To The Moon

$Autodesk(ADSK)$ is scheduled to release its Q1 2026 earnings after the market close on Thursday, 22 May 2025, followed by a conference call.

Revenue: The consensus revenue estimate is around $1.61 billion, aligning with the upper end of Autodesk's guidance. This represents a year-over-year increase of approximately 13.4%.

Adjusted EPS: Analysts expect adjusted EPS to be around $2.15, placing it within the company's guided range and indicating a year-over-year growth of about 15%. Some analysts have a slightly lower EPS estimate around $1.50.

Autodesk (ADSK) Last Neutral Earnings Call Saw Share Price Gain A Modest 5.57%

Autodesk had a neutral earnings call on 27 Feb 2025 which saw its share price gain a modest 5.57% since.

Autodesk reported strong financial results with significant growth in construction and make segments, alongside operational improvements. However, macroeconomic uncertainties and challenges in new business growth, coupled with productivity issues in agency transitions, present ongoing challenges.

Autodesk (ADSK) Guidance

During Autodesk's fiscal 2025 fourth quarter and full year earnings call, the company provided guidance for fiscal 2026, highlighting several key metrics. Autodesk expects constant currency billings growth of 17% to 19%, excluding the impact of their new transaction model, and constant currency revenue growth of between 8% and 9%. The company anticipates a GAAP operating margin in the range of 21% to 22%, with non-GAAP operating margin expected to be between 39% and 40%, excluding transaction model and currency effects.

Free cash flow is projected to be between $2.075 billion and $2.175 billion, after accounting for $110 million to $120 million in cash outflows due to restructuring actions and a discrete cash benefit from U.S. deferred tax assets. Additionally, Autodesk plans to buy back $1.1 billion to $1.2 billion of shares in fiscal 2026, marking a 30% to 40% increase from fiscal 2025.

Key Areas to Watch in Autodesk's Q1 2026 Earnings

Autodesk delivered strong fourth quarter and full year results, with billings and revenue topping the higher end of expectations. Total revenue in the fourth quarter grew 12%, while billings increased 24% in constant currency.

Subscription Growth: The continued growth of subscription revenue will be a key indicator of the health of Autodesk's business model transition.

Billings Performance: Strong billings growth suggests future revenue potential. Investors will be looking to see if the momentum from Q4 2025 has carried into the first quarter.

Net Revenue Retention Rate: Maintaining a high net revenue retention rate indicates customer satisfaction and the ability to generate more revenue from existing customers.

Impact of Restructuring: In February 2025, Autodesk announced a restructuring plan that included a reduction of approximately 9% of its workforce. Investors will be interested in any updates on this plan and its impact on operating expenses and future profitability.

Construction revenue growth accelerated in the fourth quarter, adding nearly 400 net new logos. The Make products, driven by Construction and Fusion, continue to enhance growth.

Progress in Cloud, Platform, and AI Initiatives: Autodesk has emphasized its investments in cloud-based platforms, integration of design and manufacturing workflows, and the use of AI. Any updates on the progress and customer adoption of these initiatives will be closely watched.

Autodesk's business model proved resilient with strong renewal rates and broad-based growth across products and regions. The company's focus on cloud, platform, and AI leadership positions it well for future growth.

Guidance for the Remainder of Fiscal Year 2026: The company's outlook for the full fiscal year, including revenue and earnings guidance, will be crucial for investor sentiment.

Market Conditions and Competition: Insights into the demand environment across Autodesk's key verticals (Architecture, Engineering, and Construction; Manufacturing; and Media and Entertainment) and the competitive landscape will be valuable.

Fourth-quarter GAAP and non-GAAP operating margins increased, reflecting strong fiscal discipline. The company exceeded non-GAAP margin expectations and plans further margin expansion in fiscal 2026. The broader economic environment presented headwinds to new business growth, with uncertainty affecting customer sentiment and willingness to invest.

Autodesk's underlying growth has been hovering around the lower end of the 10% to 15% revenue growth framework, necessitating adjustments in future growth expectations.

Potential Factors Influencing Q1 2026 Performance

Economic Conditions: Global economic conditions can impact spending on software and design tools.

Industry Trends: The pace of digitalization in the engineering and construction industries continues to be a significant driver for Autodesk.

Currency Fluctuations: As a multinational company, Autodesk's results can be affected by changes in foreign currency exchange rates.

Adoption of New Offerings: The success of new products and services, particularly those leveraging cloud and AI, will influence growth. The transition to the new transaction model and agency changes led to some productivity issues, particularly in the APAC region, impacting new business.

Autodesk (ADSK) Price Target

Based on 27 analysts from Tiger Brokers offering 12 month price targets for Autodesk in the last 3 months. The average price target is $311.26 with a high forecast of $370.00 and a low forecast of $250.00. The average price target represents a 4.42% change from the last price of $298.08.

Market is expecting Autodesk to report earnings within the guidance provided in previous earnings call, but if any reduction in the subscription model growth might cause an impact to its share price, which could be trending towards the upper range of the low forecast.

Technical Analysis - Exponential Moving Average (EMA)

Though we are seeing good momentum formed for Autodesk, but there might be a challenge if Autodesk could not meet the estimated revenue which is expected to be in the range of $1.60 billion to $1.61 billion. And investors would be also looking at whether Autodesk can keep to the non-GAAP EPS which is projected to be between $2.14 and $2.17.

Any slippage on these two readings might cause a significant pullback, not forgetting that this week we might expect broader market pullback due to the U.S. debt ratings announcement.

Though we are not seeing any selling off or profit taking yet from Autodesk stock, but there might be some investors who would took some profits in concerns of the U.S. debt ratings impact, but on the other hand, this might offer a discount on the price before its earnings.

Summary

Market expects Autodesk to report revenue and earnings within its provided guidance for fiscal Q1 2026, indicating continued growth driven by its subscription model.

I think as investors, we might want to focus to look at the company's progress in its strategic initiatives, the impact of its restructuring efforts, and its outlook for the rest of the fiscal year. The earnings call on 22 May 2025, will provide further insights into these key areas.

Appreciate if you could share your thoughts in the comment section whether you think Autodesk can meet or even beat the earnings estimate they have provided in the guidance during the previous earnings call.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.