Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The discussion in our MD&A and elsewhere in this Quarterly Report on Form 10-Q contains trend analyses and other forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are any statements that look to future events and consist of, among other things, our business strategies, including those discussed in “Strategy,” “Overview of the Three and Nine Months Ended October 31, 2024,” and in “Results of Operations-Overview.” Examples of such forward-looking statements may relate to items such as future net revenue, operating expenses, recurring revenue, net revenue retention rate, cash flow, remaining performance obligations, and other future financial results (by product type and geography); the transition to annual billings for multi-year contracts; the implementation of new transaction models; the effectiveness of our efforts to successfully manage transitions to new markets; our ability to increase our subscription base; expected market trends, including the growth of cloud and mobile computing; the availability of credit; the effect of unemployment; the effects of global economic conditions, including from an economic downturn or recession in the United States or in other countries around the world; the effects of revenue recognition; the effects of recently issued accounting standards; expected trends in certain financial metrics, including expenses; expectations regarding our cash needs; the effects of fluctuations in exchange rates and our hedging activities on our financial results; our ability to successfully expand adoption of our products; our ability to gain market acceptance of new business and sales initiatives; the impact of past acquisitions, including our integration efforts and expected synergies; the impact of economic volatility and geopolitical activities in certain countries, particularly emerging economy countries; the timing and amount of purchases under our stock buy-back plan; and the effects of potential non-cash charges on our financial results and the resulting effect on our financial results. In addition, forward-looking statements also consist of statements involving expectations regarding product capability and acceptance, anticipated benefits of our products; statements regarding our liquidity and short-term and long-term cash requirements, as well as statements involving trend analyses and statements including such words as “may,” “believe,” “could,” “anticipate,” “would,” “might,” “plan,” “expect,” and similar expressions or the negative of these terms or other comparable terminology. These forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q and are subject to business and economic risks. As such, our actual results could differ materially from those set forth in the forward-looking statements as a result of a number of factors, including those set forth below in Part II, Item 1A, “Risk Factors,” and in our other reports filed with the U.S. Securities and Exchange Commission. We assume no obligation to update the forward-looking statements to reflect events that occur or circumstances that exist after the date on which they were made, except as required by law.

Note: A glossary of terms used in this Quarterly Report on Form 10-Q appears at the end of this Item 2.

Strategy

Autodesk is changing how the world is designed and made. Our technology spans architecture, engineering, construction, product design, manufacturing, media and entertainment, empowering innovators everywhere to solve challenges big and small. From greener buildings to smarter products to more mesmerizing blockbusters, Autodesk technology helps our customers to design and make a better world for all.

Our strategy is to deliver a trusted design and make platform that connects people through automation, data, and insights to help them achieve better outcomes for their businesses and the world. To drive the execution of our strategy, we are focused on three strategic priorities: build the platform of choice for Design and Make, accelerate adoption of Fusion, Forma, and Flow, and transform how customers experience Autodesk.

We equip and inspire our users with the tailored tools, services, and access they need for success today and tomorrow. At every step, we help users harness the power of data to build upon their ideas and explore new ways of imagining, collaborating, and creating to achieve better outcomes for their customers, for society, and for the world. And because creativity can’t flourish in silos, we connect what matters - from steps in a project to collaborators on a unified platform.

Product Evolution

We offer subscriptions for individual products and Industry Collections, enterprise business arrangements (“EBAs”), and cloud service offerings (collectively referred to as “subscription plans”). Subscription plans are designed to give our customers more flexibility with how they use our offerings and to attract a broader range of customers, such as project-based users and small businesses.

Our subscription plans represent a hybrid of desktop software and cloud functionality, which provides a device-independent, collaborative design workflow for designers and their stakeholders. Our cloud offerings, for example, Autodesk

Construction Cloud, Autodesk Build, Fusion, Flow Production Tracking, AutoCAD web app, and AutoCAD mobile app, provide tools, including mobile and collaboration capabilities, to streamline design, collaboration, building and manufacturing, and data management processes. We believe that customer adoption of these latest offerings will continue to grow as customers across a range of industries begin to take advantage of the scalable computing power and flexibility provided through these services.

Industry Collections provide our customers with access to a broader selection of Autodesk solutions and services, simplifying the customers’ ability to benefit from a complete set of tools for their industry.

To support our strategic priority of digital transformation in Architecture, Engineering, and Construction (“AEC”), we are strengthening our AEC solutions’ foundation with both organic and inorganic investments. In the first quarter of fiscal 2025, we acquired Payapps Limited (“Payapps”), a leading cloud-based software platform for managing construction-related payments. This acquisition will deepen Autodesk Construction Cloud’s footprint and provide a robust payment management offering to serve the needs of general contractors and trade contractors. Through automating the application of the payment process, Payapps’ solution provides greater transparency, reduces risk and helps accelerate time-to-payment. In fiscal 2024, we launched the first set of capabilities in Autodesk Forma, an industry cloud that unifies workflows across the teams that design, build, and operate the built environment. Autodesk Forma’s initial capabilities enable the early-stage planning and design process with automation and Artificial Intelligence (“AI”)-powered insights that simplify the exploration of design concepts, offload repetitive tasks, and help evaluate environmental qualities surrounding a building site. In fiscal 2023, we acquired a cloud-connected, extended reality (XR) platform enabling AEC professionals to present, collaborate and review projects in immersive and interactive experiences, from anywhere and at any time. This acquisition enables Autodesk to meet increasing needs for augmented reality (AR) and virtual reality (VR) technology advancements within the AEC industry and further support AEC customers throughout the project delivery lifecycle.

In manufacturing, our strategy is to combine organic and acquired software in existing and adjacent verticals to create end-to-end, cloud-based solutions for our customers that drive efficiency and sustainability. We continue to attract global manufacturing leaders and disruptive startups with our generative design and cloud-based Fusion that converges the design process with manufacturing. In fiscal 2024, we acquired a provider of simulation technology that enables factory and logistics center operators to optimize their processes. In fiscal 2023, we acquired a maker of software for optimizing manufacturing processes with automation and digitization from the shop floor upward that provides a real-time system of record for data collection, management, and analysis.

Our strategy includes improving our product functionality and expanding our product offerings through internal development as well as through the acquisition of products, technology, and businesses. Acquisitions often increase the speed at which we can deliver product functionality to our customers; however, they entail cost and integration challenges and may, in certain instances, negatively impact our operating margins. We continually review these factors in making decisions regarding acquisitions. We anticipate that we will continue to acquire products, technology, and businesses as compelling opportunities become available.

Global Reach

We sell our products and services globally, through a combination of direct and indirect channels. Our direct channels include, but are not limited to, internal sales resources focused on selling our highly specialized solutions in our largest accounts, Solution Providers focused on serving certain Flex and subscription customers through our new transaction model, and business transacted through our online Autodesk branded store. Our indirect channels primarily include value added distributors, value added resellers, direct market resellers, volume channel partners, and product-specific resellers. During fiscal 2023, we entered into transition agreements with certain of our distributors, including TD Synnex and Ingram Micro Inc., to provide transition distribution activities for a one-to-two-year period. In the third fiscal quarter of 2025, we entered into a new distribution agreement with TD Synnex for government business in certain jurisdictions. Existing distribution agreements will continue in emerging markets. We introduced a new transaction model for our token-based Flex offering in North America, and certain countries in EMEA, and APAC during fiscal 2023 and 2024. Most of our subscription offerings transitioned to the new transaction model in Australia during fiscal 2024, in North America during our second fiscal quarter of fiscal 2025, and in Western Europe during our third fiscal quarter of 2025. In this new transaction model, Solution Providers provide a quote to customers but the actual transaction occurs directly between Autodesk and the customer. We intend to transition our indirect business in our remaining major markets to the new transaction model by the end of fiscal 2025. We expect the change in recognition of sales incentives to indirect channels from contra revenue to operating costs under the new transaction model to positively impact calculated revenue growth, while being broadly neutral to calculated operating profit and free cash flow dollars, and to result in a calculated negative impact to operating margin. See Part I, Item 1, “Financial Statements,” Note 3, “Revenue Recognition” in the Notes to the Condensed Consolidated Financial Statements for further detail on the results of our indirect and direct channel sales for the three and nine months ended October 31, 2024 and 2023.

We anticipate that our channel mix will continue to change as we scale our business. With the continued growth of our online Autodesk branded store and our new transaction model, we are transacting directly with more end customers, rather than through distributors, without substantial disruption to our revenue. We expect our indirect channel will continue to transact and support a considerable portion of our customers. We also expect our transition to annual billings for multi-year contracts to impact the timing of our billings and cash collections. We employ a variety of incentive programs and promotions to align our direct and indirect channels with our business strategies.

Platform Capabilities

We are building a trusted, outcome-focused platform for critical customer workflows that enables end-to-end digital transformation for our customers and partners within and between the industries we serve. We aim to accelerate these customer workloads by providing granular, interoperable and accessible data.

We plan to do this by focusing on building the next generation of technology and services as trusted, shared capabilities. We aim to centralize critical and duplicative capabilities across key offerings. These include foundational capabilities to make our offers safer, faster, easier, and globally scalable, as well as capabilities that can accelerate new sources of value for our customers.

One example of these shared capabilities is Autodesk AI. We have been investing in AI for over a decade. Our focus is on building AI capabilities that add value to our customers’ workloads through augmentation, automation and analysis.

One of our key strategies is to maintain an API based architecture of our software products to facilitate third-party development of complementary products and industry-specific software solutions. This approach enables customers and third parties to customize solutions for a wide variety of highly specific uses. We offer several programs that provide strategic investment funding, technological platforms, user communities, technical support, forums, and events to developers who develop add-on applications for our products. For example, we have established the Autodesk Platform Services to support innovators that build solutions to facilitate the development of a single connected ecosystem for the future of how things are designed, made, and used.

In addition to the competitive advantages afforded by our technology, our large global network of distributors, resellers, Solution Providers, third-party developers, customers, educators, educational institutions, learning partners, and students is a key competitive advantage that has been cultivated over an extensive period. This network of partners and relationships provides us with a broad and deep reach into volume markets worldwide. Our distributor, reseller and Solution Provider network is extensive and provides our customers with the resources to purchase, deploy, learn, and support our solutions quickly and easily. We have a significant number of registered third-party developers who create products that work well with our solutions and extend them to a variety of specialized applications.

Impact at Autodesk

Autodesk is committed to advancing a more sustainable, resilient, and inclusive world. We don’t believe in waiting for progress, we believe in making it. We take action as a business and support our employees, customers, and communities in our collective opportunity to design and make a better world for all.

We focus our efforts to advance positive outcomes across three primary areas: energy and materials, health and resilience, and work and prosperity. These impact opportunity areas are derived from the UN Sustainable Development Goals (“SDGs”) and have been focused through a multi-pronged process to align the top needs of our stakeholders, the important issues of our business, and the areas we are best placed to accelerate positive impact at scale.

These opportunities manifest as outcomes through how our customers leverage our technology to design and make net-zero carbon buildings, resilient infrastructure, more sustainable products, and a thriving workforce. We complement these opportunities through powering our business with 100% renewable energy, neutralizing greenhouse gas emissions and developing an inclusive culture. We advance these opportunities with industry innovators through collaboration, philanthropic capital, software donations, and training.

The Autodesk Foundation (the “Foundation”), a privately funded 501(c)(3) charity organization established and solely funded by us, leads our philanthropic efforts. The purpose of the Foundation is twofold: to support employees to create a better world at work, at home, and in the community by matching employees’ volunteer time and donations to nonprofit organizations; and to support organizations using design and make solutions to drive positive social and environmental impact. On our behalf, the Foundation also administers a discounted software donation program to nonprofit organizations, social and environmental entrepreneurs, and others who are developing design solutions that will transform industries and help shape a better world for all.

Additional information about our environmental, social, and governance program is available in our annual impact report on our website at www.autodesk.com. Information contained on or accessible through our website is not part of or incorporated by reference into this report.

Assumptions Behind Our Strategy

Our strategy depends upon many assumptions, including: making our technology available to mainstream markets; leveraging our large global network of distributors, resellers, Solution Providers, third-party developers, customers, educators, educational institutions, learning partners, and students; improving the performance and functionality of our products and platform; and adequately protecting our intellectual property. If the outcome of any of these assumptions differs from our expectations, we may not be able to implement our strategy, which could potentially adversely affect our business. For further discussion regarding these and related risks, Part II, Item 1A, “Risk Factors.”

Critical Accounting Policies and Estimates

Our Condensed Consolidated Financial Statements are prepared in conformity with U.S. generally accepted accounting principles (“GAAP”). In preparing our Condensed Consolidated Financial Statements, we make assumptions, judgments, and estimates that can have a significant impact on amounts reported in our Condensed Consolidated Financial Statements. We evaluate our estimates and assumptions on an ongoing basis. We base our assumptions, judgments, and estimates on historical experience and various other factors that we believe to be reasonable under the circumstances. Actual results could differ materially from these estimates under different assumptions or conditions. Our significant accounting policies are described in Item 8, “Financial Statements and Supplementary Data,” Note 1, “Business and Summary of Significant Accounting Policies,” in the Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the fiscal year ended January 31, 2024.

An accounting policy is deemed to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, if different estimates reasonably could have been used, or if changes in the estimate that are reasonably possible could materially impact the financial statements. We highlighted those policies that involve a higher degree of judgment and complexity with further discussion in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in our Annual Report on Form 10-K. There have been no material changes to our critical accounting policies and estimates during the three and nine months ended October 31, 2024, as compared to those disclosed in our Annual Report on Form 10-K for the fiscal year ended January 31, 2024. We believe these policies are the most critical to aid in fully understanding and evaluating our financial condition and results of operations.

Overview of the Three and Nine Months Ended October 31, 2024

Total net revenue increased 11% and 12% to $1.57 billion and $4.49 billion, during the three and nine months ended October 31, 2024, respectively, compared to the same periods in the prior fiscal year.
Recurring revenue as a percentage of net revenue was 97% for both the three and nine months ended October 31, 2024 and 98% for both the three and nine months ended October 31, 2023.
Net revenue retention rate (“NR3”) was within the range of 100% and 110%, on a constant currency basis, for both the three and nine months ended October 31, 2024 and 2023.
Deferred revenue was $3.66 billion, a decrease of 14% compared to the fourth quarter in the prior fiscal year.
Remaining performance obligations (short-term and long-term deferred revenue plus unbilled deferred revenue) (“RPO”) was $6.11 billion, flat compared to the fourth quarter in the prior fiscal year.
Current remaining performance obligations was $4.01 billion, an increase of 1% compared to the fourth quarter in the prior fiscal year.

Revenue Analysis

Net revenue increased 11% and 12% during the three and nine months ended October 31, 2024, respectively, as compared to the same periods in the prior fiscal year, primarily due to a 11% increase in subscription revenue for both the three and nine months ended October 31, 2024, respectively.

For further discussion of the drivers of these results, see below under the heading “Results of Operations.”

We rely significantly upon major distributors and resellers in both the U.S. and international regions, including TD Synnex Corporation and its global affiliates (collectively, “TD Synnex”). Total revenue from TD Synnex accounted for 33% and 35% of our total net revenue for the three and nine months ended October 31, 2024, respectively. Total revenue from TD Synnex accounted for 39% and 40% of our total net revenue during both the three and nine months ended October 31, 2023, respectively. Our customers through TD Synnex are the resellers and end users who purchase our software subscriptions and services. During fiscal 2023, we entered into transition agreements with certain of our distributors, including TD Synnex and Ingram Micro Inc., to provide transition distribution activities for a one-to-two-year period. In the third fiscal quarter of 2025, we entered into a new distribution agreement with TD Synnex for government business in certain jurisdictions. Existing distribution agreements will continue in emerging markets. We have increased our selling efforts with Solution Providers in connection with our new transaction model. Consequently, we believe our business is not substantially dependent on TD Synnex.

Recurring Revenue and Net Revenue Retention Rate

In order to help better understand our financial performance, we use several key performance metrics including recurring revenue and NR3. These metrics are key performance metrics and should be viewed independently of revenue and deferred revenue as these metrics are not intended to be combined with those items. We use these metrics to monitor the strength of our recurring business. We believe these metrics are useful to investors because they can help in monitoring the long-term health of our business. Our determination and presentation of these metrics may differ from that of other companies. The presentation of these metrics is meant to be considered in addition to, not as a substitute for or in isolation from, our financial measures prepared in accordance with GAAP. Please refer to the Glossary of Terms for the definitions of these metrics.

The following table outlines our recurring revenue metric for the three and nine months ended October 31, 2024 and 2023:


	Three Months Ended October 31, 2024				Change compared to prior fiscal year					Three Months Ended October 31, 2023
(In millions, except percentage data)				$			%
Recurring revenue (1)	$	1,530			$	151		11	%	$	1,379
As a percentage of net revenue	97		%		N/A			N/A		98		%

	Nine Months Ended October 31, 2024				Change compared to prior fiscal year					Nine Months Ended October 31, 2023
				$			%
Recurring Revenue (1)	$	4,378			$	439		11	%	$	3,939
As a percentage of net revenue	97		%		N/A			N/A		98		%

(1)The acquisition of a business may cause variability in the comparison of recurring revenue in this table above and recurring revenue derived from the revenue reported in the Condensed Consolidated Statements of Operations.

NR3 was within the range of 100% and 110%, on a constant currency basis, for both the three and nine months ended October 31, 2024 and 2023.

Foreign Currency Analysis

We generate a significant amount of our revenue in the United States, Germany, Japan, the United Kingdom and Canada.

The following table shows the impact of foreign exchange rate changes on our net revenue and total spend:


	Three Months Ended October 31, 2024					Nine Months Ended October 31, 2024
	Percent change compared to prior fiscal year		Constant Currency percent change compared to prior fiscal year (1)		Positive/Negative/Neutral impact from foreign exchange rate changes	Percent change compared to prior fiscal year		Constant Currency percent change compared to prior fiscal year (1)		Positive/Negative/Neutral impact from foreign exchange rate changes
Net revenue	11	%	12	%	Negative	12	%	13	%	Negative
Total spend	13	%	13	%	Neutral	9	%	9	%	Neutral

(1)Please refer to the Glossary of Terms for the definitions of our constant currency growth rates.

Changes in the value of the U.S. dollar may have a significant effect on net revenue, total spend, and income from operations in future periods. We use foreign currency contracts to reduce the exchange rate effect on a portion of the net revenue of certain anticipated transactions but do not attempt to completely mitigate the impact of fluctuations of such foreign currency against the U.S. dollar.

Remaining Performance Obligations

RPO represents deferred revenue and contractually stated or committed orders under early renewal and multi-year billing plans for subscription, services, license, and maintenance for which the associated deferred revenue has not yet been recognized. Unbilled deferred revenue is not included as a receivable or deferred revenue on our Condensed Consolidated Balance Sheets. See Part I, Item 1, “Financial Statements,” Note 3, “Revenue Recognition,” for more details on Autodesk's performance obligations.


(in millions)	October 31, 2024	January 31, 2024
Deferred revenue		$	3,658	$	4,264
Unbilled deferred revenue		2,454		1,844
RPO		$	6,112	$	6,108

RPO consisted of the following:


(in millions)	October 31, 2024	January 31, 2024
Current RPO		$	4,014	$	3,976
Non-current RPO		2,098		2,132
RPO		$	6,112	$	6,108

We expect that the amount of RPO will change from quarter to quarter for several reasons, including the specific timing, duration, and size of customer subscription and support agreements, the specific timing of customer renewals, and foreign currency fluctuations. Historically, we have had increased EBA sales activity in our fourth fiscal quarter and this seasonality may affect the relative value of our billings, RPO, and collections in the fourth and first fiscal quarters. As customers transition from multi-year subscription contracts billed upfront to annual billing installments, some customers may choose annual contracts instead. If this were to occur, we would expect it to proportionately reduce the unbilled portion of our total remaining performance obligations and would expect it to impact total RPO growth rates negatively. Deferred revenue, billings, current RPO, revenue, non-GAAP operating margin, and free cash flow would remain broadly unchanged in this scenario.

Balance Sheet and Cash Flow Items

At October 31, 2024, we had $1.98 billion in cash, cash equivalents, and marketable securities. Our cash flow from operations increased to $915 million for the nine months ended October 31, 2024, compared to $876 million for the nine months ended October 31, 2023. We repurchased 1.7 million shares of our common stock for $443 million during the nine months ended October 31, 2024. Comparatively, we repurchased 3.6 million shares of our common stock for $733 million during the nine months ended October 31, 2023. See further discussion regarding the balance sheet and cash flow activities under the heading “Liquidity and Capital Resources.”

Results of Operations

Overview

We believe our investment in cloud products and a subscription business model, backed by a strong balance sheet, give us a robust foundation to successfully navigate complex geopolitical and global macro-economic challenges. However, material scarcity, supply chain disruption and resulting inflationary pressures, higher interest rates, a global labor shortage, the ongoing wars between Ukraine and Russia and between Israel and Hamas, and foreign exchange rate fluctuations, may impact our outlook. We also expect our transition to annual billings for multi-year contracts to impact the timing of our billings and cash collections. The extent of the impact of these risks on our business in the remainder of fiscal 2025 and beyond will depend on several factors, some of which are out of our control. Further discussion of the potential impacts of these risks on our business can be found in Part II, Item 1A, “Risk Factors.”

We introduced a new transaction model for our token-based Flex offering in North America, and certain countries in EMEA, and APAC during fiscal 2023 and 2024. Most of our subscription offerings transitioned to the new transaction model in Australia during fiscal 2024, in North America during our second fiscal quarter of fiscal 2025, and in Western Europe during our third fiscal quarter of 2025. In this new transaction model, Solution Providers provide a quote to customers but the actual transaction occurs directly between Autodesk and the customer. We intend to transition our indirect business in our remaining major markets to the new transaction model by the end of fiscal 2025.

Our sales incentives to Solution Providers will be recorded as operating expenses under the new transaction model as we will contract directly with end customers. Accordingly, we expect sales incentives paid to resellers recorded as a reduction of transaction price and subsequently recognized as a reduction to subscription revenue over the contract period will decrease as we transition to the new transaction model. Most of the sales incentives payments to Solution Providers in our new transaction model, will be considered incremental and recoverable costs of obtaining a contract with a customer and will be capitalized and included in “Prepaid expenses and other current assets” and “Long-term other assets” on the Condensed Consolidated Balance Sheets. The deferred costs will then be amortized over the period of benefit and recorded to “Sales and Marketing” on the Condensed Consolidated Statement of Operations. The sales incentives not qualifying for capitalization will be recorded to “Sales and Marketing” on the Condensed Consolidated Statement of Operations as the costs are incurred under the incentive program requirements. In the near term, we expect the change in recognition of sales incentives to indirect channels from contra revenue to operating expenses under the new transaction model to positively impact calculated revenue growth, while

being broadly neutral to calculated operating profit and free cash flow dollars, and to result in a calculated negative impact to operating margin.

Net Revenue

Net Revenue by Income Statement Presentation

Subscription revenue consists of our term-based product subscriptions, cloud service offerings, and flexible EBAs. Revenue from these arrangements is predominately recognized ratably over the contract term commencing with the date our service is made available to customers and when all other revenue recognition criteria have been satisfied.

Maintenance revenue consists of renewal fees for existing maintenance plan agreements that were initially purchased with a perpetual software license. Under our maintenance plan, customers are eligible to receive unspecified upgrades, when and if available, and technical support. We recognize maintenance revenue ratably over the term of the agreements, which is generally one year.

Other revenue consists of revenue from consulting and other products and services and is recognized as the products are delivered and services are performed.


	Three Months Ended			Change Compared to Prior Fiscal Year						Three Months Ended		Management Comments
(In millions, except percentages)	October 31, 2024		$			%			October 31, 2023
Net Revenue:
Subscription	$	1,457		$	143		11	%		$	1,314	Increase due to growth in subscription renewal revenue driven by expansion of subscriber base in prior periods. Also contributing to the growth was an increase in revenue from Cloud Service offerings.
Maintenance	9			(3)			(25)	%		12
Total subscription and maintenance revenue	1,466			140			11	%		1,326
Other	104			16			18	%		88
	$	1,570		$	156		11	%		$	1,414

	Nine Months Ended			Change compared to prior fiscal year						Nine Months Ended		Management Comments
	October 31, 2024		$			%			October 31, 2023
Net Revenue:
Subscription	$	4,195		$	418		11	%		$	3,777	Increase due to growth in subscription renewal revenue driven by expansion of subscriber base in prior periods. Also contributing to the growth was an increase in revenue from Cloud Service offerings and EBA offerings.
Maintenance	31			(9)			(23)	%		40
Total subscription and maintenance revenue	4,226			409			11	%		3,817
Other	266			55			26	%		211
	$	4,492		$	464		12	%		$	4,028

Net Revenue by Product Family

Our product offerings are focused in four primary product families: Architecture, Engineering and Construction (“AEC”), AutoCAD and AutoCAD LT, Manufacturing (“MFG”), and Media and Entertainment (“M&E”).


	Three Months Ended			Change compared to prior fiscal year						Three Months Ended		Management Comments
(In millions, except percentages)	October 31, 2024		$			%			October 31, 2023
Net Revenue by Product Family:
AEC	$	751		$	76		11	%		$	675	Increase due to growth in revenue from AEC Collections, Revit, Autodesk Build, and Civil 3D.
AutoCAD and AutoCAD LT	398			26			7	%		372		Increase due to growth in revenue from both AutoCAD and AutoCAD LT.
MFG	307			38			14	%		269		Increase due to growth in revenue from MFG Collections, EBA offerings, Alias, and Fusion.
M&E	83			10			14	%		73		Increase due to revenue from the PIX acquisition, upfront revenue from multi-year contract in Q3’25, and EBA offerings.
Other	31			6			24	%		25
Total Net Revenue	$	1,570		$	156		11	%		$	1,414

	Nine Months Ended			Change compared to prior fiscal year						Nine Months Ended		Management Comments
	October 31, 2024		$			%			October 31, 2023
Net Revenue by Product Family:
AEC	$	2,138		$	254		13	%		$	1,884	Increase due to growth in revenue from AEC Collections, Revit, Autodesk Build, and EBA offerings.
AutoCAD and AutoCAD LT	1,163			78			7	%		1,085		Increase due to growth in revenue from both AutoCAD and AutoCAD LT.
MFG	871			100			13	%		771		Increase due to growth in revenue from MFG Collections, EBA offerings, Fusion, and Inventor.
M&E	231			13			6	%		218		Increase due to revenue from PIX acquisition, upfront revenue from multi-year contract in Q3’25, and EBA offerings.
Other	89			19			27	%		70
Total Net Revenue	$	4,492		$	464		12	%		$	4,028

Net Revenue by Geographic Area


	Three Months Ended October 31, 2024			Change compared to prior fiscal year						Constant currency change compared to prior fiscal year		Three Months Ended October 31, 2023
(In millions, except percentages)			$			%			%
Net Revenue:
Americas
U.S.	$	579		$	59		11	%		*		$	520
Other Americas	126			6			5	%		*		120
Total Americas	705			65			10	%		11	%	640
EMEA	580			64			12	%		13	%	516
APAC	285			27			10	%		14	%	258
Total Net Revenue	$	1,570		$	156		11	%		12	%	$	1,414

	Nine Months Ended October 31, 2024			Change compared to prior fiscal year						Constant currency change compared to prior fiscal year		Nine Months Ended October 31, 2023
(In millions, except percentages)			$			%			%
Net Revenue:
Americas
U.S.	$	1,631		$	170		12	%		*		$	1,461
Other Americas	355			34			11	%		*		321
Total Americas	1,986			204			11	%		12	%	1,782
EMEA	1,684			188			13	%		13	%	1,496
APAC	822			72			10	%		14	%	750
Total Net Revenue	$	4,492		$	464		12	%		13	%	$	4,028

Constant currency data not provided at this level.

We believe that international revenue will continue to comprise a majority of our net revenue. Unfavorable economic conditions, including in connection with the ongoing wars between Ukraine and Russia and between Israel and Hamas (and any related political or economic responses and counter-responses or otherwise by various global actors or the general effect on the global economy), in the countries that contribute a significant portion of our net revenue, including in emerging economies such as Brazil, India, and China, has had and may continue to have an adverse effect on our business in those countries and our overall financial performance. Changes in the value of the U.S. dollar relative to other currencies have significantly affected, and could continue to significantly affect, our financial results for a given period even though we hedge a portion of our current and projected revenue. Increases to the levels of political and economic unpredictability or protectionism in the global market may impact our future financial results.

Net Revenue by Sales Channel


	Three Months Ended			Change compared to prior fiscal year						Three Months Ended
(In millions, except percentages)	October 31, 2024		$			%			October 31, 2023
Net Revenue by Sales Channel:
Indirect	$	908		$	32		4	%		$	876
Direct	662			124			23	%		538
Total Net Revenue	$	1,570		$	156		11	%		$	1,414

	Nine Months Ended			Change compared to prior fiscal year						Nine Months Ended
	October 31, 2024		$			%			October 31, 2023
Net Revenue by Sales Channel:
Indirect	$	2,696		$	150		6	%		$	2,546
Direct	1,796			314			21	%		1,482
Total Net Revenue	$	4,492		$	464		12	%		$	4,028

We anticipate that our revenue by direct sales channel will continue to increase as a percentage of total net revenue. With the continued growth of our online Autodesk branded store and the introduction of our new transaction model, we will be decreasing our sales through value-added resellers and distributors and transacting directly with more end customers. We expect our indirect channel will continue to transact and support a considerable portion of our customers, particularly in emerging regions. See further discussion regarding our new transaction model under the heading “Strategy.”

Net Revenue by Product Type


	Three Months Ended October 31, 2024			Change compared to prior fiscal year					Three Months Ended October 31, 2023
(In millions, except percentages)			$			%			Management Comments
Net Revenue by Product Type:
Design	$	1,295		$	103		9	%	$	1,192	Increase primarily due to growth in AEC collections, AutoCAD Family, and MFG collections.
Make	171			37			28	%	134		Increase primarily due to growth in revenue from Autodesk Construction Cloud and Fusion, as well as the PIX and Payapps acquisitions.
Other	104			16			18	%	88
Total Net Revenue	$	1,570		$	156		11	%	$	1,414

	Nine Months Ended October 31, 2024			Change compared to prior fiscal year					Nine Months Ended October 31, 2023
(In millions, except percentages)			$			%			Management Comments
Net Revenue by Product Type:
Design	$	3,748		$	316		9	%	$	3,432	Increase primarily due to growth in AEC collections, AutoCAD Family, and EBA offerings.
Make	478			93			24	%	385		Increase primarily due to growth in revenue from Autodesk Construction Cloud and Fusion, as well as the PIX and Payapps acquisitions.
Other	266			55			26	%	211
Total Net Revenue	$	4,492		$	464		12	%	$	4,028

Cost of Revenue and Operating Expenses

Cost of subscription and maintenance revenue includes the labor costs of providing product support to our subscription and maintenance customers, SaaS vendor costs and allocated IT costs, facilities costs, professional services fees related to operating our network and cloud infrastructure, royalties, depreciation expense and operating lease payments associated with computer equipment, data center costs, salaries, related expenses of network operations, stock-based compensation expense, and gains and losses on our operating expense cash flow hedges.

Cost of other revenue includes labor costs associated with product setup, costs of consulting and training services contracts, and collaborative project management services contracts. Cost of other revenue also includes stock-based compensation expense, overhead charges, allocated IT and facilities costs, professional services fees, and gains and losses on our operating expense cash flow hedges.

Cost of revenue, at least over the near term, is affected by labor costs, hosting costs for our cloud offerings, the volume and mix of product sales, fluctuations in consulting costs, amortization of developed technology, new customer support offerings, royalty rates for licensed technology embedded in our products, stock-based compensation expense, and gains and losses on our operating expense cash flow hedges.

Marketing and sales expenses include salaries, bonuses, benefits, and stock-based compensation expense for our marketing and sales employees, the expense of travel, entertainment, and training for such personnel, sales and channel partner commissions, and the costs of programs aimed at increasing revenue, such as advertising, trade shows and expositions, and various sales and promotional programs. Marketing and sales expenses also include SaaS vendor costs and allocated IT costs, payment processing fees, the cost of supplies and equipment, gains and losses on our operating expense cash flow hedges, facilities costs, and labor costs associated with sales and order management.

Research and development expenses, which are expensed as incurred, consist primarily of salaries, bonuses, benefits, and stock-based compensation expense for research and development employees, the expense of travel, entertainment, and training for such personnel, professional services such as fees paid to software development firms and independent contractors, SaaS vendor costs and allocated IT costs, gains and losses on our operating expense cash flow hedges, and facilities costs.

General and administrative expenses include salaries, bonuses, benefits, and stock-based compensation expense for our CEO, finance, human resources, and legal employees, as well as professional fees for legal and accounting services, SaaS vendor costs and net IT costs, certain foreign business taxes, gains and losses on our operating expense cash flow hedges, expense of travel, entertainment, and training, facilities costs, acquisition-related costs, and the cost of supplies and equipment.


	Three Months Ended			Change compared to prior fiscal year				Three Months Ended		Management comments
(In millions, except percentages)	October 31, 2024		$	%		October 31, 2023
Cost of revenue:
Subscription and maintenance	$	105		$	11	12	%	$	94	Increase primarily due to cloud hosting costs and employee-related costs driven by higher headcount.
Other	19			(2)		(10)	%	21		Decrease primarily due to decrease in stock-based compensation expense.
Amortization of developed technologies	23			11		92	%	12		Increase is primarily due to amortization of acquired developed technologies related to acquisitions in fiscal 2025.
Total cost of revenue	$	147		$	20	16	%	$	127

Operating expenses:
Marketing and sales	$	525		$	86	20	%	$	439	Increase primarily due to an increase in employee-related costs mostly related to headcount growth, merit increases and internal sales commissions, costs for Autodesk promotional events sales, and sales commissions to Solution Providers due to the recognition of these costs to marketing and sales expense under the new transaction model.
Research and development	378			39		12	%	339		Increase primarily due to employee-related costs driven by higher headcount and merit increases and an increase in cloud hosting costs and professional fees.
General and administrative	161			(4)		(2)	%	165		Decrease primarily due to charitable contributions to the Autodesk Foundation partially offset by an increase in employee-related costs driven by higher headcount and merit increases as well as an increase in cloud hosting costs.
Amortization of purchased intangibles	13			3		30	%	10		Increase is primarily due to amortization of intangible assets related to acquisitions in fiscal 2025.
Total operating expenses	$	1,077		$	124	13	%	$	953

	Nine Months Ended			Change compared to prior fiscal year				Nine Months Ended		Management comments
	October 31, 2024		$	%		October 31, 2023
Cost of revenue:
Subscription and maintenance	$	305		$	20	7	%	$	285	Increase primarily due to employee-related costs driven by higher headcount and an increase in cloud hosting costs.
Other	57			(5)		(8)	%	62		Decrease primarily due to a decrease in stock-based compensation expense, professional fees, and cloud hosting costs.
Amortization of developed technologies	62			28		82	%	34		Increase is primarily due to amortization of acquired developed technologies related to acquisitions in fiscal 2025 and the second half of fiscal 2024.
Total cost of revenue	$	424		$	43	11	%	$	381

Operating expenses:


Marketing and sales	$	1,474	$	130	10	%	$	1,344	Increase primarily due to an increase in employee-related costs mostly related to headcount growth, merit increases and internal sales commissions, partially offset by a decrease in stock-based compensation expense. Also, due to an increase in sales commissions to Solution Providers due to the recognition of these costs in marketing and sales expense under the new transaction model, costs for Autodesk promotional events, and cloud hosting costs.
Research and development	1,092		71		7	%	1,021		Increase primarily due to employee-related costs driven by higher headcount and merit increases offset by a decrease in stock-based compensation expense. Also, due to an increase in cloud hosting costs partially offset by the increase in capitalized software costs.
General and administrative	477		39		9	%	438		Increase primarily due to an increase in employee-related costs driven by higher headcount and merit increases partially offset by a decrease in stock-based compensation expense. Also, due to an increase in cloud hosting costs partially offset by a decrease in charitable contributions to the Autodesk Foundation.
Amortization of purchased intangibles	37		6		19	%	31		The increase is primarily due to amortization of acquired intangibles as a result of an acquisition in fiscal 2025 offset by previously acquired assets that continue to become fully amortized.
Total operating expenses	$	3,080	$	246	9	%	$	2,834

The following table highlights our expectation for the absolute dollar change and percent of revenue change between the fourth quarter of fiscal 2025, as compared to the fourth quarter of fiscal 2024:


	Absolute dollar impact	Percent of net revenue impact
Cost of revenue	Increase	Flat
Marketing and sales	Increase	Flat
Research and development	Increase	Flat
General and administrative	Decrease	Flat
Amortization of purchased intangibles	Flat	Flat

Interest and Other Income (Expense), Net

The following table sets forth the components of interest and other income (expense), net:


	Three Months Ended October 31,				Nine Months Ended October 31,
(in millions)	2024		2023		2024		2023
Interest and investment income (loss), net	$	6	$	(1)	$	25	$	10
(Loss) gain on foreign currency	—		(1)		3		—
Loss on strategic investments	(3)		(11)		(9)		(26)
Other income (loss)	2		(1)		5		2
Interest and other income (expense), net	$	5	$	(14)	$	24	$	(14)

Interest and other income (expense), net, positively changed by $19 million during the three months ended October 31, 2024, and $38 million during the nine months ended October 31, 2024, as compared to the same periods in the prior fiscal year. The positive change in the three and nine months ended October 31, 2024, as compared to the same periods in the prior fiscal year was primarily due to a decrease in impairments of strategic investment equity securities and an increase in gains for investments in debt and equity securities that are held in a rabbi trust under non-qualified deferred compensation plans in the current periods as compared to the prior periods.

Interest expense and investment income fluctuates based on average cash, marketable securities, debt balances, average maturities, and interest rates.

Gains and losses on foreign currency are primarily due to the impact of re-measuring foreign currency transactions and net monetary assets into the functional currency of the corresponding entity. The amount of the gain or loss on foreign currency is driven by the volume of foreign currency transactions and the foreign currency exchange rates for the period.

Provision for Income Taxes

We account for income taxes and the related accounts under the liability method. Deferred tax liabilities and assets are determined based on the difference between the financial statement and tax bases of assets and liabilities, using enacted rates expected to be in effect during the year in which the basis differences reverse.

We had an income tax expense of $76 million, relative to pre-tax income of $351 million for the three months ended October 31, 2024, and an income tax expense of $79 million, relative to pre-tax income of $320 million for the three months ended October 31, 2023. Income tax expense for the three months ended October 31, 2024, reflects U.S. and foreign tax expense, including withholding tax, reduced by tax-deductible stock-based compensation, tax credits, and the foreign derived intangibles income tax benefit in the U.S. The tax expense decreased compared to October 31, 2023, mainly due to U.S. foreign tax credit relief available for the three months ended October 31, 2024 which was not available for the three months ended October 31, 2023 prior to the issuance of Notice 2023-80 by the Internal Revenue Service (“IRS”).

We had an income tax expense of $203 million, relative to pre-tax income of $1.01 billion for the nine months ended October 31, 2024, and income tax expense of $175 million, relative to pre-tax income of $799 million for the nine months ended October 31, 2023. Income tax expense for the nine months ended October 31, 2024, reflects U.S. and foreign tax expense, including withholding tax, reduced by tax-deductible stock-based compensation, tax credits, and the foreign derived intangibles income tax benefit in the U.S. The tax expense increased compared to October 31, 2023 due to increased profit before tax, offset by an increase in tax-deductible stock-based compensation. The period to October 31, 2023 had a nonrecurring tax benefit arising from relief provided by IRS Notice 2023-55 and the current period reflects relief from IRS Notice 2023-80 relating to U.S. foreign tax credit regulations offset in part by a nonrecurring integration tax expense.

Autodesk regularly assesses the need for a valuation allowance against its deferred tax assets. In making that assessment, Autodesk considers both positive and negative evidence related to the likelihood of realization of the deferred tax assets to determine, based on the weight of available evidence, whether it is more likely than not that some or all of the deferred tax assets will not be realized. The Company continues to retain a valuation allowance against Australia, Portugal, New Zealand, California, Massachusetts, and Michigan deferred tax assets and deferred tax assets that will convert to a capital loss upon reversal in the U.S., as we do not have sufficient income of the appropriate character to benefit from these deferred tax assets.

As we continually strive to optimize our overall business model, tax planning strategies may become feasible and prudent allowing us to realize many of the deferred tax assets that are offset by a valuation allowance; therefore, we will continue to evaluate the ability to utilize the deferred tax assets each quarter, both in the U.S. and in foreign jurisdictions, based on all available evidence, both positive and negative.

As of October 31, 2024, we had $277 million of gross unrecognized tax benefits, of which $234 million would impact the effective tax rate, if recognized. The remaining $43 million would reduce our valuation allowance, if recognized. The amount of unrecognized tax benefits will immaterially decrease in the next twelve months for statute lapses.

Our future effective annual tax rate may be materially impacted by the amount of benefits and charges from tax amounts associated with our foreign earnings that are taxed at rates different from the federal statutory rate, changes in valuation allowances, level of profit before tax, accounting for uncertain tax positions, business combinations, closure of statute of limitations or settlement of tax audits, and changes in tax laws. A significant amount of our earnings are generated by our European and Asia Pacific subsidiaries. Our future effective tax rates may be adversely affected to the extent earnings are lower than anticipated in countries where we have lower statutory tax rates.

The U.S. Tax Cut and Jobs Act (“Tax Act”) enacted on December 22, 2017, eliminates the option to deduct research and development expenditures and requires taxpayers to capitalize and amortize such expenditures over five or fifteen years beginning in fiscal 2023. We anticipate that the U.S. Department of Treasury will continue to interpret or issue guidance on how provisions of the Tax Act will be applied or otherwise administered. As future guidance is issued, we may adjust the amounts that we have previously recorded that may materially impact our financial statements.

Signed into law on August 16, 2022 in the U.S., the Inflation Reduction Act contains many revisions to the Internal Revenue Code effective in taxable years beginning after December 31, 2022, including a 15% corporate alternative minimum tax. Autodesk continues to monitor the impact of the Inflation Reduction Act on our consolidated financial statements.

Signed into law on December 18, 2023 in Ireland, the Finance (No. 2) Act 2023 provides legislation to implement tax principles arising from proposals made by the Organization for Economic Co-operation and Development to establish a global minimum tax rate of 15%. The Company’s assessment of this legislation resulted in additional tax expense having a minimal impact to the consolidated financial statements. Other countries have enacted legislation or are actively considering changes to

their tax law. The Company will continue to monitor proposed and enacted legislation for potential future impact on its consolidated financial statements.

Other Financial Information

In addition to our results determined under GAAP discussed above, we believe the following non-GAAP measures are useful to investors in evaluating our operating performance. For the three and nine months ended October 31, 2024 and 2023, our gross profit, income from operations, operating margin, net income, and diluted net income per share on a GAAP and non-GAAP basis were as follows (in millions except for operating margin and per share data):


	Three Months Ended October 31,						Nine Months Ended October 31,
	2024			2023			2024			2023
	(Unaudited)
Gross profit	$	1,423		$	1,287		$	4,068		$	3,647
Non-GAAP gross profit	$	1,457		$	1,311		$	4,163		$	3,717


Income from operations	$	346		$	334		$	988		$	813
Non-GAAP income from operations	$	573		$	547		$	1,623		$	1,440
Operating margin	22		%	24		%	22		%	20		%
Non-GAAP operating margin	36		%	39		%	36		%	36		%
Net income	$	275		$	241		$	809		$	624
Non-GAAP net income	$	470		$	447		$	1,341		$	1,191
GAAP diluted net income per share	$	1.27		$	1.12		$	3.73		$	2.89
Non-GAAP diluted net income per share	$	2.17		$	2.07		$	6.18		$	5.51

For our internal budgeting and resource allocation process and as a means to provide consistency in period-to-period comparisons, we use non-GAAP measures to supplement our condensed consolidated financial statements presented on a GAAP basis. These non-GAAP measures do not include certain items that may have a material impact upon our reported financial results. We also use non-GAAP measures in making operating decisions because we believe those measures provide meaningful supplemental information regarding our earning potential and performance for management by excluding certain benefits, credits, expenses, and charges that may not be indicative of our core business operating results. For the reasons set forth below, we believe these non-GAAP financial measures are useful to investors both because (1) they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making and (2) they are used by our institutional investors and the analyst community to help them analyze the health of our business. This allows investors and others to better understand and evaluate our operating results and future prospects in the same manner as management, compare financial results across accounting periods and to those of peer companies, and to better understand the long-term performance of our core business. We also use some of these measures for purposes of determining company-wide incentive compensation.

There are limitations in using non-GAAP financial measures because non-GAAP financial measures are not prepared in accordance with GAAP and may be different from non-GAAP financial measures used by other companies. The non-GAAP financial measures included above are limited in value because they exclude certain items that may have a material impact upon our reported financial results. In addition, they are subject to inherent limitations as they reflect the exercise of judgments by management about which charges are excluded from the non-GAAP financial measures. We compensate for these limitations by analyzing current and future results on a GAAP basis as well as a non-GAAP basis and also by providing GAAP measures in our public disclosures. The presentation of non-GAAP financial information is meant to be considered in addition to, not as a substitute for or in isolation from, the directly comparable financial measures prepared in accordance with GAAP. We urge investors to review the reconciliation of our non-GAAP financial measures to the comparable GAAP financial measures included below, and not to rely on any single financial measure to evaluate our business.

Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures

(In millions except for operating margin and per share data):


	Three Months Ended October 31,						Nine Months Ended October 31,
	2024			2023			2024			2023
	(Unaudited)
Gross profit	$	1,423		$	1,287		$	4,068		$	3,647
Stock-based compensation expense	12			13			36			39
Amortization of developed technologies	22			11			59			31

Non-GAAP gross profit	$	1,457		$	1,311		$	4,163		$	3,717







Income from operations	$	346		$	334		$	988		$	813
Stock-based compensation expense	181			181			500			543
Amortization of developed technologies	22			11			59			31
Amortization of purchased intangibles	13			10			37			30
Acquisition-related costs	11			11			39			16

Lease-related asset impairments and other charges	—			—			—			7
Non-GAAP income from operations	$	573		$	547		$	1,623		$	1,440

Operating margin	22		%	24		%	22		%	20		%
Stock-based compensation expense	12		%	13		%	11		%	13		%
Amortization of developed technologies	1		%	1		%	1		%	1		%
Amortization of purchased intangibles	1		%	1		%	1		%	1		%

Acquisition-related costs	1		%	1		%	1		%	—		%


Non-GAAP operating margin (1)	36		%	39		%	36		%	36		%

Net income	$	275		$	241		$	809		$	624
Stock-based compensation expense	181			181			500			543
Amortization of developed technologies	22			11			59			31
Amortization of purchased intangibles	13			10			37			30

Acquisition-related costs	11			11			39			16

Lease-related asset impairments and other charges	—			—			—			7
Loss on strategic investments and dispositions, net	3			11			9			26
Discrete tax provision items	7			7			(4)			(18)
Establishment of valuation allowance on deferred tax assets	—			—			4			1
Income tax effect of non-GAAP adjustments	(42)			(25)			(112)			(69)
Non-GAAP net income	$	470		$	447		$	1,341		$	1,191


	Three Months Ended October 31,				Nine Months Ended October 31,
	2024		2023		2024		2023
	(Unaudited)
Diluted net income per share	$	1.27	$	1.12	$	3.73	$	2.89
Stock-based compensation expense	0.83		0.84		2.30		2.52
Amortization of developed technologies	0.10		0.05		0.27		0.14
Amortization of purchased intangibles	0.06		0.05		0.17		0.14

Acquisition-related costs	0.05		0.05		0.18		0.07

Lease-related asset impairments and other charges	—		—		—		0.03
Loss on strategic investments and dispositions, net	0.01		0.05		0.04		0.12
Establishment of valuation allowance on deferred tax assets	—		—		0.02		—
Discrete tax provision items	0.04		0.03		(0.02)		(0.08)
Income tax effect of non-GAAP adjustments	(0.19)		(0.12)		(0.51)		(0.32)
Non-GAAP diluted net income per share	$	2.17	$	2.07	$	6.18	$	5.51

(1)Totals may not sum due to rounding.

Our non-GAAP financial measures may exclude the following, as applicable:

Stock-based compensation expenses. We exclude stock-based compensation expenses from non-GAAP measures primarily because they are non-cash expenses and management finds it useful to exclude certain non-cash charges to assess the appropriate level of various operating expenses to assist in budgeting, planning, and forecasting future periods. Moreover, because of varying available valuation methodologies, subjective assumptions, and the variety of award types that companies can use under FASB ASC Topic 718, we believe excluding stock-based compensation expenses allows investors to make meaningful comparisons between our recurring core business operating results and those of other companies.

Amortization of developed technologies and purchased intangibles. We incur amortization of acquisition-related developed technologies and purchased intangibles in connection with acquisitions of certain businesses and technologies. Amortization of developed technologies and purchased intangibles is inconsistent in amount and frequency and is significantly affected by the timing and size of our acquisitions. Management finds it useful to exclude these variable charges from our cost of revenues to assist in budgeting, planning, and forecasting future periods. Investors should note that the use of intangible assets contributed to our revenues earned during the periods presented and will contribute to our future period revenues as well. Amortization of developed technologies and purchased intangible assets will recur in future periods.

CEO transition costs. We exclude amounts paid to our former CEOs upon departure under the terms of their transition agreements, including severance payments, acceleration of restricted stock units, and continued vesting of performance stock units, and legal fees incurred with the transition. Also excluded from our non-GAAP measures are recruiting costs related to the search for a new CEO. These costs represent non-recurring expenses and are not indicative of our ongoing operating expenses. We further believe that excluding the CEO transition costs from our non-GAAP results is useful to investors in that it allows for period-over-period comparability.

Goodwill impairment. This is a non-cash charge to write down goodwill to fair value when there was an indication that the asset was impaired. As explained above, management finds it useful to exclude certain non-cash charges to assess the appropriate level of various operating expenses to assist in budgeting, planning, and forecasting future periods.

Restructuring and other exit costs, net. These expenses are associated with realigning our business strategies based on current economic conditions. In connection with these restructuring actions or other exit actions, we recognize costs related to termination benefits for former employees whose positions were eliminated, the closure of facilities, and cancellation of certain contracts. We exclude these charges because these expenses are not reflective of ongoing business and operating results. We believe it is useful for investors to understand the effects of these items on our total operating expenses.

Lease-related asset impairments and other charges.  These charges are associated with the optimization of our facilities costs related to leases for facilities that we have vacated as a result of our one-time move to a more hybrid remote workforce. In connection with these facility leases, we recognize costs related to the impairment or abandonment of operating lease right-of-use assets, computer equipment, furniture, and leasehold improvements, and other costs. We exclude these charges because

these expenses are not reflective of ongoing business and operating results. We believe it is useful for investors to understand the effects of these items on our total operating expenses.

Acquisition-related costs. We exclude certain acquisition-related costs, including due diligence costs, professional fees in connection with an acquisition, certain financing costs, and certain integration-related expenses. These expenses are unpredictable, and dependent on factors that may be outside of our control and unrelated to the continuing operations of the acquired business or our Company. In addition, the size and complexity of an acquisition, which often drives the magnitude of acquisition-related costs, may not be indicative of such future costs. We believe excluding acquisition-related costs facilitates the comparison of our financial results to our historical operating results and to other companies in our industry.

Loss (gain) on strategic investments and dispositions. We exclude gains and losses related to our strategic investments and dispositions of strategic investments, purchased intangibles, and businesses from our non-GAAP measures primarily because management finds it useful to exclude these variable gains and losses on these investments and dispositions in assessing our financial results. Included in these amounts are non-cash unrealized gains and losses on the derivative components, dividends received, realized gains and losses on the sales or losses on the impairment of these investments, and gain and loss on dispositions. We believe excluding these items is useful to investors because these excluded items do not correlate to the underlying performance of our business and these losses or gains were incurred in connection with strategic investments and dispositions which do not occur regularly.

Discrete tax provision items. We exclude the GAAP tax provision, including discrete items, from the non-GAAP measure of net income (loss), and include a non-GAAP tax provision based upon the projected annual non-GAAP effective tax rate. Discrete tax items include income tax expenses or benefits that do not relate to ordinary income from continuing operations in the current fiscal year, unusual or infrequently occurring items, or the tax impact of certain stock-based compensation. Examples of discrete tax items include, but are not limited to, certain changes in judgment and changes in estimates of tax matters related to prior fiscal years, certain costs related to business combinations, certain changes in the realizability of deferred tax assets, or changes in tax law. Management believes this approach assists investors in understanding the tax provision and the effective tax rate related to ongoing operations. We believe the exclusion of these discrete tax items provides investors with useful supplemental information about our operational performance.

Establishment (release) of a valuation allowance on certain net deferred tax assets. This is a non-cash charge to record or to release a valuation allowance on certain deferred tax assets. As explained above, management finds it useful to exclude certain non-cash charges to assess the appropriate level of various cash expenses to assist in budgeting, planning, and forecasting future periods.

Income tax effects on the difference between GAAP and non-GAAP costs and expenses. The income tax effects that are excluded from the non-GAAP measures relate to the tax impact on the difference between GAAP and non-GAAP expenses, primarily due to stock-based compensation, amortization of purchased intangibles, and restructuring charges and other exit costs (benefits) for GAAP and non-GAAP measures.

Liquidity and Capital Resources

Our primary source of cash is from the sale of our software and related services. Our primary use of cash is payment of our operating costs, which consist primarily of employee-related expenses, such as compensation and benefits, as well as general operating expenses for marketing, facilities, and overhead costs. Long-term cash requirements for items other than normal operating expenses are anticipated for the following: the acquisition of businesses, software products, or technologies complementary to our business; repayment of debt; common stock repurchases; and capital expenditures, including the purchase and implementation of internal-use software applications.

At October 31, 2024, our principal sources of liquidity were cash, cash equivalents, and marketable securities totaling $1.98 billion and net accounts receivable of $702 million.

In November 2022, Autodesk entered into an amended and restated credit agreement (“Credit Agreement”) by and among Autodesk, the lenders party thereto, and Citibank, N.A., as agent, that provides for a revolving credit facility in the aggregate principal amount of $1.5 billion with an option to be increased up to $2.0 billion. The revolving credit facility is available for working capital or other business needs. The maturity date on the Credit Agreement is September 30, 2026. At October 31, 2024, Autodesk had no outstanding borrowings under the Credit Agreement. Additionally, as of December 3, 2024, we have no amounts outstanding under the Credit Agreement. See Part I, Item 1, “Financial Statements,” Note 14, “Borrowing Arrangements,” in the Notes to Condensed Consolidated Financial Statements for further discussion on our covenant

requirements and recent amendments to the Credit Agreement. If we are unable to remain in compliance with the covenants under the Credit Agreement, we will not be able to draw on our revolving credit facility.

As of October 31, 2024, we have $2.30 billion aggregate principal amount of notes outstanding, with $300 million due in fiscal 2026. See Part I, Item 1, “Financial Statements,” Note 14, “Borrowing Arrangements,” in the Notes to Condensed Consolidated Financial Statements for further discussion.

Our cash and cash equivalents are held by diversified financial institutions globally. Our primary commercial banking relationship is with Citigroup and its global affiliates. In addition, Citibank N.A., an affiliate of Citigroup, is one of the lead lenders and agent in the syndicate of our $1.5 billion revolving credit facility.

Our cash and cash equivalents balances are concentrated in a few locations around the world, with substantial amounts held outside of the United States. As of October 31, 2024, approximately 73% of our total cash or cash equivalents are located in foreign jurisdictions and that percentage will fluctuate subject to business needs. There are several factors that can impact our ability to utilize foreign cash balances, such as foreign exchange restrictions, foreign regulatory restrictions, or adverse tax costs. Earnings in foreign jurisdictions are generally available for distribution to the United States with little to no incremental U.S. taxes. We regularly review our capital structure and consider a variety of potential financing alternatives and planning strategies to ensure we have the proper liquidity available in the locations in which it is needed. We expect to meet our liquidity needs through or in combination of current cash balances, ongoing cash flows, and external borrowings.

Cash from operations could also be affected by various risks and uncertainties, including, but not limited to, the risks detailed in Part II, Item 1A titled “Risk Factors.” Based on our current business plan and revenue prospects, we believe that our existing cash and cash equivalents, our anticipated cash flows from operations, and our available revolving credit facility will be sufficient to meet our working capital and operating resource expenditure requirements for at least the next 12 months.

Our revenue, earnings, cash flows, receivables, and payables are subject to fluctuations due to changes in foreign currency exchange rates, for which we have put in place foreign currency contracts as part of our risk management strategy. See Part I, Item 3, “Quantitative and Qualitative Disclosures About Market Risk” for further discussion.


	Nine Months Ended October 31,
(in millions)	2024		2023
Net cash provided by operating activities	$	915	$	876
Net cash used in investing activities	(836)		(524)
Net cash used in financing activities	(530)		(753)

Net cash provided by operating activities of $915 million for the nine months ended October 31, 2024, primarily consisted of $809 million of our net income adjusted for $700 million non-cash items such as stock-based compensation expense, amortization of costs to obtain a contract with a customer, depreciation, amortization, and accretion expense, and deferred income tax. The decrease in working capital is primarily due to a decrease in deferred revenue of $612 million due to the timing of our billing installments and seasonality of billings in the fourth fiscal quarter and a negative change in prepaid expenses and other assets of $221 million partially offset by the change in accounts receivable of $177 million due to the seasonality of our billings in the fourth fiscal quarter and timing of cash collections from customers.

Net cash provided by operating activities of $876 million for the nine months ended October 31, 2023, primarily consisted of $624 million of our net income adjusted for $619 million non-cash items such as stock-based compensation expense, and depreciation, amortization, and accretion expense, and deferred income tax. The decrease in working capital is primarily due to a decrease in deferred revenue of $551 million due to the timing of our billing installments and seasonality of billing in the fourth fiscal quarter partially offset by the change in accounts receivable of $380 million due to the seasonality of our billings in the fourth fiscal quarter and timing of cash collections from customers.

Net cash used in investing activities was $836 million for the nine months ended October 31, 2024, primarily due to business combinations, net of cash acquired, and purchases of marketable securities partially offset by the sales and maturities of marketable securities. Net cash used in investing activities was $524 million for the nine months ended October 31, 2023, primarily due to purchases of marketable securities partially offset by the sales and maturities of marketable securities.

Net cash used in financing activities was $530 million and $753 million for the nine months ended October 31, 2024 and 2023, respectively, primarily due to repurchases of common stock.

Issuer Purchases of Equity Securities

Autodesk's stock repurchase programs provide Autodesk with the ability to offset the dilution from the issuance of stock under our employee stock plans and reduce shares outstanding over time and has the effect of returning excess cash generated from our business to stockholders. Under the share repurchase programs, Autodesk may repurchase shares from time to time in open market transactions, privately negotiated transactions, accelerated share repurchase programs, tender offers, or by other means. The share repurchase programs do not have an expiration date and the pace and timing of repurchases will depend on factors such as cash generation from operations, available surplus, the volume of employee stock plan activity, remaining shares or dollar amount available in the authorized pool, cash requirements for acquisitions, cash requirements to retire outstanding debt, economic and market conditions, stock price, and legal and regulatory requirements.

The following table provides information about the repurchase of common stock in open-market transactions during the three months ended October 31, 2024:


(Shares in thousands)	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in millions) (2)
August 1 - August 31	161	$	240.25	161	$	4,576
September 1 - September 30	424	263.08		424	$	4,465
October 1 - October 31	605	281.41		605	$	4,295
Total	1,190	$	269.30	1,190

(1)This represents shares purchased in open-market transactions under the stock repurchase plan approved by the Board of Directors in November 2022.

(2)These amounts correspond to the plan publicly announced and approved by the Board of Directors in November 2022 that authorized the repurchase of $5 billion. At October 31, 2024, $4.30 billion remained available for repurchase under the November 2022 repurchase program. The plan does not have a fixed expiration date. See Part I, Item 1, “Financial Statements,” Note 18, “Stockholders' Equity,” in the Notes to the Condensed Consolidated Financial Statements for further discussion.

In November 2024, the Board of Directors authorized the repurchase of $5 billion of the Company's common stock, in addition to the $4.30 billion remaining under previously announced share repurchase programs.

Glossary of Terms

Billings: Total revenue plus the net change in deferred revenue from the beginning to the end of the period.

Cloud Service Offerings: Represents individual term-based offerings deployed through web browser technologies or in a hybrid software and cloud configuration. Cloud service offerings that are bundled with other product offerings are not captured as a separate cloud service offering.

Constant Currency (CC) Growth Rates: We attempt to represent the changes in the underlying business operations by eliminating fluctuations caused by changes in foreign currency exchange rates as well as eliminating hedge gains or losses recorded within the current and comparative periods. We calculate constant currency growth rates by (i) applying the applicable prior period exchange rates to current period results and (ii) excluding any gains or losses from foreign currency hedge contracts that are reported in the current and comparative periods.

Design Business: Represents the combination of maintenance, product subscriptions, and all EBAs. Main products include, but are not limited to, AutoCAD, AutoCAD LT, Industry Collections, Revit, Inventor, Maya and 3ds Max. Certain products, such as our computer aided manufacturing solutions, incorporate both Design and Make functionality and are classified as Design.

Enterprise Business Agreements (EBAs): Represents programs providing enterprise customers with token-based access to a broad pool of Autodesk products over a defined contract term.

Flex: A pay-as-you-go consumption option to pre-purchase tokens to access any product available with Flex for a daily rate.

Free Cash Flow: Cash flow from operating activities minus capital expenditures.

Industry Collections: Autodesk Industry Collections are a combination of products and services that target a specific user objective and support a set of workflows for that objective. Our Industry Collections consist of: Autodesk Architecture, Engineering and Construction Collection, Autodesk Product Design and Manufacturing Collection, and Autodesk Media and Entertainment Collection.

Maintenance Plan: Our maintenance plans provide our customers with a cost effective and predictable budgetary option to obtain the productivity benefits of our new releases and enhancements when and if released during the term of their contracts. Under our maintenance plans, customers are eligible to receive unspecified upgrades when and if available, and technical support. We recognize maintenance revenue over the term of the agreements, generally one year.

Make Business: Represents certain cloud-based product subscriptions. Main products include, but are not limited to, Assemble, Autodesk Build, BIM Collaborate Pro, BuildingConnected, Fusion, and Flow Production Tracking. Certain products, such as Fusion, incorporate both Design and Make functionality and are classified as Make.

Net Revenue Retention Rate (NR3): Measures the year-over-year change in Recurring Revenue for the population of customers that existed one year ago (“base customers”). Net revenue retention rate is calculated by dividing the current quarter Recurring Revenue related to base customers by the total corresponding quarter Recurring Revenue from one year ago. Recurring Revenue is based on USD reported revenue, and fluctuations caused by changes in foreign currency exchange rates and hedge gains or losses have not been eliminated. Recurring Revenue related to acquired companies, one year after acquisition, has been captured as existing customers until such data conforms to the calculation methodology. This may cause variability in the comparison.

Other Revenue: Consists of revenue from consulting, and other products and services, and is recognized as the products are delivered and services are performed.

Product Subscription: Provides customers a flexible, cost-effective way to access and manage 3D design, engineering, and entertainment software tools. Our product subscriptions currently represent a hybrid of desktop and cloud functionality, which provides a device-independent, collaborative design workflow for designers and their stakeholders.

Recurring Revenue: Consists of the revenue for the period from our traditional maintenance plans, our subscription plan offerings, and certain Other revenue. It excludes subscription revenue related to third-party products. Recurring revenue acquired with the acquisition of a business is captured when total subscriptions are captured in our systems and may cause variability in the comparison of this calculation.

Remaining Performance Obligations (RPO): The sum of total short-term, long-term, and unbilled deferred revenue. Current remaining performance obligations is the amount of revenue we expect to recognize in the next twelve months.

Solution Provider: Solution Provider is the name of our channel partners who primarily serve our new transaction model customers worldwide. Solution Providers may also be resellers in relation to Autodesk solutions.

Spend: The sum of cost of revenue and operating expenses.

Subscription Plan: Comprises our term-based product subscriptions, cloud service offerings, and EBAs. Subscriptions represent a combined hybrid offering of desktop software and cloud functionality which provides a device-independent, collaborative design workflow for designers and their stakeholders. With subscription, customers can use our software anytime, anywhere, and get access to the latest updates to previous versions.

Subscription Revenue: Includes our cloud-enabled term-based product subscriptions, cloud service offerings, and flexible EBAs.

Unbilled Deferred Revenue: Unbilled deferred revenue represents contractually stated or committed orders under early renewal and multi-year billing plans for subscription, services, and maintenance for which the associated deferred revenue has not been recognized. Under FASB Accounting Standards Codification ("ASC") Topic 606, unbilled deferred revenue is not included as a receivable or deferred revenue on our Condensed Consolidated Balance Sheet.

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