10q10k10q10k.net

What changed in Autodesk's 10-K — 2023 vs 2024

vs

Paragraph-level year-over-year comparison of Autodesk's 2023 and 2024 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 2024 report.

+415 added−371 removedSource: 10-K (2024-06-10) vs 10-K (2023-03-14)

Top changes in Autodesk's 2024 10-K

415 paragraphs added · 371 removed · 322 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

72 edited+15 added−9 removed54 unchanged
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.
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. • Autodesk Build Autodesk Build delivers a connected set of project management and collaboration tools for the construction industry.
Our digital media and entertainment products provide tools for digital sculpting, modeling, animation, effects, rendering, and compositing for design visualization, visual effects, games production, and enables connection of workflows and data from post-production to pre-production.
Our digital media and entertainment products provide tools for digital sculpting, modeling, animation, effects, rendering, and compositing for design visualization, visual effects, games production, and enables connection of workflows and data from pre-production to post-production.
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 majority of our research and product development is performed in the United States, Canada, China, 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.
We dedicate considerable technical and financial resources to research and development to deliver additional automation and insights to our customers through artificial intelligence, machine learning, and generative design, which increase efficiency and sustainability and reduce waste.
We dedicate considerable technical and financial resources to research and development to deliver additional automation and insights to our customers through artificial intelligence (“AI”), machine learning, and generative design, which increase efficiency and sustainability and reduce waste.
PRODUCT DEVELOPMENT AND INTRODUCTION The technology industry is characterized by rapid technological change in computer hardware, operating systems, and software. In addition, our customers’ requirements and preferences rapidly evolve, as do their expectations of the performance of our software and services.
PRODUCT DEVELOPMENT AND INTRODUCTION The technology industry is characterized by rapid technological change in computer hardware, operating systems, and software. In addition, o ur customers’ requirements and preferences rapidly evolve, as do their expectations of the performance of our software and services.
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.
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 2024 Impact Report will be published in the second quarter of fiscal 2025.
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.
Our D&B strategy includes a variety of activities, such as inclusive leadership training for 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.
Competition is increasingly enhanced by consolidation of companies with complementary products and technologies and the possibility that competitors in one vertical segment may enter other vertical segments that we serve. In addition, some of our competitors in certain markets have greater financial, technical, sales and marketing, and other resources than we do.
Competition is increasingly enhanced by consolidation of companies with complementary products 11 Table of Contents and technologies and the possibility that competitors in one vertical segment may enter other vertical segments that we serve. In addition, some of our competitors in certain markets have greater financial, technical, sales and marketing, and other resources than we do.
Enforcement of intellectual 11 Table of Contents property rights against alleged infringers can sometimes lead to costly litigation and counterclaims. Our inability to protect our proprietary information could harm our business. From time to time, we receive claims alleging infringement of a third party’s intellectual property rights, including patents.
Enforcement of intellectual property rights against alleged infringers can sometimes lead to costly litigation and counterclaims. Our inability to protect our proprietary information could harm our business. From time to time, we receive claims alleging infringement of a third party’s intellectual property rights, including patents.
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.
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 donations to nonprofit organizations; and to support organizations using design and make solutions to drive positive social and environmental impact.
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.
These impact opportunity areas are derived from the UN Sustainable Development Goals (“SDGs”) and have been identified through a multi-pronged process to align the top needs of our stakeholders, the issues that are most important to our business, and the areas we are best placed to accelerate positive impact at scale.
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.
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 API based architecture of our software products to facilitate third-party development of complementary products and industry-specific software solutions.
Under our subscription plan, customers can use our software anytime, anywhere, and get access to the latest updates to previous versions through term-based product subscriptions, cloud service offerings, and enterprise business agreements (“EBA”). Historically, we have had increased EBA sale activity in our fourth fiscal quarter.
We generate revenue primarily through various offerings that provide recurring revenue. Under our subscription plan, customers can use our software anytime, anywhere, and get access to the latest updates to previous versions through term-based product subscriptions, cloud service offerings, and enterprise business agreements (“EBA”). Historically, we have had increased EBA sale activity in our fourth fiscal quarter.
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 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 1,450 resellers and distributors worldwide. For fiscal 2024, approximately 63% of our revenue was derived from indirect channel sales through distributors and resellers.
To continue to grow this market, we provide software and support to early-stage entrepreneurs, nonprofit organizations, and start-up companies who are designing clean technologies. We are expanding these offerings based upon demand and opportunity in response to challenges posed by climate change.
To continue to grow this market, we invest in our tools to meet customer’s demand as well as provide software and support to early-stage entrepreneurs, nonprofit organizations, and start-up companies who are designing clean technologies. We are expanding these offerings based upon demand and opportunity in response to challenges posed by climate change.
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.
Additionally, in fiscal 2023, we were responsible for 115,000 metric tons of carbon dioxide equivalent emissions across our market-based operational boundary. This represents a 50% reduction compared to our fiscal year 2020 base line. In addition, our residual 115,000 metric tons of CO2e emissions were neutralized through the procurement of high quality carbon offsets and removals.
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 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 who are innovating to create a better future for our planet.
(“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.
(“Ingram Micro”), our second-largest distributor, accounted for 7%, 9%, and 9% of Autodesk's total net revenue for the fiscal years ended January 31, 2024, 2023 and 2022, respectively. During fiscal 2023, we entered into transition agreements with certain of our distributors, including TD Synnex and Ingram Micro, to provide transition distribution activities for a one-to-two-year period, with potential extensions.
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.
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. DEVELOPER PROGRAMS Our business and our customers benefit from our relationships with an extensive developer network.
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.
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 direct and indirect channels.
(“Innovyze”) Innovyze provided comprehensive water modeling solutions that augment Autodesk’s BIM offerings in civil engineering, and extended Autodesk’s presence into operations and maintenance of water infrastructure assets November 2020 Spacemaker AS ("Spacemaker") The acquisition of Spacemaker strengthened and enabled Autodesk’s early-stage design and outcome-based design capabilities. We acquire technology-related assets that are complementary to or otherwise enhance our existing technologies.
(“Innovyze”) Innovyze provided comprehensive water modeling solutions that augment Autodesk’s BIM offerings in civil engineering, and extended Autodesk’s presence into operations and maintenance of water infrastructure assets. We acquire technology-related assets that are complementary to or otherwise enhance our existing technologies.
To keep pace with these changes, we maintain a vigorous program of new product development to address demands in the marketplace for our products, such as enabling more flexibility and sustainable outcomes. Autodesk was founded during the platform transition from mainframe computers and engineering workstations to personal computers.
To keep pace with these changes, we maintain a vigorous program of new product development to address demands in the marketplace for our products, such as enabling more flexibility and sustainable outcomes.
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.
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.
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.
Revenue through our largest distributor, TD Synnex Corporation and its global affiliates (collectively, “TD Synnex”), accounted for 39%, 37%, and 36% of our net revenue for the fiscal years ended January 31, 2024, 2023 and 2022, respectively. Ingram Micro Inc.
Diversity and Belonging Autodesk is committed to building and maintaining a diverse workforce and a culture of belonging that welcomes people from all backgrounds, perspectives, and beliefs. We have developed and embedded a holistic global Diversity and Belonging (“D&B”) strategy into all that we do.
Diversity and Belonging Autodesk is committed to building and maintaining a diverse workforce and a culture of belonging where all employees have equitable opportunities to succeed and contribute. We have developed and embedded a holistic global Diversity and Belonging (“D&B”) strategy into all that we do.
Vault integrates with more than 30 Autodesk design applications, provides powerful revisioning and access control capabilities, and enables customers to share product data securely to improve engineering cycle time and reduce manufacturing errors. Media and Entertainment (“M&E”) • Media & Entertainment Collection The M&E Collection provides end-to-end creative tools for entertainment creation.
Vault integrates with more than 30 Autodesk design applications, provides powerful revisioning and access control capabilities, and enables customers to share product data securely to improve engineering cycle time and reduce manufacturing errors. Media and Entertainment (“M&E”) • Flow Production Tracking (currently ShotGrid) Flow Production Tracking is cloud-based software for review and production tracking in the M&E industry.
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.
Enterprise Business Agreements (EBAs): Represents programs providing enterprise customers with token-based access to a broad pool of Autodesk products over a defined contract term. Flex: A pay-as-you-go consumption option to pre-purchase tokens to access any product available with Flex for a daily rate. Free Cash Flow: Cash flow from operating activities minus capital expenditures.
The amount of these payments and fees may depend on various factors, including but not limited to: the structure of royalty payments, offsetting considerations, if any, and the degree of use of the licensed technology. See Item 1A, “Risk Factors,” for further discussion of risks related to protecting our intellectual property.
The amount of these payments and fees may depend on various factors, including but not limited to: the structure of royalty payments, offsetting considerations, if any, and the degree of use of the licensed technology.
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.
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.
(“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.
The following were significant acquisitions for fiscal year 2022. 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.
ENVIRONMENTAL, SOCIAL, AND GOVERNANCE PROGRAMS Impact at Autodesk Autodesk is committed to advancing a more sustainable, resilient, and equitable world. We don’t believe in waiting for progress, we believe in making it. We take action as a business and to support our employees, customers, and communities in our collective opportunity to design and make a better world for all.
ENVIRONMENTAL, SOCIAL, AND GOVERNANCE PROGRAMS Impact at Autodesk Autodesk is committed to advancing a more sustainable, resilient, and equitable world. We don’t believe in waiting for progress, we believe in making it.
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.
The loss of, or a significant reduction in, business with any one of our major distributors, large resellers or Solution Providers could harm our business. See Item 1A, “Risk Factors,” for further discussion.
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.
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.
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.
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. Our Enterprise Risk Management process considered how climate impacts could affect and potentially amplify the overall significance of each identified risk and opportunity.
Adverse economic conditions and currency exchange rates in the countries that contribute a significant portion of our net revenue, including emerging economies, may have an adverse effect on our business in those countries and our overall financial performance. Our international operations and sales subject us to a variety of risks. See Item 1A, “Risk Factors,” for further discussion.
We believe that international sales will continue to comprise the majority of our total net revenue. Adverse economic conditions and currency exchange rates in the countries that contribute a significant portion of our net revenue, including emerging economies, may have an adverse effect on our business in those countries and our overall financial performance.
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.
With the continued growth of our online Autodesk branded store, the transition to annual billings for multi-year contracts and the introduction of our new transaction model, we will be decreasing our sales through value-added resellers and distributors and transacting directly with more end customers without substantial disruption to our revenue.
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.
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.
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.
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.
Our intention is to make Autodesk software the preferred choice for those poised to become the next generation of design, engineering, and construction professionals.
Additionally, we offer self-paced, modular learning and curriculum for K-12, post-secondary students, and educators. Our intention is to make Autodesk software the preferred choice for those poised to become the next generation of design, engineering, and construction professionals.
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 Industry Collections consist of: Autodesk Architecture, Engineering and Construction Collection, Autodesk Product Design and Manufacturing Collection, and Autodesk Media and Entertainment Collection. 14 Table of Contents 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.
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 opportunities primarily 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.
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.
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.
This collection enables animators, modelers, and visual effects artists to access the tools they need, including Maya and 3ds Max, to create compelling effects, 3D characters, and digital worlds. • Maya Maya software provides 3D modeling, animation, effects, rendering, and compositing solutions that enable film and video artists, game developers, and design visualization professionals to digitally create engaging, lifelike images, realistic animations and simulations, extraordinary visual effects, and full-length animated feature films. • ShotGrid ShotGrid is cloud-based software for review and production tracking in the M&E industry.
This collection enables animators, modelers, and visual effects artists to access the tools they need, including Maya and 3ds Max, to create compelling effects, 3D characters, and digital worlds. • 3ds Max 3ds Max software provides 3D modeling, animation, and rendering solutions that enable game developers, design visualization professionals, and visual effects artists to digitally create realistic images, animations, and complex scenes and to digitally communicate abstract or complex mechanical, architectural, engineering, and construction concepts.
Creative companies use the ShotGrid platform to provide essential business tools for managers and visual collaboration tools for artists and supervisors, who often work globally with distributed teams. • 3ds Max 3ds Max software provides 3D modeling, animation, and rendering solutions that enable game developers, design visualization professionals, and visual effects artists to digitally create realistic images, animations, and complex scenes and to digitally communicate abstract or complex mechanical, architectural, engineering, and construction concepts.
Creative companies use the Flow Production Tracking platform to provide essential business tools for managers and visual collaboration tools for artists and supervisors, who often work globally with distributed teams. • Maya Maya software provides 3D modeling, animation, effects, rendering, and compositing solutions that enable film and video artists, game developers, and design visualization professionals to digitally create engaging, lifelike images, realistic animations and simulations, extraordinary visual effects, and full-length animated feature films. • Media & Entertainment Collection The M&E Collection provides end-to-end creative tools for entertainment creation.
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. • 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.
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.
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, BIM Collaborate Pro, BuildingConnected, Fusion, and Flow Production Tracking.
Emissions Performance & Other Key Performance Indicators In fiscal year 2022, we launched our second science-based GHG reduction target, to reduce Scope 1 and Scope 2 GHGs 50%, and reduce Scope 3 GHGs per dollar of gross profit 25%, by fiscal year 2031, compared to fiscal year 2020.
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. 10 Table of Contents Emissions Performance & Other Key Performance Indicators In fiscal year 2023, we made progress on our science-based GHG reduction target, to reduce Scope 1 and Scope 2 GHGs 50%, and reduce Scope 3 GHGs per dollar of gross profit 55%, by fiscal year 2031, compared to fiscal year 2020.
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.
Furthermore, our leadership is committed to taking climate action and that commitment goes hand in hand with our values and reputation in the marketplace.
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.
Product Subscription: Provides customers a flexible, cost-effective way to access and manage 3D design, engineering, and entertainment software tools. 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.
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.
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. We offer free educational licenses of Autodesk’s complete portfolio of professional software to verified students, educators, and accredited educational institutions worldwide.
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.
For example, we have established the Autodesk Platform Services 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. Autodesk Platform Services facilitates the development of a single connected ecosystem for integrating Autodesk applications with other enterprise, web, and mobile solutions.
Engineers can integrate AutoCAD drawings and model-based design data into a single digital model, creating a virtual representation of a final product that enables them to validate the form, fit, and function of the product before it is ever built. • Vault Vault data management software makes it easier to manage data in one central location, accelerate design processes, and streamline internal/external collaboration.
Engineers can integrate AutoCAD drawings and model-based design data into a single digital model, creating a virtual representation of a final product that enables them to validate the form, fit, and function of the product before it is ever built. • 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.
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.
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. Other Revenue: Consists of revenue from consulting and other products and services, and is recognized as the products are delivered and services are performed.
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.
In addition to competitive base pay 13 Table of Contents and opportunities to receive short-term incentives, all our employees are eligible to participate in our long-term plans. 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.
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.
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, 2024, we employed approximately 14,100 people, an increase from approximately 13,700 employees as of the end of fiscal year 2023.
Autodesk’s product offerings include: Architecture, Engineering and Construction (“AEC”) • AutoCAD Civil 3D AutoCAD Civil 3D solution provides a surveying, design, analysis, and documentation solution for civil engineering, including land development, transportation, and environmental projects.
Autodesk’s product offerings include: Architecture, Engineering and Construction (“AEC”) • 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. 5 Table of Contents • AutoCAD Civil 3D AutoCAD Civil 3D solution provides a surveying, design, analysis, and documentation solution for civil engineering, including land development, transportation, and environmental projects.
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.
In connection with the transition agreements, we intend to increase our selling efforts with value-added resellers and Solution Providers in connection with our new transaction model. Consequently, we believe our business is not substantially dependent on TD Synnex or Ingram Micro. No other distributor, reseller, or direct customer accounted for 10% or more of our revenue.
As part of Autodesk Construction Cloud, Build connects data originating in design and preconstruction to the construction and operations phase, allowing users to identify, manage and de-risk project decisions. • Revit Revit software is built for Building Information Modeling (“BIM”) to help professionals design, build, and maintain higher-quality, more energy-efficient buildings.
As part of Autodesk Construction Cloud, Build connects data originating in design and preconstruction to the construction and operations phase, allowing users to identify, manage and de-risk project decisions. • BIM Collaborate Pro Autodesk BIM Collaborate Pro is cloud-based design collaboration and design management software that enables teams to: organize project data, democratize access, and connect; improve project visibility to deliver on time; and work together on increasingly complex projects. • 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. • Revit Revit software is built for Building Information Modeling (“BIM”) to help professionals design, build, and maintain higher-quality, more energy-efficient buildings.
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.
Certain products, such as Fusion, incorporate both Design and Make functionality and are classified as Make. 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”).
We focus our efforts to advance positive outcomes across three primary areas: energy and materials, health and resilience, and work and prosperity.
We take action as a business to support our employees, customers, and communities in our collective opportunity to design and make a better world for all. 9 Table of Contents We focus our efforts to advance positive outcomes across three primary areas: energy and materials, health and resilience, and work and prosperity.
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: 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. 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.
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.
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, 2024, 2023 and 2022, we acquired companies accounted for as business combinations. The acquisitions during fiscal 2024 and 2023 were not individually significant.
PRODUCTION AND SUPPLIERS The production of our software products and services involves duplication or hosting of software media. The way that we deliver software has evolved during our business model transition. For certain cloud-based products, we use a combination of co-located hosting facilities and increasingly Amazon Web Services and to a lesser degree other infrastructure-as-a-service providers.
For certain cloud-based products, we use a combination of co-located hosting facilities and increasingly Amazon Web Services and to a lesser degree other infrastructure-as-a-service providers. We offer customers an electronic software download option for both initial product fulfillment and subsequent product updates. Customers who choose electronic fulfillment receive the latest version of the software from our vendor’s secure servers.
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.
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. We have never experienced any work stoppages and believe our employee relations are strong.
We have a worldwide user group organization and we have created online user communities dedicated to the exchange of information related to the use of our products and services. We generate revenue primarily through various offerings that provide recurring revenue.
We employ mass-marketing techniques such as webcasts, seminars, telemarketing, direct mailings, sponsorships, advertising in business and trade journals, and social media. We have a worldwide user group organization and we have created online user communities dedicated to the exchange of information related to the use of our products and services.
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.
Solution Providers may also be resellers in relation to Autodesk solutions. Spend : The sum of cost of revenue and operating expenses. Subscription Plan: Comprises our term-based product subscriptions, cloud service offerings, and 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.
These organizations develop and manage overall marketing and sales programs and work closely with a network of domestic and international sales offices. We believe that international sales will continue to comprise the majority of our total net revenue.
Our customer-related operations are divided into three geographic regions: the Americas; EMEA; and APAC. Each geographic region is supported by global marketing and sales organizations. These organizations develop and manage overall marketing and sales programs and work closely with a network of domestic and international sales offices.
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.
We employ a variety of incentive programs and promotions to align our direct and indirect channels with our business strategies. We anticipate that our channel mix will continue to change as we scale our business.
Current remaining performance obligations is the amount of revenue we expect to recognize in the next twelve months. Spend : The sum of cost of revenue and operating expenses. Subscription Plan: Comprises our term-based product subscriptions, cloud service offerings, and EBAs.
Remaining Performance Obligations (RPO): The sum of total short-term, long-term, and unbilled deferred revenue. Current remaining performance obligations is the amount of revenue we expect to recognize in the next twelve months. Solution Provider : Solution Provider is the name of our channel partners who primarily serve our new transaction model customers worldwide.
We also work directly with reseller and distributor sales organizations, computer manufacturers, other software developers, and peripherals manufacturers in cooperative advertising, promotions, and trade-show presentations. We employ mass-marketing techniques such as webcasts, seminars, telemarketing, direct mailings, sponsorships, advertising in business and trade journals, and social media.
Our international operations and sales subject us to a variety of risks. See Item 1A, “Risk Factors,” for further discussion. We also work directly with reseller, distributor, and Solution Provider partner organizations, computer manufacturers, other software developers, and peripherals manufacturers in cooperative advertising, promotions, and trade-show presentations.
We offer customers an electronic software download option for both initial product fulfillment and subsequent product updates. Customers who choose electronic fulfillment receive the latest version of the software from our vendor’s secure servers. Customers may also obtain our software through media such as DVDs and USB flash drives available from multiple sources.
Customers may also obtain our software through media such as DVDs and USB flash drives available from multiple sources. TALENT AND HUMAN CAPITAL MANAGEMENT Our employees play a central role in the success of our long-term strategy.
A comprehensive line-up of expert products, including PowerMill, FeatureCAM, PowerInspect, PowerShare, and others, help our customers manufacture complex, innovative products and components with maximum quality, control, and production efficiency. • Fusion 360 Fusion 360 is the first 3D CAD, CAM, and computer-aided engineering (“CAE”) tool of its kind.
Manufacturing (“MFG”) • Fusion (Formerly Fusion 360) 6 Table of Contents Fusion is the first 3D CAD, CAM, and computer-aided engineering (“CAE”) tool of its kind.
Removed
Manufacturing (“MFG”) • CAM Solutions Our computer-aided manufacturing (“CAM”) software offers industry-leading solutions for computer numerical control (“CNC”) machining, inspection, and modeling for manufacturing.
Added
The collection offers access to a wide range of our products, including AutoCAD, Fusion, Vault, and Inventor. • Vault Vault data management software makes it easier to manage data in one central location, accelerate design processes, and streamline internal/external collaboration.
Removed
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.
Added
With the new transaction model, we are approaching the final phase of modernizing our go-to-market motion, which includes building more durable and direct relationships with our customers, updating our data infrastructure, and retiring old 7 Table of Contents information systems and business models.
Removed
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.
Added
We are undertaking a multi-year process to develop lifecycle solutions within and between our industry clouds, powered by shared platform services, and with our data model at its core. Together, these will help enable Autodesk, its customers, and partners, to create more valuable, data-driven, and connected products and services.
Removed
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.
Added
We transact directly with our enterprise and named account customers, with customers through our online Autodesk branded store, and with certain customers through our new transaction model whereby channel partners provide a quote to customers but the actual transaction occurs directly between Autodesk and the customer.

… 16 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

103 edited+39 added−13 removed157 unchanged
Biggest changeIn 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.
Biggest changeIn 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; • 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, which impacted the timing of our billings and cash collections in fiscal year 2024 and which is expected to continue into fiscal year 2025; • our ability to successfully introduce and expand new transaction models such as FLEX; • 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; 20 Table of Contents • 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; • 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.
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.
Over time, we have modified and especially during the transition process noted above, 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.
In the EU and the UK, regulators are increasingly focusing on compliance with requirements in the online behavioral advertising ecosystem, and current national laws that implement the ePrivacy Directive are highly likely to be replaced by an EU regulation known as the ePrivacy Regulation, which is expected to significantly increase fines for non-compliance.
In the EU and the UK, regulators are increasingly focusing on compliance with requirements in the online behavioral advertising ecosystem, and current national laws that implement the ePrivacy Directive are likely to be replaced by an EU regulation known as the ePrivacy Regulation, which is expected to significantly increase fines for non-compliance.
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.
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. Other countries, such as India, also are considering data localization requirements.
Risks Relating to Our Operations Security incidents may compromise the integrity of our or our customers’ systems, solutions, offerings, services, applications, data, or intellectual property, harm our reputation, damage our competitiveness, create additional liability, and adversely impact our financial results.
Risks Relating to Our Operations Security breaches or incidents may compromise the integrity of our or our customers’ systems, solutions, offerings, services, applications, data, or intellectual property, harm our reputation, damage our competitiveness, create additional liability, and adversely impact our financial results.
In addition, our operations or the operations of our customers or partners could be negatively affected in the event of a security incident and could be subject to the loss or theft of confidential or proprietary information, including source code.
In addition, our operations or the operations of our customers or partners could be negatively affected in the event of a security breach or incident and could be subject to the loss or theft of confidential or proprietary information, including source code.
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.
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, 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.
Any perception of our practices, products, offerings, or services as a violation of individual privacy or data protection rights may subject us to public criticism, lawsuits, reputational harm, or investigations or claims by regulators, industry groups or other third parties, all of which could disrupt or adversely impact our business and expose us to increased liability.
Any perception of our practices, products, offerings, or services as a violation of individual privacy or data protection rights may subject us to public criticism, lawsuits, reputational harm, or investigations, claims, demands, or other proceedings by regulators, industry groups or other third parties, all of which could disrupt or adversely impact our business and expose us to increased liability.
There have been and may continue to be significant supply chain attacks, and we cannot guarantee that our or our such third parties’ systems have not been breached or that they do not contain exploitable defects, bugs, or vulnerabilities that could result in an incident, breach, or other disruption to, our or these third parties’ systems.
There have been and may continue to be significant supply chain attacks, and we cannot guarantee that our or our such third parties’ systems have not been breached or otherwise compromised or that they do not contain exploitable defects, bugs, or vulnerabilities that could result in an incident, breach, or other disruption to, our or these third parties’ systems.
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.
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.
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.
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 19 Table of Contents 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.
If any of the following risks actually occur, our business, financial condition, or results of operations may be adversely impacted, causing the trading price of our common stock to decline. In addition, these risks and uncertainties may impact the forward-looking statements described elsewhere in this Form 10-K and in the documents incorporated herein by reference.
If any of the following risks actually occur, our business, financial condition, or results of operations may be adversely impacted, causing the trading price of our common stock to decline. In addition, these risks and uncertainties may impact the forward-looking statements described elsewhere in this Annual Report on Form 10-K and in the documents incorporated herein by reference.
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.
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.
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.
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 corporate alternative minimum tax and excise tax on stock buybacks.
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.
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, or be asserted to place, additional burdens on us.
Security incidents could disrupt the proper functioning of our systems, solutions, offerings, applications, or services; cause errors in the output of our customers’ work; allow unauthorized access to or unauthorized use, disclosure, modification, loss, or destruction of, sensitive data or intellectual property, including proprietary or confidential information of ours or our customers; or cause other destructive outcomes.
Security breaches or incidents could disrupt the proper functioning of our systems, solutions, offerings, applications, or services; cause errors in the output of our customers’ work; allow unauthorized access to or unauthorized use, disclosure, modification, loss, unavailability, or destruction of, sensitive data or intellectual property, including proprietary or confidential information of ours or our customers; or cause other destructive or disruptive outcomes.
Many governments have enacted laws requiring companies to provide notice of security incidents involving certain types of personal data and personal information. We are also contractually required to notify certain customers of certain security incidents.
Many governments have enacted laws requiring companies to provide notice of security breaches or incidents involving certain types of personal data and personal information. We are also contractually required to notify certain customers of certain security breaches or incidents.
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.
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.
These laws, regulations and codes may also impact our innovation and business drivers in developing new and emerging technologies (e.g., artificial intelligence and machine learning). These requirements, among others, may impact demand for our offerings and force us to bear the burden of expanded obligations in our contracts.
These laws, regulations, and codes may also impact our innovation and business drivers in developing new and emerging technologies (e.g., AI and machine learning). These requirements, among others, may impact demand for our offerings and force us to bear the burden of expanded obligations in our contracts.
If this were to occur, it may be difficult and/or costly for us to enforce our rights, and our financial performance and reputation could be negatively impacted. We may face intellectual property infringement claims that could be costly to defend and result in the loss of significant rights.
If this were to occur, it may be difficult and/or costly for us to enforce our rights, and our financial performance and reputation could be negatively impacted. 30 Table of Contents We may face intellectual property infringement claims that could be costly to defend and result in the loss of significant rights.
Unauthorized access to data and other confidential or proprietary information may be obtained through break-ins, network breaches by unauthorized parties, employee theft or misuse, or other misconduct.
Unauthorized access to or other processing of data and other confidential or proprietary information may be obtained through break-ins, network breaches by unauthorized parties, employee theft or misuse, or other misconduct.
Also, our ability to mitigate the security incident risk may be impacted by our limited control over our customers or third-party technology providers and vendors, or the processing of data by third-party technology providers and vendors, which may not allow us to maintain the integrity or security of such transmissions or processing.
Also, our ability to mitigate the risk of security breaches and incidents may be impacted by our limited control over our customers or third-party technology providers and vendors, or the processing of data by third-party technology providers and vendors, which may not allow us to maintain the integrity or security of such transmissions or processing.
Our customers include government entities, including the U.S. federal government, and if spending cuts impede the ability of governments to purchase our products and services, our revenue could decline. In addition, a number of our customers rely, directly and indirectly, on government spending.
Our customers include government entities, including the U.S. federal 17 Table of Contents government, and if spending cuts impede the ability of governments to purchase our products and services, our revenue could decline. In addition, a number of our customers rely, directly and indirectly, on government spending.
Moreover, because the interpretation and application of many laws and regulations relating to privacy, data protection, and information security are uncertain, it is possible that these laws and regulations may be interpreted and applied in a manner that is inconsistent with our existing data management practices or the features of our products, offerings, and services.
Moreover, because the interpretation and application of many laws, regulations, and other actual and asserted obligations relating to privacy, data protection, and information security are uncertain, it is possible that these laws, regulations, and obligations may be interpreted and applied in a manner that is inconsistent with our existing data management practices or the features of our products, offerings, and services.
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.
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.
These 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.
These 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 (both with new and existing customers), 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. • Challenges relating to the proper management and governance of our use of AI 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, data protection, and information security 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.
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.
We also make assumptions, judgments, and estimates in determining the accruals for uncertain tax positions, variable compensation, partner incentive programs, allowances for credit losses, asset retirement obligations, legal contingencies, and operating lease liabilities.
These threats include identity theft, unauthorized access, DNS attacks, wireless network attacks, viruses and worms, malware, bugs, vulnerabilities, advanced persistent threats (APT), application-centric attacks, peer-to-peer attacks, social engineering, phishing, credential stuffing, malicious file uploads, backdoor trojans, supply chain attacks, ransomware attacks, and distributed denial of service (DDoS) attacks.
These threats include, among others, identity theft, unauthorized access, DNS attacks, wireless network attacks, viruses and worms, malware, bugs, vulnerabilities, advanced persistent threats, application-centric attacks, peer-to-peer attacks, social engineering, phishing, credential stuffing, malicious file uploads, backdoor trojans, supply chain attacks, ransomware attacks, and distributed denial of service attacks.
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.
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.
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.
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 ongoing wars between the Ukraine and Russia and between Israel and Hamas, 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.
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 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 64% and 66% of our net revenue for fiscal 2024 and 2023, respectively.
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.
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.
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 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.
If we are not able to meet customer requirements, either with respect to our software or the manner in which we provide such products, or if we are not able to adapt our business model to meet our customers’ requirements, our business, financial condition, or results of operations may be adversely impacted.
If we are not able to meet customer requirements, either with respect to new customers or existing customers, and either with respect to our software or the manner in which we provide such products, or if we are not able to adapt our business model to meet our customers’ requirements, our business, financial condition, or results of operations may be adversely impacted.
Licenses may be restricted in the term or the use of such technology in ways that negatively affect our business. Similarly, we may not be able to obtain or renew license agreements for key technology on favorable terms, if at all, and any failure to do so could harm our business.
We license certain key technologies from third parties. Licenses may be restricted in the term or the use of such technology in ways that negatively affect our business. Similarly, we may not be able to obtain or renew license agreements for key technology on favorable terms, if at all, and any failure to do so could harm our business.
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.
These economic conditions can occur abruptly. For example, current geopolitical and global macro-economic challenges 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.
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.
Inability of such third parties to satisfy our requirements could disrupt our operations or make it more difficult for us to implement our 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. 30 Table of Contents We are required to comply with the covenants set forth in our credit agreement.
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.
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.
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 make additional modifications, and to incur substantial costs and expenses, in our efforts to comply.
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.
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 ongoing wars between the Ukraine and Russia and between Israel and Hamas; • 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.
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.
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, introducing and expanding new business models such as the new transaction model and FLEX, realigning our development and marketing organizations, offering software as a service, and realigning our internal resources in an effort to improve efficiency.
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.
For fiscal 2024 and 2023, approximately 63% and 65%, 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.
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.
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 ongoing wars between the Ukraine and Russia and between Israel and Hamas, 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.
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.
These existing risks are compounded given the shift in recent years 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 ongoing war between Ukraine and Russia 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.
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.
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, material scarcity, as well as other factors; 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; wars and armed conflicts, including the ongoing wars between the Ukraine and Russia and between Israel and Hamas; foreign exchange rate fluctuations; and the effect of these challenges on margins and cash flow.
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.
More recently, the United States and other global actors have imposed sanctions as a result of the war against Ukraine launched by Russia, and the ongoing war between Israel and Hamas. New or increased tariffs and other changes in U.S. trade policy, including new sanctions, could trigger retaliatory actions by affected countries, including Russia.
During October and November 2022, we entered into transition agreements with each of Tech Data and Ingram Micro to provide transition distribution activities for a one-to-two-year period, with potential extensions. In connection with such transition agreements, we intend to increase our selling efforts with value-added resellers and agents.
During October 2022, we entered into 26 Table of Contents a transition agreements with each of TD Synnex and Ingram Micro to provide transition distribution activities for a one-to-two-year period, with potential extensions. In connection with such transition agreements, we intend to increase our selling efforts with value-added resellers and agents.
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.
However, if during the transition period, TD Synnex or Ingram Micro 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.
The loss of licenses to, or inability to support, maintain, and enhance any such software could result in increased costs or delays until equivalent software can be developed, identified, licensed, and integrated, which would likely harm our business. Disruptions in licensing relationships and with third-party developers could adversely impact our business. We license certain key technologies from third parties.
The loss of licenses to, or inability to support, maintain, and enhance any such software could result in 27 Table of Contents increased costs or delays until equivalent software can be developed, identified, licensed, and integrated, which would likely harm our business. Disruptions in licensing relationships and with third-party developers could adversely impact our business.
Additionally, countries in which we operate may be classified as highly inflationary economies, requiring special accounting and financial reporting treatment for such operations, or such countries’ currencies may be devalued, or both, which may adversely impact our business operations and financial results. Our debt service obligations may adversely affect our financial condition and cash flows from operations.
Additionally, countries in which we operate may be classified as highly inflationary economies, requiring special accounting and financial reporting treatment for such operations, or such countries’ currencies may be devalued, or both, which may adversely impact our business operations and financial results.
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.
During the transition period, we believe the resellers and end users who currently purchase our products through TD Synnex and Ingram Micro will be able to continue to do so, and following the transition period, we believe such end users will be able to continue to purchase our products from certain value-added resellers or directly from Autodesk, in each case under substantially the same terms and without substantial disruption to our revenue.
Any security incident involving such third parties could compromise the integrity or availability of, or result in the theft of, our and our customers’ data.
Any security breach or incident involving such third parties could compromise the integrity or availability of, or result in the theft or unauthorized use, modification, or other processing of, our and our customers’ data.
Social and ethical issues relating to the use of new and evolving technologies such as artificial intelligence (“AI”) in our offerings, may result in reputational harm and liability, and may cause us to incur additional research and development costs to resolve such issues. We are increasingly building AI into many of our offerings.
Social and ethical issues relating to the use of new and evolving technologies such as AI in our offerings, may result in reputational harm and liability, and may cause us to incur additional research and development costs to resolve such issues.
In addition, use of development resources through consulting relationships, particularly in non-U.S. jurisdictions with developing legal systems, may be adversely impacted by, and expose us to risks relating to, evolving employment, export, and intellectual property laws. These risks could, among other things, expose our intellectual property to misappropriation and result in disruptions to product delivery schedules.
In addition, use of development resources through consulting relationships, particularly in non-U.S. jurisdictions with developing legal systems, may be adversely impacted by, and expose us to risks relating to, evolving employment, export, and intellectual property laws.
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.
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; • the potential that acquired businesses or businesses that we invest in may not have adequate controls, processes, and procedures to ensure compliance with laws and regulations, including with respect to data privacy, data protection, and data security, as well as anti-bribery and anti-corruption laws, export controls, sanctions and industry-specific-regulation; • potential additional exposure to economic, tax, currency, political, legal, and regulatory risks and liabilities, including 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.
Our dependency on international revenue makes us much more exposed to global economic and political trends, which can negatively impact our financial results even if our results in the United States are strong for a particular period.
Our total revenue is also impacted by the relative geographical and country mix of our revenue over time. Our dependency on international revenue makes us much more exposed to global economic and political trends, which can negatively impact our financial results even if our results in the United States are strong for a particular period.
Such improvements are often complex, costly, and time consuming. In addition, such improvements can be challenging to integrate with our existing technology systems, or may uncover problems with those systems.
In addition, such improvements can be challenging to integrate with our existing technology systems, or may uncover problems with those systems.
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.
War, including the ongoing wars between the Ukraine and Russia and between Israel and Hamas, 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.
We will continue to perform these tests on our worldwide deferred tax assets, and any future adjustments to the realizability of our deferred tax assets may have a material effect on our financial condition and results of operations. General Risk Factors Our business may be significantly disrupted upon the occurrence of a catastrophic event.
We will continue to perform these tests on our worldwide deferred tax assets, and any future adjustments to the realizability of our deferred tax assets may have a material effect on our financial condition and results of operations.
In any of these scenarios, our liquidity may be negatively impacted, which in turn may prohibit us from making investments in our business, taking advantage of opportunities, and potentially meeting our financial obligations as they come due. Changes in tax rules and regulations, and uncertainties in interpretation and application, could materially affect our tax obligations and effective tax rate.
In any of these scenarios, our liquidity may be negatively impacted, which in turn may prohibit us from making investments in our business, taking advantage of opportunities, and potentially meeting our financial obligations as they come due.
This shift further lowers barriers to entry and poses a disruptive challenge to established software companies. The markets in which we operate are characterized by vigorous competition, both by entrants with innovative technologies and by consolidation of companies with complementary offerings and technologies. Some of our competitors have greater financial, technical, sales and marketing, and other resources.
The markets in which we operate are characterized by vigorous competition, both by entrants with innovative technologies and by consolidation of companies with complementary offerings and technologies. Some of our competitors have greater financial, technical, sales and marketing, and other resources.
If any of these situations were to occur, our reputation could be harmed, we could be subject to third-party liability, including under data protection and privacy laws in certain jurisdictions, and our financial results could be negatively impacted. We are investing in resources to update and improve our information technology systems to digitize Autodesk and support our customers.
If any of these situations were to occur, our reputation could be harmed, we could be subject to third-party liability, including under laws relating to privacy, data protection, and information security in certain jurisdictions, and our financial results could be negatively impacted.
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 are dependent on attracting new customers as well as renewing and expanding our business with existing customers. 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.
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.
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, disclosure, or other processing of, our and our customers’ information.
As with many innovations, AI presents risks and challenges that could affect its adoption, and therefore our business. AI presents emerging ethical issues and if we enable or offer solutions that draw controversy due to their perceived or actual impact on society, we may experience brand or reputational harm, competitive harm, or legal liability.
AI presents emerging ethical issues and if we enable or offer solutions that draw controversy due to their perceived or actual impact on society, we may experience brand or reputational harm, competitive harm, or legal liability.
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.
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. 28 Table of Contents In addition, the United Kingdom’s (“UK”) exit from the EU, and ongoing developments in the UK, have created uncertainty with regard to data protection regulation in the UK.
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.
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 2023 and 2024.
If any of the foregoing were to occur or to be perceived to occur, our reputation may suffer, our competitive position may be diminished, customers may buy fewer of our offerings and services, we could face lawsuits, regulatory investigation, fines, and potential liability, and our financial results could be negatively impacted.
If any of the foregoing were to occur or to be perceived to occur, our reputation may suffer, our competitive position may be diminished, customers may buy fewer of our offerings and services, we could face lawsuits, regulatory investigation, fines, and potential liability, and our financial results could be negatively impacted. 25 Table of Contents Delays in service from third-party service providers could expose us to liability, harm our reputation, damage our competitiveness, and adversely impact our financial results.
These laws and regulations, as well as industry self-regulatory codes, create new compliance obligations and substantially expand the scope of potential liability and provide greater penalties for non-compliance.
These laws and regulations, as well as industry self-regulatory codes, industry standards, and other actual and asserted obligations to which we are or may be asserted to be subject, create new compliance obligations and substantially expand the scope of potential liability and provide greater penalties for non-compliance.
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.
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.
We derive a substantial portion of our net revenue from a small number of solutions, including our AutoCAD-based software products and collections, and if these offerings are not successful, our revenue would be adversely affected.
Greater than anticipated expenses or a failure to maintain rigorous cost controls would also negatively affect profitability. We derive a substantial portion of our net revenue from a small number of solutions, including our AutoCAD-based software products and collections, and if these offerings are not successful, our revenue would be adversely affected.
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.
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.
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.
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 (both with new and existing customers), costs related to product defects, and large expenditures, each of which may result in no additional net revenue or decreased net revenue. 16 Table of Contents The software industry is characterized by rapid technological changes as well as changes in customer requirements and preferences.
We could incur significant costs and liabilities, including due to litigation, indemnity obligations, damages for contract breach, penalties for violation of applicable laws or regulations, and costs for remediation and other incentives offered to customers or other business partners in an effort to maintain business relationships after a security incident, and our financial performance could be negatively impacted.
We could incur significant costs and liabilities, including due to litigation, indemnity obligations, damages for contract breach, penalties for violation of applicable laws or regulations, and costs for remediation and other incentives offered to customers or other business partners in an effort to maintain business relationships after a security breach or incident, and our financial performance could be negatively impacted. 24 Table of Contents We cannot assure you that any limitations of liability provisions in our contracts would be enforceable or adequate or would otherwise protect us from any liabilities or damages with respect to any particular claim relating to a security incident.
We make assumptions, judgments, and estimates for a number of items, including revenue recognition for product subscriptions and enterprise business arrangements (“EBAs”), the determination of the fair value of acquired assets and liabilities, goodwill, financial instruments including strategic investments, long-lived assets, and intangible assets, the realizability of deferred tax assets, and the fair value of stock awards.
In preparing our financial statements we make certain assumptions, judgments, and estimates that affect amounts reported in our consolidated financial statements which, if not accurate, may significantly impact our financial results. 34 Table of Contents We make assumptions, judgments, and estimates for a number of items, including revenue recognition for product subscriptions and enterprise business arrangements (“EBAs”), the determination of the fair value of acquired assets and liabilities, goodwill, financial instruments including strategic investments, long-lived assets, and intangible assets, the realizability of deferred tax assets, and the fair value of stock awards.
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 debt service obligations may adversely affect our financial condition and cash flows from operations. 31 Table of Contents 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, 2024, as described in Part II, Item 8.
Customers are also reconsidering how they purchase software products, which requires us to constantly evaluate our business model and strategy. In response, we are focused on providing solutions to enable our customers to be more agile and collaborative on their projects. We devote significant resources to the development of new technologies.
In response, we are focused on providing solutions to enable our customers to be more agile and collaborative on their projects. We devote significant resources to the development of new technologies.
We continually invest resources to update and improve these systems to meet the evolving requirements of our business and customers. In particular, our transition to cloud-based products and a subscription-only business model involves considerable investment in the development of technologies, as well as back-office systems for technical, financial, compliance, and sales resources.
In particular, our transition to cloud-based products and a subscription-only business model involves considerable investment in the development of technologies, as well as back-office systems for technical, financial, compliance, and sales resources. Such improvements are often complex, costly, and time consuming.
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.
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. Significant judgment is required in determining our effective tax rate and in evaluating our tax positions on a worldwide basis.
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.
Of our distributors, TD Synnex accounted for 39% and 37% of our total net revenue for fiscal 2024 and 2023, respectively, and Ingram Micro accounted for 7% and 9% of our total net revenue for fiscal 2024 and 2023, respectively.

… 75 more changes not shown on this page.

Item 2. Properties

Properties — owned and leased real estate

3 edited+0 added−2 removed0 unchanged
Biggest changeWe believe that our existing facilities and offices are adequate to meet our requirements for the foreseeable future.
Biggest changeWe believe that our existing facilities and offices are adequate to meet our requirements for the foreseeable future. See Part II, Item 8, Note 9, “Leases,” in the Notes to Consolidated Financial Statements for more information.
Our 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.
Our San Francisco facilities consist of approximately 211,000 square feet under leases that have expiration dates ranging from June 2026 to December 2028. 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 1,500,000 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.
ITEM 2. PROPERTIES We lease approximately 1,400,000 square feet of office space in 88 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.
Removed
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.
Removed
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.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+9 added−0 removed2 unchanged
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.
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.
Added
In early March 2024, the Audit Committee of Autodesk’s Board of Directors commenced an internal investigation with the assistance of outside counsel and advisors regarding the Company’s free cash flow and non-GAAP operating margin practices (the “Internal Investigation”). On March 8, 2024, the Company voluntarily contacted the U.S. Securities and Exchange Commission (“SEC”) to inform it of the Internal Investigation.
Added
On April 3, 2024, the United States Attorney’s Office for the Northern District of California (“USAO”) contacted the Company regarding the Internal Investigation. The Company voluntarily provided the SEC and USAO with certain documents relating to the Internal Investigation and will continue to 36 Table of Contents cooperate with the SEC and USAO.
Added
At this stage, the Company cannot reasonably estimate the amount of any possible financial loss that could result from this matter. On April 24, 2024, plaintiff Michael Barkasi filed a purported federal securities class action complaint in the Northern District of California against the Company, our Chief Executive Officer Andrew Anagnost, and our former Chief Financial Officer, Deborah L. Clifford.
Added
The action is captioned Michael Barkasi v. Autodesk, Inc. et al., 3:24-cv-02431.
Added
The complaint, which was filed shortly after the Company’s announcement of the Audit Committee of the Board of Directors’ internal investigation regarding the Company’s free cash flow and non-GAAP operating margin practices, generally alleges that the defendants made false and misleading statements in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder.
Added
The action purports to be brought on behalf of those who purchased or otherwise acquired the Company’s publicly traded securities between June 1, 2023 and April 16, 2024, and seeks unspecified damages and other relief. The case is in its early stages and a lead plaintiff has yet to be appointed.
Added
At this stage, the Company cannot reasonably estimate the amount of any possible financial loss that could result from this matter.
Added
In addition, on June 7, 2024, a purported stockholder derivative complaint was filed in the United States District Court for the Northern District of California, naming our current directors and our Chief Strategy Officer as defendants and our company as a nominal defendant.
Added
The complaint generally alleges violations of Section 14(a) of the Exchange Act and breach of fiduciary duties, aiding and abetting breach of fiduciary duties, unjust enrichment, abuse of control, and waste of corporate assets, based on similar underlying allegations contained in the purported federal securities class action complaint described above.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

9 edited+0 added−2 removed2 unchanged
Biggest changeAt 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.
Biggest change(2) These amounts correspond to the plan publicly announced and approved by the Board of Directors in November 2022 that authorized the repurchase of $5 billion. At January 31, 2024, $4.74 billion remained available for repurchase under the November 2022 repurchase program. The plan does not have a fixed expiration date.
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.
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.
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.
Comparison of Five Year Cumulative Total Stockholder Return (1) ___________________ (1) Assumes $100 invested on January 31, 2019, in Autodesk’s stock, the Standard & Poor’s 500 Stock Index, Standard & Poor’s North American Technology Software Index, and the Dow Jones U.S. Software Index with reinvestment of all dividends.
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.
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.
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.
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.
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.
STOCKHOLDERS As of January 31, 2024, the number of common stockholders of record was 286. 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.
Total stockholder returns for prior periods are not an indication of future investment returns. 36 Table of Contents
Total stockholder returns for prior periods are not an indication of future investment returns. 39 Table of Contents
SALES 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.
SALES OF UNREGISTERED SECURITIES There were no sales of unregistered securities during the three months ended January 31, 2024. 38 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 North American Technology Software Index, and the Dow Jones U.S.
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.
The following table provides information about the repurchase of common stock in open-market transactions during the quarter ended January 31, 2024: (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) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans of Program ( in millions ) (2) November 1 - November 30 156 $ 205.50 156 $4,769 December 1 - December 31 49 224.39 49 4,758 January 1 - January 31 84 232.59 84 4,739 Total 289 $ 216.55 289 ____________________ (1) Represents shares purchased in open-market transactions under the stock repurchase program approved by the Board of Directors in November 2022.
Removed
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
(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.

Item 7. Management's Discussion & Analysis

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

128 edited+30 added−23 removed103 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, 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.
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. 60 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, 2024 2023 2022 (Unaudited) Gross profit $ 4,986 $ 4,525 $ 3,968 Stock-based compensation expense 51 46 35 Amortization of developed technologies 43 53 50 Acquisition-related costs — — 1 Non-GAAP gross profit $ 5,080 $ 4,624 $ 4,054 Income from operations $ 1,128 $ 989 $ 618 Stock-based compensation expense 703 660 559 Amortization of developed technologies 43 53 50 Amortization of purchased intangibles 41 40 40 Acquisition-related costs 33 10 26 Lease-related asset impairments and other charges 14 33 104 Non-GAAP income from operations $ 1,962 $ 1,785 $ 1,397 Operating margin 21 % 20 % 14 % Stock-based compensation expense 13 % 13 % 13 % 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 — % 1 % 2 % Non-GAAP operating margin (1) 36 % 36 % 32 % Net income $ 906 $ 823 $ 497 Stock-based compensation expense 703 660 559 Amortization of developed technologies 43 53 50 Amortization of purchased intangibles 41 40 40 Acquisition-related costs 33 10 26 Lease-related asset impairments and other charges 14 33 104 Loss (gain) on strategic investments and dispositions, net 32 (1) (3) Establishment (release) of valuation allowance on deferred tax assets 16 (38) — Discrete GAAP tax items (34) 28 (72) Income tax effect of non-GAAP adjustments (112) (163) (75) Non-GAAP net income $ 1,642 $ 1,445 $ 1,126 Diluted net income per share $ 4.19 $ 3.78 $ 2.24 Stock-based compensation expense 3.26 3.03 2.52 Amortization of developed technologies 0.20 0.24 0.22 61 Table of Contents Fiscal Year Ended January 31, 2024 2023 2022 (Unaudited) Amortization of purchased intangibles 0.19 0.18 0.18 Acquisition-related costs 0.15 0.05 0.11 Lease-related asset impairments and other charges 0.06 0.15 0.47 Loss (gain) on strategic investments and dispositions, net 0.15 — (0.01) Establishment (release) of valuation allowance on deferred tax assets 0.07 (0.18) — Discrete GAAP tax items (0.15) 0.13 (0.32) Income tax effect of non-GAAP adjustments (0.52) (0.75) (0.34) Non-GAAP diluted net income per share $ 7.60 $ 6.63 $ 5.07 Net cash provided by operating activities $ 1,313 $ 2,071 $ 1,531 Capital expenditures (31) (40) (56) Free cash flow $ 1,282 $ 2,031 $ 1,475 _______________ (1) Totals may not sum due to rounding.
Additionally, in fiscal 2022, we launched Autodesk Tandem, a cloud-based digital twin technology platform that extends digital project delivery by providing owner/operators with an easy to use, accurate, digital as-built model of a newly built or renovated facility. For owner/operators, this accelerates operational readiness and extends the value of BIM downstream into the owner/operator segment.
Additionally, in fiscal 2022, we launched Autodesk Tandem, a cloud-based digital twin technology platform that extends digital project delivery by providing owner/operators with an easy to use, accurate, digital as-built model of a newly built or renovated facility. This accelerates operational readiness and extends the value of BIM downstream into the owner/operator segment.
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.
In manufacturing, our strategy is to combine organic and acquired software in existing and adjacent verticals to create end-to-end, cloud-based solutions for our customers that drive efficiency and sustainability. We continue to attract global manufacturing leaders and disruptive startups with our generative design and cloud-based Fusion that converges the design process with manufacturing.
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.
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. 55 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.
We incur amortization of acquisition-related developed technology and purchased intangibles in connection with acquisitions of certain businesses and technologies. Amortization of developed technologies and purchased intangibles is inconsistent in amount and frequency and is significantly affected by both the timing and size of our acquisitions.
We incur amortization of acquisition-related developed technologies and purchased intangibles in connection with acquisitions of certain businesses and technologies. Amortization of developed technologies and purchased intangibles is inconsistent in amount and frequency and is significantly affected by both the timing and size of our acquisitions.
These charges are associated with the optimization of our facilities costs related to leases for facilities that we have recently vacated as a result of our one-time move to a more hybrid remote workforce.
These charges are associated with the optimization of our facilities costs related to leases for facilities that we have vacated as a result of our one-time move to a more hybrid remote workforce.
Further discussion regarding the balance sheet and cash flow activities are discussed below under the heading “Liquidity and Capital Resources.” 45 Table of Contents RESULTS OF OPERATIONS Overview We believe our investment in cloud products and a subscription business model, backed by a strong balance sheet, give us a robust foundation to successfully navigate complex geopolitical and global macro-economic challenges.
Further discussion regarding the balance sheet and cash flow activities are discussed below under the heading “Liquidity and Capital Resources.” 49 Table of Contents RESULTS OF OPERATIONS Overview We believe our investment in cloud products and a subscription business model, backed by a strong balance sheet, give us a robust foundation to successfully navigate complex geopolitical and global macro-economic challenges.
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.
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. 41 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.
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.
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.
The tax expense for fiscal 2023 consists primarily of the U.S. and foreign tax expense, including withholding tax, an increase in tax expense relating to stock-based compensation, final U.S. foreign tax credit regulations enacted in fiscal 2023, offset by the benefit from the Canada valuation allowance release and a U.S. foreign derived intangible income benefit driven by capitalization of research and development expenditures starting in fiscal 2023 as required by the Tax Act.
Tax expense for fiscal 2023 consisted primarily of the U.S. and foreign tax expense, including withholding tax, an increase in tax expense relating to stock-based compensation, final U.S. foreign tax credit regulations enacted in fiscal 2023, offset by the benefit from the Canada valuation allowance release and a U.S. foreign derived intangible income benefit driven by capitalization of research and development expenditures starting in fiscal 2023 as required by the Tax Act.
The extent of the impact of these risks on our business in fiscal 2024 and beyond will depend on several factors, some of which are out of our control.
The extent of the impact of these risks on our business in the remainder of fiscal 2024 and beyond will depend on several factors, some of which are out of our control.
As a result, earnings in foreign jurisdictions are generally available for distribution to the United States with little to no incremental U.S. taxes. We regularly review our capital structure and consider a variety of potential financing alternatives and planning strategies to ensure we have the proper liquidity available in the locations in which it is needed.
Earnings in foreign jurisdictions are generally available for distribution to the United States with little to no incremental U.S. taxes. We regularly review our capital structure and consider a variety of potential financing alternatives and planning strategies to ensure we have the proper liquidity available in the locations in which it is needed.
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.
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.
Significant judgment is required to estimate the amount and timing of future cash flows and the relative risk of achieving those cash flows. We also make judgments about the remaining useful lives of acquired intangible assets and other long-lived assets that have finite lives.
Significant judgment is required to estimate the amount and timing of future cash flows and the relative risk of achieving those cash flows. We also make judgments about the remaining useful lives of acquired intangible assets and other intangible assets that have finite lives.
Furthermore, on January 22, 2018, the FASB released guidance on the accounting for tax on the global intangible low-taxed income (“GILTI”) provisions of the TCJA. The GILTI provisions impose a tax on foreign income in excess of a deemed return on tangible assets of foreign corporations.
Furthermore, on January 22, 2018, the FASB released guidance on the accounting for tax on the global intangible low-taxed income (“GILTI”) provisions of the Tax Act. The GILTI provisions impose a tax on foreign income in excess of a deemed return on tangible assets of foreign corporations.
Our purchase orders are based on our current procurement or development needs and are fulfilled by our vendors within short time horizons. We do not have significant agreements for the purchase of supplies or other goods specifying minimum quantities or set prices that exceed our expected requirements for three months.
Our purchase orders are based on our current 65 Table of Contents procurement or development needs and are fulfilled by our vendors within short time horizons. We do not have significant agreements for the purchase of supplies or other goods specifying minimum quantities or set prices that exceed our expected requirements for three months.
Our distributor and reseller network is extensive and provides our customers with the resources to purchase, deploy, learn, and support our solutions quickly and easily. We have a significant number of registered third-party developers who create products that work well with our solutions and extend them for a variety of specialized applications.
Our distributor, reseller and Solution Provider network is extensive and provides our customers with the resources to purchase, deploy, learn, and support our solutions quickly and easily. We have a significant number of registered third-party developers who create products that work well with our solutions and extend them to a variety of specialized applications.
CONTRACTUAL OBLIGATIONS The following table summarizes our significant financial contractual obligations at January 31, 2023, and the effect such obligations are expected to have on our liquidity and cash flows in future periods.
CONTRACTUAL OBLIGATIONS The following table summarizes our significant financial contractual obligations at January 31, 2024, and the effect such obligations are expected to have on our liquidity and cash flows in future periods.
In connection with these facility leases, we recognize costs related to the impairment or abandonment of operating lease right-of-use assets, computer equipment, furniture, and leasehold improvements, and other costs. We exclude these charges because these expenses are not reflective of ongoing business and operating results.
In 62 Table of Contents connection with these facility leases, we recognize costs related to the impairment or abandonment of operating lease right-of-use assets, computer equipment, furniture, and leasehold improvements, and other costs. We exclude these charges because these expenses are not reflective of ongoing business and operating results.
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.
In addition to the competitive advantages afforded by our technology, our large global network of distributors, resellers, Solution Providers, third-party developers, customers, educators, educational institutions, learning partners, and students is a key competitive advantage that 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.
Under this method, deferred tax assets, including those related to tax loss carryforwards and credits, and deferred tax liabilities are determined based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.
Under this method, deferred tax assets, including those related to tax loss carryforwards and credits, and deferred tax liabilities are determined based on the 46 Table of Contents differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.
Changes in the value of the U.S. dollar may have a significant effect on net revenue, total spend, and income from operations in future periods.
Changes in the value of the U.S. dollar may have a significant effect on net revenue, total spend, income from operations, and cash flow in future periods.
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.
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.
See Part II, Item 8, Note 12, “Stock Repurchase Program,” in the Notes to Consolidated Financial Statements for further discussion. 62 Table of Contents
See Part II, Item 8, Note 12, “Stock Repurchase Program,” in the Notes to Consolidated Financial Statements for further discussion. 66 Table of Contents
Credit-related impairment is recognized as an allowance on the Consolidated Balance Sheets with a corresponding adjustment to “Interest and other expense, net” on the Company’s Consolidated Statements of Operations. Any impairment that is not credit-related is recognized in “Accumulated other comprehensive loss” on the Consolidated Balance Sheets.
Credit-related impairment is recognized as an allowance on the Consolidated Balance Sheets with a corresponding adjustment to “Interest and 45 Table of Contents other expense, net” on the Company’s Consolidated Statements of Operations. Any impairment that is not credit-related is recognized in “Accumulated other comprehensive loss” on the Consolidated Balance Sheets.
Remaining Performance Obligations RPO represents deferred revenue and contractually stated or committed orders under early renewal and multi-year billing plans for subscription, services, license, and maintenance for which the associated deferred revenue has not yet been recognized. Unbilled deferred revenue is not included as a receivable or deferred revenue on our Consolidated Balance Sheets.
Remaining Performance Obligations RPO represents deferred revenue and contractually stated or committed orders under early renewal and multi-year billing plans for subscription, services, license, and maintenance for which the associated deferred revenue has not yet been 48 Table of Contents recognized. Unbilled deferred revenue is not included as a receivable or deferred revenue on our Consolidated Balance Sheets.
We have retained a valuation allowance against California and Michigan deferred tax assets as well as deferred tax assets that will convert into a capital loss upon reversal as we do not have sufficient income of the appropriate character to benefit these deferred tax assets.
We continue to retain a valuation allowance against California and Michigan deferred tax assets, as well as deferred tax assets that will convert into a capital loss upon reversal as we do not have sufficient income of the appropriate character to benefit these deferred tax assets.
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.
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 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 58 Table of Contents should be recorded against deferred tax assets.
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.
For example, we have established the Autodesk Platform Services 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.
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.
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.
Any residual purchase price is recorded as goodwill. Accounting for business combinations requires us to make significant estimates and assumptions, especially at the acquisition date with respect to intangible assets and deferred revenue obligations.
Any residual purchase price is recorded as goodwill. Accounting for business combinations requires us to make significant estimates and assumptions, especially at the acquisition date with respect to intangible 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, 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 Portugal, New Zealand, California, Massachusetts, Michigan, Australia capital loss and U.S. capital loss deferred tax assets will be realized.
Impact at Autodesk Autodesk is committed to advancing a more sustainable, resilient, and equitable world. We don’t believe in waiting for progress, we believe in making it. We take action as a business and to support our employees, customers, and communities in our collective opportunity to design and make a better world for all.
Impact at Autodesk 43 Table of Contents Autodesk is committed to advancing a more sustainable, resilient, and equitable world. We don’t believe in waiting for progress, we believe in making it. We take action as a business and support our employees, customers, and communities in our collective opportunity to design and make a better world for all.
If impairment indicators were present based on our undiscounted cash flow models, which include assumptions regarding projected cash flows, we would perform a discounted cash flow analysis to assess impairments on long-lived assets.
If impairment indicators were present based on our undiscounted cash flow models, which include assumptions regarding projected cash flows, we would perform a discounted cash flow analysis to assess impairments on intangible assets.
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.
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.
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.
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 9 1 4 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.
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.
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.
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.
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 Portugal, New Zealand, California, Massachusetts, Michigan and Australia capital loss and U.S. capital loss deferred tax assets will be realized.
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.
Unfavorable economic conditions, including 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, has had and may continue to have an adverse effect on our business in those countries and our overall financial performance.
Realizability of Long-Lived Assets. We assess the realizability of our long-lived assets and related intangible assets, other than goodwill, quarterly, or sooner should events or changes in circumstances indicate the carrying values of such assets may not be recoverable.
Realizability of Intangible Assets. We assess the realizability of our intangible assets, other than goodwill, quarterly, or sooner should events or changes in circumstances indicate the carrying values of such assets may not be recoverable.
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.
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, 2024, Autodesk had no outstanding borrowings under the Credit Agreement. Additionally, as of June 10, 2024, we have no amounts outstanding under the Credit Agreement.
Net cash used in investing activities was $143 million for fiscal 2023 and was primarily due to purchases of marketable securities and business combinations, net of cash acquired, partially offset by sales and maturities of marketable securities.
Net cash used in investing activities was $502 million for fiscal 2024 and was primarily due to purchases of marketable securities partially offset by sales and maturities of marketable securities. 64 Table of Contents Net cash used in investing activities was $143 million for fiscal 2023 and was primarily due to purchases of marketable securities and business combinations, net of cash acquired, partially offset by sales and maturities of marketable securities.
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 following table shows the impact of foreign exchange rate changes on our net revenue and total spend: Fiscal Year Ended January 31, 2024 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 10 % 13 % Negative Total spend 9 % 10 % Positive ________________ (1) Please refer to the “Glossary of Terms” in Part I, Item 1, “Business” for the definitions of our constant currency growth rates.
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).
Total (1) $ 4,021 $ 375 $ 918 $ 976 $ 1,752 ____________________ (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).
Further discussion of the drivers of these results are discussed below under the heading “Results of Operations.” We rely significantly upon major distributors and resellers in both the United States and international regions, including Tech Data Corporation and its global affiliates (collectively, “Tech Data”) and Ingram Micro Inc. (“Ingram Micro”).
Further discussion of the drivers of these results are discussed below under the heading “Results of Operations.” We rely significantly upon major distributors and resellers in both the United States and international regions, including TD Synnex Corporation and its global affiliates (collectively, “TD Synnex”) and Ingram Micro Inc. (“Ingram Micro”).
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.
The Company has elected to recognize any potential GILTI obligations as an expense in the period it is incurred. Income tax expense was $230 million and $123 million for fiscal 2024 and 2023, relative to pre-tax income of $1,136 million and $946 million, respectively, for the same periods.
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. 46 Table of Contents 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 (1): Subscription $ 4,651 $ 591 15 % $ 4,060 Increase due to growth in the subscriber base across subscription types, led by subscription renewal revenue with current-year subscription renewals reflecting new subscriptions sold in prior periods.
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. 50 Table of Contents Fiscal Year Ended January 31, 2024 Change compared to prior fiscal year Fiscal Year Ended January 31, 2023 Management Comments (in millions, except percentages) $ % Net revenue: Subscription $ 5,116 $ 465 10 % $ 4,651 Increase due to growth in the subscriber base across subscription types, led by subscription renewal revenue with current-year subscription renewals reflecting new subscriptions sold in prior periods.
The following table outlines our recurring revenue metric for the fiscal years ended January 31, 2023, 2022, and 2021: Fiscal Year Ended January 31, 2023 Change compared to prior fiscal year end Fiscal Year Ended January 31, 2022 Change compared to prior fiscal year end Fiscal Year Ended January 31, 2021 $ % $ % Recurring Revenue (in millions) (1) (2) $ 4,907 $ 612 14 % $ 4,295 $ 564 15 % $ 3,731 As a percentage of net revenue 98 % N/A N/A 98 % N/A N/A 98 % ________________ (1) The acquisition of a business may cause variability in the comparison of recurring revenue in this table above and recurring revenue derived from the revenue reported in the Consolidated Statements of Operations.
The following table outlines our recurring revenue metric for the fiscal years ended January 31, 2024, 2023, and 2022: Fiscal Year Ended January 31, 2024 Change compared to prior fiscal year end Fiscal Year Ended January 31, 2023 Change compared to prior fiscal year end Fiscal Year Ended January 31, 2022 $ % $ % Recurring Revenue (in millions) (1) $ 5,377 $ 470 10 % $ 4,907 $ 612 14 % $ 4,295 As a percentage of net revenue 98 % N/A N/A 98 % N/A N/A 98 % ________________ (1) The acquisition of a business may cause variability in the comparison of recurring revenue in this table above and recurring revenue derived from the revenue reported in the Consolidated Statements of Operations.
However, supply chain disruption and resulting inflationary pressures, higher interest rates, a global labor shortage, the ebb and flow of COVID-19, including in specific geographies, the war in Ukraine, and foreign exchange rate fluctuations, may impact our outlook. We also expect our transition to annual billings for multi-year contracts to impact the timing of our billings and cash collections.
However, material scarcity, supply chain disruption and resulting inflationary pressures, higher interest rates, a global labor shortage, the war in Ukraine, and foreign exchange rate fluctuations, may impact our outlook. We also expect our transition to annual billings for multi-year contracts to impact the timing of our billings and cash collections.
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.
See Part II, Item 8, Note 7, “Deferred Compensation,” in our Notes to Consolidated Financial Statements for further information regarding this plan. Pension obligations 44 4 8 8 24 Pension obligations relate to our obligations for pension plans outside of the United States.
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.
See Part II, Item 8, Note 8, “Borrowing Arrangements,” in the Notes to Consolidated Financial Statements for further discussion. Operating leases 373 76 132 88 77 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.
Also contributing to the growth was an increase in revenue from EBA offerings.
Also contributing to the growth was an increase in revenue from EBA offerings and Cloud Service Offerings.
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.
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 transform industries and help shape a better world for all. Additional information about our environmental, social, and governance program is available in our annual impact report on our website at www.autodesk.com.
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.
NR3 was within the range of 100% and 110%, on a constant currency basis, as of both January 31, 2024 and 2023. Foreign Currency Analysis We generate a significant amount of our revenue in the United States, Japan, Germany, the United Kingdom, and Canada.
Autodesk is currently assessing the impact the Inflation Reduction Act will have on our consolidated financial statements. 55 Table of Contents OTHER FINANCIAL INFORMATION In addition to our results determined under U.S. generally accepted accounting principles (“GAAP”) discussed above, we believe the following non-GAAP measures are useful to investors in evaluating our operating performance.
We continue to monitor the impact the Inflation Reduction Act on our consolidated financial statements. 59 Table of Contents OTHER FINANCIAL INFORMATION In addition to our results determined under U.S. generally accepted accounting principles (“GAAP”) discussed above, we believe the following non-GAAP measures are useful to investors in evaluating our operating performance.
Fiscal Year Ended January 31, 2023 Change compared to prior fiscal year Fiscal Year Ended January 31, 2022 Management Comments (In millions, except percentages) $ % Cost of revenue: Subscription and maintenance $ 343 $ 44 15 % $ 299 Increase primarily due to cloud hosting costs, employee-related costs, including stock-based compensation expense, driven by higher headcount, and increase in travel and entertainment expense.
Total operating expenses $ 3,858 $ 322 9 % $ 3,536 56 Table of Contents Fiscal Year Ended January 31, 2023 Change compared to prior fiscal year Fiscal Year Ended January 31, 2022 Management comments (In millions, except percentages) $ % Cost of revenue: Subscription and maintenance $ 343 $ 44 15 % $ 299 Increase primarily due to cloud hosting costs, employee-related costs, including stock-based compensation expense, driven by higher headcount, and increase in travel and entertainment expense.
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.
Other 289 39 16 % 250 Total Net Revenue $ 5,005 $ 619 14 % $ 4,386 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.
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 product family: AEC (1) $ 2,278 $ 309 16 % $ 1,969 Increase due to growth in revenue from AEC Collections, EBAs, Revit, and Autodesk Build.
Other 97 26 37 % 71 $ 5,497 $ 492 10 % $ 5,005 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 product family: AEC $ 2,278 $ 309 16 % $ 1,969 Increase due to growth in revenue from AEC Collections, EBAs, Revit, and Autodesk Build.
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.
Our cloud offerings, for example, Autodesk Construction Cloud, Autodesk Build, Fusion, Flow Production Tracking, 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.
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.
For the fiscal years ended January 31, 2024, 2023, and 2022, 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, 2024 2023 2022 (Unaudited) Gross profit $ 4,986 $ 4,525 $ 3,968 Non-GAAP gross profit $ 5,080 $ 4,624 $ 4,054 Income from operations $ 1,128 $ 989 $ 618 Non-GAAP income from operations $ 1,962 $ 1,785 $ 1,397 Operating margin 21 % 20 % 14 % Non-GAAP operating margin 36 % 36 % 32 % Net income $ 906 $ 823 $ 497 Non-GAAP net income $ 1,642 $ 1,445 $ 1,126 Diluted net income per share $ 4.19 $ 3.78 $ 2.24 Non-GAAP diluted net income per share $ 7.60 $ 6.63 $ 5.07 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.
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.
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 100 10 18 18 54 Deferred compensation obligations relate to amounts held in a rabbi trust under our non-qualified deferred compensation plan.
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.
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 donations to nonprofit organizations; and to support organizations using design and make solutions to drive positive social and environmental impact.
Our customers through Tech Data and Ingram Micro are the resellers and end users who purchase our software subscriptions and services. We entered into transition agreements with each of our distributors Tech Data and Ingram Micro to provide transition distribution activities for a one-to-two-year period, with potential extensions.
Our customers through TD Synnex and Ingram Micro are the resellers and end users who purchase our software subscriptions and services. During fiscal 2023, we entered into transition agreements with certain of our distributors, including TD Synnex and Ingram Micro, to provide transition distribution activities for a one-to-two-year period, with potential extensions.
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.
Purchase obligations 844 215 340 278 11 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.
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.
Amortization of purchased intangibles 40 — — % 40 Total operating expenses $ 3,536 $ 186 6 % $ 3,350 The following table highlights our expectation for the absolute dollar change and percent of revenue change for fiscal 2025 as compared to fiscal 2024: 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 Decrease Flat Amortization of purchased intangibles Decrease Flat 57 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, 2024 2023 2022 (in millions) Interest and investment income (expense), net $ 26 $ (71) $ (65) Gain on foreign currency 10 15 1 (Loss) gain on strategic investments (32) 1 3 Other income 4 12 8 Interest and other income (expense), net $ 8 $ (43) $ (53) Interest and other income (expense), net, positively changed by $51 million during fiscal 2024, as compared to fiscal 2023.
(in millions) Total Fiscal year 2024 Fiscal years 2025-2026 Fiscal years 2027-2028 Thereafter Management Comments Notes payable $ 2,720 $ 69 $ 430 $ 601 $ 1,620 Notes payable consist of the notes issued in June 2015, June 2017, January 2020, and October 2021 including interest.
(in millions) Total Fiscal year 2025 Fiscal years 2026-2027 Fiscal years 2028-2029 Thereafter Management Comments Notes payable $ 2,651 $ 69 $ 416 $ 583 $ 1,583 Notes payable consist of the notes issued in June 2015, June 2017, January 2020, and October 2021 including interest.
Net cash provided by operating activities of $1,531 million for fiscal 2022, primarily consisted of $497 million of our net income adjusted for $817 million non-cash items such as stock-based compensation expense, depreciation, amortization, and accretion expense, lease-related asset impairment charges, and deferred income tax.
Net cash provided by operating activities of $2,071 million for fiscal 2023, primarily consisted of $823 million of our net income adjusted for $556 million non-cash items such as stock-based compensation expense, depreciation, amortization, and accretion expense, lease-related asset impairment charges, and deferred income tax.
In connection with the transition agreements, Autodesk intends to increase our selling efforts with value-added resellers and agents.
In connection with the transition agreements, Autodesk intends to increase its selling efforts with value-added resellers and Solution Providers.
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.
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, 2024, 2023, and 2022. We anticipate that our channel mix will continue to change as we scale our business.
Acquisitions often increase the speed at which we can deliver product functionality to our customers; however, they entail cost and integration challenges and may, in certain instances, negatively impact our operating margins. We continually review these factors in making decisions regarding acquisitions. We anticipate that we will continue to acquire products, technology, and businesses as compelling opportunities become available.
Acquisitions often increase the speed at which we can deliver product functionality to our customers; however, they entail cost and integration challenges and may, in certain instances, negatively impact our operating margins. We continually review these factors in making decisions regarding acquisitions.
As of January 31, 2023, we had $223 million of gross unrecognized tax benefits, of which $38 million would reduce our valuation allowance, if recognized. The remaining $185 million would impact the effective tax rate. The amount of unrecognized tax benefits will decrease in the next twelve months for statute lapse of approximately $4 million.
As of January 31, 2024, we had $261 million of gross unrecognized tax benefits, of which $43 million would reduce our valuation allowance, if recognized. The remaining $218 million would impact the effective tax rate. The amount of unrecognized tax benefits will decrease in the next twelve months for statute lapse is nil.
Fiscal year ended January 31, (in millions) 2023 2022 2021 Net cash provided by operating activities $ 2,071 $ 1,531 $ 1,437 Net cash used in investing activities (143) (1,595) (404) Net cash used in financing activities (1,487) (169) (1,047) Net cash provided by operating activities of $2,071 million for fiscal 2023, primarily consisted of $823 million of our net income adjusted for $556 million non-cash items such as stock-based compensation expense, depreciation, amortization, and accretion expense, lease-related asset impairment charges, and deferred income tax.
Fiscal year ended January 31, (in millions) 2024 2023 2022 Net cash provided by operating activities $ 1,313 $ 2,071 $ 1,531 Net cash used in investing activities (502) (143) (1,595) Net cash used in financing activities (852) (1,487) (169) Net cash provided by operating activities of $1,313 million for fiscal 2024, primarily consisted of $906 million of our net income adjusted for $718 million non-cash items such as stock-based compensation expense, depreciation, amortization, and accretion expense, and deferred income tax.
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.
As of January 31, 2024, we had $2.30 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.
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.
Other 327 38 13 % 289 Total Net Revenue $ 5,497 $ 492 10 % $ 5,005 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: Design $ 4,264 $ 492 13 % $ 3,772 Increase due to growth in AEC & MFG collections, EBA offerings, AutoCAD LT and AutoCAD Family.
Signed into law on August 16, 2022, the Inflation Reduction Act contains many revisions to the Internal Revenue Code effective in taxable years beginning after December 31, 2022, including a 15% corporate minimum income tax and a 1% excise tax on corporate stock repurchases by publicly traded U.S. corporations.
Signed into law on August 16, 2022, the Inflation Reduction Act contains many revisions to the Internal Revenue Code effective in taxable years beginning after December 31, 2022, including a 15% corporate alternative minimum tax.
In these instances, we use relevant information such as the sales channel to determine the SSP. Strategic Investments. Strategic investment debt and equity securities are valued using significant unobservable inputs or data in an inactive market and the valuation requires our judgment due to the absence of market prices and inherent lack of liquidity.
Strategic investment debt and equity securities are valued using significant unobservable inputs or data in an inactive market and the valuation requires our judgment due to the absence of market prices and inherent lack of liquidity.
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.
See Part II, Item 8, Note 17, “Subsequent Events,” in the Notes to Consolidated Financial Statements for further discussion. 63 Table of Contents 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.
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.
OVERVIEW OF FISCAL 2024 • Total net revenue was $5.50 billion during fiscal 2024, an increase of 10% compared to the prior fiscal year. • Recurring revenue as a percentage of net revenue was 98% for both fiscal years ending January 31, 2024 and 2023. • Net revenue retention rate (“NR3”) was within the range of 100% and 110%, on a constant currency basis, as of both January 31, 2024 and 2023. • Deferred revenue was $4.26 billion, a decrease of 7% compared to the prior fiscal year. • Remaining performance obligations (short-term and long-term deferred revenue plus unbilled deferred revenue) (“RPO”) was $6.11 billion, an increase of 9% compared to the fourth quarter in the prior fiscal year. • Current remaining performance obligations were $3.98 billion, an increase of 13% compared to the prior fiscal year.
We equip and inspire our users with the tailored tools, services, and access they need for success today and tomorrow. At every step, we help users harness the power of data to build upon their ideas and explore new ways of imagining, collaborating, and creating to achieve better outcomes for their customers, for society, and for the world.
At every step, we help users harness the power of data to build upon their ideas and explore new ways of imagining, collaborating, and creating to achieve better outcomes for their customers, for society, and for the world.

… 101 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+0 added−0 removed6 unchanged
Biggest changeOur 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.
Biggest changeOur 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, 2024 January 31, 2023 Notional Amount Fair Value Notional Amount Fair Value Forward Contracts: Purchased $ 1,430 $ (5) $ 711 $ 13 Sold 1,789 11 1,755 (11) Option Contracts: Purchased 1,048 8 904 5 Sold 1,118 (8) 974 (23) We use foreign currency contracts to reduce the exchange rate impact on the net revenue and operating expenses of certain anticipated transactions.
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
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." 67 Table of Contents
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 hypothetical 10% depreciation of the dollar from its value at January 31, 2024 and 2023, would decrease the fair value of our foreign currency contracts by $99 million and $191 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, 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.
A sensitivity analysis performed on our hedging portfolio as of January 31, 2024, indicated that a hypothetical 10% appreciation of the U.S. dollar from its value at January 31, 2024 and 2023, would increase the fair value of our foreign currency contracts by $121 million and $149 million, respectively.
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.
As of January 31, 2024 and 2023, 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, British pounds, Japanese yen, Canadian dollars, Australian dollars, Norwegian krone, Singapore dollars, Indian rupees, and Swiss francs.
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.
At January 31, 2024, we had $1.71 billion of cash equivalents and marketable securities, including $354 million classified as short-term marketable securities and $234 million classified as long-term marketable securities.

Other ADSK 10-K year-over-year comparisons