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x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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94-2819853
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. employer
Identification No.)
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111 McInnis Parkway,
San Rafael, California
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94903
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
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x
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Accelerated filer
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¨
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Non-accelerated filer
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¨
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Smaller reporting company
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¨
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Emerging growth company
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¨
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Page No.
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Item 1.
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Unaudited
Financial Statements:
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Item 2.
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Item 3.
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Item 4.
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||
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Item 1.
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||
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Item 1A.
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||
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Item 2.
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||
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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ITEM 1.
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FINANCIAL STATEMENTS
|
|
Three Months Ended July 31,
|
|
Six Months Ended July 31,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net revenue:
|
|
|
|
|
|
|
|
||||||||
Maintenance
|
$
|
261.8
|
|
|
$
|
277.5
|
|
|
$
|
525.4
|
|
|
$
|
561.9
|
|
Subscription
|
196.1
|
|
|
101.8
|
|
|
369.5
|
|
|
187.3
|
|
||||
Total maintenance and subscription revenue
|
457.9
|
|
|
379.3
|
|
|
894.9
|
|
|
749.2
|
|
||||
License and other
|
43.9
|
|
|
171.4
|
|
|
92.6
|
|
|
313.4
|
|
||||
Total net revenue
|
501.8
|
|
|
550.7
|
|
|
987.5
|
|
|
1,062.6
|
|
||||
Cost of revenue:
|
|
|
|
|
|
|
|
||||||||
Cost of maintenance and subscription revenue
|
52.8
|
|
|
46.8
|
|
|
107.7
|
|
|
93.4
|
|
||||
Cost of license and other revenue
|
17.8
|
|
|
27.6
|
|
|
36.4
|
|
|
62.5
|
|
||||
Amortization of developed technology
|
4.0
|
|
|
10.7
|
|
|
8.7
|
|
|
21.6
|
|
||||
Total cost of revenue
|
74.6
|
|
|
85.1
|
|
|
152.8
|
|
|
177.5
|
|
||||
Gross profit
|
427.2
|
|
|
465.6
|
|
|
834.7
|
|
|
885.1
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Marketing and sales
|
257.6
|
|
|
243.1
|
|
|
513.3
|
|
|
483.9
|
|
||||
Research and development
|
193.8
|
|
|
193.0
|
|
|
381.5
|
|
|
386.5
|
|
||||
General and administrative
|
78.0
|
|
|
68.6
|
|
|
156.3
|
|
|
143.3
|
|
||||
Amortization of purchased intangibles
|
4.9
|
|
|
7.8
|
|
|
10.6
|
|
|
15.7
|
|
||||
Restructuring charges and other facility exit costs, net
|
0.5
|
|
|
16.0
|
|
|
0.2
|
|
|
68.3
|
|
||||
Total operating expenses
|
534.8
|
|
|
528.5
|
|
|
1,061.9
|
|
|
1,097.7
|
|
||||
Loss from operations
|
(107.6
|
)
|
|
(62.9
|
)
|
|
(227.2
|
)
|
|
(212.6
|
)
|
||||
Interest and other expense, net
|
(18.8
|
)
|
|
(10.1
|
)
|
|
(20.6
|
)
|
|
(13.7
|
)
|
||||
Loss before income taxes
|
(126.4
|
)
|
|
(73.0
|
)
|
|
(247.8
|
)
|
|
(226.3
|
)
|
||||
Provision for income taxes
|
(17.6
|
)
|
|
(25.2
|
)
|
|
(25.8
|
)
|
|
(39.6
|
)
|
||||
Net loss
|
$
|
(144.0
|
)
|
|
$
|
(98.2
|
)
|
|
$
|
(273.6
|
)
|
|
$
|
(265.9
|
)
|
Basic net loss per share
|
$
|
(0.66
|
)
|
|
$
|
(0.44
|
)
|
|
$
|
(1.25
|
)
|
|
$
|
(1.19
|
)
|
Diluted net loss per share
|
$
|
(0.66
|
)
|
|
$
|
(0.44
|
)
|
|
$
|
(1.25
|
)
|
|
$
|
(1.19
|
)
|
Weighted average shares used in computing basic net loss per share
|
219.5
|
|
|
223.2
|
|
|
219.7
|
|
|
223.8
|
|
||||
Weighted average shares used in computing diluted net loss per share
|
219.5
|
|
|
223.2
|
|
|
219.7
|
|
|
223.8
|
|
|
Three Months Ended July 31,
|
|
Six Months Ended July 31,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net loss
|
$
|
(144.0
|
)
|
|
$
|
(98.2
|
)
|
|
$
|
(273.6
|
)
|
|
$
|
(265.9
|
)
|
Other comprehensive income (loss), net of reclassifications:
|
|
|
|
|
|
|
|
||||||||
Net loss on derivative instruments (net of tax effect of $0.9, $1.1, $1.4 and ($0.8), respectively)
|
(11.6
|
)
|
|
(1.5
|
)
|
|
(13.0
|
)
|
|
(11.0
|
)
|
||||
Change in net unrealized (loss) gain on available-for-sale securities (net of tax effect of $0.4, ($0.1), $0.1, and ($0.6), respectively)
|
(0.5
|
)
|
|
1.1
|
|
|
0.2
|
|
|
3.4
|
|
||||
Change in defined benefit pension items (net of tax effect of $0.0, ($0.2), $0.0, and ($0.2), respectively)
|
0.3
|
|
|
—
|
|
|
(0.2
|
)
|
|
0.3
|
|
||||
Net change in cumulative foreign currency translation gain (loss) (net of tax effect of ($0.6), $0.0, ($0.9) and $0.0, respectively)
|
25.2
|
|
|
(7.9
|
)
|
|
38.6
|
|
|
(1.4
|
)
|
||||
Total other comprehensive income (loss)
|
13.4
|
|
|
(8.3
|
)
|
|
25.6
|
|
|
(8.7
|
)
|
||||
Total comprehensive loss
|
$
|
(130.6
|
)
|
|
$
|
(106.5
|
)
|
|
$
|
(248.0
|
)
|
|
$
|
(274.6
|
)
|
|
July 31, 2017
|
|
January 31, 2017
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
1,174.1
|
|
|
$
|
1,213.1
|
|
Marketable securities
|
533.6
|
|
|
686.8
|
|
||
Accounts receivable, net
|
265.6
|
|
|
452.3
|
|
||
Prepaid expenses and other current assets
|
110.0
|
|
|
108.4
|
|
||
Total current assets
|
2,083.3
|
|
|
2,460.6
|
|
||
Marketable securities
|
236.0
|
|
|
306.2
|
|
||
Computer equipment, software, furniture and leasehold improvements, net
|
153.0
|
|
|
158.6
|
|
||
Developed technologies, net
|
34.0
|
|
|
45.7
|
|
||
Goodwill
|
1,588.6
|
|
|
1,561.1
|
|
||
Deferred income taxes, net
|
66.2
|
|
|
63.9
|
|
||
Other assets
|
192.9
|
|
|
202.0
|
|
||
Total assets
|
$
|
4,354.0
|
|
|
$
|
4,798.1
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
93.0
|
|
|
$
|
93.5
|
|
Accrued compensation
|
161.7
|
|
|
238.2
|
|
||
Accrued income taxes
|
21.3
|
|
|
50.0
|
|
||
Deferred revenue
|
1,308.5
|
|
|
1,270.1
|
|
||
Current portion of long-term notes payable, net
|
—
|
|
|
398.7
|
|
||
Other accrued liabilities
|
117.2
|
|
|
134.9
|
|
||
Total current liabilities
|
1,701.7
|
|
|
2,185.4
|
|
||
Long-term deferred revenue
|
467.5
|
|
|
517.9
|
|
||
Long-term income taxes payable
|
33.2
|
|
|
39.3
|
|
||
Long-term deferred income taxes
|
100.9
|
|
|
91.5
|
|
||
Long-term notes payable, net
|
1,584.9
|
|
|
1,092.0
|
|
||
Other liabilities
|
150.3
|
|
|
138.4
|
|
||
Stockholders’ equity:
|
|
|
|
||||
Common stock and additional paid-in capital
|
1,934.8
|
|
|
1,876.3
|
|
||
Accumulated other comprehensive loss
|
(152.9
|
)
|
|
(178.5
|
)
|
||
Accumulated deficit
|
(1,466.4
|
)
|
|
(964.2
|
)
|
||
Total stockholders’ equity
|
315.5
|
|
|
733.6
|
|
||
Total liabilities and stockholders' equity
|
$
|
4,354.0
|
|
|
$
|
4,798.1
|
|
|
Six Months Ended July 31,
|
||||||
|
2017
|
|
2016
|
||||
Operating activities:
|
|
|
|
||||
Net loss
|
$
|
(273.6
|
)
|
|
$
|
(265.9
|
)
|
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
|
|
|
|
||||
Depreciation, amortization and accretion
|
56.8
|
|
|
70.4
|
|
||
Stock-based compensation expense
|
134.4
|
|
|
105.9
|
|
||
Deferred income taxes
|
5.8
|
|
|
(9.2
|
)
|
||
Restructuring charges and other facility exit costs, net
|
0.2
|
|
|
68.3
|
|
||
Other operating activities
|
7.7
|
|
|
(6.2
|
)
|
||
Changes in operating assets and liabilities, net of acquisitions:
|
|
|
|
|
|||
Accounts receivable
|
185.5
|
|
|
346.9
|
|
||
Prepaid expenses and other current assets
|
(2.4
|
)
|
|
(23.3
|
)
|
||
Accounts payable and accrued liabilities
|
(95.8
|
)
|
|
(44.6
|
)
|
||
Deferred revenue
|
(9.9
|
)
|
|
(1.4
|
)
|
||
Accrued income taxes
|
(36.0
|
)
|
|
(94.5
|
)
|
||
Net cash (used in) provided by operating activities
|
(27.3
|
)
|
|
146.4
|
|
||
Investing activities:
|
|
|
|
||||
Purchases of marketable securities
|
(299.7
|
)
|
|
(810.9
|
)
|
||
Sales of marketable securities
|
110.8
|
|
|
354.7
|
|
||
Maturities of marketable securities
|
420.3
|
|
|
791.3
|
|
||
Capital expenditures
|
(26.4
|
)
|
|
(42.6
|
)
|
||
Acquisitions, net of cash acquired
|
—
|
|
|
(85.2
|
)
|
||
Other investing activities
|
(4.3
|
)
|
|
(6.7
|
)
|
||
Net cash provided by investing activities
|
200.7
|
|
|
200.6
|
|
||
Financing activities:
|
|
|
|
||||
Proceeds from issuance of common stock, net of issuance costs
|
55.9
|
|
|
54.2
|
|
||
Taxes paid related to net share settlement of equity awards
|
(49.8
|
)
|
|
(19.9
|
)
|
||
Repurchases of common stock
|
(315.2
|
)
|
|
(270.0
|
)
|
||
Proceeds from debt, net of discount
|
496.9
|
|
|
—
|
|
||
Repayment of debt
|
(400.0
|
)
|
|
—
|
|
||
Other financing activities
|
(5.8
|
)
|
|
—
|
|
||
Net cash used in financing activities
|
(218.0
|
)
|
|
(235.7
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
5.6
|
|
|
3.0
|
|
||
Net (decrease) increase in cash and cash equivalents
|
(39.0
|
)
|
|
114.3
|
|
||
Cash and cash equivalents at beginning of period
|
1,213.1
|
|
|
1,353.0
|
|
||
Cash and cash equivalents at end of period
|
$
|
1,174.1
|
|
|
$
|
1,467.3
|
|
|
Three Months Ended July 31, 2016
|
|
Six Months Ended July 31, 2016
|
||||||||||||||||||||
|
Previously Reported
|
|
Change in Presentation Reclassification
|
|
Current Presentation
|
|
Previously Reported
|
|
Change in Presentation Reclassification
|
|
Current Presentation
|
||||||||||||
Net revenue:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Maintenance (1)
|
N/A
|
|
$
|
277.5
|
|
|
$
|
277.5
|
|
|
N/A
|
|
$
|
561.9
|
|
|
$
|
561.9
|
|
||||
Subscription
|
$
|
322.0
|
|
|
(220.2
|
)
|
|
101.8
|
|
|
$
|
648.0
|
|
|
(460.7
|
)
|
|
187.3
|
|
||||
License and other
|
228.7
|
|
|
(57.3
|
)
|
|
171.4
|
|
|
414.6
|
|
|
(101.2
|
)
|
|
313.4
|
|
||||||
Total
|
$
|
550.7
|
|
|
$
|
—
|
|
|
$
|
550.7
|
|
|
$
|
1,062.6
|
|
|
$
|
—
|
|
|
$
|
1,062.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Maintenance and subscription (2)
|
$
|
38.2
|
|
|
$
|
8.6
|
|
|
$
|
46.8
|
|
|
$
|
78.0
|
|
|
$
|
15.4
|
|
|
$
|
93.4
|
|
License and other
|
46.9
|
|
|
(19.3
|
)
|
|
27.6
|
|
|
99.5
|
|
|
(37.0
|
)
|
|
62.5
|
|
||||||
Amortization of developed technology (1)
|
N/A
|
|
10.7
|
|
|
10.7
|
|
N/A
|
|
21.6
|
|
|
21.6
|
||||||||||
Total
|
$
|
85.1
|
|
|
$
|
—
|
|
|
$
|
85.1
|
|
|
$
|
177.5
|
|
|
$
|
—
|
|
|
$
|
177.5
|
|
(1)
|
These lines were not previously reported in the Condensed Consolidated Statement of Operations.
|
(2)
|
Previously, titled "Subscription."
|
|
|
|
July 31, 2017
|
||||||||||||||||||||||||||
|
|
|
Amortized Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Fair Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||||
Cash equivalents (1):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Agency bonds
|
$
|
7.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7.0
|
|
|
$
|
7.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Certificates of deposit
|
61.3
|
|
|
—
|
|
|
—
|
|
|
61.3
|
|
|
61.3
|
|
|
—
|
|
|
—
|
|
||||||||
|
Corporate debt securities
|
23.0
|
|
|
—
|
|
|
—
|
|
|
23.0
|
|
|
23.0
|
|
|
—
|
|
|
—
|
|
||||||||
|
Commercial paper
|
167.6
|
|
|
—
|
|
|
—
|
|
|
167.6
|
|
|
—
|
|
|
167.6
|
|
|
—
|
|
||||||||
|
Custody cash deposit
|
42.8
|
|
|
—
|
|
|
—
|
|
|
42.8
|
|
|
42.8
|
|
|
—
|
|
|
—
|
|
||||||||
|
Municipal bonds
|
15.0
|
|
|
—
|
|
|
—
|
|
|
15.0
|
|
|
15.0
|
|
|
—
|
|
|
—
|
|
||||||||
|
Money market funds
|
348.5
|
|
|
—
|
|
|
—
|
|
|
348.5
|
|
|
—
|
|
|
348.5
|
|
|
—
|
|
||||||||
|
Sovereign debt
|
5.0
|
|
|
—
|
|
|
—
|
|
|
5.0
|
|
|
—
|
|
|
5.0
|
|
|
—
|
|
||||||||
|
U.S. government securities
|
100.0
|
|
|
—
|
|
|
—
|
|
|
100.0
|
|
|
100.0
|
|
|
—
|
|
|
—
|
|
||||||||
Marketable securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Short-term available-for-sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
|
Agency bonds
|
7.5
|
|
|
—
|
|
|
—
|
|
|
7.5
|
|
|
7.5
|
|
|
—
|
|
|
—
|
|
|||||||
|
|
Asset backed securities
|
30.2
|
|
|
—
|
|
|
—
|
|
|
30.2
|
|
|
—
|
|
|
30.2
|
|
|
—
|
|
|||||||
|
|
Certificates of deposit
|
13.0
|
|
|
—
|
|
|
—
|
|
|
13.0
|
|
|
13.0
|
|
|
—
|
|
|
—
|
|
|||||||
|
|
Commercial paper
|
98.9
|
|
|
—
|
|
|
—
|
|
|
98.9
|
|
|
—
|
|
|
98.9
|
|
|
—
|
|
|||||||
|
|
Corporate debt securities
|
219.3
|
|
|
0.1
|
|
|
—
|
|
|
219.4
|
|
|
219.4
|
|
|
—
|
|
|
—
|
|
|||||||
|
|
Municipal bonds
|
36.7
|
|
|
0.1
|
|
|
—
|
|
|
36.8
|
|
|
36.8
|
|
|
—
|
|
|
—
|
|
|||||||
|
|
Sovereign debt
|
14.0
|
|
|
—
|
|
|
—
|
|
|
14.0
|
|
|
—
|
|
|
14.0
|
|
|
—
|
|
|||||||
|
|
U.S. government securities
|
59.4
|
|
|
—
|
|
|
—
|
|
|
59.4
|
|
|
59.4
|
|
|
—
|
|
|
—
|
|
|||||||
|
Short-term trading securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
|
Mutual funds
|
48.7
|
|
|
5.7
|
|
|
—
|
|
|
54.4
|
|
|
54.4
|
|
|
—
|
|
|
—
|
|
|||||||
|
Long-term available-for-sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
|
Agency bonds
|
7.5
|
|
|
—
|
|
|
—
|
|
|
7.5
|
|
|
7.5
|
|
|
—
|
|
|
—
|
|
|||||||
|
|
Asset backed securities
|
57.6
|
|
|
—
|
|
|
(0.1
|
)
|
|
57.5
|
|
|
—
|
|
|
57.5
|
|
|
—
|
|
|||||||
|
|
Corporate debt securities
|
126.3
|
|
|
0.3
|
|
|
—
|
|
|
126.6
|
|
|
126.6
|
|
|
—
|
|
|
—
|
|
|||||||
|
|
Municipal bonds
|
5.0
|
|
|
—
|
|
|
—
|
|
|
5.0
|
|
|
5.0
|
|
|
—
|
|
|
—
|
|
|||||||
|
|
Sovereign debt
|
1.6
|
|
|
—
|
|
|
—
|
|
|
1.6
|
|
|
—
|
|
|
1.6
|
|
|
—
|
|
|||||||
|
|
U.S. government securities
|
37.8
|
|
|
—
|
|
|
—
|
|
|
37.8
|
|
|
37.8
|
|
|
—
|
|
|
—
|
|
|||||||
Convertible debt securities (2)
|
10.7
|
|
|
3.4
|
|
|
(3.1
|
)
|
|
11.0
|
|
|
—
|
|
|
—
|
|
|
11.0
|
|
|||||||||
Derivative contract assets (3)
|
3.0
|
|
|
10.2
|
|
|
(2.2
|
)
|
|
11.0
|
|
|
—
|
|
|
9.0
|
|
|
2.0
|
|
|||||||||
Derivative contract liabilities (4)
|
—
|
|
|
—
|
|
|
(19.3
|
)
|
|
(19.3
|
)
|
|
—
|
|
|
(19.3
|
)
|
|
—
|
|
|||||||||
|
|
Total
|
$
|
1,547.4
|
|
|
$
|
19.8
|
|
|
$
|
(24.7
|
)
|
|
$
|
1,542.5
|
|
|
$
|
816.5
|
|
|
$
|
713.0
|
|
|
$
|
13.0
|
|
(1)
|
Included in “
Cash and cash equivalents
” in the accompanying Condensed Consolidated Balance Sheets.
|
(2)
|
Considered “available-for-sale” and included in “
Other assets
” in the accompanying Condensed Consolidated Balance Sheets.
|
(3)
|
Included in “
Prepaid expenses and other current assets
” or “
Other assets
” in the accompanying Condensed Consolidated Balance Sheets.
|
(4)
|
Included in “
Other accrued liabilities
” in the accompanying Condensed Consolidated Balance Sheets.
|
|
|
|
January 31, 2017
|
||||||||||||||||||||||||||
|
|
|
Amortized Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Fair Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||||
Cash equivalents (1):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Agency bonds
|
$
|
6.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6.0
|
|
|
$
|
6.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Certificates of deposit
|
63.1
|
|
|
—
|
|
|
—
|
|
|
63.1
|
|
|
63.1
|
|
|
—
|
|
|
—
|
|
||||||||
|
Commercial paper
|
207.4
|
|
|
—
|
|
|
—
|
|
|
207.4
|
|
|
—
|
|
|
207.4
|
|
|
—
|
|
||||||||
|
Corporate debt securities
|
40.2
|
|
|
—
|
|
|
—
|
|
|
40.2
|
|
|
40.2
|
|
|
—
|
|
|
—
|
|
||||||||
|
Custody cash deposit
|
3.2
|
|
|
—
|
|
|
—
|
|
|
3.2
|
|
|
3.2
|
|
|
—
|
|
|
—
|
|
||||||||
|
Money Market funds
|
256.5
|
|
|
—
|
|
|
—
|
|
|
256.5
|
|
|
—
|
|
|
256.5
|
|
|
—
|
|
||||||||
|
Municipal bonds
|
5.0
|
|
|
—
|
|
|
—
|
|
|
5.0
|
|
|
5.0
|
|
|
—
|
|
|
—
|
|
||||||||
|
Sovereign debt
|
15.0
|
|
|
—
|
|
|
—
|
|
|
15.0
|
|
|
—
|
|
|
15.0
|
|
|
—
|
|
||||||||
|
U.S. government securities
|
309.5
|
|
|
—
|
|
|
—
|
|
|
309.5
|
|
|
309.5
|
|
|
—
|
|
|
—
|
|
||||||||
Marketable securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Short-term available-for-sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
|
Agency bonds
|
13.2
|
|
|
—
|
|
|
|
|
13.2
|
|
|
13.2
|
|
|
—
|
|
|
—
|
|
||||||||
|
|
Asset backed securities
|
19.6
|
|
|
—
|
|
|
—
|
|
|
19.6
|
|
|
—
|
|
|
19.6
|
|
|
—
|
|
|||||||
|
|
Certificates of deposit
|
157.3
|
|
|
—
|
|
|
—
|
|
|
157.3
|
|
|
157.3
|
|
|
—
|
|
|
—
|
|
|||||||
|
|
Commercial paper
|
109.2
|
|
|
—
|
|
|
—
|
|
|
109.2
|
|
|
—
|
|
|
109.2
|
|
|
—
|
|
|||||||
|
|
Corporate debt securities
|
234.7
|
|
|
—
|
|
|
(0.2
|
)
|
|
234.5
|
|
|
234.5
|
|
|
—
|
|
|
—
|
|
|||||||
|
|
Municipal bonds
|
43.4
|
|
|
—
|
|
|
—
|
|
|
43.4
|
|
|
43.4
|
|
|
—
|
|
|
—
|
|
|||||||
|
|
Sovereign debt
|
30.0
|
|
|
—
|
|
|
—
|
|
|
30.0
|
|
|
—
|
|
|
30.0
|
|
|
—
|
|
|||||||
|
|
U.S. government securities
|
32.3
|
|
|
—
|
|
|
—
|
|
|
32.3
|
|
|
32.3
|
|
|
—
|
|
|
—
|
|
|||||||
|
Short-term trading securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
|
Mutual funds
|
44.8
|
|
|
2.5
|
|
|
—
|
|
|
47.3
|
|
|
47.3
|
|
|
—
|
|
|
—
|
|
|||||||
|
Long-term available-for-sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
|
Agency bonds
|
7.1
|
|
|
—
|
|
|
—
|
|
|
7.1
|
|
|
7.1
|
|
|
—
|
|
|
—
|
|
|||||||
|
|
Asset backed securities
|
65.8
|
|
|
0.1
|
|
|
—
|
|
|
65.9
|
|
|
—
|
|
|
65.9
|
|
|
—
|
|
|||||||
|
|
Corporate debt securities
|
172.1
|
|
|
0.1
|
|
|
(0.1
|
)
|
|
172.1
|
|
|
172.1
|
|
|
—
|
|
|
—
|
|
|||||||
|
|
Municipal bonds
|
10.7
|
|
|
—
|
|
|
—
|
|
|
10.7
|
|
|
10.7
|
|
|
—
|
|
|
—
|
|
|||||||
|
|
Sovereign debt
|
1.5
|
|
|
—
|
|
|
—
|
|
|
1.5
|
|
|
—
|
|
|
1.5
|
|
|
—
|
|
|||||||
|
|
U.S. government securities
|
48.8
|
|
|
0.1
|
|
|
—
|
|
|
48.9
|
|
|
48.9
|
|
|
—
|
|
|
—
|
|
|||||||
Convertible debt securities (2)
|
4.9
|
|
|
2.3
|
|
|
(1.6
|
)
|
|
5.6
|
|
|
—
|
|
|
—
|
|
|
5.6
|
|
|||||||||
Derivative contract assets (3)
|
2.2
|
|
|
12.3
|
|
|
(1.3
|
)
|
|
13.2
|
|
|
—
|
|
|
11.9
|
|
|
1.3
|
|
|||||||||
Derivative contract liabilities (4)
|
—
|
|
|
—
|
|
|
(10.4
|
)
|
|
(10.4
|
)
|
|
—
|
|
|
(10.4
|
)
|
|
—
|
|
|||||||||
|
|
Total
|
$
|
1,903.5
|
|
|
$
|
17.4
|
|
|
$
|
(13.6
|
)
|
|
$
|
1,907.3
|
|
|
$
|
1,193.8
|
|
|
$
|
706.6
|
|
|
$
|
6.9
|
|
(1)
|
Included in “
Cash and cash equivalents
” in the accompanying Condensed Consolidated Balance Sheets.
|
(2)
|
Considered “available-for-sale” and included in “
Other assets
” in the accompanying Condensed Consolidated Balance Sheets.
|
(3)
|
Included in “
Prepaid expenses and other current assets
,” “
Other assets
,” or “
Other accrued liabilities
” in the accompanying Condensed Consolidated Balance Sheets.
|
(4)
|
Included in “
Other accrued liabilities
” in the accompanying Condensed Consolidated Balance Sheets.
|
|
Fair Value Measurements Using
Significant Unobservable Inputs
|
|||||||||||
|
(Level 3)
|
|||||||||||
|
|
Derivative Contracts
|
|
Convertible Debt Securities
|
|
Total
|
||||||
Balances, January 31, 2017
|
|
$
|
1.3
|
|
|
$
|
5.6
|
|
|
$
|
6.9
|
|
Purchases
|
|
1.1
|
|
|
5.9
|
|
|
7.0
|
|
|||
Losses included in earnings
|
|
(0.4
|
)
|
|
—
|
|
|
(0.4
|
)
|
|||
Losses included in OCI
|
|
—
|
|
|
(0.5
|
)
|
|
(0.5
|
)
|
|||
Balances, July 31, 2017
|
|
$
|
2.0
|
|
|
$
|
11.0
|
|
|
$
|
13.0
|
|
|
July 31, 2017
|
||||||
|
Cost
|
|
Fair Value
|
||||
Due within 1 year
|
$
|
475.7
|
|
|
$
|
475.8
|
|
Due in 1 year through 5 years
|
243.3
|
|
|
244.0
|
|
||
Due in 5 years through 10 years
|
1.9
|
|
|
1.9
|
|
||
Due after 10 years
|
4.6
|
|
|
4.5
|
|
||
Total
|
$
|
725.5
|
|
|
$
|
726.2
|
|
|
Balance Sheet Location
|
|
Fair Value at
|
||||||
|
July 31, 2017
|
|
January 31, 2017
|
||||||
Derivative Assets
|
|
|
|
|
|
||||
Foreign currency contracts designated as cash flow hedges
|
Prepaid expenses and other current assets
|
|
$
|
8.1
|
|
|
$
|
10.1
|
|
Derivatives not designated as hedging instruments
|
Prepaid expenses and other current assets and Other assets
|
|
2.9
|
|
|
3.2
|
|
||
Total derivative assets
|
|
|
$
|
11.0
|
|
|
$
|
13.3
|
|
Derivative Liabilities
|
|
|
|
|
|
||||
Foreign currency contracts designated as cash flow hedges
|
Other accrued liabilities
|
|
$
|
16.2
|
|
|
$
|
4.5
|
|
Derivatives not designated as hedging instruments
|
Other accrued liabilities
|
|
3.1
|
|
|
6.0
|
|
||
Total derivative liabilities
|
|
|
$
|
19.3
|
|
|
$
|
10.5
|
|
|
Foreign Currency Contracts
|
||||||||||||||
|
Three Months Ended July 31,
|
|
Six Months Ended July 31,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Am
ount of (loss) gain rec
ognized in accumulated other comprehensive (loss) income on derivatives (effective portion)
|
$
|
(9.3
|
)
|
|
$
|
1.5
|
|
|
$
|
(11.4
|
)
|
|
$
|
(4.9
|
)
|
Amount and location of gain (loss) reclassified from accumulated other comprehensive (loss) income into (loss) income (effective portion)
|
|
|
|
|
|
|
|
||||||||
Net revenue
|
$
|
2.8
|
|
|
$
|
2.5
|
|
|
$
|
4.8
|
|
|
$
|
7.4
|
|
Operating expenses
|
(0.5
|
)
|
|
0.5
|
|
|
(3.2
|
)
|
|
(1.3
|
)
|
||||
Total
|
$
|
2.3
|
|
|
$
|
3.0
|
|
|
$
|
1.6
|
|
|
$
|
6.1
|
|
Amount and location of gain (loss) recognized in (loss) income on derivatives (ineffective portion and amount excluded from effectiveness testing)
|
|
|
|
|
|
|
|
||||||||
Interest and other expense, net
|
$
|
0.1
|
|
|
$
|
(0.2
|
)
|
|
$
|
(0.1
|
)
|
|
$
|
(0.4
|
)
|
|
Three Months Ended July 31,
|
|
Six Months Ended July 31,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Amount and location of loss recognized in (loss) income on derivatives
|
|
|
|
|
|
|
|
||||||||
Interest and other expense, net
|
$
|
(6.5
|
)
|
|
$
|
(3.9
|
)
|
|
$
|
(8.3
|
)
|
|
$
|
(10.9
|
)
|
|
Unvested
Restricted
Stock Units
|
|
Weighted
average grant
date fair value
per share
|
|||
|
(in thousands)
|
|
|
|||
Unvested restricted stock units at January 31, 2017
|
7,622.4
|
|
|
$
|
60.13
|
|
Granted
|
815.8
|
|
|
93.97
|
|
|
Vested
|
(1,269.2
|
)
|
|
58.17
|
|
|
Canceled/Forfeited
|
(331.4
|
)
|
|
61.31
|
|
|
Performance Adjustment (1)
|
24.7
|
|
|
61.79
|
|
|
Unvested restricted stock units at July 31, 2017
|
6,862.3
|
|
|
$
|
65.30
|
|
(1)
|
Based on Autodesk's financial results and relative total stockholder return for the fiscal
2017
performance period. The performance stock units were attained at rates ranging from
99.7%
to
114.7%
of the target award.
|
•
|
Up to one third of the performance stock units may vest following year one, depending upon the achievement of the performance criteria for fiscal 2018 as well as 1-year Relative TSR (covering year one).
|
•
|
Up to one third of the performance stock units may vest following year two, depending upon the achievement of the performance criteria for year two as well as 2-year Relative TSR (covering years one and two).
|
•
|
Up to one third of the performance stock units may vest following year three, depending upon the achievement of the performance criteria for year three as well as 3-year Relative TSR (covering years one, two and three).
|
|
Three Months Ended July 31,
|
|
Six Months Ended July 31,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Cost of maintenance and subscription revenue (1)
|
$
|
2.9
|
|
|
$
|
2.0
|
|
|
$
|
5.7
|
|
|
$
|
4.0
|
|
Cost of license and other revenue (1)
|
1.0
|
|
|
1.4
|
|
|
2.1
|
|
|
2.8
|
|
||||
Marketing and sales
|
26.0
|
|
|
23.3
|
|
|
52.4
|
|
|
44.8
|
|
||||
Research and development
|
20.4
|
|
|
20.2
|
|
|
41.6
|
|
|
39.1
|
|
||||
General and administrative
|
17.3
|
|
|
7.4
|
|
|
32.6
|
|
|
15.2
|
|
||||
Stock-based compensation expense related to stock awards and ESPP purchases
|
67.6
|
|
|
54.3
|
|
|
134.4
|
|
|
105.9
|
|
||||
Tax benefit
|
(0.3
|
)
|
|
—
|
|
|
(0.3
|
)
|
|
—
|
|
||||
Stock-based compensation expense related to stock awards and ESPP purchases, net of tax
|
$
|
67.3
|
|
|
$
|
54.3
|
|
|
$
|
134.1
|
|
|
$
|
105.9
|
|
(1)
|
Prior periods have been adjusted to conform with the current period's presentation. See Note
1
, "
Basis of Presentation
," for additional information.
|
|
Three Months Ended July 31, 2017
|
|
Three Months Ended July 31, 2016
|
||||
|
Performance Stock Unit
|
|
ESPP (1)
|
|
Performance Stock Unit (2)
|
|
ESPP (1)
|
Range of expected volatilities
|
31.8%
|
|
N/A
|
|
N/A
|
|
N/A
|
Range of expected lives (in years)
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
Expected dividends
|
—%
|
|
N/A
|
|
N/A
|
|
N/A
|
Range of risk-free interest rates
|
1.2%
|
|
N/A
|
|
N/A
|
|
N/A
|
|
Six Months Ended July 31, 2017
|
|
Six Months Ended July 31, 2016
|
||||
|
Performance Stock Unit
|
|
ESPP
|
|
Performance Stock Unit
|
|
ESPP
|
Range of expected volatilities
|
31.8%
|
|
31.4 - 33.7%
|
|
38.4 - 38.6%
|
|
35.0 - 40.2%
|
Range of expected lives (in years)
|
N/A
|
|
0.5 - 2.0
|
|
N/A
|
|
0.5 - 2.0
|
Expected dividends
|
—%
|
|
—%
|
|
—%
|
|
—%
|
Range of risk-free interest rates
|
1.0 - 1.2%
|
|
0.9 - 1.3%
|
|
0.6 - 0.7%
|
|
0.5 - 0.9%
|
(1)
|
Autodesk does not issue any shares under its ESPP in the second or fourth quarter.
|
(2)
|
Autodesk did not grant PSUs in the three months ended July 31, 2016 that were subject to market conditions.
|
|
July 31, 2017
|
|
January 31, 2017
|
||||
Developed technologies, at cost
|
$
|
577.0
|
|
|
$
|
583.6
|
|
Customer relationships, trade names, patents, and user lists, at cost (1)
|
367.1
|
|
|
375.9
|
|
||
Other intangible assets, at cost (2)
|
944.1
|
|
|
959.5
|
|
||
Less: Accumulated amortization
|
(873.7
|
)
|
|
(862.0
|
)
|
||
Other intangible assets, net
|
$
|
70.4
|
|
|
$
|
97.5
|
|
(1)
|
Included in “Other assets” in the accompanying Condensed Consolidated Balance Sheets.
|
(2)
|
Includes the effects of foreign currency translation.
|
|
July 31, 2017
|
|
January 31, 2017
|
||||
Goodwill, beginning of the period (as of February 1, 2017 and February 1, 2016, respectively)
|
$
|
1,710.3
|
|
|
$
|
1,684.2
|
|
Less: accumulated impairment losses, beginning of the period (as of February 1, 2017 and February 1, 2016, respectively)
|
(149.2
|
)
|
|
(149.2
|
)
|
||
Net goodwill, beginning of the period (as of February 1, 2017 and February 1, 2016, respectively)
|
1,561.1
|
|
|
1,535.0
|
|
||
Additions arising from acquisitions during the period
|
—
|
|
|
62.8
|
|
||
Effect of foreign currency translation, purchase accounting adjustments, and other
|
27.5
|
|
|
(36.7
|
)
|
||
Goodwill, end of the period
|
$
|
1,588.6
|
|
|
$
|
1,561.1
|
|
|
July 31, 2017
|
|
January 31, 2017
|
||||
Computer hardware, at cost
|
$
|
217.0
|
|
|
$
|
206.1
|
|
Computer software, at cost
|
78.7
|
|
|
73.5
|
|
||
Leasehold improvements, land and buildings, at cost
|
218.5
|
|
|
206.3
|
|
||
Furniture and equipment, at cost
|
60.5
|
|
|
58.2
|
|
||
|
574.7
|
|
|
544.1
|
|
||
Less: Accumulated depreciation
|
(421.7
|
)
|
|
(385.5
|
)
|
||
Computer software, hardware, leasehold improvements, furniture and equipment, net
|
$
|
153.0
|
|
|
$
|
158.6
|
|
|
Balances, January 31, 2017
|
|
Additions
|
|
Payments
|
|
Adjustments (1)
|
|
Balances, July 31, 2017
|
||||||||||
Fiscal 2017 Plan
|
|
|
|
|
|
|
|
|
|
||||||||||
Employee termination costs
|
$
|
1.1
|
|
|
$
|
0.1
|
|
|
$
|
(1.4
|
)
|
|
$
|
0.2
|
|
|
$
|
—
|
|
Lease termination and other exit costs
|
1.9
|
|
|
0.1
|
|
|
(1.1
|
)
|
|
(0.3
|
)
|
|
0.6
|
|
|||||
Other Lease Termination Costs
|
|
|
|
|
|
|
|
|
|
||||||||||
Lease termination costs
|
4.5
|
|
|
0.3
|
|
|
(1.4
|
)
|
|
—
|
|
|
3.4
|
|
|||||
Total
|
$
|
7.5
|
|
|
$
|
0.5
|
|
|
$
|
(3.9
|
)
|
|
$
|
(0.1
|
)
|
|
$
|
4.0
|
|
Current portion (2)
|
$
|
5.9
|
|
|
|
|
|
|
|
|
$
|
3.6
|
|
||||||
Non-current portion (2)
|
1.6
|
|
|
|
|
|
|
|
|
0.4
|
|
||||||||
Total
|
$
|
7.5
|
|
|
|
|
|
|
|
|
$
|
4.0
|
|
(1)
|
Adjustments primarily include the impact from a change in sublease assumptions related to certain lease terminations.
|
(2)
|
The current and non-current portions of the reserve are recorded in the Condensed Consolidated Balance Sheets under “
Other accrued liabilities
” and “
Other liabilities
,” respectively.
|
|
Net Unrealized Gains (Losses) on Derivative Instruments
|
|
Net Unrealized Gains (Losses) on Available-for-Sale Securities
|
|
Defined Benefit Pension Components
|
|
Foreign Currency Translation Adjustments
|
|
Total
|
||||||||||
Balances, January 31, 2017
|
$
|
14.6
|
|
|
$
|
1.5
|
|
|
$
|
(33.8
|
)
|
|
$
|
(160.8
|
)
|
|
$
|
(178.5
|
)
|
Other comprehensive (loss) income before reclassifications
|
(12.8
|
)
|
|
0.1
|
|
|
(0.1
|
)
|
|
39.4
|
|
|
26.6
|
|
|||||
Pre-tax (gains) losses reclassified from accumulated other comprehensive loss
|
(1.6
|
)
|
|
—
|
|
|
(0.1
|
)
|
|
0.1
|
|
|
(1.6
|
)
|
|||||
Tax effects
|
1.4
|
|
|
0.1
|
|
|
—
|
|
|
(0.9
|
)
|
|
0.6
|
|
|||||
Net current period other comprehensive (loss) income
|
(13.0
|
)
|
|
0.2
|
|
|
(0.2
|
)
|
|
38.6
|
|
|
25.6
|
|
|||||
Balances, July 31, 2017
|
$
|
1.6
|
|
|
$
|
1.7
|
|
|
$
|
(34.0
|
)
|
|
$
|
(122.2
|
)
|
|
$
|
(152.9
|
)
|
|
Three Months Ended July 31,
|
|
Six Months Ended July 31,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Net loss
|
$
|
(144.0
|
)
|
|
$
|
(98.2
|
)
|
|
$
|
(273.6
|
)
|
|
$
|
(265.9
|
)
|
Denominator:
|
|
|
|
|
|
|
|
||||||||
Denominator for basic net loss per share—weighted average shares
|
219.5
|
|
|
223.2
|
|
|
219.7
|
|
|
223.8
|
|
||||
Effect of dilutive securities (1)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Denominator for dilutive net loss per share
|
219.5
|
|
|
223.2
|
|
|
219.7
|
|
|
223.8
|
|
||||
Basic net loss per share
|
$
|
(0.66
|
)
|
|
$
|
(0.44
|
)
|
|
$
|
(1.25
|
)
|
|
$
|
(1.19
|
)
|
Diluted net loss per share
|
$
|
(0.66
|
)
|
|
$
|
(0.44
|
)
|
|
$
|
(1.25
|
)
|
|
$
|
(1.19
|
)
|
(1)
|
The effect of dilutive securities of
4.8 million
and
4.2 million
shares in the
three
months ended
July 31, 2017
and
2016
, respectively, have been excluded from the calculation of diluted net loss per share as those shares would have been anti-dilutive due to the net loss incurred during those periods. The effect of dilutive securities of
4.7 million
and
4.0 million
shares in the
six
months ended
July 31, 2017
and
2016
, respectively, have been excluded from the calculation of diluted net loss per share as those shares would have been anti-dilutive due to the net loss incurred during those periods.
|
|
Three Months Ended July 31,
|
|
Six Months Ended July 31,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net revenue by geographic area:
|
|
|
|
|
|
|
|
||||||||
Americas
|
|
|
|
|
|
|
|
||||||||
U.S.
|
$
|
184.6
|
|
|
$
|
195.2
|
|
|
$
|
364.4
|
|
|
$
|
379.9
|
|
Other Americas
|
29.4
|
|
|
34.9
|
|
|
59.7
|
|
|
67.9
|
|
||||
Total Americas
|
214.0
|
|
|
230.1
|
|
|
424.1
|
|
|
447.8
|
|
||||
Europe, Middle East and Africa
|
199.3
|
|
|
220.5
|
|
|
389.0
|
|
|
423.1
|
|
||||
Asia Pacific
|
88.5
|
|
|
100.1
|
|
|
174.4
|
|
|
191.7
|
|
||||
Total net revenue
|
$
|
501.8
|
|
|
$
|
550.7
|
|
|
$
|
987.5
|
|
|
$
|
1,062.6
|
|
|
|
|
|
|
|
|
|
||||||||
Net revenue by product family:
|
|
|
|
|
|
|
|
||||||||
Architecture, Engineering and Construction
|
$
|
208.8
|
|
|
$
|
253.2
|
|
|
$
|
413.3
|
|
|
$
|
472.1
|
|
Manufacturing
|
147.0
|
|
|
176.9
|
|
|
289.1
|
|
|
334.9
|
|
||||
AutoCAD and AutoCAD LT
|
96.5
|
|
|
73.1
|
|
|
188.0
|
|
|
159.0
|
|
||||
Media and Entertainment
|
37.9
|
|
|
34.4
|
|
|
74.4
|
|
|
69.4
|
|
||||
Other
|
11.6
|
|
|
13.1
|
|
|
22.7
|
|
|
27.2
|
|
||||
|
$
|
501.8
|
|
|
$
|
550.7
|
|
|
$
|
987.5
|
|
|
$
|
1,062.6
|
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
(in millions)
|
Three Months Ended July 31, 2017
|
|
As a % of Net
Revenue
|
|
Change compared to
prior fiscal year |
|
Three Months Ended July 31, 2016
|
|
As a % of Net
Revenue
|
|||||||||||
|
|
|
$
|
|
%
|
|
|
|||||||||||||
Net Revenue
|
$
|
501.8
|
|
|
100
|
%
|
|
$
|
(48.9
|
)
|
|
(9
|
)%
|
|
$
|
550.7
|
|
|
100
|
%
|
Cost of revenue
|
74.6
|
|
|
15
|
%
|
|
(10.5
|
)
|
|
(12
|
)%
|
|
85.1
|
|
|
15
|
%
|
|||
Gross Profit
|
427.2
|
|
|
85
|
%
|
|
(38.4
|
)
|
|
(8
|
)%
|
|
465.6
|
|
|
85
|
%
|
|||
Operating expenses
|
534.8
|
|
|
107
|
%
|
|
6.3
|
|
|
1
|
%
|
|
528.5
|
|
|
96
|
%
|
|||
Loss from operations
|
$
|
(107.6
|
)
|
|
(21
|
)%
|
|
$
|
(44.7
|
)
|
|
71
|
%
|
|
$
|
(62.9
|
)
|
|
(11
|
)%
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Six Months Ended July 31, 2017
|
|
As a % of Net
Revenue
|
|
Change compared to
prior fiscal year |
|
Six Months Ended July 31, 2016
|
|
As a % of Net
Revenue
|
|||||||||||
|
|
|
$
|
|
%
|
|
|
|||||||||||||
Net Revenue
|
$
|
987.5
|
|
|
100
|
%
|
|
$
|
(75.1
|
)
|
|
(7
|
)%
|
|
$
|
1,062.6
|
|
|
100
|
%
|
Cost of revenue
|
152.8
|
|
|
15
|
%
|
|
(24.7
|
)
|
|
(14
|
)%
|
|
177.5
|
|
|
17
|
%
|
|||
Gross Profit
|
834.7
|
|
|
85
|
%
|
|
(50.4
|
)
|
|
(6
|
)%
|
|
885.1
|
|
|
83
|
%
|
|||
Operating expenses
|
1,061.9
|
|
|
108
|
%
|
|
(35.8
|
)
|
|
(3
|
)%
|
|
1,097.7
|
|
|
103
|
%
|
|||
Loss from operations
|
$
|
(227.2
|
)
|
|
(23
|
)%
|
|
$
|
(14.6
|
)
|
|
7
|
%
|
|
$
|
(212.6
|
)
|
|
(20
|
)%
|
(In millions, except percentage data)
|
Three Months Ended July 31, 2017
|
|
Change compared to
prior fiscal year end |
|
Three Months Ended July 31, 2016 (1)
|
|||||||||
|
|
$
|
|
%
|
|
|||||||||
Recurring Revenue
(2)
|
$
|
457.4
|
|
|
$
|
79.9
|
|
|
21
|
%
|
|
$
|
377.5
|
|
As a percentage of net revenue
|
91
|
%
|
|
N/A
|
|
|
N/A
|
|
|
69
|
%
|
|||
|
|
|
|
|
|
|
|
|||||||
|
Six Months Ended July 31, 2017
|
|
Change compared to
prior fiscal year end |
|
Six Months Ended July 31, 2016 (1)
|
|||||||||
|
|
$
|
|
%
|
|
|||||||||
Recurring Revenue
(2)
|
$
|
893.3
|
|
|
$
|
146.9
|
|
|
20
|
%
|
|
$
|
746.4
|
|
As a percentage of net revenue
|
90
|
%
|
|
N/A
|
|
|
N/A
|
|
|
70
|
%
|
(1)
|
Prior periods have been adjusted to conform with the current period's presentation.
|
(2)
|
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 Condensed Consolidated Statement of Operations.
|
|
Balances, July 31, 2017
|
|
Change compared to
prior quarter end |
|
Balances, April 30, 2017
|
|
Balances, July 31, 2017
|
|
Change compared to
prior fiscal year end |
|
Balances, January 31, 2017 (1)
|
||||||||||||||||||
|
|
$
|
|
%
|
|
|
|
$
|
|
%
|
|
||||||||||||||||||
Subscriptions
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Maintenance plan
|
1,854.0
|
|
|
(117.2
|
)
|
|
(6
|
)%
|
|
1,971.2
|
|
|
1,854.0
|
|
|
(164.0
|
)
|
|
(8
|
)%
|
|
2,018.0
|
|
||||||
Subscription plan
|
1,589.2
|
|
|
269.7
|
|
|
20
|
%
|
|
1,319.5
|
|
|
1,589.2
|
|
|
502.1
|
|
|
46
|
%
|
|
1,087.1
|
|
||||||
Total subscriptions
|
3,443.2
|
|
|
152.5
|
|
|
5
|
%
|
|
3,290.7
|
|
|
3,443.2
|
|
|
338.1
|
|
|
11
|
%
|
|
3,105.1
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
ARR
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Maintenance plan ARR
|
$
|
1,046.0
|
|
|
$
|
(5.7
|
)
|
|
(1
|
)%
|
|
$
|
1,051.7
|
|
|
$
|
1,046.0
|
|
|
$
|
(22.0
|
)
|
|
(2
|
)%
|
|
$
|
1,068.0
|
|
Subscription plan ARR
|
783.7
|
|
|
91.8
|
|
|
13
|
%
|
|
691.9
|
|
|
783.7
|
|
|
212.3
|
|
|
37
|
%
|
|
571.4
|
|
||||||
Total ARR (2)
|
$
|
1,829.7
|
|
|
$
|
86.1
|
|
|
5
|
%
|
|
$
|
1,743.6
|
|
|
$
|
1,829.7
|
|
|
$
|
190.3
|
|
|
12
|
%
|
|
$
|
1,639.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
ARPS
(ARR divided by number of Subscriptions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Maintenance plan ARPS
|
$
|
564
|
|
|
$
|
30
|
|
|
6
|
%
|
|
$
|
534
|
|
|
$
|
564
|
|
|
$
|
35
|
|
|
7
|
%
|
|
$
|
529
|
|
Subscription plan ARPS
|
493
|
|
|
(31
|
)
|
|
(6
|
)%
|
|
524
|
|
|
493
|
|
|
(33
|
)
|
|
(6
|
)%
|
|
526
|
|
||||||
Total ARPS (3)
|
$
|
531
|
|
|
$
|
1
|
|
|
—
|
%
|
|
$
|
530
|
|
|
$
|
531
|
|
|
$
|
3
|
|
|
1
|
%
|
|
$
|
528
|
|
(1)
|
Prior periods have been adjusted to conform with the current period's presentation.
|
(2)
|
The acquisition of a business may cause variability in the comparison of ARR reported in this table above and ARR derived from the revenue reported in the Condensed Consolidated Statement of Operations.
|
(3)
|
There are small variances between ARR and total subscriptions due in part to the inherent limitation with collecting all subscriptions information. For example, Buzzsaw and Constructware are included with ARR but not in total subscriptions due to these inherent limitations. We do not view these variances as meaningful to amounts or quarterly comparisons presented here for ARPS.
|
|
Three Months Ended July 31, 2017
|
|
Six Months Ended July 31, 2017
|
||||||||||||
|
Percent change compared to
prior fiscal year |
|
Constant Currency percent change compared to
prior fiscal year (2) |
|
Positive/Negative/Neutral impact from foreign exchange rate changes
|
|
Percent change compared to
prior fiscal year |
|
Constant Currency percent change compared to
prior fiscal year (2) |
|
Positive/Negative/Neutral impact from foreign exchange rate changes
|
||||
Revenue
|
(9
|
)%
|
|
(8
|
)%
|
|
Negative
|
|
(7
|
)%
|
|
(6
|
)%
|
|
Negative
|
Spend (1)
|
(1
|
)%
|
|
—
|
%
|
|
Positive
|
|
(5
|
)%
|
|
(4
|
)%
|
|
Positive
|
(1)
|
Our total spend is defined as cost of revenue plus operating expenses.
|
(2)
|
Please refer to the Glossary of Terms for the definitions of our constant currency growth rates.
|
|
Six Months Ended
|
||
(in millions)
|
July 31, 2017
|
||
Deferred revenue
|
$
|
1,776.0
|
|
Unbilled deferred revenue (1)
|
62.6
|
|
|
Total
|
$
|
1,838.6
|
|
(1)
|
This is our first year presenting this metric and we are not able to provide historical information at this time. Comparative information will not be available until our first quarter of fiscal 2019.
|
|
Three Months Ended
|
|
Change compared to
prior fiscal year |
|
Three Months Ended
|
|
Six Months Ended
|
|
Change compared to
prior fiscal year |
|
Six Months Ended
|
||||||||||||||||||
(in millions)
|
July 31, 2017
|
$
|
|
%
|
|
July 31, 2016
|
|
July 31, 2017
|
$
|
|
%
|
|
July 31, 2016
|
||||||||||||||||
Net Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Maintenance (1)
|
$
|
261.8
|
|
|
$
|
(15.7
|
)
|
|
(6
|
)%
|
|
$
|
277.5
|
|
|
$
|
525.4
|
|
|
$
|
(36.5
|
)
|
|
(6
|
)%
|
|
$
|
561.9
|
|
Subscription (1)
|
$
|
196.1
|
|
|
$
|
94.3
|
|
|
93
|
%
|
|
$
|
101.8
|
|
|
369.5
|
|
|
182.2
|
|
|
97
|
%
|
|
187.3
|
|
|||
Total maintenance and subscription revenue
|
457.9
|
|
|
78.6
|
|
|
21
|
%
|
|
379.3
|
|
|
894.9
|
|
|
145.7
|
|
|
19
|
%
|
|
749.2
|
|
||||||
License and other (1)
|
43.9
|
|
|
(127.5
|
)
|
|
(74
|
)%
|
|
171.4
|
|
|
92.6
|
|
|
(220.8
|
)
|
|
(70
|
)%
|
|
313.4
|
|
||||||
|
$
|
501.8
|
|
|
$
|
(48.9
|
)
|
|
(9
|
)%
|
|
$
|
550.7
|
|
|
$
|
987.5
|
|
|
$
|
(75.1
|
)
|
|
(7
|
)%
|
|
$
|
1,062.6
|
|
(1)
|
Prior periods have been adjusted to conform with current period's presentation. See Note
1
, "
Basis of Presentation
", of our condensed consolidated financial statements for additional information.
|
|
Three Months Ended
|
|
Change compared to
prior fiscal year |
|
Three Months Ended
|
|
Six Months Ended
|
|
Change compared to
prior fiscal year |
|
Six Months Ended
|
||||||||||||||||||
(in millions)
|
July 31, 2017
|
$
|
|
%
|
|
July 31, 2016
|
|
July 31, 2017
|
$
|
|
%
|
|
July 31, 2016
|
||||||||||||||||
Net Revenue by Product Family:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Architecture, Engineering and Construction ("AEC")
|
$
|
208.8
|
|
|
$
|
(44.4
|
)
|
|
(18
|
)%
|
|
$
|
253.2
|
|
|
$
|
413.3
|
|
|
$
|
(58.8
|
)
|
|
(12
|
)%
|
|
$
|
472.1
|
|
Manufacturing ("MFG")
|
147.0
|
|
|
(29.9
|
)
|
|
(17
|
)%
|
|
176.9
|
|
|
289.1
|
|
|
(45.8
|
)
|
|
(14
|
)%
|
|
334.9
|
|
||||||
AutoCAD and AutoCAD LT ("ACAD") (1)
|
96.5
|
|
|
23.4
|
|
|
32
|
%
|
|
73.1
|
|
|
188.0
|
|
|
29.0
|
|
|
18
|
%
|
|
159.0
|
|
||||||
Media and Entertainment ("M&E")
|
37.9
|
|
|
3.5
|
|
|
10
|
%
|
|
34.4
|
|
|
74.4
|
|
|
5.0
|
|
|
7
|
%
|
|
69.4
|
|
||||||
Other (1)
|
11.6
|
|
|
(1.5
|
)
|
|
(11
|
)%
|
|
13.1
|
|
|
22.7
|
|
|
(4.5
|
)
|
|
(17
|
)%
|
|
27.2
|
|
||||||
|
$
|
501.8
|
|
|
$
|
(48.9
|
)
|
|
(9
|
)%
|
|
$
|
550.7
|
|
|
$
|
987.5
|
|
|
$
|
(75.1
|
)
|
|
(7
|
)%
|
|
$
|
1,062.6
|
|
(1)
|
Prior periods have been adjusted to conform with current period's presentation.
|
(in millions)
|
Three Months Ended July 31, 2017
|
|
As a % of Net
Revenue
|
|
Three Months Ended July 31, 2016
|
|
As a % of Net
Revenue
|
||||||
Net Revenue:
|
|
|
|
|
|
|
|
|
|
||||
Americas
|
$
|
214.0
|
|
|
43
|
%
|
|
$
|
230.1
|
|
|
42
|
%
|
Europe, Middle East and Africa ("EMEA")
|
199.3
|
|
|
40
|
%
|
|
220.5
|
|
|
40
|
%
|
||
Asia Pacific ("APAC")
|
88.5
|
|
|
18
|
%
|
|
100.1
|
|
|
18
|
%
|
||
Total Net Revenue (1)
|
$
|
501.8
|
|
|
100
|
%
|
|
$
|
550.7
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
||||||
(in millions)
|
Six Months Ended July 31, 2017
|
|
As a % of Net
Revenue
|
|
Six Months Ended July 31, 2016
|
|
As a % of Net
Revenue
|
||||||
Net Revenue:
|
|
|
|
|
|
|
|
||||||
Americas
|
$
|
424.1
|
|
|
43
|
%
|
|
$
|
447.8
|
|
|
42
|
%
|
EMEA
|
389.0
|
|
|
39
|
%
|
|
423.1
|
|
|
40
|
%
|
||
APAC
|
174.4
|
|
|
18
|
%
|
|
191.7
|
|
|
18
|
%
|
||
Total Net Revenue
|
$
|
987.5
|
|
|
100
|
%
|
|
$
|
1,062.6
|
|
|
100
|
%
|
(1)
|
Totals may not sum due to rounding.
|
|
Three Months Ended
|
|
Change compared to
prior fiscal year |
|
Three Months Ended
|
|
Management comments
|
|||||||||
(in millions)
|
July 31, 2017
|
$
|
|
%
|
|
July 31, 2016
|
|
|||||||||
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
|||||||
Maintenance and subscription (1)
|
$
|
52.8
|
|
|
$
|
6.0
|
|
|
13
|
%
|
|
$
|
46.8
|
|
|
Driven by increases in employee-related costs
|
License and other (1)
|
17.8
|
|
|
(9.8
|
)
|
|
(36
|
)%
|
|
27.6
|
|
|
Down due to lower employee-related costs from reduced headcount associated with license and other revenue products and services, and decreases in direct material costs as a result of the business model transition
|
|||
Amortization of developed technology (1)
|
4.0
|
|
|
(6.7
|
)
|
|
(63
|
)%
|
|
10.7
|
|
|
Down as previously acquired developed technologies continue to become fully amortized and there were no acquisitions in the current period
|
|||
Total cost of revenue
|
$
|
74.6
|
|
|
$
|
(10.5
|
)
|
|
(12
|
)%
|
|
$
|
85.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Marketing and sales
|
$
|
257.6
|
|
|
$
|
14.5
|
|
|
6
|
%
|
|
$
|
243.1
|
|
|
Driven by employee-related costs and stock-based compensation expense on increased headcount
|
Research and development
|
193.8
|
|
|
0.8
|
|
|
—
|
%
|
|
193.0
|
|
|
Driven by higher professional fees
|
|||
General and administrative
|
78.0
|
|
|
9.4
|
|
|
14
|
%
|
|
68.6
|
|
|
Driven by costs associated with the CEO transition
|
|||
Amortization of purchased intangibles
|
4.9
|
|
|
(2.9
|
)
|
|
(37
|
)%
|
|
7.8
|
|
|
Down as previously acquired intangible assets continue to become fully amortized and there were no acquisitions in the current period
|
|||
Restructuring charges and other facility exit costs, net (2)
|
0.5
|
|
|
(15.5
|
)
|
|
(97
|
)%
|
|
16.0
|
|
|
Down as the majority of the Fiscal 2017 Plan was recognized during the first half of fiscal 2017
|
|||
Total operating expenses
|
$
|
534.8
|
|
|
$
|
6.3
|
|
|
1
|
%
|
|
$
|
528.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
Six Months Ended
|
|
Change compared to
prior fiscal year |
|
Six Months Ended
|
|
Management comments
|
|||||||||
|
July 31, 2017
|
$
|
|
%
|
|
July 31, 2016
|
|
|||||||||
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
|||||||
Maintenance and subscription (1)
|
$
|
107.7
|
|
|
$
|
14.3
|
|
|
15
|
%
|
|
$
|
93.4
|
|
|
Driven by increases in employee-related costs and royalties
|
License and other (1)
|
36.4
|
|
|
(26.1
|
)
|
|
(42
|
)%
|
|
62.5
|
|
|
Down due to lower employee-related costs from reduced headcount associated with license and other revenue products and services, decreases in direct material costs as a result of the business model transition, and decreased royalties
|
|||
Amortization of developed technology (1)
|
8.7
|
|
|
(12.9
|
)
|
|
(60
|
)%
|
|
21.6
|
|
|
Down as previously acquired developed technologies continue to become fully amortized and there were no acquisitions in the current period
|
|||
Total cost of revenue
|
$
|
152.8
|
|
|
$
|
(24.7
|
)
|
|
(14
|
)%
|
|
$
|
177.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|||||||
Marketing and sales
|
$
|
513.3
|
|
|
$
|
29.4
|
|
|
6
|
%
|
|
$
|
483.9
|
|
|
Driven by employee-related costs and stock-based compensation expense on increased headcount
|
Research and development
|
381.5
|
|
|
(5.0
|
)
|
|
(1
|
)%
|
|
386.5
|
|
|
Down on a decrease in employee-related costs on lower headcount
|
|||
General and administrative
|
156.3
|
|
|
13.0
|
|
|
9
|
%
|
|
143.3
|
|
|
Driven by costs associated with the CEO transition partially offset by a decrease in employee-related costs on lower headcount and a decrease in professional fees
|
|||
Amortization of purchased intangibles
|
10.6
|
|
|
(5.1
|
)
|
|
(32
|
)%
|
|
15.7
|
|
|
Down as previously acquired intangible assets continue to become fully amortized and there were no acquisitions in the current period
|
|||
Restructuring charges and other facility exit costs, net (2)
|
0.2
|
|
|
(68.1
|
)
|
|
(100
|
)%
|
|
68.3
|
|
|
Down as the majority of the Fiscal 2017 Plan was recognized during the first half of fiscal 2017
|
|||
Total operating expenses
|
$
|
1,061.9
|
|
|
$
|
(35.8
|
)
|
|
(3
|
)%
|
|
$
|
1,097.7
|
|
|
|
(1)
|
Prior periods have been adjusted to conform with current period's presentation. See Note
1
, "
Basis of Presentation
," of our condensed consolidated financial statements for additional information.
|
(2)
|
See Note
13
, "
Restructuring charges and other facility exit costs, net
" in the Notes to Condensed Consolidated Financial Statements for additional information.
|
|
Absolute dollar impact
|
|
Percent of net revenue impact
|
Cost of Revenue
|
Decrease
|
|
Decrease
|
Marketing and sales
|
Increase
|
|
Flat
|
Research and development
|
Increase
|
|
Slight Increase
|
General and administrative
|
Flat
|
|
Flat
|
Amortization of purchased intangibles
|
Decrease
|
|
Slight Decrease
|
|
Three Months Ended July 31,
|
|
Six Months Ended July 31,
|
||||||||||||
(in millions)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Interest and investment expense, net
|
$
|
(10.0
|
)
|
|
$
|
(6.2
|
)
|
|
$
|
(16.9
|
)
|
|
$
|
(12.7
|
)
|
Gain (loss) on foreign currency
|
0.3
|
|
|
(4.5
|
)
|
|
(0.7
|
)
|
|
(3.2
|
)
|
||||
(Loss) gain on strategic investments and dispositions
|
(13.5
|
)
|
|
(0.3
|
)
|
|
(7.8
|
)
|
|
0.2
|
|
||||
Other income
|
4.4
|
|
|
0.9
|
|
|
4.8
|
|
|
2.0
|
|
||||
Interest and other expense, net
|
$
|
(18.8
|
)
|
|
$
|
(10.1
|
)
|
|
$
|
(20.6
|
)
|
|
$
|
(13.7
|
)
|
|
Three Months Ended July 31,
|
|
Six Months Ended July 31,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(Unaudited)
|
||||||||||||||
Gross profit
|
$
|
427.2
|
|
|
$
|
465.6
|
|
|
$
|
834.7
|
|
|
$
|
885.1
|
|
Non-GAAP gross profit
|
$
|
435.0
|
|
|
$
|
479.7
|
|
|
$
|
851.1
|
|
|
$
|
913.5
|
|
Gross margin
|
85
|
%
|
|
85
|
%
|
|
85
|
%
|
|
83
|
%
|
||||
Non-GAAP gross margin
|
87
|
%
|
|
87
|
%
|
|
86
|
%
|
|
86
|
%
|
||||
Loss from operations
|
$
|
(107.6
|
)
|
|
$
|
(62.9
|
)
|
|
$
|
(227.2
|
)
|
|
$
|
(212.6
|
)
|
Non-GAAP loss from operations
|
$
|
(28.8
|
)
|
|
$
|
25.9
|
|
|
$
|
(68.3
|
)
|
|
$
|
(1.1
|
)
|
Operating margin
|
(21
|
)%
|
|
(11
|
)%
|
|
(23
|
)%
|
|
(20
|
)%
|
||||
Non-GAAP operating margin
|
(6
|
)%
|
|
5
|
%
|
|
(7
|
)%
|
|
—
|
%
|
||||
Net loss
|
$
|
(144.0
|
)
|
|
$
|
(98.2
|
)
|
|
$
|
(273.6
|
)
|
|
$
|
(265.9
|
)
|
Non-GAAP net (loss) income
|
$
|
(25.2
|
)
|
|
$
|
11.9
|
|
|
$
|
(60.0
|
)
|
|
$
|
(11.1
|
)
|
GAAP diluted net loss per share (1)
|
$
|
(0.66
|
)
|
|
$
|
(0.44
|
)
|
|
$
|
(1.25
|
)
|
|
$
|
(1.19
|
)
|
Non-GAAP diluted net (loss) income per share (1)
|
$
|
(0.11
|
)
|
|
$
|
0.05
|
|
|
$
|
(0.27
|
)
|
|
$
|
(0.05
|
)
|
GAAP diluted shares used in per share calculation
|
219.5
|
|
|
223.2
|
|
|
219.7
|
|
|
223.8
|
|
||||
Non-GAAP diluted weighted average shares used in per share calculation
|
219.5
|
|
|
227.4
|
|
|
219.7
|
|
|
223.8
|
|
(1)
|
Net (loss) income per share was computed independently for each of the periods presented; therefore the sum of the net (loss) income per share amount for the quarters may not equal the total for the year.
|
|
Three Months Ended July 31,
|
|
Six Months Ended July 31,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(Unaudited)
|
||||||||||||||
Gross profit
|
$
|
427.2
|
|
|
$
|
465.6
|
|
|
$
|
834.7
|
|
|
$
|
885.1
|
|
Stock-based compensation expense
|
3.8
|
|
|
3.4
|
|
|
7.7
|
|
|
6.8
|
|
||||
Amortization of developed technologies
|
4.0
|
|
|
10.7
|
|
|
8.7
|
|
|
21.6
|
|
||||
Non-GAAP gross profit
|
$
|
435.0
|
|
|
$
|
479.7
|
|
|
$
|
851.1
|
|
|
$
|
913.5
|
|
Gross margin
|
85
|
%
|
|
85
|
%
|
|
85
|
%
|
|
83
|
%
|
||||
Stock-based compensation expense
|
1
|
%
|
|
—
|
%
|
|
—
|
%
|
|
1
|
%
|
||||
Amortization of developed technologies
|
1
|
%
|
|
2
|
%
|
|
1
|
%
|
|
2
|
%
|
||||
Non-GAAP gross margin
|
87
|
%
|
|
87
|
%
|
|
86
|
%
|
|
86
|
%
|
||||
Loss from operations
|
$
|
(107.6
|
)
|
|
$
|
(62.9
|
)
|
|
$
|
(227.2
|
)
|
|
$
|
(212.6
|
)
|
Stock-based compensation expense
|
58.8
|
|
|
54.3
|
|
|
117.8
|
|
|
105.9
|
|
||||
Amortization of developed technologies
|
4.0
|
|
|
10.7
|
|
|
8.7
|
|
|
21.6
|
|
||||
Amortization of purchased intangibles
|
4.9
|
|
|
7.8
|
|
|
10.6
|
|
|
15.7
|
|
||||
CEO transition costs (1)
|
10.6
|
|
|
—
|
|
|
21.6
|
|
|
—
|
|
||||
Restructuring charges and other facility exit costs, net
|
0.5
|
|
|
16.0
|
|
|
0.2
|
|
|
68.3
|
|
||||
Non-GAAP loss from operations
|
$
|
(28.8
|
)
|
|
$
|
25.9
|
|
|
$
|
(68.3
|
)
|
|
$
|
(1.1
|
)
|
Operating margin
|
(21
|
)%
|
|
(11
|
)%
|
|
(23
|
)%
|
|
(20
|
)%
|
||||
Stock-based compensation expense
|
12
|
%
|
|
10
|
%
|
|
12
|
%
|
|
10
|
%
|
||||
Amortization of developed technologies
|
1
|
%
|
|
2
|
%
|
|
1
|
%
|
|
2
|
%
|
||||
Amortization of purchased intangibles
|
1
|
%
|
|
1
|
%
|
|
1
|
%
|
|
2
|
%
|
||||
CEO transition costs (1)
|
2
|
%
|
|
—
|
%
|
|
2
|
%
|
|
—
|
%
|
||||
Restructuring charges and other facility exit costs, net
|
—
|
%
|
|
3
|
%
|
|
—
|
%
|
|
6
|
%
|
||||
Non-GAAP operating margin (2)
|
(6
|
)%
|
|
5
|
%
|
|
(7
|
)%
|
|
—
|
%
|
||||
Net loss
|
$
|
(144.0
|
)
|
|
$
|
(98.2
|
)
|
|
$
|
(273.6
|
)
|
|
$
|
(265.9
|
)
|
Stock-based compensation expense
|
58.8
|
|
|
54.3
|
|
|
117.8
|
|
|
105.9
|
|
||||
Amortization of developed technologies
|
4.0
|
|
|
10.7
|
|
|
8.7
|
|
|
21.6
|
|
||||
Amortization of purchased intangibles
|
4.9
|
|
|
7.8
|
|
|
10.6
|
|
|
15.7
|
|
||||
CEO transition costs (1)
|
10.6
|
|
|
—
|
|
|
21.6
|
|
|
—
|
|
||||
Restructuring charges and other facility exit costs, net
|
0.5
|
|
|
16.0
|
|
|
0.2
|
|
|
68.3
|
|
||||
Loss (gain) on strategic investments and dispositions
|
13.5
|
|
|
0.3
|
|
|
7.8
|
|
|
(0.2
|
)
|
||||
Discrete tax items
|
(0.1
|
)
|
|
14.9
|
|
|
(7.7
|
)
|
|
13.0
|
|
||||
Income tax effect of non-GAAP adjustments
|
26.6
|
|
|
6.1
|
|
|
54.6
|
|
|
30.5
|
|
||||
Non-GAAP net (loss) income
|
$
|
(25.2
|
)
|
|
$
|
11.9
|
|
|
$
|
(60.0
|
)
|
|
$
|
(11.1
|
)
|
|
Three Months Ended July 31,
|
|
Six Months Ended July 31,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(Unaudited)
|
||||||||||||||
GAAP diluted net loss per share (3)
|
$
|
(0.66
|
)
|
|
$
|
(0.44
|
)
|
|
$
|
(1.25
|
)
|
|
$
|
(1.19
|
)
|
Stock-based compensation expense
|
0.27
|
|
|
0.24
|
|
|
0.54
|
|
|
0.47
|
|
||||
Amortization of developed technologies
|
0.02
|
|
|
0.05
|
|
|
0.04
|
|
|
0.10
|
|
||||
Amortization of purchased intangibles
|
0.02
|
|
|
0.03
|
|
|
0.05
|
|
|
0.07
|
|
||||
CEO transition costs (1)
|
0.05
|
|
|
—
|
|
|
0.09
|
|
|
—
|
|
||||
Restructuring charges and other facility exit costs, net
|
—
|
|
|
0.07
|
|
|
—
|
|
|
0.30
|
|
||||
Loss on strategic investments and dispositions
|
0.07
|
|
|
—
|
|
|
0.04
|
|
|
—
|
|
||||
Discrete tax items
|
—
|
|
|
0.07
|
|
|
(0.03
|
)
|
|
0.06
|
|
||||
Income tax effect of non-GAAP adjustments
|
0.12
|
|
|
0.03
|
|
|
0.25
|
|
|
0.14
|
|
||||
Non-GAAP diluted net (loss) income per share (3)
|
$
|
(0.11
|
)
|
|
$
|
0.05
|
|
|
$
|
(0.27
|
)
|
|
$
|
(0.05
|
)
|
(1)
|
CEO transition costs include stock-based compensation of $8.8 million and $16.6 million related to the acceleration of eligible stock awards in the three and six months ended July 31, 2017, respectively.
|
(2)
|
Totals may not sum due to rounding.
|
(3)
|
Net (loss) income per share was computed independently for each of the periods presented; therefore the sum of the net (loss) income per share amount for the quarters may not equal the total for the year.
|
|
Six Months Ended July 31,
|
||||||
(in millions)
|
2017
|
|
2016
|
||||
Net cash (used in) provided by operating activities
|
$
|
(27.3
|
)
|
|
$
|
146.4
|
|
Net cash provided by investing activities
|
200.7
|
|
|
200.6
|
|
||
Net cash used in financing activities
|
(218.0
|
)
|
|
(235.7
|
)
|
(Shares in millions)
|
Total Number of
Shares
Purchased
|
|
Average Price
Paid per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)
|
|
Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (2)
|
|||||
May 1 - May 31
|
0.3
|
|
|
$
|
94.52
|
|
|
0.3
|
|
|
24.1
|
|
June 1 - June 30
|
0.5
|
|
|
104.80
|
|
|
0.5
|
|
|
23.6
|
|
|
July 1 - July 31
|
0.4
|
|
|
106.31
|
|
|
0.4
|
|
|
23.2
|
|
|
Total
|
1.2
|
|
|
$
|
102.71
|
|
|
1.2
|
|
|
|
|
(1)
|
Represents shares purchased in open-market transactions under the stock repurchase plan approved by the Board of Directors.
|
(2)
|
These amounts correspond to the plan approved by the Board of Directors in September 2016 that authorized the repurchase of
30.0 million
shares. These plans do not have a fixed expiration date.
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 4.
|
CONTROLS AND PROCEDURES
|
ITEM 1.
|
LEGAL PROCEEDINGS
|
ITEM 1A.
|
RISK FACTORS
|
•
|
economic volatility;
|
•
|
fluctuating currency exchange rates, including risks related to any hedging activities we undertake;
|
•
|
unexpected 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;
|
•
|
tariffs, quotas, and other trade barriers and restrictions;
|
•
|
operating in locations with a higher incidence of corruption and fraudulent business practices, particularly in emerging economies;
|
•
|
increasing enforcement by the U.S. under the Foreign Corrupt Practices Act, and adoption of stricter anti-corruption laws in certain countries, including the United Kingdom;
|
•
|
difficulties in staffing and managing foreign sales and development operations;
|
•
|
local competition;
|
•
|
longer collection cycles for accounts receivable;
|
•
|
potential changes in tax laws, including possible U.S. and foreign tax law changes that, if enacted, could significantly impact how multinational companies are taxed;
|
•
|
tax arrangements with foreign governments, including our ability to meet and renew the terms of those tax arrangements;
|
•
|
laws regarding the 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, natural disasters, and diseases.
|
•
|
general market, economic, business, and political conditions in particular geographies, including Europe, APAC, and emerging economies;
|
•
|
failure to produce sufficient revenue, billings or subscription growth, and profitability;
|
•
|
failure to achieve anticipated levels of customer acceptance of our business model transition, including the impact of the end of perpetual licenses and the introduction of our maintenance to subscription program;
|
•
|
changes in product mix, pricing pressure or changes in product pricing;
|
•
|
weak or negative growth in one or more of the industries we serve, including AEC, manufacturing, and digital media and entertainment markets;
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•
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the success of new business or sales initiatives;
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•
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restructuring or other accounting charges and unexpected costs or other operating expenses;
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•
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security breaches and potential financial penalties to customers and government entities;
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•
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changes in revenue recognition or other accounting guidelines employed by us and/or established by the Financial Accounting Standards Board or other rule-making bodies;
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•
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fluctuations in foreign currency exchange rates and the effectiveness of our hedging activity;
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•
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failure to achieve and maintain cost reductions and productivity increases;
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•
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dependence on and the timing of large transactions;
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•
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changes in billings linearity;
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•
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adjustments arising from ongoing or future tax examinations;
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•
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the ability of governments around the world to adopt fiscal policies, meet their financial and debt obligations, and to finance infrastructure projects;
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•
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lower growth or contraction of our maintenance program;
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•
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failure to expand our AutoCAD and AutoCAD LT customer base to related design products and services;
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•
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our ability to rapidly adapt to technological and customer preference changes, including those related to cloud computing, mobile devices, new computing platforms, and 3D printing;
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•
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the timing of the introduction of new products by us or our competitors;
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•
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the financial and business condition of our reseller and distribution channels;
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•
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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;
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•
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perceived or actual technical or other problems with a product or combination of products;
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•
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unexpected or negative outcomes of matters and expenses relating to litigation or regulatory inquiries;
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•
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increases in cloud services-related expenses;
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•
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timing of additional investments in the development of our platform or deployment of our services;
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•
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timing of product releases and retirements;
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•
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changes in tax laws or regulations, tax arrangements with foreign governments or accounting rules, such as increased use of fair value measures;
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•
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changes in sales compensation practices;
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•
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failure to effectively implement our copyright legalization programs, especially in developing countries;
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•
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failure to achieve sufficient sell-through in our channels for new or existing products;
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•
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renegotiation or termination of royalty or intellectual property arrangements;
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•
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interruptions or terminations in the business of our consultants or third-party developers;
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•
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the timing and degree of expected investments in growth and efficiency opportunities;
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•
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failure to achieve continued success in technology advancements;
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•
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catastrophic events or natural disasters;
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•
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regulatory compliance costs;
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•
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potential goodwill impairment charges related to prior acquisitions; and
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•
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failure to appropriately estimate the scope of services under consulting arrangements.
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•
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the inability to retain customers, key employees, vendors, distributors, business partners, and other entities associated with the acquired business;
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•
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the potential that due diligence of the acquired business or product does not identify significant problems;
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•
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exposure to litigation or other claims in connection with, or inheritance of claims or litigation risk as a result of, an acquisition, including but not limited to, claims from terminated employees, customers, or other third parties;
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•
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the potential for incompatible business cultures;
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•
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significantly higher than anticipated transaction or integration-related costs;
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•
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potential additional exposure to fluctuations in currency exchange rates; and
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•
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the potential impact on relationships with existing customers, vendors, and distributors as business partners as a result of acquiring another business.
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•
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shortfalls in our expected financial results, including net revenue, ARR, ARPS, earnings, subscriptions, or other key performance metrics;
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•
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results and future projections related to our business model transition;
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•
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quarterly variations in our or our competitors' results of operations;
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•
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general socio-economic, political or market conditions;
|
•
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changes in estimates of future results or recommendations or confusion on the part of analysts and investors about the short-term and long-term impact to our business resulting from our business model transition;
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•
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uncertainty about certain governments' abilities to repay debt or effect fiscal policy;
|
•
|
the announcement of new products or product enhancements by us or our competitors;
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•
|
unusual events such as significant acquisitions, divestitures, regulatory actions, and litigation;
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•
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changes in laws, rules, or regulations applicable to our business;
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•
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outstanding debt service obligations; and
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•
|
other factors, including factors unrelated to our operating performance, such as instability affecting the economy or the operating performance of our competitors.
|
•
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increasing our vulnerability to adverse changes in general economic, industry and competitive conditions;
|
•
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requiring the dedication of a greater than expected portion of our expected cash from operations to service our indebtedness, thereby reducing the amount of expected cash flow available for other purposes, including capital expenditures and acquisitions; and
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•
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limiting our flexibility in planning for, or reacting to, changes in our business and our industry.
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ITEM 2.
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UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
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ITEM 3.
|
DEFAULTS UPON SENIOR SECURITIES
|
ITEM 4.
|
MINE SAFETY DISCLOSURES
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ITEM 5.
|
OTHER INFORMATION
|
ITEM 6.
|
EXHIBITS
|
Exhibit No.
|
|
Description
|
|
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10.1
|
|
Third Supplemental Indenture, dated June 8, 2017, by and between Autodesk, Inc. and U.S. Bank National Association. (
incorporated by reference from Exhibit 4.1 of the Registrant's Current Report on Form 8-K filed on June 8, 2017
)
|
|
|
|
10.2
|
|
Form of Note for Autodesk, Inc.’s 3.500% Notes due 2027 (
incorporated by reference from Exhibit 4.1 of the Registrant's Current Report on Form 8-K filed on June 8, 2017
)
|
|
|
|
10.3*
|
|
Autodesk, Inc. 1998 Employee Qualified Stock Purchase Plan, as amended
|
|
|
|
10.4*
|
|
Autodesk, Inc. 2012 Employee Stock Plan, as amended
|
|
|
|
10.5*
|
|
Employment Agreement, dated as of June 19, 2017, by and between Autodesk, Inc. and Andrew Anagnost (
incorporated by reference to Exhibit 10.1 filed with the Registrant’s Current Report on Form 8-K filed on June 19, 2017
)
|
|
|
|
10.6*
|
|
Separation Agreement, dated as of June 19, 2017, by and between Autodesk, Inc. and Amar Hanspal. (
incorporated by reference to Exhibit 10.2 filed with the Registrant’s Current Report on Form 8-K filed on June 19, 2017
)
|
31.1
|
|
Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934
|
|
|
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31.2
|
|
Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934
|
|
|
|
32.1 †
|
|
Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
101.INS ††
|
|
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
|
|
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|
101.SCH ††
|
|
XBRL Taxonomy Extension Schema
|
|
|
|
101.CAL ††
|
|
XBRL Taxonomy Extension Calculation Linkbase
|
|
|
|
101.DEF ††
|
|
XBRL Taxonomy Definition Linkbase
|
|
|
|
101.LAB ††
|
|
XBRL Taxonomy Extension Label Linkbase
|
|
|
|
101.PRE ††
|
|
XBRL Taxonomy Extension Presentation Linkbase
|
|
|
*
|
Denotes a management contract or compensatory plan or arrangement.
|
†
|
The certifications attached as Exhibit 32 that accompany this Quarterly Report on Form 10-Q are not deemed filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of Autodesk, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Form 10-Q, irrespective of any general incorporation language contained in such filing.
|
|
|
††
|
The financial information contained in these XBRL documents is unaudited.
|
|
AUTODESK, INC.
|
(Registrant)
|
|
/s/ PAUL UNDERWOOD
|
Paul Underwood
|
Vice President and Corporate Controller
|
(Principal Accounting Officer)
|
|
1.
|
I have reviewed this report on Form 10-Q of Autodesk, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
/s/ ANDREW ANAGNOST
|
|
Andrew Anagnost
|
|
President and Chief Executive Officer
(Principal Executive Officer)
|
1.
|
I have reviewed this report on Form 10-Q of Autodesk, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
/s/ R. SCOTT HERREN
|
|
R. Scott Herren
|
|
Senior Vice President and Chief Financial Officer
(Principal Financial Officer)
|
|
/s/ ANDREW ANAGNOST
|
|
Andrew Anagnost
|
|
President and Chief Executive Officer
|
|
(Principal Executive Officer)
|
|
/s/ R. SCOTT HERREN
|
|
R. Scott Herren
|
|
Senior Vice President and Chief Financial Officer
|
|
(Principal Financial Officer)
|