10q10k10q10k.net

What changed in Autodesk's 10-K — 2022 vs 2023

vs

Paragraph-level year-over-year comparison of Autodesk's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+325 added−340 removedSource: 10-K (2023-03-14) vs 10-K (2022-03-14)

Top changes in Autodesk's 2023 10-K

325 paragraphs added · 340 removed · 283 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

55 edited+6 added−16 removed74 unchanged
Biggest changeBIM 360 empowers those in the field to better anticipate and act, and those in the back office to optimize and manage all aspects of construction performance. 5 Table of Contents • Architecture, Engineering & Construction Collection The AEC Collection, including AutoCAD, AutoCAD Civil3D, and Revit, aims to help our customers design, engineer, and construct higher quality, more predictable building and civil infrastructure projects, commonly used by AEC industry experts. • Autodesk Build Autodesk Build delivers a connected set of project management and collaboration tools for the construction industry.
Biggest changeWith AutoCAD Civil 3D, the entire project team works from the same consistent, up-to-date model so they stay coordinated throughout all project phases. • Building Connected BuildingConnected is a SaaS preconstruction solution that combines the largest real-time, construction network with an easy-to-use tool that helps general contractors and owners streamline subcontractor qualification, and the bid and risk management process. 5 Table of Contents • Architecture, Engineering & Construction Collection The AEC Collection, including AutoCAD, AutoCAD Civil3D, and Revit, aims to help our customers design, engineer, and construct higher quality, more predictable building and civil infrastructure projects, commonly used by AEC industry experts. • Autodesk Build Autodesk Build delivers a connected set of project management and collaboration tools for the construction industry.
Subscriptions represent a combined hybrid offering of desktop software and cloud functionality which provides a device-independent, collaborative design workflow for designers and their stakeholders. With subscription, customers can use our software anytime, anywhere, and get access to the latest updates to previous versions. Subscription Revenue: Includes our term-based product subscriptions, cloud service offerings, and flexible EBAs.
Subscriptions represent a combined hybrid offering of desktop software and cloud functionality which provides a device-independent, collaborative design workflow for designers and their stakeholders. With subscription, customers can use our software anytime, anywhere, and get access to the latest updates to previous versions. Subscription Revenue: Includes our cloud-enabled term-based product subscriptions, cloud service offerings, and flexible EBAs.
For example, we created a web services platform, Autodesk Forge, which includes web services that enable software developers to rapidly develop the next generation of applications and experiences that will power the future of making things. Forge facilitates the development of a single connected ecosystem for integrating Autodesk applications with other enterprise, web, and mobile solutions.
For example, we created Autodesk Platform Services which includes web services that enable software developers to rapidly develop the next generation of applications and experiences that will power the future of making things. Autodesk Platform Services facilitates the development of a single connected ecosystem for integrating Autodesk applications with other enterprise, web, and mobile solutions.
The majority of our research and product development is performed in the United States, China, Singapore, Canada, and the United Kingdom. However, we employ experienced software developers in many of our other locations. Translation and localization of our products are performed in several local markets, principally Singapore and Ireland.
The majority of our research and product development is performed in the United States, China, Canada, India, Singapore, and the United Kingdom. However, we employ experienced software developers in many of our other locations. Translation and localization of our products are performed in several local markets, principally Singapore and Ireland.
The purpose of the Foundation is twofold: to support employees to create a better world at work, at home, and in the community by matching employees’ volunteer time and/or donations to nonprofit organizations; and to support organizations and individuals using design to drive positive social and environmental impact.
The purpose of the Foundation is twofold: to support employees to create a better world at work, at home, and in the community by matching employees’ volunteer time and/or donations to nonprofit organizations; and to support organizations using design to drive positive social and environmental impact.
We generally localize and translate our products into German, French, Italian, Spanish, Russian, Japanese, Korean, and simplified and traditional Chinese. We plan to continue managing significant product development operations internationally over the next several years.
We generally localize and translate our products into German, French, Italian, Spanish, Japanese, Korean, and simplified and traditional Chinese. We plan to continue managing significant product development operations internationally over the next several years.
We have developed and sustained a compelling value proposition based upon software for the personal computer. Just as the transition from mainframes to personal computers transformed the industry over 30 years ago, the software industry has undergone a transition from developing and selling perpetual licenses and on-premises products to subscriptions and cloud-enabled technologies.
We have developed and sustained a compelling value proposition based upon software for the personal computer. Just as the transition from mainframes to personal computers transformed the industry over 30 years ago, the software industry has undergone a transition from developing and selling perpetual licenses and on-premise products to subscriptions and cloud-enabled technologies.
Our indirect channel model includes both a two-tiered distribution structure, where distributors sell to resellers, and a one-tiered structure, where Autodesk sells directly to resellers. We have a network of approximately 1,500 resellers and distributors worldwide. For fiscal 2022, approximately 65% of our revenue was derived from indirect channel sales through distributors and resellers.
Our indirect channel model includes both a two-tiered distribution structure, where distributors sell to resellers, and a one-tiered structure, where Autodesk sells directly to resellers. We have a network of approximately 1,500 resellers and distributors worldwide. For fiscal 2023, approximately 65% of our revenue was derived from indirect channel sales through distributors and resellers.
Our primary global competitors include Adobe Systems Incorporated, AVEVA Group plc, Bentley Systems, Inc., Dassault Systèmes S.A. and its subsidiary Dassault Systèmes SolidWorks Corp., Intergraph Corporation, a wholly owned subsidiary of Hexagon AB, MSC Software Corporation, Nemetschek AG, Oracle Corporation, Procore Technologies, Inc., PTC Inc., 3D Systems Corporation, Siemens PLM, and Trimble Navigation Limited, among others.
Our primary global competitors include Adobe Systems Incorporated, Bentley Systems, Inc., Dassault Systèmes S.A. and its subsidiary Dassault Systèmes SolidWorks Corp., Intergraph Corporation, a wholly owned subsidiary of Hexagon AB, MSC Software Corporation, Nemetschek AG, Oracle Corporation, Procore Technologies, Inc., PTC Inc., 3D Systems Corporation, Siemens PLM, and Trimble Navigation Limited, among others.
The collection offers access to a wide range of our products, including AutoCAD, Fusion 360, Vault, and Inventor. 6 Table of Contents • Inventor Inventor enables manufacturers to go beyond 3D design to digital prototyping by giving engineers a comprehensive and flexible set of tools for 3D mechanical design, simulation, analysis, tooling, visualization, and documentation.
The collection offers access to a wide range of our products, including AutoCAD, Fusion 360, Vault, and Inventor. • Inventor Inventor enables manufacturers to go beyond 3D design to digital prototyping by giving engineers a comprehensive and flexible set of tools for 3D mechanical design, simulation, analysis, tooling, visualization, and documentation.
It connects the entire product development process on a single cloud-based platform. • Product Design & Manufacturing Collection The Product Design & Manufacturing Collection offers connected, professional-grade tools that help our customers make great products today and compete in the changing manufacturing landscape of the future.
It connects the entire product development process on a single cloud-based platform. • Product Design & Manufacturing Collection 6 Table of Contents The Product Design & Manufacturing Collection offers connected, professional-grade tools that help our customers make great products today and compete in the changing manufacturing landscape of the future.
Sales through our largest distributor, Tech Data Corporation and its global affiliates (collectively, “Tech Data”), accounted for 36%, 37%, and 35% of our net revenue for the fiscal years ended January 31, 2022, 2021 and 2020, respectively. Ingram Micro Inc.
Sales through our largest distributor, Tech Data Corporation and its global affiliates (collectively, “Tech Data”), accounted for 37%, 36%, and 37% of our net revenue for the fiscal years ended January 31, 2023, 2022 and 2021, respectively. Ingram Micro Inc.
Our portfolio of products and services enables our customers to foster innovation, optimize and improve their designs, save time and money, improve quality, communicate plans, and collaborate with others. A summary of our revenue by geographic area and product family is found in Note 2, “Revenue Recognition,” in the Notes to Consolidated Financial Statements.
Our portfolio of products and services enables our customers to foster innovation, optimize and improve their designs, save time and money, improve quality, communicate plans, and collaborate with others. A summary of our revenue by geographic area and product family is found in Part II, Item 8, Note 2, “Revenue Recognition,” in the Notes to Consolidated Financial Statements.
In the latter case, we use grant funding, software donations, and training to accomplish this goal, selecting the most impactful and innovative organizations around the world, thus leading to a better future for our planet.
In the latter case, we use philanthropic capital, software donations, and training to accomplish this goal, selecting the most impactful and innovative organizations around the world, thus leading to a better future for our planet.
In addition, we provide ongoing development opportunities, such as the Autodesk Mentorship Program, which provides one-on-one mentorship relationships. Autodesk has seven employee resource groups (“ERGs”), which are employee-led groups that bring employees together based on common backgrounds or diversity characteristics, to foster a sense of belonging and connection.
We provide ongoing development opportunities, such as the Autodesk Mentorship Program, which provides one-on-one mentorship relationships. Autodesk has nine employee resource groups (“ERGs”), which are volunteer-led groups that bring employees together based on common interests, backgrounds or diversity characteristics, to foster a sense of belonging and connection.
This seasonality may not have an immediate impact on our revenue as we recognize subscription revenue over the term of the contract. This seasonality may also affect the relative value of our billings, RPO, and collections in the fourth and first fiscal quarters.
This seasonality may not have an immediate impact on our revenue as we recognize subscription revenue over the term of the contract. This seasonality may also affect the relative value of our billings, Remaining Performance Obligations (“RPO”), and collections in the fourth and first fiscal quarters.
For further discussion regarding risks from our product development and introduction efforts, see Item 1A, “Risk Factors.” MARKETING AND SALES We sell our products and services globally, primarily through indirect channels consisting of distributors and resellers. We also transact directly with our enterprise and named account customers and with customers through our online Autodesk branded store.
For further discussion regarding risks from our product development and introduction efforts, see Item 1A, “Risk Factors.” MARKETING AND SALES We sell our products and services globally, through a combination of indirect and direct channels. We also transact directly with our enterprise and named account customers, and with customers through our online Autodesk branded store.
This may cause variability in the comparison. Other Revenue: Consists of revenue from consulting, training and other products and services, and is recognized as the products are delivered and services are performed. Product Subscription: Provides customers a flexible, cost-effective way to access and manage 3D design, engineering, and entertainment software tools.
Other Revenue: Consists of revenue from consulting, training and other products and services, and is recognized as the products are delivered and services are performed. Product Subscription: Provides customers a flexible, cost-effective way to access and manage 3D design, engineering, and entertainment software tools.
Subscription and maintenance 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. Subscription and maintenance revenue related to acquired companies, one year after acquisition, has been captured as existing customers until such data conforms to the calculation methodology.
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, one year after acquisition, has been captured as existing customers until such data conforms to the calculation methodology. This may cause variability in the comparison.
These opportunities manifest as outcomes through how our customers leverage our technology to design and make net-zero carbon buildings, resilient infrastructure, more sustainable products, and a thriving workforce. We realize these opportunities in our business through our 100% renewable and net-zero greenhouse gas operations and inclusive culture.
These opportunities manifest as outcomes through how our customers leverage our technology to design and make net-zero carbon buildings, resilient infrastructure, more sustainable products, and a thriving workforce. We realize these opportunities in our business through neutralizing our greenhouse gas emissions, powering our operations with 100% renewable energy and promoting an inclusive culture.
These developers create and sell their own interoperable products that further enhance the range of integrated solutions available to our customers. One of our key strategies is to maintain an open-architecture design of our software products to facilitate third-party development of complementary products and industry-specific software solutions.
These developers create and sell their own interoperable products that further enhance the range of integrated solutions available to our customers. One of our key strategies is to maintain an Application Programming Interface (“API”) based architecture of our software products to facilitate third-party development of complementary products and industry-specific software solutions.
Our product subscriptions currently represent a hybrid of desktop and cloud functionality, which provides a device-independent, collaborative design workflow for designers and their stakeholders. Recurring Revenue: Consists of the revenue for the period from our traditional maintenance plans and revenue from our subscription plan offerings.
Our product subscriptions currently represent a hybrid of desktop and cloud functionality, which provides a device-independent, collaborative design workflow for designers and their stakeholders. Recurring Revenue: Consists of the revenue for the period from our traditional maintenance plans, our subscription plan offerings, and certain Other revenue. It excludes subscription revenue related to third-party products.
We believe that our ability to conduct research and development at various locations throughout the world allows us to optimize product development, lower costs, and integrate local market knowledge into our development activities. We continually assess the significant costs and challenges, including intellectual property protection, against the benefits of our international development activities.
We believe that our ability to conduct research and development at various locations throughout the world allows us to tap into a diverse global talent pool, optimize costs, and integrate local market knowledge into our development activities. We continually assess costs, hiring challenges, and intellectual property protection, against the benefits of our international development activities.
We also encourage our employees to advance our vision for a better world and support their professional development by participating in our pro bono consulting program, using paid time to volunteer, and have their charitable giving matched by the Autodesk Foundation.
These include self-service online modules and personalized learning paths, professional and management development programs, and a tuition reimbursement program. We also encourage our employees to advance our vision for a better world and support their professional development by participating in our pro bono consulting program, using paid time to volunteer, and have their charitable giving matched by the Autodesk Foundation.
Reliance upon employees in other countries entails various risks and changes in these foreign countries, such as government instability or regulation unfavorable to foreign-owned businesses, which could negatively impact our business in the future.
We have never experienced any work stoppages and believe our employee relations are strong. Reliance upon employees in other countries entails various risks and changes in these foreign countries, such as government instability or regulation unfavorable to foreign-owned businesses, which could negatively impact our business in the future.
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.
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. Free Cash Flow: Cash flow from operating activities minus capital expenditures.
It excludes subscription revenue related to consumer product offerings, select Creative Finishing product offerings, and 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. Remaining Performance Obligations (RPO): The sum of total short-term, long-term, and unbilled deferred revenue.
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. Remaining Performance Obligations (RPO): The sum of total short-term, long-term, and unbilled deferred revenue.
Our intention is to make Autodesk software ubiquitous and the design and making software of choice for those poised to become the next generation of professional users.
Our intention is to make Autodesk software the preferred choice for those poised to become the next generation of design, engineering, and construction professionals.
ITEM 1. BUSINESS Note: A glossary of terms used in this Form 10-K appears at the end of this Item 1. GENERAL We are a global leader in 3D design, engineering, and entertainment software and services, offering customers productive business solutions through powerful technology products and services.
ITEM 1. BUSINESS Note: A glossary of terms used in this Form 10-K appears at the end of this Item 1. GENERAL We are a global leader in 3D design, engineering and entertainment technology solutions, spanning architecture, engineering, construction, product design, manufacturing, media, and entertainment.
Total Rewards To attract, retain, and support our highly qualified employees, we offer competitive compensation and benefits, which include an element of choice to meet the needs of our diverse and global population. In addition to base pay and opportunities to receive short- and long-term incentives, we have an employee stock purchase plan, and retirement and other financial support.
Total Rewards To attract, retain, and support our employees, we offer competitive compensation and benefits programs, several of which include an element of choice to meet the needs of our diverse and global population. In addition to competitive base pay and opportunities to receive short-term incentives, all our employees are eligible to participate in our long-term plans.
The loss of, or a significant reduction in, business with any one of our major distributors or large resellers could harm our business. See Item 1A, “Risk Factors,” for further discussion.
Our ability to effectively distribute our products depends in part upon the financial and business condition of our distributor and reseller networks. The loss of, or a significant reduction in, business with any one of our major distributors or large resellers could harm our business. See Item 1A, “Risk Factors,” for further discussion.
Internally, we are investing in best practices to mitigate our greenhouse gas emissions (“GHGs”) and climate change risk through investments in renewable energy, energy efficiency, and disaster management and recovery strategies. In fiscal year 2022, we deployed a new sustainability financing framework to accelerate new and existing efforts in these areas.
Internally, we are investing in best practices to mitigate our greenhouse gas emissions (“GHGs”) and climate change risk through investments in renewable energy, energy efficiency, and disaster management and recovery strategies.
We anticipate that our channel mix will continue to change, particularly as we scale our online Autodesk branded store business and our largest accounts shift towards direct-only business models. Importantly, we expect that the majority of our revenue will continue to be derived from indirect channel sales in the near future.
We anticipate that our channel mix will continue to change, particularly as we scale our online Autodesk branded store business and our largest accounts shift towards direct-only business models.
The following were significant acquisitions for fiscal years 2022 and 2021: Date of closing Company Details May 2021 Upchain Inc. (“Upchain”) Autodesk integrated Upchain’s unified cloud platform in Autodesk solutions to centralize data management and process management. March 2021 Storm UK Holdco Limited, the parent of Innovyze, Inc.
(“Upchain”) Autodesk integrated Upchain’s unified cloud platform in Autodesk solutions to centralize data management and process management. March 2021 Storm UK Holdco Limited, the parent of Innovyze, Inc.
Under our maintenance plans, customers are eligible to receive unspecified upgrades when and if available, and technical support. We recognize maintenance revenue over the term of the agreements, generally one year. Make Business: Represents certain cloud-based product subscriptions. Main products include, but are not limited to, Assemble, Autodesk Build, BuildingConnected, Fusion 360, and ShotGrid.
We recognize maintenance revenue over the term of the agreements, generally one year. Make Business: Represents certain cloud-based product subscriptions. Main products include, but are not limited to, Assemble, Autodesk Build, BuildingConnected, Fusion 360, and ShotGrid. Certain products, such as Fusion 360, incorporate both Design and Make functionality and are classified as Make.
Unbilled Deferred Revenue: Unbilled deferred revenue represents contractually stated or committed orders under early renewal and multi-year billing plans for subscription, services, and maintenance for which the associated deferred revenue has not been recognized.
Unbilled Deferred Revenue: Unbilled deferred revenue represents contractually stated or committed orders under early renewal and multi-year billing plans for subscription, services, and maintenance for which the associated deferred revenue has not been recognized. Under FASB Accounting Standards Codification ("ASC") Topic 606, unbilled deferred revenue is not included as a receivable or deferred revenue on our Consolidated Balance Sheet.
Professional Development and Employee Impact We believe career development plays an important role in keeping our employees engaged and to provide additional opportunities to grow and build their careers. Autodesk offers extensive professional and technical development opportunities for our employees. These include self-service online modules and personalized learning paths, professional and management development programs, and a tuition reimbursement program.
Professional Development and Employee Impact We believe career development plays an important role in keeping our employees engaged and in providing additional opportunities for them to grow and build their careers. Autodesk offers extensive professional and technical development opportunities for our employees.
More information about our sustainability commitment can be found in our annual impact reports, which we have published on our website since 2008. Our fiscal 2022 impact report will be published in the second quarter of fiscal 2023. Philanthropy The Autodesk Foundation (the “Foundation”), a privately funded 501(c)(3) charity organization established and solely funded by us, leads our philanthropic efforts.
Impact Reports More information about our sustainability financing and commitment can be found in our annual Impact Reports, which we have published on our website since 2008. Our fiscal 2023 Impact Report will be published in the second quarter of fiscal 2024.
Net revenue retention rate is calculated by dividing the current quarter subscription and maintenance revenue related to base customers by the total corresponding quarter subscription and maintenance revenue from one year ago.
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.
Subscription plan offerings are designed to give our customers increased flexibility with how they use our products and service offerings and to attract a broader range of customers such as project-based users and small businesses. Subscription plans represent a combined hybrid offering of desktop software and cloud functionality which provides a device-independent, collaborative design workflow for designers and their stakeholders.
Subscription plan offerings are designed to give our customers increased flexibility with how they use our products and service offerings and to attract a broader range of customers such as project- 7 Table of Contents based users and small businesses.
In fiscal year 2021, we attained our ongoing commitment to being net-zero emissions, and before carbon offsets, were responsible for 126,000 metric tons of carbon dioxide equivalent across our operational, market-based, boundary. This represents a 45% reduction compared to our fiscal year 2020 base line.
Additionally, in fiscal 2022, we were responsible for 103,000 metric tons of carbon dioxide equivalent emissions across our operational, market-based, boundary. This represents a 55% reduction compared to our fiscal year 2020 base line. In addition, our residual 103,000 metric tons of CO2e emissions were neutralized through the procurement of high quality carbon offsets.
Our Industry Collections consist of: Autodesk Architecture, Engineering and Construction Collection, Autodesk Product Design and Manufacturing Collection, and Autodesk Media and Entertainment Collection. Maintenance Plan: Our maintenance plans provide our customers with a cost effective and predictable budgetary option to obtain the productivity benefits of our new releases and enhancements when and if released during the term of their contracts.
Maintenance Plan: Our maintenance plans provide our customers with a cost effective and predictable budgetary option to obtain the productivity benefits of our new releases and enhancements when and if released during the term of their contracts. 14 Table of Contents Under our maintenance plans, customers are eligible to receive unspecified upgrades when and if available, and technical support.
Our D&B strategy includes a variety of activities, such as inclusive leadership training for all people managers and senior employees, hiring manager and interview classes that include training on mitigating bias and inclusive practices, Culture Sprints for all employees to foster belonging, and a D&B speaker series featuring leaders from a range of disciplines.
Our D&B strategy includes a variety of activities, such as inclusive leadership training for 12 Table of Contents all people managers and senior employees, and hiring manager and interview classes that include training on mitigating bias and inclusive practices. To help us build a more diverse workforce, we have continued to invest in our diversity partnerships.
To help us build a more diverse workforce, we have continued to invest in our diversity partnerships. We partner with educational institutions such as Hispanic-Serving Institutions and Historically Black Colleges and Universities, and professional organizations around the globe supporting underrepresented groups in technology.
We partner with educational institutions such as Hispanic-Serving Institutions and Historically Black Colleges and Universities, and professional organizations around the globe supporting underrepresented groups in technology. We provide a variety of scholarships, internship programs, sponsorship agreements, mentoring and development partnerships, and program support to organizations focused on women and underrepresented groups.
(“Ingram Micro”), our second-largest distributor, accounted for 9% of Autodesk's total net revenue for fiscal year ended January 31, 2022 and 10% of total net revenue for fiscal years ended January 31, 2021 and 2020. We believe our business is not substantially dependent on either Tech Data or Ingram Micro.
(“Ingram Micro”), our second-largest distributor, accounted for 9%, 9%, and 10% of Autodesk's total net revenue for the fiscal years ended January 31, 2023, 2022 and 2021, respectively. We entered into transition agreements with two of our distributors Tech Data and Ingram Micro to provide transition distribution activities for a one-to-two-year period, with potential extensions.
Autodesk’s Culture Code defines values and behaviors that support our commitment to being a customer company, where each employee takes responsibility for understanding our customers’ needs, expectations, and experiences. As of January 31, 2022, we employed approximately 12,600 people, an increase from approximately 11,500 employees as of the end of fiscal year 2021.
TALENT AND HUMAN CAPITAL MANAGEMENT Our employees play a central role in the success of our long-term strategy. Autodesk’s Culture Code defines values and behaviors that support our commitment to being a customer company, where each employee takes responsibility for understanding our customers’ needs, expectations, and experiences.
Furthermore, our leadership is committed to taking climate action and that commitment goes hand in hand with our values and reputation in the marketplace. In fiscal 2022, we integrated regular analysis of various climate scenarios into our enterprise strategy and risk processes.
Furthermore, our leadership is committed to taking climate action and that commitment goes hand in hand with our values and reputation in the marketplace. Our FY23 Enterprise Risk Management process considered how climate impacts could affect and potentially amplify the overall significance of each identified risk and opportunity.
Free Cash Flow: Cash flow from operating activities minus capital expenditures. 14 Table of Contents 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.
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.
The information posted on our website is not incorporated into this Annual Report on Form 10-K.
Our professional software products are sold globally through a combination of indirect and direct channels. Corporate Information Our internet address is www.autodesk.com. The information posted on our website is not incorporated into this Annual Report on Form 10-K.
These capabilities allow our customers to foster innovation, optimize their designs, streamline their manufacturing and construction processes, save time and money, improve quality, deliver more sustainable outcomes, communicate plans, and collaborate with others. Our professional software products are sold globally, both directly to customers and through a network of resellers and distributors. Corporate Information Our internet address is www.autodesk.com.
Our customers design, fabricate, manufacture, and build anything by visualizing, simulating, and analyzing real-world performance early in the design process. These capabilities allow our customers to foster innovation, optimize their designs, streamline their manufacturing and construction processes, save time and money, improve quality, deliver more sustainable outcomes, communicate plans, and collaborate with others.
None of our employees in the United States are represented by a labor union. In certain foreign countries, our employees are represented by trade unions or work councils. We have never experienced any work stoppages and believe our employee relations are strong.
As of January 31, 2023, we employed approximately 13,700 people, an increase from approximately 12,600 employees as of the end of fiscal year 2022. None of our employees in the United States are represented by a labor union. In certain foreign countries, our employees are represented by trade unions or works councils.
Details about this effort can be found in our Sustainability Financing Framework on our website at www.autodesk.com. Information contained on or accessible through our website is not part of or incorporated by reference into this report.
Information contained on or accessible through our website is not part of or incorporated by reference into this report. Philanthropy The Autodesk Foundation (the “Foundation”), a privately funded 501(c)(3) charity organization established and solely funded by us, leads our philanthropic efforts.
We advance these opportunities with industry innovators through collaboration, grants, software donations, and training. Education Autodesk is committed to helping fuel a lifelong passion for design and making among students of all ages, both within and outside the classroom. We offer free educational licenses of Autodesk’s professional software to students, educators, and accredited educational institutions worldwide.
We advance these opportunities with industry innovators through collaboration, grants, software donations, and training. Education Autodesk is committed to helping students gain the in-demand skills and certifications needed to demonstrate they are prepared for current and emerging roles in the industries we serve.
ACQUISITIONS We acquired new technology or supplemented our existing technology by purchasing businesses or technology related assets focused in specific markets or industries. For the fiscal years ended January 31, 2022 and 2021, we acquired companies accounted for as business combinations. Autodesk did not complete any business combinations during fiscal year 2020.
For the fiscal years ended January 31, 2023, 2022 and 2021, we acquired companies accounted for as business combinations. The acquisitions during fiscal 2023 were not individually significant. The following were significant acquisitions for fiscal years 2022 and 2021. Date of closing Company Details May 2021 Upchain Inc.
We employ a variety of incentive programs and promotions to align our reseller channel with our business strategies. Our ability to effectively distribute our products depends in part upon the financial and business condition of our distributor and reseller networks.
We expect our indirect channel will continue to transact and support a considerable portion of our customers. We also expect our transition to annual billings for multi-year contracts to impact the timing of our billings and cash collections. We employ a variety of incentive programs and promotions to align our reseller channel with our business strategies.
Removed
We serve customers in architecture, engineering, and construction; product design and manufacturing; and digital media and entertainment industries. Our customers design, fabricate, manufacture, and build anything by visualizing, simulating, and analyzing real-world performance early in the design process.
Added
Subscription plans represent a combined hybrid offering of desktop software and cloud functionality which provides a device-independent, collaborative design workflow for designers and their stakeholders.
Removed
With AutoCAD Civil 3D, the entire project team works from the same consistent, up-to-date model so they stay coordinated throughout all project phases. • BIM 360 BIM 360 construction management cloud-based software enables almost anytime, anywhere access to project data throughout the building construction lifecycle.
Added
Additionally, as part of the continued growth of our online Autodesk branded store and the transition to annual billings for multi-year contracts and our new token-based Flex model, we are planning to expand our transactions with value-added resellers and transact directly with more end customers without substantial disruption to our revenue.
Removed
I n order to offer better service to our customers, we are transitioning our existing customers from serial numbers to named users. We 7 Table of Contents completed the migration of our single-user subscriptions from serial numbers in fiscal 2021 and are transitioning multi-user subscriptions to named users through February 2024.
Added
In connection with the transition agreements, Autodesk intends to increase our selling efforts with value-added resellers and agents. We believe our business is not substantially dependent on either Tech Data or Ingram Micro.
Removed
Should any of the agreements between us and Tech Data or Ingram Micro be terminated for any reason, we believe the resellers and end users who currently purchase our products through Tech Data or Ingram Micro would be able to continue to do so under substantially the same terms from one of our many other distributors without substantial disruption to our revenue.
Added
We offer free educational licenses of Autodesk’s complete portfolio of professional software to verified students, educators, and accredited educational institutions worldwide. 9 Table of Contents Additionally, we offer self-paced, modular learning and curriculum for K-12, post-secondary students, and educators.
Removed
We inspire and support beginners with Tinkercad, a simple online 3D design and 3D printing tool. Through Autodesk Design Academy, we provide secondary and post-secondary schools hundreds of standards-aligned class projects to support design-based disciplines in Science, Technology, Engineering, Digital Arts, and 9 Table of Contents Math (STEAM) using Autodesk’s professional-grade design, engineering, and entertainment software.
Added
In fiscal year 2022, we deployed a new sustainability financing framework to accelerate new and existing efforts in these areas, including issuing a $1 billion sustainability bond to support eligible projects and initiatives.
Removed
Autodesk Design Academy curricula is also syndicated on iTunes U and Udemy, where millions of students go to learn online. Classes and projects are available on our Instructables website for anyone looking to expand their “making” skills.
Added
We also have comprehensive health and wellness benefits, a generous time off program, an employee stock purchase plan, sabbaticals, retirement plans, financial support programs, financial tools and education, and an employee assistance program. 13 Table of Contents ACQUISITIONS We acquired new technology or supplemented our existing technology by purchasing businesses or technology related assets focused in specific markets or industries.
Removed
In November 2020, we launched a credential program, which empowers current and future Autodesk customers to learn in-demand toolsets, skillsets, and mindsets, while earning credentials that demonstrate their job readiness.
Removed
We offer self-paced, modular learning through a range of skill levels, roles, and career ambitions, helping professionals demonstrate and apply relevant knowledge, step into emerging roles, and stay at the forefront of their industry.
Removed
Our assured results for fiscal year 2022 and our ongoing commitments will be published in our fiscal year 2022 impact report. This change in GHGs largely stemmed from changes in travel during the global pandemic and also continued investment in renewable energy and efficiency across our footprint areas.
Removed
The purchase of media and the transfer of the software programs onto media for distribution to customers are performed by us and by licensed subcontractors. Packaging materials are produced to our specifications by outside sources. Production is performed in leased facilities operated by independent third-party contractors.
Removed
To date, we have not experienced any material difficulties or delays in the production of our software and documentation. 12 Table of Contents TALENT AND HUMAN CAPITAL MANAGEMENT Our employees play a central role in the success of our long-term strategy.
Removed
We provide a variety of scholarships, internship programs, mentoring and development partnerships, and program support to organizations focused on women and underrepresented groups. We also have an Emerging Leaders Program which is focused on developing a diverse cohort of leaders through professional development, mentoring, and networking opportunities.
Removed
In addition to comprehensive health insurance and wellness benefits, we have a generous time off program, including sabbatical, financial tools and education, and an employee assistance program. In fiscal 2021, we made changes to our equity strategy, expanding our grant program eligibility for new hires and existing employees.
Removed
As part of this strategy, we made a one-time equity grant to all regular employees with no unvested equity to align all employees to the long-term success of the company and encourage an owner mindset. 13 Table of Contents COVID-19 In response to the COVID-19 pandemic, we supported our employees by adopting remote work and providing reimbursements to employees to equip their home offices, unlimited videoconferencing access to gather virtually with friends and family, and additional company holidays in recognition of the unusual demands of the working environment during the pandemic.
Removed
Certain products, such as Fusion 360, incorporate both Design and Make functionality and are classified as Make. Net Revenue Retention Rate (NR3): Measures the year-over-year change in subscription and maintenance revenue for the population of customers that existed one year ago (“base customers”).
Removed
Under FASB Accounting Standards Codification ("ASC") Topic 606, unbilled deferred revenue is not included as a receivable or deferred revenue on our Condensed Consolidated Balance Sheet. 15 Table of Contents

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

77 edited+6 added−17 removed190 unchanged
Biggest changeThese risks are described more fully below and include, but are not limited to, risks relating to the following: • Our strategy to develop and introduce new products and services, exposing us to risks such as limited customer acceptance, costs related to product defects, and large expenditures. • The effects of the COVID-19 pandemic and related public health measures. • Global economic and political conditions. • Costs and challenges associated with strategic acquisitions and investments. • Dependency on international revenue and operations, exposing us to significant international regulatory, economic, intellectual property, collections, currency exchange rate, taxation, political, and other risks. • Inability to predict subscription renewal rates and their impact on our future revenue and operating results. • Existing and increased competition and rapidly evolving technological changes. • Fluctuation of our financial results, key metrics and other operating metrics. • Deriving a substantial portion of our net revenue from a small number of solutions, including our AutoCAD-based software products and collections. • Any failure to successfully execute and manage initiatives to realign or introduce new business and sales initiatives. • Net revenue, billings, earnings, cash flow, or subscriptions shortfalls or volatility of the market causing the market price of our stock to decline. • Social and ethical issues relating to the use of artificial intelligence in our offerings. • Security incidents compromising the integrity of our or our customers’ offerings, services, data, or intellectual property. • Reliance on third parties to provide us with a number of operational and technical services as well as software. • Our highly complex software, which may contain undetected errors, defects, or vulnerabilities. • Increasing regulatory focus on privacy issues and expanding laws. • Governmental export and import controls that could impair our ability to compete in international markets or subject us to liability if we violate the controls. • Protection of our intellectual property rights and intellectual property infringement claims from others. • The government procurement process. • Fluctuations in currency exchange rates. • Our debt service obligations. • Our investment portfolio consisting of a variety of investment vehicles that are subject to interest rate trends, market volatility, and other economic factors. 16 Table of Contents Risks Relating to Our Business and Strategy Our strategy to develop and introduce new products and services exposes us to risks such as limited customer acceptance, costs related to product defects, and large expenditures, each of which may result in no additional net revenue or decreased net revenue.
Biggest changeThese risks are described more fully below and include, but are not limited to, risks relating to the following: • Our strategy to develop and introduce new products and services, exposing us to risks such as limited customer acceptance, costs related to product defects, and large expenditures. • Global economic and political conditions. • Costs and challenges associated with strategic acquisitions and investments. • Dependency on international revenue and operations, exposing us to significant international regulatory, economic, intellectual property, collections, currency exchange rate, taxation, political, and other risks. • Inability to predict subscription renewal rates and their impact on our future revenue and operating results. • Existing and increased competition and rapidly evolving technological changes. • Fluctuation of our financial results, key metrics and other operating metrics. • Deriving a substantial portion of our net revenue from a small number of solutions, including our AutoCAD-based software products and collections. • Any failure to successfully execute and manage initiatives to realign or introduce new business and sales initiatives. • Net revenue, billings, earnings, cash flow, or subscriptions shortfalls or volatility of the market causing the market price of our stock to decline. • Social and ethical issues relating to the use of artificial intelligence in our offerings. • Security incidents compromising the integrity of our or our customers’ offerings, services, data, or intellectual property. • Reliance on third parties to provide us with a number of operational and technical services as well as software. • Our highly complex software, which may contain undetected errors, defects, or vulnerabilities, and is subject to service disruptions, degradations, outages or other performance problems. • Increasing regulatory focus on privacy issues and expanding laws. • Governmental export and import controls that could impair our ability to compete in international markets or subject us to liability if we violate the controls. • Protection of our intellectual property rights and intellectual property infringement claims from others. • The government procurement process. • Fluctuations in currency exchange rates. • Our debt service obligations. • Our investment portfolio consisting of a variety of investment vehicles that are subject to interest rate trends, market volatility, and other economic factors. • The effects of the COVID-19 pandemic and related public health measures.
A loss on any of our investments may cause us to record an other-than-temporary impairment charge. The effect of this charge could impact our overall net income (loss) and earnings (loss) per share.
A loss on any of our investments may cause us to record an other-than-temporary impairment charge. The effect of this charge could impact our overall net income and earnings per share.
Bribery Act, and other anti-corruption laws; • difficulties in staffing and managing foreign sales and development operations; • local competition; • longer collection cycles for accounts receivable; • U.S. and foreign tax law changes and the complexities of tax reporting; • laws regarding the free flow of data across international borders and management of and access to data and public networks; • possible future limitations upon foreign-owned businesses; • increased financial accounting and reporting burdens and complexities; 19 Table of Contents • inadequate local infrastructure; • greater difficulty in protecting intellectual property; • software piracy; and • other factors beyond our control, including popular uprisings, terrorism, war (including the significant military action against Ukraine launched by Russia and any related political or economic responses and counter-responses or otherwise by various global actors or the general effect on the global economy), natural disasters, and diseases and pandemics, such as COVID-19.
Bribery Act, and other anti-corruption laws; • difficulties in staffing and managing foreign sales and development operations; • local competition; • longer collection cycles for accounts receivable; • U.S. and foreign tax law changes and the complexities of tax reporting; • laws regarding the free flow of data across international borders and management of and access to data and public networks; • possible future limitations upon foreign-owned businesses; • increased financial accounting and reporting burdens and complexities; • inadequate local infrastructure; • greater difficulty in protecting intellectual property; • software piracy; and • other factors beyond our control, including popular uprisings, terrorism, war (including the significant military action against Ukraine launched by Russia and any related political or economic responses and counter-responses or otherwise by various global actors or the general effect on the global economy), natural disasters, and diseases and pandemics, such as COVID-19.
The market price for our common stock may be affected by a number of factors, including the other risks described in these risk factors and the following: 22 Table of Contents • shortfalls in our expected financial results, including net revenue, billings, earnings, and cash flow or key performance metrics, such as subscriptions, including as a result of the current COVID-19 pandemic, and how those results compare to securities analyst expectations, including whether those results fail to meet, exceed, or significantly exceed securities analyst expectations; • quarterly variations in our or our competitors’ results of operations; • general socioeconomic, political, or market conditions, including from an economic downturn or recession in the United States or in other countries; • changes in forward-looking estimates of future results, how those estimates compare to securities analyst expectations, or changes in recommendations or confusion on the part of analysts and investors about the short- and long-term impact to our business; • uncertainty about certain governments’ abilities to repay debt or effect fiscal policy; • announcements of new offerings or enhancements by us or our competitors; • unusual events such as significant acquisitions, divestitures, regulatory actions, and litigation; • changes in laws, rules, or regulations applicable to our business; • outstanding debt service obligations; and • other factors, including factors unrelated to our operating performance, such as instability affecting the economy or the operating performance of our competitors.
The market price for our common stock may be affected by a number of factors, including the other risks described in these risk factors and the following: • shortfalls in our expected financial results, including net revenue, billings, earnings, and cash flow or key performance metrics, such as subscriptions, including as a result of the current COVID-19 pandemic, and how those results compare to securities analyst expectations, including whether those results fail to meet, exceed, or significantly exceed securities analyst expectations; • quarterly variations in our or our competitors’ results of operations; • general socioeconomic, political, or market conditions, including from an economic downturn or recession in the United States or in other countries; • changes in forward-looking estimates of future results, how those estimates compare to securities analyst expectations, or changes in recommendations or confusion on the part of analysts and investors about the short- and long-term impact to our business; • uncertainty about certain governments’ abilities to repay debt or effect fiscal policy; • announcements of new offerings or enhancements by us or our competitors; • unusual events such as significant acquisitions, divestitures, regulatory actions, and litigation; • changes in laws, rules, or regulations applicable to our business; • outstanding debt service obligations; and • other factors, including factors unrelated to our operating performance, such as instability affecting the economy or the operating performance of our competitors.
Department of Treasury and other standard-setting bodies have been issuing and will continue to issue regulations and interpretative guidance that could significantly impact how we will apply the law and the ultimate effect on our results of operations from both the TCJA and the CARES Act, including for our prior tax years.
Department of Treasury and other standard-setting bodies have been issuing and will continue to issue regulations and interpretative guidance that could significantly impact how we will apply the law and the ultimate effect on our results of operations from both the Tax Act and the CARES Act, including for our prior tax years.
Each quarter, we assess the need for a valuation allowance, considering both positive and negative evidence to determine whether all or a portion of the deferred tax assets are more likely than not to be realized. We continue to have a full valuation allowance against certain U.S. and foreign deferred tax assets.
Each quarter, we assess the need for a valuation allowance, considering both positive and negative evidence to determine whether all or a portion of the deferred tax assets are more likely than not to be realized. We continue to have a valuation allowance against certain U.S. and foreign deferred tax assets.
In addition, global events, including the sudden and unexpected effects of the COVID-19 pandemic as well as geopolitical developments, may contribute to volatility in foreign exchange markets, which we may not be able to effectively manage, and our financial results could be adversely impacted.
In addition, global events, including the sudden and unexpected effects of the COVID-19 pandemic as well as geopolitical and economic developments, may contribute to volatility in foreign exchange markets, which we may not be able to effectively manage, and our financial results could be adversely impacted.
We also entered into a credit agreement that provides for an unsecured revolving loan facility in the aggregate principal amount of $1.5 billion, with an option to be increased up to $2.0 billion, as described in Part 2, Item 8.
We also entered into a credit agreement that provides for an unsecured revolving loan facility in the aggregate principal amount of $1.5 billion, with an option to be increased up to $2.0 billion, as described in Part II, Item 8.
Risks inherent in our international operations include: • economic volatility; • tariffs, quotas, and other trade barriers and restrictions , including any political or economic responses and counter-responses or otherwise by various global actors to the significant military action against Ukraine launched by Russia; • fluctuating currency exchange rates, including devaluations, currency controls, and inflation, and risks related to any hedging activities we undertake; • changes in regulatory requirements and practices; • delays resulting from difficulty in obtaining export licenses for certain technology; • different purchase patterns as compared to the developed world; • operating in locations with a higher incidence of corruption and fraudulent business practices, particularly in emerging economies; • compliance with the U.S.
Risks inherent in our international operations include: • economic volatility; • tariffs, quotas, and other trade barriers and restrictions , including any political or economic responses and counter-responses or otherwise by various global actors to the significant military action against Ukraine launched by Russia; • fluctuating currency exchange rates, including devaluations, currency controls, and inflation, and risks related to any hedging activities we undertake; • changes in regulatory requirements and practices; • delays resulting from difficulty in obtaining export licenses for certain technology; 18 Table of Contents • different purchase patterns as compared to the developed world; • operating in locations with a higher incidence of corruption and fraudulent business practices, particularly in emerging economies; • compliance with the U.S.
In addition, such acquisitions and investments involve other risks such as: • the inability to retain customers, key employees, vendors, distributors, business partners, and other entities associated with the acquired business; • the potential that due diligence of the acquired business or solution does not identify significant problems; • exposure to litigation or other claims in connection with, or inheritance of claims or litigation risk as a result of, an acquisition, including claims from terminated employees, customers, or other third parties; 18 Table of Contents • the potential for incompatible business cultures; • significantly higher than anticipated transaction or integration-related costs; • potential additional exposure to economic, tax, currency, political, legal, and regulatory risks associated with specific countries; and • the potential impact on relationships with existing customers, vendors, and distributors as business partners as a result of acquiring another business.
In addition, such acquisitions and investments involve other risks such as: • the inability to retain customers, key employees, vendors, distributors, business partners, and other entities associated with the acquired business; • the potential that due diligence of the acquired business or solution does not identify significant problems; • exposure to litigation or other claims in connection with, or inheritance of claims or litigation risk as a result of, an acquisition, including claims from terminated employees, customers, or other third parties; • the potential for incompatible business cultures; • significantly higher than anticipated transaction or integration-related costs; • potential additional exposure to economic, tax, currency, political, legal, and regulatory risks associated with specific countries; and • the potential impact on relationships with existing customers, vendors, and distributors as business partners as a result of acquiring another business.
If any of the foregoing security incidents were to occur or to be perceived to have occurred, our reputation may suffer, our competitive position may be diminished, customers may stop paying for our solutions and services, we could be required to expend significant capital and other resources to evaluate and alleviate the security incident and to try to prevent further or additional incidents, and we could face regulatory inquiry, lawsuits, and potential liability.
If any of the foregoing security incidents were to occur or to be perceived to have occurred, our reputation may suffer, our competitive position may be diminished, customers (including government customers) may stop paying for our solutions and services, we could be required to expend significant capital and other resources to evaluate and alleviate the security incident and to try to prevent further or additional incidents, and we could face regulatory inquiry, lawsuits, and potential liability.
In addition to the other risks described in these risk factors, some of the factors that could cause our financial results, key metrics, and other operating metrics to fluctuate include: • general market, economic, business, and political conditions in Europe, APAC, and emerging economies, including from an economic downturn or recession in the United States or other countries; • failure to produce sufficient revenue, billings, subscription, profitability, and cash flow growth, including as a result of the COVID-19 pandemic; • failure to accurately predict the impact of acquired businesses or to identify and realize the anticipated benefits of acquisitions, and successfully integrate such acquired businesses and technologies; • potential goodwill impairment charges related to prior acquisitions; • failure to manage spend; • changes in billings linearity; • changes in subscription mix, pricing pressure, or changes in subscription pricing; • weak or negative growth in one or more of the industries we serve, including AEC, manufacturing, and digital media and entertainment markets; • the success of new business or sales initiatives; • security breaches, related reputational harm, and potential financial penalties to customers and government entities; • restructuring or other accounting charges and unexpected costs or other operating expenses; • timing of additional investments in our technologies or deployment of our services; • changes in revenue recognition or other accounting guidelines employed by us and/or established by the Financial Accounting Standards Board, Securities and Exchange Commission, or other rulemaking bodies; • fluctuations in foreign currency exchange rates and the effectiveness of our hedging activity; • dependence on and timing of large transactions; • adjustments arising from ongoing or future tax examinations; • the ability of governments around the world to adopt fiscal policies, meet their financial and debt obligations, and finance infrastructure projects; • failure to expand our AutoCAD and AutoCAD LT customer base to related design products and services; • our ability to rapidly adapt to technological and customer preference changes, including those related to cloud computing, mobile devices, and new computing platforms; • timing of the introduction of new products by us or our competitors; • the financial and business condition of our reseller and distribution channels; • perceived or actual technical or other problems with a product or combination of subscriptions; • unexpected or negative outcomes of matters and expenses relating to litigation or regulatory inquiries; • increases in cloud functionality-related expenses; • timing of releases and retirements of offerings; • changes in tax laws or tax or accounting rules and regulations, such as increased use of fair value measures; 21 Table of Contents • changes in sales compensation practices; • failure to effectively implement and maintain our copyright legalization programs, especially in developing countries; • renegotiation or termination of royalty or intellectual property arrangements; • interruptions or terminations in the business of our consultants or third-party developers; • timing and degree of expected investments in growth and efficiency opportunities; • failure to achieve continued success in technology advancements; • catastrophic events, natural disasters, or public health events, such as pandemics and epidemics, including COVID-19; • regulatory compliance costs; and • failure to appropriately estimate the scope of services under consulting arrangements.
In addition to the other risks described in these risk factors, some of the factors that could cause our financial results, key metrics, and other operating metrics to fluctuate include: • general market, economic, business, and political conditions in Europe, APAC, and emerging economies, including from an economic downturn or recession in the United States or other countries; • failure to produce sufficient revenue, billings, subscription, profitability, and cash flow growth, including as a result of the COVID-19 pandemic; • failure to accurately predict the impact of acquired businesses or to identify and realize the anticipated benefits of acquisitions, and successfully integrate such acquired businesses and technologies; • shift to named-user plans and annual billing of multi-year contracts; • potential goodwill impairment charges related to prior acquisitions; • failure to manage spend; • changes in billings linearity; • changes in subscription mix, pricing pressure, or changes in subscription pricing; • weak or negative growth in one or more of the industries we serve, including AEC, manufacturing, and digital media and entertainment markets; • the success of new business or sales initiatives; • security breaches, related reputational harm, and potential financial penalties to customers and government entities; • restructuring or other accounting charges and unexpected costs or other operating expenses; • timing of additional investments in our technologies or deployment of our services; • changes in revenue recognition or other accounting guidelines employed by us and/or established by the Financial Accounting Standards Board, Securities and Exchange Commission, or other rulemaking bodies; • fluctuations in foreign currency exchange rates and the effectiveness of our hedging activity; • dependence on and timing of large transactions; • adjustments arising from ongoing or future tax examinations; • the ability of governments around the world to adopt fiscal policies, meet their financial and debt obligations, and finance infrastructure projects; • failure to expand our AutoCAD and AutoCAD LT customer base to related design products and services; 20 Table of Contents • our ability to rapidly adapt to technological and customer preference changes, including those related to cloud computing, mobile devices, and new computing platforms; • timing of the introduction of new products by us or our competitors; • the financial and business condition of our reseller and distribution channels; • perceived or actual technical or other problems with a product or combination of subscriptions; • unexpected or negative outcomes of matters and expenses relating to litigation or regulatory inquiries; • increases in cloud functionality-related expenses; • timing of releases and retirements of offerings; • changes in tax laws or tax or accounting rules and regulations, such as increased use of fair value measures; • changes in sales compensation practices; • failure to effectively implement and maintain our copyright legalization programs, especially in developing countries; • renegotiation or termination of royalty or intellectual property arrangements; • interruptions or terminations in the business of our consultants or third-party developers; • timing and degree of expected investments in growth and efficiency opportunities; • failure to achieve continued success in technology advancements; • catastrophic events, natural disasters, or public health events, such as pandemics and epidemics, including COVID-19; • regulatory compliance costs; and • failure to appropriately estimate the scope of services under consulting arrangements.
If we breach any of the covenants and do not obtain a waiver from the note holders or lenders, then, subject to applicable cure periods, we would not be able to incur additional indebtedness under the credit agreement described in Part 2, Item 8, and any outstanding indebtedness under the credit agreement may be declared immediately due and payable.
If we breach any of the covenants and do not obtain a waiver from the note holders or lenders, then, subject to applicable cure periods, we would not be able to incur additional indebtedness under the credit agreement described in Part II, Item 8, and any outstanding indebtedness under the credit agreement may be declared immediately due and payable.
The failure of our systems or hosted computer 32 Table of Contents services due to a catastrophic event, such as an earthquake, fire, flood, tsunami, weather event, telecommunications failure, power failure, cyber attack, terrorism or war (including the significant military action against Ukraine launched by Russia 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 business interruption from epidemics or pandemics, or the fear of such events, could adversely impact our business, financial results, and financial condition.
The failure of our systems or hosted computer services due to a catastrophic event, such as an earthquake, fire, flood, tsunami, weather event, telecommunications failure, power failure, cyber attack, terrorism or war (including the significant military action against Ukraine launched by Russia 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 business interruption from epidemics or pandemics, or the fear of such events, could adversely impact our business, financial results, and financial condition.
We are dependent on international revenue and operations, exposing us to significant international regulatory, economic, intellectual property, collections, currency exchange rate, taxation, political, and other risks, which could adversely impact our financial results. International net revenue represented 67% and 66% of our net revenue for fiscal 2022 and 2021, respectively.
We are dependent on international revenue and operations, exposing us to significant international regulatory, economic, intellectual property, collections, currency exchange rate, taxation, political, and other risks, which could adversely impact our financial results. International net revenue represented 66% and 67% of our net revenue for fiscal 2023 and 2022, respectively.
We are a U.S.-based multinational company subject to tax in multiple U.S. and foreign tax jurisdictions. Our effective tax rate is primarily based on our geographic mix of earnings; statutory rates; intercompany arrangements, including the manner we develop, value, and license our intellectual property; and enacted tax rules.
We are a U.S.-based multinational company subject to tax in multiple U.S. and foreign tax jurisdictions. Our effective tax rate is primarily based on our geographic mix of earnings; statutory rates; stock-based compensation; intercompany arrangements, including the manner we develop, value, and license our intellectual property; and enacted tax rules.
We may take such actions without clear indications that they will prove successful and, at times, we have been met with short-term challenges in the execution of such initiatives. Market acceptance of any new business or sales initiative is dependent on our ability to match our customers’ needs at the right time and price.
We may take such actions without clear indications that they will prove successful and, at times, we have been met with short-term challenges in the execution of such initiatives. Market acceptance of any new business or sales 21 Table of Contents initiative is dependent on our ability to match our customers’ needs at the right time and price.
Some open source software licenses require end- 24 Table of Contents users, who distribute or make available across a network software and services that include open source software, to make publicly available or to license all or part of such software (which in some circumstances could include valuable proprietary code, such as modifications or derivative works created, based upon, incorporating, or using the open source software) under the terms of the particular open source license.
Some open source software licenses require end-users, who distribute or make available across a network software and services that include open source software, to make publicly available or to license all or part of such software (which in some circumstances could include valuable proprietary code, such as modifications or derivative works created, based upon, incorporating, or using the open source software) under the terms of the particular open source license.
Our business strategy has historically depended in part on our relationships with third-party developers who provide products that expand the functionality of our design software. Some developers may elect to support other products or may experience disruption in product development and delivery cycles or financial pressure during periods of economic downturn.
Our business strategy has historically depended in part on our relationships with third-party developers who provide products that expand the 26 Table of Contents functionality of our design software. Some developers may elect to support other products or may experience disruption in product development and delivery cycles or financial pressure during periods of economic downturn.
Furthermore, 29 Table of Contents legal standards relating to the validity, enforceability, and scope of protection of intellectual property rights are uncertain. Despite our efforts to protect our proprietary rights, unauthorized parties from time to time have copied or reverse engineered aspects of our software or have obtained and used information that we regard as proprietary.
Furthermore, legal standards relating to the validity, enforceability, and scope of protection of intellectual property rights are uncertain. Despite our efforts to protect our proprietary rights, unauthorized parties from time to time have copied or reverse engineered aspects of our software or have obtained and used information that we regard as proprietary.
They could affect our actual results of operations, causing them to differ materially from those expressed in forward-looking statements. Summary of Risk Factors Our business is subject to numerous risks and uncertainties that you should consider before investing in our securities.
They could affect our actual results of operations, causing them to differ materially from those expressed in forward-looking statements. Summary of Risk Factors 15 Table of Contents Our business is subject to numerous risks and uncertainties that you should consider before investing in our securities.
Because of these and other 20 Table of Contents factors, competitive conditions in the industry are likely to intensify in the future. Increased competition could result in price reductions, reduced net revenue and profit margins, and loss of market share, any of which would likely harm our business.
Because of these and other factors, competitive conditions in the industry are likely to intensify in the future. Increased competition could result in price reductions, reduced net revenue and profit margins, and loss of market share, any of which would likely harm our business.
Such third-party software includes software licensed from commercial suppliers and under public open source licenses. While we have internal processes to 26 Table of Contents manage our use of such third-party software, if such processes are inadequate, we may be subject to copyright infringement or other third-party claims.
Such third-party software includes software licensed from commercial suppliers and under public open source licenses. While we have internal processes to manage our use of such third-party software, if such processes are inadequate, we may be subject to copyright infringement or other third-party claims.
The evaluation of privately held companies is based on information that we request from these companies, which is 31 Table of Contents not subject to the same disclosure regulations as U.S. publicly traded companies and, as such, the basis for these evaluations is subject to the timing and accuracy of the data received from these companies.
The evaluation of privately held companies is based on information that we request from these companies, which is not subject to the same disclosure regulations as U.S. publicly traded companies and, as such, the basis for these evaluations is subject to the timing and accuracy of the data received from these companies.
Furthermore, from time to time we may introduce or acquire new products, including in areas where we historically have not competed, which could increase our exposure to patent and other intellectual property claims. Contracting with government entities exposes us to additional risks inherent in the government procurement process.
Furthermore, from time to time we may introduce or 29 Table of Contents acquire new products, including in areas where we historically have not competed, which could increase our exposure to patent and other intellectual property claims. Contracting with government entities exposes us to additional risks inherent in the government procurement process.
The scope of these laws and regulations is rapidly 27 Table of Contents evolving, subject to differing interpretations, may be inconsistent among jurisdictions, or conflict with other rules and is likely to remain uncertain for the foreseeable future.
The scope of these laws and regulations is rapidly evolving, subject to differing interpretations, may be inconsistent among jurisdictions, or conflict with other rules and is likely to remain uncertain for the foreseeable future.
In any such event, our financial results, results of operations, cash flows, or trading prices for our securities could be negatively impacted. Changes in existing financial accounting standards or practices, or taxation rules or practices may adversely affect our results of operations.
In any such event, our financial results, results of operations, cash flows, or trading prices for our securities could be negatively impacted. 32 Table of Contents Changes in existing financial accounting standards or practices, or taxation rules or practices may adversely affect our results of operations.
Potential government regulation in the space of AI ethics may also increase the burden and cost of research and development in this area, subjecting us to brand or reputational harm, competitive harm, or legal liability.
Potential government regulation in the space of AI ethics may also 22 Table of Contents increase the burden and cost of research and development in this area, subjecting us to brand or reputational harm, competitive harm, or legal liability.
Unsuccessful implementation of hardware or software updates and improvements 25 Table of Contents could result in disruption in our business operations, loss of customers, loss of revenue, errors in our accounting and financial reporting, or damage to our reputation, all of which could harm our business.
Unsuccessful implementation of hardware or software updates and improvements could result in disruption in our business operations, loss of customers, loss of revenue, errors in our accounting and financial reporting, or damage to our reputation, all of which could harm our business.
We also cannot be sure that our existing insurance coverage will continue to be available on acceptable terms or will be available in sufficient amounts to cover one or more large claims related to a security incident, or that the insurer will not deny coverage as to any future claim.
We also cannot be sure that our existing insurance coverage will continue to be available on acceptable terms or will be 23 Table of Contents available in sufficient amounts to cover one or more large claims related to a security incident, or that the insurer will not deny coverage as to any future claim.
We also make assumptions, judgments, and estimates in determining the accruals for uncertain tax positions, variable compensation, partner incentive programs, product returns 33 Table of Contents reserves, allowances for credit losses, asset retirement obligations, legal contingencies, and operating lease liabilities.
We also make assumptions, judgments, and estimates in determining the accruals for uncertain tax positions, variable compensation, partner incentive programs, product returns reserves, allowances for credit losses, asset retirement obligations, legal contingencies, and operating lease liabilities.
If our distributors and resellers were to become insolvent, they would not be able to maintain their business and sales or provide customer support services, which would negatively impact our business and revenue. We rely significantly upon major distributors and resellers in both the U.S. and international regions, including the distributors Tech Data and Ingram Micro.
If our distributors and resellers were to become insolvent, they would not be able to maintain their business and sales or provide customer support services, which would negatively impact our business and revenue. We rely significantly upon major distributors and resellers in both the U.S. and international regions.
In addition, the new state laws – the CPRA and the VCDPA – that become effective on January 1, 2023, and the CPA that becomes effective on July 1, 2023, introduce additional obligations such as data minimization and storage limitations, granting additional rights to consumers such as correction of personal information and additional opt-out rights.
In addition, the new state laws – the CPRA and the VCDPA – that became effective on January 1, 2023, the CPA and CTDPA that become effective on July 1, 2023, and the UCPA that becomes effective on December 31, 2023, introduce additional obligations such as data minimization and storage limitations, granting additional rights to consumers such as correction of personal information and additional opt-out rights.
Additionally, in addition to government activity, privacy advocacy 28 Table of Contents groups and technology and other industries are considering various new, additional or different self-regulatory standards that may place additional burdens on us.
Additionally, in addition to government activity, privacy advocacy groups and technology and other industries are considering various new, additional or different self-regulatory standards that may place additional burdens on us.
If our customers do not renew their subscriptions or if they renew on less favorable terms, our revenues may decline. Existing and increased competition and rapidly evolving technological changes may reduce our revenue and profits.
If our customers do not renew their subscriptions or if they renew on less favorable terms, our revenues may decline. 19 Table of Contents Existing and increased competition and rapidly evolving technological changes may reduce our revenue and profits.
Inability of such third parties to satisfy our requirements could disrupt our operations or make it more difficult for us to implement our strategy.
Inability of such third parties to satisfy our requirements could disrupt our operations or make it more difficult for us to implement our 24 Table of Contents strategy.
Maintenance of our indebtedness, contractual restrictions, and additional issuances of indebtedness could: • cause us to dedicate a substantial portion of our cash flows from operations towards debt service obligations and principal repayments; • increase our vulnerability to adverse changes in general economic, industry, and competitive conditions; • limit our flexibility in planning for, or reacting to, changes in our business and our industry; • impair our ability to obtain future financing for working capital, capital expenditures, acquisitions, general corporate, or other purposes; and • due to limitations within the debt instruments, restrict our ability to grant liens on property, enter into certain mergers, dispose of all or substantially all of the assets of Autodesk and its subsidiaries, taken as a whole, materially change our business, and incur subsidiary indebtedness, subject to customary exceptions.
Maintenance of our indebtedness, contractual restrictions, and additional issuances of indebtedness could: • cause us to dedicate a substantial portion of our cash flows from operations towards debt service obligations and principal repayments; • increase our vulnerability to adverse changes in general economic, industry, and competitive conditions; • limit our flexibility in planning for, or reacting to, changes in our business and our industry; • impair our ability to obtain future financing for working capital, capital expenditures, acquisitions, general corporate, or other purposes; and • due to limitations within the debt instruments, restrict our ability to grant liens on property, enter into certain mergers, dispose of all or substantially all of the assets of Autodesk and its subsidiaries, taken as a whole, materially change our business, and incur subsidiary indebtedness, subject to customary exceptions. 30 Table of Contents We are required to comply with the covenants set forth in our credit agreement.
As part of our effort to accommodate our customers’ needs and demands and the rapid evolution of technology, from time to time we evolve our business and sales initiatives, such as realigning our development and marketing organizations, offering software as a service, and realigning our internal resources in an effort to improve efficiency.
As part of our effort to accommodate our customers’ needs and demands and the rapid evolution of technology, from time to time we evolve our business and sales initiatives, such as shifting to annual billing of multi-year contracts, realigning our development and marketing organizations, offering software as a service, and realigning our internal resources in an effort to improve efficiency.
For fiscal 2022 and 2021, approximately 65% and 69%, respectively, of our revenue was derived from indirect channel sales through distributors and resellers, and we expect that the majority of our revenue will continue to be derived from indirect channel sales in the near future.
For both fiscal 2023 and 2022, approximately 65% of our revenue was derived from indirect channel sales through distributors and resellers, and we expect that the majority of our revenue will continue to be derived from indirect channel sales in the near future.
During both fiscal 2022 and 2021, combined revenue from our AutoCAD and AutoCAD LT family products, not including collections having AutoCAD or AutoCAD LT as a component, represented 29% of our total net revenue.
During fiscal 2023 and 2022, combined revenue from our AutoCAD and AutoCAD LT family products, not including collections having AutoCAD or AutoCAD LT as a component, represented 28% and 29% of our total net revenue, respectively.
The CPRA also creates a new agency to implement and enforce the law. These new state laws will require us to modify our data processing practices and policies and may cause us to incur substantial costs and expenses in order to comply.
The CPRA also created a new agency to implement and enforce the law. These new state laws have required us to modify our data processing practices and policies and may cause us to incur substantial costs and expenses in order to comply.
Over time, we have modified and will continue to modify aspects of our relationship with our distributors and resellers, such as their incentive programs, pricing to them, and our distribution model to motivate and reward them for aligning their businesses with our strategy and business objectives.
Over time, we have modified and especially during the transition process noted above, we will continue to modify aspects of our relationship with our distributors and resellers, such as their incentive programs, pricing to them, and our distribution model to motivate and reward them for aligning their businesses with our strategy and business objectives.
On February 2, 2022, the UK’s Information Commissioner’s Office issued new standard contractual clauses to support personal data transfers out of the UK (“UK SCCs”).
On February 2, 2022, the UK’s Information Commissioner’s Office issued new standard contractual clauses to support personal data transfers out of the UK (“UK SCCs”), which became effective March 21, 2022.
The United States and other countries’ economies have experienced cyclical downturns, in which economic activity was impacted by falling demand for a variety of goods and services, restricted credit, poor liquidity, decreased government spending, reduced corporate profitability, volatility in credit, equity, and foreign exchange markets, bankruptcies, and overall uncertainty. These economic conditions can occur abruptly.
The United States and other countries’ economies have experienced cyclical downturns, in which economic activity was impacted by falling demand for a variety of goods and services, restricted credit, poor liquidity, decreased government spending, reduced corporate profitability, volatility in credit, equity, and foreign exchange markets, inflationary pressures and higher interest rates, bankruptcies, and overall uncertainty.
The escalation of protectionist or retaliatory trade measures in either the United States or any other countries in which we do business, such as announcing sanctions, a change in tariff structures, export compliance, or other trade policies, may increase the cost of, or otherwise interfere with, the conduct of our business.
The escalation of protectionist or retaliatory trade measures in either the United States or any other countries in which we do business, such as announcing sanctions, a change in tariff structures, export compliance, or other trade policies, may increase the cost of, or otherwise interfere with, the conduct of our business, and could have a material adverse effect on our operations and business outlook.
War, including the significant military action against Ukraine launched by Russia and any related political or economic responses and counter-responses or otherwise by various global actors or the general effect on the global economy, could also affect our business. Any of these events could harm our business, results of operations, and financial condition.
War, including the significant military action against Ukraine launched by Russia and any related political or economic responses and counter-responses or otherwise by various global actors or the general effect on the global economy, could also affect our business.
The extent to which COVID-19 will impact our financial condition or results of operations is still uncertain and will continue to depend on developments such as the impact on our customers, vendors, distributors, and resellers, such as the supply chain disruption and resulting inflationary pressures and global labor shortage that we have seen recently, as well as other factors, including the full duration and the extent of the pandemic, including as a result of outbreaks and variants; actions taken by governments, businesses, and consumers in response to the pandemic; speed and timing of economic recovery, including in specific geographies; speed of rollout of COVID-19 vaccines, lifting of restrictions on movement, and normalization of full-time return to work and social events; our billings and renewal rates, including new business close rates, rate of multi-year contracts, pace of closing larger transactions, and new unit volume growth; and effect of the pandemic on margins and cash flow.
The extent to which these challenges will impact our financial condition or results of operations is still uncertain and will continue to depend on developments such as the impact of these challenges on our customers, vendors, distributors, and resellers, such as the supply chain disruption and resulting inflationary pressures and global labor shortage that we have seen recently, as well as other factors; the ebb and flow of COVID-19, including in specific geographies and as a result of outbreaks and variants; actions taken by governments, businesses, and consumers in response to these challenges; speed and timing of economic recovery, including in specific geographies; our billings and renewal rates, including new business close rates, rate of multi-year contracts, pace of closing larger transactions, and new unit volume growth; the war in Ukraine; foreign exchange rate fluctuations; and the effect of these challenges on margins and cash flow.
Several other countries, including China, Australia, New Zealand, Brazil, and Japan, have also established specific legal requirements for cross-border data transfers. There is also an increasing trend towards data localization policies. For example, in 2015, Russia introduced data localization laws. In 2021, China introduced localization requirements for certain data.
Several other countries, including China, Australia, New Zealand, Brazil, and Japan, have also established specific legal requirements for cross-border data transfers. There is also an increasing trend towards data localization policies. For example, in 2021, China introduced localization requirements for certain data. There are also other countries, such as India, that are considering data localization requirements.
In addition, new and emerging state laws in the United States governing privacy, data protection, and information security, such as the California Consumer Privacy Act (“CCPA”), the California Privacy Rights Act (“CPRA”), the Virginia Consumer Data Protection Act (“VCDPA”), and the Colorado Privacy Act (“CPA”) have been enacted.
In addition, new and emerging state laws in the United States governing privacy, data protection, and information security, such as the California Consumer Privacy Act (“CCPA”), the California Privacy Rights Act (“CPRA”), the Virginia Consumer Data Protection Act (“VCDPA”), the Colorado Privacy Act (“CPA”), the Utah Consumer Privacy Act (“UCPA”), and Connecticut’s Act Concerning Personal Data Privacy and Online Monitoring (“CTDPA”) have been enacted.
Tech Data accounted for 36% and 37% of our total net revenue for fiscal 2022 and 2021, respectively, and Ingram Micro accounted for 9% and 10% of our total net revenue for fiscal 2022 and 2021, respectively.
Of our distributors, Tech Data accounted for 37% and 36% of our total net revenue for fiscal 2023 and 2022, respectively, and Ingram Micro accounted for 9% of our total net revenue for both fiscal 2023 and 2022.
Our software is highly complex and may contain undetected errors, defects, or vulnerabilities, each of which could harm our business and financial performance. The software solutions that we offer are complex and, despite extensive testing and quality control, may contain errors, defects, or vulnerabilities.
Our software solutions are highly complex and may contain undetected errors, defects, or vulnerabilities, and are subject to service disruptions, degradations, outages or other performance problems, each of which could harm our business and financial performance. The software solutions that we offer are complex and, despite extensive testing and quality control, may contain errors, defects, or vulnerabilities.
Global economic and political conditions may further impact our industries, business, and financial results. Our overall performance depends largely upon domestic and worldwide economic and political conditions.
This in turn could adversely affect our business and financial performance. Global economic and political conditions may further impact our industries, business, and financial results. Our overall performance depends largely upon domestic and worldwide economic and political conditions.
For example, the coronavirus (COVID-19) pandemic has caused additional uncertainty in the global economy, and an economic downturn or recession in the United States or in other countries may occur or has already occurred and may continue.
These economic conditions can occur abruptly. For example, current geopolitical and global macro-economic challenges and the coronavirus (COVID-19) pandemic have caused uncertainty in the global economy, and an economic downturn or recession in the United States or in other countries may occur or has already occurred and may continue.
We may not be able to predict subscription renewal rates and their impact on our future revenue and operating results. Our customers are not obligated to renew their subscriptions for our offerings, and they may elect not to renew, upgrade, or expand their subscriptions. We cannot assure renewal rates or the mix of subscriptions renewals.
Our customers are not obligated to renew their subscriptions for our offerings, and they may elect not to renew, upgrade, or expand their subscriptions. We cannot assure renewal rates or the mix of subscriptions renewals.
We have $2.65 billion of principal debt, consisting of notes due at various times from December 2022 to December 2031, as described in Part 2, Item 8.
We have $2.30 billion of principal debt, consisting of notes due at various times from June 2025 to December 2031, as of January 31, 2023, as described in Part II, Item 8.
Our business could be adversely impacted by the costs and challenges associated with strategic acquisitions and investments. We regularly acquire or invest in businesses, software solutions, and technologies that are complementary to our business through acquisitions, strategic alliances, or equity or debt investments, including several transactions in fiscal 2022.
We regularly acquire or invest in businesses, software solutions, and technologies that are complementary to our business through acquisitions, strategic alliances, or equity or debt investments, including several transactions in fiscal 2022 and the first fiscal quarter in fiscal 2023.
These existing risks are compounded given the COVID-19 pandemic and the resulting shift to work-from-home arrangements for a large population of employees and contractors, as well as employees and contractors of our third-party technology providers and vendors, and the risks could also be elevated in connection with the Russian invasion of Ukraine.
These existing risks are compounded given the COVID-19 pandemic and the resulting shift to work-from-home arrangements for a large population of employees and contractors, as well as employees and contractors of our third-party technology providers and vendors, and the risks could also be elevated in connection with the Russian invasion of Ukraine as we and our third-party technology providers and vendors are vulnerable to a heightened risk of cyberattacks from or affiliated with nation-state actors, including retaliatory attacks from Russian actors against U.S.-based companies.
Tax laws in the United States and in foreign tax jurisdictions are dynamic and subject to change as new laws are passed and new interpretations of the law are issued or applied. For example, the U.S. government enacted significant tax law changes in December 2017, the U.S.
Tax laws in the United States and in foreign tax jurisdictions are dynamic and subject to change as new laws are passed and new interpretations of the law are issued or applied.
Consequently, we believe our business is not substantially dependent on either Tech Data or Ingram Micro. However, if either distributor were to experience a significant business disruption or if our relationship with either were to significantly deteriorate, it is possible that our ability to sell to end users would, at least temporarily, be negatively impacted.
However, if during the transition period, Tech Data or Ingram Micro 25 Table of Contents were to experience a significant business disruption or if our relationship with either were to significantly deteriorate, it is possible that our ability to sell to end users would, at least temporarily, be negatively impacted.
It is uncertain whether these strategies, including our product and pricing changes, will accurately reflect customer demand or be successful, or whether we will be able to develop the necessary infrastructure and business models more quickly than our competitors. We make such investments through further development and enhancement of our existing products and services, as well as through acquisitions.
It is uncertain whether these strategies, 16 Table of Contents including our product and pricing changes, will accurately reflect customer demand or be successful, or whether we will be able to develop the necessary infrastructure and business models more quickly than our competitors.
As we digitize Autodesk and use cloud- and web-based technologies to leverage customer data to deliver the total customer experience, we are exposed to increased security risks and the potential for unauthorized access to, or improper use of, 23 Table of Contents our and our customers’ information.
As we digitize Autodesk and use cloud- and web-based technologies to leverage customer data to deliver the total customer experience, we are exposed to increased security risks and the potential for unauthorized access to, or improper use of, our and our customers’ information. Like other software offerings and systems, ours are vulnerable to security incidents, including those from acquired companies.
If we are obligated to fundamentally change our business activities and practices or modify our products, offerings, or services, we may be unable to make such changes and modifications in a commercially reasonable manner, or at all, and our ability to develop new products, offerings, and services could be limited.
If we are obligated to fundamentally change our business activities and practices or modify our products, offerings, or services, we may be unable to make such changes and modifications in a commercially reasonable manner, or at all, and our ability to develop new products, offerings, and services could be limited. 28 Table of Contents We are subject to governmental export and import controls that could impair our ability to compete in international markets or subject us to liability if we violate the controls.
Should any of our agreements with Tech Data or Ingram Micro be terminated, we believe the resellers and end users who currently purchase our products through Tech Data or Ingram Micro would be able to continue to do so under substantially the same terms from one of our many other distributors without substantial disruption to our revenue.
During the transition period, we believe the resellers and end users who currently purchase our products through Tech Data and Ingram Micro will be able to continue to do so, and following the transition period, we believe such resellers and end users will be able to continue to purchase our products from our value-added resellers, our agents or from one of our many other distributors or directly from Autodesk, in each case under substantially the same terms and without substantial disruption to our revenue.
There are also other countries, such as India, that are considering data localization requirements. If this trend continues, and countries implement more restrictive regulations for cross-border personal data transfers (or do not permit personal data to leave the country of origin), our business, financial condition, and results of operations in those jurisdictions could be impacted.
If this trend continues, and countries implement more restrictive regulations for cross-border personal data transfers (or do not permit personal data to leave the country of origin), it could affect the manner in which we provide our services, the geographical location or segregation of our relevant systems and operations, and our business, financial condition, and results of operations in those jurisdictions could be impacted.
Tax Cuts and Jobs Act (“TCJA”), which impacted our tax obligations and effective tax rate beginning in our fiscal 2018 tax year, and significant tax legislation was included in the March 2020 CARES Act and subsequent Consolidated Appropriations Act in December 2020. Due to the complexity and varying interpretations of the TCJA and the CARES Act, the U.S.
For example, the U.S. government enacted significant tax law changes in December 2017, the Tax Act, which impacted our tax obligations and effective tax rate beginning in our fiscal 2018 tax year, and significant tax legislation was included in the March 2020 CARES Act and subsequent Consolidated Appropriations Act in December 2020.
These foreign currency instruments may have maturities that extend for one to 18 months in the future and provide us with some protection against currency exposures.
These foreign currency instruments may have maturities that extend for one to 18 months in the future and provide us with some protection against currency exposures. However, our attempts to hedge against these risks may not be completely successful, resulting in an adverse impact on our financial results.
Many countries in the European Union as well as other countries and organizations such as the Organization for Economic Cooperation and Development are actively considering new taxing regimes and changes to existing tax laws.
We are assessing these impacts on our consolidated financial statements. 31 Table of Contents Increasingly, tax authorities are reviewing existing corporate tax regulatory and legal regimes. Many countries in the European Union as well as other countries and organizations such as the Organization for Economic Cooperation and Development are actively considering new taxing regimes and changes to existing tax laws.
More recently, the United States and other global actors have imposed sanctions as a result of the significant military action against Ukraine launched by Russia.
More recently, the United States and other global actors have imposed sanctions as a result of the significant military action against Ukraine launched by Russia. New or increased tariffs and other changes in U.S. trade policy, including new sanctions, could trigger retaliatory actions by affected countries, including Russia.
Such investments may not result in sufficient revenue generation to justify their costs and could result in decreased net revenue or profitability.
We make such investments through further development and enhancement of our existing products and services, as well as through acquisitions. Such investments may not result in sufficient revenue generation to justify their costs and could result in decreased net revenue or profitability.
New or increased tariffs and other changes in U.S. trade policy, including sanctions, could trigger retaliatory actions by affected countries, including Russia, and certain foreign governments, including the Chinese government, have instituted or considered imposing trade sanctions on certain U.S.-manufactured goods.
In addition, certain foreign governments, including the Chinese government, have instituted or considered imposing trade sanctions on certain U.S.-manufactured goods.
If approved by the UK Parliament, the UK SCCs will become effective March 21, 2022, and we may, in addition to other impacts, experience additional costs associated with increased compliance burdens and be required to engage in new contract negotiations with third parties that aid in processing personal data on our behalf or localize certain personal data.
We may, in addition to other impacts, experience additional costs associated with increased compliance burdens and be required to engage in new contract negotiations with third parties that aid in processing personal data on our behalf or localize certain personal data. 27 Table of Contents Further, several European data protection authorities recently indicated that the use of Google Analytics by European website operators involves the unlawful transfer of personal data to the United States.
We continue to evaluate our business operations there, including whether and how to support existing customers. Even if we are able to successfully manage the risks of international operations, our business may be adversely affected if our business partners are not able to successfully manage these risks.
Even if we are able to successfully manage the risks of international operations, our business may be adversely affected if our business partners are not able to successfully manage these risks. We may not be able to predict subscription renewal rates and their impact on our future revenue and operating results.
Some errors, defects, or vulnerabilities in our software solutions may only be discovered after they have been released.
Some errors, defects, or vulnerabilities in our software solutions may only be discovered after they have been released. In addition, we have experienced, and may in the future experience, service disruptions, degradations, outages, and other performance problems in connection with our software solutions.
If we elect to rely on the new SCCs for personal data transfers, we may be required to expend significant time and resources to update our contractual arrangements and to comply with new obligations.
We may, in addition to other impacts, be required to expend significant time and resources to update our contractual arrangements and to comply with new obligations, and we face exposure to regulatory actions, substantial fines and injunctions in connection with transfers of personal data from the EU.
Any errors, defects, or vulnerabilities could result in the need for corrective releases to our software solutions, damage to our reputation, loss of revenue, an increase in subscription cancellations, or lack of market acceptance of our offerings, any of which would likely harm our business and financial performance.
Any errors, defects, vulnerabilities, service disruptions, degradations, outages or other performance problems could result in the need for corrective releases to our software solutions, damage to our reputation, damage to our customers’ businesses, loss of revenue, an increase in subscription cancellations, or lack of market acceptance of our offerings, any of which would likely harm our business and financial performance If we do not maintain good relationships with the members of our distribution channel, or if our distribution channel suffers financial losses, becomes financially unstable or insolvent, or is not provided the right mix of incentives to sell our subscriptions, our ability to generate revenue will be adversely affected.
However, our attempts to hedge against these risks may not be completely successful, resulting in an adverse impact on our financial results. 30 Table of Contents The fluctuations of currencies in which we conduct business can both increase and decrease our overall revenue and expenses for any given period.
The fluctuations of currencies in which we conduct business can both increase and decrease our overall revenue and expenses for any given period.
In addition, increases in corporate tax rates, could increase our effective tax rate, cash taxes and have an adverse effect on our results from operations. Increasingly, tax authorities are reviewing existing corporate tax regulatory and legal regimes.
In addition, increases in corporate tax rates, could increase our effective tax rate, cash taxes and have an adverse effect on our results from operations. Signed into law on August 16, 2022, the Inflation Reduction Act contains many provisions that may impact Autodesk, including the adjusted book minimum tax and excise tax on stock buybacks.
Removed
This in turn could adversely affect our business and financial performance. The effects of the COVID-19 pandemic and related public health measures have affected how we and our customers are operating our respective businesses, and the extent of the impact on our business and results of operations remains uncertain .
Added
Risks Relating to Our Business and Strategy Our strategy to develop and introduce new products and services exposes us to risks such as limited customer acceptance, costs related to product defects, and large expenditures, each of which may result in no additional net revenue or decreased net revenue.
Removed
We are continuing to conduct business during the COVID-19 pandemic with substantial modifications to employee travel and work locations, as well as virtualization, postponement, or cancellation of certain sales and marketing events, among other changes. We have observed other companies as well as governments taking precautionary measures to address COVID-19.

… 20 more changes not shown on this page.

Item 2. Properties

Properties — owned and leased real estate

5 edited+0 added−0 removed0 unchanged
Biggest changeOur San Rafael facilities consist of approximately 116,000 square feet under leases that expire in December 2024. Our San Francisco facilities consist of approximately 284,000 square feet under leases that have expiration dates ranging from December 2022 to June 2026.
Biggest changeOur San Francisco facilities consist of approximately 211,000 square feet under leases that have expiration dates ranging from December 2023 to December 2027. We and our foreign subsidiaries lease additional space in various locations throughout the world for local sales, product development, and technical support personnel. All facilities are in good condition.
ITEM 2. PROPERTIES We lease approximately 1,830,000 square feet of office space in 101 locations in the United States and internationally through our foreign subsidiaries. Our executive offices are in leased office space in San Francisco, California, and our corporate headquarters are in leased office space in San Rafael, California.
ITEM 2. PROPERTIES We lease approximately 1,500,000 square feet of office space in 93 locations in the United States and internationally through our foreign subsidiaries. Our executive offices and corporate headquarters are in leased office space in San Francisco, California.
We and our foreign subsidiaries lease additional space in various locations throughout the world for local sales, product development, and technical support personnel. All facilities are in good condition. The COVID-19 pandemic has spurred changes in the way we work as we move to a more hybrid workforce resulting in an evaluation of our office space needs.
The COVID-19 pandemic spurred changes in the way we work and we moved to a more hybrid workforce resulting in an evaluation of our office space needs.
Accordingly, we are reducing the square footage of our facilities portfolio by approximately 20 percent worldwide and incurred impairments to assets associated with our operating leases for real estate in the fiscal year ended January 31, 2022, and expect to incur impairments over the next several quarters.
Accordingly, we reduced the square footage of our facilities portfolio worldwide and incurred impairments to assets associated with our operating leases for real estate in the fiscal years ended January 31, 2023 and 2022. See Part II, Item 7, “Results of Operations” and Part II, Item 8, Note 9, “Leases,” in the Notes to Consolidated Financial Statements for more information.
See Part II, Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations” and Note 9, “Leases,” in the Notes to Consolidated Financial Statements for more information. We believe that our existing facilities and offices are adequate to meet our requirements for the foreseeable future.
We believe that our existing facilities and offices are adequate to meet our requirements for the foreseeable future.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed2 unchanged
Biggest changeITEM 3. LEGAL PROCEEDINGS We are involved in a variety of claims, suits, investigations, inquiries, and proceedings in the normal course of business activities including claims of alleged infringement of intellectual property rights, commercial, employment, tax, prosecution of unauthorized use, business practices, and other matters.
Biggest changeITEM 3. LEGAL PROCEEDINGS 33 Table of Contents We are involved in a variety of claims, suits, investigations, inquiries, and proceedings in the normal course of business activities including claims of alleged infringement of intellectual property rights, commercial, employment, tax, prosecution of unauthorized use, business practices, and other matters.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

8 edited+3 added−2 removed2 unchanged
Biggest changeSuch shares will be issued in private placements exempt from the registration requirements of the Securities Act in reliance on the exemptions set forth in Section 4(a)(2) of the Securities Act and Rule 506 under Regulation D. 35 Table of Contents COMPANY STOCK PERFORMANCE The following graph shows a five-year comparison of cumulative total return (equal to dividends plus stock appreciation) for our common stock, the Standard & Poor’s 500 Stock Index, and the Dow Jones U.S.
Biggest changeSALES OF UNREGISTERED SECURITIES There were no sales of unregistered securities during the three months ended January 31, 2023. 35 Table of Contents COMPANY STOCK PERFORMANCE The following graph shows a five-year comparison of cumulative total return (equal to dividends plus stock appreciation) for our common stock, the Standard & Poor’s 500 Stock Index, the Standard & Poor’s 500 North American Technology Software Index, which we have added this fiscal year as it is a software index and includes companies in our similar line of business, and the Dow Jones U.S.
Under the share repurchase program, Autodesk may repurchase shares from time to time in open market transactions, privately negotiated transactions, accelerated share repurchase programs, tender offers, or by other means.
Under the share repurchase programs, Autodesk may repurchase shares from time to time in open market transactions, privately negotiated transactions, accelerated share repurchase programs, tender offers, or by other means.
The share repurchase program does not have an expiration date and the pace and timing of repurchases will depend on factors such as cash generation from operations, available surplus, the volume of employee stock plan activity, remaining shares available in the authorized pool, cash requirements for acquisitions, economic and market conditions, stock price, and legal and regulatory requirements.
The share repurchase programs do not have an expiration date and the pace and timing of repurchases will depend on factors such as cash generation from operations, available surplus, the volume of employee stock plan activity, remaining shares available in the authorized pool, cash requirements for acquisitions, economic and market conditions, stock price, and legal and regulatory requirements.
ISSUER PURCHASES OF EQUITY SECURITIES Autodesk’s stock repurchase program provides Autodesk with the ability to offset the dilution from the issuance of stock under our employee stock plans and reduce shares outstanding over time, and has the effect of returning excess cash generated from our business to stockholders.
ISSUER PURCHASES OF EQUITY SECURITIES Autodesk’s stock repurchase programs provide Autodesk with the ability to offset the dilution from the issuance of stock under our employee stock plans and reduce shares outstanding over time, and has the effect of returning excess cash generated from our business to stockholders.
STOCKHOLDERS As of January 31, 2022, the number of common stockholders of record was 316. Because many of our shares of common stock are held by brokers or other institutions on behalf of stockholders, we are unable to estimate the total number of stockholders represented by the record holders.
STOCKHOLDERS As of January 31, 2023, the number of common stockholders of record was 312. Because many of our shares of common stock are held by brokers or other institutions on behalf of stockholders, we are unable to estimate the total number of stockholders represented by the record holders.
Comparison of Five Year Cumulative Total Stockholder Return (1) ___________________ (1) Assumes $100 invested on January 31, 2017, in Autodesk’s stock, the Standard & Poor’s 500 Stock Index, and the Dow Jones U.S. Software Index, with reinvestment of all dividends. Total stockholder returns for prior periods are not an indication of future investment returns. 36 Table of Contents
Comparison of Five Year Cumulative Total Stockholder Return (1) ___________________ (1) Assumes $100 invested on January 31, 2018, in Autodesk’s stock, the Standard & Poor’s 500 Stock Index, Standard & Poor’s 500 North American Technology Software Index, and the Dow Jones U.S. Software Index with reinvestment of all dividends.
The following table provides information about the repurchase of common stock in open-market transactions during the quarter ended January 31, 2022: (Shares in millions) Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(1) Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs(2) November 1 - November 30 0.3 $ 279.82 0.3 10.1 December 1 - December 31 1.3 272.30 1.3 8.8 January 1 - January 31 0.7 251.00 0.7 8.1 Total 2.3 $ 267.22 2.3 ____________________ (1) Represents shares purchased in open-market transactions under the stock repurchase program approved by the Board of Directors.
The following table provides information about the repurchase of common stock in open-market transactions during the quarter ended January 31, 2023: (Shares in thousands) Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(1) Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs(2) November 1 - November 30 259 $ 196.34 259 3,496 December 1 - December 31 575 191.72 575 2,921 January 1 - January 31 253 193.43 253 2,668 Total 1,087 $ 193.21 1,087 ____________________ (1) Represents shares purchased in open-market transactions under the stock repurchase programs approved by the Board of Directors.
(2) These amounts correspond to the plan publicly announced and approved by the Board of Directors in September 2016 that authorizes the repurchase of 30.0 million shares. The plan does not have a fixed expiration date.
(2) These amounts correspond to the plans publicly announced and approved by the Board of Directors in September 2016 and November 2022 that authorize the repurchase of 30 million shares and $5 billion, respectively.
Removed
SALES OF UNREGISTERED SECURITIES In connection with acquisitions completed in the fourth fiscal quarter of 2022, we issued and entered into agreements to issue up to an estimated 52,000 shares of our common stock (based on the volume weighted average closing price of our common stock as of January 31, 2022) as part of the consideration for the acquisition, contingent upon the achievement of certain events expected in fiscal years 2023, 2024 and 2025.
Added
In November 2022, the Board of Directors authorized the repurchase of $5 billion of the Company's common stock, in addition to the shares remaining under previously announced share repurchase programs.
Removed
The exact number of shares will be determined and issued following these events. The issuance of shares of our common stock in these acquisitions will not be registered under the Securities Act of 1933, as amended (the "Securities Act").
Added
At January 31, 2023, 3 million shares and $5 billion remained available for repurchase under the September 2016 and November 2022 repurchase programs approved by the Board of Directors, respectively. The plans do not have a fixed expiration date.
Added
Total stockholder returns for prior periods are not an indication of future investment returns. 36 Table of Contents

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

131 edited+26 added−21 removed97 unchanged
Biggest changeWe urge investors to review the reconciliation of our non-GAAP financial measures to the comparable GAAP financial measures included below, and not to rely on any single financial measure to evaluate our business. 56 Table of Contents RECONCILIATION OF GAAP FINANCIAL MEASURES TO NON-GAAP FINANCIAL MEASURES (In millions except for operating margin, and per share data): Fiscal Year Ended January 31, 2022 2021 2020 (Unaudited) Gross profit $ 3,967.9 $ 3,453.3 $ 2,949.4 Stock-based compensation expense 34.5 23.6 19.6 Acquisition-related costs 0.7 0.7 0.5 Amortization of developed technologies 51.2 30.9 34.5 Non-GAAP gross profit $ 4,054.3 $ 3,508.5 $ 3,004.0 Income from operations $ 617.6 $ 629.1 $ 343.0 Stock-based compensation expense 558.5 399.8 362.4 Amortization of developed technologies 51.2 30.9 34.5 Amortization of purchased intangibles 40.4 37.5 38.9 Acquisition-related costs 26.0 14.6 23.3 Lease-related asset impairments and other charges 103.7 — — Restructuring and other exit costs, net — — 0.5 Non-GAAP income from operations $ 1,397.4 $ 1,111.9 $ 802.6 Operating margin 14 % 17 % 10 % Stock-based compensation expense 13 % 11 % 11 % Amortization of developed technologies 1 % 1 % 1 % Amortization of purchased intangibles 1 % 1 % 1 % Acquisition-related costs 1 % — % 1 % Lease-related asset impairments and other charges 2 % — % — % Non-GAAP operating margin (1) 32 % 29 % 25 % Net income $ 497.0 $ 1,208.2 $ 214.5 Stock-based compensation expense 558.5 399.8 362.4 Amortization of developed technologies 51.2 30.9 34.5 Amortization of purchased intangibles 40.4 37.5 38.9 Acquisition-related costs 26.0 14.6 23.3 Lease-related asset impairments and other charges 103.7 — — 57 Table of Contents Fiscal Year Ended January 31, 2022 2021 2020 (Unaudited) Restructuring and other exit costs, net — — 0.5 (Gain) loss on strategic investments (4.0) 41.7 3.2 Release of valuation allowance on deferred tax assets — (679.0) (40.4) Discrete tax benefit provision items (72.3) (43.9) 2.1 Income tax effect of non-GAAP adjustments (74.4) (110.0) (17.8) Non-GAAP net income $ 1,126.1 $ 899.8 $ 621.2 Diluted net income per share $ 2.24 $ 5.44 $ 0.96 Stock-based compensation expense 2.52 1.80 1.63 Amortization of developed technologies 0.23 0.14 0.16 Amortization of purchased intangibles 0.18 0.17 0.17 Acquisition-related costs 0.12 0.07 0.11 Lease-related asset impairments and other charges 0.47 — — (Gain) loss on strategic investments (0.02) 0.19 0.01 Release of valuation allowance on deferred tax assets — (3.06) (0.18) Discrete tax (benefit) provision items (0.33) (0.20) 0.01 Income tax effect of non-GAAP adjustments (0.34) (0.50) (0.08) Non-GAAP diluted net income per share $ 5.07 $ 4.05 $ 2.79 _______________ (1) Totals may not sum due to rounding.
Biggest changeWe urge investors to review the reconciliation of our non-GAAP financial measures to the comparable GAAP financial measures included below, and not to rely on any single financial measure to evaluate our business. 56 Table of Contents RECONCILIATION OF GAAP FINANCIAL MEASURES TO NON-GAAP FINANCIAL MEASURES (In millions except for operating margin, and per share data): Fiscal Year Ended January 31, 2023 2022 2021 (Unaudited) Gross profit $ 4,525 $ 3,968 $ 3,453 Stock-based compensation expense 46 35 23 Amortization of developed technologies 53 50 31 Acquisition-related costs — 1 1 Non-GAAP gross profit $ 4,624 $ 4,054 $ 3,508 Income from operations $ 989 $ 618 $ 629 Stock-based compensation expense 660 559 399 Amortization of developed technologies 53 50 31 Amortization of purchased intangibles 40 40 38 Acquisition-related costs 10 26 15 Lease-related asset impairments and other charges 33 104 — Non-GAAP income from operations $ 1,785 $ 1,397 $ 1,112 Operating margin 20 % 14 % 17 % Stock-based compensation expense 13 % 13 % 11 % Amortization of developed technologies 1 % 1 % 1 % Amortization of purchased intangibles 1 % 1 % 1 % Acquisition-related costs — % 1 % — % Lease-related asset impairments and other charges 1 % 2 % — % Non-GAAP operating margin (1) 36 % 32 % 29 % Net income $ 823 $ 497 $ 1,208 Stock-based compensation expense 660 559 399 Amortization of developed technologies 53 50 31 Amortization of purchased intangibles 40 40 38 Acquisition-related costs 10 26 15 Lease-related asset impairments and other charges 33 104 — (Gain) loss on strategic investments and dispositions, net (1) (3) 41 Release of valuation allowance on deferred tax assets (38) — (679) Discrete GAAP tax items 28 (72) (44) Income tax effect of non-GAAP adjustments (163) (75) (109) Non-GAAP net income $ 1,445 $ 1,126 $ 900 Diluted net income per share $ 3.78 $ 2.24 $ 5.44 Stock-based compensation expense 3.03 2.52 1.80 Amortization of developed technologies 0.24 0.22 0.14 57 Table of Contents Fiscal Year Ended January 31, 2023 2022 2021 (Unaudited) Amortization of purchased intangibles 0.18 0.18 0.17 Acquisition-related costs 0.05 0.11 0.07 Lease-related asset impairments and other charges 0.15 0.47 — (Gain) loss on strategic investments and dispositions, net — (0.01) 0.18 Release of valuation allowance on deferred tax assets (0.18) — (3.06) Discrete GAAP tax items 0.13 (0.32) (0.20) Income tax effect of non-GAAP adjustments (0.75) (0.34) (0.49) Non-GAAP diluted net income per share $ 6.63 $ 5.07 $ 4.05 _______________ (1) Totals may not sum due to rounding.
Unfavorable economic conditions in the countries that contribute a significant portion of our net revenue, including in emerging economies such as Brazil, Russia, India, and China, and including as a result of the COVID-19 pandemic or in connection with the significant military action against Ukraine launched by Russia (or any related political or economic responses and counter-responses or otherwise by various global actors or the general effect on the global economy), may have an adverse effect on our business in those countries and our overall financial performance.
Unfavorable economic conditions, including as a result of the COVID-19 pandemic or in connection with the significant military action against Ukraine launched by Russia (and any related political or economic responses and counter-responses or otherwise by various global actors or the general effect on the global economy), in the countries that contribute a significant portion of our net revenue, including in emerging economies such as Brazil, India, and China, may have an adverse effect on our business in those countries and our overall financial performance.
Interest expense and investment income fluctuates based on average cash, marketable securities and 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.
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 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 recoverable; such assessment is required on a jurisdiction-by-jurisdiction basis. Significant judgment is required in determining whether the valuation allowance should be recorded against deferred tax assets.
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 recoverable; such assessment is required on a jurisdiction-by-jurisdiction basis. Significant judgment is required in determining whether the valuation allowance should be recorded against deferred tax assets.
As we continually strive to optimize our overall business model, tax planning strategies may become feasible whereby management may determine, based on all available evidence, both positive and negative, that it is more likely than not that the Netherlands, Canada, Australia, California, Michigan, and U.S. capital loss deferred tax assets will be realized.
As we continually strive to optimize our overall business model, tax planning strategies may become feasible whereby management may determine, based on all available evidence, both positive and negative, that it is more likely than not that the Netherlands, Australia, California, Michigan, and U.S. capital loss deferred tax assets will be realized.
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 subscription plans currently represent a hybrid of desktop software and cloud functionality, which provides a device-independent, collaborative design workflow for designers and their stakeholders.
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 subscription plans represent a hybrid of desktop software and cloud functionality, which provides a device-independent, collaborative design workflow for designers and their stakeholders.
On our behalf, the Foundation also administers a discounted software donation program to nonprofit organizations, social and environmental entrepreneurs, and others who are developing design solutions that will shape a more sustainable future. Additional information about our environmental, social, and governance program are available in our annual impact report on our website at www.autodesk.com.
On our behalf, the Foundation also administers a discounted software donation program to nonprofit organizations, social and environmental entrepreneurs, and others who are developing design solutions that will shape a more sustainable future. Additional information about our environmental, social, and governance program is available in our annual impact report on our website at www.autodesk.com.
As we continually strive to optimize our overall business model, tax planning strategies may become feasible and prudent whereby management may determine that it is more likely than not that the Netherlands, Canada, Australia, California, Michigan and U.S. capital loss deferred tax assets will be realized.
As we continually strive to optimize our overall business model, tax planning strategies may become feasible and prudent whereby management may determine that it is more likely than not that the Netherlands, Australia, California, Michigan and U.S. capital loss deferred tax assets will be realized.
The purpose of the Foundation is twofold: to support employees to make a better world by matching employees’ volunteer time and/or donations to nonprofit organizations; and to support organizations and individuals using design to drive positive social and environmental impact.
The purpose of the Foundation is twofold: to support employees to make a better world by matching employees’ volunteer time and/or donations to nonprofit organizations; and to support organizations using design to drive positive social and environmental impact.
Examples of critical estimates used in valuing certain of the intangible assets and in determining the assets’ useful lives for the assets we have acquired or may acquire in the future include but are not limited to: • future expected cash flows from subscriptions and maintenance agreements, sales, and acquired developed technologies; 41 Table of Contents • the acquired company's trade name and patents, as well as assumptions about the period of time the acquired trade name and patents will continue to be used in our product portfolio; • expected growth in revenue from the acquired company’s existing customer relationships; • expected costs to develop the in-process research and development into commercially viable products and estimated cash flows from the projects when completed; • uncertain tax positions and tax related valuation allowances assumed; and • discount rates used to determine the present value of estimated future cash flows.
Examples of critical estimates used in valuing certain of the intangible assets and in determining the assets’ useful lives for the assets we have acquired or may acquire in the future include but are not limited to: • future expected cash flows from subscriptions and maintenance agreements, sales, and acquired developed technologies; • the acquired company's trade name and patents, as well as assumptions about the period of time the acquired trade name and patents will continue to be used in our product portfolio; • expected growth in revenue from the acquired company’s existing customer relationships; • expected costs to develop the in-process research and development into commercially viable products and estimated cash flows from the projects when completed; • uncertain tax positions and tax related valuation allowances assumed; and • discount rates used to determine the present value of estimated future cash flows.
Under the share repurchase program, Autodesk may repurchase shares from time to time in open market transactions, privately negotiated transactions, accelerated share repurchase programs, tender offers, or by other means.
Under the share repurchase programs, Autodesk may repurchase shares from time to time in open market transactions, privately negotiated transactions, accelerated share repurchase programs, tender offers, or by other means.
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 both global manufacturing leaders and disruptive startups with our generative design and cloud-based Fusion 360 that converges the process of design with manufacturing.
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 360 that converges the design process with manufacturing.
The revolving credit facility is available for working capital or other business needs. The maturity date on the Credit Agreement is September 30, 2026. At January 31, 2022, Autodesk had no outstanding borrowings under the Credit Agreement. Additionally, as of March 14, 2022, we have no amounts outstanding under the Credit Agreement.
The revolving credit facility is available for working capital or other business needs. The maturity date on the Credit Agreement is September 30, 2026. At January 31, 2023, Autodesk had no outstanding borrowings under the Credit Agreement. Additionally, as of March 14, 2023, we have no amounts outstanding under the Credit Agreement.
For our quarterly impairment assessment of privately held debt and equity securities, the analysis encompasses an assessment of the severity and duration of the impairment and qualitative and quantitative analysis of other key factors including: the investee’s financial metrics, the investee’s products and technologies meeting or exceeding predefined milestones, market acceptance of the product or technology, other competitive products or technology in the market, general market conditions, management and governance structure of the investee, the investee’s liquidity, debt ratios, and the rate at which the investee is using its cash.
For our quarterly impairment assessment of privately held debt and equity securities, the analysis encompasses an assessment of the severity and duration of the impairment and qualitative and quantitative analysis of other key factors 41 Table of Contents including: the investee’s financial metrics, the investee’s products and technologies meeting or exceeding predefined milestones, market acceptance of the product or technology, other competitive products or technology in the market, general market conditions, management and governance structure of the investee, the investee’s liquidity, debt ratios, and the rate at which the investee is using its cash.
In addition to the competitive advantages afforded by our technology, our large global network of distributors, resellers, third-party developers, customers, educators, educational institutions, learning partners, and students is a key competitive advantage which has been cultivated over an extensive period. This network of partners and relationships provides us with a broad and deep reach into volume markets around the world.
In addition to the competitive advantages afforded by our technology, our large global network of distributors, resellers, third-party developers, customers, educators, educational institutions, learning partners, and students is a key competitive advantage which has been cultivated over an extensive period. This network of partners and relationships provides us with a broad and deep reach into volume markets worldwide.
We advance these opportunities with industry innovators through collaboration, grants, software donations, and training. The Autodesk Foundation (the “Foundation”), a privately funded 501(c)(3) charity organization established and solely funded by us, leads our philanthropic efforts.
We advance these opportunities with industry innovators through collaboration, philanthropic capital, software donations, and training. The Autodesk Foundation (the “Foundation”), a privately funded 501(c)(3) charity organization established and solely funded by us, leads our philanthropic efforts.
NR3 was within the range of 100% and 110% as of both January 31, 2022 and 2021. Foreign Currency Analysis We generate a significant amount of our revenue in the United States, Japan, Germany, the United Kingdom, and Finland.
NR3 was within the range of 100% and 110% as of both January 31, 2023 and 2022. Foreign Currency Analysis We generate a significant amount of our revenue in the United States, Japan, Germany, the United Kingdom, and Finland.
Due to inherent uncertainties related to these matters, we base our loss accruals on the best information available at the time. Until the final resolution of such matters, there may be an exposure to loss in excess of the 42 Table of Contents amount recorded. As additional information becomes available, we reassess our potential liability and may revise our estimates.
Due to inherent uncertainties related to these matters, we base our loss accruals on the best information available at the time. Until the final resolution of such matters, there may be an exposure to loss in excess of the amount recorded. As additional information becomes available, we reassess our potential liability and may revise our estimates.
RECENTLY ISSUED ACCOUNTING STANDARDS See Part II, Item 8, Note 1, “Business and Summary of Significant Accounting Policies,” in the Notes to Consolidated Financial Statements for a full description of recent accounting pronouncements, including the expected dates of adoption and estimated effects on results of operations and financial condition.
RECENTLY ISSUED ACCOUNTING STANDARDS See Part II, Item 8, “Financial Statements and Supplementary Data,” Note 1, “Business and Summary of Significant Accounting Policies,” in the Notes to Consolidated Financial Statements for a full description of recent accounting pronouncements, including the expected dates of adoption and estimated effects on results of operations and financial condition.
Our cloud offerings, for example, BIM 360, Fusion 360, ShotGrid, 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.
Our cloud offerings, for example, BIM 360, Autodesk Build, Fusion 360, ShotGrid, 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.
These impact opportunity areas are derived from the UN Sustainable Development Goals (“SDGs”) 39 Table of Contents and have been focused through a multi-pronged process to align the top needs of our stakeholders, the important issues of our business, and the areas we are best placed to accelerate positive impact at scale.
These impact opportunity areas are derived from the UN Sustainable Development Goals (“SDGs”) and have been focused through a multi-pronged process to align the top needs of our stakeholders, the important issues of our business, and the areas we are best placed to accelerate positive impact at scale.
The tax expense for fiscal 2022 consists primarily of the U.S. and foreign tax expense, including withholding tax, offset by shared-based compensation deductions, India withholding tax refunds and generation of federal tax credits.
Tax expense for fiscal 2022 consisted primarily of the U.S. and foreign tax expense, including withholding tax, offset by shared-based compensation deductions, India withholding tax refunds and generation of federal tax credits.
We believe it is useful for investors to understand the effects of these items on our total operating expenses. Acquisition-related costs. We exclude certain acquisition-related costs, including due diligence costs, professional fees in connection with an acquisition, certain financing costs, and certain integration-related expenses.
We believe it is useful for investors to understand the effects of these items on our total operating expenses. 58 Table of Contents Acquisition-related costs. We exclude certain acquisition-related costs, including due diligence costs, professional fees in connection with an acquisition, certain financing costs, and certain integration-related expenses.
Timing of payments and actual amounts paid may be different depending on the time of receipt of goods or services or changes to agreed-upon amounts for some obligations. 62 Table of Contents We provide indemnifications of varying scopes and certain guarantees, including limited product warranties.
Timing of payments and actual amounts paid may be different depending on the time of receipt of goods or services or changes to agreed-upon amounts for some obligations. We provide indemnifications of varying scopes and certain guarantees, including limited product warranties.
The share repurchase program does not have an expiration date and the pace and timing of repurchases will depend on factors such as cash generation from operations, available surplus, the volume of employee stock plan activity, remaining shares available in the authorized pool, cash requirements for acquisitions, economic and market conditions, stock price, and legal and regulatory requirements.
The share repurchase programs do not have an expiration date and the pace and timing of repurchases will depend on factors such as cash generation from operations, available surplus, the volume of employee stock plan activity, remaining shares available in the authorized pool, cash requirements for acquisitions, economic and market conditions, stock price, and legal and regulatory requirements.
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.
An 40 Table of Contents 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.
In addition, we have certain software royalty commitments associated with the shipment and licensing of certain products. The expected timing of payment of the obligations discussed above is estimated based on current information.
In addition, we have certain software royalty commitments associated with the shipment and licensing of certain products. 61 Table of Contents The expected timing of payment of the obligations discussed above is estimated based on current information.
Consequently, we believe our business is not substantially dependent on Tech Data or Ingram Micro. 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.
Consequently, we believe our business is not substantially dependent on Tech Data or Ingram Micro. 43 Table of Contents 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.
ISSUER PURCHASES OF EQUITY SECURITIES Autodesk’s stock repurchase program provides Autodesk with the ability to offset the dilution from the issuance of stock under our employee stock plans and reduce shares outstanding over time and has the effect of returning excess cash generated from our business to stockholders.
ISSUER PURCHASES OF EQUITY SECURITIES Autodesk’s stock repurchase programs provide Autodesk with the ability to offset the dilution from the issuance of stock under our employee stock plans and reduce shares outstanding over time and has the effect of returning excess cash generated from our business to stockholders.
One of our key strategies is to maintain an open-architecture design of our software products to facilitate third-party development of complementary products and industry-specific software solutions. This approach enables customers and third parties to customize solutions for a wide variety of highly specific uses.
One of our key strategies is to maintain an API based architecture of our software products to facilitate third-party development of complementary products and industry-specific software solutions. This approach enables customers and third parties to customize solutions for a wide variety of highly specific uses.
As described in Part I, Item 3, “Legal Proceedings” and Part II, Item 8, Note 10, “Commitments and Contingencies,” in the Notes to Consolidated Financial Statements, we are periodically involved in various legal claims and proceedings. We routinely review the status of each significant matter and assess our potential financial exposure.
As described in Part I, Item 3, “Legal Proceedings” and Part II, Item 8, “Financial Statements and Supplementary Data, Note 11, “Commitments and Contingencies,” in the Notes to Consolidated Financial Statements, we are periodically involved in various legal claims and proceedings. We routinely review the status of each significant matter and assess our potential financial exposure.
Assumptions Behind Our Strategy Our strategy depends upon a number of assumptions, including: making our technology available to mainstream markets; leveraging our large global network of distributors, resellers, third-party developers, customers, educators, educational institutions, learning partners, and students; improving the performance and functionality of our products; and adequately protecting our intellectual property.
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, agents, 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.
Our significant accounting policies are described in Part II, Item 8, Note 1, “Business and Summary of Significant Accounting Policies,” in the Notes to Consolidated Financial Statements.
Our significant accounting policies are described in Part II, Item 8, “Financial Statements and Supplementary Data,” Note 1, “Business and Summary of Significant Accounting Policies,” in the Notes to Consolidated Financial Statements.
Total cost of revenue $ 418.5 $ 81.4 24 % $ 337.1 Operating expenses: Marketing and sales $ 1,623.1 $ 182.8 13 % $ 1,440.3 Increase primarily due to an increase in employee-related costs driven by higher headcount, an increase in stock-based compensation expense, an increase in advertisement and promotion costs due to new company branding campaign, as well as an increase in cloud hosting costs and professional fees.
Total cost of revenue $ 418 $ 81 24 % $ 337 Operating expenses: Marketing and sales $ 1,623 $ 183 13 % $ 1,440 Increase primarily due to employee-related costs driven by higher headcount, an increase in stock-based compensation expense, advertisement and promotion costs due to new company branding campaign, as well as an increase in cloud hosting costs and professional fees.
Net cash used in investing activities was $1,594.6 million for fiscal 2022 and was primarily due to business combinations, net of cash acquired, and purchases of marketable securities.
Net cash used in investing activities was $1,595 million for fiscal 2022 and was primarily due to business combinations, net of cash acquired, and purchases of marketable securities.
Considering this negative evidence, we determined that it was more likely than not that we would 54 Table of Contents not realize the U.S. deferred tax assets and recorded a full valuation allowance against our deferred tax assets.
Considering this negative evidence, we determined that it was more likely than not that we would not realize the U.S. deferred tax assets and recorded a full valuation allowance against our deferred tax assets.
Just as the transition from mainframes to personal computers transformed the industry, the software industry has undergone a transition from developing and selling perpetual licenses and on-premises products to subscriptions and cloud-enabled technologies. Product Evolution We offer subscriptions for individual products and Industry Collections, enterprise business arrangements (“EBAs”), and cloud service offerings (collectively referred to as “subscription plan”).
Just as the transition from mainframes to personal computers transformed the hardware industry, the software industry has transitioned from developing and selling perpetual licenses and on-premises products to subscriptions and cloud-enabled technologies. Product Evolution We offer subscriptions for individual products and Industry Collections, enterprise business arrangements (“EBAs”), and cloud service offerings (collectively referred to as “subscription plans”).
See Part II, Item 8, Note 15, “Retirement Benefit Plans,” in our Notes to Consolidated Financial Statements for further information regarding these obligations. Asset retirement obligations 12.0 4.3 4.0 0.8 2.9 Asset retirement obligations represent the estimated costs to bring certain office buildings that we lease back to their original condition after the termination of the lease.
See Part II, Item 8, Note 16, “Retirement Benefit Plans,” in our Notes to Consolidated Financial Statements for further information regarding these obligations. Asset retirement obligations 12 2 6 1 3 Asset retirement obligations represent the estimated costs to bring certain office buildings that we lease back to their original condition after the termination of the lease.
Historically, we have had increased EBA 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 January 31, 2022, we had $1.81 billion in cash, cash equivalents, and marketable securities.
Historically, we have had increased EBA 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 January 31, 2023, we had $2.17 billion in cash, cash equivalents, and marketable securities.
Total sales to Tech Data accounted for 36%, 37% and 35% of Autodesk’s total net revenue during fiscal 2022, 2021 and 2020, respectively. Ingram Micro accounted for 9% of Autodesk's total net revenue during fiscal 2022 and 10% of Autodesk's total net revenue during both fiscal 2021 and 2020.
Total sales to Tech Data accounted for 37%, 36%, and 37% of Autodesk’s total net revenue during fiscal 2023, 2022 and 2021, respectively. Ingram Micro accounted for 9%, 9%, and 10% of Autodesk's total net revenue during fiscal 2023, 2022 and 2021, respectively.
See Part II, Item 8, Note 11, “Stock Repurchase Program,” in the Notes to Consolidated Financial Statements for further discussion. 63 Table of Contents
See Part II, Item 8, Note 12, “Stock Repurchase Program,” in the Notes to Consolidated Financial Statements for further discussion. 62 Table of Contents
Amortization of purchased intangibles 40.7 3.2 9 % 37.5 Increase due to growth in amortization expense from acquired intangibles as a result of our acquisitions in the fourth quarter of fiscal 2021 and in fiscal 2022.
Amortization of purchased intangibles 40 2 5 % 38 Increase due to growth in amortization expense from acquired intangibles as a result of our acquisitions in the fourth quarter of fiscal 2021 and in fiscal 2022.
In assessing the need for a valuation allowance, we consider all available evidence including past operating results and estimates of future taxable income. In fiscal 2016, we considered cumulative losses in the United States from our business model transition as a significant source of negative evidence.
In assessing the need for a valuation allowance, we consider all available evidence including past operating results and estimates of future taxable income. 54 Table of Contents In fiscal 2016, we considered cumulative losses in the U.S. from our business model transition as a significant source of negative evidence.
See Note 2, "Revenue Recognition" in the Notes to the Consolidated Financial Statements for further detail on the results of our indirect and direct channel sales for the fiscal years ended January 31, 2022, 2021, and 2020.
See Part II, Item 8, Note 2, "Revenue Recognition" in the Notes to the Consolidated Financial Statements for further detail on the results of our indirect and direct channel sales for the fiscal years ended January 31, 2023, 2022, and 2021.
Judgment is required to determine the SSP for each distinct performance obligation. We use a range of amounts to estimate SSP when we sell each of the products and services separately and need to determine whether there is a discount that should be allocated based on the relative SSP of the various products and services.
We use a range of amounts to estimate SSP when we sell each of the products and services separately and need to determine whether there is a discount that should be allocated based on the relative SSP of the various products and services.
The following table shows the impact of foreign exchange rate changes on our net revenue and total spend: Fiscal Year Ended January 31, 2022 Percent change compared to prior fiscal year (as reported) Constant currency percent change compared to prior fiscal year (1) Positive/negative/neutral impact from foreign exchange rate changes Net revenue 16 % 14 % Positive Total spend 19 % 18 % Negative ________________ (1) Please refer to the “Glossary of Terms” in Part I, Item 1 Business for the definitions of our constant currency growth rates.
The following table shows the impact of foreign exchange rate changes on our net revenue and total spend: Fiscal Year Ended January 31, 2023 Percent change compared to prior fiscal year (as reported) Constant currency percent change compared to prior fiscal year (1) Positive/negative/neutral impact from foreign exchange rate changes Net revenue 14 % 15 % Negative Total spend 7 % 8 % Positive ________________ (1) Please refer to the “Glossary of Terms” in Part I, Item 1, “Business” for the definitions of our constant currency growth rates.
The assets acquired and liabilities assumed in a business combination are recorded based on their estimated fair values at the acquisition date, with the exception of contract assets and contract liabilities (i.e., deferred revenue) which are recognized and measured on the acquisition date in accordance with Autodesk’s “Revenue Recognition” policy in Note 1 “Business and Summary of Significant Accounting Policies”.
The assets acquired and liabilities assumed in a business combination are recorded based on their estimated fair values at the acquisition date, with the exception of contract assets and contract liabilities (i.e., deferred revenue) which are recognized and measured on the acquisition date in accordance with Autodesk’s “Revenue Recognition” policy in Part II, Item 8, “Financial Statements and Supplementary Data,” Note 1 “Business and Summary of Significant Accounting Policies”.
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 re-imagining Architecture, Engineering, and Construction (“AEC”), we are strengthening the foundation of our AEC solutions with both organic and inorganic investments.
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. 38 Table of Contents To support our strategic priority of digital transformation in Architecture, Engineering, and Construction (“AEC”), we are strengthening our AEC solutions’ foundation with both organic and inorganic investments.
Also contributing to the growth was an increase in revenue from EBA offerings.
Also contributing to the growth was an increase in revenue from new subscriptions and EBA offerings.
Total (1) $ 4,071.7 $ 649.5 $ 512.2 $ 541.1 $ 2,368.9 ____________________ (1) This table generally excludes amounts already recorded on the balance sheet as current liabilities, certain purchase obligations as discussed below, long term deferred revenue, and amounts related to income tax accruals for uncertain tax positions, since we cannot predict with reasonable reliability the timing of cash settlements to the respective taxing authorities (see Part II, Item 8, Note 5, “Income Taxes” in the Notes to Consolidated Financial Statements).
Total (1) $ 3,554 $ 305 $ 706 $ 736 $ 1,807 ____________________ (1) This table generally excludes amounts already recorded on the balance sheet as current liabilities, certain purchase obligations as discussed below, long term deferred revenue, and amounts related to income tax accruals for uncertain tax positions, since we cannot predict with reasonable reliability the timing of cash settlements to the respective taxing authorities (see Part II, Item 8, Note 5, “Income Taxes” in the Notes to Consolidated Financial Statements).
See Part II, Item 8, Note 7, “Deferred Compensation,” in our Notes to Consolidated Financial Statements for further information regarding this plan. Pension obligations 35.2 2.9 5.8 6.6 19.9 Pension obligations relate to our obligations for pension plans outside of the United States.
See Part II, Item 8, Note 7, “Deferred Compensation,” in our Notes to Consolidated Financial Statements for further information regarding this plan. Pension obligations 32 3 6 6 17 Pension obligations relate to our obligations for pension plans outside of the United States.
These opportunities manifest as outcomes through how our customers leverage our technology to design and make net-zero carbon buildings, resilient infrastructure, more sustainable products, and a thriving workforce. We realize these opportunities in our business through our 100% renewable and net-zero greenhouse gas operations and inclusive culture.
These opportunities manifest as outcomes through how our customers leverage our technology to design and make net-zero carbon buildings, resilient infrastructure, more sustainable products, and a thriving workforce. We realize these opportunities through powering our business with 100% renewable energy, neutralizing greenhouse gas emissions and developing an inclusive culture.
In September 2021, Autodesk entered into an amended and restated credit agreement (“Credit Agreement”) by and among Autodesk, the lenders party thereto, and Citibank, N.A., as agent, that provides for a revolving credit facility in the aggregate principal amount of $1.5 billion with an option to be increased up to $2.0 billion which increased from an aggregate principal amount of $650.0 million, with an option to be increased up to $1.0 billion, under our previous credit agreement.
In November 2022, Autodesk entered into an amended and restated credit agreement (“Credit Agreement”) by and among Autodesk, the lenders party thereto, and Citibank, N.A., as agent, that provides for a revolving credit facility in the aggregate principal amount of $1.5 billion with an option to be increased up to $2.0 billion.
Purchase obligations relate primarily to acquisition of cloud services, marketing, and commitments related to our investment agreements with limited liability partnership funds. Deferred compensation obligations 89.5 7.1 15.6 14.1 52.7 Deferred compensation obligations relate to amounts held in a rabbi trust under our non-qualified deferred compensation plan.
Purchase obligations relate primarily to acquisition of cloud services, commitments related to our investment agreements with limited liability partnership funds, and marketing. Deferred compensation obligations 86 7 17 14 48 Deferred compensation obligations relate to amounts held in a rabbi trust under our non-qualified deferred compensation plan.
Research and development 1,114.8 182.3 20 % 932.5 Increase primarily due to an increase in stock-based compensation expense, an increase in employee-related costs driven by higher headcount, as well as an increase in professional fees.
Research and development 1,115 183 20 % 932 Increase primarily due to stock-based compensation expense, employee-related costs driven by higher headcount, as well as an increase in professional fees.
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 51 Table of Contents 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.
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. 51 Table of Contents 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 571.7 157.8 38 % 413.9 Increase primarily due to lease-related asset impairment and other charges in fiscal 2022, an increase in stock-based compensation expense, an increase in employee related costs driven by higher headcount, as well as an increase in cloud hosting costs.
General and administrative 572 158 38 % 414 Increase primarily due to lease-related asset impairment and other charges in fiscal 2022, stock-based compensation expense, employee related costs driven by higher headcount, as well as an increase in cloud hosting costs.
Direct 1,537.0 346.6 29 % 1,190.4 Increase due to an increase in EBAs and our online Autodesk branded store.
Direct 1,537 347 29 % 1,190 Increase due to an increase in EBAs and our online Autodesk branded store.
Our cash flow from operations increased to $1.53 billion for the fiscal year ended January 31, 2022, from $1.44 billion for the fiscal year ended January 31, 2021. We repurchased 4.0 million shares of our common stock for $1.09 billion during fiscal 2022. Comparatively, we repurchased 2.6 million shares of our common stock for $549.4 million during fiscal 2021.
Our cash flow from operations increased to $2.07 billion for the fiscal year ended January 31, 2023, from $1.53 billion for the fiscal year ended January 31, 2022. We repurchased 5 million shares of our common stock for $1.08 billion during fiscal 2023. Comparatively, we repurchased 4 million shares of our common stock for $1.09 billion during fiscal 2022.
Revenue Analysis During fiscal 2022, net revenue increased 16%, as compared to the prior fiscal year, primarily due to a 19% increase in subscription revenue, partially offset by a 58% decrease in maintenance revenue.
Revenue Analysis During fiscal 2023, net revenue increased 14%, as compared to the prior fiscal year, primarily due to a 15% increase in subscription revenue, partially offset by a 14% decrease in maintenance revenue.
Other 128.2 (7.6) (6) % 135.8 Total Net Revenue $ 3,790.4 $ 516.1 16 % $ 3,274.3 Cost of Revenue and Operating Expenses Cost of subscription and maintenance revenue includes the labor costs of providing product support to our subscription and maintenance 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, salaries, related expenses of network operations, stock-based compensation expense, and gains and losses on our operating expense cash flow hedges.
Cost of Revenue and Operating Expenses Cost of subscription and maintenance revenue includes the labor costs of providing product support to our subscription and maintenance 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.
We released our Singapore valuation allowance in fiscal 2020 due to positive evidence in the form of cumulative earnings, resulting in a $42.0 million non-cash benefit to earnings. In the fourth quarter of fiscal 2021, we released the valuation allowance against our deferred tax assets in the U.S., resulting in a $679.0 million non-cash benefit to earnings.
In the fourth quarter of fiscal 2021, we released the valuation allowance against our deferred tax assets in the U.S., resulting in a $679 million non-cash benefit to earnings.
See Part II, Item 8, Note 8, “Borrowing Arrangements,” in the Notes to Consolidated Financial Statements for further discussion. Operating leases 467.4 95.8 153.5 94.0 124.1 Operating lease obligations consist primarily of obligations for real estate, vehicles, and certain equipment. See Part II, Item 8, Note 9, “Leases,” in the Notes to Consolidated Financial Statements for further discussion.
See Part II, Item 8, Note 8, “Borrowing Arrangements,” in the Notes to Consolidated Financial Statements for further discussion. Operating leases 417 94 142 77 104 Operating lease obligations consist primarily of obligations for real estate, vehicles, and certain equipment. See Part II, Item 8, Note 9, “Leases,” in the Notes to Consolidated Financial Statements for further discussion.
Restructuring and other exit costs, net — (0.5) (100) % 0.5 Total operating expenses $ 2,824.2 $ 217.8 8 % $ 2,606.4 The following table highlights our expectation for the absolute dollar change and percent of revenue change for fiscal 2023 as compared to fiscal 2022: Absolute dollar impact Percent of net revenue impact Cost of revenue Increase Flat Marketing and sales Decrease Decrease Research and development Increase Decrease General and administrative Increase Increase Amortization of purchased intangibles Flat Flat 53 Table of Contents Interest and Other Expense, Net The following table sets forth the components of interest and other expense, net: Fiscal year ended January 31, 2022 2021 2020 (in millions) Interest and investment expense, net $ (65.0) $ (51.1) $ (54.0) Gain on foreign currency 0.4 3.5 3.9 Gain (loss) on strategic investments 4.0 (41.7) (3.3) Other income 7.7 6.9 5.2 Interest and other expense, net $ (52.9) $ (82.4) $ (48.2) Interest and other expense, net, decreased by $29.5 million during fiscal 2022, as compared to fiscal 2021.
Total operating expenses $ 3,350 $ 526 19 % $ 2,824 The following table highlights our expectation for the absolute dollar change and percent of revenue change for fiscal 2024 as compared to fiscal 2023: Absolute dollar impact Percent of net revenue impact Cost of revenue Increase Flat Marketing and sales Increase Flat Research and development Increase Flat General and administrative Increase Flat Amortization of purchased intangibles Flat Flat 53 Table of Contents Interest and Other Expense, Net The following table sets forth the components of interest and other expense, net: Fiscal year ended January 31, 2023 2022 2021 (in millions) Interest and investment expense, net $ (71) $ (65) $ (51) Gain on foreign currency 15 1 3 Gain (loss) on strategic investments 1 3 (41) Other income 12 8 7 Interest and other expense, net $ (43) $ (53) $ (82) Interest and other expense, net, decreased by $10 million during fiscal 2023, as compared to fiscal 2022.
Total net revenue $ 3,790.4 $ 516.1 16 % $ 3,274.3 50 Table of Contents Net Revenue by Product Type Fiscal Year Ended January 31, 2022 Change compared to prior fiscal year Fiscal Year Ended January 31, 2021 (In millions, except percentages) $ % Management Comments Net Revenue by Product Type: Design $ 3,868.8 $ 503 15 % $ 3,365.8 Increase is due to growth in AEC & MFG collections, AutoCAD Family, AutoCAD LT, and EBA offerings.
Total net revenue $ 4,386 $ 596 16 % $ 3,790 50 Table of Contents Net Revenue by Product Type Fiscal Year Ended January 31, 2023 Change compared to prior fiscal year Fiscal Year Ended January 31, 2022 (In millions, except percentages) $ % Management Comments Net Revenue by Product Type (1): Design $ 4,264 $ 492 13 % $ 3,772 Increase due to growth in AEC & MFG collections, EBA offerings, AutoCAD LT and AutoCAD Family.
Fiscal Year Ended January 31, 2022 Change compared to prior fiscal year Fiscal Year Ended January 31, 2021 Management Comments (In millions, except percentages) $ % Cost of revenue: Subscription and maintenance $ 299.1 $ 57.0 24 % $ 242.1 Increase primarily due to an increase in cloud hosting costs and employee-related costs driven by higher headcount as well as an increase in stock-based compensation expense.
Amortization of purchased intangibles 40 — — % 40 Total operating expenses $ 3,536 $ 186 6 % $ 3,350 52 Table of Contents Fiscal Year Ended January 31, 2022 Change compared to prior fiscal year Fiscal Year Ended January 31, 2021 Management comments (In millions, except percentages) $ % Cost of revenue: Subscription and maintenance $ 299 $ 57 24 % $ 242 Increase primarily due to cloud hosting costs and employee-related costs driven by higher headcount as well as an increase in stock-based compensation expense.
Increases to the levels of political and economic unpredictability or protectionism in the global market may impact our future financial results. 49 Table of Contents Net Revenue by Sales Channel Fiscal Year Ended January 31, 2022 Change compared to prior fiscal year Fiscal Year Ended January 31, 2021 Management Comments (in millions, except percentages) $ % Net revenue by sales channel: Indirect $ 2,849.4 $ 249.4 10 % $ 2,600.0 Increase due to growth in subscription revenue.
Increases to the levels of political and economic unpredictability or protectionism in the global market may impact our future financial results. 49 Table of Contents Net Revenue by Sales Channel Fiscal Year Ended January 31, 2023 Change compared to prior fiscal year Fiscal Year Ended January 31, 2022 Management Comments (in millions, except percentages) $ % Net revenue by sales channel: Indirect $ 3,250 $ 401 14 % $ 2,849 Increase due to growth in subscription revenue, led by product subscription renewal revenue from a growing subscriber base.
Purchase obligations 317.6 109.4 195.5 9.2 3.5 Purchase obligations are contractual obligations for purchase of goods or services and are defined as agreements that are enforceable and legally binding to Autodesk and that specify all significant terms, including: fixed or minimum quantities to be purchased; fixed, minimum, or variable price provisions; and the approximate timing of the transaction.
Purchase obligations 287 130 105 37 15 Purchase obligations are contractual obligations for purchase of goods or services and are defined as agreements that are enforceable and legally binding to Autodesk and that specify all significant terms, including: fixed or minimum quantities to be purchased; fixed, minimum, or variable price provisions; and the approximate timing of the transaction.
Net cash used in financing activities was $168.6 million in fiscal 2022 and was primarily due to repurchases of our common stock offset by proceeds from the issuance of debt and common stock. Net cash used in financing activities was $1,046.8 million in fiscal 2021 and was primarily due to repurchases of our common stock and repayment of debt.
Net cash used in financing activities was $1,487 million in fiscal 2023 and was primarily due to repurchases of our common stock and repayment of debt. 60 Table of Contents Net cash used in financing activities was $169 million in fiscal 2022 and was primarily due to repurchases of our common stock offset by proceeds from the issuance of debt and common stock.
OVERVIEW OF FISCAL 2022 • Total net revenue was $4.39 billion during fiscal 2022, an increase of 16% compared to the prior fiscal year. • Recurring revenue as a percentage of net revenue was 96% for the fiscal year ending January 31, 2022, compared to 97% for the same period in the prior fiscal year. • Net revenue retention rate (“NR3”) was within the range of 100% and 110% as of both January 31, 2022 and 2021. • Deferred revenue was $3.79 billion, an increase of 13% compared to the prior fiscal year. • Remaining performance obligations (short-term and long-term deferred revenue plus unbilled deferred revenue) (“RPO”) was $4.74 billion, an increase of 12% compared to the fourth quarter in the prior fiscal year. • Current remaining performance obligations were $3.14 billion, an increase of 15% compared to the prior fiscal year.
OVERVIEW OF FISCAL 2023 • Total net revenue was $5.01 billion during fiscal 2023, an increase of 14% compared to the prior fiscal year. • Recurring revenue as a percentage of net revenue was 98% for both fiscal years ending January 31, 2023 and 2022. • Net revenue retention rate (“NR3”) was within the range of 100% and 110% as of both January 31, 2023 and 2022. • Deferred revenue was $4.58 billion, an increase of 21% compared to the prior fiscal year. • Remaining performance obligations (short-term and long-term deferred revenue plus unbilled deferred revenue) (“RPO”) was $5.62 billion, an increase of 19% compared to the fourth quarter in the prior fiscal year. • Current remaining performance obligations were $3.52 billion, an increase of 12% compared to the prior fiscal year.
We anticipate that our channel mix will continue to change as we scale our online Autodesk branded store business and our largest accounts shift towards direct-only business models. However, we expect our indirect channel will continue to transact and support the majority of our customers and revenue.
We anticipate that our channel mix will continue to change as we scale our online Autodesk branded store business and our largest accounts shift towards direct-only business models.
The Company has elected to recognize any potential GILTI obligations as an expense in the period it is incurred. Income tax expense was $67.7 million and tax benefit was $661.5 million for fiscal 2022 and 2021, relative to pre-tax income of $564.7 million and $546.7 million, respectively, for the same periods.
The Company has elected to recognize any potential GILTI obligations as an expense in the period it is incurred. Income tax expense was $123 million and $68 million for fiscal 2023 and 2022, relative to pre-tax income of $946 million and $565 million, respectively, for the same periods.
Make 363.9 67.5 23 % 296.4 Increase primarily due to growth in revenue from BIM Family, PlanGrid, and Fusion products.
Make 364 68 23 % 296 Increase primarily due to growth in revenue from BIM Family, PlanGrid, and Fusion products.
As of January 31, 2022, we had $2.65 billion aggregate principal amount of notes outstanding. See Part II, Item 8, Note 8, “Borrowing Arrangements,” in the Notes to Consolidated Financial Statements for further discussion. Our cash and cash equivalents are held by diversified financial institutions globally. Our primary commercial banking relationship is with Citigroup and its global affiliates.
As of January 31, 2023, we had $2.30 billion aggregate principal amount of notes outstanding. See Part II, Item 8, Note 8, 59 Table of Contents “Borrowing Arrangements,” in the Notes to Consolidated Financial Statements for further discussion. Our cash and cash equivalents are held by diversified financial institutions globally.
Other 66.6 2.5 4 % 64.1 Increase primarily due to an increase in stock-based compensation expense. Amortization of developed technologies 52.8 21.9 71 % 30.9 Increase due to growth in amortization expense from acquired developed technologies as a result of our acquisitions in the fourth quarter of fiscal 2021 and in fiscal 2022.
Other 67 3 5 % 64 Increase primarily due to stock-based compensation expense. Amortization of developed technologies 52 21 68 % 31 Increase due to growth in amortization expense from acquired developed technologies as a result of our acquisitions in the fourth quarter of fiscal 2021 and in fiscal 2022.
For the fiscal years ended January 31, 2022, 2021, and 2020, our gross profit, income from operations, operating margin, net income, and diluted net income per share on a GAAP and non-GAAP basis were as follows (in millions except for operating margin and per share data): Fiscal Year Ended January 31, 2022 2021 2020 (Unaudited) Gross profit $ 3,967.9 $ 3,453.3 $ 2,949.4 Non-GAAP gross profit $ 4,054.3 $ 3,508.5 $ 3,004.0 Income from operations $ 617.6 $ 629.1 $ 343.0 Non-GAAP income from operations $ 1,397.4 $ 1,111.9 $ 802.6 Operating margin 14 % 17 % 10 % Non-GAAP operating margin 32 % 29 % 25 % Net income $ 497.0 $ 1,208.2 $ 214.5 Non-GAAP net income $ 1,126.1 $ 899.8 $ 621.2 Diluted net income per share $ 2.24 $ 5.44 $ 0.96 Non-GAAP diluted net income per share $ 5.07 $ 4.05 $ 2.79 For our internal budgeting and resource allocation process and as a means to provide consistency in period-to-period comparisons, we use non-GAAP measures to supplement our consolidated financial statements presented on a GAAP basis.
For the fiscal years ended January 31, 2023, 2022, and 2021, our gross profit, income from operations, operating margin, net income, and diluted net income per share on a GAAP and non-GAAP basis were as follows (in millions except for operating margin and per share data): Fiscal Year Ended January 31, 2023 2022 2021 (Unaudited) Gross profit $ 4,525 $ 3,968 $ 3,453 Non-GAAP gross profit $ 4,624 $ 4,054 $ 3,508 Income from operations $ 989 $ 618 $ 629 Non-GAAP income from operations $ 1,785 $ 1,397 $ 1,112 Operating margin 20 % 14 % 17 % Non-GAAP operating margin 36 % 32 % 29 % Net income $ 823 $ 497 $ 1,208 Non-GAAP net income $ 1,445 $ 1,126 $ 900 Diluted net income per share $ 3.78 $ 2.24 $ 5.44 Non-GAAP diluted net income per share $ 6.63 $ 5.07 $ 4.05 For our internal budgeting and resource allocation process and as a means to provide consistency in period-to-period comparisons, we use non-GAAP measures to supplement our consolidated financial statements presented on a GAAP basis.
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 from the date of this Annual Report.
Cash from operations could also be affected by various risks and uncertainties, including, but not limited to the risks detailed in Part I, Item 1A,“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 from the date of this Annual Report.
For example, we have established the Autodesk Forge developer platform to support innovators that build solutions to facilitate the development of a single connected ecosystem for the future of how things are designed, made, and used as well as support ideas that push the boundaries of 3D printing.
For example, we have established the Autodesk Platform Services to support 39 Table of Contents innovators that build solutions to facilitate the development of a single connected ecosystem for the future of how things are designed, made, and used.
There is a high degree of interaction of the desktop applications and cloud functionalities, which is not available with the desktop applications alone or in conjunction with third-party cloud service providers.
There is a high degree of interaction of the desktop applications and cloud functionalities, which is not available with the desktop applications alone or in conjunction with third-party cloud service providers. Furthermore, customers are not able to use the desktop applications for its intended purpose without our cloud functionalities.
In connection with these restructuring actions or other exit actions, we recognize costs related to termination benefits for former employees whose positions were eliminated, the closure of facilities, and cancellation of certain contracts. We exclude these charges because these expenses are not reflective of ongoing business and operating results.
These expenses are associated with realigning our business strategies based on current economic conditions. In connection with these restructuring actions or other exit actions, we recognize costs related to termination benefits for former employees whose positions were eliminated, the closure of facilities, and cancellation of certain contracts.

… 98 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

6 edited+1 added−1 removed5 unchanged
Biggest changeAt January 31, 2022, we had $708.2 million of cash equivalents and marketable securities, including $235.7 million classified as short-term marketable securities. If interest rates were to move up by 50 or 100 basis points over a 12-month period, the market value change of these securities would not have a material impact on our results of operations.
Biggest changeIf interest rates were to move up by 50 or 100 basis points over a 12-month period, the market value change of these securities would not have a material impact on our results of operations. OTHER MARKET RISK From time to time we make direct investments in privately held companies. Privately held company investments generally are considered inherently risky.
See Part II, Item 8, Note 3, “Financial Instruments” in the Notes to Consolidated Financial Statements for further discussion regarding these strategic investments. For information about exposure to counter-party credit-related losses, see Part II, Item 8, Note 1, “Business and Summary of Significant Accounting Policies - Concentration of Credit Risk." 64 Table of Contents
See Part II, Item 8, Note 3, “Financial Instruments” in the Notes to Consolidated Financial Statements for further discussion regarding these strategic investments. For information about exposure to counter-party credit-related losses, see Part II, Item 8, Note 1, “Business and Summary of Significant Accounting Policies - Concentration of Credit Risk." 63 Table of Contents
As of January 31, 2022 and 2021, we had open cash flow and balance sheet hedge contracts with future settlements generally within one to 12 months. Contracts were primarily denominated in euros, Japanese yen, British pounds, Canadian dollars, Australian dollars, Singapore dollars, Swiss francs, Swedish krona, and Czech koruna.
As of January 31, 2023 and 2022, we had open cash flow and balance sheet hedge contracts with future settlements generally within one to 12 months. Contracts were primarily denominated in euros, Japanese yen, British pounds, Indian rupees, Canadian dollars, Australian dollars, Singapore dollars, Swiss francs, Swedish krona, and Czech koruna.
A hypothetical 10% depreciation of the dollar from its value at January 31, 2022 and 2021, would decrease the fair value of our foreign currency contracts by $138.1 million and $149.2 million, respectively. INTEREST RATE RISK Interest rate movements affect both the interest income we earn on our short-term investments and the market value of certain longer term securities.
A hypothetical 10% depreciation of the dollar from its value at January 31, 2023 and 2022, would decrease the fair value of our foreign currency contracts by $191 million and $138 million, respectively. INTEREST RATE RISK Interest rate movements affect both the interest income we earn on our short-term investments and the market value of certain longer term securities.
A sensitivity analysis performed on our hedging portfolio as of January 31, 2022, indicated that a hypothetical 10% appreciation of the U.S. dollar from its value at January 31, 2022 and 2021, would increase the fair value of our foreign currency contracts by $217.8 million and $118.6 million, respectively.
A sensitivity analysis performed on our hedging portfolio as of January 31, 2023, indicated that a hypothetical 10% appreciation of the U.S. dollar from its value at January 31, 2023 and 2022, would increase the fair value of our foreign currency contracts by $149 million and $218 million, respectively.
Our option and foreign exchange forward contracts outstanding as of the respective period-ends are summarized in U.S. dollar equivalents as follows (in millions): January 31, 2022 January 31, 2021 Notional Amount Fair Value Notional Amount Fair Value Forward Contracts: Purchased $ 852.3 $ (10.3) $ 686.0 $ 3.6 Sold 1,611.9 7.0 1,172.1 2.2 Option Contracts: Purchased 1,272.6 18.3 1,044.4 5.2 Sold 1,321.8 (7.6) 1,092.1 (18.6) We use foreign currency contracts to reduce the exchange rate impact on the net revenue and operating expenses of certain anticipated transactions.
Our option and foreign exchange forward contracts outstanding as of the respective period-ends are summarized in U.S. dollar equivalents as follows (in millions): January 31, 2023 January 31, 2022 Notional Amount Fair Value Notional Amount Fair Value Forward Contracts: Purchased $ 711 $ 13 $ 852 $ (10) Sold 1,755 (11) 1,612 7 Option Contracts: Purchased 904 5 1,273 18 Sold 974 (23) 1,322 (8) We use foreign currency contracts to reduce the exchange rate impact on the net revenue and operating expenses of certain anticipated transactions.
Removed
OTHER MARKET RISK From time to time we make direct investments in privately held companies. Privately held company investments generally are considered inherently risky.
Added
At January 31, 2023, we had $1.19 billion of cash equivalents and marketable securities, including $125 million classified as short-term marketable securities and $102 million classified as long-term marketable securities.

Other ADSK 10-K year-over-year comparisons