Autodesk Inc.

08/28/2026 | Press release | Distributed by Public on 08/28/2026 14:03

Quarterly Report for Quarter Ending July 31, 2026 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The discussion in our MD&A and elsewhere in this Quarterly Report on Form 10-Q 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 are any statements that look to future events and consist of, among other things, our business strategies, including those discussed in "Strategy," "Overview of the Three and Six Months Ended July 31, 2026," and in "Results of Operations-Overview." Examples of such forward-looking statements may relate to items such as future net revenue, operating expenses, recurring revenue, net revenue retention rate, cash flow, remaining performance obligations, and other future financial results (by product type and geography); the transition to annual billings for multi-year contracts; the implementation of new transaction models; the effectiveness of our efforts to successfully manage transitions to new markets; our ability to increase our subscription base; expected market trends, including the growth of cloud and mobile computing; the availability of credit; the effects of global economic conditions, including from global trade wars or an economic downturn or recession in the United States or in other countries around the world; the effects of revenue recognition; the effects of recently issued accounting standards; expected trends in certain financial metrics, including expenses; expectations regarding our cash needs and financing arrangements; the effects of fluctuations in exchange rates and our hedging activities on our financial results; our ability to successfully expand adoption of our products; our ability to gain market acceptance of new business and sales initiatives; the impact of restructuring activities; cybersecurity and privacy issues or incidents; the impact of past acquisitions, including our integration efforts and expected synergies; the impact of economic volatility and geopolitical activities in certain countries, particularly emerging economy countries; the timing and amount of purchases under our stock buy-back 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, anticipated benefits of our products; 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 Quarterly Report on Form 10-Q 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 Part II, 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.
Note: A glossary of terms used in this Quarterly Report on Form 10-Q appears at the end of this Item 2.
Strategy
Autodesk is changing how the world is designed and made. Our technology spans architecture, engineering, construction, product design, manufacturing, operations, and 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 enabling convergence through our artificial intelligence ("AI") -powered industry clouds, Fusion, Forma, and Flow, accelerating the delivery of AI and platform capabilities, creating a smooth path from our core products to industry clouds, and strengthening customer trust in every interaction.
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. Autodesk has invested in the development, scaling, and monetization of agentic AI in design, engineering, manufacturing, construction, and operations industries. Our strategy is built on the foundational pillars of proprietary data, deep contextual integration, and specialized AI expertise.
Platform Capabilities
We develop and operate a trusted platform designed to support critical customer workflows and digital transformation across the industries we serve. The platform provides granular, interoperable, and accessible data through shared and
centralized capabilities that support the functionality, performance, usability, security, and scalability of our offerings. These shared capabilities include Autodesk AI, reflecting more than a decade of investment in AI technologies used to augment, automate, and analyze customer workflows.
Our products are built on an application-programming-interfaces ("API")-based architecture that enables third-party developers and partners to build complementary and industry-specific applications. Autodesk Platform Services ("APS") provides technology, infrastructure, and services that support connected workflows across design, make, and operate use cases. As part of the ongoing development of APS, we are integrating Model Context Protocol ("MCP") servers to provide a standardized foundation to support AI-enabled integrations and workflow automation for developers and partners.
We offer subscriptions for individual products and Industry Collections, EBAs, and cloud service offerings (collectively referred to as "subscription plans") and emerging offerings such as Flex and APS. 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 global ecosystem of distributors, resellers, Solution Providers, third-party developers, customers, educators, and learning partners supports the sale, deployment, adoption, and extension of our solutions worldwide. This ecosystem contributes to the scale, reach, and extensibility of our platform and enables customers to address a broad range of industry-specific and specialized use cases.
Product Evolution
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, Fusion, Flow Production Tracking, Autodesk Forma, 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. By bringing Autodesk Construction Cloud's leading construction management tools into Autodesk Forma, we're delivering a full lifecycle platform for our customers that creates a deeper connection from design to construction to operations.
Our acquisition of MaintainX, Inc. ("MaintainX") expands our relationship with manufacturing, and architecture, engineering, and construction customers into asset operations and maintenance management. We expect MaintainX to further extend our operations capabilities by providing a cloud-based platform for maintenance management, asset tracking, inspections, work orders, and frontline operational workflows. Its solutions help customers improve asset reliability, reduce downtime, and optimize operational performance through the collection and analysis of real-time maintenance and asset data. By connecting operational workflows and asset performance information with our existing design, construction, and operations solutions, we believe MaintainX will help support our strategy of delivering a more comprehensive lifecycle platform for the built environment.
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.
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.
Marketing and Sales
We sell our products and services globally through several direct channels that allow us to transact directly with end customers. These 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 providing certain products and services to specific customers, and business transacted through our online Autodesk-branded store. Solution Providers provide quotes to customers; however, the final transaction occurs directly between Autodesk and the customer. This approach allows the company to maintain a direct relationship while still benefiting from the expertise and advisory role of Solution Providers. We also conduct direct sales through our online branded store, enabling customers to purchase products and subscriptions digitally.
In addition to direct sales, we distribute our products and services through indirect channels, such as distributors and resellers. These distributors and resellers facilitate sales, provide customer support, and help deliver our solutions to a wide range of customers across different regions and market segments. Although we are increasingly transacting directly with customers due to the growth of our online store and sales with Solution Providers, our distributors and resellers are expected to continue supporting and transacting with a portion of our customers.
We expect our channel mix to evolve as our business scales. Growth in direct channels may gradually increase the proportion of direct customer transactions, while distributors and resellers will continue to provide distribution reach, market expertise, for example in emerging markets, and customer support. The company also implements various incentive programs and promotional initiatives to ensure that both direct and indirect channels remain aligned with overall business objectives and sales strategies.
Assumptions Behind Our Strategy
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, please see Part II, Item 1A, "Risk Factors."
Critical Accounting Policies and Estimates
Our Condensed Consolidated Financial Statements are prepared in conformity with U.S. generally accepted accounting principles ("GAAP"). In preparing our Condensed Consolidated Financial Statements, we make assumptions, judgments, and estimates that can have a significant impact on amounts reported in our Condensed 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 Item 8, "Financial Statements and Supplementary Data," Note 1, "Business and Summary of Significant Accounting Policies," in the Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the fiscal year ended January 31, 2026 (our "Annual Report on Form 10-K").
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 highlighted those policies that involve a higher degree of judgment and complexity with further discussion in Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations," in our Annual Report on Form 10-K. There have been no material changes to our critical accounting policies and estimates during the three and six months ended July 31, 2026, as compared to those disclosed in our Annual Report on Form 10-K. We believe these policies are the most critical to aid in fully understanding and evaluating our financial condition and results of operations.
Overview of the Three and Six Months Ended July 31, 2026
•Total net revenue increased 16% and 17% to $2.05 billion and $3.98 billion during the three and six months ended July 31, 2026, respectively, compared to the same periods in the prior fiscal year.
•Recurring revenue as a percentage of net revenue was 97% and 98% for the three months ended July 31, 2026 and 2025, respectively, and 97% for both the six months ended July 31, 2026 and 2025.
•Net revenue retention rate ("NR3") approximated the top end of the range and was slightly above the range of 100% to 110%, on a constant currency basis, as of July 31, 2026, and July 31, 2025, respectively.
•Deferred revenue was $4.26 billion, a decrease of 9% compared to the fourth quarter in the prior fiscal year.
•Remaining performance obligations (short-term and long-term deferred revenue plus unbilled deferred revenue) ("RPO") was $7.43 billion, a decrease of 10% compared to the fourth quarter in the prior fiscal year.
•Current remaining performance obligations was $5.24 billion, a decrease of 4% compared to the fourth quarter in the prior fiscal year.
Revenue Analysis
Net revenue increased 16% and 17% during the three and six months ended July 31, 2026, respectively, as compared to the same periods in the prior fiscal year, primarily due to an increase in subscription revenue. For further discussion of these results, see below under the heading "Results of Operations."
We rely upon major distributors and resellers in both the U.S. and international regions, including TD Synnex Corporation and its global affiliates (collectively, "TD Synnex"). Total revenue from TD Synnex accounted for 8% of Autodesk's total net revenue during both the three and six months ended July 31, 2026. Total revenue from TD Synnex accounted for 16% and 18% of Autodesk's total net revenue during the three and six months ended July 31, 2025, respectively. TD Synnex sells to resellers and end users who purchase our software subscriptions and services. We are increasingly transacting directly with customers due to the growth of our online store and sales with Solution Providers. Consequently, we believe our business is not substantially dependent on TD Synnex.
Recurring Revenue and Net Revenue Retention Rate
In order to help better understand our financial performance, we use several key performance metrics including recurring revenue and NR3.
Recurring revenue consists of the revenue for the period from 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.
Net revenue retention rate (NR3) 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 is generally included in the calculation one year after the quarter of the acquisition. This may cause variability in the comparison.
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.
The following table outlines our recurring revenue metric for the three and six months ended July 31, 2026 and 2025:
Three Months Ended July 31, 2026 Change compared to
prior fiscal year 		Three Months Ended July 31, 2025
(In millions, except percentage data) $ %
Recurring revenue (1)
$ 1,992 $ 273 16 % $ 1,719
As a percentage of net revenue 97 % N/A N/A 98 %
Six Months Ended July 31, 2026 Change compared to
prior fiscal year 		Six Months Ended July 31, 2025
$ %
Recurring Revenue (1)
$ 3,873 $ 562 17 % $ 3,311
As a percentage of net revenue 97 % N/A N/A 97 %
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(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 Condensed Consolidated Statements of Operations.
NR3 approximated the top end of the range and was slightly above the range of 100% to 110%, on a constant currency basis, as of July 31, 2026, and 2025, respectively.
Foreign Currency Analysis
We generate a significant amount of our revenue in the United States, Germany, the United Kingdom, Japan, and Canada.
The following table shows the impact of foreign exchange rate changes on our net revenue and total cost of revenue and total operating expenses:
Three Months Ended July 31, 2026 Six Months Ended July 31, 2026
Percent change
compared to prior fiscal year 		Constant Currency percent change compared to
prior fiscal year (1) 		Positive/Negative/Neutral impact from foreign exchange rate changes Percent change
compared to prior fiscal year 		Constant Currency percent change compared to
prior fiscal year (1) 		Positive/Negative/Neutral impact from foreign exchange rate changes
Net revenue 16 % 14 % Positive 17 % 15 % Positive
Total cost of revenue and total operating expenses 10 % 9 % Negative 4 % 3 % Negative
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(1)Please refer to the Glossary of Terms for the definitions of our constant currency growth rates.
Changes in the value of the U.S. dollar may have a significant effect on net revenue, total cost of revenue and total operating expenses, and income from operations 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.
Remaining Performance Obligations
RPO represents deferred revenue and unbilled deferred revenue, which consists of contractually stated or committed contracts under early renewal and multi-year billing plans for which the associated deferred revenue has not yet been recorded. Unbilled deferred revenue is not included as a receivable or deferred revenue on our Condensed Consolidated Balance Sheets. See Part I, Item 1, "Financial Statements," Note 3, "Revenue Recognition," for more details on Autodesk's performance obligations.
(in millions) July 31, 2026 January 31, 2026
Deferred revenue $ 4,258 $ 4,693
Unbilled deferred revenue 3,175 3,607
RPO $ 7,433 $ 8,300
RPO consisted of the following:
(in millions) July 31, 2026 January 31, 2026
Current RPO $ 5,245 $ 5,479
Non-current RPO 2,188 2,821
RPO $ 7,433 $ 8,300
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 sales activity in our fourth fiscal quarter and this seasonality may affect the relative value of our billings, RPO, and collections in the fourth and first fiscal quarters.
Balance Sheet and Cash Flow Items
At July 31, 2026, we had $4.36 billion in cash, cash equivalents, and marketable securities. Our cash flow from operations increased to $1.47 billion for the six months ended July 31, 2026, compared to $1.02 billion for the six months ended July 31, 2025. We repurchased 4 million shares of our common stock for $901 million during the six months ended July 31, 2026. Comparatively, we repurchased 2 million shares of our common stock for $709 million during the six months ended July 31, 2025. See further discussion regarding the balance sheet and cash flow activities under the heading "Liquidity and Capital Resources."
Results of Operations
Overview
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, economic and regulatory uncertainty, the potential for global trade wars, and foreign exchange rate fluctuations, may impact our outlook. The extent of the impact of these risks on our business in fiscal 2027 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 II, Item 1A, "Risk Factors."
Net Revenue
Net Revenue by Income Statement Presentation
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.
Other revenue consists of revenue from other products and services and is recognized as the products are delivered or services are performed.
Three Months Ended Change Compared to Prior Fiscal Year Three Months Ended Management Comments
(In millions, except percentages) July 31, 2026 $ % July 31, 2025
Net Revenue:
Subscription (1) $ 1,952 $ 285 17 % $ 1,667 Increase primarily due to growth in subscriptions from our existing customer base.
Other 94 (2) (2) % 96
Total Net Revenue $ 2,046 $ 283 16 % $ 1,763
Six Months Ended Change compared to
prior fiscal year 		Six Months Ended Management Comments
July 31, 2026 $ % July 31, 2025
Net Revenue:
Subscription (1)
 		$ 3,788 $ 581 18 % $ 3,207 Increase primarily due to growth in subscriptions from our existing customer base.
Other 192 3 2 % 189
Total Net Revenue $ 3,980 $ 584 17 % $ 3,396
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(1) During the six months ended July 31, 2026, the Company changed its presentation of maintenance revenue and reclassified "Maintenance revenue" to "Subscription revenue". Prior period amounts have been reclassified to conform to the current period presentation. The reclassification did not impact total net revenue.
Net Revenue by Product Family
Our product offerings are focused in four primary product families: Architecture, Engineering, Construction and Operations ("AECO"), AutoCAD and AutoCAD LT, Manufacturing ("MFG"), and Media and Entertainment ("M&E").
Three Months Ended Change compared to
prior fiscal year 		Three Months Ended Management Comments
(In millions, except percentages) July 31, 2026 $ % July 31, 2025
Net Revenue by Product Family:
AECO $ 1,029 $ 151 17 % $ 878 Increase due to growth in revenue from AEC Collections, Autodesk Forma, and Revit.
AutoCAD and AutoCAD LT 500 60 14 % 440 Increase due to growth in revenue from our existing customer base for both AutoCAD and AutoCAD LT.
MFG 385 51 15 % 334 Increase due to growth in revenue from MFG Collections, Fusion, and EBA offerings.
M&E 92 12 15 % 80 Increase primarily due to growth in revenue from EBA offerings.
Other 40 9 29 % 31
Total Net Revenue $ 2,046 $ 283 16 % $ 1,763
Six Months Ended Change compared to
prior fiscal year 		Six Months Ended Management Comments
July 31, 2026 $ % July 31, 2025
Net Revenue by Product Family:
AECO $ 1,999 $ 312 18 % $ 1,687 Increase due to growth in revenue from AEC Collections, Autodesk Forma, and Revit.
AutoCAD and AutoCAD LT 974 123 14 % 851 Increase due to growth in revenue from our existing customer base for both AutoCAD and AutoCAD LT.
MFG 752 109 17 % 643 Increase due to growth in revenue from MFG Collections, Fusion, and EBA offerings.
M&E
178 22 14 % 156 Increase primarily due to growth in revenue from EBA offerings.
Other 77 18 31 % 59
Total Net Revenue $ 3,980 $ 584 17 % $ 3,396
Net Revenue by Geographic Area
Three Months Ended July 31, 2026 Change compared to
prior fiscal year 		Constant currency change compared to prior fiscal year Three Months Ended July 31, 2025
(In millions, except percentages) $ % %
Net Revenue:
Americas
U.S. $ 727 $ 98 16 % * $ 629
Other Americas 171 14 9 % * 157
Total Americas 898 112 14 % 14 % 786
EMEA 804 129 19 % 13 % 675
APAC 344 42 14 % 14 % 302
Total Net Revenue $ 2,046 $ 283 16 % 14 % $ 1,763
Six Months Ended July 31, 2026 Change compared to
prior fiscal year 		Constant currency change compared to prior fiscal year Six Months Ended July 31, 2025
(In millions, except percentages) $ % %
Net Revenue:
Americas
U.S. $ 1,409 $ 195 16 % * $ 1,214
Other Americas 333 36 12 % * 297
Total Americas 1,742 231 15 % 16 % 1,511
EMEA 1,565 263 20 % 14 % 1,302
APAC 673 90 15 % 15 % 583
Total Net Revenue $ 3,980 $ 584 17 % 15 % $ 3,396
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* Constant currency data not provided at this level.
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), or global trade wars, 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.
Net Revenue by Product Type
Three Months Ended July 31, 2026 Change compared to
prior fiscal year 		Three Months Ended July 31, 2025
(In millions, except percentages) $ % Management Comments
Net Revenue by Product Type:
Design $ 1,708 $ 236 16 % $ 1,472 Increase primarily due to growth in AEC collections, EBA offerings, AutoCAD, AutoCAD LT, and MFG collections.
Make 244 50 26 % 194 Increase primarily due to growth in revenue from Autodesk Forma and Fusion.
Other 94 (3) (3) % 97
Total Net Revenue $ 2,046 $ 283 16 % $ 1,763
Six Months Ended July 31, 2026 Change compared to
prior fiscal year 		Six Months Ended July 31, 2025
(In millions, except percentages) $ % Management Comments
Net Revenue by Product Type:
Design $ 3,320 $ 487 17 % $ 2,833 Increase primarily due to growth in AEC collections, EBA offerings, AutoCAD, AutoCAD LT, and MFG collections.
Make 468 95 25 % 373 Increase primarily due to growth in revenue from Autodesk Forma and Fusion.
Other 192 2 1 % 190
Total Net Revenue $ 3,980 $ 584 17 % $ 3,396
Cost of Revenue and Operating Expenses
Cost of subscription revenue includes the labor costs of providing product support to our subscription 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 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.
Most of the sales incentives payments to Solution Providers are considered incremental and recoverable costs of obtaining a contract with a customer. The deferred costs are amortized over the period of benefit. The sales incentives not qualifying for capitalization are recorded as marketing and sales expenses as the costs are incurred under the incentive program requirements.
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.
Restructuring, other exit costs, and facility reductions include charges related to the restructuring plan initiated during the fourth fiscal quarter ended January 31, 2026 ("January 2026 Plan") to support our initiatives to optimize and complete our go-to-market organization and, at the same time, to reallocate resources to our strategic priorities of investments in cloud, platform and AI. In addition to the culmination of our sales and marketing optimization program, the January 2026 Plan reallocates resources in certain other functions to accelerate Autodesk's strategic priorities.
Three Months Ended Change compared to
prior fiscal year 		Three Months Ended Management comments
(In millions, except percentages) July 31, 2026 $ % July 31, 2025
Cost of revenue:
Subscription $ 130 $ 16 14 % $ 114 Increase primarily due to an increase in cloud hosting costs.
Other 22 - - % 22 Other cost of revenue remained flat period over period.
Amortization of developed technologies 24 1 4 % 23 Amortization of developed technologies remained flat period over period.
Total cost of revenue $ 176 $ 17 11 % $ 159
Operating expenses:
Marketing and sales $ 616 $ 57 10 % $ 559 Increase primarily due to an increase in sales commissions to Solution Providers and an increase in advertisement and promotion costs partially offset by a decrease in employee-related costs and stock-based compensation expense.
Research and development 464 51 12 % 413 Increase primarily due to an increase in employee-related costs driven by higher headcount and an increase in cloud hosting costs.
General and administrative 179 11 7 % 168 Increase primarily due to an increase in acquisition-related costs partially offset by a decrease in employee-related costs.
Amortization of purchased intangibles 13 (1) (7) % 14 Amortization of purchased intangibles remained flat period over period.
Restructuring, other exit costs, and facility reductions (1) (7) NM (1) 6 Restructuring, other exit costs, and facility reductions remained flat period over period.
Total operating expenses $ 1,271 $ 111 10 % $ 1,160
Six Months Ended Change compared to
prior fiscal year 		Six Months Ended Management comments
July 31, 2026 $ % July 31, 2025
Cost of revenue:
Subscription $ 259 $ 34 15 % $ 225 Increase primarily due to an increase in cloud hosting costs and employee-related costs.
Other 43 (3) (7) % 46 Other cost of revenue remained flat period over period.
Amortization of developed technologies 49 1 2 % 48 Amortization of developed technologies remained flat period over period.
Total cost of revenue $ 351 $ 32 10 % $ 319
Operating expenses:
Marketing and sales $ 1,209 $ 84 7 % $ 1,125 Increase primarily due to an increase in sales commissions to Solution Providers and an increase in advertisement and promotion costs partially offset by a decrease in employee-related costs and the recording of the cumulative adjustment related to the Company's Employee Stock Purchase Plan in the prior comparative period.
Research and development 885 78 10 % 807 Increase primarily due to an increase in employee-related costs driven by higher headcount and an increase in cloud hosting costs partially offset by a decrease in stock-based compensation due to the recording of the cumulative adjustment related to the Company's Employee Stock Purchase Plan in the prior comparative period.
General and administrative 341 11 3 % 330 Increase primarily due to an increase in acquisition-related costs and an increase in cloud hosting costs partially offset by a decrease in employee-related costs and the recording of the cumulative adjustment related to the Company's Employee Stock Purchase Plan in the prior comparative period.
Amortization of purchased intangibles 25 (2) (7) % 27 Amortization of purchased intangibles remained flat period over period.
Restructuring, other exit costs, and facility reductions 29 (82) NM (1) 111 The decrease is due to the restructuring plan initiated during the first quarter of fiscal 2026 which was substantially complete as of January 31, 2026.
Total operating expenses $ 2,489 $ 89 4 % $ 2,400
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(1)Not meaningful
The following table highlights our expectation for the absolute dollar change between the third quarter of fiscal 2027, as compared to the third quarter of fiscal 2026:
Absolute dollar impact Management Comments
Cost of revenue Increase We expect our cost of revenue to increase as our revenue grows as well as due to our recent acquisition.
Marketing and sales Increase We expect marketing and sales expenses to increase with the recognition of Solution Provider commissions and our recent acquisition.
Research and development Increase We expect our research and development expenses to increase as we continue our investments in cloud, platform, and AI.
General and administrative Increase We expect general and administrative expenses to increase but at a slower rate than revenue, due to continued cost discipline.
Amortization of purchased intangibles Increase We expect our amortization of purchased intangibles to increase largely due to our recent acquisition.
Restructuring, other exit costs, and facility reductions Flat We expect restructuring, other exit costs, and facility reductions to remain flat. The plan initiated in the first quarter of fiscal 2026 was substantially complete as of January 31, 2026. The majority of the costs of the plan initiated in the fourth quarter of fiscal 2026 were incurred in fiscal 2026 and in the first quarter of fiscal 2027.
Interest and Other Income (Expense), Net
The following table sets forth the components of interest and other income (expense), net:
Three Months Ended July 31, Six Months Ended July 31,
(in millions) 2026 2025 2026 2025
Interest and investment income (loss), net $ 5 $ 11 $ 9 $ 9
Gain (loss) on foreign currency 1 1 (3) 4
Gain (loss) on strategic investments (13) (1) 43 (2)
Other income 1 1 3 2
Interest and other income (expense), net $ (6) $ 12 $ 52 $ 13
Interest and other income (expense), net, changed by $18 million and increased by $39 million during the three and six months ended July 31, 2026, respectively, as compared to the same periods in the prior fiscal year. The change in the three months ended July 31, 2026, as compared to the same period in the prior fiscal year was primarily due to an increase in losses
on strategic investments. The increase in the six months ended July 31, 2026 as compared to the same period in the prior fiscal year was primarily due to gains on strategic investments.
Interest expense and investment income fluctuates based on average cash, marketable securities, debt balances, average maturities, and interest rates.
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 period.
Provision for Income Taxes
We had income tax expense of $101 million, relative to pre-tax income of $593 million for the three months ended July 31, 2026, and income tax expense of $143 million, relative to pre-tax income of $456 million for the three months ended July 31, 2025. Income tax expense for the three months ended July 31, 2026, decreased compared to the corresponding periods in fiscal year 2026. In the preceding period, the company made an election in the U.S. regarding the timing of taxation of revenue, which reduced the taxable benefit arising from FDDEI and increased tax expense associated with NCTI.
We had income tax expense of $209 million, relative to pre-tax income of $1.19 billion for the six months ended July 31, 2026, and income tax expense of $225 million, relative to pre-tax income of 690 million for the six months ended July 31, 2025.
Income tax expense for the six months ended July 31, 2026, decreased compared to the corresponding periods in fiscal year 2026. The decrease reflects prior year impacts from the One Big Beautiful Bill Act ("OBBBA") and the Company's U.S. tax election regarding the timing of taxation of revenue, which reduced the tax benefit from FDDEI and increased tax expense associated with NCTI.
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 realized. 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 realizable; such assessment is required on a jurisdiction-by-jurisdiction basis. Significant judgment is required in determining whether a 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.
We continue to retain a valuation allowance against New Zealand, California, Massachusetts, and Michigan deferred tax assets and deferred tax assets on capital losses or items that will convert to a capital loss upon reversal in Australia and the U.S., as we do not have sufficient income of the appropriate character to benefit from these deferred tax assets. We will continue to evaluate all available positive and negative evidence, including future taxable income and tax planning strategies, in assessing the need for valuation allowances.
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.
The Company filed a request to the Internal Revenue Service ("IRS") in the U.S. in fiscal 2026 for non-automatic change in accounting method to no longer capitalize certain research and development expenditures in its controlled foreign corporations, in line with recent IRS guidance. The tax effects of the proposed accounting method change have not been recognized in the accompanying consolidated financial statements as of July 31, 2026 as IRS approval is required prior to recognition. The Company will record the impact of the method change in the period that IRS approval is obtained. We anticipate this method change will decrease our provision for income taxes due to reduction of tax expense associated with NCTI.
Signed into law on July 4, 2025, the OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The OBBBA has multiple effective dates, with certain provisions effective in fiscal 2027. We have reflected the tax effects of OBBBA in our provision for income taxes as of July 31, 2026.
Liquidity and Capital Resources
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.
At July 31, 2026, our principal sources of liquidity were cash, cash equivalents, and marketable securities totaling $4.36 billion, net accounts receivable of $684 million, and our revolving loan facility. As disclosed below, after that date, we used a portion of our cash to fund our acquisition of MaintainX.
In May 2025, and as amended on June 15, 2026, the Company entered into a Credit Agreement (the "2025 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 $2 billion. The proceeds from the 2025 Credit Agreement are available for working capital and general corporate purposes. At July 31, 2026, Autodesk had no outstanding borrowings under the 2025 Credit Agreement. See Part I, Item 1, "Financial Statements," Note 11, "Borrowing Arrangements," in the Notes to Condensed Consolidated Financial Statements for further discussion on our covenant requirements and additional information with respect to the 2025 Credit Agreement. If we are unable to remain in compliance with the covenants under the 2025 Credit Agreement, we will not be able to draw on our revolving credit facility. Additionally, as of August 28, 2026, we have no amounts outstanding under the 2025 Credit Agreement.
In June 2026, we entered into a Term Loan Credit Agreement ("Term Loan Credit Agreement") which provides for an unsecured 364-day delayed draw term loan facility in the aggregate principal amount of $1 billion. On August 3, 2026, we borrowed $1 billion under the Term Loan Agreement in connection with the acquisition of MaintainX. See also Part I, Item 1, "Financial Statements," Note 11, "Borrowing Arrangements," in the Notes to Condensed Consolidated Financial Statements for further discussion.
In July 2026, Autodesk established a commercial paper program under which Autodesk may issue short-term, unsecured commercial paper notes in amounts up to a maximum aggregate face amount of $2 billion outstanding at any time, with maturities up to 364 days from the date of issuance. We intend to use the net proceeds of the commercial paper notes for general corporate purposes and to fund the acquisition of businesses. For example, we partially funded the acquisition of MaintainX with borrowings under the commercial paper program. As of July 31, 2026, we had $1 billion of short-term outstanding borrowings under the commercial paper program. See also Part I, Item 1, "Financial Statements," Note 11, "Borrowing Arrangements," in the Notes to Condensed Consolidated Financial Statements for further discussion.
As of July 31, 2026, we have $2.50 billion aggregate principal amount of notes outstanding. See Part I, Item 1, "Financial Statements," Note 11, "Borrowing Arrangements," in the Notes to Condensed Consolidated Financial Statements for further discussion.
On August 3, 2026, we acquired MaintainX for approximately $3.6 billion, net of cash acquired. See Part I, Item 1, "Financial Statements," Note 19, "Subsequent Events," in the Notes to Condensed Consolidated Financial Statements for further discussion. We financed the acquisition through borrowings under the Term Loan Credit Agreement, borrowings under our commercial paper program, and cash on hand.
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 $2 billion revolving credit facility.
Our cash and cash equivalents and marketable securities balances are concentrated in a few locations around the world, with substantial amounts held outside of the United States. 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 II, Item 1A titled "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.
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 I, Item 3, "Quantitative and Qualitative Disclosures About Market Risk" for further discussion.
Six Months Ended July 31,
(in millions) 2026 2025
Net cash provided by operating activities $ 1,468 $ 1,024
Net cash provided by investing activities 381 8
Net cash provided by (used in) financing activities 4 (634)
Net cash provided by operating activities of $1.47 billion for the six months ended July 31, 2026, primarily consisted of $983 million of our net income adjusted for $795 million non-cash items such as stock-based compensation expense, restructuring-related asset impairments, amortization of costs to obtain a contract with a customer, depreciation, amortization, and accretion expense, and deferred income tax and by changes in operating assets and liabilities. The negative change in cash provided by working capital is primarily due to changes in accounts payable and other liabilities of $408 million due to the timing of payments related to employee compensation and related costs and deferred revenue of $434 million due to the timing of our billing installments and seasonality of billings in the fourth fiscal quarter partially offset by the change in accounts receivable of $753 million due to the seasonality of our billings in the fourth fiscal quarter and timing of cash collections.
Net cash provided by operating activities of $1.02 billion for the six months ended July 31, 2025, primarily consisted of $465 million of our net income adjusted for $885 million non-cash items such as stock-based compensation expense, restructuring-related asset impairments, amortization of costs to obtain a contract with a customer, depreciation, amortization, and accretion expense, and deferred income tax. The decrease in working capital is primarily due to a negative change in prepaid expenses and other assets of $539 million, and a decrease in deferred revenue of $287 million due to the timing of our billing installments and seasonality of billings in the fourth fiscal quarter, partially offset by the change in accounts receivable of $476 million due to the seasonality of our billings in the fourth fiscal quarter and timing of cash collections from customers.
Net cash provided by investing activities was $381 million for the six months ended July 31, 2026, primarily due to sales and maturities of marketable securities partially offset by purchases of marketable securities. Net cash provided by investing activities was $8 million for the six months ended July 31, 2025, primarily due to sales and maturities of marketable securities partially offset by purchases of marketable securities.
Net cash provided by financing activities was $4 million for the six months ended July 31, 2026, primarily due to proceeds from the issuance of short-term debt partially offset by the repurchases of common stock. Net cash used in financing activities was $634 million for the six months ended July 31, 2025, primarily due to repurchases of common stock and payment of notes payable due in June 2025 partially offset by the proceeds from the issuance of notes payable due in June 2035.
Glossary of Terms
Billings: Total revenue plus the net change in deferred revenue, as presented in the consolidated statement of cash flows, less the net change in contract assets for the reporting period.
Cloud Service Offerings: 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.
Constant Currency (CC) Growth Rates: 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.
Design Business: Represents the combination of 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.
Enterprise Business Agreements (EBAs): Represents programs providing enterprise customers with token-based access to a broad pool of Autodesk products over a defined contract term.
Flex: A pay-as-you-go consumption option to pre-purchase tokens to access any product available with Flex for a daily rate.
Industry Collections: 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.
Make Business: Represents certain cloud-based product subscriptions. Main products include, but are not limited to, Autodesk Build, Forma Design Collaboration, BuildingConnected, Fusion, and Flow Production Tracking. Certain products, such as Fusion, incorporate both Design and Make functionality and are classified as Make.
Product Family: A grouping of related products or solutions that address specific industry or market needs, customer types, or use cases, or share core underlying technology or deployment models. Where a customer has a right to use different products over time, Autodesk may classify amounts to a single product family based on the customer's primary industry or use case, or to product family other, or allocate the amounts across product families using estimates.
Solution Provider: Solution Providers are our channel partners when we transact directly with our customers. Solution Providers may act as resellers in certain markets or Autodesk products or solutions.
Autodesk Inc. published this content on August 28, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on August 28, 2026 at 20:04 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]