Autodesk beat second-quarter earnings estimates but shares slid on concerns over its fiscal 2027 guidance. Subscription growth topped forecasts, though remaining performance obligations decelerated.
Autodesk shares dropped more than 4% in premarket trading Friday after the design software company issued fiscal 2027 guidance that fell short of investor expectations, even as its second-quarter results beat estimates.
Q2 beats, but cRPO growth slows
The company posted adjusted earnings per share of $3.30 for the quarter ended July 31, above the analyst consensus of $3.12. Revenue rose 16% year-over-year to $2.05 billion, topping the $2.01 billion estimate, with 14% growth on a constant currency basis.
Subscription growth reached 17%, ahead of the Street's 14.5% estimate, driven by better-than-expected linearity and renewal rates. However, current remaining performance obligations growth decelerated to just 12% in the quarter, down from 18%-20% in recent quarters, as the removal of multi-year discounts shifted some customers toward annual contracts — a headwind expected to persist for several more quarters.
Guidance undercuts the beat
Despite the strong quarter, Autodesk's full-year fiscal 2027 adjusted EPS guidance of $12.52 to $12.60 fell short of the analyst consensus of $12.60 at its midpoint. The company guided third-quarter revenue to $2.125 billion to $2.140 billion, with adjusted EPS of $3.04 to $3.09.
According to Investing.com: "mixed 2Q27 results with conservatism into 2H27 guide" is how Bank of America analysts described the print, while reiterating their Buy rating and $300 price objective on the stock.
Billings for the quarter reached $1.85 billion, up 10% year-over-year, and adjusted operating margin expanded two percentage points to 41%. Free cash flow surged 24% to $561 million.
Segment performance
By product segment, Design revenue grew 16% to $1.71 billion, while Make revenue increased 26% to $244 million. The AECO product family generated $1.03 billion, up 17% year-over-year, and AutoCAD revenue reached $500 million, up 14%.
Autodesk CFO Janesh Moorjani said the company raised its fiscal 2027 billings and revenue growth guidance to reflect higher underlying growth expectations, as well as the incremental contribution from MaintainX. For the full year, Autodesk expects billings of $8.575 billion to $8.650 billion and revenue of $8.295 billion to $8.345 billion.
Source: Investing.com
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