Autodesk Inc (NASDAQ:ADSK) Q1 2016 Earnings Conference Call Transcript
May 19, 2015 • 05:00 pm ET
of existing PLM customers coming back to add on to their original deal. In Q1, we had a record quarter for total PLM 360 deals with many new companies buying, as well as many companies expanding their use of PLM 360.There are a lot of exciting things happening with Fusion 360 recently and the buzz around the product is building. Fusion 360 is such a game-changer for both startups and established manufacturers that we wanted to make it simple to purchase and make it very accessible. So, earlier this month, we simplified the pricing structure and made Fusion 360 subscriptions available-for-sale on Amazon.com.
It's clear that the way products are being designed and built is changing and customers are looking for tools to support these changes. Our cloud-based products like BIM 360, PLM 360, and Fusion 360 are leading the market. Just as we have changed the engineering in PLM markets with cloud-based products, we're doing the same with the Internet of Things. Across all the industries we serve, there is great interest in this technology. In the near-term, we can monitor buildings and factories to optimize operating conditions such as energy use, safety, and preventative maintenance.
Today's industrial products, commercial buildings and urban infrastructure have sensors built into them. The world of the future includes capturing and analyzing data from these sensors, incorporating the learnings into the next generation of products and designing new products that respond in real-time to changing conditions. The Internet of Things has the potential to substantively change design from creating static, inert, discrete things to creating dynamic networks of interacting things, environments and media. We think we are in a fantastic position to lead this market.
Now, let's talk more about our business transition. I think what is getting lost on some people is that we're not just changing our business model, we are transforming our business and the products that our customers use. The cloud is enabling our customers to think differently about how they approach design, simulation, production, and collaboration and doing so in ways that were not previously possible. We're also expanding our presence into new markets and adding new customers to our sizeable base.
It's worth repeating that our business model transition will not be perfectly linear and that the amount of business that we transition, the number of subscription additions and the mix of subscription additions will fluctuate from quarter-to-quarter and year-to-year. Earlier this year, we announced that we would stop selling new perpetual offerings from most of the standalone products at the end of our fiscal year, which is January 31 of calendar 2016. We will also discontinue selling new perpetual licenses for suites some time in fiscal 2017.
At that point, nearly all revenue will come from ratably recognized offerings including desktop and cloud subscriptions, EBAs and maintenance. This will naturally put downward pressure on reported revenue in FY 2017 as perpetual license offerings are discontinued. From there, we would expect a material rebound in the income