About Autodesk, Inc.

Want to look at things from both sides now? How about all sides? Then Autodesk, which develops 3D design, engineering, and digital entertainment software, might be on auto-dial. Since introducing its AutoCAD software in 1982, the company has offered a broad portfolio of 3D computer-aided design (CAD) software and tools. Its AutoCAD and Revit software programs are primarily used by architects, engineers, and structural designers to design, draft, and model products, buildings, and other objects. The company also provides 3D animation software for movies and games, and applications for manufacturing, construction, and civil engineering. Autodesk is shifting it tools and services to cloud-based applications as well as developing mobile apps.

Operations

Autodesk's biggest operating segment is Architecture, Engineering, and Construction, which generates about 40% of revenue. It develops software for designing, building, and managing buildings, civil infrastructure, and manufacturing plants.

The Manufacturing segment, about 30% of revenue, makes comprehensive prototyping software for manufacturers of automotive, industrial machinery, consumer products, and building products. The segment's lead product is Autodesk Inventor.

The Platform Solutions and Emerging Business, more than 25% of revenue, is the home of Autodesk's flagship product and biggest revenue producer, AutoCAD, and its companion that allows sharing of documents, AutoCAD LT.

The Media and Entertainment segment, about 5% of revenue, offers computer animation programs such as Autodesk Maya, for design visualization, visual effects, and games production.

Geographic Reach

While the US is Autodesk's biggest single market, accounting for more than a third of sales, most of the company's revenue comes from international customers. The Europe, Middle East, and Africa region generates nearly 40% of sales and the Asia/Pacific region accounts for about a quarter of sales. The company's products are translated and localized for users who speak German, French, Italian, Spanish, Russian, Japanese, Korean, and simplified and traditional Chinese.

Sales and Marketing

About three-quarters of Autodesk's sales are made through its network of some 1,700 distributors and resellers around the world. Tech Data Corp. is the company's biggest distributor, accounting for about a quarter of revenue. The company sells directly to enterprise and named account customers as well as those who buy from its online store.

Financial Performance

Autodesk reported lower revenue and a deeper loss in 2017 (ended January) from 2016.

Revenue dropped about 19% to $2 billion in 2017 as the company posted lower sales across the board. The company blamed the reduction mostly on its switch from perpetual licenses, in which revenue is recognized upfront, to a subscription model in which revenue is recognized over the length of the subscription. The company's exit from its Creative Finishing hardware business in late 2016 also contributed to lower revenue. International revenue also fell due to the revenue switch as well as continued economic weakness in Japan.

Changes to its revenue model and restructuring expenses combined to drive Autodesk to a loss of $582 million in 2017 from a loss of $330 million in 2016 (the only losses in the past decade). Restructuring to adjust the company's headcount to the subscription revenue model cost about $70 million.

To get a handle of the financial impact of the revenue changes, the company set new measurements, average recurring revenue (ARR) and average revenue per subscriber (ARPS). Total ARR rose 16% in 2017 from 2016 driven by a better than 100% increase in New Model ARR from growth in all new model subscription types. The total ARPS dropped 4% because of a 20% decrease in new model ARPS. The number of individual product subscriptions, which have lower prices than flexible enterprise business agreements, reduced ARPS.

Autodesk's cash flow from operations fell to about $170 million in 2017 from $414 million in 2016 from lower revenue and the net loss.

Strategy

By 2017, Autodesk, one of the older companies in Silicon Valley, had embraced the cloud and subscription sales. The company has made much of its software available from a cloud computing environment, meaning that customers can get access to it almost wherever they are. The company introduced AutoCAD 360, a mobile version of its AutoCAD software. The construction industry, which is turning to digital applications, has been quickly taken to the mobile app and the company's cloud products.

The move to a subscription model for selling software follows the path tread by many other software companies. While the switch can hurt revenue and profit during the transition, it can result in better performance over time as customers keep buying without a new sales push every two or three years. By mid-2017 more than 1.3 million Autodesk customers had become subscribers, but more than 2 million remained on maintenance contracts.

On the product side, Autodesk is moving into 3D printing, the step beyond the 3D modeling of the company's software. The company has made several acquisitions of companies with 3D printing capabilities and has made research investments in the technology.

Mergers and Acquisitions

In 2016 Autodesk acquired Solid Angle, the developer an advanced, ray-tracing image renderer for high-quality 3D animation and visual effects creation used in film, television, and advertising worldwide. Acquisition terms were not disclosed.

In 2015 the $42 million of acquisition of netfabb GmbH brought software for 3D printing to Autodesk. At the same time, Autodesk invested netfabb's parent company, FIT Technology Group, to collaborate on industrial applications of 3D printing.

Also in 2015 Autodesk bought SeeControl, a developer of an enterprise Internet of Things (IoT) cloud-service platform. The SeeControl technology helps manufacturers and systems integrators connect to and analyze information from remote assets, as well as control and manage those assets.

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Autodesk, Inc.

111 Mcinnis Pkwy
San Rafael, CA 94903-2700
Phone: 1 (415) 507-5000
Fax: 1 (415) 507-5100

Stats

  • Employer Type: Public
  • Interim Co-CEO, SVP, and Chief Product Officer: Amar Hanspal
  • Chairman: Crawford W. Beveridge
  • Interim Co-CEO, SVP, and Chief Product Officer: Amar Hanspal
  • 2017 Employees: 9,000

Major Office Locations

  • San Rafael, CA

Other Locations

  • Palo Alto, CA
  • San Francisco, CA
  • Denver, CO
  • Tampa, FL
  • Alpharetta, GA
  • Rockford, IL
  • Boston, MA
  • Newburyport, MA
  • Novi, MI
  • Manchester, NH
  • Lake Oswego, OR
  • Plano, TX
  • Brussel, Belgium
  • Merelbeke, Belgium
  • Calgary, Canada
  • Montréal, Canada
  • Ottawa, Canada
  • Toronto, Canada
  • Sheffield, England
  • Bengaluru, India
  • Mumbai, India
  • New Delhi, India
  • Pune, India
  • Nagoya, Japan
  • Osaka, Japan
  • Gümligen, Switzerland
  • Ho Chi Minh, Vietnam
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