Autodesk, Inc. reports 1.3% revenue growth in FY2018 and 1.7 pp EBITDA Margin decline from -17.7% to -19.5%
03/06/2018 • About Autodesk, Inc. (
$ADSK) • By InTwits
Autodesk, Inc. reported FY2018 financial results today. Here are the key drivers of the company's long term financial model:
- The company operates at negative EBITDA Margin: -19.5%
- Autodesk, Inc. spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for FY2014-FY2018 is 8.5%. Average EBITDA Margin for the same period was 0.6%. In FY2018 SBC/Revenue was even higher: 12.7%
- Autodesk, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.0%. At the same time it's a lot of higher than industry average of 3.1%.
- CAPEX is quite volatile: $61m in 2018, $26m in 2017, $25m in 2016, $37m in 2015, $29m in 2014
- In the last 5 years the company invested considerably less than D&A: $339m vs. $668m. In FY2018 this situation was still the same: CAPEX was 51 while D&A was 108
- The company has unprofitable business model: ROIC is -27.9%
- It operates with high leverage: Net Debt/EBITDA is 13.3x while industry average is -2.2x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue increased slightly on 1.3%. Revenue growth showed acceleration in FY18Q4 - it increased 15.7% YoY. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased slightly on 1.9 pp from 32.3% to 34.2% in 2018. EBITDA Margin declined at -10.4 pp per annum in FY2014-FY2018.
Gross Margin increased on 2.1 pp from 83.2% to 85.2% in FY2018. During FY2014-FY2018 Gross Margin bottomed in FY2017 at 83.2%. SG&A as a % of Revenue increased on 3.2 pp from 64.5% to 67.7% in FY2018. SG&A as a % of Revenue followed a growing trend at 5.3 pp per annum in FY2014-FY2018. Stock Based Compensation (SBC) as a % of Revenue increased slightly on 1.8 pp from 10.9% to 12.7% in FY2018. SBC as a % of Revenue grew at 1.9 pp per annum in the last 5 years.
Net Income margin increased slightly on 1.1 pp from -28.7% to -27.6% in FY2018. Net Income margin followed a declining trend at -10.7 pp per annum in FY2014-FY2018.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 2.5% in FY2018. Autodesk, Inc.'s CAPEX/Revenue decreased slightly on 0.54 pp from 3.0% in FY2015 to 2.5% in FY2018. It's average level of CAPEX/Revenue for the last three years was 3.0%.
Accounts receivable as a % of Revenue decreased slightly on 0.96 pp from 22.3% to 21.3% in FY2018. Accounts payable as a % of Revenue increased on 3.9 pp from 27.3% to 31.2% in FY2018.
Leverage (Debt)
Debt level is 13.3x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA didn't change in FY2018. Debt increased on 6.4% while cash dropped on 11.1%.
The company has no short term refinancing risk: short term debt is zero.
Management team
Autodesk, Inc.'s CEO Andrew Anagnost is a founder and has spent 2 years with the company. CEO total compensation was
$36,046,959 in FY2018 which included
$958,500 salary and
$1,200 annual bonus. Autodesk, Inc.'s CFO R Scott Herren has spent 4 years with the company.
At the end of financial year the company had 0.27% shares owned by insiders. Insider ownership didn't change in 2018.
The company has 8,800 employees. The number of employees decreased on 2.2%. Average revenue per employee in FY2018 was
$233,705 and it increased on 3.6%.
Financial and operational results
FY ended 01/31/2018
Autodesk, Inc. ($ADSK) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 2,274 | 2,512 | 2,504 | 2,031 | 2,057 | 1.3% |
| Gross Profit | 2,000 | 2,170 | 2,133 | 1,689 | 1,753 | 3.8% |
| SG&A | 1,091 | 1,281 | 1,309 | 1,310 | 1,392 | 6.3% |
| EBITDA | 414 | 267 | 147 | -360 | -401 | |
| EBIT | 285 | 121 | 1 | -500 | -509 | |
| Tax | 51 | 1 | 310 | 58 | 10 | -83.5% |
| Net Income | 229 | 82 | -331 | -582 | -567 | |
| Stock Based Compensation | 123 | 165 | 197 | 222 | 261 | 17.9% |
Balance Sheet
|
|---|
| Cash | 1,853 | 1,411 | 1,353 | 1,213 | 1,078 | -11.1% |
| Accounts Receivable | 424 | 459 | 654 | 452 | 438 | -3.1% |
| Accounts Payable | 85 | 101 | 120 | 94 | 95 | 1.3% |
| Short Term Debt | 0 | 0 | 0 | 399 | 0 | -100.0% |
| Long Term Debt | 746 | 743 | 1,488 | 1,092 | 1,586 | 45.2% |
Cash flow
|
|---|
| Capex | 64 | 76 | 72 | 76 | 51 | -33.3% |
| Acquisitions | 176 | 630 | 149 | 85 | | |
Ratios
|
|---|
| Revenue growth | -1.7% | 10.5% | -0.3% | -18.9% | 1.3% | |
| EBITDA growth | -4.6% | -35.6% | -44.8% | -345.0% | 11.2% | |
|
|---|
| Gross Margin | 87.9% | 86.4% | 85.2% | 83.2% | 85.2% | 2.1% |
| EBITDA Margin | 18.2% | 10.6% | 5.9% | -17.7% | -19.5% | -1.7% |
| EBIT Margin | 12.5% | 4.8% | 0.1% | -24.6% | -24.8% | -0.2% |
| SG&A, % of revenue | 48.0% | 51.0% | 52.3% | 64.5% | 67.7% | 3.2% |
| SBC, % of revenue | 5.4% | 6.6% | 7.9% | 10.9% | 12.7% | 1.8% |
| Net Income Margin | 10.1% | 3.3% | -13.2% | -28.7% | -27.6% | 1.1% |
| CAPEX, % of revenue | 2.8% | 3.0% | 2.9% | 3.7% | 2.5% | -1.3% |
|
|---|
| ROIC | 9.5% | 4.0% | 0.0% | -18.1% | -27.9% | -9.8% |
| ROE | 10.6% | 3.7% | -17.2% | -49.5% | | |
| Net Debt/EBITDA | -2.7x | -2.5x | 0.9x | | |
People
|
|---|
| Insider ownership | 0.3% | 0.3% | 0.3% | 0.3% | 0.3% | 0.0% |
| Employees | 7,600 | 8,823 | 9,500 | 9,000 | 8,800 | -2.2% |
| Revenue/Employee, th. $ | 299 | 285 | 264 | 226 | 234 | 3.6% |
Autodesk, Inc. ($ADSK) key quoterly financial indicators
| mln. $ | FY18Q1 | FY18Q2 | FY18Q3 | FY18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 486 | 502 | 515 | 554 | | -5.1% | -8.9% | 5.2% | 15.7% |
| EBITDA | -91 | -79 | -75 | -155 | | | -1,156.0% | | |
| Net Income | -130 | -144 | -120 | -174 | | | | | |
Balance Sheet
|
|---|
| Cash | 1,340 | 1,174 | 1,025 | 1,078 | | 9.5% | -20.0% | -28.6% | -11.1% |
| Short Term Debt | 399 | 0 | 0 | 0 | | | | | -100.0% |
| Long Term Debt | 1,092 | 1,585 | 1,585 | 1,586 | | -26.6% | 6.4% | 6.4% | 45.2% |
Ratios
|
|---|
| Gross Margin | 83.9% | 85.1% | 85.0% | 86.8% | | 1.9% | 0.6% | 1.6% | 4.1% |
| EBITDA Margin | -18.8% | -15.8% | -14.6% | -28.0% | | 3.2% | -17.1% | -11.5% | -0.3% |
| Net Income Margin | -26.7% | -28.7% | -23.2% | -31.3% | | 6.1% | -10.9% | 5.9% | 4.9% |
Peers in Application Software
Below we provide Autodesk, Inc. benchmarking against other companies in Application Software industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| nFusz Inc ($FUSZ) | | | | | 433.3% |
| CloudCommerce Inc ($CLWD) | | -38.1% | 247.6% | 40.9% | 301.1% |
| Seven Stars Cloud Group, Inc. ($SSC) | | 134.7% | 663.8% | 310.3% | 161.7% |
| Aurora Mobile Limited ($JG) | | | | 304.9% | 150.8% |
| Intelligent Systems Corporation ($INS) | | 14.2% | 71.0% | 12.2% | 119.0% |
| |
|---|
| Median (150 companies) | 27.9% | 14.0% | 14.3% | 15.7% | 15.2% |
|---|
| Autodesk, Inc. ($ADSK) | | 10.5% | -0.3% | -18.9% | 1.3% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Skkynet Cloud Systems Inc ($SKKY) | 99.7% | 97.4% | 98.0% | 97.6% | 96.5% |
| hopTo Inc ($HPTO) | 91.8% | 87.8% | 95.9% | 98.2% | 95.4% |
| Aware, Inc. ($AWRE) | 75.4% | 87.2% | 90.3% | 94.6% | 92.3% |
| Alteryx, Inc. ($AYX) | 77.5% | 80.5% | 81.3% | 83.4% | 91.0% |
| Aspen Technology, Inc. ($AZPN) | 86.5% | 88.7% | 89.7% | 90.2% | 89.9% |
| |
|---|
| Median (149 companies) | 62.8% | 61.7% | 63.8% | 64.4% | 65.3% |
|---|
| Autodesk, Inc. ($ADSK) | 87.9% | 86.4% | 85.2% | 83.2% | 85.2% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Aspen Technology, Inc. ($AZPN) | 34.5% | 42.2% | 46.0% | 45.2% | 43.3% |
| ANSYS, Inc. ($ANSS) | 45.9% | 45.8% | 45.1% | 41.9% | 41.4% |
| Paycom Software, Inc. ($PAYC) | 15.1% | 19.5% | 35.1% | 34.4% | 35.9% |
| j2 Global, Inc. ($JCOM) | 41.6% | 40.6% | 41.7% | 36.5% | 35.7% |
| Adobe Inc. ($ADBE) | 17.5% | 25.9% | 31.2% | 34.2% | 35.3% |
| |
|---|
| Median (151 companies) | -10.3% | -10.7% | -5.3% | -3.3% | -3.1% |
|---|
| Autodesk, Inc. ($ADSK) | 18.2% | 10.6% | 5.9% | -17.7% | -19.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| TimefireVR Inc ($TFVR) | 0.0% | 350.5% | 4.3% | | 1,021.9% |
| MGT Capital Investments Inc ($MGTI) | 0.0% | 36.5% | 221.4% | 129.8% | 344.5% |
| Integrated Ventures Inc ($INTV) | | | | | 199.9% |
| ShotSpotter, Inc. ($SSTI) | | 18.3% | 28.9% | 27.1% | 24.3% |
| Ellie Mae, Inc. ($ELLI) | 12.3% | 20.6% | 16.7% | 21.1% | 19.4% |
| |
|---|
| Median (152 companies) | 2.8% | 2.7% | 3.0% | 2.3% | 2.4% |
|---|
| Autodesk, Inc. ($ADSK) | 2.8% | 3.0% | 2.9% | 3.7% | 2.5% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| InsPro Technologies Corp ($ITCC) | -558.9% | | | | 127.4% |
| Manhattan Associates, Inc. ($MANH) | 64.8% | 78.7% | 99.3% | 102.5% | 80.9% |
| Intuit Inc. ($INTU) | 34.2% | 23.7% | 52.1% | 72.6% | 66.8% |
| Aspen Technology, Inc. ($AZPN) | 133.4% | | | | 58.1% |
| Paycom Software, Inc. ($PAYC) | 16.7% | 30.5% | 75.4% | 51.1% | 47.5% |
| |
|---|
| Median (178 companies) | -14.4% | -13.1% | -9.8% | -10.2% | -9.1% |
|---|
| Autodesk, Inc. ($ADSK) | 9.5% | 4.0% | 0.0% | -18.1% | -27.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Upland Software, Inc. ($UPLD) | | | 16.4x | 115.6x | 16.7x |
| Nuance Communications, Inc. ($NUAN) | 7.9x | 5.7x | 5.3x | 7.1x | 15.2x |
| Asure Software Inc ($ASUR) | 3.4x | 4.5x | 3.6x | 9.5x | 14.5x |
| SS&C Technologies Holdings, Inc. ($SSNC) | 1.7x | 7.3x | 4.6x | 3.1x | 8.5x |
| Avaya Holdings Corp. ($AVYA) | | | | | 7.4x |
| |
|---|
| Median (70 companies) | -1.2x | -0.9x | -0.9x | -0.8x | -0.7x |
|---|
