Autodesk (ADSK) Stock Slides 4% After Fiscal 2027 Earnings Outlook Disappoints

Key Takeaways

• Second quarter adjusted earnings per share reached $3.30, surpassing analyst expectations of $3.12
• Quarterly revenue climbed 16% to $2.05 billion, exceeding the projected $2.01 billion
• Fiscal year 2027 adjusted EPS guidance center point of $12.56 fell short of the $12.60 Wall Street estimate
• Shares declined over 4% during premarket sessions following the guidance announcement
• Guggenheim analysts increased their price objective to $283 from $277 while maintaining their Buy recommendation

---

The design software giant delivered impressive second-quarter results, yet investors remained concerned about future prospects. Shares tumbled more than 4% during Friday’s premarket session after the company issued fiscal 2027 projections that disappointed Wall Street.

Autodesk, Inc., ADSK

The technology firm announced second-quarter adjusted earnings of $3.30 per share compared to the Street’s expectation of $3.12. Quarterly sales reached $2.05 billion, marking a 16% increase from the prior year and surpassing the anticipated $2.01 billion.

Subscription revenue growth registered at 17%, outperforming analysts’ projections of 14.5%. Both contract renewal percentages and customer purchasing patterns throughout the quarter exceeded forecasts.

However, challenges emerged in certain metrics. Growth in current remaining performance obligations decelerated to 12% during Q2, a notable decline from the 18% to 20% range seen in previous quarters. The slowdown stems from the company’s decision to eliminate multi-year contract discounts, prompting customers to opt for shorter annual agreements instead. Management anticipates this headwind will persist for multiple quarters ahead.

Free cash flow generation improved 24% to $561 million. The adjusted operating margin widened by 2 percentage points to reach 41%. Total billings registered $1.85 billion, representing a 10% year-over-year increase.

Annual Forecast Falls Below Expectations

The company’s fiscal 2027 adjusted EPS guidance spanning $12.52 to $12.60 came in marginally below the analyst consensus of $12.60. The midpoint figure of $12.56 proved sufficient to trigger investor disappointment.

For the third quarter, Autodesk projected revenue between $2.125 billion and $2.140 billion with adjusted earnings per share ranging from $3.04 to $3.09.

Looking at the complete fiscal year, management anticipates billings of $8.575 billion to $8.650 billion alongside revenue of $8.295 billion to $8.345 billion. The annual revenue outlook increased by approximately $135 million at the midpoint, with around $60 million attributed to the recently completed MaintainX acquisition.

Bank of America characterized the quarter as showing “mixed 2Q27 results with conservatism into 2H27 guide,” while retaining its Buy rating and $300 price target. The firm emphasized that strong renewal metrics support sustainable growth at or exceeding current guidance levels.

Wall Street Raises Price Objectives Despite Decline

Guggenheim elevated its price target on the stock to $283 from $277 while preserving its Buy rating. The analysts observed that Q2 revenue and billings exceeded consensus forecasts by approximately 1.7% and 2%, respectively. Both free cash flow and non-GAAP earnings also surpassed estimates.

UBS demonstrated even greater confidence, boosting its price target to $325 from $290 while also maintaining a Buy rating. UBS emphasized the company’s low-teens organic growth trajectory, highlighting a 12% expansion in both revenue and billings on a constant currency basis.

Breaking down performance by business segment, Design revenue advanced 16% to $1.71 billion. Make revenue surged 26% to $244 million. The AECO product family generated $1.03 billion, up 17%, while AutoCAD revenue reached $500 million, increasing 14%.

CFO Janesh Moorjani stated the sales organization restructuring is “proceeding as expected” and noted that the elevated billings and revenue guidance reflects stronger underlying growth expectations combined with the MaintainX contribution.

Autodesk shares were trading at $270.58 with a market capitalization of $57.13 billion according to the latest available data.

The post Autodesk (ADSK) Stock Slides 4% After Fiscal 2027 Earnings Outlook Disappoints appeared first on Blockonomi.

Source: https://blockonomi.com/autodesk-adsk-stock-slides-4-after-fiscal-2027-earnings-outlook-disappoints/