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Autodesk (ADSK)

Q4 2012 Earnings Call

February 23, 2012 5:00 pm ET


David Gennarelli -

Carl Bass - Chief Executive Officer, President and Director

Mark J. Hawkins - Chief Financial Officer and Executive Vice President


Brent Thill - UBS Investment Bank, Research Division

Sterling P. Auty - JP Morgan Chase & Co, Research Division

Jay Vleeschhouwer - Griffin Securities, Inc., Research Division

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Steven M. Ashley - Robert W. Baird & Co. Incorporated, Research Division

Richard H. Davis - Canaccord Genuity, Research Division

Ross MacMillan - Jefferies & Company, Inc., Research Division

Daniel T. Cummins - ThinkEquity LLC, Research Division

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Good afternoon. My name is Misty, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Autodesk Fourth Quarter Fiscal Year 2012 Financial Results Conference Call. [Operator Instructions] I would now like to turn the call over to Dave Gennarelli, Director, Investor Relations. You may proceed.

David Gennarelli

Thanks, operator. Good afternoon. Thank you for joining our conference call to discuss the results of our fourth quarter of fiscal 2012. 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 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 the company, such as our guidance for the first quarter and full year fiscal 2013 and long-term financial model guidance, the factors we use to estimate our guidance, new product and suite releases and expected growth rates, 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 these actual 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 2011; our forms 10-Q for the periods ending April 30, July 31 and October 31, 2011; and our periodic 8-K filings, including the 8-K filed with today's press release and prepared remarks. Those documents contain and identify important risks and other factors that may cause our actual results to differ from those contained in our forward-looking statements.

Forward-looking statements made during this 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 any forward-looking statements. We will provide guidance on today's call but will not provide any further guidance or updates on our performance during the quarter unless we do so in a public forum.

During the call, 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 the Investor Relations section of the website.

We will quote a number of numeric or growth changes as we discuss our financial performance. And unless otherwise noted, each such reference represents a year-on-year comparison.

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

Carl Bass

Thanks, Dave, and good afternoon, everyone. We started FY '12 with a target of 10% revenue growth and 200 basis point operating margin improvement. Despite some economic turbulence, through consistent execution, we finished FY '12 with 14% revenue growth, 260 basis points of margin improvement and 32% growth in EPS. This is strong growth, particularly on the heels of our FY '11 results of 14% revenue growth, 480 basis point operating margin improvement and 33% growth in EPS, capping the year with a strong performance in the fourth quarter.

Fourth quarter revenue was driven by growth across all of our major geographies, with particular strength in Americas. All of our businesses performed well, driven by demand for our suites. We achieved record results in several areas, and we made solid progress in advancing our operating margin and EPS.

There were several areas of notable growth and achievement during the quarter, including 12% growth in total revenue; 25% growth in total suites revenue; 18% growth in revenue from commercial new licenses; record revenue levels in AEC, Manufacturing and the Americas; record maintenance billings in deferred revenue; 360 basis point improvement in non-GAAP operating margin; 31% growth in non-GAAP EPS; and solid cash flow from operations.

In addition to strong financial performance, we made substantial progress on many of our key initiatives in the fourth quarter. We launched our new design and creation suites almost a full year ago now. We believe the new suites deliver a tremendous amount of value and functionality, and we've been pleased with the customer reception and uptake to date.

We're especially pleased with the adoption of our specialty plant and factory design suites and how they're opening up new industry opportunities for us.

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