Autodesk delivered significant operating leverage in its fiscal second quarter of 2027, with revenue rising at a double-digit rate while operating income grew more than twice as fast.
Quarterly revenue reached $2.046 billion, increasing 16% year-over-year and 14% in constant currency.
GAAP operating income increased approximately 35% to $599 million from $444 million.
That faster profit growth pushed GAAP operating margin to 29%, up about 400 basis points from the prior-year period.
Non-GAAP operating margin also improved, expanding approximately two percentage points to 41%.
The combination of revenue growth and margin expansion demonstrates Autodesk’s increasing operating leverage as its subscription-oriented software platform scales.
GAAP diluted EPS increased to $2.33 from $1.46.
Non-GAAP diluted EPS reached $3.30.
Cash generation also strengthened.
Operating cash flow rose 25% to $575 million, outpacing revenue growth.
Free cash flow increased 24% to $561 million.
The ability to generate more than half a billion dollars of quarterly free cash flow gives Autodesk substantial flexibility for reinvestment, acquisitions, capital returns and other strategic priorities.
Growth was broad across Autodesk’s portfolio.
Design revenue increased 16% to $1.708 billion.
Make revenue grew even faster, increasing 26% to $244 million.
Within the company’s major product families, Architecture, Engineering, Construction and Operations revenue increased 17% to $1.029 billion.
Manufacturing revenue increased 15%.
AutoCAD and AutoCAD LT revenue increased 14%, while Media and Entertainment revenue rose 15%.
The broad-based increases are important because they reduce dependence on a single product or end market.
Autodesk serves customers across architecture, construction, manufacturing, engineering, media and other design-intensive industries.
Growing revenue across several of those categories creates opportunities to expand customer relationships and increase the value of Autodesk’s platform.
Forward contracted revenue also increased.
Current remaining performance obligations rose 12% to $5.245 billion.
Autodesk noted that total RPO growth has been affected by its decision to reduce discounts for multi-year contracts.
That strategy can temporarily weigh on unbilled deferred revenue because customers have less incentive to sign heavily discounted longer-duration commitments, but management expects improved price realization over time.
Management raised its fiscal 2027 revenue and billings guidance following the quarter.
Full-year revenue is now expected between $8.295 billion and $8.345 billion.
Free cash flow is projected between $2.725 billion and $2.75 billion.
Autodesk is also positioning artificial intelligence as a way to increase the value of its data and software ecosystem.
Management views AI as a mechanism for converting connected project data and context into more actionable intelligence, potentially helping customers deal with labor constraints and improve productivity.
The most compelling financial aspect of the quarter, however, remains Autodesk’s earnings leverage.
A 16% increase in revenue produced approximately 35% operating-income growth, a 400-basis-point GAAP operating-margin expansion and 24% free-cash-flow growth.
KEY QUOTE:
“AI turns connected data and context into actionable project intelligence that can ease endemic capacity constraints, raise the bar on what’s possible in the physical world, and help our customers do more with scarce resources.”
Andrew Anagnost, Chief Executive Officer of Autodesk
