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Autodesk slides amid analyst day; FY16 guidance reiterated, FY20 targets set

Sep. 29, 2015 3:55 PM ETAutodesk, Inc. (ADSK) StockBy: Eric Jhonsa, SA News Editor
  • Autodesk (NASDAQ:ADSK -1.8%) used its 2015 analyst day to reiterate its FQ3 and FY16 (ends Jan. '16) guidance, which sparked a selloff when first disclosed on Aug. 27.
  • The CAD/CAM software giant expects subscriptions to grow at a 20% CAGR from FY16-FY20, and annualized recurring revenue at a 24% CAGR. With most commercial products set to become subscription-only as of July 31, 2016, Autodesk promises FY17 will serve as a revenue "inflection point," and that financial metrics will normalize by FY20.
  • Revenue of "at least" $3.5B and free cash flow of $1B (over $4/share) is expected in FY20, up from expected FY16 levels of  of $2.465B-$2.505B and ~$400M. Op. margin is expected to rise to a mid-20% range by FY20 from an expected FY16 level of 9%-10%, and eventually top 30%. The company promises to "materially decrease M&A spend" (particularly in the U.S), and to return excess cash to shareholders.
  • JPMorgan is pleased with the long-term targets, and declares Autodesk's transparency about them a "major step in the right direction." It also buys into management's assertion that the transition to subscriptions from up-front licenses is expanding Autodesk's market opportunity.
  • Shares are close to a 52-week low of $44.46. YTD, they're down 25%.
  • Analyst day slides

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