Autodesk (ADSK)

Q4 2011 Earnings Call

February 24, 2011 5:00 pm ET

Executives

Mark Hawkins - Chief Financial Officer, Principal Accounting Officer and Executive Vice President

David Gennarelli - Director of Investor Relations

Carl Bass - Chief Executive Officer, President and Director

Analysts

Keith Weiss - Morgan Stanley

Richard Davis - Canaccord Genuity

Dennis Simson - Crédit Suisse AG

Derek Bingham - Goldman Sachs Group Inc.

Sterling Auty - JP Morgan Chase & Co

Heather Bellini - ISI Group Inc.

Brent Thill - UBS Investment Bank

Daniel Cummins - ThinkEquity LLC

Steven Ashley - Robert W. Baird & Co. Incorporated

Kenneth Wong

Blair Abernethy - Stifel, Nicolaus & Co., Inc.

Israel Hernandez - Barclays Capital

Steven Koenig - Longbow Research LLC

Matthew Coss

Presentation

Operator

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Previous Statements by ADSK
» Autodesk, Inc. Q1 2010 Earnings Call Transcript
» Autodesk, Inc. Q4 2010 Earnings Call Transcript
» Autodesk, Inc. Q3 2010 Earnings Call Transcript

Good day, ladies and gentlemen, and welcome to the Fourth Quarter 2011 Autodesk Inc. Earnings Conference Call. [Operator Instructions] I would now like to turn the presentation over to your host for today's call, Mr. Dave Gennarelli. Please proceed.

David Gennarelli

Thanks, operator. Good afternoon. Thank you for joining our conference call to discuss our fourth quarter fiscal 2011. Joining me today are Carl Bass, our Chief Executive Officer; and Mark Hawkins, our Chief Financial Officer. Today's conference call is being broadcast live via webcast. In addition, a replay of the call will be available at autodesk.com/investors.

As noted in our press release, we have published our prepared remarks on our website in advance of this call. Those remarks are intended to serve in place of extended formal comments and we will not repeat them on this call. During the course of this conference call, we will make forward-looking statements regarding future events and the future performance of the company such as our guidance for the first quarter and full year fiscal 2012, our five-year financial targets, the factors we used to estimate our guidance, the new products and suites releases, certain future strategic transactions, business prospects and financial results, our market opportunities and strategies and trends in sales initiatives for our products and trends in various geographies and industries. We caution you that such statements reflect our best judgment based on factors currently known to us and that actual events or results could differ materially. Please refer to the documents we file from time to time with the SEC, specifically our Form 10-K for the fiscal year 2010, our Form 10-Q for the quarters ended April 30, July 31 and October 31, 2010, and our periodic Form 8-K filings, including the Form 8-K filed with today's press release and prepared remarks. Those documents contain and identify important risks and other factors that may cause actual results to differ from those contained in our forward-looking statements.

Forward-looking statements made during the call are being made as of today. If this call is replayed or reviewed after today, the information presented during the call may not contain current or accurate information. Autodesk disclaims any obligation to update or revise forward-looking statements. We will provide guidance on today's call but we'll not provide any further guidance or updates on our performance during the quarter unless we do so in a public forum.

During the quarter, we will also discuss non-GAAP financial measures. These non-GAAP measures are not prepared in accordance with Generally Accepted Accounting Principles. A reconciliation of the GAAP and non-GAAP results is provided in today's press release, prepared remarks and on our Investor Relations section of our website. We will quote a number of percentage increases as we discuss our financial performance and unless otherwise noted, each percentage represents a year-over-year comparison. In addition, during the call, we will discuss our five-year non-GAAP operating margin target. Autodesk is not able to provide a five-year GAAP operating margin target or reconciliation at this time because of the difficulty of estimating certain items that are excluded from the non-GAAP measure that affect the operating margin, such as charges related to stock-based compensation expense and amortization of acquisition-related intangibles.

And now I'd like to turn the call over to Carl Bass.

Carl Bass

Thank you, and good afternoon. Our strong fourth quarter results capped off a substantial year of progress. After navigating through the biggest economic downturn in Autodesk history, we're now experiencing a healthy recovery and even achieving record results in several areas. Highlights for the quarter include: 16% growth in total revenue; double-digit revenue growth in all of our geographies and business segments; a sharp increase in large deal activity; record total billings; record revenue for our Manufacturing business; record revenue for our Revit family of products; record deferred revenue; and strong growth in cash flow from operating activities.

We experienced strong year-on-year growth in all of our geographies with APAC again leading the way. Global revenue growth was led by our model-based design products. Our Manufacturing business had record quarterly revenue in the fourth quarter and grew 22% for the full year.

Over the last few years the dynamics of the Manufacturing segment have shifted dramatically. Historically, engineering software was targeting different sized companies and competition mostly occurred within those strata. Our initial mission was to provide 80% of the functionality at 20% of the price. So truthfully, we're often seen as a provider of high-value but less strategic software and we competed infrequently against our major global competitors.

Today, we do much more than that original mission. Through sustained investment in R&D and targeted acquisitions, we now have a product portfolio that is the most comprehensive and functional in the industry, while staying true to our original mission of providing great value. The combination of our modeling, data management and simulation capabilities has allowed us to grow much faster than our major global competitors despite the difficult economic times.

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