This week we are going to go over Autodesk's results for its most recent quarter. The story has been very good for them so it is important to take a critical look at where they are going.
Let's start with the basics. The company had $501M in Revenue and lost $0.66 per share. Again, the company is in the conversion from Sales of perpetual licenses to a subscription based service. This has caused this apparent loss but if I look at the Cash Flow statement the company only burned $27M in cash out of a total of about $1.6B on the books. So, the company should complete the transition before it runs out of cash easily. Autodesk also projected between $505M - $515M in revenue for the next quarter and a loss of $0.58 - $0.64. It should be noted that the loss narrows to $0.12 - $0.16 if accounting charges (non-operating considerations) are omitted. The good news is that these metrics are all better than expected.
So, I want to say something about "Beating the Street" or a "Miss against Expectations". The Sell Side Analysts on these calls will generally put out a note a day or so after the call. They use the transcript of the call and the numbers provided by the call to give some thoughts about how the company is doing and where they think the price will go. What they don't do is deep market analysis by calling customers, studying market research, deeply studying competitors or any other type of detailed work. They simply have too many companies to cover and so much analysis is surface layer. All I am saying is that this is not PhD work.
As to Autodesk, I want to put forth some numbers. Non-GaaP Operating Expenses (excluding all those non-cash, non-operating expenses) are $464M (from the Press Release). Non-GaaP Gross Profit is $435M so on an ongoing basis the company only needs to close about $30M in Profit. That equates to about $534M of revenue. That number will not be done in Q4 (which ends 1/31/18), but should be achieved next year.
I saw an Article on Seeking Alpha that talked about the stock being at or near its peak. I don't work on those kinds of terms. What I can say is that this transition shows great evidence of work and the company has a solid foundation. They have some more transition to complete and I look forward to seeing more results from them
Have a great day!
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