FinanceLooker

Excrept from filing document 2025-01-31

As of July 31 2024 the last business day of the registrant s most recently completed second fiscal quarter there were approximately 215 million shares of the registrant s common stock outstanding that were held by non affiliates and the aggregate market value of such shares held by non affiliates of the registrant
based on the closing sale price of such shares on the Nasdaq Global Select Market on July 31 2024 was approximately 53 2 billion Shares of the registrant s common stock held by each executive officer and director have been excluded in that such persons may be deemed to be affiliates This determination of affiliate status is not necessarily a conclusive determination for other purposes
Portions of the Proxy Statement for registrant s Annual Meeting of Stockholders the Proxy Statement are incorporated by reference in Part III of this Form 10 K to the extent stated herein The Proxy Statement will be filed within 120 days of the registrant s fiscal year ended January 31 2025
The discussion in this Annual Report on Form 10 K contains trend analyses and other forward looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 Forward looking statements may appear throughout this Annual Report on Form 10 K including the following sections Business Part I Item 1 Risk Factors Part I Item 1A and Management s Discussion and Analysis of Financial Condition and Results of Operations Part II Item 7 Forward looking statements are any statements that look to future events and consist of among other things our business strategies the implementation of new transaction models future financial results by product type and geography operational and key metrics and subscriptions the effects of global economic and political conditions including the impact of economic volatility and geopolitical activities in certain countries such as the Russian invasion of Ukraine the impact of past and planned acquisitions and investment activities expected market trends and market opportunities our ability to successfully expand adoption of our products our ability to gain market acceptance of new businesses and sales initiatives the impact of restructuring activities cybersecurity and privacy issues or incidents the effect of competition the availability of credit the effects of revenue recognition the effects of newly recently issued accounting standards expected trends in certain financial metrics including expenses expectations regarding our cash needs and expenditures the effects of fluctuations in exchange rates and our hedging activities on our financial results the effect of laws and regulations that we are subject to the timing and amount of purchases under our stock repurchase plan and the effects of potential non cash charges on our financial results and the resulting effect on our financial results In addition forward looking statements also consist of statements involving expectations regarding product capability and acceptance statements regarding our liquidity and short term and long term cash requirements as well as statements involving trend analyses and statements including such words as may believe could anticipate would might plan expect and similar expressions or the negative of these terms or other comparable terminology These forward looking statements speak only as of the date of this Annual Report on Form 10 K and are subject to business and economic risks As such our actual results could differ materially from those set forth in the forward looking statements as a result of a number of factors including those set forth below in Item 1A Risk Factors and in our other reports filed with the U S Securities and Exchange Commission We assume no obligation to update the forward looking statements to reflect events that occur or circumstances that exist after the date on which they were made except as required by law
We are a global leader in 3D design engineering and entertainment technology solutions spanning architecture engineering construction product design manufacturing media and entertainment Our customers design fabricate manufacture and build anything by visualizing simulating and analyzing real world performance early in the design process These capabilities allow our customers to foster innovation optimize their designs streamline their manufacturing and construction processes save time and money improve quality deliver more sustainable outcomes communicate plans and collaborate with others Our professional software products are sold globally through a combination of indirect and direct channels
Our internet address is www autodesk com The information posted on our website is not incorporated into this Annual Report on Form 10 K Our Annual Report on Form 10 K Quarterly Reports on Form 10 Q Current Reports on Form 8 K and amendments to reports filed or furnished pursuant to Sections 13 a and 15 d of the Securities Exchange Act of 1934 as amended are available free of charge on the Investor Relations portion of our website at www autodesk com as soon as reasonably practicable after we electronically file such material with or furnish it to the SEC
Our architecture engineering construction and operations products improve the way building infrastructure and industrial projects are designed built and operated Our product development and manufacturing software provides manufacturers in automotive transportation industrial machinery consumer products and building product industries with comprehensive digital design engineering manufacturing and production solutions These technologies bring together data from all phases of the product development and production life cycle creating a digital pipeline that supports greater productivity accuracy through process automation and insights that enable more sustainable outcomes Our digital media and entertainment products provide tools for digital sculpting modeling animation effects rendering and compositing for design visualization visual effects 3D animation games production and enable connection of workflows and data from pre production to post production Our portfolio of products and services enables our customers to foster innovation optimize and improve their designs save time and money improve quality communicate plans and collaborate with others A summary of our revenue by geographic area and product family is found in Part II Item 8 Note 2 Revenue Recognition in the Notes to Consolidated Financial Statements
The AEC Collection including AutoCAD AutoCAD Civil 3D and Revit aims to help our customers design engineer and construct higher quality more predictable building and civil infrastructure projects commonly used by AECO industry experts
AutoCAD Civil 3D solution provides a surveying design analysis and documentation solution for civil engineering including land development transportation and environmental projects Using a model centric approach that automatically updates documentation as design changes are made AutoCAD Civil 3D enables civil engineers designers drafters and surveyors to significantly boost productivity and deliver higher quality designs and construction documentation faster With AutoCAD Civil 3D the entire project team works from the same consistent up to date model so they stay coordinated throughout all project phases
Autodesk Build delivers a connected set of project management and collaboration tools for the construction industry Autodesk Build provides a toolset for managing sharing and accessing project documents that results in streamlined workflows between the office trailer and jobsite In addition Autodesk Build can be used to track the quality and safety of the project with issues and forms Team members can use Autodesk Build for requests for information RFIs submittals and meetings to manage the flow of information and track project progress across the construction timeline The PlanGrid Build mobile app delivers field critical project information and collaboration from Autodesk Build to the jobsite As part of Autodesk Construction Cloud Build connects data originating in design and preconstruction to the construction and operations phase allowing users to identify manage and de risk project decisions
Autodesk BIM Collaborate Pro is cloud based design collaboration and design management software that enables teams to organize project data democratize access and connect improve project visibility to deliver on time and work together on increasingly complex projects
BuildingConnected is a SaaS preconstruction solution that combines the largest real time construction network with an easy to use tool that helps general contractors and owners streamline subcontractor qualification and the bid and risk management process
Revit software is built for Building Information Modeling BIM to help professionals design build and maintain higher quality more energy efficient buildings Using the information rich models created with Revit architects engineers and construction firms can collaborate to make better informed decisions earlier in the design process to deliver projects with greater efficiency Revit includes features for architectural mechanical electrical and plumbing design as well as structural engineering and construction providing a comprehensive solution for the entire building project team
Tandem is a cloud based platform that transforms the built asset lifecycle Tandem helps AECO firms harness BIM data throughout the project lifecycle to create and hand over a digital twin Tandem helps owners connect operational systems to the digital twin turning fragmented data into business intelligence
AutoCAD software is a customizable and extensible CAD application for professional design drafting detailing and visualization AutoCAD software provides digital tools that can be used independently and in conjunction with other specific applications in fields ranging from construction and civil engineering to manufacturing and plant design
AutoCAD LT software is purpose built for professional drafting and detailing AutoCAD LT includes document sharing capability without the need for software customization or certain advanced functionality found in AutoCAD Users can share all design data with team members who use AutoCAD or other Autodesk products built on AutoCAD
Inventor enables manufacturers to go beyond 3D design to digital prototyping by giving engineers a comprehensive and flexible set of tools for 3D mechanical design simulation analysis tooling visualization and documentation Engineers can integrate AutoCAD drawings and model based design data into a single digital model creating a virtual representation of a final product that enables them to validate the form fit and function of the product before it is ever built
The Product Design Manufacturing Collection offers connected professional grade tools that help our customers make great products today and compete in the changing manufacturing landscape of the future The collection offers access to a wide range of our products including AutoCAD Fusion Vault and Inventor
Vault data management software makes it easier to manage data in one central location accelerate design processes and streamline internal external collaboration Vault integrates with more than 30 Autodesk design applications provides powerful revisioning and access control capabilities and enables customers to share product data securely to improve engineering cycle time and reduce manufacturing errors
Flow Production Tracking is cloud based production management software for the M E industry Creative companies use the Flow Production Tracking platform to provide essential tool collaboration review scheduling and tracking to producers production managers artists and supervisors who often work globally with distributed teams
Maya software provides 3D modeling animation effects rendering and compositing solutions that enable film and video artists game developers and design visualization professionals to digitally create engaging lifelike images realistic animations and simulations extraordinary visual effects and full length animated feature films
The M E Collection provides end to end creative tools for entertainment creation This collection enables animators modelers and visual effects artists to access the tools they need including Maya and 3ds Max to create compelling effects 3D characters and digital worlds
3ds Max software provides 3D modeling animation and rendering solutions that enable game developers design visualization professionals and visual effects artists to digitally create realistic images animations and complex scenes and to digitally communicate abstract or complex mechanical architectural engineering and construction concepts
ur customers requirements and preferences rapidly evolve as do their expectations of the performance of our software and services To keep pace with these changes we maintain a vigorous program of new product development to address demands in the marketplace for our products such as enabling convergence more flexibility and sustainable outcomes
We are undertaking a multi year process to develop lifecycle solutions within and between our industry clouds powered by shared platform services and with our data model at its core Together these will help enable Autodesk its customers and partners to create more valuable data driven and connected products and services
Subscription plan offerings are designed to give our customers increased flexibility with how they use our products and service offerings and to attract a broader range of customers such as project based users and small businesses Subscription plans represent a combined hybrid offering of desktop software and cloud functionality which provides a device independent collaborative design workflow for designers and their stakeholders
We dedicate considerable technical and financial resources to research and development to deliver additional automation and insights to our customers through artificial intelligence AI machine learning and generative design which increase efficiency and sustainability and reduce waste These investments further enhance our existing products and create new solutions and technologies which connect the workflows and data of our customers across the ecosystem of their projects and expand our market opportunity Our tools connect and automate the phases of design and creation enabling greater collaboration and the seamless flow of data for individuals and teams across all phases
Our software is primarily developed internally however we also use independent firms and contractors to perform some of our product development activities Additionally we acquire or license products and technologies developed by third parties We continually review these investments to ensure that we are generating sufficient revenue or gaining a competitive advantage to justify their costs
The majority of our research and product development is performed in the United States Canada and India However we employ experienced software developers in many of our other locations Translation and localization of our products are performed in several local markets principally Singapore and Ireland We generally localize and translate our products into German French Italian Spanish Japanese Korean and simplified and traditional Chinese
We plan to continue managing significant product development operations internationally over the next several years We believe that our ability to conduct research and development at various locations throughout the world allows us to tap into a diverse global talent pool optimize costs and integrate local market knowledge into our development activities We continually assess costs hiring challenges and intellectual property protection against the benefits of our international development activities
We sell our products and services globally through a combination of direct and indirect channels We transact directly with our enterprise and named account customers with customers through our online Autodesk branded store and with certain customers through our new transaction model whereby Solution Providers provide a quote to customers but the actual transaction occurs directly between Autodesk and the customer We introduced the new transaction model for our token based Flex offering in North America and certain countries in EMEA and APAC during fiscal 2023 and 2024 Most of our subscription offerings transitioned to the new transaction model in Australia during fiscal 2024 In fiscal 2025 we transitioned most of our indirect business to the new transaction model in our major markets The new transaction model helps customers with enhanced control and time savings through self service consistent pricing and a more personalized buying experience Also it gives Solution Providers and Autodesk access to essential data to improve our offerings and the customers buying experience
We expect our indirect channel will continue to transact and support a considerable portion of our customers particularly in emerging regions and with governments Our indirect channel model includes both a two tiered distribution structure where distributors sell to resellers and a one tiered structure where Autodesk sells directly to resellers We have a network of approximately 1 260 resellers and distributors worldwide For fiscal 2025 approximately 58 of our revenue was derived from indirect channel sales through distributors and resellers We employ a variety of incentive programs and promotions to align our direct and indirect channels with our business strategies
We anticipate that our channel mix will continue to change as we scale our business With the continued growth of our online Autodesk branded store and our new transaction model we are transacting directly with more end customers rather than through distributors without substantial disruption to our revenue Our ability to effectively distribute our products depends in part upon the financial and business condition of our distributor reseller and Solution Provider networks The loss of or a significant reduction in business with any one of our major distributors large resellers or Solution Providers could harm our business See Item 1A Risk Factors for further discussion The transition to annual billings for multi year contracts impacted the timing of our billings and cash collections in fiscal year 2025 and we expect this impact to continue into fiscal year 2026 See Part II Item 7 Management s Discussion and Analysis of Financial Condition and Results of Operations for further discussion
Revenue through our largest distributor TD Synnex Corporation and its global affiliates collectively TD Synnex accounted for 33 39 and 37 of our net revenue for the fiscal years ended January 31 2025 2024 and 2023 respectively During fiscal 2023 we entered into transition agreements with TD Synnex to provide transition distribution activities for a one to two year period In the third fiscal quarter of 2025 we entered into a new distribution agreement with TD Synnex for government business in certain jurisdictions Existing distribution agreements will continue in emerging markets We have increased our selling efforts with Solution Providers in connection with our new transaction model Consequently we believe our business is not substantially dependent on TD Synnex No other distributor reseller or direct customer accounted for 10 or more of our revenue in fiscal 2025
Our customer related operations are divided into three geographic regions the Americas EMEA and APAC Each geographic region is supported by global marketing and sales organizations These organizations develop and manage overall marketing and sales programs and work closely with a network of domestic and international sales offices We believe that international sales will continue to comprise the majority of our total net revenue Adverse economic conditions and currency exchange rates in the countries that contribute a significant portion of our net revenue including emerging economies may have an adverse effect on our business in those countries and our overall financial performance Our international operations and sales subject us to a variety of risks See Item 1A Risk Factors for further discussion
We also work directly with reseller distributor and Solution Provider partner organizations computer manufacturers other software developers and peripherals manufacturers in cooperative advertising promotions and trade show presentations We connect with our audiences through scalable marketing strategies such as webinars live and virtual events personalized outreach digital campaigns sponsorships and targeted advertising across industry publications technology platforms media outlets and social networks We also foster global user networks and online communities enabling customers to connect collaborate and share insights about our products services and solutions
We generate revenue primarily through various offerings that provide recurring revenue Under our subscription plan customers can use our software anytime anywhere and get access to the latest updates to previous versions through term based product subscriptions cloud service offerings and enterprise business agreements EBA Historically we have had increased EBA sales activity in our fourth fiscal quarter This seasonality may not have an immediate impact on our revenue as we recognize subscription revenue over the term of the contract This seasonality may also affect the relative value of our billings Remaining Performance Obligations RPO and collections in the fourth and first fiscal quarters
With the new transaction model we are approaching the final phase of modernizing our go to market motion which includes building more durable and direct relationships with our customers updating our data infrastructure and retiring old information systems and business models We provide technical support and training to customers through a multi tiered support model augmented by direct programs designed to address certain specific customer needs Some of our customers receive support and training from resellers and distributors from which they purchased subscriptions or licenses for our products or services with Autodesk in turn providing second tier support to the resellers and distributors Some of our customers may also purchase support and training from Solution Providers Other customers are supported directly via self service using the Autodesk Knowledge Network which guides customers to answers in our online support assets support forums or webinars or to support representatives using different modalities such as social media phone email and webchat We also support our resellers and distributors through technical product training sales training classes webinars and other knowledge sharing programs
Autodesk is committed to advancing a more sustainable resilient and inclusive world We take action as a business to support our employees customers and communities in our collective opportunity to design and make a better world for all
We focus our efforts to advance positive outcomes across three primary areas energy and materials health and resilience and work and prosperity These impact opportunity areas are derived from the UN Sustainable Development Goals SDGs and have been identified through a multi pronged process to align the top needs of our stakeholders the issues that are most important to our business and the areas we are best placed to accelerate positive impact at scale
These opportunities primarily manifest as outcomes through how our customers leverage our technology to design and make net zero carbon buildings resilient infrastructure more sustainable products and a thriving workforce We support and amplify these opportunities through powering our business with 100 renewable energy neutralizing greenhouse gas emissions associated with our operations developing an inclusive culture and supporting students and educators with tools and training to equip the next generation of innovators We advance these opportunities with industry innovators through collaboration with our customers and partners deploying philanthropic capital to changemakers and providing software donations and training to our wider ecosystem Autodesk committed to target 1 of annual operating profit for the long term support of our impact programs which includes our philanthropic work and our climate commitments
Autodesk is committed to helping students gain the in demand skills and certifications needed to demonstrate they are prepared for current and emerging roles in the industries we serve We offer free educational licenses of Autodesk s complete portfolio of professional software to verified students educators and accredited educational institutions worldwide Additionally we offer self paced modular learning and curriculum for K 12 post secondary students and educators Our intention is to make Autodesk software the preferred choice for those poised to become the next generation of design engineering and construction professionals
In addressing the global challenges posed by climate change we make it possible for our customers to innovate and respond to associated changes in regulation building code physical climate parameters and other climate related developments This effort can directly and indirectly create more demand for existing and new Autodesk products and services in the short and long term Furthermore our leadership is committed to taking climate action and that commitment goes hand in hand with our values and reputation in the marketplace
To drive continued progress and meet growing demand we continue to expand the solutions education and support we offer helping customers secure a competitive advantage for a low carbon future by designing high performance buildings resilient cities and infrastructure and more efficient transportation and products To continue to grow this market we invest in our tools to meet customer s demand as well as provide software and support to early stage entrepreneurs nonprofit organizations and start up companies who are designing clean technologies We are expanding these offerings based upon demand and opportunity in response to challenges posed by climate change
Internally we are investing in best practices to mitigate our greenhouse gas emissions GHGs and climate change risk through investments in renewable energy energy efficiency and disaster management and recovery strategies Our Enterprise Risk Management process considered how climate impacts could affect and potentially amplify the overall significance of each identified risk and opportunity We regularly assess risks and opportunities in this area and respond accordingly
In fiscal year 2024 we made progress on our science based GHG reduction target to reduce Scope 1 and Scope 2 GHGs 50 and reduce Scope 3 GHGs per dollar of gross profit 55 by fiscal year 2031 compared to fiscal year 2020 Additionally in fiscal 2024 we were responsible for 155 000 metric tons of carbon dioxide equivalent emissions across our market based operational boundary This represents a 32 reduction compared to our fiscal year 2020 base line In addition our residual 155 000 metric tons of CO2e emissions were neutralized through the procurement of high quality carbon offsets credits
More information about our sustainability financing and commitment can be found in our annual Impact Reports which we have published on our website since 2008 Our fiscal 2025 Impact Report will be published in fiscal 2026 Information contained on or accessible through our website is not part of or incorporated by reference into this report
The Autodesk Foundation the Foundation a privately funded 501 c 3 charity organization established and solely funded by us leads our philanthropic efforts The purpose of the Foundation is twofold to support employees to create a better world at work at home and in the community by matching employees volunteer time and donations to nonprofit organizations and to support organizations using design and make solutions to drive positive impact In the latter case we use philanthropic capital software donations and training to accomplish this goal selecting the most impactful and innovative organizations around the world who are innovating to create a better future for our planet On our behalf the Foundation also administers a discounted software donation program to nonprofit organizations entrepreneurs and others who are developing design solutions that will shape a more sustainable future
Our business and our customers benefit from our relationships with an extensive developer network These developers create and sell their own interoperable products that further enhance the range of integrated solutions available to our customers One of our key strategies is to maintain an API based architecture of our software products to facilitate third party development of complementary products and industry specific software solutions This approach enables customers and third parties to customize solutions for a wide variety of highly specific uses We offer several programs that provide strategic investment funding technological platforms user communities technical support forums and events to developers who develop add on applications for our products For example we have established the Autodesk Platform Services to support innovators that build solutions to facilitate the development of a single connected ecosystem for the future of how things are designed made and used Autodesk Platform Services facilitates the development of a single connected ecosystem for integrating Autodesk applications with other enterprise web and mobile solutions
The markets for our products are highly competitive are subject to rapid change and can have complex interdependencies between many of the larger businesses We strive to increase our competitive separation by investing in research and development allowing us to bring new products to market and create exciting new versions of existing products that offer compelling efficiencies for our customers We also compete through investments in marketing and sales to more effectively reach new customers and better serve existing customers
Our competitors include large global publicly traded companies small geographically focused firms startup firms and solutions produced in house by their users Our primary global competitors include Adobe Systems Incorporated Bentley Systems Inc Dassault Systèmes S A and its subsidiary Dassault Systèmes SolidWorks Corp Intergraph Corporation a wholly owned subsidiary of Hexagon AB MSC Software Corporation Nemetschek AG Oracle Corporation Procore Technologies Inc PTC Inc 3D Systems Corporation Siemens PLM and Trimble Navigation Limited among others
The software industry has limited barriers to entry and the availability of computing power with continually expanding performance at progressively lower prices contributes to the ease of market entry The industry continues to undergo a platform shift from the personal computer to cloud and mobile computing This shift further lowers barriers to entry and poses a disruptive challenge to established software companies The design software market is characterized by vigorous competition in each of the vertical markets in which we compete both from existing competitors and by entry of new competitors with innovative technologies Competition is increasingly enhanced by consolidation of companies with complementary products and technologies and the possibility that competitors in one vertical segment may enter other vertical segments that we serve In addition some of our competitors in certain markets have greater financial technical sales and marketing and other resources than we do Because of these and other factors competitive conditions in these industries are likely to continue to intensify in the future Increased competition could result in price reductions reduced net revenue and profit margins and loss of market share any of which could harm our business See Item 1A Risk Factors for further discussion of risks regarding competition
We believe that our future results depend largely upon our ability to better serve customers by offering new products including cloud and mobile computing products whether by internal development or acquisition and to continue to provide existing product offerings that compete favorably with respect to ease of use reliability performance range of useful features continuing product enhancements reputation price and training
We maintain an active program to legally protect our investment in technology through intellectual property rights We protect our intellectual property through a combination of patent copyright trademark and trade secret protections confidentiality procedures and contractual provisions The nature and extent of legal protection associated with each such intellectual property right depends on among other things the type of intellectual property right and the given jurisdiction in which such right arises We believe that our intellectual property rights are valuable and important to our business
Nonetheless our intellectual property rights may not be successfully asserted in the future or may be invalidated circumvented or challenged In addition the laws and enforcement of the laws of various foreign countries where our products are distributed do not protect our intellectual property rights to the same extent as U S laws Enforcement of intellectual property rights against alleged infringers can sometimes lead to costly litigation and counterclaims Our inability to protect our proprietary information could harm our business
From time to time we receive claims alleging infringement of a third party s intellectual property rights including patents Disputes involving our intellectual property rights or those of another party have in the past and may in the future lead to among other things costly litigation or product shipment delays which could harm our business
We retain ownership of software we develop Our combined hybrid offerings include both desktop software and cloud functionality Desktop software is licensed to users pursuant to click through or signed license agreements containing restrictions on duplication disclosure and transfer Cloud software and associated services are provided to users pursuant to online or signed terms of service agreements containing restrictions on access and use
We believe that because of the limitations of laws protecting our intellectual property and the rapid ongoing technological changes in both the computer hardware and software industries we must rely principally upon software engineering and marketing skills to continually maintain and enhance our competitive market position
While we have recovered some revenue resulting from the unauthorized use of our software solutions we are unable to measure the full extent to which unauthorized use of our software products exists We believe however that unauthorized use of our software is and can be expected to be a persistent problem that negatively impacts our revenue and financial results We believe that our transition from perpetual use software licenses to a subscription based business model combined with the change from desktop to cloud based computing will shift the incentives and means by which software is used without authorization
In addition through various licensing arrangements we receive certain rights to intellectual property of others We expect to maintain current licensing arrangements and to secure licensing arrangements in the future as needed and to the extent available on reasonable terms and conditions to support continued development and sales of our products and services Some of these licensing arrangements require or may require royalty payments and other licensing fees The amount of these payments and fees may depend on various factors including but not limited to the structure of royalty payments offsetting considerations if any and the degree of use of the licensed technology
The production of our software products and services involves duplication or hosting of software media The way that we deliver software has evolved during our business model transition For certain cloud based products we use a combination of co located hosting facilities and increasingly Amazon Web Services and to a lesser degree other infrastructure as a service providers We offer customers an electronic software download option for both initial product fulfillment and subsequent product updates Customers who choose electronic fulfillment receive the latest version of the software from our vendor s secure servers Customers may also obtain our software through media such as DVDs and USB flash drives available from multiple sources
Our employees play a central role in the success of our long term strategy Autodesk s Culture Code defines values and behaviors that support our commitment to being a customer company where each employee takes responsibility for understanding our customers needs expectations and experiences As of January 31 2025 we employed approximately 15 300 people an increase from approximately 14 100 employees as of the end of fiscal year 2024 None of our employees in the United States are represented by a labor union In certain foreign countries our employees are represented by trade unions or works councils We have never experienced any work stoppages and believe our employee relations are strong Reliance upon employees in other countries entails various risks and changes in these foreign countries such as government instability or regulation unfavorable to foreign owned businesses which could negatively impact our business in the future
Autodesk views our culture diversity and belonging efforts as directly linked to high performance and unlocking human ingenuity Our commitment to maintaining a global workforce is grounded in our values and how we work being inclusive respectful and collaborative Our culture seeks to enable Autodesk employees to do their best work innovate contribute to the success of our company and prosper
We believe there are markets for talent that remain untapped or underutilized which drives our sourcing and networking efforts We do this by widening our talent pipelines to attract and retain the most capable skilled and top tier professionals from all backgrounds This strategy strengthens our ability to meet and speak to an ever expanding and diverse customer base fueling our competitive edge increasing customer trust and driving sustainable growth and success in a dynamic global marketplace
We consistently expand our networks and investments in targeted partnerships both professional and academic including Hispanic serving educational institutions Historically Black Colleges and Universities and professional organizations around the globe that provide greater access to pools of under recognized talent in key sectors like technology By leveraging our extensive portfolio of programs scholarships internships sponsorship agreements mentorship and development we demonstrate our capability to nurture and retain top tier talent
We offer continuous development opportunities to all employees that facilitate mentorship relationships as well as focused sponsorship and leadership development programs in partnership with our Employee Resource Groups ERGs
We proudly support nine ERGs which are open to all employees and play a pivotal role in scaling a sense of belonging across the company These groups are formed based on various factors including shared interests backgrounds unique identities and professional experiences Our culture promotes choice allowing employees to engage and participate in ways that resonate with them whether as allies or direct members of one or more groups ERGs are one of the ways we retain and engage our talent community of Autodesk employees while also creating a work environment that learns from and leverages diverse perspectives and experiences that enrich how we all work together as one Autodesk
Finally we are an equal opportunity employer that does not discriminate in recruiting hiring training or promoting on any basis protected by law Additional information on our Diversity and Belonging program initiatives and metrics can be found on our website at autodesk com company diversity and belonging Information contained on or accessible through our website is not part of or incorporated by reference into this report
We believe career development plays an important role in keeping our employees engaged and in providing additional opportunities for them to grow and build their careers Autodesk offers extensive professional and technical development opportunities for our employees These include self service online modules and personalized learning paths professional and management development programs and a tuition reimbursement program
We also encourage our employees to advance our vision for a better world and support their professional development by participating in our pro bono consulting program using paid time to volunteer and have their charitable giving matched by the Autodesk Foundation
To attract retain and support our employees we offer competitive compensation and benefits programs several of which include an element of choice to meet the needs of our diverse and global population In addition to competitive base pay and opportunities to receive short term incentives all our employees are eligible to participate in our long term plans We also have comprehensive health and wellness benefits a generous time off program an employee stock purchase plan sabbaticals retirement plans financial support programs financial tools and education and an employee assistance program
We acquired new technology or supplemented our existing technology by purchasing businesses or technology related assets focused in specific markets or industries For the fiscal years ended January 31 2025 2024 and 2023 we acquired companies accounted for as business combinations The acquisitions during both fiscal 2024 and 2023 were not individually significant The following were significant acquisitions for fiscal year 2025
This acquisition will deepen Autodesk Construction Cloud s footprint and provide a robust payment management offering to serve the needs of general contractors and trade contractors Through automating the application of the payment process Payapps solution provides greater transparency reduces risk and helps accelerate time to payment
We acquire technology related assets that are complementary to or otherwise enhance our existing technologies We also make investments in privately held companies that develop technology that is complementary to or provide strategic value and expand opportunities for our technologies
Represents individual term based offerings deployed through web browser technologies or in a hybrid software and cloud configuration Cloud service offerings that are bundled with other product offerings are not captured as a separate cloud service offering
We attempt to represent the changes in the underlying business operations by eliminating fluctuations caused by changes in foreign currency exchange rates as well as eliminating hedge gains or losses recorded within the current and comparative periods We calculate constant currency growth rates by i applying the applicable prior period exchange rates to current period results and ii excluding any gains or losses from foreign currency hedge contracts that are reported in the current and comparative periods
Represents the combination of maintenance product subscriptions and all EBAs Main products include but are not limited to AutoCAD AutoCAD LT Industry Collections Revit Inventor Maya and 3ds Max Certain products such as our computer aided manufacturing solutions incorporate both Design and Make functionality and are classified as Design
Autodesk Industry Collections are a combination of products and services that target a specific user objective and support a set of workflows for that objective Our Industry Collections consist of Autodesk Architecture Engineering and Construction Collection Autodesk Product Design and Manufacturing Collection and Autodesk Media and Entertainment Collection
Our maintenance plans provide our customers with a cost effective and predictable budgetary option to obtain the productivity benefits of our new releases and enhancements when and if released during the term of their contracts Under our maintenance plans customers are eligible to receive unspecified upgrades when and if available and technical support We recognize maintenance revenue over the term of the agreements generally one year
Represents certain cloud based product subscriptions Main products include but are not limited to Autodesk Build BIM Collaborate Pro BuildingConnected Fusion and Flow Production Tracking Certain products such as Fusion incorporate both Design and Make functionality and are classified as Make
Measures the year over year change in Recurring Revenue for the population of customers that existed one year ago base customers Net revenue retention rate is calculated by dividing the current quarter Recurring Revenue related to base customers by the total corresponding quarter Recurring Revenue from one year ago Recurring Revenue is based on USD reported revenue and fluctuations caused by changes in foreign currency exchange rates and hedge gains or losses have not been eliminated Recurring Revenue related to acquired companies one year after acquisition has been captured as existing customers until such data conforms to the calculation methodology This may cause variability in the comparison
Provides customers a flexible cost effective way to access and manage 3D design engineering and entertainment software tools Our product subscriptions currently represent a hybrid of desktop and cloud functionality which provides a device independent collaborative design workflow for designers and their stakeholders
Consists of the revenue for the period from our traditional maintenance plans our subscription plan offerings and certain Other revenue It excludes subscription revenue related to third party products Recurring revenue acquired with the acquisition of a business is captured when total subscriptions are captured in our systems and may cause variability in the comparison of this calculation
Comprises our term based product subscriptions cloud service offerings and EBAs Subscriptions represent a combined hybrid offering of desktop software and cloud functionality which provides a device independent collaborative design workflow for designers and their stakeholders With subscription customers can use our software anytime anywhere and get access to the latest updates to previous versions
Unbilled deferred revenue represents contractually stated or committed orders under early renewal and multi year billing plans for subscription services and maintenance for which the associated deferred revenue has not been recognized Under FASB Accounting Standards Codification ASC Topic 606 unbilled deferred revenue is not included as a receivable or deferred revenue on our Consolidated Balance Sheet
We operate in a rapidly changing environment that involves significant risks a number of which are beyond our control In addition to the other information contained in this Annual Report on Form 10 K the following discussion highlights some of these risks and the possible impact of these factors on our business financial condition and future results of operations If any of the following risks actually occur our business financial condition or results of operations may be adversely impacted causing the trading price of our common stock to decline In addition these risks and uncertainties may impact the forward looking statements described elsewhere in this Annual Report on Form 10 K and in the documents incorporated herein by reference They could affect our actual results of operations causing them to differ materially from those expressed in forward looking statements
Our business is subject to numerous risks and uncertainties that you should consider before investing in our securities These risks are described more fully below and include but are not limited to risks relating to the following
Our strategy to develop and introduce new products and services exposing us to risks such as limited customer acceptance both with new and existing customers costs related to product defects and large expenditures
Dependency on international revenue and operations exposing us to significant international regulatory economic intellectual property collections currency exchange rate taxation political and other risks
Our strategy to develop and introduce new products and services exposes us to risks such as limited customer acceptance both with new and existing customers costs related to product defects and large expenditures each of which may result in no additional net revenue or decreased net revenue
The software industry is characterized by rapid technological changes as well as changes in customer requirements and preferences In recent years the industry has undergone a transition from developing and selling perpetual licenses and on premises products to subscriptions and cloud enabled technologies Both new and existing customers are also reconsidering how they purchase software products which requires us to constantly evaluate our business model and strategy In response we are focused on providing solutions to enable our customers to be more agile and collaborative on their projects We devote significant resources to the development of new technologies If we are unable to provide new features enhancements to user experience and modifications in a timely and cost effective manner that achieve market acceptance align with customer expectations and that keep pace with rapid technological developments and changing regulatory landscapes our business and operating results could be adversely affected For example AI and machine learning are propelling advancements in technology but if they are not widely adopted and accepted or fail to operate as expected our business and reputation may be harmed
In addition we frequently introduce new business models or methods that require a considerable investment of technical and financial resources such as our introduction of flexible subscription and service offerings our transition of multi subscription plans to named user plans and our new transaction model It is uncertain whether these strategies including our product and pricing changes will accurately reflect customer demand or be successful or whether we will be able to develop the necessary infrastructure and business models more quickly than our competitors We make such investments through further development and enhancement of our existing products and services as well as through acquisitions Such investments may not result in sufficient revenue generation to justify their costs and could result in decreased net revenue or profitability If we are not able to meet customer requirements either with respect to new customers or existing customers and either with respect to our software or the manner in which we provide such products or if we are not able to adapt our business model to meet our customers requirements our business financial condition or results of operations may be adversely impacted
In particular a critical component of our growth strategy is to have customers of our AutoCAD and AutoCAD LT products as well as other individual Autodesk products expand their portfolios to include our other offerings and cloud based functionality and we are taking steps to accelerate this migration At times sales of our AutoCAD and AutoCAD LT or individual Autodesk flagship products have decreased without a corresponding increase in Industry Collections or cloud based functionality revenue or without purchases of customer seats to our Industry Collections Should this continue our results of operations will be adversely affected
Our executive management team must continuously act quickly and with vision given the rapidly changing customer expectations and technology advancements inherent in the software industry the extensive and complex efforts required to create useful and widely accepted products and the rapid evolution of cloud computing mobile devices new computing platforms and other technologies such as consumer products Although we have articulated a strategy that we believe will fulfill these challenges if we fail to execute properly on that strategy or adapt the strategy as market conditions evolve we may fail to meet our customers expectations be unable to compete with our competitors products and technology and lose the confidence of our channel partners and employees This in turn could adversely affect our business and financial performance
Our overall performance depends largely upon domestic and worldwide economic and political conditions The United States and other countries economies have experienced cyclical downturns in which economic activity was impacted by falling demand for a variety of goods and services restricted credit poor liquidity decreased government spending reduced corporate profitability volatility in credit equity and foreign exchange markets inflationary pressures and higher interest rates bankruptcies and overall uncertainty These economic conditions can occur abruptly For example current geopolitical and global macro economic challenges have caused uncertainty in the global economy and an economic downturn or recession in the United States or in other countries may occur or has already occurred and may continue The extent to which these challenges will impact our financial condition or results of operations is still uncertain and will continue to depend on developments such as the impact of these challenges on our customers vendors distributors and resellers such as the supply chain disruption and resulting inflationary pressures and global labor shortage that we have seen recently material scarcity as well as other factors actions taken by governments businesses and consumers in response to these challenges speed and timing of economic recovery including in specific geographies our billings and renewal rates including new business close rates rate of multi year contracts pace of closing larger transactions and new unit volume growth wars and armed conflicts including the ongoing wars between Ukraine and Russia and between Israel and Hamas foreign exchange rate fluctuations and the effect of these challenges on margins and cash flow All of these factors continue to evolve and remain uncertain at this time and some of these factors are not within our control If economic growth in countries where we do business slows or if such countries experience further economic recessions customers may delay or reduce technology purchases Our customers include government entities including the U S federal government and if spending cuts impede the ability of governments to purchase our products and services our revenue could decline In addition a number of our customers rely directly and indirectly on government spending
As described elsewhere in these risk factors we are dependent on international revenue and operations and are subject to related risks of conducting business globally Trends toward nationalism and protectionism and the weakening or dissolution of international trade pacts may increase the cost of or otherwise interfere with conducting business These trends have increased political and economic unpredictability globally and may increase the volatility of global financial markets and the impact of such developments on the global economy remains uncertain Political instability or adverse political developments in any of the countries in which we do business could harm our business results of operations and financial condition A financial sector credit crisis could impair credit availability and the financial stability of our customers including our distribution partners and channels A disruption in the financial markets may also have an effect on our derivative counter parties and could also impair our banking partners on which we rely for operating cash management War geopolitical conflicts and any related political or economic responses and counter responses or otherwise by various global actors or the general effect on the global economy could also affect our business Any of these events could harm our business results of operations and financial condition
We regularly acquire or invest in businesses software solutions and technologies that are complementary to our business through acquisitions strategic alliances or equity or debt investments including several transactions in fiscal 2024 and 2025 The risks associated with such acquisitions include the difficulty of integrating solutions operations and personnel inheriting liabilities such as intellectual property infringement claims failure to realize anticipated revenue and cost projections and expected synergies the requirement to test and assimilate the internal control processes of the acquired business in accordance with the requirements of Section 404 of the Sarbanes Oxley Act of 2002 and diversion of management s time and attention In addition such acquisitions and investments involve other risks such as
exposure to litigation or other claims in connection with or inheritance of claims or litigation risk as a result of an acquisition including claims from terminated employees customers or other third parties
the potential that acquired businesses or businesses that we invest in may not have adequate controls processes and procedures to ensure compliance with laws and regulations including with respect to data privacy data protection and data security as well as anti bribery and anti corruption laws export controls sanctions and industry specific regulation
We may not be successful in overcoming such risks and such acquisitions and investments may negatively impact our business In addition if we do not complete an announced acquisition transaction or integrate an acquired business successfully and in a timely manner we may not realize the benefits of the acquisition to the extent anticipated Acquisitions and investments have in the past and may in the future contribute to fluctuations in our quarterly financial results These fluctuations could arise from transaction related costs and charges associated with eliminating redundant expenses or write offs of impaired assets recorded in connection with acquisitions and investments and could negatively impact our financial results
We are dependent on international revenue and operations exposing us to significant international regulatory economic intellectual property collections currency exchange rate taxation political and other risks which could adversely impact our financial results
International net revenue represented 64 of our net revenue for both fiscal 2025 and 2024 Our international revenue some of which comes from emerging economies is subject to economic and political conditions in foreign markets including those resulting from economic and political conditions in the United States Our total revenue is also impacted by the relative geographical and country mix of our revenue over time Our dependency on international revenue makes us much more exposed to global economic and political trends which can negatively impact our financial results even if our results in the United States are strong for a particular period
We anticipate that our international operations will continue to account for a significant portion of our net revenue and as we expand our international development sales and marketing expertise will provide significant support to our overall efforts in countries outside of the United States Risks inherent in our international operations include
other factors beyond our control including popular uprisings terrorism war including any related political or economic responses and counter responses or otherwise by various global actors or the general effect on the global economy natural disasters and diseases and pandemics
In addition in recent years the United States has instituted or proposed changes to foreign trade policy including the negotiation or termination of trade agreements the imposition of tariffs on products imported from certain countries economic sanctions on individuals corporations or countries and other government regulations affecting trade between the United States
and other countries in which we do business For example the United States and other global actors have imposed sanctions as a result of the war against Ukraine launched by Russia and the ongoing war between Israel and Hamas Additionally recent executive actions and executive branch policies in the United States such as those communicated in a February 2025 memorandum regarding a change in U S policy with respect to the negotiation and imposition of digital services taxes and regulations by other countries suggest a broader purview for changes in U S trade policy as a component of U S foreign policy New or increased tariffs and other changes in U S trade policy including new sanctions could trigger retaliatory actions by affected countries including Russia In addition certain foreign governments including the Chinese government have instituted considered or are considering imposing tariffs and other trade sanctions on certain U S manufactured goods The escalation of protectionist or retaliatory trade measures in either the United States or any other countries in which we do business such as announcing sanctions a change in tariff structures export compliance or other trade policies may increase the cost of or otherwise interfere with the conduct of our business and could have a material adverse effect on our operations and business outlook
We are dependent on attracting new customers as well as renewing and expanding our business with existing customers Our customers are not obligated to renew their subscriptions for our offerings and they may elect not to renew upgrade or expand their subscriptions We cannot assure renewal rates or the mix of subscriptions renewals Customer renewal rates may decline or fluctuate due to a number of factors including offering pricing competitive offerings customer satisfaction and reductions in customer spending levels customer activity or number of users due to economic downturns or financial markets uncertainty If our customers do not renew their subscriptions or if they renew on less favorable terms our revenues may decline
The software industry has limited barriers to entry and the availability of computing devices with continually expanding performance at progressively lower prices contributes to the ease of market entry The industry has undergone a transition from developing and selling perpetual licenses and on premises products to
This shift further lowers barriers to entry and poses a disruptive challenge to established software companies The markets in which we operate are characterized by vigorous competition both by entrants with innovative technologies and by consolidation of companies with complementary offerings and technologies Some of our competitors have greater financial technical sales and marketing and other resources Our competitors may also be able to develop and market new technologies that render our existing or future products less competitive For example disruptive technologies such as machine learning and other AI technologies may significantly alter the market for our products in unpredictable ways and reduce customer demand Furthermore a reduction in the number and availability of compatible third party applications or our inability to rapidly adapt to technological and customer preference changes including those related to cloud computing mobile devices and new computing platforms may adversely affect the sale of our solutions Because of these and other factors competitive conditions in the industry are likely to intensify in the future Increased competition could result in price reductions reduced net revenue and profit margins and loss of market share any of which would likely harm our business
Our quarterly financial results key metrics and other operating metrics have fluctuated in the past and will continue to do so in the future These fluctuations have in the past caused and could in the future cause our stock price to change significantly or experience declines We also provide investors with quarterly and annual financial forward looking guidance that could prove to be inaccurate as a result of these fluctuations In addition to the other risks described in these risk factors some of the factors that have in the past caused and could in the future cause our financial results key metrics and other operating metrics to fluctuate include
shift to named user plans and annual billing of multi year contracts which impacted the timing of our billings and cash collections in fiscal year 2024 and 2025 and which is expected to continue into fiscal year 2026
changes in revenue recognition or other accounting guidelines employed by us and or established by the Financial Accounting Standards Board Securities and Exchange Commission or other rulemaking bodies
We have also experienced fluctuations in financial results in interim periods in certain geographic regions due to seasonality or regional economic or political conditions In particular our financial results key metrics or other operating metrics in Europe during our third quarter are usually affected by a slower summer period and our APAC operations typically experience seasonal slowing in our fourth quarter War geopolitical conflicts and any related political or economic responses and counter responses or otherwise by various global actors or the general effect on the global economy could also affect our business
Our operating expenses are based in part on our expectations for future revenue and are relatively fixed in the short term Accordingly any revenue shortfall below expectations has had and in the future could have an immediate and significant
We derive a substantial portion of our net revenue from a small number of solutions including our AutoCAD based software products and collections and if these offerings are not successful our revenue would be adversely affected
We derive a substantial portion of our net revenue from sales of subscriptions of a limited number of our offerings including AutoCAD software solutions based on AutoCAD which include our collections that serve specific markets and products that are interoperable with AutoCAD Any factor adversely affecting sales of these subscriptions including the product release cycle market acceptance product competition performance and reliability reputation price competition economic and market conditions and the availability of third party applications would likely harm our financial results During fiscal 2025 and 2024 combined revenue from our AutoCAD and AutoCAD LT family products not including collections having AutoCAD or AutoCAD LT as a component represented 26 and 27 of our total net revenue respectively
As part of our effort to accommodate our customers needs and demands and the rapid evolution of technology from time to time we evolve our business and sales initiatives such as shifting to annual billing of multi year contracts introducing and expanding new business models such as the new transaction model and Flex realigning our development and marketing organizations offering software as a service and realigning our internal resources in an effort to improve efficiency We may take such actions without clear indications that they will prove successful and at times we have been met with short term challenges in the execution of such initiatives Market acceptance of any new business or sales initiative is dependent on our ability to match our customers needs at the right time and price Often we have limited prior experience and operating history in these new areas of emphasis If any of our assumptions about expenses revenue or revenue recognition principles from these initiatives proves incorrect or our attempts to improve efficiency are not successful our actual results may vary materially from those anticipated and our financial results will be negatively impacted
During the first quarter of fiscal 2026 we initiated a restructuring plan the 2026 Plan to support Autodesk s initiatives to optimize its go to market organization and at the same time to reallocate resources to Autodesk s strategic priorities such as investments in cloud platform and artificial intelligence These measures are intended to address our short and long term objectives and are based on our current estimates assumptions and forecasts which are subject to known and unknown risks and uncertainties Implementation of these and any other initiatives may not achieve our expected benefits may be disruptive to our business the expected costs and charges may be greater than we have forecasted and the estimated cost savings may be lower than we have forecasted In addition our 2026 Plan could result in personnel attrition beyond our planned reduction in headcount or could reduce employee morale which could in turn adversely impact productivity including through a loss of continuity loss of accumulated knowledge and or inefficiency during transitional periods could affect our ability to attract highly skilled employees or may otherwise adversely affect our business
The market price for our common stock has experienced significant fluctuations and may continue to fluctuate significantly The market price for our common stock has in the past been and in the future may be affected by a number of factors including the other risks described in these risk factors and the following
shortfalls in our expected financial results including net revenue billings earnings and cash flow or key performance metrics such as subscriptions and how those results compare to securities analyst expectations including whether those results fail to meet exceed or significantly exceed securities analyst expectations
changes in forward looking estimates of future results how those estimates compare to securities analyst expectations or changes in recommendations or confusion on the part of analysts and investors about the short and long term impact to our business
Significant changes in the price of our common stock could expose us to costly and time consuming litigation Historically after periods of volatility in the market price of a company s securities a company becomes more susceptible to securities class action litigation This type of litigation is often expensive and diverts management s attention and resources
As a result of our strategy of partnering with other companies for product development our product delivery schedules could be adversely affected if we experience difficulties with our product development partners
We partner with certain independent firms and contractors to perform some of our product development activities We believe our partnering strategy allows us to achieve efficiencies in developing new products and maintaining and enhancing existing product offerings This strategy creates a dependency on independent developers Independent developers including those who currently develop solutions for us in the United States and throughout the world may not be able or willing to provide development support to us in the future In addition use of development resources through consulting relationships particularly in non U S jurisdictions with developing legal systems may be adversely impacted by and expose us to risks relating to evolving employment export and intellectual property laws These risks could among other things expose our intellectual property to misappropriation and result in disruptions to product delivery schedules
We are increasingly building AI into many of our offerings We expect to rely on AI technologies to help drive future growth in our business but there can be no assurance that we will realize the desired or anticipated benefits from AI or at all We may also fail to properly implement or market our AI offerings As with many innovations AI presents risks and challenges that could affect its adoption and therefore our business Our competitors or other third parties may incorporate AI into their products more quickly or more successfully than us which could impair our ability to compete effectively and adversely affect our results of operations Additionally our offerings based on AI may expose us to additional lawsuits and regulatory investigations and other proceedings and subject us to legal liability as well as brand and reputational harm For example if the content analyses or recommendations that AI applications assist in producing are or are alleged to be deficient inaccurate or biased our business financial condition and results of operations may be adversely affected The use of AI applications has resulted in and may in the future result in cybersecurity incidents that implicate the personal data of end users of such applications Any such cybersecurity incidents related to our use of AI applications could adversely affect our reputation and results of operations
Social and ethical issues relating to the use of new and evolving technologies such as AI in our offerings may result in reputational harm and liability and may cause us to incur additional research and development costs to resolve such issues AI presents emerging ethical issues and if we enable or offer solutions that draw controversy due to their perceived or actual impact on society we may experience brand or reputational harm competitive harm or legal liability Government regulation addressing AI ethics or other aspects of the development or use of AI may also increase the burden and cost of research and development in this area subjecting us to brand or reputational harm competitive harm or legal liability For example the European Union s Artificial Intelligence Act the AI Act which achieved approval by the European Council on February 2 2024 and the European Parliament on March 13 2024 will impose obligations on providers and users of artificial intelligence technologies Some U S states have proposed and in certain cases enacted laws addressing aspects of the development and use of AI Failure to address AI ethical and regulatory issues by us or others in our industry could undermine public confidence in
AI slow adoption of AI in our products and services and subject us to claims demands and proceedings from private actors regulatory investigations and other proceedings by regulatory authorities and fines penalties and other liabilities
As previously disclosed on April 1 2024 the Audit Committee commenced an internal investigation with the assistance of outside counsel and advisors regarding Autodesk s free cash flow and non GAAP operating margin practices The results of that investigation were announced on May 31 2024
We have incurred significant expenses including audit legal consulting and other professional fees in connection with the investigation and we could be forced to incur significant additional time and expense as a result of the investigation The incurrence of significant additional expense or the requirement that management devote significant time that could reduce the time available to execute on our business strategies could have an adverse effect on our business results of operations and financial condition
In addition the United States Attorney s Office for the Northern District of California contacted us regarding the Audit Committee investigation We cannot guarantee that we will not receive inquiries from other regulatory authorities regarding the investigation or that we will not be subject to future claims investigations or proceedings Any future inquiries from the SEC or other regulatory authorities or future claims or proceedings or any related regulatory investigation will regardless of the outcome likely consume a significant amount of our internal resources and result in additional legal and accounting costs
In addition we and certain of our officers and directors have been named in purported shareholder litigation arising out of our announcement of the investigation For additional discussion see Part I Item 3 Legal Proceedings and Note 11 to our Consolidated Financial Statements The pending litigation and any future litigation investigation or other actions that may be filed or initiated against us or our officers or directors may be time consuming and expensive We cannot predict what losses we may incur in these litigation matters and contingencies related to our obligations under the federal and state securities laws or in other legal proceedings or governmental investigations or proceedings related to these matters
Any legal proceedings if decided adversely to us could result in significant monetary damages penalties and reputational harm and will likely involve significant defense and other costs We have entered into indemnification agreements with each of our directors and certain of our officers and our bylaws require us to indemnify each of our directors and officers Further our insurance may not cover all claims that have been or may be brought against us and insurance coverage may not continue to be available to us at a reasonable cost As a result we may be exposed to substantial uninsured liabilities including pursuant to our indemnification obligations which could adversely affect our business prospects results of operations and financial condition
Security breaches or incidents may compromise the integrity of our or our customers systems solutions offerings services applications data or intellectual property harm our reputation damage our competitiveness create additional liability and adversely impact our financial results
As we digitize Autodesk and use cloud and web based technologies to leverage customer data to deliver the total customer experience we are exposed to increased security risks and the potential for unauthorized access to or improper use disclosure or other processing of our and our customers information Like other software offerings and systems ours are vulnerable to security breaches and incidents including those from acquired companies Also our ability to mitigate the risk of security breaches and incidents may be impacted by our limited control over our customers or third party technology providers and vendors or the processing of data by third party technology providers and vendors which may not allow us to maintain the integrity or security of such transmissions or processing We devote significant resources in an effort to maintain the security and integrity of our systems offerings services and applications online mobile and desktop Despite these efforts we have been subject to security breaches and incidents and we face the risks of them occurring in the future as well as the risks of delays and other difficulties in identifying responding to or remediating security breaches or incidents
Hackers regularly have targeted our systems offerings services and applications and we expect them to do so in the future To date we have not considered any such identified security events as material to us including to our reputation or business operations or had a material financial impact but there can be no assurance that future cyberattacks will not be material or otherwise significant Security breaches or incidents disrupt the proper functioning of our systems solutions offerings applications or services cause errors in the output of our customers work allow unauthorized access to or unauthorized use disclosure modification loss unavailability or destruction of sensitive data or intellectual property including proprietary or confidential information of ours or our customers or cause other destructive or disruptive outcomes The risk of a security incident particularly through cyber attack or cyber intrusion including by computer hackers foreign governments and cyber terrorists has increased as the number intensity and sophistication of attempted attacks and intrusions from around the world have increased These threats include among others identity theft unauthorized access DNS attacks wireless network attacks viruses and worms malware bugs vulnerabilities advanced persistent threats application centric attacks peer to peer attacks social engineering phishing credential stuffing malicious file uploads backdoor trojans supply chain attacks ransomware attacks and distributed denial of service attacks In addition third parties may attempt to fraudulently induce our employees vendors partners customers or users to disclose information to gain access to our data or our customers or users data and there is the risk of employee contractor or vendor error or malfeasance These existing risks are compounded given the shift in recent years to work from home arrangements for a large population of employees and contractors as well as employees and contractors of our third party technology providers and vendors and the risks could also be elevated in connection with the ongoing wars between Ukraine and Russia and between Israel and Hamas as we and our third party technology providers and vendors are vulnerable to a heightened risk of cyberattacks from or affiliated with nation state actors including retaliatory attacks from Russian actors against U S based companies Additionally these threats continue to evolve in sophistication and volume and are difficult to detect and predict due to advances in electronic warfare techniques advances in cryptography and other technologies including AI and machine learning Our use of AI may also increase our risks of being subject to a security breach or incident Despite our significant efforts to create security barriers to such threats we cannot entirely mitigate these risks and there is no guarantee that inadvertent or unauthorized use or disclosure of such information will not occur or that third parties will not gain unauthorized access to such information
Many governments have enacted laws requiring companies to provide notice of security breaches or incidents involving certain types of personal data and personal information We are also contractually required to notify certain customers of certain security breaches or incidents Any security breach or incident suffered or believed to have been suffered by us or by our technology providers or vendors could result in harm to our reputation and competitive position difficulty attracting new customers including government customers retaining existing customers and securing payment from customers our expenditure of significant capital and other resources to evaluate and alleviate the security incident and to try to prevent further or additional incidents and regulatory inquiries investigations and other proceedings private claims demands lawsuits potential liability and the potential loss of our authorization under the Federal Risk and Authorization Management Program FedRAMP We could incur significant costs and liabilities including due to litigation indemnity obligations damages for contract breach penalties for violation of applicable laws or regulations and costs for remediation and other incentives offered to customers or other business partners in an effort to maintain business relationships after a security breach or incident and our financial performance could be negatively impacted
We cannot assure you that any limitations of liability provisions in our contracts would be enforceable or adequate or would otherwise protect us from any liabilities or damages with respect to any particular claim relating to a security incident We also cannot be sure that our existing insurance coverage will continue to be available on acceptable terms or will be available in sufficient amounts to cover one or more large claims related to a security incident or that the insurer will not deny coverage as to any future claim The successful assertion of one or more large claims against us that exceed available insurance coverage or the occurrence of changes in our insurance policies including premium increases or the imposition of large deductible or co insurance requirements could have a material adverse effect on our business including our financial condition operating results and reputation
We use third party open source software From time to time companies that use third party open source software have faced claims challenging the use of such open source software and compliance with the open source software license terms Accordingly we may be subject to suits by parties claiming ownership of what we believe to be open source software or claiming non compliance with the applicable open source licensing terms Some open source software licenses require end users who distribute or make available across a network software and services that include open source software to make publicly available or to license all or part of such software which in some circumstances could include valuable proprietary code such as modifications or derivative works created based upon incorporating or using the open source software under
the terms of the particular open source license While we employ practices designed to monitor our compliance with the licenses of third party open source software and protect our valuable proprietary source code we may inadvertently use third party open source software in a manner that exposes us to claims of non compliance with the terms of the applicable license including claims of intellectual property rights infringement or for breach of contract Furthermore there exists today an increasing number of types of open source software licenses almost none of which have been tested in courts of law to provide clarity on their proper legal interpretation If we were to receive a claim of non compliance with the terms of any of these open source licenses we may be required to publicly release certain portions of our proprietary source code We could also be required to expend substantial time and resources to re engineer some or all of our software Any of the foregoing could materially adversely affect our business financial condition results of operations and prospects
In addition the use of third party open source software typically exposes us to greater risks than the use of third party commercial software because open source licensors generally do not provide warranties or controls on the functionality or origin of the software Use of open source software may also present additional security risks because the public availability of such software may make it easier for hackers and other third parties to determine how to compromise our platform Any of the foregoing could materially adversely affect our business financial condition results of operations and prospects and could help our competitors develop products and services that are similar to or better than ours
We rely on third parties to provide us with a number of operational and technical services third party security incidents could result in the loss of our or our customers data expose us to liability harm our reputation damage our competitiveness and adversely impact our financial results
We rely on third parties such as Amazon Web Services to provide us with operational and technical services These third parties may have access to our systems provide hosting services or otherwise process data about us or our customers employees or partners Our ability to monitor such third parties security measures is limited There have been and may continue to be significant supply chain attacks and we cannot guarantee that our or our such third parties systems have not been breached or otherwise compromised or that they do not contain exploitable defects bugs or vulnerabilities that could result in an incident breach or other disruption to our or these third parties systems Any security breach or incident involving such third parties could compromise the integrity or availability of or result in the theft
or unauthorized use modification or other processing of our and our customers data In addition our operations or the operations of our customers or partners could be negatively affected in the event of a security breach or incident and could be subject to the loss or theft of confidential or proprietary information including source code Unauthorized access to or other processing of data and other confidential or proprietary information may be obtained through break ins network breaches by unauthorized parties employee theft or misuse or other misconduct If any of the foregoing were to occur or to be perceived to occur our reputation may suffer our competitive position may be diminished customers may buy fewer of our offerings and services we could face lawsuits regulatory investigation fines and potential liability and our financial results could be negatively impacted
From time to time we may rely on a single or limited number of suppliers or upon suppliers in a single country for the provision of services and materials that we use in the operation of our business and production of our solutions Inability of such third parties to satisfy our requirements could disrupt our operations or make it more difficult for us to implement our strategy If any of these situations were to occur our reputation could be harmed we could be subject to third party liability including under laws relating to privacy data protection and information security in certain jurisdictions and our financial results could be negatively impacted
We are investing in resources to update and improve our information technology systems to digitize Autodesk and support our customers Should our investments not succeed or if delays or other issues with new or existing information technology systems disrupt our operations our business could be harmed
We rely on our network and data center infrastructure technology systems and websites for our development marketing operational support sales accounting and financial reporting activities We continually invest resources to update and improve these systems to meet the evolving requirements of our business and customers In particular our transition to cloud based products and a subscription only business model involves considerable investment in the development of technologies as well as back office systems for technical financial compliance and sales resources Such improvements are often complex costly and time consuming In addition such improvements can be challenging to integrate with our existing technology systems or may uncover problems with those systems Unsuccessful implementation of hardware or software updates and improvements
could result in disruption in our business operations loss of customers loss of revenue errors in our accounting and financial reporting or damage to our reputation all of which could harm our business
Our software solutions are highly complex and may contain undetected errors defects or vulnerabilities and are subject to service disruptions degradations outages or other performance problems each of which could harm our business and financial performance
The software solutions that we offer are complex and despite extensive testing and quality control may contain errors defects or vulnerabilities Some errors defects or vulnerabilities in our software solutions may only be discovered after they have been released In addition we have experienced and may in the future experience service disruptions degradations outages and other performance problems in connection with our software solutions
Any errors defects vulnerabilities service disruptions degradations outages or other performance problems could result in the need for corrective releases to our software solutions damage to our reputation damage to our customers businesses loss of revenue an increase in subscription cancellations or lack of market acceptance of our offerings any of which would likely harm our business and financial performance
If we do not maintain good relationships with the members of our distribution channel or if our distribution channel suffers financial losses becomes financially unstable or insolvent or is not provided the right mix of incentives to sell our subscriptions our ability to generate revenue will be adversely affected
We sell our software products both directly to end users and through a network of distributors and resellers For fiscal 2025 and 2024 approximately 58 and 63 respectively of our revenue was derived from indirect channel sales primarily through distributors and resellers Our ability to effectively distribute our solutions depends in part upon the financial and business condition of our distributor and reseller network Computer software distributors and resellers typically are not highly capitalized and have previously experienced difficulties during times of economic contraction as well as during the past several years We have processes to ensure that we assess the creditworthiness of distributors and resellers prior to our sales to them In the past we have taken steps to support them and may take additional steps in the future such as extending credit terms and adjusting our incentives These steps if taken could harm our financial results If our distributors and resellers were to become insolvent they would not be able to maintain their business and sales or provide customer support services which would negatively impact our business and revenue
We rely significantly upon major distributors and resellers in both the U S and international regions Of our distributors TD Synnex accounted for 33 and 39 of our total net revenue for fiscal 2025 and 2024 respectively and Ingram Micro Inc Ingram Micro accounted for 5 and 7 of our total net revenue for fiscal 2025 and 2024 respectively During October 2022 we entered into a transition agreements with each of TD Synnex and Ingram Micro to provide transition distribution activities for a one to two year period with potential extensions In connection with such transition agreements we intend to increase our selling efforts with resellers and agents During the transition period we believe the resellers and end users who currently purchase our products through TD Synnex and Ingram Micro will be able to continue to do so and following the transition period we believe such end users will be able to continue to purchase our products from certain resellers or directly from Autodesk in each case under substantially the same terms and without substantial disruption to our revenue However if during the transition period TD Synnex or Ingram Micro were to experience a significant business disruption or if our relationship with either were to significantly deteriorate it is possible that our ability to sell to end users would at least temporarily be negatively impacted Also if any of our assumptions about our end users resellers distributors or agents or our direct selling capabilities proves incorrect these changes could harm our business
Over time we have modified and especially during the transition process noted above will continue to modify aspects of our relationship with our distributors and resellers such as their incentive programs pricing to them and our distribution model to motivate and reward them for aligning their businesses with our strategy and business objectives Changes in these relationships and underlying programs could negatively impact their business and harm our business Further our distributors and resellers may lose confidence in our business move to competitive products or not have the skills or ability to support customers The loss of or a significant reduction in business with those distributors or resellers could harm our business In particular if one or more of such distributors or resellers were unable to meet their obligations with respect to accounts payable to us we could be forced to write off such accounts and may be required to delay the recognition of revenue on future sales to these customers These events could have a material adverse effect on our financial results
Many of our products are designed to include software licensed from third parties Such third party software includes software licensed from commercial suppliers and under public open source licenses While we have internal processes to manage our use of such third party software if such processes are inadequate we may be subject to copyright infringement or other third party claims If we are non compliant with a license for commercial software we may be required to pay penalties or undergo costly audits pursuant to the license agreement In the case of open source software licensed under certain copyleft licenses the license itself or a court imposed remedy for non compliant use of the open source software may require that proprietary portions of our own software be publicly disclosed or licensed This could result in a loss of intellectual property rights increased costs re engineering of our software damage to our reputation or loss of revenue
In addition to risks related to license requirements usage of open source software can lead to greater risks than use of third party commercial software as open source licensors generally do not provide warranties support indemnities assurances of title or controls on origin of the software or other contractual protections regarding infringement claims or the quality of the code Likewise some open source projects have known security and other vulnerabilities and architectural instabilities or are otherwise subject to security attacks due to their wide availability and are provided on an as is basis
Our success and ability to invest and grow depend largely on our ability to attract and retain highly skilled technical professional managerial sales and marketing personnel Historically competition for these key personnel has been intense The loss of services of any of our key personnel including key personnel joining our company through acquisitions inability to retain and attract qualified employees in the future or delays in hiring required personnel particularly engineering and sales personnel including sales leadership personnel could make it difficult to meet key objectives such as timely and effective product introductions and financial goals
We rely on certain software that we license from third parties including software that is integrated with internally developed software and used in our offerings to perform key functions These third party software licenses may not continue to be available on commercially reasonable terms and the software may not be appropriately supported maintained or enhanced by the licensors The loss of licenses to or inability to support maintain and enhance any such software could result in increased costs or delays until equivalent software can be developed identified licensed and integrated which would likely harm our business
We license certain key technologies from third parties Licenses may be restricted in the term or the use of such technology in ways that negatively affect our business Similarly we may not be able to obtain or renew license agreements for key technology on favorable terms if at all and any failure to do so could harm our business Our business strategy has historically depended in part on our relationships with third party developers who provide products that expand the functionality of our design software Some developers may elect to support other products or may experience disruption in product development and delivery cycles or financial pressure during periods of economic downturn In particular markets such disruptions have in the past and would likely in the future negatively impact these third party developers and end users which could harm our business
Technology created by outsourced product development whether outsourced to third parties or developed externally and transferred to us through business or technology acquisitions involves additional risks such as effective integration into existing products adequate transfer of technology know how and ownership and protection of transferred intellectual property
Our strategy to digitize Autodesk involves increasing our use of cloud and web based technologies and applications to leverage customer data to improve our offerings for the benefit of our customers To accomplish this strategy we must collect and otherwise process customer data which may include personal data and personal information of users from different jurisdictions globally We also collect and otherwise process personal data and personal information of our employees and contractors As a result federal state and global laws relating to privacy data protection and information security apply to Autodesk s personal data and personal information processing activities The scope of these laws and regulations is rapidly evolving subject to differing interpretations may be inconsistent among jurisdictions or conflict with other rules and is likely to remain uncertain for the foreseeable future We also expect that there will continue to be new laws regulations and industry standards concerning privacy data protection and information security proposed and enacted in various jurisdictions Globally laws such as the General Data Protection Regulation EU 2016 679 GDPR in the European Union EU and the Personal Information Protection Law PIPL in China have been enacted and numerous other countries have proposed or have enacted laws concerning privacy data protection and information security In addition new and emerging state laws in the United States governing privacy data protection and information security such as the California Consumer Privacy Act CCPA the California Privacy Rights Act CPRA and numerous laws in other states many of which provide for obligations similar to the CCPA and CPRA have been enacted These laws and regulations as well as industry self regulatory codes industry standards and other actual and asserted obligations to which we are or may be asserted to be subject create new compliance obligations and substantially expand the scope of potential liability and provide greater penalties for non compliance For example the GDPR provides for penalties of up to 20 million or 4 of a company s annual global revenue whichever is greater the PIPL provides for penalties of up to 50 million renminbi or 5 of a company s annual revenue and disgorgement of all illegal gains whichever is greater and the CCPA provides for penalties of up to 7 500 per violation These laws regulations and codes may also impact our innovation and business drivers in developing new and emerging technologies e g AI and machine learning These requirements among others may impact demand for our offerings and force us to bear the burden of expanded obligations in our contracts
In addition there is continued instability of international personal data transfer legal mechanisms that are complex uncertain and subject to active litigation and enforcement actions in a number of jurisdictions around the world
For example on June 4 2021 the European Commission published a new set of modular standard contractual clause SCCs which became effective on June 29 2021 The SCCs impose on companies obligations relating to personal data transfers including the obligation to conduct a transfer impact assessment and depending on a party s role in the transfer to implement additional security measures and to update internal privacy practices We may in addition to other impacts be required to expend significant time and resources to update our contractual arrangements and to comply with new obligations and we face exposure to regulatory actions substantial fines and injunctions in connection with transfers of personal data from the EU or other regions
In addition the United Kingdom s UK exit from the EU and ongoing developments in the UK have created uncertainty with regard to data protection regulation in the UK Personal data processing in the UK is governed by the UK General Data Protection Regulation and supplemented by other domestic data protection laws such as the UK Data Protection Act 2018 which authorizes fines of up to 17 5 million or 4 of annual global revenue whichever is higher We are also exposed to potentially divergent enforcement actions for certain violations Furthermore the new SCCs apply only to the transfer of personal data outside the EU and not the UK Although the European Commission adopted an adequacy decision for the UK on June 28 2021 allowing the continued flow of personal data from the EU to the UK this decision will be regularly reviewed going forward and may be revoked if the UK diverges from its current adequate data protection laws following its exit from the EU On February 2 2022 the UK s Information Commissioner s Office issued new standard contractual clauses to support personal data transfers out of the UK UK SCCs which became effective March 21 2022 Following issuance of a U S executive order a new framework the EU U S Data Privacy Framework DPF was created Following an adequacy decision issued by the European Commission on July 10 2023 the DPF along with a UK extension to the DPF that allows the transfer of personal data from the UK to the U S the UK DPF Extension and the Swiss U S Data Privacy Framework Swiss U S DPF are available for companies to make use of to legitimize personal data transfers to the U S from the European Economic Area Switzerland and UK We have certified to the U S Department of Commerce that we adhere to the DPF UK DPF Extension and Swiss U S DPF However the DPF has been subject to a legal challenge and it the UK DPF Extension and the Swiss U S DPF may be subject to legal challenges in the future from privacy advocacy groups or others Further the European Commission s adequacy decision regarding the EU U S DPF provides that the EU U S DPF will be subject to future reviews and may be subject to suspension amendment repeal or limitations to its scope by the European Commission We may in addition to other impacts experience additional costs associated with increased compliance burdens and be required to engage in new contract negotiations with third parties that aid in processing personal data on our behalf or localize certain personal data
Further several European data protection authorities have indicated that the use of Google Analytics by European website operators involves the unlawful transfer of personal data to the United States As the enforcement landscape further develops
and depending on the impacts of these rulings and other developments with respect to cross border data transfer we could suffer additional costs complaints and or regulatory investigations or fines have to stop using certain tools and vendors and make other operational changes
Several other countries including China Australia New Zealand Brazil and Japan have also established specific legal requirements for cross border data transfers There is also an increasing trend towards data localization policies For example China and India have introduced localization requirements for certain data Other countries also are considering data localization requirements If this trend continues and countries implement more restrictive regulations for cross border personal data transfers or do not permit personal data to leave the country of origin it could affect the manner in which we provide our services the geographical location or segregation of our relevant systems and operations and our business financial condition and results of operations in those jurisdictions could be impacted
In addition the CPRA and many other new state laws addressing privacy and information security including those that have become or will become effective in 2025 provide for additional obligations such as data minimization and storage limitations granting additional rights to consumers such as correction of personal information and additional opt out rights
make additional modifications and to incur substantial costs and expenses in our efforts to comply Laws in all 50 states and some of our contracts require us to provide notice under certain circumstances to customers whose personal information has been disclosed as a result of a data breach Also if third parties we work with such as suppliers violate applicable data protection laws or regulations such violations may also put our users information at risk and could materially adversely affect our business financial condition results of operations and prospects Additionally in addition to government activity privacy advocacy groups and technology and other industries are considering various new additional or different self regulatory standards that may place or be asserted to place additional burdens on us Evolving legislation and the interplay of federal and state laws may be subject to varying interpretations by courts and government agencies creating complex compliance issues and have and may cause variation in requirements increase restrictions and potential legal risk and impact strategies and the availability of previously useful data potentially exposing us to additional expense adverse publicity and liability
In the EU and the UK regulators are increasingly focusing on compliance with requirements in the online behavioral advertising ecosystem and current national laws that implement the ePrivacy Directive are likely to be replaced by an EU regulation known as the ePrivacy Regulation which is expected to significantly increase fines for non compliance While the text of the ePrivacy Regulation is under development recent European case law and regulators recent guidance are driving increased attention to cookies and tracking technologies This could lead to substantial costs require significant system changes limit the effectiveness of our marketing activities divert the attention of our technology personnel adversely affect our margins increase costs and subject us to additional liabilities Regulation of cookies and similar technologies and any decline of cookies or similar online tracking technologies as a means to identify and potentially target users may lead to broader restrictions and impairments on our marketing and personalization activities and may negatively impact our efforts to understand our customers
Governments regulators plaintiffs attorneys and privacy advocates have increased their focus on how companies collect use store share transmit and otherwise process personal data and personal information Any perception of our practices products offerings or services as a violation of individual privacy or data protection rights may subject us to public criticism lawsuits reputational harm or investigations claims demands or other proceedings by regulators industry groups or other third parties all of which could disrupt or adversely impact our business and expose us to fines penalties and other liabilities Moreover because the interpretation and application of many laws regulations and other actual and asserted obligations relating to privacy data protection and cybersecurity are uncertain it is possible that these laws regulations and obligations may be interpreted and applied in a manner that is inconsistent with our practices or the features of our products offerings and services We could be required to fundamentally change our business activities and practices or modify our offerings and services any of which could require significant additional expense and adversely affect our business including impacting our ability to innovate delaying our development roadmap and adversely affecting our relationships with customers and our ability to compete If we are obligated to fundamentally change our business activities and practices or modify our products offerings or services we may be unable to make such changes and modifications in a commercially reasonable manner or at all and our ability to develop new products offerings and services could be limited
Our offerings are subject to export controls and economic sanctions laws and regulations that prohibit the delivery of certain solutions and services without the required export authorizations or the export to locations governments and persons
targeted by applicable sanctions While we have processes to prevent our offerings from being exported in violation of these laws including obtaining authorizations as appropriate and screening against U S government and international lists of restricted and prohibited persons we cannot guarantee that these processes will prevent all violations of export controls and sanctions laws and regulations
If our channel partners fail to obtain appropriate import export or re export licenses or permits we may also be adversely affected through reputational harm as well as other negative consequences including government investigations and penalties We presently incorporate export controls and sanctions compliance requirements in our channel partner agreements Complying with export controls and sanctions laws and regulations for a particular sale may be time consuming and may result in the delay or loss of sales opportunities Violations of applicable sanctions or export control laws or regulations can result in fines or penalties
We rely on a combination of patent copyright and trademark laws trade secret protections confidentiality procedures and contractual provisions to protect our proprietary rights However the steps we take to protect our intellectual property rights may be inadequate While we have patent applications pending in the United States and throughout the world we may be unable to obtain patent protection for the technology covered in our patent applications In addition any patents issued to us in the future may not provide us with competitive advantages or may be successfully challenged by third parties Furthermore legal standards relating to the validity enforceability and scope of protection of intellectual property rights are uncertain Despite our efforts to protect our proprietary rights unauthorized parties from time to time have copied or reverse engineered aspects of our software or have obtained and used information that we regard as proprietary Policing unauthorized use of our software is time consuming and costly We are unable to measure the extent to which unauthorized use of our software exists and we expect that unauthorized use of software will remain a persistent problem particularly in emerging economies
Additionally we actively protect the secrecy of our confidential information and trade secrets including our source code If unauthorized disclosure of our source code occurs we could potentially lose future trade secret protection for that source code Unauthorized disclosure of our source code could make it easier for third parties to compete with our offerings by copying functionality which could adversely affect our financial performance and our reputation We also seek to protect our confidential information and trade secrets through the use of non disclosure agreements with our employees customers contractors vendors and partners However it is possible that our confidential information and trade secrets may be disclosed or published without our authorization If this were to occur it may be difficult and or costly for us to enforce our rights and our financial performance and reputation could be negatively impacted
Our competitors as well as a number of other entities and individuals may own or claim to own intellectual property relating to our business Third parties may claim that we are infringing upon or misappropriating their intellectual property rights and we may be found to be infringing upon such rights even if we are unaware of the intellectual property rights claimed against us As more software patents are granted worldwide the number of offerings and competitors in our industries grows and the functionality of products in different industries overlaps we expect that software developers will be increasingly subject to infringement claims Additionally certain patent assertion entities have become more aggressive in threatening and pursuing litigation in attempts to obtain fees for licensing the right to use patents
Any claims or threats of infringement or misappropriation whether with or without merit have been and could in the future be time consuming to defend result in costly litigation and diversion of resources cause product delays require us to change our products or business practices prevent us from offering our software and services or require us to enter into royalty or licensing agreements In addition such royalty or license agreements if required may not be available on acceptable terms if at all which would likely harm our business We may also be obligated to indemnify our customers or business partners or pay substantial settlement costs including royalty payments in connection with any such claim or litigation and to obtain licenses modify applications or refund fees which could be costly Furthermore from time to time we may introduce or acquire new products including in areas where we historically have not competed which could increase our exposure to patent and other intellectual property claims
We provide products and services directly and indirectly to a variety of government entities Risks associated with licensing and selling products and services to government entities include extended sales and collection cycles varying governmental budgeting processes and adherence to complex procurement regulations and other government specific contractual requirements which are subject to change by the government and which may require significant upfront cost time and resources with no assurance that we will secure contracts with government entities Furthermore government certification requirements applicable to our platform including FedRAMP may change and in doing so restrict our ability to sell into the governmental sector until we have attained the full or revised certification Governmental entities may also have statutory contractual or other legal rights to terminate contracts with us or our partners for convenience or for other reasons
We have obtained authorization under FedRAMP for certain offerings which facilitates our entry into the U S federal government market Such certification is subject to rigorous compliance and if we lose our certification it could inhibit or preclude our ability to contract with certain U S federal government customers In addition some customers may rely on our authorization under FedRAMP to help satisfy their own legal and regulatory compliance requirements and our failure to maintain FedRAMP authorization might result in a breach under public sector contracts obtained on the basis of such authorization This could subject us to liability result in reputational harm and adversely impact our financial condition or operating results
We may be subject to audits and investigations relating to our government contracts and any violations could result in civil and criminal penalties and administrative sanctions including termination of contracts payment of fines and suspension or debarment from future government business as well as harm to our reputation and financial results
Because we conduct a substantial portion of our business outside the United States we face exposure to adverse movements in foreign currency exchange rates which could have a material adverse impact on our financial results and cash flows These exposures may change over time as business practices evolve and economic conditions change We use derivative instruments to manage a portion of our cash flow revenue and expense exposure to fluctuations in foreign currency exchange rates As part of our risk management strategy we use foreign currency contracts to manage a portion of our exposures of underlying assets liabilities and other obligations which exist as part of our ongoing business operations These foreign currency instruments may have maturities that extend for one to 18 months in the future and provide us with some protection against currency exposures However our attempts to hedge against these risks may not be completely successful resulting in an adverse impact on our financial results
The fluctuations of currencies in which we conduct business can both increase and decrease our overall revenue and expenses for any given period Although our foreign currency cash flow hedge program extends beyond the current quarter in order to reduce our exposure to foreign currency volatility we do not attempt to completely mitigate this risk and in any case will incur transaction fees in adopting such hedging programs Such volatility even when it increases our revenues or decreases our expenses impacts our ability to accurately predict our future results and earnings
In addition global events including geopolitical and economic developments may contribute to volatility in foreign exchange markets which we may not be able to effectively manage and our financial results could be adversely impacted Additionally countries in which we operate may be classified as highly inflationary economies requiring special accounting and financial reporting treatment for such operations or such countries currencies may be devalued or both which may adversely impact our business operations and financial results
We have 2 30 billion of principal debt consisting of notes due at various times from June 2025 to December 2031 as of January 31 2025 as described in Part II Item 8 We also entered into a credit agreement that provides for an unsecured revolving loan facility in the aggregate principal amount of 1 5 billion with an option to be increased up to 2 0 billion as described in Part II Item 8 Maintenance of our indebtedness contractual restrictions and additional issuances of indebtedness could
due to limitations within the debt instruments restrict our ability to grant liens on property enter into certain mergers dispose of all or substantially all of the assets of Autodesk and its subsidiaries taken as a whole materially change our business and incur subsidiary indebtedness subject to customary exceptions
We are required to comply with the covenants set forth in our credit agreement If we breach any of the covenants and do not obtain a waiver from the note holders or lenders then subject to applicable cure periods we would not be able to incur additional indebtedness under the credit agreement described in Part II Item 8 and any outstanding indebtedness under the credit agreement may be declared immediately due and payable In addition changes by any rating agency to our credit rating may negatively impact the value and liquidity of our securities Under certain circumstances if our credit ratings are downgraded or other negative action is taken the interest rate payable by us under our credit agreement could increase Downgrades in our credit ratings could also restrict our ability to obtain additional financing in the future and could affect the terms of any such financing
Our investment portfolio consists of a variety of investment vehicles that are subject to interest rate trends market volatility and other economic factors If general economic conditions decline this could cause the credit ratings of our investments to deteriorate and illiquidity in the financial marketplace and we may experience a decline in interest income and an inability to sell our investments leading to impairment in the value of our investments
It is our policy to invest our cash cash equivalents and marketable securities in highly liquid instruments with and in the custody of financial institutions with high credit ratings and to limit the amounts invested with any one institution type of security or issuer However we are subject to general economic conditions interest rate trends and volatility in the financial marketplace that can affect the income that we receive from our investments the net realizable value of our investments including our cash cash equivalents and marketable securities and our ability to sell them Any one of these factors could reduce our investment income or result in material charges which in turn could impact our overall net income loss and earnings loss per share
From time to time we make direct investments in privately held companies Investments in privately held companies are considered inherently risky The technologies and products these companies have under development are typically in the early stages and may never materialize which could result in a loss of all or a substantial part of our initial investment in these companies The evaluation of privately held companies is based on information that we request from these companies which is not subject to the same disclosure regulations as U S publicly traded companies and as such the basis for these evaluations is subject to the timing and accuracy of the data received from these companies
In any of these scenarios our liquidity may be negatively impacted which in turn may prohibit us from making investments in our business taking advantage of opportunities and potentially meeting our financial obligations as they come due
We are a U S based multinational company subject to tax in multiple U S and foreign tax jurisdictions Our effective tax rate is primarily based on our geographic mix of earnings statutory rates stock based compensation intercompany arrangements including the manner we develop value and license our intellectual property and enacted tax rules Significant judgment is required in determining our effective tax rate and in evaluating our tax positions on a worldwide basis While we believe our tax positions including intercompany transfer pricing policies are consistent with the tax laws in the jurisdictions in which we conduct our business it is possible that these positions may be challenged by tax authorities and if our positions are not sustained may have a significant impact on our effective tax rate and cash taxes
Tax laws in the United States and in foreign tax jurisdictions are dynamic and subject to change as new laws are passed and new interpretations of the law are issued or applied Due to the complexity and varying interpretations of new and existing tax laws the U S Department of Treasury and other standard setting bodies have issued and will continue to issue regulations and interpretative guidance that could significantly impact how we will apply the law and the ultimate effect on our results of operations including for our prior tax years
Increasingly tax authorities are reviewing existing corporate tax regulatory and legal regimes Many countries are actively considering or implementing new taxing regimes and changes to existing tax laws This could include U S and foreign tax law developments related to changes to long standing tax principles arising from proposals made by the Organisation for Economic Co operation and Development that seek to allocate greater taxing rights to countries where customers are located and establish a global minimum tax rate of 15 If U S or foreign tax authorities change applicable tax laws or successfully challenge how or where our profits are currently recognized our overall taxes could increase and our business financial condition or results of operations may be adversely impacted
If we were required to record an impairment charge related to the value of our long lived assets or an additional valuation allowance against our deferred tax assets our results of operations would be adversely affected
Our long lived assets are tested for impairment if indicators of impairment exist If impairment testing shows that the carrying value of our long lived assets exceeds their estimated fair values we would be required to record a non cash impairment charge which would decrease the carrying value of our long lived assets adversely affecting our results of operations Our deferred tax assets include net operating loss amortizable tax assets and tax credit carryforwards that can be used to offset taxable income and reduce income taxes payable in future periods Each quarter we assess the need for a valuation allowance considering both positive and negative evidence to determine whether all or a portion of the deferred tax assets are more likely than not to be realized
We continue to have a valuation allowance against certain U S and foreign deferred tax assets Changes in the amount of the U S and foreign jurisdictions valuation allowance could also result in a material non cash expense or benefit in the period in which the valuation allowance is adjusted and our results of operations could be materially affected We will continue to perform these tests on our worldwide deferred tax assets and any future adjustments to the realizability of our deferred tax assets may have a material effect on our financial condition and results of operations
Our business is highly automated and relies extensively on the availability of our network and data center infrastructure our internal technology systems and our websites We also rely on hosted computer services from third parties for services that we provide to our customers and computer operations for our internal use The failure of our systems or hosted computer services due to a catastrophic event such as an earthquake fire flood tsunami weather event other climate related events such as drought water security heat waves cold waves and poor air quality telecommunications failure power failure cyber attack terrorism or war including the ongoing wars between Ukraine and Russia and between Israel and Hamas and any related political or economic responses and counter responses or otherwise by various global actors or the general effect on the global economy or business interruption from epidemics or pandemics or the fear of such events could adversely impact our business financial results and financial condition For example our corporate headquarters and executive offices are located near major seismic faults in the San Francisco Bay Area and face annual periods of wildfire danger which increase the probability of power outages and may impact employees abilities to commute to work or to work from home We have developed disaster recovery plans and maintain backup systems in order to reduce the potential impact of a catastrophic event however there can be no assurance that these plans and systems would enable us to return to normal business operations In addition any such event could negatively impact a country or region in which we sell our products This could in turn decrease that country s or region s demand for our products negatively impacting our financial results
We are subject to legal proceedings and regulatory inquiries and we may be named in additional legal proceedings or become involved in regulatory inquiries in the future all of which are costly distracting to our core business and could result in an unfavorable outcome or a material adverse effect on our business financial condition results of operations cash flows or the trading prices for our securities
We are involved in legal proceedings and receive inquiries from regulatory agencies As the global economy has changed and our business has evolved we have seen an increase in litigation activity and regulatory inquiries Like many other technology companies the number and frequency of inquiries from U S and foreign regulatory agencies we have received regarding our business and our business practices as well as the business practices of others in our industry have increased in recent years In the event we are involved in significant disputes or are the subject of a formal action by a regulatory agency we could be exposed to costly and time consuming legal proceedings that could result in any number of outcomes Any claims or regulatory actions initiated by or against us whether successful or not could result in high defense costs damage awards injunctive relief increased costs of business fines or orders to change certain business practices significant dedication of management time diversion of operational resources or otherwise harm our business In any such event our financial results results of operations cash flows or trading prices for our securities could be negatively impacted
Changes in existing accounting or taxation rules or practices new accounting pronouncements or taxation rules or varying interpretations of current accounting pronouncements or taxation practices could have a significant adverse effect on our results of operations or the way we conduct our business Further such changes could potentially affect our reporting of transactions completed before such changes are effective
We are required to evaluate our internal control over financial reporting under Section 404 of the Sarbanes Oxley Act of 2002 and any adverse results from such evaluation could result in a loss of investor confidence in our financial reports and have an adverse effect on our stock price
Pursuant to Section 404 of the Sarbanes Oxley Act of 2002 we are required to furnish a report by our management on our internal control over financial reporting including an assessment of the effectiveness of our internal control over financial reporting as of the end of our fiscal year This assessment must include a statement as to whether or not our internal control over financial reporting is effective and disclosure of any material weaknesses in our internal control over financial reporting identified by management If our management or independent registered public accounting firm identifies one or more material weaknesses in our internal control over financial reporting we are unable to assert that our internal control over financial reporting is effective or our independent registered public accounting firm is unable to express an opinion that our internal controls are effective investors could lose confidence in the accuracy and completeness of our financial reports which could have an adverse effect on our business and stock price
In preparing our financial statements we make certain assumptions judgments and estimates that affect amounts reported in our consolidated financial statements which if not accurate may significantly impact our financial results
We make assumptions judgments and estimates for a number of items including revenue recognition for product subscriptions and enterprise business arrangements EBAs the determination of the fair value of acquired assets and liabilities goodwill financial instruments including strategic investments long lived assets and intangible assets the realizability of deferred tax assets and the fair value of stock awards We also make assumptions judgments and estimates in determining the accruals for uncertain tax positions variable compensation partner incentive programs allowances for credit losses asset retirement obligations legal contingencies and operating lease liabilities These assumptions judgments and estimates are drawn from historical experience and various other factors that we believe are reasonable under the circumstances as of the date of the consolidated financial statements Actual results could differ materially from our estimates and such differences could significantly impact our financial results
Autodesk has established policies and processes for assessing treating and managing material risk from cybersecurity threats based on relevant industry standards These policies and processes are reviewed and updated at least annually We have
integrated these processes into our overall risk management systems and processes We routinely assess material risks from cybersecurity threats including any potential unauthorized occurrence on or conducted through our information systems that may adversely affect the confidentiality integrity or availability of our information systems or any information residing therein
We conduct risk assessments penetration tests and other security assessments to identify cybersecurity threats regularly and in the event of a material change in our business practices that may affect information systems potentially vulnerable to such cybersecurity threats These assessments include the identification of reasonably foreseeable internal and external risks the likelihood and potential damage that could result from such risks and the sufficiency of existing policies procedures systems and safeguards in place to manage such risks Risks are then assigned to the appropriate owners for tracking and mitigation
Following these assessments we re design implement and maintain reasonable safeguards when appropriate to minimize identified risks reasonably address any identified gaps in existing safeguards and continually monitor the effectiveness of our safeguards We devote significant resources and designate high level personnel including our Chief Trust Officer who reports to our Chief Technology Officer to manage the risk assessment and mitigation processes
As part of our overall risk management system we monitor and test our safeguards We train our workforce on these safeguards Personnel at all levels and departments are made aware of our cybersecurity policies through required trainings Cybersecurity tabletop exercises are regularly conducted for our executives and for incident response professionals Improvements identified at these tabletop exercises are implemented into our processes
We engage assessors consultants and auditors in connection with our risk assessment processes These outside advisors assist us to design and implement our cybersecurity policies and procedures as well as to monitor and test our safeguards
We require Autodesk s third party service providers and suppliers to implement and maintain appropriate security measures consistent with applicable laws in connection with their work with us and to promptly report any suspected breach of their security measures that may affect our Company
For additional information regarding whether any risks from cybersecurity threats including as a result of any previous cybersecurity incidents have materially affected or are reasonably likely to materially affect our Company including our business strategy results of operations or financial condition please refer to Item 1A Risk Factors in this Annual Report on Form 10 K including the risk factors under the heading Risks Relating to Our Operations
One of the key functions of our board of directors is informed oversight of our risk management process including risks from cybersecurity threats Our board of directors is responsible for monitoring and assessing strategic risk exposure The board s Audit Committee oversees the management of cybersecurity risks relating to financial accounting and internal control matters The full board receives regular updates from our senior management and outside advisors regarding cybersecurity risks Autodesk faces Our Enterprise Risk Management function is responsible for identifying prioritizing and mitigating risks that could limit Autodesk s achievement of its strategic and operational priorities Our executive officers are responsible for the day to day assessment and management of these risks
Our Chief Trust Officer is responsible for assessing and managing material risks from cybersecurity threats Our Chief Trust Officer has more than twenty years of cybersecurity leadership experience including serving in similar roles leading cybersecurity programs at other public companies
Our Chief Trust Officer oversees our cybersecurity policies and processes including those described in Risk Management and Strategy above The processes by which our Chief Trust Officer is informed about and monitors the prevention detection mitigation and remediation of cybersecurity incidents include the following leading Autodesk s Trust program which implements data protection measures and processes across the organization strategic planning of the company s cybersecurity initiatives and objectives cybersecurity risk mitigation efforts managing tools and processes that support security incident monitoring and alerting overseeing security incident response planning managing exercises that test management s response plans and procedures and managing our response to suspected or actual security incidents
Our Chief Trust Officer provides quarterly briefings to the Audit Committee regarding our cybersecurity risks and state of our Trust program including recent cybersecurity incidents and related responses cybersecurity systems testing and data
protection initiatives and metrics Our Audit Committee regularly updates the board of directors on such reports In addition our Chief Trust Officer provides briefings on cybersecurity risks and activities to the board of directors at least annually Our Chief Trust Officer may also brief the board of directors regarding significant cybersecurity incidents
We lease approximately 1 300 000 square feet of office space in 87 locations in the United States and internationally through our foreign subsidiaries Our executive offices and corporate headquarters are in leased office space in San Francisco California Our San Francisco facilities consist of approximately 211 000 square feet under leases that have expiration dates ranging from June 2026 to December 2028 We and our foreign subsidiaries lease additional space in various locations throughout the world for local sales product development and technical support personnel
All facilities are in good condition We believe that our existing facilities and offices are adequate to meet our requirements for the foreseeable future See Part II Item 8 Note 9 Leases in the Notes to Consolidated Financial Statements for more information
We are involved in a variety of claims suits investigations inquiries and proceedings in the normal course of business activities including claims of alleged infringement of intellectual property rights commercial employment tax prosecution of unauthorized use business practices and other matters In our opinion resolution of pending matters is not expected to have a material adverse impact on our consolidated results of operations cash flows or financial position Given the unpredictable nature of legal proceedings there is a reasonable possibility that an unfavorable resolution of one or more such proceedings could in the future materially affect our results of operations cash flows or financial position in a particular period however based on the information known by us as of the date of this filing and the rules and regulations applicable to the preparation of our financial statements any such amount is either immaterial or it is not possible to provide an estimated amount of any such potential loss
In early March 2024 the Audit Committee of Autodesk s Board of Directors commenced an internal investigation with the assistance of outside counsel and advisors regarding the Company s free cash flow and non GAAP operating margin practices the Internal Investigation On March 8 2024 the Company voluntarily contacted the U S Securities and Exchange Commission SEC to inform it of the Internal Investigation On April 3 2024 the United States Attorney s Office for the Northern District of California USAO contacted the Company regarding the Internal Investigation The Company voluntarily provided the SEC and USAO with certain documents relating to the Internal Investigation and will continue to cooperate with the SEC and USAO At this stage the Company cannot reasonably estimate the amount of any possible financial loss that could result from this matter
On April 24 2024 Michael Barkasi filed a purported federal securities class action complaint in the Northern District of California against Autodesk our Chief Executive Officer Andrew Anagnost and our former Chief Financial Officer Deborah L Clifford The complaint which was filed shortly after Autodesk s announcement of the Internal Investigation generally alleges that the defendants made false and misleading statements in violation of Sections 10 b and 20 a of the Securities Exchange Act of 1934 the Exchange Act and Rule 10b 5 promulgated thereunder On July 10 2024 the Court appointed a lead plaintiff in the action and an amended complaint was filed on September 16 2024 The action purports to be brought on behalf of those who purchased or otherwise acquired the Company s securities between February 23 2023 and April 16 2024 and seeks unspecified damages and other relief On November 25 2024 defendants filed a motion to dismiss the complaint At this stage the Company cannot reasonably estimate the amount of any possible financial loss that could result from this matter
In addition on June 7 2024 a purported stockholder derivative complaint was filed in the United States District Court for the Northern District of California naming our directors at the time of the complaint and our Chief Strategy Officer as defendants and our company as a nominal defendant The complaint generally alleges violations of Section 14 a of the Exchange Act and breach of fiduciary duties aiding and abetting breach of fiduciary duties unjust enrichment abuse of control and waste of corporate assets based on similar underlying allegations contained in the purported federal securities class action complaint described above A second purported stockholder derivative complaint naming the same defendants was filed in the Northern District of California on June 25 2024
The complaint in that case generally alleges violations of Section 10 b of the Exchange Act and Rule 10b 5 Section 20 a of the Exchange Act breach of fiduciary duties unjust enrichment abuse of control gross mismanagement waste of corporate assets and contribution also based on similar underlying allegations contained in the purported federal securities class action described above On October 29 2024 the Court consolidated and stayed the two stockholder derivative actions A third purported stockholder derivative complaint naming the same defendants was filed in the District of Delaware on February 14 2025 This complaint generally alleges contribution under Section 10 b of the Exchange Act and Rule 10b 5 Sections 14 a and 20 a of the Exchange Act breach of fiduciary duties for insider
selling and misappropriation of information unjust enrichment abuse of control gross mismanagement and waste of corporate assets also based on similar underlying allegations contained in the purported federal securities class action described above
As of January 31 2025 the number of common stockholders of record was 262 Because many of our shares of common stock are held by brokers or other institutions on behalf of stockholders we are unable to estimate the total number of stockholders represented by the record holders
Our stock repurchase programs provide us with the ability to offset the dilution from the issuance of stock under our employee stock plans and reduce shares outstanding over time and have the effect of returning excess cash generated from our business to stockholders Under the share repurchase programs we may repurchase shares from time to time in open market transactions privately negotiated transactions accelerated share repurchase programs tender offers or by other means The share repurchase programs do not have an expiration date and the pace and timing of repurchases will depend on factors such as cash generation from operations available surplus the volume of employee stock plan activity remaining shares available in the authorized pool cash requirements for acquisitions economic and market conditions stock price and legal and regulatory requirements
These amounts correspond to the plans publicly announced and approved by the Board of Directors in November 2022 and November 2024 that authorized the repurchase of 5 billion and 5 billion respectively At January 31 2025 3 88 billion and 5 billion remained available for repurchase under the November 2022 and November 2024 repurchase programs respectively The plans do not have a fixed expiration date
The following graph shows a five year comparison of cumulative total return equal to dividends plus stock appreciation for our common stock the Standard Poor s 500 Stock Index the Standard Poor s North American Technology Software Index and the Dow Jones U S Software Index The following graph and related information will not be deemed to be soliciting material or to be filed with the SEC nor will such information be incorporated by reference into any filing pursuant to the Securities Act of 1933 or the Securities Exchange Act of 1934 except to the extent that we specifically incorporate it by reference into such filing
Assumes 100 invested on January 31 2020 in Autodesk s stock the Standard Poor s 500 Stock Index Standard Poor s North American Technology Software Index and the Dow Jones U S Software Index with reinvestment of all dividends Total stockholder returns for prior periods are not an indication of future investment returns
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes appearing in Part II Item 8 of this Annual Report on Form 10 K This discussion contains forward looking statements based upon current expectations that involve risks and uncertainties Our actual results may differ materially from those anticipated in these forward looking statements as a result of several factors including those set forth above in Part I Item 1A Risk Factors and elsewhere in this report See Forward Looking Information immediately preceding Part I
Autodesk is changing how the world is designed and made Our technology spans architecture engineering construction product design manufacturing media and entertainment empowering innovators everywhere to solve challenges big and small From greener buildings to smarter products to more mesmerizing blockbusters Autodesk technology helps our customers to design and make a better world for all
Our strategy is to drive customer workflow convergence by delivering a trusted design and make platform that connects people through automation data and insights to help them achieve better outcomes for their businesses and the world To drive the execution of our strategy we are focused on three strategic priorities build the platform of choice for Design and Make accelerate adoption of Fusion Forma and Flow and transform how customers experience Autodesk
We equip and inspire our users with the tailored tools services and access they need for success today and tomorrow At every step we help users harness the power of data to build upon their ideas and explore new ways of imagining collaborating and creating to achieve better outcomes for their customers for society and for the world And because creativity can t flourish in silos we connect what matters from steps in a project to collaborators on a unified platform
We offer subscriptions for individual products and Industry Collections enterprise business arrangements EBAs and cloud service offerings collectively referred to as subscription plans Subscription plans are designed to give our customers more flexibility with how they use our offerings and to attract a broader range of customers such as project based users and small businesses
Our subscription plans represent a hybrid of desktop software and cloud functionality which provides a device independent collaborative design workflow for designers and their stakeholders Our cloud offerings for example Autodesk Construction Cloud Autodesk Build Fusion Flow Production Tracking AutoCAD web app and AutoCAD mobile app provide tools including mobile and collaboration capabilities to streamline design collaboration building and manufacturing and data management processes We believe that customer adoption of these latest offerings will continue to grow as customers across a range of industries begin to take advantage of the scalable computing power and flexibility provided through these services
Industry Collections provide our customers with access to a broader selection of Autodesk solutions and services simplifying the customers ability to benefit from a complete set of tools for their industry
To support our strategic priority of digital transformation in Architecture Engineering Construction and Operations AECO we are strengthening our AECO solutions foundation with both organic and inorganic investments In the first quarter of fiscal 2025 we acquired Payapps Limited Payapps a leading cloud based software platform for managing construction related payments This acquisition will deepen Autodesk Construction Cloud s footprint and provide a robust payment management offering to serve the needs of general contractors and trade contractors Through automating the application of the payment process Payapps solution provides greater transparency reduces risk and helps accelerate time to payment In fiscal 2024 we launched the first set of capabilities in Autodesk Forma an industry cloud that unifies workflows across the teams that design build and operate the built environment Autodesk Forma s initial capabilities enable the early stage planning and design process with automation and Artificial Intelligence AI powered insights that simplify the exploration of design concepts offload repetitive tasks and help evaluate environmental qualities surrounding a building site In fiscal 2023 we acquired a cloud connected extended reality XR platform enabling AECO professionals to present collaborate and review projects in immersive and interactive experiences from anywhere and at any time This acquisition enables Autodesk to meet increasing needs for augmented reality AR and virtual reality VR technology advancements within the AECO industry and further support AECO customers throughout the project delivery lifecycle
In manufacturing our strategy is to combine organic and acquired software in existing and adjacent verticals to create end to end cloud based solutions for our customers that drive efficiency and sustainability We continue to attract global manufacturing leaders and disruptive startups with our generative design and cloud based Fusion that converges the design process with manufacturing In fiscal 2024 we acquired a provider of simulation technology that enables factory and logistics center operators to optimize their processes In fiscal 2023 we acquired a maker of software for optimizing manufacturing processes with automation and digitization from the shop floor upward that provides a real time system of record for data collection management and analysis
Our strategy includes improving our product functionality and expanding our product offerings through internal development as well as through the acquisition of products technology and businesses Acquisitions often increase the speed at which we can deliver product functionality to our customers however they entail cost and integration challenges and may in certain instances negatively impact our operating margins We continually review these factors in making decisions regarding acquisitions We anticipate that we will continue to acquire products technology and businesses as compelling opportunities become available
We sell our products and services globally through a combination of direct and indirect channels Our direct channels include but are not limited to internal sales resources focused on selling our highly specialized solutions in our largest accounts Solution Providers focused on serving certain Flex and subscription customers through our new transaction model and business transacted through our online Autodesk branded store Our indirect channels primarily include distributors resellers direct market resellers volume channel partners and product specific resellers During fiscal 2023 we entered into transition agreements with certain of our distributors including TD Synnex and Ingram Micro Inc to provide transition distribution activities for a one to two year period In the third fiscal quarter of 2025 we entered into a new distribution agreement with TD Synnex for government business in certain jurisdictions Existing distribution agreements will continue in emerging markets We introduced a new transaction model for our token based Flex offering in North America and certain countries in EMEA and APAC during fiscal 2023 and 2024 Most of our subscription offerings transitioned to the new transaction model in Australia during fiscal 2024 In fiscal 2025 we transitioned most of our indirect business to the new transaction model in our major markets In this new transaction model Solution Providers provide a quote to customers but the actual transaction occurs directly between Autodesk and the customer We expect the change in recognition of sales incentives to indirect channels from contra revenue to operating costs under the new transaction model to positively impact calculated revenue growth while being broadly neutral to calculated operating profit and free cash flow dollars and to result in a calculated negative impact to operating margin See Part II Item 8 Note 2 Revenue Recognition in the Notes to the Consolidated Financial Statements for further detail on the results of our indirect and direct channel sales for the fiscal years ended January 31 2025 2024 and 2023
We anticipate that our channel mix will continue to change as we scale our business With the continued growth of our online Autodesk branded store and our new transaction model we are transacting directly with more end customers rather than through distributors without substantial disruption to our revenue We expect our indirect channel will continue to transact and support a considerable portion of our customers We also expect our transition to annual billings for multi year contracts to impact the timing of our billings and cash collections We employ a variety of incentive programs and promotions to align our direct and indirect channels with our business strategies
We are building a trusted outcome focused platform for critical customer workflows that enables end to end digital transformation for our customers and partners within and between the industries we serve We aim to accelerate these customer workloads by providing granular interoperable and accessible data
We plan to do this by focusing on building the next generation of technology and services as trusted shared capabilities We aim to centralize critical and duplicative capabilities across key offerings These include foundational capabilities to make our offers safer faster easier and globally scalable as well as capabilities that can accelerate new sources of value for our customers
One example of these shared capabilities is Autodesk AI We have been investing in AI for over a decade Our focus is on building AI capabilities that add value to our customers workloads through augmentation automation and analysis
One of our key strategies is to maintain an API based architecture of our software products to facilitate third party development of complementary products and industry specific software solutions This approach enables customers and third parties to customize solutions for a wide variety of highly specific uses We offer several programs that provide strategic investment funding technological platforms user communities technical support forums and events to developers who develop add on applications for our products For example we have established the Autodesk Platform Services to support innovators that build solutions to facilitate the development of a single connected ecosystem for the future of how things are designed made and used
In addition to the competitive advantages afforded by our technology our large global network of distributors resellers Solution Providers third party developers customers educators educational institutions learning partners and students is a key competitive advantage that has been cultivated over an extensive period This network of partners and relationships provides us with a broad and deep reach into volume markets worldwide Our distributor reseller and Solution Provider network is extensive and provides our customers with the resources to purchase deploy learn and support our solutions quickly and easily We have a significant number of registered third party developers who create products that work well with our solutions and extend them to a variety of specialized applications
Autodesk is committed to advancing a more sustainable resilient and inclusive world We take action as a business to support our employees customers and communities in our collective opportunity to design and make a better world for all
We focus our efforts to advance positive outcomes across three primary areas energy and materials health and resilience and work and prosperity These impact opportunity areas informed by the UN Sustainable Development Goals SDGs have been identified through a multi pronged process to align the top needs of our stakeholders the issues most important to our business and the areas we are best placed to accelerate positive impact at scale
We drive positive outcomes across these areas primarily by empowering customers to leverage our technology to design and make net zero carbon buildings resilient infrastructure more sustainable products and cultivate a thriving workforce We advance these opportunities with industry innovators through collaboration philanthropic capital software donations and training
The Autodesk Foundation the Foundation a privately funded 501 c 3 charity organization established and solely funded by us leads our philanthropic efforts The purpose of the Foundation is twofold to support employees to create a better world at work at home and in the community by matching employees volunteer time and donations to nonprofit organizations and to support organizations using design and make solutions to drive positive impact On our behalf the Foundation also administers a discounted software donation program to nonprofit organizations entrepreneurs and others who are developing design solutions that will transform industries and help shape a better world for all
Additional information about our environmental social and governance program is available in our annual impact report on our website at www autodesk com Information contained on or accessible through our website is not part of or incorporated by reference into this report
Our strategy depends upon many assumptions including making our technology available to mainstream markets leveraging our large global network of distributors resellers Solution Providers third party developers customers educators educational institutions learning partners and students improving the performance and functionality of our products and platform and adequately protecting our intellectual property If the outcome of any of these assumptions differs from our expectations we may not be able to implement our strategy which could potentially adversely affect our business For further discussion regarding these and related risks see Part I Item 1A Risk Factors
Our Consolidated Financial Statements are prepared in accordance with U S generally accepted accounting principles In preparing our Consolidated Financial Statements we make assumptions judgments and estimates that can have a significant impact on amounts reported in our Consolidated Financial Statements We evaluate our estimates and assumptions on an ongoing basis We base our assumptions judgments and estimates on historical experience and various other factors that we believe to be reasonable under the circumstances Actual results could differ materially from these estimates under different assumptions or conditions
Our significant accounting policies are described in Part II Item 8 Financial Statements and Supplementary Data Note 1 Business and Summary of Significant Accounting Policies in the Notes to Consolidated Financial Statements An accounting policy is deemed to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made if different estimates reasonably could have been used or if changes in the estimate that are reasonably possible could materially impact the financial statements We believe that of all our significant accounting policies the following accounting policies and specific estimates involve a greater degree of judgment and complexity Accordingly these are the accounting policies we believe are the most critical to aid in fully understanding and evaluating our financial condition and results of operations
Our contracts with customers may include promises to transfer multiple products and services to a customer A performance obligation is a promise in a contract with a customer to transfer products or services that are distinct Determining whether products and services are distinct performance obligations that should be accounted for separately or combined as a single performance obligation may require significant judgment that requires us to assess the nature of the promise and value delivered to the customer and the interaction of the desktop applications and cloud functionalities
For our product subscriptions cloud service offerings and flexible enterprise business arrangements the functional nature of the promise as well as the customers value expectations led us to conclude desktop applications and cloud functionalities are not distinct in the context of the contract and should be accounted for as a single performance obligation There is a high degree of interaction of the desktop applications and cloud functionalities which is not available with the desktop applications alone or in conjunction with third party cloud service providers Furthermore customers are not able to use the desktop applications for its intended purpose without our cloud functionalities
For contracts with more than one performance obligation the transaction price is allocated among the performance obligations in an amount that depicts the relative standalone selling price SSP of each obligation We establish SSP for most of our products and services based on observable prices when sold separately in similar circumstances or to similar customers When products or services are not sold separately we establish SSP based on other observable inputs
The assets acquired and liabilities assumed in a business combination are recorded based on their estimated fair values at the acquisition date with the exception of contract assets and contract liabilities i e deferred revenue which are recognized and measured on the acquisition date in accordance with Autodesk s Revenue Recognition policy in Part II Item 8 Financial Statements and Supplementary Data Note 1 Business and Summary of Significant Accounting Policies Any residual purchase price is recorded as goodwill Accounting for business combinations requires us to make significant estimates and assumptions especially at the acquisition date with respect to intangible assets
Although we believe the assumptions and estimates we have made are reasonable they are based in part on historical experience and information obtained from the management of the acquired companies and are inherently uncertain and unpredictable Unanticipated events and circumstances may occur which may affect the accuracy or validity of such assumptions estimates or actual results Examples of critical estimates used in valuing certain of the acquired intangible assets and in determining their useful lives include but are not limited to
We account for income taxes and the related accounts under the liability method Deferred tax liabilities and assets are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted rates expected to be in effect during the year in which the basis differences reverse We recognize the tax benefit for an uncertain tax position when it meets the more likely than not threshold for recognition We recognize potential accrued interest and penalties related to unrecognized tax benefits as income tax expense
A valuation allowance is recorded to reduce deferred tax assets when management cannot conclude that it is more likely than not that the deferred tax asset will be recovered The valuation allowance is determined by assessing both positive and negative evidence to determine whether it is more likely than not that deferred tax assets are recoverable such assessment is required on a jurisdiction by jurisdiction basis Significant judgment is required in determining whether the valuation allowance should be recorded against deferred tax assets In assessing the need for or release of a valuation allowance we consider all available evidence including past operating results and estimates of future taxable income
As we continually strive to optimize our overall business model tax planning strategies may become feasible and prudent allowing us to realize many of the deferred tax assets that are offset by a valuation allowance therefore we will continue to evaluate the ability to utilize the deferred tax assets each quarter both in the U S and in foreign jurisdictions based on all available evidence both positive and negative
As described in Part I Item 3 Legal Proceedings and Part II Item 8 Financial Statements and Supplementary Data Note 11 Commitments and Contingencies in the Notes to Consolidated Financial Statements we are periodically involved in various legal claims and proceedings We routinely review the status of each significant matter and assess our potential financial exposure If the potential loss from any matter is considered probable and the amount can be reasonably estimated we record a liability for the estimated loss Significant judgment is required to determine both the likelihood of there being and the estimated amount of a loss related to such matters Due to inherent uncertainties related to these matters we base our loss accruals on the best information available at the time Until the final resolution of such matters there may be an exposure to loss in excess of the amount recorded As additional information becomes available we reassess our potential liability and may revise our estimates Such revisions could have a material impact on future quarterly or annual results of operations
See Part II Item 8 Financial Statements and Supplementary Data Note 1 Business and Summary of Significant Accounting Policies in the Notes to Consolidated Financial Statements for a full description of recent accounting pronouncements including the expected dates of adoption and estimated effects on results of operations and financial condition
Remaining performance obligations short term and long term deferred revenue plus unbilled deferred revenue RPO was 6 94 billion an increase of 14 compared to the fourth quarter in the prior fiscal year
We rely significantly upon major distributors and resellers in both the United States and international regions including TD Synnex Corporation and its global affiliates collectively TD Synnex Total revenue from TD Synnex accounted for 33 39 and 37 of Autodesk s total net revenue during fiscal 2025 2024 and 2023 respectively Our customers through TD Synnex are the resellers and end users who purchase our software subscriptions and services During fiscal 2023 we entered into transition agreements with TD Synnex to provide transition distribution activities for a one to two year period with potential extensions In the third fiscal quarter of 2025 we entered into a new distribution agreement with TD Synnex for government business in certain jurisdictions Existing distribution agreements will continue in emerging markets We have increased our selling efforts with Solution Providers in connection with our new transaction model Consequently we believe our business is not substantially dependent on TD Synnex
In order to help better understand our financial performance we use several key performance metrics including recurring revenue and NR3 These metrics are key performance metrics and should be viewed independently of revenue and deferred revenue as these metrics are not intended to be combined with those items We use these metrics to monitor the strength of our recurring business We believe these metrics are useful to investors because they can help in monitoring the long term health of our business Our determination and presentation of these metrics may differ from that of other companies The presentation of these metrics is meant to be considered in addition to not as a substitute for or in isolation from our financial measures prepared in accordance with GAAP Please refer to the Glossary of Terms for the definitions of these metrics in Part I Item 1 Business
1 The acquisition of a business may cause variability in the comparison of recurring revenue in this table above and recurring revenue derived from the revenue reported in the Consolidated Statements of Operations
Changes in the value of the U S dollar may have a significant effect on net revenue total spend income from operations and cash flow in future periods We use foreign currency contracts to reduce the exchange rate effect on a portion of the net revenue of certain anticipated transactions but do not attempt to completely mitigate the impact of fluctuations of such foreign currency against the U S dollar
RPO represents deferred revenue and contractually stated or committed orders under early renewal and multi year billing plans for subscription services license and maintenance for which the associated deferred revenue has not yet been recognized Unbilled deferred revenue is not included as a receivable or deferred revenue on our Consolidated Balance Sheets See Part II Item 8 Note 2 Revenue Recognition for more details on Autodesk s performance obligations
We expect that the amount of RPO will change from quarter to quarter for several reasons including the specific timing duration and size of customer subscription and support agreements the specific timing of customer renewals and foreign currency fluctuations Historically we have had increased EBA sales activity in our fourth fiscal quarter and this seasonality may affect the relative value of our billings RPO and cash collections in the fourth and first fiscal quarters As customers transition from multi year subscription contracts billed upfront to annual billing installments some customers may choose annual contracts instead If this were to occur we would expect it to proportionately reduce the unbilled portion of our total remaining performance obligations and would expect it to impact total RPO growth rates negatively Deferred revenue billings current RPO revenue Non GAAP operating margin and free cash flow would remain broadly unchanged in this scenario
At January 31 2025 we had 2 15 billion in cash cash equivalents and marketable securities Our cash flow from operations increased to 1 61 billion for the fiscal year ended January 31 2025 from 1 31 billion for the fiscal year ended January 31 2024 We repurchased 3 million shares of our common stock for 858 million during fiscal 2025 Comparatively we repurchased 4 million shares of our common stock for 795 million during fiscal 2024 Further discussion regarding the balance sheet and cash flow activities are discussed below under the heading Liquidity and Capital Resources
We believe our investment in cloud products and a subscription business model backed by a strong balance sheet give us a robust foundation to successfully navigate complex geopolitical and global macro economic challenges However material scarcity supply chain disruption and resulting inflationary pressures higher interest rates a global labor shortage ongoing geopolitical conflicts and foreign exchange rate fluctuations may impact our outlook We also expect our transition to annual billings for multi year contracts to impact the timing of our billings and cash collections The extent of the impact of these risks on our business in fiscal 2026 and beyond will depend on several factors some of which are out of our control Further discussion of the potential impacts of these risks on our business can be found in Part I Item 1A Risk Factors
We introduced a new transaction model for our token based Flex offering in North America and certain countries in EMEA and APAC during fiscal 2023 and 2024 Most of our subscription offerings transitioned to the new transaction model in Australia during fiscal 2024 In fiscal 2025 we transitioned most of our indirect business to the new transaction model in our major markets In this new transaction model Solution Providers provide a quote to customers but the actual transaction occurs directly between Autodesk and the customer
Our sales incentives to Solution Providers will be recorded as operating expenses under the new transaction model as we will contract directly with end customers Accordingly we expect sales incentives paid to resellers recorded as a reduction of transaction price and subsequently recognized as a reduction to subscription revenue over the contract period will decrease as we transition to the new transaction model Most of the sales incentives payments to Solution Providers in our new transaction model will be considered incremental and recoverable costs of obtaining a contract with a customer and will be capitalized and included in Prepaid expenses and other current assets and Long term other assets on the Consolidated Balance Sheets The deferred costs will then be amortized over the period of benefit and recorded to Sales and Marketing on the Consolidated Statement of Operations The sales incentives not qualifying for capitalization will be recorded to Sales and Marketing on the Consolidated Statement of Operations as the costs are incurred under the incentive program requirements In the near term we expect the change in recognition of sales incentives to indirect channels from contra revenue to operating expenses under the new transaction model to positively impact calculated revenue growth while being broadly neutral to calculated operating profit and free cash flow dollars and to result in a calculated negative impact to operating margin
Subscription revenue consists of our term based product subscriptions cloud service offerings and flexible EBAs Revenue from these arrangements is predominately recognized ratably over the contract term commencing with the date our service is made available to customers and when all other revenue recognition criteria have been satisfied
Maintenance revenue consists of renewal fees for existing maintenance plan agreements that were initially purchased with a perpetual software license Under our maintenance plan customers are eligible to receive unspecified upgrades when and if available and technical support We recognize maintenance revenue ratably over the term of the agreements which is generally one year
Increase due to growth in the subscriber base across subscription types led by subscription renewal revenue with current year subscription renewals reflecting new subscriptions sold in prior periods Also contributing to the growth was an increase in revenue from EBA offerings and Cloud Service Offerings
We believe that international revenue will continue to comprise a majority of our net revenue Unfavorable economic conditions including in connection with the ongoing geopolitical conflicts and any related political or economic responses and counter responses or otherwise by various global actors or the general effect on the global economy in the countries that contribute a significant portion of our net revenue including in emerging economies such as Brazil India and China has had and may continue to have an adverse effect on our business in those countries and our overall financial performance Changes in the value of the U S dollar relative to other currencies have significantly affected and could continue to significantly affect our financial results for a given period even though we hedge a portion of our current and projected revenue Increases to the levels of political and economic unpredictability or protectionism in the global market may impact our future financial results
For fiscal 2025 and 2024 approximately 42 and 37 respectively of our revenue was derived from direct sales to customers With the continued growth of our online Autodesk branded store and the introduction of our new transaction model we have been decreasing our sales through resellers and distributors and transacting directly with more end customers We anticipate that our revenue by direct sales channel will continue to increase as a percentage of total net revenue We expect our indirect channel will continue to transact and support a considerable portion of our customers particularly in emerging regions See further discussion regarding our new transaction model in the Overview to Results of Operations above
Cost of subscription and maintenance revenue includes the labor costs of providing product support to our subscription and maintenance customers SaaS vendor costs and allocated IT costs facilities costs professional services fees related to operating our network and cloud infrastructure royalties depreciation expense and operating lease payments associated with computer equipment data center costs related expenses of network operations stock based compensation expense and gains and losses on our operating expense cash flow hedges
Cost of other revenue includes labor costs associated with product setup costs of consulting and training services contracts and collaborative project management services contracts Cost of other revenue also includes stock based compensation expense overhead charges allocated IT and facilities costs professional services fees and gains and losses on our operating expense cash flow hedges
Cost of revenue at least over the near term is affected by labor costs hosting costs for our cloud offerings the volume and mix of product sales fluctuations in consulting costs amortization of developed technology new customer support offerings royalty rates for licensed technology embedded in our products stock based compensation expense and gains and losses on our operating expense cash flow hedges
Marketing and sales expenses include salaries bonuses benefits and stock based compensation expense for our marketing and sales employees the expense of travel entertainment and training for such personnel sales commissions to employees and Solution Providers and the costs of programs aimed at increasing revenue such as advertising trade shows and expositions and various sales and promotional programs Marketing and sales expenses also include SaaS vendor costs and allocated IT costs payment processing fees the cost of supplies and equipment gains and losses on our operating expense cash flow hedges facilities costs and labor costs associated with sales and order management
Research and development expenses which are expensed as incurred consist primarily of salaries bonuses benefits and stock based compensation expense for research and development employees the expense of travel entertainment and training for such personnel professional services such as fees paid to software development firms and independent contractors SaaS vendor costs and allocated IT costs gains and losses on our operating expense cash flow hedges and facilities costs
General and administrative expenses include salaries bonuses benefits and stock based compensation expense for our CEO finance human resources and legal employees as well as professional fees for legal and accounting services SaaS vendor costs and net IT costs certain foreign business taxes gains and losses on our operating expense cash flow hedges expense of travel entertainment and training facilities costs acquisition related costs and the cost of supplies and equipment
Increase primarily due to an increase in employee related costs mostly related to headcount growth merit increases and internal sales commissions partially offset by a decrease in stock based compensation expense Also due to an increase in sales commissions to Solution Providers due to the recognition of these costs in marketing and sales expense under the new transaction model cloud hosting costs and professional fees partially offset by an increase in capitalized software costs
Increase primarily due to employee related costs driven by higher headcount and merit increases and an increase in cloud hosting costs and professional fees partially offset by an increase in capitalized software costs
Increase primarily due to an increase in employee related costs driven by higher headcount and merit increases and an increase in cloud hosting costs partially offset by a decrease in charitable contributions to the Autodesk Foundation and a decrease in lease related asset impairment and other charges
Increase primarily due to employee related costs including stock based compensation expense driven by higher headcount and merit increases as well as an increase in cloud hosting costs and professional fees
Increase primarily due to employee related costs including stock based compensation driven by higher headcount and merit increases as well as an increase in cloud hosting costs partially offset by lower professional fees
Increase primarily due to an increase in employee related costs including stock based compensation expense driven by higher headcount and merit increases as well as an increase in cloud hosting costs and lower capitalized software costs
We expect marketing and sales expenses to increase with the recognition of Solution Provider commissions under our new transaction model partially offset by savings from the restructuring initiated in fiscal 2026
We expect our research and development expenses to increase as we continue our investments in cloud platform and artificial intelligence partially offset by savings from the restructuring initiated in fiscal 2026
Interest and other income expense net increased by 22 million during fiscal 2025 as compared to fiscal 2024 The increase in interest and other income expense net was primarily due to a decrease in impairments of strategic investment equity securities and an increase in gains for investments in debt and equity securities that are held in a rabbi trust under non qualified deferred compensation plans partially offset by a decrease in interest income and a decrease in gains on foreign currency in the current period as compared to the prior period
Interest and other income expense net positively changed by 51 million during fiscal 2024 as compared to fiscal 2023 The positive change in interest and other income expense net was primarily due to an increase in interest income due to higher interest rates in the current period as compared to the prior period and gains in the current year for investments in debt and equity securities that are held in a rabbi trust under non qualified deferred compensation plans compared to losses in the prior period The increase in interest and other income expense net was partially offset by an increase in losses on strategic investment equity securities in the current period compared to the prior period
Gains and losses on foreign currency are primarily due to the impact of re measuring foreign currency transactions and net monetary assets into the functional currency of the corresponding entity The amount of the gain or loss on foreign currency is driven by the volume of foreign currency transactions and the foreign currency exchange rates for the year
We account for income taxes and the related accounts under the liability method Deferred tax liabilities and assets are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted rates expected to be in effect during the year in which the basis differences reverse
Income tax expense was 272 million and 230 million for fiscal 2025 and 2024 relative to pre tax income of 1 384 million and 1 136 million respectively for the same periods The tax expense for fiscal 2025 consists primarily of the U S and foreign tax expense including withholding tax on payments made to the United States or to Singapore from foreign sources a partial audit settlement with the IRS and related increase in reserves relating to research and development tax credits offset by a decrease in tax expense relating to stock based compensation and tax benefit from the Australia valuation allowance release Tax expense for fiscal 2024 consisted primarily of the U S and foreign tax expense including withholding tax on payments made to the United States or to Singapore from foreign sources an increase in tax expense relating to stock based compensation reduced by non recurring integration net tax benefit and an income tax benefit arising from temporary relief provided by the Internal Revenue Service relating to U S foreign tax credit regulations
A valuation allowance is recorded to reduce deferred tax assets when management cannot conclude that it is more likely than not that the net deferred tax asset will be recovered The valuation allowance is determined by assessing both positive and negative evidence to determine whether it is more likely than not that deferred tax assets are recoverable such assessment is required on a jurisdiction by jurisdiction basis Significant judgment is required in determining whether the valuation allowance should be recorded against deferred tax assets In assessing the need for a valuation allowance we consider all available evidence including past operating results and estimates of future taxable income
In fiscal 2025 the company established a valuation allowance through goodwill in Australia related to negative evidence at the time of the Payapps Limited acquisition however due to positive evidence supporting the realization of its deferred tax assets the valuation allowance was released
We continue to retain a valuation allowance against California Michigan and Massachusetts deferred tax assets as well as U S capital losses and deferred tax assets that will convert into a capital loss upon reversal as we do not have sufficient income of the appropriate character to benefit these deferred tax assets Also the Company continues to retain a valuation allowance against foreign deferred tax assets in Portugal and New Zealand and Australia
As we continually strive to optimize our overall business model tax planning strategies may become feasible whereby management may determine based on all available evidence both positive and negative that it is more likely than not that the deferred tax assets in Portugal New Zealand California Massachusetts Michigan and the assets relating to capital losses or assets that will convert into a capital loss upon reversal in Australia and U S will be realized
As of January 31 2025 we had 312 million of gross unrecognized tax benefits of which 47 million would reduce our valuation allowance if recognized The remaining 265 million would impact the effective tax rate The amount of unrecognized tax benefits will immaterially decrease in the next twelve months for statute lapses
Our future effective annual tax rate may be materially impacted by the amount of benefits and charges from tax amounts associated with our foreign earnings that are taxed at rates different from the federal statutory rate changes in valuation allowances level of profit before tax accounting for uncertain tax positions business combinations closure of statute of limitations or settlement of tax audits and changes in tax laws Our future effective tax rates may be adversely affected to the extent earnings are lower than anticipated in countries where we have lower statutory tax rates
Our revenue is currently subject to U S income tax at the time it is billed We anticipate filing an election in fiscal 2026 that will more closely align the timing of taxation of our revenue with our U S GAAP revenue recognition principles The impact of this election is anticipated to increase our cash flow from operating activities in fiscal 2026 and increase our provision for income taxes due to the loss of taxation benefits we receive through the FDII and GILTI tax regimes
Signed into law on August 16 2022 the Inflation Reduction Act contains many revisions to the Internal Revenue Code effective in taxable years beginning after December 31 2022 including a 15 corporate alternative minimum tax We continue to monitor the impact the Inflation Reduction Act on our consolidated financial statements
In addition to our results determined under U S generally accepted accounting principles GAAP discussed above we believe the following non GAAP measures are useful to investors in evaluating our operating performance For the fiscal years ended January 31 2025 2024 and 2023 our gross profit income from operations operating margin net income and diluted net income per share on a GAAP and non GAAP basis were as follows in millions except for operating margin and per share data
For our internal budgeting and resource allocation process and as a means to provide consistency in period to period comparisons we use non GAAP measures to supplement our consolidated financial statements presented on a GAAP basis These non GAAP measures do not include certain items that may have a material impact upon our reported financial results We also use non GAAP measures in making operating decisions because we believe those measures provide meaningful supplemental information regarding our earning potential and performance for management by excluding certain benefits credits expenses and charges that may not be indicative of our core business operating results For the reasons set forth below we believe these non GAAP financial measures are useful to investors both because 1 they allow for greater transparency with respect to key metrics used by management in its financial and operational decision making and 2 they are used by our institutional investors and the analyst community to analyze the health of our business This allows investors and others to better understand and evaluate our operating results and future prospects in the same manner as management compare financial results across accounting periods and to those of peer companies and to better understand the long term performance of our core business We also use some of these measures for purposes of determining company wide incentive compensation
There are limitations in using non GAAP financial measures because non GAAP financial measures are not prepared in accordance with GAAP and may be different from non GAAP financial measures used by other companies The non GAAP financial measures included above are limited in value because they exclude certain items that may have a material impact upon our reported financial results In addition they are subject to inherent limitations as they reflect the exercise of judgments by management about which charges are excluded from the non GAAP financial measures We compensate for these limitations by analyzing current and future results on a GAAP basis as well as a non GAAP basis and also by providing GAAP measures in our public disclosures The presentation of non GAAP financial information is meant to be considered in addition to not as a substitute for or in isolation from the directly comparable financial measures prepared in accordance with GAAP We urge investors to review the reconciliation of our non GAAP financial measures to the comparable GAAP financial measures included below and not to rely on any single financial measure to evaluate our business
We exclude stock based compensation expenses from non GAAP measures primarily because they are non cash expenses and management finds it useful to exclude certain non cash charges to assess the appropriate level of various operating expenses to assist in budgeting planning and forecasting future periods Moreover because of varying available valuation methodologies subjective assumptions and the variety of award types that companies can use under FASB ASC Topic 718 we believe excluding stock based compensation expenses allows investors to make meaningful comparisons between our recurring core business operating results and those of other companies
We incur amortization of acquisition related developed technologies and purchased intangibles in connection with acquisitions of certain businesses and technologies Amortization of developed technologies and purchased intangibles is inconsistent in amount and frequency and is significantly affected by both the timing and size of our acquisitions Management finds it useful to exclude these variable charges from our cost of revenues to assist in budgeting planning and forecasting future periods Investors should note that the use of intangible assets contributed to our revenues earned during the periods presented and will contribute to our future period revenues as well Amortization of developed technologies and purchased intangible assets will recur in future periods
These expenses are associated with realigning our business strategies based on current economic conditions In connection with these restructuring actions or other exit actions we recognize costs related to termination benefits for former employees whose positions were eliminated the reduction of facilities and cancellation of certain contracts We exclude these charges because these expenses are not reflective of ongoing business and operating results We believe it is useful for investors to understand the effects of these items on our total operating expenses
These charges are associated with the optimization of our facilities costs related to leases for facilities that we have vacated as a result of our one time move to a more hybrid remote workforce In connection with these facility leases we recognize costs related to the impairment or abandonment of operating lease right of use assets computer equipment furniture and leasehold improvements and other costs We exclude these charges because these expenses are not reflective of ongoing business and operating results We believe it is useful for investors to understand the effects of these items on our total operating expenses
We exclude certain acquisition related costs including due diligence costs professional fees in connection with an acquisition certain financing costs and certain integration related expenses These expenses are unpredictable and depend on factors that may be outside of our control and unrelated to the continuing operations of the acquired business or our Company In addition the size and complexity of an acquisition which often drives the magnitude of
acquisition related costs may not be indicative of such future costs We believe excluding acquisition related costs facilitates the comparison of our financial results to the Company s historical operating results and to other companies in our industry
We exclude gains and losses related to our strategic investments and dispositions of strategic investments purchased intangibles and businesses from our non GAAP measures primarily because management finds it useful to exclude these variable gains and losses on these investments and dispositions in assessing our financial results Included in these amounts are non cash unrealized gains and losses dividends received realized gains and losses on the sales or losses on the impairment of these investments and gain and loss on dispositions We believe excluding these items is useful to investors because they do not correlate to the underlying performance of our business and these losses or gains were incurred in connection with strategic investments and dispositions which do not occur regularly
We exclude the GAAP tax provision including discrete items from the non GAAP measure of net income loss and include a non GAAP tax provision based upon the projected annual non GAAP effective tax rate Discrete tax items include income tax expenses or benefits that do not relate to ordinary income from continuing operations in the current fiscal year unusual or infrequently occurring items or the tax impact of certain stock based compensation Examples of discrete tax items include but are not limited to certain changes in judgment and changes in estimates of tax matters related to prior fiscal years certain costs related to business combinations certain changes in the realizability of deferred tax assets or changes in tax law Management believes this approach assists investors in understanding the tax provision and the effective tax rate related to ongoing operations We believe the exclusion of these discrete tax items provides investors with useful supplemental information about our operational performance
This is a non cash charge to record or to release a valuation allowance on certain deferred tax assets As explained above management finds it useful to exclude certain non cash charges to assess the appropriate level of various cash expenses to assist in budgeting planning and forecasting future periods
The income tax effects that are excluded from the non GAAP measures relate to the tax impact on the difference between GAAP and non GAAP expenses primarily due to stock based compensation amortization of purchased intangibles and restructuring charges and other exit costs benefits for GAAP and non GAAP measures
Our primary source of cash is from the sale of our software and related services Our primary use of cash is payment of our operating costs which consist primarily of employee related expenses such as compensation and benefits as well as general operating expenses for marketing facilities and overhead costs Long term cash requirements for items other than normal operating expenses are anticipated for the following the acquisition of businesses software products or technologies complementary to our business repayment of debt common stock repurchases and capital expenditures including the purchase and implementation of internal use software applications
In November 2022 Autodesk entered into an amended and restated credit agreement Credit Agreement by and among Autodesk the lenders party thereto and Citibank N A as agent that provides for a revolving credit facility in the aggregate principal amount of 1 5 billion with an option to be increased up to 2 0 billion The revolving credit facility is available for working capital or other business needs The maturity date on the Credit Agreement is September 30 2026 At January 31 2025 Autodesk had no outstanding borrowings under the Credit Agreement Additionally as of March 6 2025 we have no amounts outstanding under the Credit Agreement See Part II Item 8 Note 8 Borrowing Arrangements in the Notes to Consolidated Financial Statements for further discussion on our covenant requirements If we are unable to remain in compliance with the covenants under the Credit Agreement we may not be able to draw on our revolving credit facility
As of January 31 2025 we had 2 30 billion aggregate principal amount of notes outstanding See Part II Item 8 Note 8 Borrowing Arrangements in the Notes to Consolidated Financial Statements for further discussion
Our cash and cash equivalents are held by diversified financial institutions globally Our primary commercial banking relationship is with Citigroup and its global affiliates In addition Citibank N A an affiliate of Citigroup is one of the lead lenders and agent in the syndicate of our 1 5 billion revolving credit facility
Our cash cash equivalents and marketable securities balances are concentrated in a few locations around the world with substantial amounts held outside of the United States As of January 31 2025 approximately 66 of our total cash or cash equivalents and marketable securities are located in foreign jurisdictions and that percentage will fluctuate subject to business needs There are several factors that can impact our ability to utilize foreign cash balances such as foreign exchange restrictions foreign regulatory restrictions or adverse tax costs Earnings in foreign jurisdictions are generally available for distribution to the United States with little to no incremental U S taxes We regularly review our capital structure and consider a variety of potential financing alternatives and planning strategies to ensure we have the proper liquidity available in the locations in which it is needed We expect to meet our liquidity needs through or in combination of current cash balances ongoing cash flows and external borrowings
Cash from operations could also be affected by various risks and uncertainties including but not limited to the risks detailed in Part I Item 1A Risk Factors Based on our current business plan and revenue prospects we believe that our existing cash and cash equivalents our anticipated cash flows from operations and our available revolving credit facility will be sufficient to meet our working capital and operating resource expenditure requirements for at least the next 12 months from the date of this Annual Report
Our revenue earnings cash flows receivables and payables are subject to fluctuations due to changes in foreign currency exchange rates for which we have put in place foreign currency contracts as part of our risk management strategy See Part II Item 7A Quantitative and Qualitative Disclosures about Market Risk for further discussion
Net cash provided by operating activities of 1 61 billion for fiscal 2025 primarily consisted of 1 11 billion of our net income adjusted for 953 million non cash items such as stock based compensation expense amortization of costs to obtain a contract with a customer depreciation amortization and accretion expense and deferred income tax Net cash provided by working capital remained flat primarily due to an increase in accounts payable and other accrued liabilities due to the timing of payments related to employee compensation and related costs partially offset by a decrease in deferred revenue driven by the transition of multi year subscription contracts billed upfront to annual billing installments a change in accounts receivable due to the growth in billings and more billings in the fourth fiscal quarter of the current year as compared to the prior period and a change in prepaid expenses and other assets
Net cash provided by operating activities of 1 31 billion for fiscal 2024 primarily consisted of 906 million of our net income adjusted for 858 million non cash items such as stock based compensation expense amortization of costs to obtain a contract with a customer depreciation amortization and accretion expense and deferred income tax The decrease in cash provided by working capital was primarily due to a decrease in deferred revenue of 316 million driven by the transition of multi year subscription contracts billed upfront to annual billing installments
Net cash used in investing activities was 903 million for fiscal 2025 and was primarily due to business combinations net of cash acquired and purchases of marketable securities partially offset by sales and maturities of marketable securities
The following table summarizes our significant financial contractual obligations at January 31 2025 and the effect such obligations are expected to have on our liquidity and cash flows in future periods
Notes payable consist of the notes issued in June 2015 June 2017 January 2020 and October 2021 including interest See Part II Item 8 Note 8 Borrowing Arrangements in the Notes to Consolidated Financial Statements for further discussion
Operating lease obligations consist primarily of obligations for real estate vehicles and certain equipment See Part II Item 8 Note 9 Leases in the Notes to Consolidated Financial Statements for further discussion
Purchase obligations are contractual obligations for purchase of goods or services and are defined as agreements that are enforceable and legally binding to Autodesk and that specify all significant terms including fixed or minimum quantities to be purchased fixed minimum or variable price provisions and the approximate timing of the transaction Purchase obligations relate primarily to acquisition of cloud services marketing and commitments related to our investment agreements with limited liability partnership funds
Deferred compensation obligations relate to amounts held in a rabbi trust under our non qualified deferred compensation plan See Part II Item 8 Note 7 Deferred Compensation in our Notes to Consolidated Financial Statements for further information regarding this plan
Pension obligations relate to our obligations for pension plans outside of the United States See Part II Item 8 Note 16 Retirement Benefit Plans in our Notes to Consolidated Financial Statements for further information regarding these obligations
This table generally excludes amounts already recorded on the balance sheet as current liabilities certain purchase obligations as discussed below long term deferred revenue and amounts related to income tax accruals for uncertain tax positions since we cannot predict with reasonable reliability the timing of cash settlements to the respective taxing authorities see Part II Item 8 Note 5 Income Taxes in the Notes to Consolidated Financial Statements
Purchase orders or contracts for the purchase of supplies and other goods and services are not included in the table above We are not able to determine the aggregate amount of such purchase orders that represent contractual obligations as purchase orders may represent authorizations to purchase rather than binding agreements Our purchase orders are based on our current procurement or development needs and are fulfilled by our vendors within short time horizons We do not have significant agreements for the purchase of supplies or other goods specifying minimum quantities or set prices that exceed our expected requirements for three months In addition we have certain software royalty commitments associated with the shipment and licensing of certain products
The expected timing of payment of the obligations discussed above is estimated based on current information Timing of payments and actual amounts paid may be different depending on the time of receipt of goods or services or changes to agreed upon amounts for some obligations
We provide indemnifications of varying scopes and certain guarantees including limited product warranties Historically costs related to these warranties and indemnifications have not been significant but because potential future costs are highly variable we are unable to estimate the maximum potential impact of these guarantees on our future results of operations
Our stock repurchase programs provide us with the ability to offset the dilution from the issuance of stock under our employee stock plans and reduce shares outstanding over time and has the effect of returning excess cash generated from our business to stockholders Under the share repurchase programs we may repurchase shares from time to time in open market transactions privately negotiated transactions accelerated share repurchase programs tender offers or by other means The share repurchase programs do not have an expiration date and the pace and timing of repurchases will depend on factors such as cash generation from operations available surplus the volume of employee stock plan activity remaining shares available in the authorized pool cash requirements for acquisitions economic and market conditions stock price and legal and regulatory requirements
During the three and 12 months ended January 31 2025 we repurchased 1 million and 3 million shares of our common stock respectively At January 31 2025 3 88 billion and 5 billion remained available for repurchase under the November 2022 and November 2024 repurchase programs approved by the Board of Directors The plans do not have a fixed expiration dat
Our revenue earnings cash flows receivables and payables are subject to fluctuations due to changes in foreign currency exchange rates Our risk management strategy utilizes foreign currency contracts to manage our exposure to foreign currency volatility that exists as part of our ongoing business operations We utilize cash flow hedge contracts to reduce the exchange rate impact on a portion of the net revenue or operating expense of certain anticipated transactions In addition we use balance sheet hedge contracts to reduce the exchange rate risk associated primarily with foreign currency denominated receivables and payables As of January 31 2025 and 2024 we had open cash flow and balance sheet hedge contracts with future settlements generally within one to 12 months Contracts were primarily denominated in Euros British pounds Japanese yen Canadian dollars Singapore dollars Australian dollars Swiss francs Norwegian krone and Swedish Krona We do not enter into foreign exchange derivative instruments for trading or speculative purposes
We use foreign currency contracts to reduce the exchange rate impact on the net revenue and operating expenses of certain anticipated transactions A sensitivity analysis performed on our hedging portfolio as of January 31 2025 indicated that a hypothetical 10 appreciation of the U S dollar from its value at January 31 2025 and 2024 would increase the fair value of our foreign currency contracts by 209 million and 121 million respectively A hypothetical 10 depreciation of the dollar from its value at January 31 2025 and 2024 would decrease the fair value of our foreign currency contracts by 116 million and 99 million respectively
Interest rate movements affect both the interest income we earn on our short term investments and the market value of certain longer term securities At January 31 2025 we had 1 32 billion of cash equivalents and marketable securities including 287 million classified as short term marketable securities and 267 million classified as long term marketable securities If interest rates were to move up by 50 or 100 basis points over a 12 month period the market value change of these securities would not have a material impact on our results of operations
From time to time we make direct investments in privately held companies Privately held company investments generally are considered inherently risky The technologies and products these companies have under development are typically in the early stages and may never materialize which could result in a loss of all or a substantial part of our initial investment in these companies The evaluation of privately held companies is based on information that we request from these companies which is not subject to the same disclosure regulations as U S publicly traded companies and as such the basis for these evaluations is subject to the timing and accuracy of the data received from these companies See Part II Item 8 Note 3 Financial Instruments in the Notes to Consolidated Financial Statements for further discussion regarding these strategic investments
Autodesk Inc Autodesk or the Company is a global leader in 3D design engineering and entertainment technology solutions spanning architecture engineering construction product design manufacturing media and entertainment The Company s sophisticated software products offered through a hybrid of desktop and cloud functionality enable its customers to design fabricate manufacture and build anything by visualizing simulating and analyzing real world performance early in the design process These capabilities allow our customers to foster innovation optimize their designs streamline their manufacturing and construction processes save time and money improve quality deliver more sustainable outcomes communicate plans and collaborate with others Autodesk software products are sold globally through a combination of direct and indirect channels
The preparation of financial statements in conformity with U S generally accepted accounting principles GAAP requires management to make estimates and assumptions that affect the amounts reported in Autodesk s consolidated financial statements and notes thereto These estimates are based on information available as of the date of the consolidated financial statements On a regular basis management evaluates these estimates and assumptions Actual results may differ materially from these estimates
Examples of significant estimates and assumptions made by management involve revenue recognition for product subscriptions and enterprise business arrangements EBAs the determination of the fair value of acquired intangible assets and goodwill the realizability of deferred tax assets and the fair value of stock awards The Company also makes assumptions judgments and estimates in determining the accruals for uncertain tax positions variable compensation partner incentive programs loss contingencies and operating lease liabilities
During the fiscal year ended January 31 2025 the Company changed its presentation of the amortization of costs capitalized to obtain a contract with a customer in our Consolidated Statements of Cash Flows Amortization of costs capitalized to obtain a contract with a customer were previously presented in Changes in operating assets and liabilities net of business combinations and are now presented in Adjustments to reconcile net income to net cash provided by operating activities Accordingly prior period amounts have been reclassified to conform to the current period presentation The effect of the change on the Consolidated Statement of Cash Flows for the fiscal years ended January 31 2024 and January 31 2023 was 140 million and 138 million respectively These reclassifications did not impact total net cash provided by operating activities
Autodesk operates in one operating and reportable segment the Company as a whole Autodesk is a global leader in 3D design engineering and entertainment technology solutions spanning architecture engineering construction product design manufacturing media and entertainment Autodesk s software products are offered through a hybrid of desktop and cloud functionality The chief operating decision maker CODM assesses performance and decides how to allocate resources based on consolidated net income as reported on the Consolidated Statements of Operations Operating segments are defined as components of an enterprise for which separate financial information is evaluated regularly by the CODM in deciding how to allocate resources and assess performance Autodesk reports segment information based on the management approach The management approach designates the internal reporting used by management for making decisions allocating resources and assessing performance as the source of the Company s reportable segments The description of Autodesk s products and offerings and accounting policies are described in Note 1 Business and Summary of Significant Accounting Policies The measure of Autodesk s segment assets is reported on the Consolidated Balance Sheets as total assets Autodesk determined that the Company s Chief Executive Officer serves as the CODM
The CODM reviews financial information presented on a consolidated basis for purposes of allocating resources evaluating financial performance and making operating decisions of Autodesk Consolidated net income is indicative of financial performance and is monitored by the CODM The CODM considers budget to actual comparisons of total net revenue and consolidated net income on a regular basis when assessing the operating results and making resource decisions to improve profitability The CODM also uses the budget to actual comparisons of total net revenue and consolidated net income to make decisions aligned with Autodesk s strategic initiatives and go to market strategies and capital allocation priorities
Autodesk s revenue is divided into three categories subscription revenue maintenance revenue and other revenue Subscription revenue consists of our term based product subscriptions cloud service offerings and flexible enterprise business agreements EBAs Maintenance revenue consists of renewal fees for existing maintenance plan agreements that were initially purchased with a perpetual software license Under our maintenance plan customers are eligible to receive unspecified upgrades when and if available and technical support Other revenue consists of revenue from consulting and other products and services Revenue is recognized when control for these offerings is transferred to our customers in an amount that reflects the consideration we expect to be entitled to in exchange for products and services
Autodesk s contracts with customers may include promises to transfer multiple products and services to a customer Determining whether the products and services are considered distinct performance obligations that should be accounted for separately or as a single performance obligation may require significant judgment Judgment is required to determine the level of integration and interdependency between individual components of desktop software applications and cloud functionalities This determination influences whether the desktop software is considered distinct and accounted for separately as a license performance obligation recognized at the time of delivery or not distinct and accounted for together with the cloud functionalities as a single subscription performance obligation recognized over time
For product subscriptions and flexible EBA subscriptions in which the desktop software and related cloud functionalities are highly interrelated the single performance obligation is recognized ratably over the contract term as the subscription is delivered For subscriptions involving distinct desktop software licenses the license performance obligation is satisfied when delivered to our customers For standalone maintenance subscriptions and cloud subscriptions the performance obligation is satisfied ratably over the contract term as those services are delivered For consulting services the performance obligation is satisfied over a period of time as those services are delivered
When an arrangement includes multiple performance obligations which are concurrently delivered and have the same pattern of transfer to the customer the services transfer to the customer over the contract period we account for those performance obligations as a single performance obligation
For contracts with more than one performance obligation the transaction price is allocated among the performance obligations in an amount that depicts the relative standalone selling price SSP of each obligation We establish SSP for most of our products and services based on observable prices when sold separately in similar circumstances or to similar customers When products or services are not sold separately we establish SSP based on other observable inputs
Our indirect channel model includes both a two tiered distribution structure where Autodesk sells to distributors that subsequently sell to resellers and a one tiered structure where Autodesk sells directly to resellers For these arrangements transfer of control begins at the time access to our subscriptions is made available electronically to our customer provided all other criteria for revenue recognition are met Judgment is required to determine whether our distributors and resellers have the ability to honor their commitment to pay regardless of whether they collect payment from their customers If we were to change this assessment it could cause a material increase or decrease in the amount of revenue that we report in a particular period
Sales commissions earned by our internal sales personnel and our solution providers are considered incremental and recoverable costs of obtaining a contract with a customer The commission costs are capitalized and included in Prepaid expenses and other current assets and Long term other assets on our Consolidated Balance Sheets The deferred costs are then amortized over the period of benefit Autodesk determined that sales commissions earned by internal sales personnel that are related to contract renewals are commensurate with sales commissions earned on the initial contracts and we determined the period of benefit to be the term of the respective customer contract Commissions paid to our solution providers that are related to contract renewals may either be commensurate or non commensurate with commissions earned on the initial contract depending on the commissions program Costs for initial contracts that are non commensurate with commissions on renewal contracts are amortized on a straight line basis over the period of benefit For non commensurate commissions we determined the estimated period of benefit by taking into consideration customer retention data customer contracts our technology and other factors Costs for initial contracts that are commensurate with commissions on renewal contracts are amortized based on the contract term which ranges from 1 to 3 years Deferred costs are periodically reviewed for impairment Amortization expense is included in marketing and sales expenses in the Consolidated Statements of Operations
Fair value is defined as the price that would be received from the sale of an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date In determining the fair value of our investments we are sometimes required to use various alternative valuation techniques Inputs to valuation techniques are either observable or unobservable Observable inputs reflect market data obtained from independent sources while unobservable inputs reflect our market assumptions These two types of inputs have created the following fair value hierarchy
Level 2 Quoted prices for similar instruments in active markets quoted prices for identical or similar instruments in markets that are not active and model derived valuations in which all significant inputs and significant value drivers are observable in active markets and
This hierarchy requires us to minimize the use of unobservable inputs and to use observable market data if available when determining fair value This is generally true for our cash and cash equivalents and the majority of our marketable securities which we consider to be Level 1 and Level 2 assets
Key inputs for currency derivatives are spot rates forward rates interest rates volatility and credit default rates The spot rate for each currency is the same spot rate used for all balance sheet translations at the measurement date Autodesk reviews for any potential changes on a quarterly basis in conjunction with our fiscal quarter end close It is Autodesk s assessment that the leveling best reflects current market activity when observing the pricing information for these assets Autodesk s Level 2 securities and derivatives are valued primarily using observable inputs other than quoted prices in active markets for identical assets and liabilities The Company has elected to use the income approach to value derivatives using the observable Level 2
market expectations at measurement date and standard valuation techniques to convert future amounts to a single present amount discounted Mid market pricing is used as a practical expedient and when required rates are interpolated from commonly quoted intervals published by market sources See Note 3 Financial Instruments for more information
Autodesk considers all highly liquid investments with insignificant interest rate risk and remaining maturities of three months or less at the date of purchase to be cash equivalents Cash equivalents are stated at estimated fair value
Autodesk classifies its marketable securities as either short term or long term generally based on each instrument s underlying contractual maturity date Generally marketable securities with remaining maturities of less than 12 months are classified as short term and marketable securities with remaining maturities greater than 12 months are classified as long term Autodesk may sell certain of its marketable securities prior to their stated maturities for strategic purposes or in anticipation of credit deterioration
Autodesk determines the appropriate classification of its marketable securities at the time of purchase and re evaluates such classification as of each balance sheet date Autodesk carries all available for sale securities at fair value with unrealized gains and losses net of tax reported in stockholders equity until disposition or maturity Autodesk carries all trading securities at fair value with unrealized gains and losses recorded in Interest and other expense net in the Company s Consolidated Statements of Operations The cost of securities sold is based on the specific identification method
Under the measurement alternative method strategic investments in equity securities are measured at cost less any impairments plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer in the current period The carrying value is not adjusted for the Company s strategic investments in equity securities if there are no observable price changes in a same or similar security from the same issuer or if there are no identified events or changes in circumstances that may indicate impairment as discussed below To determine if a transaction is deemed a similar investment Autodesk considers the rights and obligations between the investments and the extent to which those differences would affect the fair values of those investments with additional consideration for the stage of development of the investee company The fair value would then be adjusted positively or negatively based on available information such as pricing in recent rounds of financing
The company s strategic investments in debt and equity securities Level 3 are valued using significant unobservable inputs or data in an inactive market and the valuation requires the Company s judgment due to the absence of market prices and inherent lack of liquidity These assumptions are inherently subjective and involve significant management judgment Whenever possible we use observable market data and rely on unobservable inputs only when observable market data is not available when determining fair value
In determining the estimated fair value of its strategic investments the Company utilizes the most recent data available to the Company In addition the determination of whether an orderly transaction is for a same or similar investment requires significant management judgment including the rights and obligations of the investments the extent to which those differences would affect the fair values of those investments and the impact of any differences based on the stage of operational development of the investee
All of Autodesk s marketable securities and strategic investments are subject to a periodic impairment review Strategic investments in equity securities are assessed based on available information such as current cash positions earnings earnings and cash flow forecasts recent operational performance and any other readily available market data For any available for sale debt securities if Autodesk does not intend to sell and it is not more likely than not that Autodesk will be required to sell the available for sale debt security prior to recovery of its amortized cost basis Autodesk will determine whether a decline in fair value below the amortized cost basis is due to credit related factors The credit loss is measured as the amount by which the debt security s amortized cost basis exceeds the estimate of the present value of cash flows expected to be collected up to the
difference between the amortized cost basis and the fair value Impairment will be assessed at the individual security level Credit related impairment is recognized as an allowance on the Consolidated Balance Sheets with a corresponding adjustment to Interest and other expense net on the Company s Consolidated Statements of Operations Any impairment that is not credit related is recognized in Accumulated other comprehensive loss on the Consolidated Balance Sheets
Autodesk does not measure an allowance for credit losses on accrued interest receivables on available for sale debt securities separately Autodesk writes off accrued interest receivables by reversing interest income in the period deemed uncollectible in Interest and other expense net on the Company s Consolidated Statements of Operations Any accrued interest receivable on available for sale debt securities is recorded in Prepaid expenses and other current assets in the accompanying Consolidated Balance Sheets as applicable
For Autodesk s quarterly impairment assessment of privately held debt and equity securities strategic investment portfolio the analysis encompasses an assessment of the severity and duration of the impairment and qualitative and quantitative analysis of other key factors including the investee s financial metrics the investee s products and technologies meeting or exceeding predefined milestones market acceptance of the product or technology other competitive products or technology in the market general market conditions management and governance structure of the investee the investee s liquidity debt ratios and the rate at which the investee is using its cash
Under its risk management strategy Autodesk uses derivative instruments to manage its short term exposures to fluctuations in foreign currency exchange rates that exist as part of ongoing business operations Autodesk s general practice is to hedge a portion of transaction exposures primarily denominated in Australian dollars British pounds Canadian dollars Euros Japanese yen Norwegian krone Singapore dollars Swedish krona and Swiss francs These instruments generally have maturities between one and 12 months in the future Autodesk uses foreign currency contracts not designated as hedging instruments and foreign currency contracts designated as cash flow hedges but Autodesk does not enter into derivative instrument transactions for trading or speculative purposes
The bank counterparties to the derivative contracts potentially expose Autodesk to credit related losses in the event of their nonperformance However to mitigate that risk Autodesk only contracts with counterparties who meet the Company s minimum requirements under its counterparty risk assessment process Autodesk monitors counterparty risk on at least a quarterly basis and will adjust its exposure to various counterparties as necessary Autodesk generally enters into master netting arrangements which reduce credit risk by permitting net settlement of transactions with the same counterparty Autodesk does not have any master netting arrangements in place with collateral features
Autodesk accounts for these derivative instruments as either assets or liabilities on the balance sheet and carries them at fair value Gains and losses resulting from changes in fair value are accounted for depending on the use of the derivative and whether it is designated and qualifies for hedge accounting Derivatives that do not qualify for hedge accounting are adjusted to fair value through earnings
In addition to these foreign currency contracts Autodesk holds derivative instruments issued by privately held companies which are not designated as hedging instruments These derivatives consist of certain conversion options on the convertible debt securities held by Autodesk or options to acquire equity securities in a privately held company These derivatives are recorded at fair value as of each balance sheet date and are recorded in Long term other assets Changes in the fair values of these instruments are recognized in Interest and other income expense net
The assets and liabilities of Autodesk s foreign subsidiaries are translated from their respective functional currencies into U S dollars at the rates in effect at the balance sheet date and revenue and expense amounts are translated at exchange rates that approximate those rates in effect during the period in which the underlying transactions occur Foreign currency translation adjustments are recorded in other comprehensive income loss
Gains and losses realized from foreign currency transactions those transactions denominated in currencies other than the foreign subsidiary s functional currency are included in Interest and other income expense net Monetary assets and liabilities are remeasured using foreign currency exchange rates at the end of the period and non monetary assets and liabilities are remeasured based on historical exchange rates
Autodesk uses foreign currency contracts to reduce the exchange rate impact on a portion of the net revenue or operating expense of certain anticipated transactions These currency collars and forward contracts are designated and documented as cash flow hedges The effectiveness of the cash flow hedge contracts is assessed quantitatively using regression at inception and thereafter To receive cash flow hedge accounting treatment all hedging relationships are formally documented at the inception of the hedge relationship and the hedges are expected to be highly effective in offsetting changes to future cash flows on hedged transactions The gains and losses on these hedges are included in Accumulated other comprehensive loss and are reclassified into earnings at the time the forecasted revenue or expense is recognized In the event the underlying forecasted transaction does not occur or it becomes probable that it will not occur Autodesk reclassifies and discloses the gain or loss on the related cash flow hedge from Accumulated other comprehensive loss to Interest and other income expense net in the Company s Consolidated Financial Statements at that time Derivative contracts and related gain loss are presented within Net cash provided by operating activities in the Company s Consolidated Statements of Cash Flow See Note 3 Financial Instruments for additional information
Autodesk uses foreign currency contracts that are not designated as hedging instruments to reduce the exchange rate risk associated primarily with foreign currency denominated receivables payables and cash These forward contracts are marked to market at the end of each fiscal quarter with gains and losses recognized as Interest and other income expense net These derivative instruments do not subject the Company to material balance sheet risk due to exchange rate movements because gains and losses on these derivative instruments are intended to offset the gains or losses resulting from the revaluation and settlement of the underlying foreign currency denominated receivables payables and cash
Allowances for uncollectible trade receivables and contract assets are subject to impairment using the expected credit loss model Allowances for expected credit losses are measured based upon the lifetime expected credit loss which is based on historical experience the number of days that billings are past due reasonable economic forecast including revised forecast data for the current economic environment customer payment behavior credit reports and other customer specific information Allowances for credit losses on trade receivables and contract assets were not material as of January 31 2025
As part of the indirect channel model Autodesk has a partner incentive program that uses quarterly attainment of monetary rewards to motivate distributors and resellers to achieve mutually agreed upon business goals in a specified time period The majority of these incentives are recorded as a reduction to accounts receivable and deferred revenue in the period the transaction is billed The portion recorded as deferred revenue is subsequently recognized as a reduction to subscription revenue over the contract period The remainder reduces subscription or other revenue in the current period
These incentive balances do not require significant assumptions or judgments Depending on how the payments are made the reserves associated with the partner incentive program are recognized on the balance sheet as either a reduction to accounts receivable or recorded as accounts payable
Autodesk places its cash cash equivalents and marketable securities in highly liquid instruments with and in the custody of multiple diversified financial institutions globally with high credit ratings and limits the amounts invested with any one institution type of security and issuer Autodesk s primary commercial banking relationship is with Citigroup Inc and its global affiliates Citibank N A an affiliate of Citigroup is one of the lead lenders and an agent in the syndicate of Autodesk s 1 5 billion revolving credit facility
The bank counterparties to the derivative contracts potentially expose Autodesk to credit related losses in the event of their nonperformance However to mitigate that risk Autodesk only contracts with counterparties who meet the Company s minimum requirements under its counterparty risk assessment process Autodesk monitors counterparty risk on at least a quarterly basis and will adjust its exposure to various counterparties as necessary Autodesk generally enters into master netting arrangements which reduce credit risk by permitting net settlement of transactions with the same counterparty However Autodesk does not have any master netting arrangements in place with collateral features
Autodesk s accounts receivable are derived from sales to a large number of resellers distributors and direct customers in the Americas Europe Middle East and Africa EMEA and Asia Pacific APAC geographies Autodesk performs ongoing evaluations of these partners and customers financial condition and limits the amount of credit extended when deemed necessary but generally does not require collateral from such parties Total revenue from the Company s largest distributor TD Synnex Corporation and its global affiliates TD Synnex accounted for 33 39 and 37 of Autodesk s net revenue for fiscal years ended January 31 2025 2024 and 2023 respectively The majority of the net revenue from sales to TD Synnex is from sales made outside of the United States In addition TD Synnex accounted for 5 and 18 of trade accounts receivable as of January 31 2025 and 2024 respectively No other customer accounted for more than 10 of Autodesk s total net revenue or trade accounts receivable for each of the respective periods
Intangible assets include customer relationships developed technologies trade names and patents and other and the related accumulated amortization These assets are presented as Intangible assets net in the Consolidated Balance Sheets The majority of Autodesk s intangible assets are amortized to expense over the estimated economic life which ranges from 3 to 15 years Amortization expense for intangible assets was 134 million in fiscal 2025 89 million in fiscal 2024 and 98 million in fiscal 2023
The weighted average amortization period for intangible assets during fiscal 2025 was 7 2 years Expected future amortization expense for intangible assets for each of the fiscal years ended thereafter is as follows
Computer equipment software and furniture are depreciated using the straight line method over the estimated useful lives of the assets which range from three to five years Leasehold improvements are amortized on a straight line basis over the shorter of their estimated useful lives or the lease term Depreciation expense was 43 million in fiscal 2025 47 million in fiscal 2024 and 50 million in fiscal 2023 Impairment losses were not material in fiscal years ended January 31 2025 2024 and 2023
Costs incurred for computer software developed or obtained for internal use are capitalized for application development activities if material and immediately expensed for preliminary project activities and post implementation activities These capitalized costs are amortized straight line over the software s expected useful life which is generally three years Autodesk had no material capitalized internal use software development costs at January 31 2025 and 2024
Software development costs for external use incurred prior to the establishment of technological feasibility are included in research and development expenses Autodesk defines establishment of technological feasibility as the completion of a working model Software development costs incurred subsequent to the establishment of technological feasibility through the period of general market availability of the products are capitalized and generally amortized over a two year period if material Autodesk had no material capitalized software development costs at January 31 2025 and 2024
Autodesk enters into certain cloud based software hosting arrangements that are accounted for as service contracts Costs incurred for these arrangements are capitalized for application development activities if material and immediately expensed for preliminary project activities and post implementation activities Autodesk amortizes the capitalized development costs straight line over the fixed non cancellable term of the associated hosting arrangement plus any reasonably certain renewal periods The capitalized costs are included in Prepaid expenses and other current assets and Long term other assets on our Consolidated Balance Sheets Capitalized costs were 327 million and 254 million at January 31 2025 and January 31 2024 respectively Accumulated amortization was 136 million and 83 million at January 31 2025 and January 31 2024 respectively Amortization expense was 53 million 42 million and 24 million in fiscal 2025 fiscal 2024 and fiscal 2023 respectively
Autodesk determines if an arrangement is a lease at inception Operating leases are included in Operating lease right of use assets Operating lease liabilities and Long term operating lease liabilities in the Consolidated Balance Sheets
Operating lease right of use assets represent Autodesk s right to use an underlying asset for the lease term and operating lease liabilities represent the Company s obligation to make lease payments arising from the lease Operating lease right of use assets and operating lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term The operating lease right of use assets also include any lease payments made and are reduced by any lease incentives Autodesk uses its incremental borrowing rate if the Company s leases do not provide an implicit rate adjusted for local country specific borrowing rates as applicable based on the information available at commencement date in determining the present value of lease payments Options to extend or terminate the lease are considered in determining the lease term when it is reasonably certain that the option will be exercised Lease expense for lease payments is recognized on a straight line basis over the lease term
Autodesk records the tangible and intangible assets acquired and liabilities assumed in a business combination based on their estimated fair values at the date of the respective acquisition with the exception of contract assets and contract liabilities i e deferred revenue which are recognized and measured on the acquisition date in accordance with Autodesk s Revenue Recognition policy in Note 1 Business and Summary of Significant Accounting Policies The fair values assigned to the identifiable intangible assets acquired are based on estimates and assumptions determined by management Autodesk records the excess of consideration transferred over the aggregate fair values as goodwill During the measurement period which may be up to one year from the acquisition date Autodesk may record adjustments to these tangible and intangible assets acquired and liabilities assumed with the corresponding offset to goodwill
At least annually or more frequently as circumstances dictate Autodesk reviews its long lived assets for impairment whenever impairment indicators exist Autodesk continually monitors events and changes in circumstances that could indicate the carrying amounts of its long lived assets may not be recoverable When such events or changes in circumstances occur Autodesk assesses the recoverability of these assets Recoverability is measured by comparison of the carrying amounts of the assets to the future undiscounted cash flow the assets are expected to generate generally using Level 3 inputs If the long lived assets are impaired the impairment to be recognized is equal to the amount by which the carrying value of the assets exceeds its fair market value See Note 9 Leases for further discussion on impairment charges of lease related right of assets
In addition to the recoverability assessments Autodesk routinely reviews the remaining estimated useful lives of its long lived assets Any reduction in the useful life assumption will result in increased depreciation and amortization expense in the quarter when such determinations are made as well as in subsequent quarters
Goodwill consists of the excess of the consideration transferred over the fair value of net assets acquired in business combinations Autodesk tests goodwill for impairment annually in its fourth fiscal quarter or more often if circumstances indicate a potential impairment may exist or if events have affected the composition of its reporting unit
Autodesk tests goodwill for impairment by performing a quantitative assessment of whether fair value of the reporting unit is greater than its carrying value In situations in which an entity s reporting unit is publicly traded the fair value of the company may be approximated by its market capitalization in performing the quantitative impairment test
Goodwill impairment exists when the estimated fair value of goodwill is less than its carrying value If impairment exists the carrying value of the goodwill is reduced to fair value through an impairment charge recorded in the Company s consolidated statements of operations The process of evaluating the potential impairment of goodwill is subjective and requires significant judgment at many points during the analysis The value of Autodesk s goodwill could also be impacted by future adverse changes such as i declines in Autodesk s actual financial results ii a sustained decline in Autodesk s market capitalization iii a significant slowdown in the worldwide economy or the industries Autodesk serves or iv changes in Autodesk s business strategy
For the annual impairment test Autodesk s market capitalization was substantially in excess of the carrying value of the Company as of January 31 2025 Accordingly Autodesk has determined there was no goodwill impairment of our reporting unit during the fiscal year ended January 31 2025 In addition Autodesk did not recognize any goodwill impairment losses in fiscal 2024 or 2023
Deferred tax assets arise primarily from tax credits net operating losses and timing differences for reserves accrued liabilities stock options deferred revenue purchased technologies and capitalized intangibles partially offset by U S deferred tax liabilities on acquired intangibles and valuation allowances against Portugal New Zealand California Michigan and Massachusetts deferred tax assets and deferred tax assets relating to capital losses and assets that will convert into capital loss upon reversal in Australia and the U S Autodesk performs a quarterly assessment of the recoverability of these net deferred tax
assets and believes it will generate sufficient future taxable income in appropriate tax jurisdictions to realize the net deferred tax assets They are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to reverse Valuation allowances are established when necessary to reduce gross deferred tax assets to the amount that is more likely than not to be realized
Autodesk measures stock based compensation cost at the grant date fair value of the award and recognizes expense ratably over the requisite service period which is generally the vesting period Autodesk determines the grant date fair value of its stock based payment awards for grants of employee stock purchases related to the employee stock purchase plan using the Black Scholes Merton BSM option pricing model To determine the grant date fair value of our stock based payment awards for restricted stock units and performance stock units we use the quoted stock price on the date of grant unless the awards are subject to market conditions in which case we use the Monte Carlo simulation model The Monte Carlo simulation model utilizes multiple input variables to estimate the probability that market conditions will be achieved These variables include our expected stock price volatility over the expected term of the award actual and projected employee stock option exercise behaviors the risk free interest rate for the expected term of the award and expected dividends The variables used in these models are reviewed when awards are granted and adjusted as needed Stock based compensation cost for restricted stock is measured on the closing fair market value of our common stock on the date of grant Autodesk uses the following assumptions to estimate the fair value of stock based awards
Autodesk estimates expected volatility for stock based awards based on the average of the following two measures 1 a measure of historical volatility in the trading market for the Company s common stock and 2 the implied volatility of traded options to purchase shares of the Company s common stock The expected volatility for performance stock units subject to market conditions includes the expected volatility of companies within the S P North American Technology Software Index with a market capitalization over 2 0 billion depending on the award type
Autodesk did not pay cash dividends in fiscal 2025 2024 or 2023 and does not anticipate paying any cash dividends in the foreseeable future Consequently an expected dividend yield of zero is used in the BSM option pricing model and the Monte Carlo simulation model
The risk free interest rate used in the BSM option pricing model and the Monte Carlo simulation model for stock based awards is the historical yield on U S Treasury securities with equivalent remaining lives
Basic net income per share is computed using the weighted average number of shares of common stock outstanding during the period Diluted net income per share is computed using the weighted average shares of common stock outstanding during the period and potentially dilutive common shares including the effect of restricted stock units performance share awards and stock options using the treasury stock method
The funded status of Autodesk s defined benefit pension plans is recognized in the Consolidated Balance Sheets The funded status is measured as the difference between the fair value of plan assets and the projected benefit obligation for the fiscal years presented The projected benefit obligation represents the actuarial present value of benefits expected to be paid upon retirement based on employee services already rendered and estimated future compensation levels The fair value of plan assets represents the current market value of Autodesk s cumulative company and participant contributions made to the various plans in effect
Net periodic benefit cost is recorded in the Consolidated Statements of Operations and includes service cost interest cost expected return on plan assets amortization of prior service costs and gains or losses previously recognized as a component of other comprehensive income loss Certain events such as changes in the employee base plan amendments and changes in actuarial assumptions may result in a change in the defined benefit obligation and the corresponding change to other comprehensive loss
Gains and losses and prior service costs not recognized as a component of net periodic benefit cost in the Consolidated Statements of Operations as they arise are recognized as a component of other comprehensive income loss in the Consolidated Statements of Comprehensive Income Those gains and losses and prior service costs are subsequently amortized as a component of net periodic benefit cost over the average remaining service lives of the plan participants using a corridor approach to determine the portion of gain or loss subject to amortization
The measurement of projected benefit obligations and net periodic benefit cost is based on estimates and assumptions that reflect the terms of the plans and use participant specific information such as compensation age and years of services as well as certain assumptions including estimates of discount rates expected return of plan assets rate of compensation increases interest rates and mortality rates
With the exception of those discussed below there have been no recent changes in accounting pronouncements issued by FASB or adopted by the Company during the fiscal year ended January 31 2025 that are applicable to the Company
In November 2023 the FASB issued ASU No 2023 07 Segment Reporting Topic 280 Improvements to Reportable Segment Disclosures ASU 2023 07 which are intended to improve reportable segment disclosure requirements ASU 2023 07 expands public entities segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss an amount and description of its composition for other segment items and interim disclosures of a reportable segment s profit or loss and assets All disclosure requirements of ASU 2023 07 are required for entities with a single reportable segment Autodesk adopted the annual disclosures of ASU 2023 07 for our fiscal year ended January 31 2025 ASU 2023 07 is effective for interim periods for Autodesk s fiscal year beginning February 1 2025 and should be applied on a retrospective basis
In November 2024 the FASB issued ASU No 2024 03 Income Statement Reporting Comprehensive Income Expense Disaggregation Disclosures ASU 2024 03 which requires disaggregated disclosures in the notes to the financial statements of certain categories of expenses that are included in expense line items on the face of the income statement ASU 2024 03 also requires a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively and disclosure of the total amount of selling expenses and in annual reporting periods Autodesk s definition of selling expenses In addition the FASB issued ASU No 2025 01 to clarify the requirement to adopt the guidance in annual reporting periods beginning after December 15 2026 and interim periods within annual reporting periods beginning after December 15 2027 ASU 2024 03 is effective for Autodesk s fiscal year beginning February 1 2027 and interim periods for Autodesk s fiscal year beginning February 1 2028 Early adoption is permitted Autodesk is currently evaluating the effect of adopting ASU 2024 03 on its disclosures
In December 2023 the FASB issued ASU No 2023 09 Income Taxes Topic 740 Improvement to Income Tax Disclosures ASU 2023 09 to enhance the transparency and decision usefulness of income tax disclosures ASU 2023 09 requires disaggregated information about a reporting entity s effective tax rate reconciliation as well as information on income taxes paid The standard is intended to benefit investors by providing more detailed income tax disclosures that would be useful in making capital allocation decisions and applies to all entities subject to income taxes ASU 2023 09 is effective for Autodesk s fiscal year beginning February 1 2025 on a prospective basis Autodesk is currently evaluating the effect of adopting ASU 2023 09 on its disclosures
Autodesk recognizes revenue from the sale of 1 product subscriptions cloud service offerings and EBAs 2 renewal fees for existing maintenance plan agreements that were initially purchased with a perpetual software license and 3 consulting and other products and services The three categories are presented as line items on Autodesk s Consolidated Statements of Operations
Payments for product subscriptions cloud subscriptions and maintenance subscriptions are typically due in annual installments or up front with payment terms of 30 to 45 days Payments on EBAs are typically due up front or in annual installments over the contract term with payment terms of 30 to 60 days Autodesk does not have any material variable consideration such as obligations for returns refunds warranties or amounts due to customers for which significant estimation or judgment is required as of the reporting date
Remaining performance obligations consist of total short term long term and unbilled deferred revenue As of January 31 2025 Autodesk had remaining performance obligations of 6 94 billion which represents the total transaction price allocated to remaining performance obligations which are generally recognized over the next three years We expect to recognize 4 46 billion or 64 of our remaining performance obligations as revenue during the next 12 months We expect to recognize the remaining 2 48 billion or 36 of our remaining performance obligations as revenue thereafter
The amount of remaining performance obligations may be impacted by the specific timing duration and size of customer subscription and support agreements the specific timing of customer renewals and foreign currency fluctuations
We receive payments from customers based on a billing schedule as established in our contracts Contract assets relate to performance completed in advance of scheduled billings Contract assets were not material as of January 31 2025 Deferred revenue relates to billings in advance of performance under the contract The primary changes in our contract assets and deferred revenues are due to our performance under the contracts and billings
Revenue recognized during the fiscal years ended January 31 2025 and 2024 that was included in the deferred revenue balances at January 31 2024 and 2023 was 3 49 billion and 3 20 billion respectively The satisfaction of performance obligations typically lags behind billings under revenue contracts from customers
As of both January 31 2025 and 2024 Autodesk had no material unrealized losses individually and in the aggregate for marketable debt securities that are in a continuous unrealized loss position for greater than 12 months Total unrealized gains for securities with net gains in accumulated other comprehensive income were not material for fiscal 2025
Autodesk monitors all marketable debt securities for potential credit losses by reviewing indicators such as but not limited to current credit rating change in credit rating credit outlook and default risk There were no allowances for credit losses as of both January 31 2025 and 2024 There were no write offs of accrued interest receivables for both fiscal 2025 and 2024
There were no material realized gain or loss for the sales or redemptions of debt securities during fiscal 2025 2024 and 2023 Realized gains and losses from the sale or redemption of marketable securities are recorded in Interest and other income expense net on the Company s Consolidated Statements of Operations
As of January 31 2025 and 2024 Autodesk had 168 million and 162 million respectively in direct investments in privately held companies These strategic investments in equity securities do not have readily determined fair values and Autodesk uses the measurement alternative to account for the adjustment to these investments in a given quarter If Autodesk determines that an impairment has occurred Autodesk writes down the investment to its fair value These strategic investments in equity securities are generally subject to a security specific restriction which limits the sale or transfer of the respective equity security during the holding period
Adjustments to the carrying value of our strategic investments in equity securities with no readily determined fair values measured using the measurement alternative are included in Interest and Other Income Expense net on the Company s Consolidated Statements of Operations These adjustments were as follows
Autodesk applies fair value accounting for certain financial assets and liabilities which consist of cash equivalents marketable securities and other financial instruments on a recurring basis The Company defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date
The 2022 Equity Incentive Plan the 2022 Plan was approved by Autodesk s stockholders and became effective on June 16 2022 The 2022 Plan replaced the 2012 Employee Stock Plan as amended and the 2012 Outside Directors Stock Plan as amended collectively the Prior Plans and no further equity awards may be granted under the Prior Plans The 2022 Plan reserves up to 23 million shares The 2022 Plan permits the grant of stock options restricted stock units and restricted stock awards to employees and non employee members of the Board of Directors Each restricted stock unit or restricted stock award granted will be counted against the shares authorized for issuance under the 2022 Plan as 2 08 shares If a granted option restricted stock unit or restricted stock award expires or becomes unexercisable for any reason the unpurchased or forfeited shares that were granted may be returned to the 2022 Plan and may become available for future grant under the 2022 Plan As of January 31 2025 16 million shares subject to restricted stock units and restricted stock awards have been granted under the 2022 Plan Restricted stock units that were granted under the 2022 Plan vest over one to three years from the date of grant The 2022 Plan will expire on March 17 2032 At January 31 2025 approximately 8 million shares were available for future issuance under the 2022 Plan
Based on Autodesk s financial results and relative total stockholder return for the fiscal 2024 performance period The performance stock units were attained at rates ranging from 75 to 96 of the target award
For the restricted stock granted during fiscal years ended January 31 2025 2024 and 2023 the weighted average grant date fair values were 245 32 200 53 and 198 89 respectively The fair value of the shares vested during fiscal years ended January 31 2025 2024 and 2023 were 785 million 580 million and 490 million respectively
During the fiscal year ended January 31 2025 Autodesk granted 3 million restricted stock units Restricted stock units vest over periods ranging from immediately upon grant to a pre determined date that is typically within three years from the date of grant Restricted stock units are not considered outstanding stock at the time of grant as the holders of these units are not entitled to any of the rights of a stockholder including voting rights The fair value of the restricted stock units is expensed ratably over the vesting period
During the fiscal years ended January 31 2025 and 2024 Autodesk settled liability classified awards of 4 million and 15 million respectively As these awards were settled in a fixed dollar amount of shares the awards were accounted for as a liability classified award and were expensed using the straight line method over the vesting period
Autodesk recorded stock based compensation expense related to restricted stock units of 584 million 580 million and 510 million during fiscal years ended January 31 2025 2024 and 2023 respectively As of January 31 2025 total compensation cost not yet recognized of 795 million related to unvested awards is expected to be recognized over a weighted average period of 1 71 years At January 31 2025 the number of restricted stock units granted but unvested was 5 million
During the fiscal year ended January 31 2025 Autodesk granted 279 thousand performance stock units for which the ultimate number of shares earned is determined based on the achievement of performance criteria at the end of the stated service and performance period The performance criteria for the majority of the performance stock units are primarily based on revenue and free cash flow goals adopted by the Compensation and Human Resource Committee and total stockholder return compared against companies in the S P North American Technology Software Index with a market capitalization over 2 0 billion Relative TSR The fair value of the performance stock units is expensed using the accelerated attribution method over the three year vesting period and the performance stock units have the following vesting schedule
Up to one third of the performance stock units may vest following year two depending upon the achievement of the performance criteria for year two as well as two year Relative TSR covering years one and two
Up to one third of the performance stock units may vest following year three depending upon the achievement of the performance criteria for year three as well as three year Relative TSR covering years one two and three
The performance criteria for the performance stock units vested during fiscal year ended January 31 2025 was based on revenue and free cash flow goals adopted by the Compensation and Human Resource Committee
Performance stock units are not considered outstanding stock at the time of grant as the holders of these units are not entitled to any of the rights of a stockholder including voting rights The fair value of the performance stock units is expensed using the accelerated attribution over the vesting period
Autodesk recorded stock based compensation expense related to performance stock units of 57 million 42 million and 54 million during fiscal years ended January 31 2025 2024 and 2023 respectively As of January 31 2025 total compensation cost not yet recognized of 13 million related to unvested performance stock units is expected to be recognized over a weighted average period of 0 83 years At January 31 2025 the number of performance stock units granted but unvested was 541 thousand
Under Autodesk s ESPP which was approved by stockholders in 1998 eligible employees may purchase shares of Autodesk s common stock at their discretion using up to 15 of their eligible compensation subject to certain limitations at 85 of the lower of Autodesk s closing price fair market value on the offering date or the exercise date The offering period for ESPP awards consists of four six month exercise periods within a 24 month offering period
At January 31 2025 a total of 3 million shares were available for future issuance Under the ESPP the Company issues shares on the first trading day following March 31 and September 30 of each fiscal year The ESPP does not have an expiration date
The following table summarizes the number of outstanding options and awards granted to employees and directors as well as the number of securities remaining available for future issuance under these plans as of January 31 2025
Autodesk s fiscal 2025 tax expense is primarily driven by the U S and foreign tax expense including withholding taxes on payments made to the United States or to Singapore from foreign sources a partial audit settlement with the IRS and related increase in reserves offset by a decrease in tax expense relating to stock based compensation and the tax benefit from the valuation allowance release in Australia
Autodesk regularly assesses the need for a valuation allowance against its deferred tax assets In making that assessment Autodesk evaluates whether it is more likely than not that some or all of the deferred tax assets will not be realized based on all available positive and negative evidence
The Company continues to retain a valuation allowance against Portugal New Zealand California Massachusetts and Michigan deferred tax assets and deferred tax assets relating to capital losses or assets that will convert into a capital loss upon reversal in Australia and U S as we do not have sufficient income of the appropriate character to benefit these deferred tax assets In fiscal 2025 the Company established a valuation allowance through goodwill in Australia related to negative evidence at the time of the Payapps Limited acquisition however due to positive evidence supporting the realization of its deferred tax assets the valuation allowance was released In fiscal 2024 the Company established a valuation allowance in Massachusetts on the basis that it is more likely than not that some or all of the deferred tax assets will not be realized The impact of this establishment was offset by a decrease in the valuation allowance in the Netherlands due to the elimination of the deferred tax assets in that jurisdiction in fiscal 2024
The valuation allowance decreased by 18 million in fiscal 2025 primarily due to the reduction of California deferred tax assets The valuation allowance increased by 1 million in fiscal 2024 due to the establishment of valuation allowance in Massachusetts offset with the release of the valuation allowance in the Netherlands due to the elimination of the deferred tax assets
As of January 31 2025 Autodesk had 7 million of cumulative U S federal tax loss carryforwards and 316 million of cumulative U S state tax loss carryforwards which may be available to reduce future income tax liabilities in federal and state jurisdictions The U S federal losses generated beginning in fiscal 2019 are carried forward indefinitely The U S state tax loss carryforward will expire beginning fiscal 2025 through fiscal 2045 In addition to U S federal and state tax loss carryforwards Portugal Norway New Zealand and other foreign jurisdictions incurred tax losses totaling 24 million which may be available to reduce future income tax liabilities Our Portugal Norway and New Zealand losses of 8 million 9 million and 3 million
respectively have an indefinite expiration period Portugal and New Zealand losses have a full valuation allowance against them on our balance sheet as the Company has determined it is more likely than not that these losses will not be utilized
As of January 31 2025 Autodesk had 130 million of cumulative California state research tax credit carryforwards 13 million of cumulative Massachusetts state research tax credit carryforwards and 42 million of cumulative Canadian federal research which may be available to reduce future income tax liabilities in the respective jurisdictions The state research tax credit carryforwards in California and Massachusetts may reduce future California and Massachusetts income tax liabilities indefinitely in those respective states and the Canadian research tax credit carryforwards will expire beginning fiscal 2031 through fiscal 2045 Autodesk also has 20 million of cumulative U S federal foreign tax credit carryforwards which may be available to reduce future U S tax liabilities These foreign tax credits will expire beginning fiscal 2032 through fiscal 2035 As discussed above the California and Massachusetts cumulative assets have full valuation allowance against them on our balance sheet as the Company has determined it is more likely than not that these losses and credits will not be utilized
Utilization of net operating losses and tax credits may be subject to an annual limitation due to ownership change limitations provided in the Internal Revenue Code and similar state provisions This annual limitation may result in the expiration of net operating losses and credits before utilization No ownership change has occurred through the balance sheet date that would result in permanent losses of the U S federal and state tax attributes
As of January 31 2025 the Company had 312 million of gross unrecognized tax benefits of which 47 million would reduce our valuation allowance if recognized The remaining 265 million would impact the effective tax rate The amount of unrecognized tax benefits will immaterially decrease in the next twelve months for statute lapses
During the year ended January 31 2024 the Company corrected its presentation to remove correlative benefits related to certain transfer pricing matters The above comparatives for fiscal 2023 has been corrected to conform to the current period presentation The effect of the change on the ending gross unrecognized tax benefits was 15 million in fiscal 2023
It is the Company s continuing practice to recognize interest and or penalties related to income tax matters in income tax expense Autodesk had 15 million 7 million and 5 million net of tax benefit accrued for interest and penalties related to unrecognized tax benefits as of January 31 2025 2024 and 2023 respectively There was 9 million 2 million and 2 million of net expense for interest and penalties related to tax matters recorded through the consolidated statements of operations for the years ended January 31 2025 2024 and 2023 respectively
Autodesk s U S and state income tax returns for fiscal 2002 through fiscal 2025 remain open to examination due to either net operating loss or credit carryforward The Internal Revenue Service notified the Company of examination of the Company s consolidated federal income tax returns for fiscal 2020 and 2021 This audit commenced in February 2022 and remains in progress As of fiscal 2025 Autodesk settled on a partial disallowance of research and development credits and consequently the reserve on such credits for years not under audit has increased
The results of operations for the following acquisitions are included in the accompanying Consolidated Statements of Operations since their respective acquisition dates Pro forma results of operations have not been presented because the effects of these acquisitions were not material to Autodesk s Consolidated Financial Statements
On May 20 2024 Autodesk acquired 100 of Aether Media Inc Aether a provider of a cloud based artificial intelligence pipeline for creating computer generated 3D characters into live action scenes for total consideration of 131 million in cash Of the total consideration transferred 122 million is considered purchase consideration The remaining amount of 9 million was primarily recorded in Prepaid expenses and other current assets and Long term other assets on our Consolidated Balance Sheets and will be amortized to compensation expense using the straight line method over the vesting period Autodesk expects to enhance artificial intelligence capabilities for Autodesk s visual effects VFX creation tools and democratize high end VFX work on Autodesk s Flow platform
On March 15 2024 Autodesk acquired 100 of the PIX business of X2X LLC PIX a production management solution for secure review and content collaboration in the media and entertainment industry for total consideration of 266 million in cash The acquisition is expected to foster broader collaboration and communication as well as help drive greater efficiencies in the production process
On February 20 2024 Autodesk acquired 100 of the outstanding stock of Payapps Limited Payapps a leading cloud based software platform for managing construction related payments for total consideration of 387 million in cash Of the total consideration transferred 381 million is considered purchase consideration The remaining amount of 6 million was recorded in Prepaid expenses and other current assets and Long term other assets on our Consolidated Balance Sheets and will be amortized to compensation expense using the straight line method over the vesting period Autodesk expects to deepen Autodesk Construction Cloud s footprint and provide a robust payment management offering to serve the needs of general contractors and trade contractors Through automating the application of the payment process Payapps solution provides greater transparency reduces risk and helps accelerate time to payment
The acquisitions during fiscal 2025 were accounted for as business combinations and Autodesk recorded the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values at the date of each respective acquisition The fair values assigned to the identifiable intangible assets acquired were based on estimates and assumptions determined by management Autodesk recorded the excess of consideration transferred over the aggregate fair values as goodwill The goodwill recorded was primarily attributable to synergies expected to arise after the respective acquisition Goodwill of 159 million and 185 million is expected to be deductible for U S income tax purposes for Payapps and PIX respectively No goodwill is deductible for U S income tax purposes for Aether The transaction costs related to the acquisitions were not material
The following table summarizes the fair value of the assets acquired and liabilities assumed by major class for the significant business combinations that were completed during the fiscal year ended January 31 2025
For the business combinations the allocation of purchase price consideration to certain assets and liabilities as well as the final amount of purchase consideration are not yet finalized For the items not yet finalized Autodesk s estimates and assumptions are subject to change within the measurement period up to one year from the acquisition date The primary areas
During the fiscal year ended January 31 2024 Autodesk completed three business combinations The acquisition date fair value of the consideration transferred totaled 85 million in cash Of the total consideration transferred 71 million was considered purchase consideration
The results of operations for fiscal 2024 acquisitions were included in the accompanying Consolidated Statement of Operations from the dates of the respective acquisitions Goodwill of 35 million is deductible for U S income tax purposes
During the fiscal year ended January 31 2023 Autodesk completed two business combinations The acquisition date fair value of the consideration transferred totaled 114 million which consisted of 96 million of cash 40 thousand shares of Autodesk s restricted common stock at an aggregate fair value of 10 million and Autodesk issued a fixed amount of 5 million in common stock at future dates to certain employees Of the total consideration transferred 97 million was considered purchase consideration Of the remaining amount 10 million was recorded in Prepaid expenses and other current assets and Long term other assets on our Consolidated Balance Sheets and is amortized to stock based compensation expense using the straight line method over the vesting period 5 million was accounted for as liability classified awards and is recognized as compensation expense using the straight line method over the vesting period and 2 million was recorded as stock based compensation expense on the date of acquisition
The results of operations for fiscal 2023 acquisitions were included in the accompanying Consolidated Statement of Operations from the dates of the respective acquisitions No goodwill is deductible for U S income tax purposes
At January 31 2025 Autodesk had investments in debt and equity securities that are held in a rabbi trust under non qualified deferred compensation plans and a corresponding deferred compensation liability totaling 118 million Of this amount 12 million was classified as current and 106 million was classified as non current in the Consolidated Balance Sheet Of the 100 million related to investments and deferred compensation liability in a rabbi trust as of January 31 2024 10 million was classified as current and 90 million was classified as non current The current and non current asset portions of the investments in debt and equity securities that are held in a rabbi trust under non qualified deferred compensation plans are recorded in the Consolidated Balance Sheets under Prepaid expenses and other current assets and Long term other assets respectively The current and non current portions of the deferred compensation liability are recorded in the Consolidated Balance Sheets under Accrued compensation and Long term other liabilities respectively
Sales commissions earned by our internal sales personnel and our solution providers are considered incremental and recoverable costs of obtaining a contract with a customer The ending balance of assets recognized from costs to obtain a contract with a customer was 467 million and 210 million as of January 31 2025 and January 31 2024 respectively These assets are recorded in Prepaid expenses and other current assets and Long term other assets in the Consolidated Balance Sheet Amortization expense related to assets recognized from costs to obtain a contract with a customer was 212 million 140 million and 138 million during fiscal years ended January 31 2025 2024 and 2023 respectively Autodesk did not recognize any contract cost impairment losses during the fiscal years ended January 31 2025 2024 or 2023
In November 2022 the Company entered into an Amended and Restated Credit Agreement the Credit Agreement by and among the Company the lenders party thereto and Citibank N A Citibank as administrative agent which provides for an unsecured revolving loan facility in the aggregate principal amount of 1 50 billion with an option to be increased up to 2 0 billion The revolving credit facility is available for working capital or other business needs The Credit Agreement contains customary covenants that could among other things restrict the imposition of liens on Autodesk s assets and restrict Autodesk s ability to incur additional indebtedness or make dispositions of assets if Autodesk fails to maintain compliance with
the financial covenants The Credit Agreement requires the Company to maintain a maximum leverage ratio of Consolidated Covenant Debt to Consolidated EBITDA each as defined in the Credit Agreement no greater than 3 50 1 00 during the term of the credit facility subject to adjustment following the consummation of certain acquisitions up to 4 00 1 00 for up to four consecutive fiscal quarters At January 31 2025 Autodesk was in compliance with the Credit Agreement covenants Revolving loans under the Credit Agreement will bear interest at the Company s option at either i a per annum rate equal to the Base Rate as defined in the Credit Agreement plus a margin of between 0 000 and 0 375 depending on the Company s Public Debt Rating as defined in the Credit Agreement or ii a per annum rate equal to the rate at which dollar deposits are offered in the Secured Overnight Financing Rate plus a margin of between 0 785 and 1 375 depending on Company s Public Debt Rating The interest rates for the revolving credit facility are subject to upward or downward adjustments on an annual basis if the Company achieves or fails to achieve certain sustainability linked targets based on two key performance indicator metrics i the amount of scope 1 and 2 greenhouse gas emissions from the global operations of the Company and its subsidiaries during a fiscal year less qualified emissions reduction instruments and ii the percentage of employees of the Company and its subsidiaries identifying as female working in technical roles The maturity date on the Credit Agreement is September 30 2026 At January 31 2025 Autodesk had no outstanding borrowings under the Credit Agreement
In October 2021 Autodesk issued 1 0 billion aggregate principal amount of 2 4 notes due December 15 2031 2021 Notes Net of a discount of 3 million and issuance costs of 9 million Autodesk received net proceeds of 988 million from issuance of the 2021 Notes Both the discount and issuance costs are being amortized to interest expense over the term of the 2021 Notes using the effective interest method The 2021 Notes were designated as sustainability bonds the net proceeds of which are used to fund environmentally and socially responsible projects in the following areas eco efficient products production technologies and processes sustainable water and wastewater management renewable energy energy efficiency green buildings pollution prevention and control and socioeconomic advancement and empowerment
In January 2020 Autodesk issued 500 million aggregate principal amount of 2 85 notes due January 15 2030 2020 Notes Net of a discount of 1 million and issuance costs of 5 million Autodesk received net proceeds of 494 million from issuance of the 2020 Notes Both the discount and issuance costs are being amortized to interest expense over the term of the 2020 Notes using the effective interest method The proceeds of the 2020 Notes were used for the repayment of 450 million of debt due June 15 2020 and the remainder is available for general corporate purposes
In June 2017 Autodesk issued 500 million aggregate principal amount of 3 5 notes due June 15 2027 the 2017 Notes Net of a discount of 3 million and issuance costs of 5 million Autodesk received net proceeds of 492 million from issuance of the 2017 Notes Both the discount and issuance costs are being amortized to interest expense over the term of the 2017 Notes using the effective interest method The proceeds of the 2017 Notes have been used for the repayment of 400 million of debt due December 15 2017 and the remainder is available for general corporate purposes
In June 2015 Autodesk issued 300 million aggregate principal amount of 4 375 notes due June 15 2025 2015 Notes Net of a discount of 1 million and issuance costs of 3 million Autodesk received net proceeds of 296 million from issuance of the 2015 Notes Both the discount and issuance costs are being amortized to interest expense over the respective terms of the 2015 Notes using the effective interest method The proceeds of the 2015 Notes are available for general corporate purposes
The 2021 Notes 2020 Notes 2017 Notes and the 2015 Notes may all be redeemed at any time subject to a make whole premium In addition upon the occurrence of certain change of control triggering events Autodesk may be required to repurchase all the Notes at a price equal to 101 of their principal amount plus accrued and unpaid interest to the date of repurchase All Notes contain restrictive covenants that limit Autodesk s ability to create certain liens to enter into certain sale and leaseback transactions and to consolidate or merge with or convey transfer or lease all or substantially all of its assets subject to important qualifications and exceptions
Autodesk has operating leases for real estate vehicles and certain equipment Leases have remaining lease terms of less than 1 year to 65 years some of which include options to extend the lease with renewal terms from 1 year to 8 years
and some of which include options to terminate the leases from less than 1 year to 5 years Options to extend the lease are included in the lease liability if they are reasonably certain of being exercised Options to terminate are considered in determining the lease liability if they are reasonably certain of being exercised Payments under our lease arrangements are primarily fixed however certain lease agreements contain variable payments which are expensed as incurred and not included in the operating lease assets and liabilities These amounts include payments affected by the Consumer Price Index payments for common area maintenance that are subject to annual reconciliation and payments for maintenance and utilities The Company s leases do not contain residual value guarantees or material restrictive covenants Short term leases are recognized in the Consolidated Statement of Operations on a straight line basis over the lease term Short term lease expense was not material for the periods presented Changes in operating lease right of use assets and operating lease liabilities are presented net in the accounts payable and other liabilities line in the Consolidated Statements of Cash Flows with the exception of Lease related asset impairments which is presented in Adjustments to reconcile net income to net cash provided by operating activities
Autodesk recorded no operating lease right of use assets impairment charges during the fiscal year ended January 31 2025 During the fiscal years ended January 31 2024 and 2023 Autodesk recorded total operating lease right of use assets impairment charges of 9 million and 29 million respectively Autodesk assessed the asset groupings for disaggregation based on the proposed changes in use of the facilities For asset groups where impairment was triggered Autodesk utilized an income approach to value the asset groups by developing discounted cash flow models The significant assumptions used in the discounted cash flow models for each of the asset groups included projected sublease income over the remaining lease terms expected downtime prior to the commencement of future subleases expected lease incentives offered to future tenants and discount rates that reflected the level of risk associated with these future cash flows These significant assumptions are considered Level 1 and Level 2 inputs in accordance with the fair value hierarchy described in Note 1 Business and Summary of Significant Accounting Policies The operating lease right of use assets and other lease related assets charges are included in general and administrative in the Company s Consolidated Statements of Operations
1 Includes 13 million 16 million and 14 million in variable lease payments not included in Operating lease liabilities and Long term operating lease liabilities on the Consolidated Balance Sheet for fiscal years ended January 31 2025 2024 and 2023 respectively
The weighted average remaining lease term for operating leases is 5 8 years and 6 2 years at January 31 2025 and 2024 respectively The weighted average discount rate was 2 90 and 2 86 at January 31 2025 and 2024 respectively
Autodesk has subleased certain office space to a third party and has classified the sublease as an operating lease The sublease has a remaining lease term of 7 1 years Sublease income was 8 million 8 million and 5 million during the fiscal years ended January 31 2025 2024 and 2023 respectively Sublease income is recorded as a reduction of lease expense in the Company s Consolidated Statements of Operations
Operating lease amounts in the table above do not include sublease income payments of 64 million Autodesk expects to receive sublease income payments of approximately 34 million for fiscal 2026 through fiscal 2030 and 30 million thereafter
The effects of derivatives designated as hedging instruments on Autodesk s Consolidated Statements of Operations were as follows for the fiscal years ended January 31 2025 2024 and 2023 amounts presented include any income tax effects
The amount and location of gain loss recognized in net income of derivatives not designated as hedging instruments on Autodesk s Consolidated Statements of Operations were as follows for the fiscal years ended January 31 2025 2024 and 2023 amounts presented include any income tax effects
Autodesk uses foreign currency contracts to reduce the exchange rate impact on a portion of the net revenue or operating expense of certain anticipated transactions These currency collars and forward contracts are designated and documented as cash flow hedges The notional amounts of these contracts are presented net settled and were 1 52 billion at January 31 2025 and 1 25 billion at January 31 2024 Outstanding contracts are recognized as either assets or liabilities on the Company s Consolidated Balance Sheets at fair value The majority of the net gain of 24 million remaining in Accumulated other comprehensive loss as of January 31 2025 is expected to be recognized into earnings within the next 24 months
Autodesk uses foreign currency contracts that are not designated as hedging instruments to reduce the exchange rate risk associated primarily with foreign currency denominated receivables payables and cash The notional amounts of these foreign currency contracts are presented net settled and were 1 14 billion at January 31 2025 and 455 million at January 31 2024
In the normal course of business Autodesk enters into various purchase commitments for goods or services Total non cancellable purchase commitments as of January 31 2025 were approximately 843 million for periods through fiscal 2033 These purchase commitments primarily result from contracts entered into for the acquisition of cloud services marketing and commitments related to our investment agreements with limited liability partnership funds
Autodesk has certain royalty commitments associated with the sale and licensing of certain products Royalty expense is generally based on a fixed rate over a specified period dollar amount per unit sold or a percentage of the underlying revenue Royalty expense which was recorded under cost of subscription and maintenance revenue and cost of other revenue on Autodesk s Consolidated Statements of Operations was 23 million in fiscal 2025 21 million in fiscal 2024 and 18 million in fiscal 2023
In the normal course of business Autodesk provides indemnifications of varying scopes including limited product warranties and indemnification of customers against claims of intellectual property infringement made by third parties arising from the use of its products or services Autodesk accrues for known indemnification issues if a loss is probable and can be reasonably estimated Historically costs related to these indemnifications have not been significant and because potential future costs are highly variable Autodesk is unable to estimate the maximum potential impact of these indemnifications on its future results of operations
In connection with the purchase sale or license of assets or businesses with third parties Autodesk has entered into or assumed customary indemnification agreements related to the assets or businesses purchased sold or licensed Historically costs related to these indemnifications have not been significant and because potential future costs are highly variable Autodesk is unable to estimate the maximum potential impact of these indemnifications on its future results of operations
As permitted under Delaware law Autodesk has agreements whereby it indemnifies its officers and directors for certain events or occurrences while the officer or director is or was serving at Autodesk s request in such capacity The maximum potential amount of future payments Autodesk could be required to make under these indemnification agreements is unlimited however Autodesk has directors and officers liability insurance coverage that is intended to reduce its financial exposure and may enable Autodesk to recover a portion of any future amounts paid Autodesk believes the estimated fair value of these indemnification agreements in excess of applicable insurance coverage is minimal
Autodesk is involved in a variety of claims suits inquiries investigations and proceedings in the normal course of business including claims of alleged infringement of intellectual property rights commercial employment tax prosecution of unauthorized use business practices and other matters Autodesk routinely reviews the status of each significant matter and assesses its potential financial exposure If the potential loss from any matter is considered probable and the amount can be reasonably estimated Autodesk records a liability for the estimated loss Because of inherent uncertainties related to these legal matters Autodesk bases its loss accruals on the best information available at the time As additional information becomes
available Autodesk reassesses its potential liability and may revise its estimates In the Company s opinion resolution of pending matters is not expected to have a material adverse impact on its consolidated results of operations cash flows or its financial position Given the unpredictable nature of legal proceedings there is a reasonable possibility that an unfavorable resolution of one or more such proceedings could in the future materially affect the Company s results of operations cash flows or financial position in a particular period however based on the information known by the Company as of the date of this filing and the rules and regulations applicable to the preparation of the Company s financial statements any such amount is either immaterial or it is not possible to provide an estimated amount of any such potential loss
In early March 2024 the Audit Committee of Autodesk s Board of Directors commenced an internal investigation with the assistance of outside counsel and advisors regarding the Company s free cash flow and non GAAP operating margin practices the Internal Investigation On March 8 2024 the Company voluntarily contacted the U S Securities and Exchange Commission SEC to inform it of the Internal Investigation On April 3 2024 the United States Attorney s Office for the Northern District of California USAO contacted the Company regarding the Internal Investigation The Company voluntarily provided the SEC and USAO with certain documents relating to the Internal Investigation and will continue to cooperate with the SEC and USAO At this stage the Company cannot reasonably estimate the amount of any possible financial loss that could result from this matter
On April 24 2024 Michael Barkasi filed a purported federal securities class action complaint in the Northern District of California against the Company our Chief Executive Officer Andrew Anagnost and our former Chief Financial Officer Deborah L Clifford The complaint which was filed shortly after the Company s announcement of the Internal Investigation generally alleges that the defendants made false and misleading statements in violation of Sections 10 b and 20 a of the Securities Exchange Act of 1934 the Exchange Act and Rule 10b 5 promulgated thereunder On July 10 2024 the Court appointed a lead plaintiff in the action and an amended complaint was filed on September 16 2024 The action purports to be brought on behalf of those who purchased or otherwise acquired the Company s securities between February 23 2023 and April 16 2024 and seeks unspecified damages and other relief On November 25 2024 defendants filed a motion to dismiss the complaint At this stage the Company cannot reasonably estimate the amount of any possible financial loss that could result from this matter
Autodesk has stock repurchase programs that are used to offset dilution from the issuance of stock under the Company s employee stock plans and for such other purposes as may be in the interests of Autodesk and its stockholders which has the effect of returning excess cash generated from the Company s business to stockholders Autodesk repurchased and retired 3 million shares in fiscal 2025 at an average repurchase price of 278 86 per share 4 million shares in fiscal 2024 at an average repurchase price of 201 54 per share and 5 million shares in fiscal 2023 at an average repurchase price of 198 51 per share
At January 31 2025 3 88 billion and 5 billion remained available for repurchase under the November 2022 and November 2024 repurchase programs approved by the Board of Directors respectively The share repurchase programs do not have an expiration date and the pace and timing of repurchases will depend on factors such as cash generation from operations available surplus the volume of employee stock plan activity remaining shares available in the authorized pool cash requirements for acquisitions cash requirements to retire outstanding debt economic and market conditions stock price and legal and regulatory requirements
Reclassifications related to gains and losses on available for sale debt securities are included in Interest and other income expense net Refer to Note 10 Derivative Instruments for the amount and location of reclassifications related to derivative instruments Reclassifications of the defined benefit pension components of net periodic benefit cost are included in Interest and other income expense net
Basic net income per share is computed using the weighted average number of shares of common stock outstanding during the period Diluted net income per share is computed using the weighted average number of shares of common stock outstanding during the period and potentially dilutive common shares including the effect of restricted stock units performance share awards and stock options using the treasury stock method The following table sets forth the computation of the numerators and denominators used in the basic and diluted net income per share amounts
The computation of diluted net income per share does not include shares that are anti dilutive under the treasury stock method because their exercise prices are higher than the average market value of Autodesk s stock during the fiscal year The effect of 92 thousand 297 thousand and 962 thousand anti dilutive shares were excluded from the computation of diluted net income per share for the fiscal years ended January 31 2025 2024 and 2023 respectively
Autodesk has a 401 k plan that covers nearly all U S employees Eligible employees may contribute up to 75 of their pretax salary subject to limitations mandated by the Internal Revenue Service Autodesk makes voluntary cash contributions and matches a portion of employee contributions in cash Autodesk s contributions were 27 million in fiscal 2025 26 million in fiscal 2024 and 26 million in fiscal 2023 Autodesk does not allow participants to invest in Autodesk common stock through the 401 k plan
Autodesk provides certain defined benefit pension plans to employees located in countries outside of the United States primarily the United Kingdom Switzerland and Japan The Company deposits funds for specific plans consistent with the requirements of local law with insurance companies or third party trustees or into government managed accounts and accrues for the unfunded portion of the obligation where material
The projected benefit obligation was 78 million and 81 million as of January 31 2025 and January 31 2024 respectively The accumulated benefit obligation was 70 million and 73 million as of January 31 2025 and January 31 2024 respectively The related fair value of plan assets was 74 million and 77 million as of January 31 2025 and January 31 2024 respectively Our defined pension plan assets are measured at fair value and consist primarily of insurance contracts categorized as level 2 in the fair value hierarchy and an investment fund valued using net asset value The insurance contracts represent the immediate cash surrender value of assets managed by qualified insurance companies The assets held in the investment fund are invested in a diversified growth fund actively managed by a third party
Autodesk recognized an aggregate pension liability for the funded status of 9 million and 6 million in Long term other liabilities on the Consolidated Balance Sheet as of January 31 2025 and January 31 2024 respectively Our total net periodic pension plan cost was 3 million 2 million and 3 million for fiscal years 2025 2024 and 2023 respectively
Autodesk also provides defined contribution plans in certain foreign countries where required by statute Autodesk s funding policy for foreign defined contribution plans is consistent with the local requirements in each country Autodesk s contributions to these plans were 47 million in fiscal 2025 43 million in fiscal 2024 and 39 million in fiscal 2023
Autodesk provides a cash balance plan that insures the risks of disability death and longevity in which the vested pension capital is reinvested and provides a 100 capital and interest guarantee The weighted average guaranteed interest crediting rate for cash balance plans was 1 1 and 1 for mandatory retirement savings and 0 5 0 3 and 0 3 for supplementary retirement savings for fiscal 2025 2024 and 2023 respectively
In addition Autodesk offers a non qualified deferred compensation plan to certain key employees whereby they may defer a portion or all of their annual compensation until retirement or a different date specified by the employee in accordance with terms of the plan See Note 7 Deferred Compensation for further discussion
During fiscal 2026 Autodesk initiated a restructuring plan 2026 Plan to support Autodesk s initiatives to optimize its go to market organization and at the same time to reallocate resources to Autodesk s strategic priorities of investments in cloud platform and artificial intelligence With this restructuring plan Autodesk is realigning roles to maximize talent investments and to distribute critical expertise globally
The 2026 Plan includes a gross reduction in force that will result in the aggregate termination of approximately 9 of the Company s workforce or approximately 1 350 employees other exit costs and facility reductions Total pre tax restructuring charges are estimated to be approximately 135 million to 150 million Autodesk expects to complete the 2026 Plan by the end of its fourth quarter of fiscal 2026 ending January 31 2026 Under the 2026 Plan Autodesk recorded restructuring charges of 15 million for the fiscal year ended January 31 2025 in accordance with applicable accounting guidance
We have audited the accompanying consolidated balance sheets of Autodesk Inc the Company as of January 31 2025 and 2024 the related consolidated statements of operations comprehensive income stockholders equity and cash flows for each of the three years in the period ended January 31 2025 and the related notes and financial statement schedule listed in the Index at Item 15 a 2 collectively referred to as the consolidated financial statements In our opinion the consolidated financial statements present fairly in all material respects the financial position of the Company at January 31 2025 and 2024 and the results of its operations and its cash flows for each of the three years in the period ended January 31 2025 in conformity with U S generally accepted accounting principles
We also have audited in accordance with the standards of the Public Company Accounting Oversight Board United States PCAOB the Company s internal control over financial reporting as of January 31 2025 based on criteria established in Internal Control
These financial statements are the responsibility of the Company s management Our responsibility is to express an opinion on the Company s financial statements based on our audits We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U S federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB
We conducted our audits in accordance with the standards of the PCAOB Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement whether due to error or fraud Our audits included performing procedures to assess the risks of material misstatement of the financial statements whether due to error or fraud and performing procedures that respond to those risks Such procedures included examining on a test basis evidence regarding the amounts and disclosures in the financial statements Our audits also included evaluating the accounting principles used and significant estimates made by management as well as evaluating the overall presentation of the financial statements We believe that our audits provide a reasonable basis for our opinion
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that 1 relates to accounts or disclosures that are material to the financial statements and 2 involved our especially challenging subjective or complex judgments The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements taken as a whole and we are not by communicating the critical audit matter below providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates
As discussed in Note 1 to the consolidated financial statements revenue is recognized when the Company s offerings are delivered to its customers in an amount that reflects the consideration expected in exchange for the products and services
The Company enters into contracts with its customers that may include promises to transfer term based product subscriptions cloud service offerings and support services Auditing the Company s revenue recognition was challenging and complex due to the effort required to analyze the accounting treatment for the Company s various product and service offerings in accordance with ASC 606 Revenue from Contracts with Customers This involved assessing the impact of terms and conditions in contracts with customers to determine whether products and services are considered distinct performance obligations and the related timing of revenue recognition
We obtained an understanding evaluated the design and tested the operating effectiveness of internal controls over the Company s identification and evaluation of distinct performance obligations and the determination of the timing of revenue recognition
Among other procedures to evaluate management s identification and evaluation of the distinct performance obligations and timing of revenue recognition we read executed contracts for a sample of sales transactions to understand the contract identify the promised products and services in the contract and identify the distinct performance obligations and related timing of revenue recognition
Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission 2013 framework the COSO criteria In our opinion Autodesk Inc the Company maintained in all material respects effective internal control over financial reporting as of January 31 2025 based on the COSO criteria
We also have audited in accordance with the standards of the Public Company Accounting Oversight Board United States PCAOB the accompanying consolidated balance sheets of the Company as of January 31 2025 and 2024 the related consolidated statements of operations comprehensive income stockholders equity and cash flows for each of the three years in the period ended January 31 2025 and the related notes and financial statement schedule listed in the Index at Item 15 a 2 and our report dated March 6 2025 expressed an unqualified opinion thereon
The Company s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management s Report on Internal Control Over Financial Reporting Our responsibility is to express an opinion on the Company s internal control over financial reporting based on our audit We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U S federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB
We conducted our audit in accordance with the standards of the PCAOB Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects
Our audit included obtaining an understanding of internal control over financial reporting assessing the risk that a material weakness exists testing and evaluating the design and operating effectiveness of internal control based on the assessed risk and performing such other procedures as we considered necessary in the circumstances We believe that our audit provides a reasonable basis for our opinion
A company s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles A company s internal control over financial reporting includes those policies and procedures that 1 pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company 2 provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company and 3 provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition use or disposition of the company s assets that could have a material effect on the financial statements
Because of its inherent limitations internal control over financial reporting may not prevent or detect misstatements Also projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate
We maintain disclosure controls and procedures as defined in Rule 13a 15 e and 15d 15 e under the Securities Exchange Act of 1934 as amended the Exchange Act Our disclosure controls and procedures are designed to ensure that information required to be disclosed in our Exchange Act reports is i recorded processed summarized and reported within the time periods specified in the rules of the Securities and Exchange Commission SEC and ii accumulated and communicated to Autodesk management including our Chief Executive Officer and Chief Financial Officer to allow timely decisions regarding required disclosure We conducted an evaluation under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this Annual Report on Form 10 K Based upon this evaluation our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures are effective as of January 31 2025
Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a 15 f under the Securities Exchange Act of 1934 as amended Our management assessed the effectiveness of our internal control over financial reporting as of January 31 2025 In making this assessment our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission COSO in the 2013 Internal Control Integrated Framework Our management including our Chief Executive Officer and Chief Financial Officer does not expect that our disclosure controls and procedures or our internal control over financial reporting will necessarily prevent all errors and all fraud A control system no matter how well conceived and operated can provide only reasonable not absolute assurance that the objectives of the control system are met Further the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs Because of the inherent limitations in all control systems no evaluation of controls can provide absolute assurance that all control issues and instances of fraud if any within Autodesk have been detected
Our management has concluded that as of January 31 2025 our internal control over financial reporting was effective to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles Our independent registered public accounting firm Ernst Young LLP has issued an audit report on our internal control over financial reporting which is included in Part II Item 8 herein
There were no changes in our internal control over financial reporting as such term is defined in Rules 13a 15 f and 15d 15 f under the Securities Exchange Act of 1934 during the three months ended January 31 2025 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting
On December 4 2024 Dr Ayanna Howard one of our directors adopted a Rule 10b5 1 trading arrangement providing for the sale from time to time of an aggregate of up to 8 170 shares of our common stock The trading arrangement is intended to satisfy the affirmative defense in Rule 10b5 1 c The duration of the trading arrangement is until December 4 2026 or earlier if all transactions under the trading arrangement are completed
No other officers or directors as defined in Rule 16a 1 f adopted and or terminated a Rule 10b5 1 trading arrangement or a non 10b5 1 trading arrangement or a non 10b5 1 trading arrangement as defined in Regulation S K Item 408 during the last fiscal quarter
Certain information required by Part III is omitted from this Annual Report because we intend to file a definitive proxy statement pursuant to Regulation 14A for our Annual Meeting of Stockholders not later than 120 days after the end of the fiscal year covered by this Annual Report the Proxy Statement and certain information included therein is incorporated herein by reference Only those sections of the Proxy Statement that specifically address the items set forth herein are incorporated by reference
The information required by this Item is incorporated herein by reference to the sections entitled Proposal One Election of Directors Security Ownership of Certain Beneficial Owners and Management Governance and our Board of Directors and Corporate Governance Guidelines in our Proxy Statement
joined Autodesk in September 1997 and has served as President and Chief Executive Officer since June 2017 He also served as Interim Chief Financial Officer from January 2021 to March 2021 Dr Anagnost served as Co CEO from February 2017 to June 2017 Chief Marketing Officer from December 2016 to June 2017 and as the Company s Senior Vice President Business Strategy Marketing from March 2012 to June 2017 From December 2009 to March 2012 Dr Anagnost was Vice President Product Suites and Web Services of the Company Prior to this position Dr Anagnost served as Vice President of CAD CAE products for the manufacturing division of the Company from March 2007 to December 2009 Previously Dr Anagnost held other senior management positions at the Company Prior to joining the Company Dr Anagnost held various engineering sales marketing and product management positions at Lockheed Aeronautical Systems Company and EXA Corporation He also served as an NRC post doctoral fellow at NASA Ames Research Center
joined Autodesk as Executive Vice President and Chief Financial Officer in December 2024 Mr Moorjani previously served as Chief Financial Officer of Elastic NV Elastic a software company for search powered solutions since August 2017 and assumed the additional responsibilities of Chief Operations Officer in May 2022 Prior to joining Elastic Mr Moorjani served in various executive and senior leadership finance and sales positions at Infoblox VMware Cisco PTC and Goldman Sachs Mr Moorjani holds a Bachelor of Commerce degree from the University of Mumbai and an M B A from the Wharton School of the University of Pennsylvania
joined Autodesk in January 2003 and has served as Executive Vice President and Chief Operating Officer since November 1 2022 He previously served as Executive Vice President and Chief Revenue Officer from December 2020 through January 2022 and as Vice President and Chief Revenue Officer from August 2020 to December 2020 Mr Blum served as Executive Vice President Worldwide Field Operations from December 2020 to November 2021 and as Senior Vice President Worldwide Field Operations from September 2017 to December 2020 Mr Blum served as Senior Vice President Worldwide Sales and Services from February 2011 to September 2017 From January 2003 to February 2011 he served as Senior Vice President of Americas Sales Prior to this position Blum was Executive Vice President of Sales and Account Management for Parago Inc Blum also held positions at Mentor Graphics most recently serving as Vice President of America s sales Before joining Mentor Graphics he held engineering and sales positions at NCR Corporation and Advanced Micro Devices
joined Autodesk in January 2022 and has served as Executive Vice President Corporate Affairs Chief Legal Officer Corporate Secretary since May 2022 Ms Keene previously served as Senior Vice President Chief Legal Officer General Counsel Corporate Secretary of Unity Technologies Unity from September 2016 to January 2022 Prior
to joining Unity Ms Keene served as Vice President Assistant General Counsel and Assistant Secretary of Autodesk from 2012 to 2016 and had served in various legal positions at Autodesk since August 2005 Before joining Autodesk Ms Keene was a technology transactions attorney at Morrison Foerster LLP
joined Autodesk in October 2015 and has served as Executive Vice President Chief People Officer since January 2022 Ms Pearce previously served as Vice President People Places from June 2020 to December 2021 and as Senior HR Director Digital Platforms and Corporate Functions from September 2018 through May 2020 Ms Pearce served as HR Director Global Territory Sales from February 2018 to September 2018 and as Asia Pacific and Japan HR Director from October 2015 through January 2018 Prior to joining Autodesk Ms Pearce was the HR Director Global Operations R D and Engineering for Dyson Limited from December 2011 to September 2015 Ms Pearce also previously held leadership positions at Microsoft Corporation including most recently as the Asia Pacific HR Leader for Microsoft Consumer and Online
The information required by this Item is incorporated herein by reference to the sections entitled Security Ownership of Certain Beneficial Owners and Management and Executive Compensation Equity Compensation Plan Information in our Proxy Statement
The information required by this Item is incorporated herein by reference to the sections entitled Certain Relationships and Related Party Transactions and Governance and our Board of Directors Independence of the Board in our Proxy Statement
The information required by this Item is incorporated herein by reference to the sections entitled Proposal Two Ratification of the Appointment of Independent Registered Public Accounting Firm in our Proxy Statement
The information concerning Autodesk s financial statements and the Report of Ernst Young LLP Independent Registered Public Accounting Firm PCAOB ID 42 San Francisco California required by this Item is incorporated by reference herein to the section of this Report in Part II Item 8 entitled Financial Statements and Supplementary Data
The following financial statement schedule of Autodesk Inc for the fiscal years ended January 31 2025 2024 and 2023 is filed as part of this Report and should be read in conjunction with the Consolidated Financial Statements of Autodesk Inc
Schedules not listed above have been omitted because they are not applicable or are not required or the information required to be set forth therein is included in the Consolidated Financial Statements or Notes thereto
The certifications attached as Exhibit 32 1 that accompany this Annual Report on Form 10 K are not deemed filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of Autodesk Inc under the Securities Act of 1933 as amended or the Securities Exchange Act of 1934 as amended whether made before or after the date of this Form 10 K irrespective of any general incorporation language contained in such filing
Pursuant to the requirements of Section 13 or 15 d of the Securities Exchange Act of 1934 the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized
that each person whose signature appears below constitutes and appoints Andrew Anagnost and Janesh Moorjani each as his or her attorney in fact each with the power of substitution for him or her in any and all capacities to sign any amendments to this Report on Form 10 K and to file the same with exhibits thereto and other documents in connection therewith with the Securities and Exchange Commission hereby ratifying and confirming all that each of said attorneys in fact or his substitute or substitutes may do or cause to be done by virtue hereof

Company Name	Autodesk, Inc. Vist SEC web-site
Category	SERVICES-PREPACKAGED SOFTWARE
Trading Symbol	ADSK