Autodesk To Report Q4 Earnings: What's In The Cards?

Autodesk Inc. ADSK is set to report fiscal fourth-quarter 2018 results on Mar 6.

Last quarter, the company reported non-GAAP loss of 12 cents per share, narrower than the Zacks Consensus Estimate of a loss of 13 cents. The figure was within the guided range of a loss of 12-16 cents per share.

Notably, the company has a positive earnings surprise track. It has beaten estimates in each of the trailing four quarters, delivering an average positive surprise of 19.2%.

Revenues of $515.3 million beat the consensus mark of $514.1 million and increased nearly 5.3% year over year. The figure was marginally ahead of the guided range of $505-$515 million.

Let's see how things are shaping up for this announcement.

Key Factors

Autodesk's business transition from licenses to cloud-based services is expected to boost subscriptions and deferred revenues.

We note that Autodesk's broad product portfolio generates new customers in both domestic and overseas markets. Double-digit growth in all three major geographies is instrumental in driving the total annualized recurring revenue of the company.

For the fourth quarter, the Zacks Consensus Estimate for ARR is $2.02 billion, up 26.5% from the reported number in the year-ago quarter.

Strong adoption of products is driving subscription revenues for the company. Cloud subscriptions are driven by robust performance of BIM 360 and Fusion tools.

The company's focus to fast integrate new technology into Fusion 360, advancement of BIM 360 platform and the growth of its Forge platform are positives.  Also, renewal opportunities for cloud are high in the quarter.

Autodesk is also gaining from the Enterprise Business Agreement (EBA) program. The company anticipates strong EBA sales in the soon-to-be reported quarter.

However, the company continues to expect decline in maintenance plan subscriptions. Additionally, slowdown in cloud subscription is a headwind.

Although the company plans to keep spending unchanged over the next year, it remains concerned about increasing foreign exchange headwinds, which might weigh heavily on its expenses. Moreover, its restructuring plan will remain an overhang on margins.

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