Autodesk (ADSK) surged nearly 10% after posting quarterly results that comfortably topped expectations and signaled accelerating momentum in its core markets.
For the second quarter, adjusted earnings came in at $2.62 per share, ahead of the $2.45 consensus, while revenue grew 17% year-over-year to $1.76 billion. Both metrics marked the strongest growth in more than three years, underscoring robust demand across architecture, engineering, construction, and manufacturing.
Management also raised full-year guidance, projecting revenue of up to $7.08 billion, alongside stronger operating margins and free cash flow. The upbeat forecast was accompanied by a new long-term outlook, with Autodesk now targeting operating margins of around 41% by fiscal 2029, compared with 37% expected in 2026.
Construction and Cloud Platforms Drive Momentum
A key highlight of the quarter was Autodesk’s Architecture, Engineering, Construction, and Operations (AECO) segment, where revenue jumped 24% in constant currency to $878 million. Demand is being fueled by large-scale infrastructure projects, data center buildouts, and industrial expansion tied to the AI boom. The Autodesk Construction Cloud continues to gain traction internationally, with management pointing to new enterprise agreements and customer wins.
Beyond construction, Autodesk’s Manufacturing segment grew 14% to $334 million, supported by digital twin adoption and supply chain optimization in industries like automotive and aerospace. AutoCAD and AutoCAD LT also delivered steady 14% growth, helped by AI-powered features that simplify 2D and 3D design.
Cloud adoption remains a key growth driver. Billings surged 36% year-over-year to $1.68 billion, reflecting strong pipeline health and customer commitment to subscription models. The company credited its new transaction model and rising adoption of AI features in platforms such as Fusion—where automated design tools are seeing high user acceptance.
Capital Efficiency and Investor Confidence
Autodesk’s financial discipline added to the bullish tone. Operating margins improved to 25% on a GAAP basis and 39% on a non-GAAP basis, while free cash flow hit $451 million in the quarter. Management raised full-year free cash flow guidance to as much as $2.28 billion.
Shareholder returns remain a priority. Autodesk repurchased 1.2 million shares for $356 million at an average price of $298 and increased its buyback target to up to $1.3 billion for the year. Analysts responded favorably—12 of 15 covering the stock raised their price targets, with some now projecting upside beyond $370.
Autodesk’s financial discipline added to the bullish tone. Operating margins improved to 25% on a GAAP basis and 39% on a non-GAAP basis, while free cash flow hit $451 million in the quarter. Management raised full-year free cash flow guidance to as much as $2.28 billion.
Shareholder returns remain a priority. Autodesk repurchased 1.2 million shares for $356 million at an average price of $298 and increased its buyback target to up to $1.3 billion for the year. Analysts responded favorably—12 of 15 covering the stock raised their price targets, with some now projecting upside beyond $370.
Conclusion
Autodesk’s latest results highlight a company executing well across multiple fronts: cloud adoption, AI integration, and disciplined capital allocation. While management acknowledged potential macroeconomic headwinds and margin pressures from its new transaction model, its raised guidance and long-term profitability targets suggest confidence in sustained growth. For investors, the combination of robust demand in construction and manufacturing, accelerating AI adoption, and stronger shareholder returns positions Autodesk as a compelling play on digital transformation in design and infrastructure.
Autodesk’s latest results highlight a company executing well across multiple fronts: cloud adoption, AI integration, and disciplined capital allocation. While management acknowledged potential macroeconomic headwinds and margin pressures from its new transaction model, its raised guidance and long-term profitability targets suggest confidence in sustained growth. For investors, the combination of robust demand in construction and manufacturing, accelerating AI adoption, and stronger shareholder returns positions Autodesk as a compelling play on digital transformation in design and infrastructure.
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