is a great example of a leading-edge AI company doing amazing things that are really going to be transformative in the media and entertainment space. And they're going to be doing great things at Autodesk for many years. They're all part of our strategy. They're all connected directly to our strategy. I think you can expect to see us continue down this path of doing acquisitions that make sense with regard to our strategy or the adjacencies that we're trying to target for our business.

Speaker Change #155: <unk> is a great example of our leading edge AI company doing amazing things that are really going to be transformative in the media and entertainment space and theyre going to be doing great things at Autodesk over multiple years, they're all part of our strategy. They're all connected directly to our strategy. I think you can expect to see us continue.

Speaker Change #155: Down this path of doing acquisitions that make sense with regards to our strategy or the adjacencies that we're trying to target for our business.

Andrew Anagnost: Great, and then just another one on the transaction model. I believe you referenced just the potential for some uncertainty around rolling out the model and leaving room for that in the full-year guide. I just want to better understand what those friction points would be, whether they were partners or customers, what they look like, and then just double-click on the guardrails or processes you have in place to mitigate that risk.

Speaker Change #156: Great and then just another one on the transaction model I believe you referenced just the potential for some uncertainty around rolling out the model and leaving room for that in the full year Guide I just wanted to better understand what the question would be whether it's our partners our customers what they look like and then just doubleclick.

Speaker Change #157: On the Guardrails are processes, you have in place to mitigate that risk.

Elizabeth Mary Elliott Porter: Yeah, Elizabeth, it's really to do with the timing of the US rollout. As you know, we went live yesterday. So far, it's all pretty quiet, which is good because it means everything's okay. And we're just going to see how that goes.

Yes.

Speaker Change #158: It's really to do with the timing of the U S rollout as you know we went live yesterday, so it's all pretty quiet.

Speaker Change #158: Which is good.

Speaker Change #158: Because it means everything is okay, and we're just going to see how that goes.

Elizabeth Mary Elliott Porter: And then that will determine what we do and the rate of rollout, as Andrew was saying earlier. So it's really to do with that, the timing of the rollout, and that's determined by how things go in the US. All right.

Speaker Change #159: And that will determine what we do in the rates of Rollouts as Andrew was saying earlier, so it's really to do with that the timing of the Rollouts and Thats determined.

Speaker Change #159: On how things go in the U S.

Speaker Change #160: Thank you.

Speaker Change #160: Thank you.

Elizabeth Mary Elliott Porter: The next question comes from the line of CT Penegrahi of Missoula. Hi, this is Sameer calling in for Citi. I have a couple of questions I have.

Speaker Change #161: Our next question comes from the line of City Pentagon.

Speaker Change #160: Mizuho.

Samir: Hi, This is samir calling in for Sydney.

Speaker Change #163: Couple of questions I have one is the.

CT Penegrahi: The Strength in Construction. Given there were some recent consolidation talks in the industry, I was wondering if there was any benefit to you from that dynamic in terms of talk starting and then not going through. Hello. I can't hear. Sorry, can you hear Andrew? Sorry, I was, yeah, I was muted.

Speaker Change #164: The strength in construction.

Speaker Change #164: And given that there were some recent consolidation talks and the industry I was wondering if there was any benefit to you.

Speaker Change #165: Some that do.

Speaker Change #165: Dynamic and knows us talk starting and then not going through.

Speaker Change #165: Okay.

Andrew Anagnost: I apologize. No, actually, there's no connection whatsoever between those dynamics and what's going on in our construction business. What you're seeing is growing momentum in our construction business related to the quality of our solution and the increasing capabilities of our go-to-market strategy and, frankly, competitive wins. So it's purely related to that.

Speaker Change #165: Hello.

Speaker Change #165: Okay.

Sorry can you hear Andrew.

Speaker Change #166: Sorry, I was I was yes it was.

Speaker Change #166: You did I apologize for that.

Speaker Change #167: No actually there is no connection whatsoever between those dynamics and what's going on in our construction business, what youre seeing is growing momentum in our construction business related to the quality of our solution and the the increasing capabilities of our go to market and frankly competitive wins so.

Speaker Change #167: It's purely related to that.

CT Penegrahi: There's no other talks, no other impact that we're having, impacts on us, purely explained. Thank you. And a quick one, you did mention that there are going to be some contracts that are going to stay legacy on-prem multi-year billing. Is there like a floor that's going to be there all the time in terms of multi-year upfront billings? No, there's no particular floor.

Speaker Change #167: There is no other no other talks that no other impacts that we're having.

Speaker Change #167: On a purely execution.

Speaker Change #168: Thank you.

Speaker Change #169: A quick one you didn't mention that are.

Speaker Change #170: There are going to be some contracts that are going to stay a legacy on prem multi year billing is there like a.

Speaker Change #170: Floor, that's going to be there all the time in terms of multiyear upfront billings.

Speaker Change #171: No there is no particular floor.

Andrew Anagnost: You know, some customers may prefer to pay up front. Some partners may prefer to sell up front. As long as we offer it, somebody is going to do it. But the important thing is it's going to be the exception, not the rule. We're well past the world where multi-year subscriptions build up front. They're like a large chunk of our business. That era is over.

Speaker Change #171: Some customers may may prefer to pay upfront.

Speaker Change #171: Some some some partners may prefer to to sell.

Speaker Change #171: Sell upfront as long as we offer it somebody is going to do it but the important thing is it's going to be the exception not the rule, we're well past the world, where multiyear billings up multi year subscriptions build upfront where like a large chunk of our business that that era is over.

CT Penegrahi: But that doesn't mean that people won't do this, and we won't end up with some multi-year contracts built up. Got it. Thank you. Thank you. That is all the time we have for Q&A today.

Speaker Change #171: That doesn't mean that people won't do this and we won't end up with some multi year contracts built upfront.

Speaker Change #172: Got it thank you.

Simon Mays: I would now like to turn the conference back to Simon Mays Smith for closing remarks, sir. Thank you everyone for joining us. I'm sorry we've been quiet for a while.

Speaker Change #173: Thank you that is all the time, we have for Q&A today I would now like to turn the conference back to Simon Mays Smith for closing remarks, Sir.

Michael Funk: Thanks everyone for joining us. Sorry we've been quiet for a while. Very much looking forward to seeing many of you and talking to you over the coming weeks. If you do have questions, please just ping me as you always do, and I'll be having a jump on a call and have a chat. Otherwise, we'll look forward to catching up with you next quarter and look forward to chatting then. Thanks all.

Speaker Change #174: Thanks, everyone for joining us I'm, sorry, we've been quiet for a while very much looking forward to seeing many of you and told you over the coming weeks. If you do have questions. Please just Ping me as you always do and I'll be happy to jump on the call and have a chat.

Simon Mays: Very much looking forward to seeing many of you and talking to you over the coming weeks. If you do have questions, please just ping me as you always do, and I'll be happy to jump on a call and have a chat. Otherwise, we'll look forward to catching up with you next quarter and look forward to chatting then. Thanks all.

Speaker Change #174: We will look forward to catching up with you next quarter.

al: Thanks Al.

Operator: This concludes today's conference call. Thank you for participating. You may now disconnect. ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? [inaudible] ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? Thank you for standing by and welcome to Autodesk first quarter fiscal year 2025 earnings conference call.

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

Speaker Change #176: This concludes today's conference call. Thank you for participating you may now disconnect.

Speaker Change #176: Okay.

Speaker Change #176: [music].

Speaker Change #176: Okay.

Speaker Change #176: Okay.

Speaker Change #176: [music].

Speaker Change #176: Okay.

Speaker Change #176: [music].

Speaker Change #176: Yes.

Speaker Change #176: Yes.

Speaker Change #176: [music].

Speaker Change #176: Okay.

Speaker Change #176: Yes.

Speaker Change #176: Yes.

[music].

Speaker Change #176: Yes.

Speaker Change #176: [music].

Speaker Change #176: Yes.

Speaker Change #176: [music].

Speaker Change #176: Okay.

Speaker Change #176: Okay.

[music].

Speaker Change #176: Okay.

Speaker Change #176: Okay.

Speaker Change #176: Okay.

Speaker Change #176: [music].

Speaker Change #176: Thanks.

Speaker Change #176: [music].

Speaker Change #176: Okay.

Speaker Change #176: Yes.

Speaker Change #176: [music].

Michael J. Funk: Michael Funk, thank everyone for joining us. Sorry, we've been quiet for a while. Very much looking forward to seeing many of you and talking to you over the coming weeks. If you do have questions, please just ping me as you always do, and I'll be having a jump on a call and have a chat.

Speaker Change #176: Okay.

Speaker Change #176: Okay.

Speaker Change #176: [music].

Speaker Change #176: Okay.

Speaker Change #176: [music].

Speaker Change #176: Okay.

Speaker Change #176: [music].

Okay.

Speaker Change #176: Okay.

Speaker Change #176: Sure.

Speaker Change #176: Okay.

Yes.

Speaker Change #176: [music].

Speaker Change #176: Yes.

[music].

Speaker Change #176: Okay.

Speaker Change #176: [music].

Speaker Change #176: Okay.

Speaker Change #176: Yes.

Speaker Change #176: Okay.

Speaker Change #176: Yes.

Speaker Change #176: Okay.

Yes.

Speaker Change #176: [music].

Speaker Change #176: Yes.

Speaker Change #176: Sure.

Speaker Change #176: Yes.

Speaker Change #176: Great.

Speaker Change #176: Yes.

Speaker Change #176: Yes.

Speaker Change #176: Okay.

Speaker Change #176: Okay.

Speaker Change #176: [music].

Speaker Change #176: Okay.

Speaker Change #176: Sure.

Speaker Change #176: Okay.

Speaker Change #176: Okay.

Speaker Change #176: Okay.

Speaker Change #176: Okay.

Speaker Change #176: [music].

Speaker Change #176: Sure.

Speaker Change #176: Okay.

Speaker Change #176: Okay.

Speaker Change #176: Okay.

Speaker Change #176: [music].

Speaker Change #176: Sure.

Speaker Change #176: Yes.

Speaker Change #176: Yes.

Speaker Change #176: Great.

Speaker Change #176: Sure.

Speaker Change #176: Okay.

Speaker Change #176: Okay.

Speaker Change #176: Yes.

Speaker Change #176: Okay.

Speaker Change #176: Okay.

Speaker Change #176: [music].

Speaker Change #176: Okay.

Okay.

Speaker Change #176: Sure.

Speaker Change #176: Sure.

Speaker Change #176: Okay.

Yes.

Speaker Change #176: Yes.

Speaker Change #176: Sure.

Speaker Change #176: Yes.

Speaker Change #176: Okay.

Speaker Change #176: Okay.

Speaker Change #176: Okay.

Speaker Change #176: Okay.

Speaker Change #176: Yes.

Speaker Change #176: Okay.

Speaker Change #176: [music].

Speaker Change #176: Yes.

Speaker Change #176: Thanks.

Speaker Change #176: Sure.

Speaker Change #176: Yes.

Speaker Change #176: Okay.

Speaker Change #176: Thanks.

Speaker Change #176: Thanks.

Speaker Change #176: Yes.

Speaker Change #176: Okay.

Speaker Change #176: Okay.

Speaker Change #176: <unk>.

Okay.

Speaker Change #176: Okay.

Speaker Change #176: Okay.

Speaker Change #176: Okay.

Speaker Change #176: Thank you.

Speaker Change #176: Okay.

Speaker Change #176: Okay.

Speaker Change #176: Okay.

Speaker Change #176: Sure.

Speaker Change #176: Sure.

Speaker Change #176: Thanks.

Speaker Change #176: Okay.

Speaker Change #176: Great.

Sure.

Speaker Change #176: Okay.

Speaker Change #176: Yes.

Speaker Change #176: [music].

Speaker Change #176: Okay.

Speaker Change #176: Thanks.

Speaker Change #176: Sure.

Speaker Change #176: Sure.

Okay.

Speaker Change #176: Thank you.

Speaker Change #176: Okay.

Speaker Change #176: Okay.

Speaker Change #176: Okay.

Operator: 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. To remove yourself from the queue, you may press star 1 1 again.

Speaker Change #176: Okay.

Speaker Change #177: Thank you for standing by and welcome to Autodesk first quarter fiscal year 2025 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.

Speaker Change #177: To ask a question during the session you will need to press star one one on your telephone.

Speaker Change #178: Remove yourself from the queue you May press Star one one again I would now like to hand, the call over to Simon Mays Smith VP Investor Relations. Please go ahead.

Simon Mays: I would now like to hand the call over to Simon Mays Smith, VP, Investor Relations. Please go ahead. Thanks, Operator, and good afternoon. Thank you for joining our conference call to discuss the first quarter results of Fiscal 25. On the line with me is Andrew Anagnost, our CEO. During this call, we will make forward-looking statements, including outlook and related assumptions, products, and strategies. However, actual events or results could differ materially.

Simon Mays: Please refer to our SEC filings, including our most recent Form 10-K and 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.

Speaker Change #179: Thanks, operator, and good afternoon. Thank you for joining our conference call to discuss the first quarter results of Autodesk fiscal 'twenty five on the line with me is Andrew agnostic CEO.

Simon Mays: Autodesk disclaims any obligation to update or revise any forward-looking statement. We will quote several numerical growth changes during this call as we discuss our financial performance. Unless otherwise noted, each such reference represents a year-on-year comparison.

Andrew Anagnost: During this call we will make forward looking statements, including outlook related assumptions products and strategies.

Speaker Change #180: Actual events or results could differ materially.

Please refer to our SEC filings, including our most recent Form 10-K and 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.

Speaker Change #180: Forward looking statements made during the call are being made as of today. If this call is replay to reviewed after today. The information presented during the call may not contain current or accurate information.

Speaker Change #180: <unk> disclaims any obligation to update or revise any forward looking statements.

Speaker Change #180: We will quote several numerical growth changes during this call as we discuss our financial performance.

Speaker Change #180: Unless otherwise noted each such reference represents a year on year comparison.

Speaker Change #180: All non-GAAP numbers referenced in today's call are reconciled in our press release, <unk> financials, and other supplemental materials available on our Investor Relations website.

Speaker Change #181: And now I will turn the call over to Andrew.

Simon Mays: All non-GATT numbers referenced in today's call are reconciled in our press release or Excel financials and other 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. As I'm sure you can appreciate with legal matters, I'm restricted in what I can say regarding the Audacity investigation, but let me say what I can.

Thank you Simon and welcome everyone to the call.

Andrew: As I'm sure you can appreciate with legal matters like this I am restricted in what I can say regarding the audit Committee investigation, but let me say what I can do.

Andrew Anagnost: The summary findings of the Audit Committee investigation are in our May 31st press release and recently filed Form 10-K. Please refer to those documents for details. We don't have further commentary beyond what we have described there. Regarding the process, we also covered that in detail in our press release. The investigation took time to complete because it was rigorous and covered all three years included in the 10-K. Betsy Raphael has been appointed by the board as interim chief financial officer. We have initiated a selection process for a new chief financial officer. The board and I are very focused on finding the right candidate.

Andrew: The summary findings of the audit Committee investigation or in our May 31 press release, and recently filed Form 10-K.

Andrew: Please refer to those documents for details we don't have further commentary beyond what we have described there.

Andrew: Regarding the process. We also cover that in detail in our press release. The investigation took time to complete because it was rigorous and covered all three years included in the 10-K.

Speaker Change #182: All have been appointed by the board as interim Chief Financial Officer, We have initiated the selection process for a new Chief Financial Officer, The board and I are very focused on finding the right candidate and.

Andrew Anagnost: In the interim, we are in great hands with Betsy, and Debbie will continue to contribute to the business in her new capacity as Chief Strategy Officer. With the conclusion of the investigation, we have determined that there will be no restatement or adjustment of any audited or unaudited, filed or previously announced GAAP or non-GAAP financial statements. And, as we'll discuss in more detail shortly, we are already underway in the transition to annual billing with the trough and free cashflow behind us.

Speaker Change #182: In the interim we are in great hands, with Betsy and Debbie will continue to contribute to the business and our new capacity as chief strategy Officer.

With the conclusion of the investigation, we have determined that there will be no restatement or adjustment of any audited or unaudited filed or previously announced GAAP or non-GAAP financial statements and as we'll discuss in more detail. Shortly we are already underway and the transition to annual billing with the trough in free cash flow behind us and Mccann.

Andrew Anagnost: The mechanical stacking of multi-year contracts, a larger enterprise cohort, and our largest product subscription cohort will provide a tailwind of free cashflow in fiscal 2020. We appreciate your patience as we work through this important process. We take situations like this very seriously and are grateful to put the investigation behind us.

Speaker Change #182: Stacking of multi year contracts are larger enterprise cohort in our largest product subscription cohort will provide a tailwind to free cash flow in fiscal 'twenty six.

Speaker Change #182: We appreciate your patience as we work through this important process, we take situations like this very seriously and are grateful to put the investigation behind us.

Andrew Anagnost: Now let's move on to our strong first. Autodesk's resilience, discipline, and opportunity again underpinned our robust financial and competitive performance. Our resilience is fortified by our subscription business model and our diversified product and customer portfolio. Renewal rates remain solid, and the momentum of new business growth and key performance indicators is consistent with the previous quarter, evidenced by increased product usage, record bid activity on Building Connected, and cautious optimism from our channel partners.

Speaker Change #182: Now, let's move on to our strong first quarter results Autodesk resilience discipline and opportunity again, underpinned, our robust financial and competitive performance.

Speaker Change #182: Brilliant this qualified by our subscription business model and our diversified product and customer portfolio renewal rates remain solid and the momentum of new business growth in key performance indicators are consistent with the previous quarter evidenced by increased product usage record bid activity on building connected and cautious optimism from our channel partners.

Andrew Anagnost: Our disciplined and focused approach to executing our strategy and deploying capital throughout the economic cycle empowers Autodesk to realize the significant benefits of its strategy while mitigating the risk of expensive catch-up investments in the future. As our customers migrate to our industry clouds and utilize our high-value AI products. Our investments in the cloud will continue to grow. At the same time, the new transaction model will allow us to optimize our sales and marketing, and we expect Autodesk Platform Services will, over time, boost the velocity and efficiency of our R&D.

Speaker Change #182: Our.

Speaker Change #182: <unk> and focused approach in executing our strategy in deploying capital throughout the economic cycle and powered audit is to realize a significant benefits of our strategy, while mitigating the risk of expensive catch up investments in the future.

Speaker Change #182: As our customers migrate to our industry cloud and utilize our high value AI products and services.

Speaker Change #182: Our investments in the cloud will continue to grow at the same time, the new transaction model will allow us to optimize our sales and marketing and we expect the Rguest platform services will over time boost the velocity and efficiency of our R&D.

Andrew Anagnost: By optimizing the allocation of our resources, we can invest in compound revenue growth and market share, while also driving margin improvement and free cash flow growth. Reductions in stock-based compensation as a proportion of revenue will provide an additional tailwind to growth.

Speaker Change #182: By optimizing the allocation of our resources, we can invest the compound revenue growth and market share gains, while also driving margin improvement and free cash flow growth over time reductions.

Speaker Change #182: The reduction in stock based compensation as a proportion of revenue will provide an additional tailwind to GAAP margin, while our transition to annual billings for multi year contract will amplify free cash flow growth over the next few years we.

Andrew Anagnost: While our transition to annual billing from multi-year contracts will amplify free cash flow growth over the next few years, we believe that constant resource optimization and our long-term investment horizon have positioned us ahead of our peers in cloud, platform, and we intend to retain and extend that lead while also driving to an industry-leading rule of 40 ratio of 45 or more. Our Project Bernini announcement on May 8th is a great example of what I mean. Bernini uses generative AI to quickly generate functional 3D shapes from a variety of 2D images, text, voxels, and.

Speaker Change #182: We believe the constant resource optimization, and our long term investment horizon, we're positioned US ahead of our peers and cloud platform and AI.

We intend to retain and extend that lead while also driving to an industry, leading rule of 40 ratio of 45 or more.

Speaker Change #182: Our project for media announcement on May eight is a great example of what I mean.

Speaker Change #182: The remaining uses generative AI to quickly generate functional <unk> shape from a variety of inputs, including to the imager tact Vauxhall endpoint clouds.

Andrew Anagnost: Bernini is different from other AI models in five important ways. First, it is trained on 3D data rather than commoditized external imagery, and it's therefore capable of reasoning about the internal structure of an object. Second, it generates shape and texture separately and does not confuse or meld those variables.

Speaker Change #182: Bernini is different from other AI models in five important ways.

First for immediate trained on three D data rather than Commoditized external imagery and it's therefore capable of reasoning on the internal structure of an object.

Speaker Change #182: Second Rimini generate shape and texture separately and does not confuse our meld those variables.

Andrew Anagnost: Third, Bernoulli can be conditioned on multiple types of input data and is therefore applicable across a much greater spectrum of work. Fourth, Bernini generates many design options from a single set of inputs, which better serves the creative process of design. Finally, Bernini can be quickly and cost-effectively fine-tuned on a customer's existing 3D repository to align to the unique creative need. [inaudible] Autodesk AI will enable Autodesk to create more valuable data-driven experiences. It will automate low value and repetitive tasks, generate more high value complex, more rapidly and with greater, over time.

Speaker Change #182: Third Bermuda can be conditioned on multiple types of input data and is therefore applicable across a much greater spectrum of workflows.

Speaker Change #182: Bernini generate many design options from a single credit input, which better serve the creative process of designers and fifth Bernini can be quickly and cost effectively fine tuned on our customer's existing three D repository to align to the unique creative needs of a particular organization.

Speaker Change #182: <unk>.

Speaker Change #182: RMS AI will enable autodesk as customers and partners to create more valuable data driven and connected products and services.

Speaker Change #182: We'll automate low value and repetitive tasks and generate more high value complex design more rapidly and with greater consistency.

Andrew Anagnost: Autodesk Platform Services will enable greater engineering velocity and efficiency and support a much broader developer ecosystem and market. Autodesk is ahead of its peers in 3D AI, platform, and business model evolution that will be needed to deliver 3D AI products and services at scale. We are well on the way to reasoning about all We will update you as we make further progress. Let's move on to our quarterly financial performance and guidance for the second quarter in a row. Q1 was a strong quarter. We generated broad-based growth across products and regions in AEC and manufacturing, which was partly offset by softness in China and in media, the latter being primarily due to the lingering effects of the Holocaust.

Speaker Change #182: Over time.

Speaker Change #182: Their platform services will enable greater engineering velocity and efficiency and support a much broader developer ecosystem and marketplace.

Speaker Change #182: Autodesk is ahead of its peers in <unk>, AI and industry cloud platform and business model evolution that will be needed to deliver <unk> AI products and services at scale.

Speaker Change #182: We are well underway to reasoning about all CAD geometry, we will update you as we make further progress.

Let's move on to our quarterly financial performance and guidance for the second quarter and the full year.

Speaker Change #182: Q1 was a strong quarter, we generated broad based growth across products and regions and ADC in manufacturing, which was partly offset by softness in China and in media and entertainment the latter being primarily due to the lingering effects of the Hollywood strike.

Andrew Anagnost: Overall, macroeconomic policy and geopolitical challenges and the underlying momentum of the business were consistent with the last few quarters. If we compare first quarter revenue with guidance, the outperformance was mainly due to that broad strength, with the timing of price increases also improving revenue linearity during the quarter. The impact of the new transaction model was immaterial in the first quarter. Total revenue grew 12% and 13% in content, by product and content. AutoCAD and AutoCAD LT revenue groups, AEC revenue grew 17%, and manufacturing revenue grew 11%. M&E Group, three, by region and continent.

Speaker Change #182: Overall macroeconomic policy and geopolitical challenges in the underlying momentum of the business were consistent with the last few quarters.

Speaker Change #182: If we compare first quarter revenue with guidance. The outperformance was mainly due to that broad strength with the timing of price increases also improving revenue linearity during the quarter.

Speaker Change #182: The impact of the new transaction model was immaterial in the first quarter.

Speaker Change #182: Total revenue grew 12% and 13% in constant currency.

Speaker Change #182: By product and constant currency, Autocad, and Autocad LT revenue grew 10%.

Speaker Change #182: <unk> revenue grew 17% manufacturing revenue grew 11% and M&A grew 3% by region in constant currency revenue grew 12% in the Americas, 14% in EMEA and 14% in APAC.

Andrew Anagnost: Revenue grew 12% in the Americas, 14% in the MIA, and 14% in April. Direct revenue increased 20% and represented 38% of total revenue, up three percentage points from last, benefiting from strong growth in both EBAs and Autodesk. The Net Revenue Retention Rate remained within the 100 to constant exchange rates. Billings declined 5% in the quarter as a result of the transition from upfront to annual billings for multi-year contracts

Speaker Change #182: Direct revenue increased 20% and represented 38% of total revenue up three percentage points from last year benefiting from strong growth in both EMEA and the outlet store.

Speaker Change #182: Net revenue retention rate remained within the 100 to 110 percentage range at constant exchange rates.

Speaker Change #182: As expected billings declined 5% in the quarter as a result of the transition from upfront to annual billing for multiyear contracts for the same reason total deferred revenue decreased 12% to $4 billion total <unk> of $5 9 billion in current <unk> of $3 9 billion grew 9% and 12%.

Andrew Anagnost: For the same reason, total deferred revenue decreased 12% to $4 billion. The total RPO of $5.9 billion and current RPO of $5.9 billion. 3.9 billion grew 9% in 12, continues to benefit from the EBA strength we saw in the second half of fiscal 24, and current RPO also benefited by about a point from early renewal. Turning to our, gap and non-gap growth margin were brought while gap and non-gap operating margin increased by four and three percentage points per second, part reflecting the absence of costs we encouraged last year to repurpose roles.

Speaker Change #182: Prospectively, which continued to benefit from the EPA strength, we saw in the second half of fiscal 'twenty core and current <unk> also benefited by about a point from early renewals.

Speaker Change #182: Turning to our P&L GAAP and non-GAAP gross margin were broadly level, while our GAAP and non-GAAP operating margin increased by 4% and three percentage points, respectively in part, reflecting the absence of costs, we incurred last year to repurpose role.

Andrew Anagnost: At current course and speed, the ratio of stock-based compensation as a percent of revenue peaked in fiscal 24 will fall by more than a percentage point, and Will. We'll be below 10%. Pre-cash flow for the quarter was $487 million, driven by collections of prior quarter billings and strong results in the current.

Speaker Change #182: At current course and speed the ratio of stock based compensation as a percent of revenue peaked in fiscal 'twenty four will fall by more than a percentage point in fiscal 'twenty, five and will we be below 10% overtime.

Speaker Change #182: Free cash flow for the quarter was $487 million driven by collections of prior quarter billings and strong results in the current quarter turning to capital allocation. We continue to actively manage capital within our framework and deploy it with discipline and focus through the economic cycle to drive long term shareholder value in the quarter we.

Andrew Anagnost: Turning to capital allocation, we continue to actively manage capital within our framework and deploy it with discipline and focus through the economic cycle to drive long-term shareholder value. In the quarter, we acquired payouts and PICs for a total of $653 million, which, with the late filing of our Form 10-K, meant we only purchased approximately 30,000 shares for $9 million at an average price of approximately $255 per share during the quarter. We will continue to repurpose shares opportunistically to offset dilution from stock-based competition when it makes sense.

Speaker Change #182: <unk> payout and pitch for a total of $653 million, which with the late filing of our Form 10-K meant we only purchased approximately 30000 shares for $9 million at an average price of approximately $255 per share during the quarter.

Speaker Change #182: We will continue to repurchase shares opportunistically to offset dilution from stock based compensation when it makes sense to do so.

Andrew Anagnost: Moving on to guide, Overall, end market demand has remained pretty consistent over many quarters. Macroeconomic and one-off factors like the Hollywood strike have dragged on new business growth and continue to drag on revenue. But Autodesk's resilient and robust underlying demand for its products reinforces its long-term growth momentum. With regard to revenue guidance, we highlighted some puts and takes last quarter that impact fiscal 25 revenue growth and refer you back to our comments. The new transaction model implementation is on track. Australia and New Zealand are performing in line with our expectations. North America went live yesterday.

Speaker Change #182: Moving on to guidance.

Speaker Change #182: Overall end market demand has remained pretty consistent over many quarters macroeconomic and one off factors like the Hollywood strike have dragged on new business growth and continued to drag on revenue growth, but R&D is resilient and robust underlying demand for its products and services reinforce that long term growth momentum and potential.

<unk>.

Speaker Change #182: With regards to revenue guidance, we highlighted some puts and takes last quarter that impacts fiscal 'twenty five revenue growth and refer you back to our comments then the.

Speaker Change #182: The new transaction model implementation is on track, Australia, and New Zealand are performing in line with our expectations North America went live yesterday.

Andrew Anagnost: As we said last quarter, our Fiscal 25 guidance assumes the new transaction model is deployed in North America and provides about a 1 percentage point tailwind to Autodesk's revenue growth and a 3 to 4 percent tailwind to Billings. Once the North America launch is successfully underway, we will likely start communicating our plans to channel partners and customers in parts of EMEA and Japan. We modeled various possible scenarios at the start of the year, reflecting different potential launch dates, channel partner behavior ahead of launch, the mechanics of the transition, and a host of other factors.

Speaker Change #182: As we said last quarter, our fiscal 'twenty five guidance assumes the new transaction model is deployed in North America and provides about a one percentage point tailwind to autodesk revenue growth and a 3% to 4% tailwind to billings growth once the North America launches successfully underway, we will likely start communicating our plans to channel partners and customers in parts of EMEA.

Speaker Change #182: In Japan, we modeled various possible scenarios at the start of the year, reflecting different potential launch dates channel partner behavior ahead of launch and mechanics of the transition and a host of other factors and we are executing within our modeled scenarios longer term. We remain excited by the benefit that's more direct real.

Andrew Anagnost: And we are executing within our model scenarios. Longer term, we remain excited by the benefits this more direct relationship with our customers and partners offers, an ability to understand and serve them enriched by data with more automation and self-service and greater predictability. Our fiscal revenue guidance between $599 and $6.09 billion is unchanged and still translates into revenue growth of about $9 to $11, (inaudible). Our strong start sets us up well to achieve our goal. Moving on to margins, we still expect non-GAAP operating margins between the range of 35 and 36% in Fiscal 25 and roughly equal to Fiscal 25.

Speaker Change #182: <unk> shipped with our customers and partners offer and ability to understand and serve them enriched by data with more automation and self service and greater predictability.

Speaker Change #182: Our fiscal revenue guidance between $5 99 at six 9 billion is unchanged and still translate into revenue growth of about 9% to 11% compared to fiscal 2000 and for our strong start sets us up well to achieve our goals for the year.

Speaker Change #182: Moving onto margins, we still expect non-GAAP operating margins between the range of 35 and 36% in fiscal 'twenty, five and roughly level with fiscal 'twenty. Four. This includes a roughly one point underlying margin improvement that we expect will be broadly offset by the margin headwinds from the new transaction model as a reminder.

Andrew Anagnost: This includes a roughly one percent underlying margin improvement that we expect will be broadly offset by the margin headwinds from the new transaction model. As a reminder, as we transition to the new transaction model, we'll see operating margin headwinds from the accounting change of moving reseller costs from contra revenue to sales and marketing, and we will also have incremental investment in people, processes, and automation. But over the long term, we expect that this transition to the new transaction model will enable us to further optimize our business, which we anticipate will provide a tailwind of revenue, operating income, and free cash flow dollars, even after the incremental costs we expect to incur.

Speaker Change #182: As we transition to the new transaction model, we will see operating margin headwinds from the accounting change of moving reseller costs from Contra revenue to sales and marketing expense will also have incremental investment in people processes and automation.

Speaker Change #182: But over the long term, we expect this transition to the new transaction model will enable us to further optimize our business, which we anticipate will provide a tailwind to revenue operating income and free cash flow dollars, even after the incremental costs, we expect to incur.

Andrew Anagnost: Moving on to precast, we still expect to generate between $1.43 and $1.5 billion of free cash flow in 2020, excluding $200 million from fiscal 24 free cash flow from multi-year upfront billings which are now filled annually.

Speaker Change #182: Moving on to free cash flow, we still expect to generate between $1 43, and $1 5 billion of free cash flow in fiscal 'twenty five excluding $200 million from fiscal 'twenty four free cash flow for multi year upfront billings, which are now billed annually in fiscal 'twenty five we expect free cash flow growth of about 35%.

Andrew Anagnost: In fiscal 25, we expect free cash flow growth of about 35% at the midpoint of our growth. We expect faster free cash flow growth in fiscal 26 because of the return of our largest multi-year renewal cohort, the mechanical stacking of multi-year contracts billed annually, and a larger EBA. As discussed last, transition and rollout will create noise, pre-cash flow, the best measure of our performance. With our current trajectory, we estimate free cash flow in fiscal 26 to be around $2.05 billion.

Speaker Change #182: The midpoint of our guidance, we expect faster free cash flow growth in fiscal 'twenty because of the return of our largest multiyear renewal cohort the mechanical stacking of multi year contracts billed annually and a larger EBITDA cohort.

Speaker Change #182: As discussed last quarter, the transition to <unk> rollout will create noise in the P&L, making free cash flow the best measure of our performance with our current trajectory, we estimate free cash flow in fiscal 'twenty six to be around $2 5 billion at the midpoint in the context of significant macroeconomic geopolitical policy health and climate and <unk>.

Andrew Anagnost: The context of significant macroeconomic, geopolitical, policy, health, and climate uncertainty, the mechanical rebuilding of our free cash flow as we transition to annual billing for multi-year contracts gives Autodesk an enviable source of visibility and, We continue to manage our business using a rule of 40 framework with a goal of reaching 45% or more over the next five years. We are taking significant steps towards our goal this year. We think this balance between compounding revenue growth and strong free cash flow margins captured in the Rule of Forty framework is the hallmark of the most valuable companies in the world, and we intend to remain one of them. The slide deck on our website has more details on the modeling assumptions for Q2. Full Year Fiscal 25

Speaker Change #182: Certainty the mechanical rebuilding of our free cash flow as we transition to annual billings for multi year contract gives autodesk and enviable source of visibility and certainty.

Speaker Change #182: We continue to manage our business using a rule of 40 framework with the goal of reaching 45% or more over time we.

Speaker Change #182: We are taking significant steps towards our goal this year and next we think this balanced between compounding revenue growth and strong free cash flow margin captured in the rule of 40 framework is the hallmark of the most valuable companies in the world and we intend to remain one of them.

Speaker Change #182: The slide deck on our website has more details on modeling assumptions for Q2 and full year fiscal 'twenty file let me finish by updating you on our strong progress in the first quarter.

Andrew Anagnost: Let me finish by updating you on our strong progress. We continue to see good momentum, particularly in infrastructure and construction, fueled by customers consolidating onto our solutions to connect and optimize previously siloed workflows through the cloud. The cornerstone of that growing interest is our comprehensive end-to-end service, comprising design, pre-construction, field execution, to handover and operation. This breadth of connected capability enables us to extend our footprint further into infrastructure and construction and also expand our reach into the mid-market. As a sign of that growing momentum, our construction business has one of its best net new customers. Let me give you a few examples. B.L.

Speaker Change #182: We continue to see good momentum in AUC, particularly in infrastructure and construction fueled by customers consolidating onto our solutions to connect and optimize previously siloed workflows through the cloud.

Speaker Change #182: Cornerstone of that growing interest as our comprehensive end to end solution encompassing design preconstruction fueled execution through handover and into operation. This breadth of connected capability enables us to extend our footprint further into infrastructure and construction and also expand our reach into the mid market.

Speaker Change #182: As a sign of that growing momentum our construction business had one of its best net new customer quarter.

Speaker Change #182: Let me give you a few examples.

Andrew Anagnost: Harvard International provides design, build, construction, management, and general content. Have a great day! It leverages advanced technology to maintain its most crucial customer and partner relationships and enhance its in-house capability. We have built a trusted partnership with the company over many years and share its integrated platform vision for the end. In the first quarter, it decided to standardize on Autodesk Construction Cloud across all regions for its design-build process, signing its first EBA and increasing its investment in August. Marathon Designs develops and builds residential apartment towers and is the largest residential apartment developer in Australia.

Speaker Change #183: BL Harbor International provides design build construction management and general contracting services to national and international clients.

Speaker Change #183: It Leverages advanced technology to maintain its most crucial customer and partner relationships enhancing the in house capabilities.

Speaker Change #183: We have built a trusted partnership with the company over many years and Sheriff integrated platform vision for the industry in.

Speaker Change #184: In the first quarter it decided to standardize on August construction cloud across all region towards design build process, signing its first DBA and increasing its investment in Autodesk <unk>.

Marathon designed developed and builds residential apartment towers and is the largest residential apartment developer in Australia. After a competitive process. It shows autodesk to replace six point solutions and unify its operations from design through to maintenance and asset management. This comprehensive solution will enable marathon.

Andrew Anagnost: After a competitive process, Marathon chose Autodesk to replace six-point solutions and unify its operations, from design through to Maintenance and Asset Management. This comprehensive solution will enable Marathon to have one common data, streamline its workflows, and have access to real time. State Window Corporation offers complete design, engineering, manufacturing, and installation of custom window walls.

Speaker Change #184: To have one common data environment, streamlining workflows and have access to real time insights.

Speaker Change #185: State window Corporation offers complete design engineering manufacturing and installation of custom window wall system.

Andrew Anagnost: It is standardizing Autodesk AEC and manufacturing so that they can effectively manage inventory levels, improve cash flow, and reduce waste caused by siloed data and disconnected work. Leveraging Revit for 3D design, our manufacturing collection for PDM and PLM, and Autodesk Build for installation, State Windows will have an end-to-end solution connecting data and workflow across design, manufacture, and build. Again, these stories are a common theme; managing people, processes, and data across the project life cycle increases efficiency and sustainability while decreasing risk.

Speaker Change #186: It is standardizing on <unk> ADC and manufacturing products. So they can effectively manage inventory levels improved cash flow and reduce waste caused by silo data and disconnected workflows.

Speaker Change #186: Leveraging <unk> for three design or manufacturing collection for PDF, and PL N and Autodesk build for installation state window will have an end to end solution connecting data and workflow across design manufacture and build.

Speaker Change #186: Again these stories of a common theme managing people processes and data across the project lifecycle to increase efficiency and sustainability, while decreasing risk.

Andrew Anagnost: Over time, we expect the majority of all projects to be managed. We remain focused on enabling that transition within our industry. Moving on to manufacturing, we made excellent progress on our strategic, Customers continue to invest in their digital transformations and consolidate our design and make platform for both products and factories to grow their business and make it more resilient. A multi-format packing solutions manufacturer in Europe had been leveraging our advanced manufacturing, including Inventor Involved for its machine design and product data management.

Speaker Change #186: Over time, we expect the majority of all projects to be managed this way and we remain focused on enabling that transition through our industry clouds moving.

Speaker Change #186: Moving on to manufacturing, we made excellent progress on our strategic initiatives customers continue to invest in their digital transformations and consolidate our design and make platform for both product and factories to grow their business and make it more resilient.

Speaker Change #186: Multi format packing solutions manufacturer in Europe had been leveraging our advanced manufacturing portfolio, including inventory volt direct machine design and product data management in the first quarter. It expanded its partnership with Autodesk to include factory design, which digitally advisers complete factory layout to reduce the potential for delay.

Andrew Anagnost: In the first quarter, it expanded its partnership with Autodesk to include factory design, which digitizes complete factory layouts to reduce the potential for delays and rework during the delivery process. As an existing FlexSim customer for battery, the manufacturer will now have a comprehensive, connected end-to-end solution that helps increase efficiency, throughput. A major multiproduct maintenance, repair, and overhaul, or MRO provider began using Fusion to convert and visualize 3D models of third-party files.

Speaker Change #186: <unk> and rework during the delivery process as.

Speaker Change #186: As an existing <unk> customer for factory stimulation. The manufacturer will now have a comprehensive connected end to end solution that helps increase efficiency throughput and quality.

Speaker Change #186: A major multi product maintenance repair and overhaul or MRO provider began using fusion to convert and visualize <unk> model of third party files.

Andrew Anagnost: And those files are now in the Fusion Ecosystem. It added the Fusion Manufacturing Extension in the first quarter to leverage Fusion for light repair and part-time maintenance. Fusion remains one of the fastest growing products in the manufacturing industry with double-digit commercial subscriber growth, driven by the growing number of customers who recognize the value of cloud-based workflows in enhancing efficiency, sustainability, and resilience within their organizations. With over a million monthly active users, a vast amount of contextual data is generated within Fusion. For example, on average 33 million new component designs were being produced in Fusion each month over the last 12 months.

With those filed now in the fusion ecosystem and added the fusion manufacturing extension in the first quarter to leverage fusion for light repair and car testing.

Speaker Change #186: <unk> remains one of the fastest growing products in the manufacturing industry with double digit commercial subscriber growth driven by the growing number of customers, who recognize the value of cloud based workflows and enhancing efficiency sustainability and resilience within their organization.

Speaker Change #186: With over a million monthly active users a vast amount of contextual data is generated with infusion. For example on average 33 million new component designs were being produced infusion each month over the last 12 months.

Andrew Anagnost: This data can help us train the next generation of generative AI products, and, for example, our recently launched Scrawling Automation Tool in Fusion, which is powered by AI, has generated 2.7 million automatic dimensions since its launch earlier this year. In education, we are preparing future engineers to drive innovation through next-generation design, analysis, and manufacturing. The Kata Yanagi Institute in Japan is a leading provider of technical education that equips its students with industry-relevant education and helps address the growing skills gap across design and make. In the first quarter, it made Fusion the standard design and make solution for its 5,000-plus students, faculty, and affiliated employees.

Speaker Change #186: This data can help US train the next generation of generative AI products and services.

Speaker Change #186: For example, our recently launched growing automation tool infusion, which is powered by AI has generated $2 7 million automatic dimensions since its launch earlier this year in.

Speaker Change #186: In education, we are preparing future engineers to drive innovation through next generation design analysis and manufacturing solutions that.

Speaker Change #187: Cutting and Nike Institute in Japan is a leading provider of technical education, but equipment.

Speaker Change #187: With industry relevant education and helps address the growing skills gap across the design and make industry in.

Speaker Change #187: In the first quarter. It made fusion the standard design and make solutions for its 5000, plus students faculty and affiliated institution, replacing two legacy solution to leverage fusion AI design and cloud collaboration capabilities.

Speaker Change #187: And lastly, we continue to work with our customers to ensure they are using the latest and most secure versions of our software through a collaborative process. We helped a large European infrastructure and railway operator achieve compliance providing visibility into existing usage and by understanding it's true needs delivering a tailored solution that included.

Speaker Change #187: Trading to newer versions of our software and the addition of more subscription licenses.

Speaker Change #187: Let me finish with a story.

Andrew Anagnost: We're putting two legacy solutions to leverage Fusion AI design and cloud collaboration. And lastly, we continue to work with our customers to ensure they are using the latest and most secure versions of our software. Through a collaborative process, we helped a large European infrastructure and railway operator achieve compliance, providing visibility into existing usage, and by understanding its true needs, delivering a tailored solution that included upgrading to newer versions of our software and the addition of more subscriptions. The opening ceremony of the Summer Olympic Games will take place on the banks of the River Seine in Paris on the evening of July 21st.

Speaker Change #188: The opening ceremony of the summer Olympic games will take place from the banks of the river, saying in Paris on the evening of July 26.

Andrew Anagnost: Over the following months, many of the approximately 10,500 athletes and 8,000 para-athletes will reside in the Athletes' Village on the Ile Saint-Denis. This is, in part, a story about innovative architects, engineers, and construction professionals collaborating efficiently and effectively in the cloud, enabled by open file formats and using modularized industrial construction, which seamlessly spans AEC and many other disciplines. It is also a story about embracing complexity, managing wastewater and risk in a sensitive ecosystem of the river, and Change by minimizing embodied carbon today and creating a built environment that embraces a warmer climate. But there

Speaker Change #188: Over the following months many of the approximately 10500 athletes and 8000 pair athletes will reside in the athlete's village on the info on the knee.

Speaker Change #188: Suburb of Paris. This is in part.

Speaker Change #189: Story about innovative architects engineers, and construction professionals collaborating efficiently and effectively in the cloud enabled by open file formats, and using marginalize industrial construction technique to seamlessly span AAC and manufacturing.

Speaker Change #189: It is also a story about embracing complexity, managing wastewater and risk in a sensitive ecosystem of the river Seine and change by minimizing embodied carbon today and creating a built environment that embraces a warmer climate tomorrow.

Speaker Change #189: But it's also a story about regeneration and hope to solve some of the new suburb of Paris is one of the poorest in France with a young diverse population with higher than average unemployment rates.

Andrew Anagnost: The Saint-Sans-Denis suburb of Paris is one of the poorest, with a young, diverse population and higher than average unemployment. After the Game. The Village will become a neighborhood with new homes and social housing, offices, neighborhood shops, a student residence, and a hotel, enveloped within gardens and parks.

Speaker Change #189: After the games the village will become a neighborhood with new homes and social housing offices neighborhood shops, our student residents and our hotel enveloped within gardens and parkland.

Andrew Anagnost: Two years ago, I told you about Autodesk's role in the reconstruction of Notre Dame, which will be completed on schedule later this month. I share the Athletes Village story because I'm reminded again of Autodesk's purpose: to design and make a better world for everyone. Together we can meet the generational challenges posed by carbon, water, and wind. Our central role in meeting these challenges underpins my confidence this year and my optimism for the future.

Two years ago, I told you about <unk> role in the reconstruction of Notre Dame Cathedral, which will be completed on schedule later this year.

Speaker Change #189: I share the athlete's village story, because I'm reminded again of Autodesk purpose to design and make a better world for everyone that purpose has never been more important or urgent together, we can meet the generational challenges caused by carbon water and waste arent a central role in meeting the challenges underpins <unk>.

Speaker Change #190: Confidence this year and my optimism for the future operator, we would now like to open the call up for questions.

Andrew Anagnost: Operator, we would now like to open the call. Thank you. As a reminder, to ask a question, you will need to press star 11 on your telephone. To remove yourself from the queue, you may press star 11 again.

Thank you as a reminder to ask a question you will need to press star one one on your telephone to remove yourself from Mccue you May Press Star one again, please limit yourself to one question and one follow up please standby, while we compile the Q&A roster.

Operator: Please limit yourself to one question and one follow-up. Please stand by while we compile the Q&A. Our first question comes from the line of Jason Celino of KeyBank Capital Markets. Great, Andrew. Good afternoon. Hello, Jason.

Speaker Change #191: Our first question comes from the line of Jason Celaeno of Keybanc capital markets.

Jason Vincent Celino: You know, I know you said that you couldn't say much about the 10k process, but how would you summarize the key takeaways for investors? Yeah, well, the first thing you know, I've never been more excited about having an earnings call in my entire career at Autodesk. That's not exactly what you're asking, but I am excited to be here.

Andrew: Great Andrew Good afternoon, Jason.

I know you said that you Couldnt say much about the 10-K process.

Jason Vincent Celino: How would you summarize the key takeaways for investors.

Speaker Change #192: Yeah, well the first thing you know I've never been more excited about having an earnings call in my entire career at Autodesk, but that's not exactly what you are asking but I am excited to be here.

Andrew Anagnost: So look, there are a few things I can just put in plain English. All right. The first thing, and I can't state how important this is, is that we don't have to restate any of our financial results. The results that happened historically in the company are the results that the business delivered, and that's really important. The second thing I want to highlight is that the company did not obfuscate the underlying strength of the business. Now, you take those two things together, and you can trust the integrity of Autodesk's financials, all right? And I think that's kind of the lesson I want you to take from all of that language.

Speaker Change #192: So look there's a few things I can just put in plain English right. The first thing and I can't state. How important. This is we don't have to restate any of our financial results. The results that happened historically in the company are the results that the business delivered and that's really important the second thing I wanted to highlight is that the company did not.

Speaker Change #192: <unk> the underlying strength of the business now you take those two things together and you can trust the integrity of Autodesk financials, Alright, and I think that's that's kind of the net I want you to take from all of that language and <unk>.

Andrew Anagnost: And personally, from my point of view, I think that means that nobody's investment thesis in Autodesk is fundamentally altered by any of this information. Okay, yeah, I think that's a good, you know, clarification. Maybe the next question, my follow-up. So Q1 performance, you know, strong, Q2 guidance, probably a little bit better than consensus expectation. But given the full year revenue guidance isn't really changing, you know, I'm wondering how you're thinking about growth in the second... Yeah, well, first off, it's only Q1. So, you know, we've got three more quarters left.

Speaker Change #192: Personally from my point of view I think that doesn't that means that nobody's investment thesis in Autodesk has fundamentally altered by any of this information.

Speaker Change #193: Okay, Yeah, I think thats a good.

Speaker Change #194: Clarification, maybe the next question my follow up so Q1 performance strong did you guide, probably a little bit better than consensus expectation.

Speaker Change #195: But given the full year revenue guidance isn't really changing im wondering how youre thinking about growth in the second half of the year, yes, well first off it's only Q1.

Jason Vincent Celino: All right. So, it's only Q1. And we also have a few big things coming in front of us here. All right. We just went live with the U.S. model. So far, so good.

Speaker Change #195: So we've got three more three more quarters left alright, so don't it's only Q1.

And we also have a few big things coming in front of us here alright.

Speaker Change #196: Just went live.

Andrew Anagnost: It's proceeding as we expect. If we learn what we expect to learn from that, we're going to live in Europe as well, but we're waiting to see what happens in the Americas and how it performs. So, those things are some big uncertainties out there that we want to pay attention to. But the great thing about the results in Q1 is that they've really set us up. So I feel really confident about the position we have right now in terms of hitting our goal. Okay, great. Thank you very much.

Speaker Change #196: In the U S.

Speaker Change #196: Model so far so good it's proceeding as we expect.

Speaker Change #196: If we learn what we expect to learn from from that we're going to go live in Europe, as well, but we're waiting to see what happens in the Americas and how it performs so those things. So there is some big uncertainties out there if you want to pay attention to but the great thing about the results in Q1 is it's really set us up strong.

Speaker Change #196: To hit the results for the full year, so I feel really confident about the position we have right now in terms of hitting our goals.

Speaker Change #197: Okay, great. Thank you very much.

Speaker Change #198: Thank you.

Jay Vleeschhouwer: Thank you. Our next question comes from the line of Jay Vleeschhouwer of Griffin Securities. Please go ahead.

Speaker Change #199: Our next question comes from the line of Jay Lee Shower of Griffin Securities. Please go ahead.

Andrew Anagnost: Thank you. Good evening. Andrew, what would you have to see over the next number of months in the Americas transition that began yesterday to commence the transition in EMEA as early as, say, mid Q3? And if you don't launch in Q3 and it makes no sense to launch in Q4, should we assume that you would then do EMEA in, let's say, early fiscal 26, and then Asia, perhaps three to six months after that? Yeah, so the last part, I'll just say yes, that's probably the way it would happen, all right, based on the results. But let me tell you what we're looking for in terms of the US.

Speaker Change #200: Thank you good evening.

Andrew: Andrew what would you have to see over the next number of months in the Americas transition.

Speaker Change #201: Dan yesterday.

Speaker Change #202: <unk> commenced the transition in EMEA as early as say mid Q3.

Speaker Change #203: And if you don't launch in Q3 and it makes no sense to launch in Q4 should we assume that you would then do it let's.

Speaker Change #203: Let's say early fiscal 'twenty six and then.

Speaker Change #203: Asia, perhaps three to six months after that.

Speaker Change #203: So.

Speaker Change #204: The last part I'll, just say, yes, that's probably the way it would happen alright based.

Speaker Change #205: Based on the results, but let me tell you what we're looking for in terms of the U S. One we're looking for performance at scale. So when we did the test in Australia, and New Zealand, we tested out the functionality the capability the processes. The training we needed to deliver to the channel partners and frankly, the training we needed to deliver to the customers.

Andrew Anagnost: One, we're looking for performance at scale. So when we did the tests in Australia and New Zealand, we tested out the functionality, the capability, the processes, the training we needed to deliver to the channel partners, and, frankly, the training we needed to deliver to the customers to make sure they knew how to set themselves up as a set us up as a vendor in their systems. Okay, so we learned all of that. We executed on new functionality. Over the course of the period, we tested that functionality in Australia and New Zealand before going live in the Americas.

Speaker Change #205: To make sure they knew how to set themselves up as <unk>.

Speaker Change #205: As a set us up as a vendor in their systems. Okay. So we learned all of that we executed on new functionality over the course of the period, we tested that functionality, Australia, New Zealand before going live in the new.

In the new in in in the Americas. So now we're going to test all that functionality and we're going to watch and see how it operated at scale and see the issues that get produced or don't get for you. So far so good and one of the things I want to make sure that we all remember is why are we doing this alright, its really important to understand why we're doing this this is a <unk>.

Andrew Anagnost: So now we're going to test all that functionality, and we're going to watch and see how it operates at scale and see the issues that get produced or don't get produced. So far, so good. And one of the things I want to make sure that we all remember is why are we doing this?

Andrew Anagnost: All right, it's really important to understand why we're doing this. This is a fundamental shift in how we will have visibility and connection to our customers. Not only are we going to have full visibility of the fully loaded sales and marketing costs of the company, which will allow us to optimize these costs over time, but it's going to enable our customers to engage with us in self-service models that they've never been able to engage with us before.

Speaker Change #205: And the mental shift and how we will have visibility in connection to our customers not only are we going to have full visibility of the fully loaded sales and marketing costs of the company, which will allow us to optimize these costs over time, but it's going to enable our customers to engage with us and self service models that they've never been able to engage with us before and it's going to give us more visibility in <unk>.

Andrew Anagnost: And it's going to give us more visibility and insight into our customers. So not only are we going to be looking at how the systems are working, but we're going to be testing out all of those new capabilities that we want to use to engage with our customers more effectively. So that's kind of what we'll be looking at. And if we see some problems with scale, which we are not anticipating, but you never know, yes, we will delay those rollouts kind of similar to the way you highlighted it. Okay, as a follow up, you used an intriguing comment in your script when you refer to the quote, velocity, and efficiency of R&D. What does that mean? How would we see that?

Speaker Change #205: Site into our customers, so not only youre going to be looking about how the systems are working we're going to be testing out all of those new capabilities that we want to use to engage with our customers more effectively so that's kind of what we'll be looking at and if we see some problems with scale, which we are not anticipating but you never know, yes, we will we will delay those rollout kind of.

Speaker Change #206: The way you highlighted it in your question.

Speaker Change #207: Okay as follow up you used an intriguing comment in your script when you referred to quote velocity and efficiency of R&D.

Jay Vleeschhouwer: Would it manifest, for example, first in AEC or otherwise manufacturing? And, you know, given the scale of your R&D, which is still the biggest in your peer group, how do you think that plays out over time? What do you mean by that? Yeah, so that goes back to the platform services. All right, and as you know, we're continuing to invest. Platform Services to make sure that the teams are using shared services to not only move faster but also move better moving forward.

Speaker Change #208: What does that mean.

Speaker Change #209: How would we see that we would've manifest for example, first in AUC or otherwise manufacturing.

Speaker Change #209: Given the scale of your R&D, which still the biggest and your peer group.

Speaker Change #210: How do you think that plays out over time, what did you mean by that yes. So that goes back to the platform services capabilities, Alright, and as you know we're continuing to invest in the platform services to make sure that the teams are using shared services to not only move faster, but also move better moving forward. We're good.

Jay Vleeschhouwer: We're getting more, and we're making more and more progress on this. We're getting more and more shared services out there that are shared across various parts of the company. There are some really interesting ones that will be coming out in the next year or so that I won't pre-announce, but they're shared services that will allow us to do some things that provide kind of common project visibility across various industries and things like that.

Speaker Change #210: More making more and more progress on this we're getting more and more shared services out there that are shared across various.

Speaker Change #210: Parts of the company there are some really interesting ones that'll be coming out in <unk>.

Speaker Change #210: In the next year or so that I won't I won't pre announced but they're shared services that will allow us to do some things that provide kind of common project visibility across various industries and things like that these are exciting things that used to get built in individual silos inside the company. So it's really important that we have these.

Jay Vleeschhouwer: These are exciting things that used to get built in individual silos inside the company. So it's really important that we have these large-scale shared services that not only prevent people from rebuilding the same thing multiple times but also allow people to start up and spin up new things quickly. And that includes some of our incubations and other things.

Speaker Change #210: Large scale shared to service debt.

Speaker Change #210: Prevent people from rebuilding the same thing multiple times, but also allow people to startup and spin up new things quickly and that includes some of our incubation and other things. So so watches this happens youll start to see more and more of these shared services and I think we're starting to hit kind of a sweet spot of momentum in terms of some of the work we're doing on the platform services.

Andrew Anagnost: So watch as this happens, and you'll start to see more and more of these shared services. I think we're starting to hit kind of a sweet spot of momentum in terms of some of the work we're doing on the platform service. Thank you, Andrew. Thank you, Jay.

Speaker Change #211: Thank you Andrew.

Jay: Thank you Jay.

Speaker Change #213: Thank you.

Adam Charles Borg: Thank you. Our next question comes from the line of the Adam Borg of speech, "Awesome." Thanks so much for taking the question. Maybe just on the macro, Andrew, you talked about that's a relatively stable backdrop. And I know fiscal 24 was a softer year for net new seed.

Speaker Change #214: Our next question.

Speaker Change #215: When it comes from the line of Adam Borg with Stifel.

Speaker Change #216: Awesome. Thanks, so much for taking the question.

Speaker Change #217: Maybe just on the macro Andrew can talk about relatively stable backdrop.

Speaker Change #218: And I know in fiscal 'twenty four it was a softer year for net new seats. So just curious if you could talk about how you think about do you see growth in 'twenty five relative to 2024.

Andrew Anagnost: So just curious if you could talk about how you think about new seed growth in 25 years. Yeah, you know, it's hard to predict what's going to happen in 2025. But what I can say right now is we've seen broadly consistent performance for many, many quarters now. All right. This whole conversation we've been having about the last quarter was fairly consistent with the previous quarter, with some puts and takes going on through all sorts of manners of changes and vaccinations out there in the macro environment.

Yes, it's hard to predict what's going to happen in 2025, but I can say right now as we've seen broadly consistent performance for many many quarters now alright.

Speaker Change #218: This whole conversation, we've been having about last quarter was fairly consistent with the previous quarter with some puts and takes that's been going on through all sorts of manners of changes and machinations out there in the macro environment.

Andrew Anagnost: Right now, I would expect to keep seeing some of those environments with the kind of puts and takes that we're seeing now. Just to remind you about the puts and takes in this quarter, we saw a lot of strength in EMEA, we saw a lot of strength in Australia and Japan, but it was offset by weakness in China and Korea. And in the industries, you know, AEC and manufacturing were strong, and M&E was kind of weak.

Speaker Change #218: Right now I would anticipate to keep seeing some of those environments are the kind of puts and takes that we're seeing now just to remind you about the puts and takes in this quarter right. We saw a lot of strength in EMEA. We saw a lot of strength in Australia, and Japan was offset by weakness in China and Korea.

Speaker Change #218: And in the industries AAC and manufacturing were strong in M&A was kind of weak.

Adam Charles Borg: These kinds of changes I expect will continue throughout the quarter so that we'll kind of continue without them throughout the quarter, so we'll continue to see some of this ongoing kind of stability but just with different puts and takes each quarter. incredibly helpful. Maybe just a quick follow-up on a project, super interesting as a long-term opportunity. How should we think about the kind of timing of this across?

Speaker Change #218: These kinds of changes I expect will continue throughout the quarter, so that will kind of continue.

Speaker Change #218: I think throughout the quarter. So we'll continue to see some of these ongoing kind of stability, but just with different puts and takes each quarter.

Speaker Change #219: Credibly helpful. Maybe just a quick follow up on project with <unk> 18 Super interesting as a long term opportunity how should we think about kind of the timing of this across the three.

Andrew Anagnost: you know, three industry clouds and kind of what the dream to dream look like in terms of the impact it could have for organizations as they look to take advantage of these capabilities? Yeah, so what I would do is I would think of Project Bernini as our first foundation model. And each foundation model that we do will be providing a certain set of capabilities or automations for our customers. For example, Bernini is a shape interpretation tool.

Speaker Change #220: Three industry cloud and kind of what what is the dream. The dream look like in terms of the impact it could have.

Speaker Change #220: For for organizations as they look to take advantage of these capabilities.

Speaker Change #221: Yes, so what I would do is I would think of project Bernini as our first foundation model and each foundation model that we do will be providing a certain set of capabilities are automation for our customers' bernini is a shape interpretation tool. It takes two to geometry.

Matthew George Hedberg: It takes 2D geometry, voxel geometry, descriptions, pictures, all of these things and creates intelligent 3D geometry that understands 3D geometry. And we're going to be looking to partner with some of our customers to make it even smarter and better. But that tool can become a core tool used across industries to provide preliminary initial geometries of all types. But it's going to be one of several foundation models because we're going to need multiple types of foundation models to automate the things that are important to our customers.

Speaker Change #221: Vauxhall geometry descriptions pictures all of these things and create intelligent street geometry that can understand three geometry, and we're going to be looking to partner with some of our customers to make it even smarter and better but that that tool can become a core tool used across industries to provide preliminary initial geometries of all types.

Speaker Change #221: But it's going to be one of several foundation models, because we're going to need multiple types of foundation model to automate the things that are important to our customers. What bernini shows is that not only are we ahead of our competitors in this area. We're producing high quality results that are getting attention and in helping us engage more tightly with some of our customers on.

Matthew George Hedberg: What Bernini shows is that not only are we ahead of our competitors in this area, but we're producing high-quality results that are getting attention and helping us engage more tightly with some of our customers on where these tools are going to go in the future.

Speaker Change #221: Were these tools are going to go in the future.

Speaker Change #222: Awesome. Thanks again.

Speaker Change #223: Thank you.

Andrew Anagnost: Thank you. Our next question comes from the line of Matt Hedberg of RBC. Great, thanks for taking my questions. Andrew, maybe just following up on that last one.

Speaker Change #224: Our next question comes from the line of Matt Hedberg of RBC.

Matthew George Hedberg: Great. Thanks for taking my questions Andrew maybe just following up on that last one when we think about these foundations. These jennie O foundational models, bringing I know, it's still early but what is sort of the philosophy on pricing and do you suspect there eventually to be a consumption element to maybe offset some additional compute costs.

Matthew George Hedberg: When we think about these foundational, these Gen AI foundational models, I know it's still early, but what is the sort of the philosophy on pricing? And do you suspect there will eventually be a consumption element to maybe offset some additional compute costs? Yeah, so, you know, Matt, it is a little early to speculate on how we make money and how we go to market with. However, you know that I've been a big fan of consumption models for a long time.

Speaker Change #226: Yes, so Matt it it is a little early to speculate on how how we make money and how we go to market with some of these things. However, you know that.

Speaker Change #227: I've been a big fan of consumption models for a long time I think consumption is directionally always been is setting us up well for the future of AI, driven automation and outcome based designs I've talked about these things for a long time I definitely see consumption as a critical part of monetizing these models.

Matthew George Hedberg: I think consumption has always been setting us up well for the future of AI-driven automations and outcome-based designs. I've talked about these things for a long time. I definitely see consumption as a critical part of monetizing these models, but I also see other critical aspects of it as being able to customize these models for individual customers and individual companies, just like we get a customized version of Autopilot and GitHub for Autodesk and GitHub Copilot for Autodesk, okay?

Speaker Change #227: I also see other critical aspects of it as being able to customize these models for individual individual customers and individual companies just like we get a customized version of.

Speaker Change #227: Auto pilot and Github for Autodesk, and Github copilot per autodesk, okay. So not going to exactly say, how it'll be monetized, but I'd be very surprised if consumption doesn't doesn't play an important role in the future of using these generative models to automate a lot of complexity for our customers.

Matthew George Hedberg: So, I'm not going to exactly say how it'll be monetized, but I would be very surprised if consumption didn't play an important role in the future of using these generative models to automate a lot of complexity for our customers.

Andrew Anagnost: Got it. Thank you for that. That's super helpful.

Speaker Change #228: Got it. Thank you for that that's Super helpful. And then maybe just.

Speaker Change #229: On the early renewals you saw in Q1 I assume that was mostly in anticipation of the transition the direct transition was that largely a U S. <unk>.

Speaker Change #230: You also.

Simon Mays: And then maybe just on the early renewals you saw in Q1, I assume that was mostly in anticipation of the transition, the direct transition. Was that largely a U.S. function that you all saw? Matt, it's Simon. It had more to do with the timing of the price increase and ahead of that. What we set as flags last quarter is that we'll expect a bit of early renewal, as we saw in Australia, ahead of the implementation in the US of the new transaction model.

Simon: It's Simon.

Simon: There's more to do with the timing of the price increase.

Simon: Ahead of that.

Speaker Change #231: We flagged last quarter is that we will expect a bit of early renewal as we saw in Australia ahead of implementation in the U S of any transaction model.

Matthew George Hedberg: Thanks a lot, guys. Thank you. Our next question comes from the line of Joe Brunk of Bayer. Great. Thanks. Thanks, everyone.

Speaker Change #232: Got it thanks, a lot guys.

Speaker Change #233: Thank you.

Speaker Change #234: Our next question comes from the line of Joe <unk> of Baird.

Joseph D. Vruwink: If my hearing is sound, I think I heard Australia, not one of the strongest regions in the corridor, but at the same time, also subject to this agency transition. So, I guess my question... Oh, yeah, Joe, let's correct you. I mean, ask your question.

Speaker Change #235: Great. Thanks.

Speaker Change #236: Thanks, everyone.

Speaker Change #237: My hearing is sound I think I heard Australia, Matt one of the strongest regions in the quarter at the same time.

Speaker Change #238: Also subject this agency transitions. So I guess my question Oh, Yes, Joe, Let's let's correct you ask your question.

Joseph D. Vruwink: Well, it gets to the point of obviously, it sounds like you have a model in place for this transition, and so far, the assumptions are holding. I'm wondering how you stress tested the model.

Yes.

Speaker Change #238: Well.

It gets to the point of obviously it sounds like you have a model in place for this transition and so far the assumptions are holding I am wondering how you stress tested the model so let's say.

Joseph D. Vruwink: So let's say, here in the States, the macro does suddenly get worse. Does that influence the intended rollout? Does that change some of the strategies you look to employ? Or is it really business as usual in terms of how you're approaching those? Okay, so first off, Joe, your ears were not working. Australia is great.

Speaker Change #239: Here in the states the macro does suddenly get worse does that influence the intended rollout does that change some of the strategy as you look to employ or is it really business as usual in terms of how you're approaching those.

Andrew Anagnost: Australia was one of the strong points. Okay, so Australia is back where it was pre the business model transit business, the new transaction model. So it's going great. So it's a nice proof point of some of the capabilities. Now, in terms of macro, macro is not going to impact our decision in terms of how we move forward with the new transaction model.

Joe: Okay. So first first off Joe your ears were not working Australia's great Australia was one of the strong points. Okay. So Australia, Australia is back where it was pre.

The business model Trans business, the new transaction model. So it's going great. So it's a nice proof point of some of the capabilities. We have now in terms of macro macro is not going to impact our decision in terms of how we move forward with the new transaction model is all about the capability of the systems the capable.

Andrew Anagnost: It's all about the capability of the system, the capability of our partners, and the ability of our customers to absorb these things and have the whole system work correctly. That's what's going to be the governor on how we roll these things out. The macro could go all sorts of directions.

Joe: They are our partners and the ability of our customers to absorb these things and have the systems. The whole system work correctly, that's what's going to be the governor on how we roll. These things out the macro could go all sorts of directions. We are still going to move forward as long as our systems are functioning the way, we expect them to and like I said, so far so good but it's only been a day.

Joseph D. Vruwink: We're still going to move forward as long as our systems are functioning the way we expect them to. And like I said, so far, so good, but it's only been a day. Okay, my ears aren't working is a common refrain.

Joseph D. Vruwink: So I'll happily move on from that one. Second question: I appreciate Autodesk is a pretty diversified business by end markets, and so sometimes it's fruitless to ask these questions.

Joe: Okay.

Speaker Change #240: Sure thing is a common refrain.

Speaker Change #241: Absolutely okay from that one.

Speaker Change #240: Yes.

Speaker Change #242: Second question I appreciate it out it is still a pretty diversified business by end markets and so sometimes that Straitlaced asked these questions, but I did want to ask about your data center exposure is specifically because I think it's an example, where you can tackle it through the ADC side of the business.

Joseph D. Vruwink: But I did want to ask you about your data center exposure specifically, because I think it's an example where you can tackle it through the AEC side of the business. You're also very involved with some of the product companies that end up in the data centers, and that's on the manufacturing side of Autodesk. So I'm just wondering if you're seeing more real-time convergence happening, and Autodesk actually has a somewhat consequential role to play in the data center build out that's underway. Joe, I love this question.

Joe: We're also very involved with some of the product companies that ended up in the data centers and that's in the manufacturing side of Autodesk. So I'm just wondering if youre seeing more real time convergence happening in autodesk actually as a somewhat consequential role to play in the data Center Buildout that's underway Joe.

Andrew Anagnost: Yes. The answer is yes, yes, yes. Okay. We are actively involved in lots of data centers. I won't say who whose data centers we're involved in, but we are involved in data centers. We're helping people build data centers and build multiple data centers that are similar. They're using our construction tools.

Joe: I Love. This question, yes. The answer is yes, yes, yes, okay.

We're actively involved and lots of data centers I won't say, who do who is data centers. We're involved in but we are involved in data centers, we're helping people bill.

Joe: Build data centers and build multiple data centers that are similar they are using our construction tools. Some of them are using our manufacturing tools and adjacent to the data centers is also that the factory boom in the U S. We're involved in building out factories with certain customers as well and in all of these you are absolutely seeing.

Andrew Anagnost: Some of them are using our manufacturing tools. And adjacent to the data centers is also the factory boom in the US. We're involved in building out factories with certain customers as well. And in all of these, you are absolutely seeing a convergence of our manufacturing portfolio and our AEC and construction portfolio. And that is happening in real time, and we expect to see more of it. There was a great article in the New York Times recently about how Europe managed to pull off what America had been talking about for so long, the Scandinavian countries building prefabricated housing and factories using our products, by the way.

Joe: The convergence of our manufacturing portfolio, and our AUC and construction portfolio and that is happening in real time, and we expect to see more of it there was a great article in the New York Times recently about about how Europe managed to pull off with America was talking about for so long in the Scandinavian countries be building pre fabricated.

Joe: Housing in factories, using our products by the way to do that and I'm, hoping that will all come to the U S. Soon as well so that we see the convergence of AUC and manufacturing in terms of building pre fabricated components of houses that day is going to come to but right now youre right Datacenters and factories are very interesting places.

Andrew Anagnost: And I'm hoping that will all come to the US soon as well, so that we see the convergence of AEC and manufacturing in terms of building prefabricated components of houses. That day is going to come, too.

Joseph D. Vruwink: But right now, you're right. Data centers and factories are very interesting places. Great, thank you very much. Thank you. Our next question comes from Ken Wong of Oppenheimer & Company. Hi, thank you for taking my question. Um, just a quick question back on the investigation.

Speaker Change #243: Great. Thank you very much.

Speaker Change #244: Thank you.

Ken Wong: My reading of your commentary was that obviously you guys completed the audit, and the SEC kind of may or may not investigate. I guess I just wanted to kind of get clarification from you guys whether or not there is any progress on that front. Yeah, so just so you know, when we kicked off the investigation, we voluntarily engaged with the SEC, and we have shared information about the investigation. So if they want more information and they want to engage more, we will cooperate with them to the fullest extent of our ability. Okay, perfect. And then second, just on the, you know, I couldn't help but notice you guys commented on this record construction foot growth. Any color on kind of where you're seeing that?

Speaker Change #245: Our next question comes from Ken Wong of Oppenheimer and company.

Ken Wong: Alright, Thank you for taking my question.

Speaker Change #246: Just a quick question back on the investigation my reading of your commentary was that obviously you guys completed the audit.

Speaker Change #247: And the FCC may or May not investigate I guess I just wanted to get clarification from you guys, whether or not there is any progress on that front.

Speaker Change #248: Yes, so just didn't know when we when we kicked off the investigation, we voluntarily engaged with the SEC and we have shared information about.

Speaker Change #248: The investigation, so if they want more information and they want to engage more we will cooperate with them to the fullest extent of our ability.

Andrew Anagnost: Obviously, the kind of construction KPIs macro-wise seem a little mixed, but you guys are showing considerable strength there. Yeah, first off, you know, one of the things that's important to look at in construction is the backlog. The backlog is still pretty solid in construction.

Speaker Change #249: Okay, Perfect and then second just on the I couldn't help but notice you guys commented on this record construction fee growth.

Speaker Change #250: Any color on kind of where you're seeing that obviously, the kind of construction kpis macro wise.

Speaker Change #251: Little mixed but you guys are showing considerable strength there.

Yes.

First off one of the things Thats important to look at in construction in the backlog. There is still at the backlog is still pretty solid and construction. Yes. We said the ryzen in new accounts was broad based across all the regions that we're working on so it's broad based we saw strength everywhere.

Ken Wong: Yeah, the rise in new accounts was broad-based across all the regions that we were working in. So, it's broad-based. We saw strength everywhere.

Andrew Anagnost: And we continue to see a great adoption of our tools, and we're continuing to do competitive wins. I mean, I love the marathon example in Australia because it's a perfect example of how somebody uses our solution to track the entire process, all the way from design through pre-construction down to construction management. It really captures the notion of what our competitive advantage is. We provide an end-to-end solution. We provide it in such a way that it's economically viable for the customer, and we deliver some of the best pre-construction tools in the industry. It's a great example.

Speaker Change #251: And we continue to see great adoption of our tools and we're continuing to do competitive wins I mean I loved the Marathon example, in Australia, because it's a perfect example of how somebody uses the <unk> solution to track the entire process all the way from design through Preconstruction down to construction management.

Speaker Change #251: It really captures the notion of what our competitive advantage is we provide the end to end solution. We provided in such a way that is economically viable for the customer and we deliver some of the best Preconstruction tools in the industry. It is a great example is a great example of what we're seeing and yes, we see ourselves accelerating not decelerating. So we're feeling.

Ken Wong: It's a great example of what we're seeing. And yeah, we see ourselves accelerating, not decelerating. So, we're feeling fairly bullish about our construction. Great, thanks for the contact.

Fairly bullish about our construction business.

Speaker Change #252: Great. Thanks for the context.

Speaker Change #251: Yeah.

Speaker Change #253: Thank you.

Speaker Change #254: Our next question.

Tyler Maverick Radke: Thank you. Our next question comes from the line of Tyler Radke of Citi. Thanks for taking the question. Andrew, could you talk about the EBA performance in the quarter? I think the license and other lines outperformed expectations by quite a bit. Was that related to some EBA strength that you saw?

Speaker Change #255: It comes from the line of Tyler Radke of Citi.

Tyler Maverick Radke: Thanks for taking the question Andrew could you talk about the EBITDA performance of the quarter I think that.

Speaker Change #256: The license and other line.

Speaker Change #257: Outperformed expectations by quite a bit was that related to some some EBITDA strength that you saw and then just given that we.

Andrew Anagnost: And then just given that we've seen some of these EBA contracts come in with multi-year billing. Is that something that you're expecting to see as EBA deals come up for renewal later this year and in the next? Thank you. All right. So Tyler, I want to make sure I understood your question. So with regard to the EBAs, all of our EBAs are multi-year, and we, we, saw, uh, we so I just want to make sure I understood what your question was. Yeah, the question was specifically around the invoicing duration and the billing duration.

Speaker Change #257: We had seen some of these EPA contracts come in with multiyear billing is that something that youre expecting to see.

Speaker Change #257: EMEA deals come up for renewal later this year and into next.

Speaker Change #258: Thank you alright.

Tyler: Alright, So Tyler I want make sure I understood. Your question so with regards to the E Bay as all of our EMEA is our multiyear contracts okay.

Speaker Change #258: We.

Speaker Change #258: We saw.

Speaker Change #258: So I just want to make sure I understood. What your question was.

Speaker Change #258: Yes.

The question was specifically around the <unk>.

Speaker Change #259: Invoicing duration in the billing duration I understand they're contractually multiyear in nature, but do you still plan to invoice them more.

Andrew Anagnost: I understand they're contractually multi-years in nature, but do you still plan to invoice them multi-years in advance? But the first part of the question was really just around, was there outsized EBA strength or any true-ups to call out in the quarter? No, no, there was no...

Speaker Change #260: Multiyear in advance, but the first part of the question is really just around was there was there outsized EMEA strength or any any true ups to call out there.

Tyler Maverick Radke: Okay, good. Okay, thank you. That's what I just wanted to clarify. There was no outsized EBA strength in the quarter, and the vast majority of EBAs are multi-year contracts that are going to be billed annually. That doesn't mean there aren't some that are done upfront. Customers ask for them sometimes, but the vast majority are done multi-year and are billed annually.

Speaker Change #261: No. Okay great. Okay. Thank you that's why I just wanted to clarify there was no outsized EMEA strength in the quarter and.

Speaker Change #262: The vast majority of EPA is our multiyear contracts that are going to be billed annually. Okay that doesn't mean, there aren't some that are done upfront.

Speaker Change #262: Customers ask for them sometimes.

Speaker Change #262: But the vast majority are done multiyear build annually.

Andrew Anagnost: And Tyler, just for some clarification, remember the true ups appear in the subscription line, and the up front is the non-cloud enabled. Primarily last year, that was from non-cloud enabled automotive products, which goes in the other line. So just to make sure you've got some geography there.

Speaker Change #263: And Todd just to.

Speaker Change #264: So clarification remember the true ups appear in the subscription line.

Speaker Change #264: It's the upfront is the non cloud enabled.

Primarily last year that was from non cloud enabled automotive products.

And the other one so just to make sure you've got some geography that but general thing is Q1, we don't guide by sub segment.

Simon Mays: But the general thing is Q1, we don't guide by subsegments, as you know. Q1 was exactly where we expected it to be. Okay, helpful clarification. And the second question, which is, and I realize, maybe more of a CFO question. So apologies if it's a little down the weeds.

Speaker Change #264: Q1 was exactly where I expected it.

Yes.

Speaker Change #265: Okay helpful clarification.

Speaker Change #266: The second question.

Speaker Change #267: Maybe more of a CFO question, so apologies if it's a.

Tyler Maverick Radke: But just as we're looking at the billing number in Q1, certainly can appreciate there's Headwinds, it's a messy number, just given the multi-year strength that you saw a year ago. But if we, investors, are doing the calculation around short-term billings, looking at the change and short-term deferred revenue, which, you know, theoretically doesn't have any impact from the multi-year, that metric, short-term billings growth, looks a lot weaker than many of the other indicators of revenue and booking. Is there anything to call out in terms of maybe why that short-term deferred revenue performance was not as strong any... I'm going to give this one to Simon, Tyler.

Speaker Change #268: A little down the weeds, but just as we're looking at the billings number in Q1.

Speaker Change #269: Certainly can appreciate theirs.

Speaker Change #269: Headwind that the domestic number just given the multiyear strength that you saw a year ago, but if investors.

Speaker Change #269: Investors are doing the calculation around short term billings looking at the change in short term deferred revenue which day.

Speaker Change #269: Theoretically it doesn't have any impact from the multiyear.

Speaker Change #269: That metric short term billings growth looked a lot weaker than many of the other.

Speaker Change #270: Both revenue and bookings is there anything to call out.

Speaker Change #270: Terms of maybe why that short term.

Speaker Change #270: Deferred revenue performance.

Speaker Change #270: It was not as strong any.

Speaker Change #271: I'm going to give me forward I'm going to give this one to Simon Tyler.

Simon Mays: Okay, Tyler. We can. We can. We can. This is a society inside baseball. Um, for the general point, as we've said, there's a lot of noise as we switch from multi-year up front to multi-year annual. So that's the first thing that's causing noise. The second thing is seasonality. Obviously, we have a bigger q3 and q4 than q1, and then in Just on billing specifically, what I'd flag, and this is primarily the multi-year to annual, we were obviously plus 4% in Q1 last year because we had two months of multi-year up front in Q1 last year because we ended it on March 28th, and then billings was down 8% in Q2, down 11% in Q3, and down 19% in Q4. And so, to put that in context, the Q1 of minus 5%, as we begin to cycle against the easier comparables, gives you context for that. So it's actually improving.

Speaker Change #271: Okay.

Speaker Change #272: We can.

Speaker Change #273: Inside baseball, but so general point as we've said, there's a lot of noise as we switch from multi year upfront to multi year annual.

Speaker Change #273: So that's the first thing, let's causing noise. The second noise is seasonality, obviously, we have a big Q3, and Q4 and Q1.

Speaker Change #273: And then in addition to that there is a bit of noise from FX as well.

Speaker Change #273: Todd.

Speaker Change #274: So what that means is and the reason we've been pointing you to CRP.

Speaker Change #275: <unk> it was probably the better metric just on billings, specifically, what I'd flag is.

This is primarily the multi year to Daniel we were obviously plus 4% Q1 last year, because we had still two months of multiyear upfronts in Q1 last year. Because we ended on March 28, and then billings was down 8% in Q2 down.

Speaker Change #275: The 11% in Q3 and down 19% in Q4.

Speaker Change #275: To put that in context, the Q1 of minus 5% as we begin to cycle against the easier Comparables.

Tyler Maverick Radke: It may be that it wasn't quite where consensus was, but remember, we don't guide to billings. But what you can actually see is the improvement in trend, and obviously, as we cycle against the easier comps in Q2 and beyond, that will then make more sense in the context of our annual guidance. Thank you very much.

Speaker Change #275: The context for that so it's actually improving in Miami and maybe it wasn't quite where consensus was but remember we don't guide to billings, but what you can actually see is the improvement in trend and obviously as we cycle against the easier comps in Q2 and beyond that will then make more sense in the context of our annual guidance.

Speaker Change #276: Thank you very much.

Speaker Change #276: No.

Joshua Alexander Tilton: Thank you. Our next question comes from the line of Joshua Tilton of Wolf Research. Hey, guys, can you hear me?

Speaker Change #277: Thank you. Our next question comes from the line of Joshua Tilton of Wolfe Research.

Speaker Change #278: Hey, guys can you hear me.

Operator: Yep, Joshua, we can hear you fine. Yeah, I apologize for any of the background noise, but I kind of want to go back to the investigation. I know I'm definitely not the smartest guy on the call tonight, but if I read through some of the bullet points that you guys put out there for investors, it sounded like there were some choices made around collections and that maybe those choices had to change going forward.

Speaker Change #279: Josh we can hear you fine, yes, I apologize for any of the other background noise, but.

Speaker Change #280: I kind of want to go back to the investigation.

Speaker Change #281: Definitely not the smartest guy in the call Tonight.

Speaker Change #282: But if I read through some of the bullet points that you guys put out there for investors. It sounded like there were some choices made around collections.

Speaker Change #283: And then maybe those choices have to change going forward and I do really appreciate that you guys reiterated your confidence in that FY 'twenty is a cash number but I guess was there any change around collections.

Operator: And I do really appreciate that you guys reiterated your confidence in that FY25 cash number, but I guess, was there any change around collections or practices related to collections that you previously undertook that you can no longer take going forward that maybe changes your confidence interval around hitting that cash number in FY26? Yeah, so first off, I just want to make clear, there are no changes in our financials. All right, and there was no obfuscation of the strength of the underlying business.

Speaker Change #283: Or practices related to collections that you'd previously undertook the longer it takes all going forward. There may be changes your thoughts evidence interval around putting that cash number in FY 'twenty six.

Speaker Change #284: Yes so.

First off I, just wanted to be clear, there's no changes in our financials alright.

Speaker Change #284: And there was no obvious cases and to strengthen the underlying business alright. So.

Joshua Alexander Tilton: All right. So any changes or practices that we are making do not impact the trajectory of our business at all. All right. There is no change in our confidence in the free cash flow target this year or the free cash flow target for next year.

Speaker Change #284: Any any changes or practices that we are making make nic do not impact the trajectory of our business at all alright. There is no no change in our confidence in the free cash flow target this year or the free cash flow target for next year.

Andrew Anagnost: Which is helpful, and then maybe just a quick follow-up, and I could just be nitpicking here, but you kind of referred to the macro environment as the one-off facets of the business, but as you also mentioned, right, we've kind of been in the States for many quarters now, so I guess, how do you think about the trajectory of the business over the next few years in the context of what might just be a I guess, when you guys think beyond the next few quarters, right, like, is the going rate assumption for Autodesk that, you know, this is a one-off and things do get better, or are you guys playing ball in terms of this game that we've been playing for the last few quarters and just assuming the macro is the way it is and maybe this is more of a new norm? So, let me be super clear about something. The long-range plan for our business is completely unchanged.

Speaker Change #285: That's helpful. And then maybe maybe just a quick follow up and I could just be nitpicking here, but you know you kind of referred to the macro environment for one off assets of the business.

Speaker Change #286: As you also mentioned right we've kind of been in this state for many quarters now so I guess, how do you think about the trajectory of the business over the next few years.

Speaker Change #286: In the context of what might just be.

Speaker Change #286: A new norm from a macro perspective and.

Speaker Change #286: Not necessarily things getting better I guess when you guys think about beyond the next few quarters right.

Speaker Change #287: Is the going rate assumption for Autodesk.

Speaker Change #288: This is one off things do get better or are you guys playing ball in terms of this game that we play in for the last few quarter can just.

Speaker Change #289: The macro is the way it is.

Speaker Change #290: This is more of a new norm.

Speaker Change #291: So let me, let me be Super clear about something the long range plan for our business is completely unchanged.

Andrew Anagnost: All right. So in terms of what we're looking at, you know, 10 to 50% revenue growth, the long-term targets, the business is completely unchanged. And the mechanical business buildup of free cash flow that we're going to see now as a result of the large renewal cohort we have next year, which is the largest renewal cohort of product solutions we have next year, plus the large renewal cohort of EBAs we have next year, all with the mechanical buildup of what will get billed from a multi-year subscriptions book this year, I mean, a recognized order this year, we see a nice build Things with regard to our long-range plan are absolutely unbearable.

Speaker Change #290: Alright.

Speaker Change #290: In terms of in terms of what we what we're looking at 10% to 50% revenue growth.

Speaker Change #290: Term targets is completely unchanged and the mechanical business buildup of free cash flow that we're going to see now as a result of the large renewal cohort we have next year plus.

Speaker Change #290: Which is the largest renewal cohort of prices here, because we have next year plus the larger neural cohort of <unk>, we have next year at.

Speaker Change #290: All with the mechanical buildup of what was what will get built.

Speaker Change #290: It's multi year subscriptions.

Speaker Change #290: This year I mean are recognized.

Speaker Change #290: Order of this year, we see a nice buildup in the business. So.

The answer to your question is.

Speaker Change #290: Things.

Speaker Change #290: Things with regard to our long range plan are absolutely unchanged.

Joshua Alexander Tilton: Thanks guys, I appreciate the feedback. Thank you. Our next question comes from the line, from Nay So Nang of Berenberg. The line is open.

Speaker Change #292: Thanks, guys I appreciate the feedback.

Speaker Change #292: Okay.

Speaker Change #292: Hi.

Speaker Change #293: Thank you.

Speaker Change #294: Our next question comes from the line.

Speaker Change #295: So netting a barren bird.

Speaker Change #295: Sure.

Speaker Change #296: Your line is open in Iceland.

Nay Soe Naing: Thanks for that. Hi Andrew. Thank you for taking my questions. Hi. My first question is around your platform cloud offerings. You've been investing in these offerings, and by the sound of it, you will continue to invest in them as well. If you could speak a little bit more about what sort of R&D commitments that we should expect as a result of that. So, taking R&D as a percentage of revenue here, should we expect that intensity, R&D intensity, to remain at FY24 levels in the near future or not?

Speaker Change #297: Hi, Hi, Andrew.

Speaker Change #298: Taking my questions.

Andrew: My first question is around your platform cloud offerings investing in these offerings and but it sounded that you will continue to invest into them as well.

Speaker Change #299: If you could speak a little bit more to sort of.

Speaker Change #299: R&D commitments that we should expect as a result of that so taking R&D as a percentage of revenue here should we expect that intensity R&D expense to remain at FY 'twenty four levels in the near future or.

Andrew Anagnost: Should we expect that to tick up as a result of the investments in your cloud offerings, cloud platform offerings specifically? And then, linking to that, when do you expect these offerings, these new offerings to start to contribute meaningfully to your top line groups? All right, so first off, you know, I wouldn't anchor on the R&D as a percent of revenue; that will drift where it's going to drift. I would pay more attention over time to the sales and marketing as a percent of revenue, because that's the place where we're going to be looking for optimization and ongoing kind of performance and productivity changes moving forward.

Speaker Change #299: Okay.

Speaker Change #299: Sure.

Speaker Change #299: Should we expect that to tick up as a result of the investments in and your cloud offerings cloud platform offerings, specifically and then Lincoln.

Speaker Change #299: Linked to that.

Speaker Change #299: When do you expect these offerings seize new offerings to become.

Speaker Change #300: Do you start to contribute meaningfully in your topline growth place alright.

Speaker Change #301: So first off.

Speaker Change #302: I wouldn't I wouldn't anchor on the R&D as a percent of revenue that will drift, where it's going to drift I would pay more attention overtime to the sales and marketing as a percent of revenue because that's the place where we're going to be looking for optimization and an ongoing kind of performance.

Speaker Change #302: Performance and productivity changes moving forward. So I would encourage you to think about that part of the business.

Nay Soe Naing: So I would encourage you to think about that part of the business as we move forward, because R&D investment is really important to us, and we'll continue to invest in R&D appropriately. With regard to the new offerings, I just want to make sure I understand what the new offerings are. Are you talking about platform services in terms of billable platform services? We already provide access to some of our services on a pay-per-view basis.

Speaker Change #302: As we move forward because.

Speaker Change #302: R&D investment is really important to us and we'll continue to invest in R&D appropriately with regards to the new offerings and I just want to make sure I understand with new offerings are talking about are you talking are you talking about platform services in terms of global platform services, we already actually provide access to some of our services on a on a on a per pay bay.

Nay Soe Naing: But there's going to be a whole set of services that continue to roll out over the next couple of years that will be available to our customers on a pay-per-use basis. So I'm just not sure what particular capabilities you were asking about. I was referring to the three cloud offerings, three industry cloud platforms. Oh, Fusion, Form, and Flow.

Speaker Change #302: <unk>, but theres going to be a whole set of services that continue to rollout over the next couple of years that will be available to our customers on a per charge basis. So.

Speaker Change #303: I just I'm just not sure what particular capabilities you were asking about.

Speaker Change #304: Since I was referring to the three cloud offerings industry cloud platform fusion form in Florida.

Andrew Anagnost: Yes. Oh, okay. Yes, those ones.

Speaker Change #303: Thanks.

Nay Soe Naing: All right. Okay. All right. Well, Fusion's already a growing business for the company, and it's already accelerating. I think Forma and Flow are very nascent. Forma is in the stage where we're focusing on product market fit, user adoption, and getting people excited about outcome-based design and the new paradigms we're going to be pioneering with Forma. And then, of course, integrating it tightly with Revit, so it's the best Revit companion out there in the market, so it provides not only next-gen cloud-based capabilities and AI capabilities, but it works incredibly well with Revit.

Speaker Change #305: Alright, Okay, alright, well fusion's already a growing business for the company and its already accelerating.

Speaker Change #305: I think.

Speaker Change #305: Former and flow our very nascent alright, former is in the stage, where we're focusing on product market fit user adoption and getting people excited about outcome based design and the new paradigms are going to be pioneering with with with pharma and then of course integrating it tightly with rabbit. So it's the <unk>.

Speaker Change #305: Rabbit companion out there in the market. So that it provides not only next gen cloud based capabilities and AI capabilities, but it works incredibly well with rabbit. So the focus on form of right now as adoption.

Andrew Anagnost: So the focus on Forma right now is adoption. The focus on flow right now is actually getting flow out the door, and the initial capabilities are going to be focused more on asset management and the capabilities of managing assets in the media and entertainment space, but they're not yet generating the revenue growth that we care about. Fusion, on the other hand, is a growing franchise, continues to grow, it's taking share from our competitors, and I continue to encourage you to watch that space. Industry Clouds are going to start contributing meaningfully to Autodesk's growth strategy. That's really helpful.

Speaker Change #305: The focus on flow right now is actually getting flow out the door.

Speaker Change #305: The initial capabilities are going to be focused more on asset management and the capabilities of managing assets in the media and entertainment place, but they are not yet generating the revenue growth that we hear about fusion on the other hand as a growing franchise continues to grow as taking share from our competitors and I can I can.

Speaker Change #305: To encourage you to watch that space, but over the next three years all of these.

Speaker Change #305: Industry clouds are going to start contributing meaningfully to autodesk growth strategy.

Nay Soe Naing: Thank you very much. And on R&D, I just wanted to make sure that I understood you correctly here. So the R&D as a percentage of revenue as an intensity, that should remain at the current level because R&D is really important for the business. But, should we expect that to take up given that you're obviously investing in platform services and also you're complementing your ACC offering overall as well? I'm not going to speculate on the future trajectory of R&D as a percent of revenue. I would really encourage you to focus more on the sales and marketing numbers at this point. Right now, we're definitely a product company, and R&D is very important to us.

That's really helpful. Thank you very much and on R&D just wanted to make sure that.

Speaker Change #306: You correctly here.

Speaker Change #307: R&D as a percentage of revenue is an intensity that should remain at current level because R&D is really important for the business but.

Speaker Change #308: Should we expect that to tick up given that you're obviously investing in the platform services and also complementing our ACC offering overall as well.

Andrew Anagnost: So we're going to continue to invest, but we're going to invest prudently and appropriately. So I want to make sure that you understand that we're going to keep these things within reasonable bounds. But sales and marketing might be something you want to pay attention to in the future. Right, okay. I understand. Thank you very much.

Speaker Change #309: I'm not going to expense speculate on the future trajectory.

Speaker Change #309: R&D as a percentage of revenue I think I'd really I would really encourage you to focus more on the sales and marketing numbers at this point alright, right now we're definitely a product company in R&D is very important to us. So we're going to continue to invest but we're going to invest prudently and appropriately alright. So I want to make sure that you understand that we're going to we're going to keep these things within reason.

Speaker Change #309: We'll balance, but sales and marketing might be something you want to pay attention to in the future.

Speaker Change #311: But okay understood. Thank you very much.

Speaker Change #310: Thank you.

Elizabeth Mary Elliott Porter: Thank you. The next question comes from the line of Keith Weiss of Morgan Stanley. Hi, this is Elizabeth Porter on behalf of Keith Weiss.

Speaker Change #312: Our next question comes from the line of.

Speaker Change #313: Keith Weiss of Morgan Stanley.

Speaker Change #313: Hi, This is Elizabeth Parker on for Keith Weiss I wanted to ask on just the cadence of M&A. We've seen some recent activity with wonder dynamics packs, adding to payouts.

Andrew Anagnost: I wanted to ask about just the pace of M&A. We've seen some recent activity with Wonder Dynamics and PICS adding to pay apps. So how should we think about this as a lever in driving faster innovation in the portfolio? And then, related, I think the prior guidance assumed about a half point tailwind from acquisitions. Is it fair to still think about that number just given some of the more recent announcements?

Speaker Change #314: How should we think about this as a lever in driving faster innovation in that portfolio and then related I think the prior guidance that assumed about a half point tailwind from acquisitions is it fair to still think about that number just given some of the more.

Speaker Change #314: Recent announcements thank you.

Elizabeth Mary Elliott Porter: Thank you. Yeah, so look, our acquisition strategy is unchanged. We always pursue interesting adjacencies and tech tuck-ins according to our strategy, and we do it in a prudent and disciplined way.

Speaker Change #315: Yes, so our acquisition strategy is unchanged, we always pursue interesting adjacencies and tech tuck ins. According to our strategy and we do it in a prudent and disciplined way I'm very excited about payouts because it's an important extension of our construction portfolio is an industry leading payment solution.

Andrew Anagnost: I'm very excited about PayApps because it's an important extension of our construction portfolio and it's an industry-leading payment solution. And it helps us integrate all the way through the process and add payment capabilities. PIX PIX is exciting because it puts us on the set and puts us in the business of capturing data on the set and interacting with the directors and furthering our script to screen vision for the media and entertainment industry.

Speaker Change #315: And it's.

Speaker Change #315: It helps us integrate all the way through the process and add the payment capabilities.

<unk> picks is exciting because it puts us on the set and puts us in the business of capturing data on the set and interacting with the directors and furthering our script to screen vision for the media and entertainment vision and Wonder dynamics is a great example of our leading edge AI.

Elizabeth Mary Elliott Porter: And Wonder Dynamics is a great example of a leading-edge AI company doing amazing things that are really going to be transformative in the media and entertainment space. And they're going to be doing great things at Autodesk for many years. They're all part of our strategy. They're all connected directly to our strategy. I think you can expect to see us continue down this path of doing acquisitions that make sense with regard to our strategy or the adjacencies that we're trying to target for our business.

Speaker Change #315: Any doing amazing things that are really going to be transformative in the media and entertainment space and theyre going to be doing great things at Autodesk over multiple years, they're all part of our strategy. They're all connected directly to our strategy. I think you can expect to see US continue down this path of doing acquisitions that make sense with regards to our strategy.

Speaker Change #315: <unk> are the Adjacencies that we're trying to target for our business.

Elizabeth Mary Elliott Porter: Great, and then just another one on the transaction model. I believe you referenced just the potential for some uncertainty around rolling out the model and leaving room for that in the full-year guide. I just want to better understand what those friction points would be, whether they were partners or customers, what they look like, and then just double-click on the guardrails or processes you have in place to mitigate that risk.

Speaker Change #315: Okay.

Speaker Change #316: Great and then just another one on the transaction model I believe you referenced just the potential for some uncertainty around rolling out the model and leaving room for that in the full year Guide I just wanted to better understand what the question quite well.

Speaker Change #317: B, whether it's our partners our customers what they look like and then just double click on the guardrails are processes you have in place to mitigate that risk.

Elizabeth Mary Elliott Porter: Yeah, Elizabeth, it's really to do with the timing of the US rollout. As you know, we went live yesterday. So far, it's all pretty quiet, which is good because it means everything's okay. And we're just going to see how that goes. And then that will determine what we do and the rate of rollout, as Andrew was saying earlier. So it's really to do with that, the timing of the rollout, and that's determined by how things go in the US.

Speaker Change #317: Yes.

Speaker Change #318: To do with the timing of the U S rollout.

We went live yesterday, so far it's pretty quiet.

Speaker Change #318: Which is good.

Speaker Change #319: Because it means everything is okay, and we're just going to see how that goes and then that will determine what we do in the rates of Rollouts as Andrew was saying earlier, so it's really to do with that the timing of the Rollouts and Thats determined.

Speaker Change #319: On how things go in the U S.

Speaker Change #320: Hi, Thank you.

Speaker Change #321: Thank you.

Elizabeth Mary Elliott Porter: All right. Thank you. Thank you. The next question comes from the line of City Penegrahi of Missoula. Hi, this is Sameer calling in for SIDI. The couple of questions I have are one is about Strength in Construction.

Our next question comes from the line of City Pentagon.

Speaker Change #321: Zero.

Samir: Hi, This is samir calling in for Sydney.

Speaker Change #321: Yeah.

Samir: Couple of questions I have one is the.

Speaker Change #322: The strength in construction.

Given there were some recent consolidation talks in the industry, I was wondering if there was any benefit to you from that dynamic, in terms of talk starting and then not going through. Hello. I can't hear. Sorry, can you hear Andrew?

Speaker Change #322: And given that there were some recent consolidation talks and industry I was wondering if there was any benefit to you.

Speaker Change #323: That <unk>.

Speaker Change #324: Dynamic and knows us talk starting and then not going through.

Speaker Change #324: Okay.

Speaker Change #324: Hello.

Speaker Change #324: Okay.

Speaker Change #325: Sorry can you hear Andrew.

Sorry, I was muted. I apologize for that. No, actually, there's no connection whatsoever between those dynamics and what's going on in our construction business. What you're seeing is growing momentum in our construction business related to the quality of our solution, and the increasing capabilities of our go-to-market strategy, and frankly, competitive wins. So it's purely related to that. There's no other talks, no other impact that we're having on ourselves. It's purely a matter of

Sorry, I was I was yes it was.

Speaker Change #325: Muted I apologize for that.

No actually there is no connection whatsoever between those dynamics and what's going on in our construction business, what youre seeing is growing momentum in our construction business related to the quality of our solution and the the increasing capabilities of our go to market and frankly competitive wins.

Speaker Change #325: No.

Speaker Change #325: It's purely related to that.

Speaker Change #325: There is no other no other talks that no other impacts that we're having.

Speaker Change #325: On a purely execution.

Thank you. And a quick one, you mentioned that there are going to be some contracts that are going to stay legacy on-prem multi-year billing. Is there like a floor that's going to be there all the time in terms of multi-year upfront billings? No, there's no particular floor.

Speaker Change #326: Thank you.

Speaker Change #327: A quick one you didn't mention that.

Speaker Change #328: There are going to be some contracts that are going to stay a legacy on prem multi year billing is there like a <unk>.

Floor, that's going to be there all the time in terms of multiyear upfront billings.

Speaker Change #329: No there is no particular slot floor.

You know, some customers may prefer to pay up front. Some partners may prefer to sell up front, As long as we offer it, somebody is going to do it. But the important thing is that it's going to be the exception, not the rule. We're well past the world where multi-year subscriptions build up front. They're like a large chunk of our business. That era is over, but that doesn't mean that people won't do this, and we won't end up with some multi-year contracts built up.

Speaker Change #329: Some customers may may prefer to pay upfront.

Speaker Change #329: Some some some partners may prefer to to.

Speaker Change #329: Sell upfront as long as we offer it somebody is going to do it but the important thing is it's going to be the exception not the rule, we're well past the world, where multiyear billings up multi year subscriptions build upfront where like a large chunk of our business that that era is over.

But that doesn't mean that people won't do this and we won't end up with some multi year contracts built upfront.

Got it. Thank you. Thank you. That is all the time we have for Q&A today.

Speaker Change #330: Got it thank you.

Speaker Change #330: Yeah.

I would now like to turn the conference back to Simon Mays Smith for closing remarks. Thank you, everyone, for joining us. I'm sorry we've been quiet for a while. Very much looking forward to seeing many of you and talking to you over the coming weeks. If you do have questions, please just ping me as you always do, and I'll be happy to jump on a call and have a chat.

Speaker Change #331: Thank you that is all the time, we have for Q&A today I would now like to turn the conference back to Simon Mays Smith for closing remarks, Sir.

Otherwise, we'll look forward to catching up with you next quarter and look forward to chatting then. Thanks, all. This concludes today's conference call. Thank you for participating. You may now disconnect.

Thanks, everyone for joining us I'm, sorry, we've been quiet for a while very much looking forward to seeing many of you and told you over the coming weeks. If you do have questions. Please just Ping me as you always do and I'll be happy to jump on the call and have a chat.

Michael J. Funk: Otherwise, we'll look forward to catching up with you next quarter and look forward to chatting then. Thanks all.

Speaker Change #331: Otherwise, we'll look forward to catching up with you next quarter and look forward to shutting them. Thanks.

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

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