SAN FRANCISCO - Autodesk, Inc. (NASDAQ: NASDAQ:ADSK) concluded an internal investigation by its Audit Committee, affirming that there will be no restatement of its previously reported financial results.
The inquiry, which began on April 1, 2024, examined the company's cash flow and non-GAAP operating margin practices but found no need for adjustments to any financial statements.
The software company also announced preliminary results for the first quarter of fiscal 2025, reporting revenue of approximately $1.42 billion and non-GAAP diluted EPS of about $1.87.
The Street was looking for EPS of $1.74 on revenue of $1.39 billion.
As a result, shares rose 6% in afterhours trading.
Autodesk's president and CEO, Andrew Anagnost, expressed satisfaction with the growth in the Architecture, Engineering, and Construction (AEC) and manufacturing sectors and confirmed that the new transaction model is proceeding as planned.
Autodesk revealed executive changes, with Elizabeth Rafael stepping in as Interim Chief Financial Officer and Deborah L. Clifford taking on the role of Chief Strategy Officer as of today. Rafael has resigned from the Audit Committee to assume her new position but will remain on the company's board.
The company is working to file its annual report and plans to hold earnings call to discuss the Q1 results once the report is submitted. Until then, Autodesk is in a closed period, limiting communication with investors.
The Audit Committee's findings highlighted that Autodesk historically used multiyear contracts with upfront billing to meet free cash flow targets. Despite a shift to annual billing for enterprise contracts announced in fiscal year 2022, the company reverted to multiyear upfront contracts in fiscal year 2023 to achieve its cash flow goals.
Autodesk has disclosed these practices and their impact on revenue and billings in subsequent years. The Committee recommended reviewing financial communications and disclosures, assessing organizational functions, and enhancing policies related to the investigation's findings.
Looking ahead, Autodesk provided a business outlook for the second quarter and full fiscal year 2025, projecting revenue between $1.475 and $1.490 billion for Q2 and an increase of 9% to 11% for the year.
Consensus was expecting a Q2 EPS of $1.47 billion.
The company anticipates a GAAP operating margin of 21% to 22% and a non-GAAP operating margin of 35% to 36%. The projected free cash flow for the fiscal year is between $1.430 and $1.500 billion.
InvestingPro Insights
Autodesk, Inc. (NASDAQ: ADSK) has maintained robust gross profit margins, with recent data showing a gross profit margin of 91.58% for the last twelve months as of Q4 2024. This impressive margin underscores the company's ability to retain a significant portion of its sales as gross profit, which might be of interest to investors looking for efficiency in operations and cost management.
Despite the company's strong profitability, Autodesk's shares are trading near their 52-week low, which, according to an InvestingPro Tip, could indicate that the stock is in oversold territory. The relative strength index (RSI) is a momentum oscillator that measures the speed and change of price movements, and an RSI below 30 typically suggests that a stock may be oversold. Investors might see this as a potential buying opportunity, especially considering the company's solid fundamentals.
However, it's worth noting that Autodesk is trading at a high Price/Earnings (P/E) ratio of 46.68, which is relatively high when compared to its near-term earnings growth, as another InvestingPro Tip points out. This suggests that the stock's current price is high relative to the company's earnings, which might be a point of caution for value-focused investors. For those looking for a deeper analysis and more InvestingPro Tips, including insights on the company's valuation multiples and debt levels, Autodesk has a total of 16 additional tips available on InvestingPro. Use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
The Market Cap (Adjusted) for Autodesk stands at $43.13B, reflecting the company's substantial market valuation. Additionally, with a Price / Book ratio of 22.82 as of the last twelve months ending Q4 2024, the stock is considered to be trading at a premium compared to its book value, which could be another factor for investors to consider in light of the company's strategic developments and financial performance.
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