On Wednesday, Griffin Securities maintained a Buy rating for Autodesk (NASDAQ:ADSK) stock, with a continued price target of $310. The firm's evaluation of Autodesk's second quarter fiscal year 2025 financial report revealed several key insights. Autodesk recognized approximately $1.02 billion in revenue from deferred balances during the three months ending July 31, 2024, which was roughly 68% of total revenues for the quarter.
The company experienced a 12% year-over-year increase in intra-year recognition, amounting to approximately $485 million for the quarter. The first half of fiscal year 2025 saw an 11% rise, with about $710 million recognized. Autodesk reported unbilled deferred revenues of $2.171 billion as of the second quarter of fiscal year 2025, marking a steady increase from previous quarters.
Autodesk's total billed and unbilled deferred revenues (RPO) reached $5.863 billion as of the second quarter of fiscal year 2025. This sum represents the total transaction price allocated to remaining performance obligations, typically recognized over the next three years. The company anticipates recognizing $3.90 billion, or 66%, of these obligations as revenue in the next 12 months, and the remaining $1.96 billion, or 34%, thereafter.
The updated compound annual growth rate (CAGR) for the comparable next-twelve-month amounts (CRPO) stands at 11%. Autodesk expects to recognize $3.896 billion over the next twelve months, an 11% increase year-over-year. This figure is equivalent to approximately 60% of the company's total estimated next twelve months' revenues of $6.481 billion.
Griffin Securities projects next twelve months' billings of $6.844 billion for Autodesk, a significant 30% increase, which contrasts with an 8% decrease for the trailing twelve months ending in the second quarter of fiscal year 2025. This growth in billings is expected to contribute to the building of total RPO, potentially reaching $6.02 billion by the end of fiscal year 2025.
In other recent news, Autodesk has been the focus of several analyst firms following its robust second-quarter results. Citi maintained its Buy rating for Autodesk and increased the company's price target to $325.00, citing resilient demand and a surprise rise in margins.
HSBC upgraded Autodesk from Hold to Buy, setting a new price target of $299, reflecting a positive outlook on the company's earnings growth and valuation.
Goldman Sachs shifted its stance from Sell to Neutral, raising the price target to $295, due to Autodesk's recent performance and future prospects. Oppenheimer maintained its Outperform rating on Autodesk and increased its price target to $300, following Autodesk's second-quarter results, which surpassed consensus expectations.
Stifel also maintained a positive outlook on Autodesk, raising the price target to $320, following the company's robust second-quarter financial results.
Autodesk's second-quarter fiscal year 2025 results surpassed consensus estimates, reporting a 2% rise in revenue, earnings per share of $2.15, and free cash flow of $203 million.
The company's transition to a subscription model and system consolidation by customers have contributed to a more predictable and robust earnings growth trajectory. Autodesk is on track to achieve its fiscal year 2026 operating margin targets of 38-40% ahead of schedule in fiscal year 2025.
Autodesk has successfully implemented a direct customer billing transaction model in North America, leading to an 11% increase in its full-year 2025 revenue growth guidance. These are recent developments for Autodesk.
InvestingPro Insights
As Autodesk continues to demonstrate robust financial performance, InvestingPro data and tips provide additional context for investors considering the company's stock. Autodesk's impressive gross profit margin of 91.92% in the last twelve months as of Q2 2025 underscores the company's efficiency in managing its cost of goods sold and suggests strong pricing power or cost control measures. With a market capitalization of $55.56 billion and a high price-to-earnings (P/E) ratio of 52.44, Autodesk trades at a premium, reflecting investor confidence in its future earnings potential despite a high valuation relative to near-term earnings growth.
InvestingPro Tips highlight that 11 analysts have revised their earnings upwards for the upcoming period, indicating a positive sentiment among experts about the company's future performance. Additionally, Autodesk's stock has shown a strong return over the last three months, with a 21.62% increase, suggesting a bullish trend in investor sentiment. Investors should note that while the company operates with a moderate level of debt, its short-term obligations exceed its liquid assets, which could be a point of consideration for risk assessment.
For those seeking to delve deeper into Autodesk's financial health and future prospects, there are 16 additional InvestingPro Tips available at: https://www.investing.com/pro/ADSK. This comprehensive analysis can provide investors with a more nuanced understanding of the company's valuation multiples, profitability, and market performance.
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