Key Takeaways
- Q2 adjusted earnings per share reached $3.30, surpassing analyst expectations of $3.12
- Quarterly revenue climbed 16% annually to $2.05 billion, exceeding the $2.01 billion forecast
- Fiscal 2027 full-year adjusted EPS guidance midpoint of $12.56 came in below the $12.60 consensus target
- Shares fell over 4% during premarket hours following the forward guidance announcement
- Guggenheim increased its price target to $283 from $277 while reaffirming a Buy recommendation
The design software provider delivered impressive second-quarter results, yet Wall Street’s attention turned to future projections. Shares tumbled more than 4% in Friday’s premarket session after the company issued fiscal 2027 guidance that disappointed market participants.
The CAD software leader announced Q2 adjusted earnings of $3.30 per share, exceeding the Street’s $3.12 projection. Top-line performance reached $2.05 billion, reflecting a 16% year-over-year increase and surpassing the anticipated $2.01 billion.
Subscription revenue accelerated 17%, outpacing Wall Street’s 14.5% forecast. Both customer retention metrics and contract timing patterns exceeded analyst models.
However, some metrics showed signs of deceleration. Current remaining performance obligations expanded at a 12% rate in Q2, marking a slowdown from the 18% to 20% growth witnessed in prior quarters. Management attributed this to the elimination of multi-year pricing incentives, which prompted more customers to opt for annual agreements. This dynamic is anticipated to persist over the coming quarters.
Free cash flow generation increased 24% to $561 million. Adjusted operating margin improved by 200 basis points to reach 41%. Total billings registered $1.85 billion, representing a 10% annual gain.
Forward Outlook Falls Below Consensus
The company’s fiscal 2027 full-year adjusted EPS outlook of $12.52 to $12.60 came in marginally below the Street’s $12.60 expectation. The range’s midpoint of $12.56 proved sufficient to trigger investor concerns.
For the third quarter, Autodesk projected revenue between $2.125 billion and $2.140 billion alongside adjusted EPS ranging from $3.04 to $3.09.
Looking at the full fiscal year, management anticipates billings of $8.575 billion to $8.650 billion and revenue of $8.295 billion to $8.345 billion. The annual revenue forecast received an approximately $135 million increase at the midpoint, with roughly $60 million attributed to the MaintainX transaction.
Bank of America characterized the report as “mixed 2Q27 results with conservatism into 2H27 guide,” while maintaining its Buy rating and $300 price objective. The firm emphasized that renewal trends support sustainable underlying expansion at or above current guidance thresholds.
Wall Street Analysts Boost Price Targets Despite Selloff
Guggenheim elevated its Autodesk price objective to $283 from $277 while retaining a Buy stance. The firm observed that Q2 revenue and billings exceeded consensus projections by approximately 1.7% and 2%, respectively. Cash flow generation and non-GAAP earnings also surpassed estimates.
UBS made an even more bullish move, lifting its price target to $325 from $290, also keeping a Buy rating. UBS emphasized the company’s low-teens organic expansion trajectory, highlighting a 12% improvement in both revenue and billings on a constant currency basis.
Breaking down segment performance, Design revenue advanced 16% to $1.71 billion. Make revenue surged 26% to $244 million. The AECO product family generated $1.03 billion, climbing 17%, while AutoCAD revenue reached $500 million, rising 14%.
CFO Janesh Moorjani indicated that the sales force restructuring is “proceeding as expected” and that the elevated billings and revenue projections reflect stronger fundamental growth assumptions combined with the MaintainX acquisition impact.
Autodesk shares were changing hands at $270.58 with a market capitalization of $57.13 billion according to the latest available data.
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