Autodesk Inc (NASDAQ:ADSK) Q4 2017 Earnings Conference Call - Final Transcript

Mar 06, 2018 • 05:00 pm ET


Autodesk Inc (NASDAQ:ADSK) Q4 2017 Earnings Conference Call - Final Transcript


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Andrew Anagnost

Thanks, Scott. I'll reiterate what Scott just said and assure you that we are confident in our ability to accelerate ARR growth to achieve our fiscal '20 ARR and free cash flow goals. And we have a realistic plan in place to achieve those goals. Given the changes we've seen at the end of this year, it shouldn't come as a surprise that we'll be reducing the subs CAGR and increasing the ARPS CAGR, consistent with the move to fewer, higher value subs in both the core business and in our cloud business. The transition is on track and these model adjustments are happening for the right reasons. We'll go into all the details at our Investor Day on March 28th.

Now, if we look back at the year, we've taken significant action to realign our investments and position Autodesk to meet our long-term goals. We are investing in building and expanding the digital infrastructure of the company, increasing go to market and development spend for the construction opportunity and maintaining development of our core products. I'll finish by repeating these three strategic priorities that will drive long term success at Autodesk, completing the subscription transition, digitizing the company, and reimagining manufacturing, construction and production. We have already made significant progress in addressing the tremendous new market opportunity in the construction market and we will continue to pursue that market aggressively.

In addition, some of you may have noticed that we are increasing our efforts in the manufacturing space as we just opened the new advanced manufacturing facility in Birmingham to highlight the work we're doing to move product design and manufacturing companies to a new hybrid, additive and subtractive future. You'll see more of that over the next couple of years and you'll also begin to see the first results of our efforts to re-imagine production.

To wrap things up, I want to thank our customers but especially recognize our employees and partners who've worked so hard to make last year a success. We're excited to be now in the growth stage of the transition to see accelerated growth in ARR and to be another step further along the journey of our transition. We're confident in our long-term plans and ability to execute while providing our customers with greater ability, more compelling products and a better user experience.

Operator, we now like to open the call up for questions.

Scott Herren

Thanks, Andrew. Subscription plan subs grew by a record 371,000 during Q4 with growth in net subscriptions coming in all three categories, cloud, enterprise and product subscriptions. Partially offsetting the growth in subscription plan subs was the expected decline in maintenance plan subs, primarily related to the M2S program. M2S program continues to progress faster than expected, especially in the Americas.

In Q4, customers migrated a 168,000 maintenance subs to product subs. Similar to last quarter, approximately one-third of our maintenance renewal opportunities during Q4 migrated to product subscription. Those who migrated over a third of eligible subscriptions, upgraded from an