Autodesk Inc (NASDAQ:ADSK) Q2 2020 Earnings Conference Call - Final Transcript
Aug 27, 2019 • 05:00 pm ET
of fiscal '20. However, we think the uncertainty caused by macro-related events is only a short-term issue. We remain confident in our ability to achieve the fiscal '23 goals we have laid out for you. Our confidence is grounded in the value delivered by our products, their ability to help our customers differentiate via innovation and digitization, focused execution delivered by our partners and sales teams, and the significant strides we are making to capture the non-paying user community. I would also like to point out that although there are headlines of some impact from the current environment on a few industry verticals like Manufacturing, we outgrew competitors and gained share in the space. The construction industry is also holding steady and continues to invest in innovative solutions, and we saw ongoing strength in construction this quarter.
Before I offer you more color on strategic highlights during the quarter, let me first turn it over to Scott to give you more details on our second quarter results as well as details of our updated fiscal '20 guidance. I'll then return with further insights on the key drivers of our business, including Construction, Manufacturing and Digital Transformation before we open it up for Q&A.
R. Scott Herren
Thanks, Andrew. As Andrew mentioned, revenue, billings, earnings and free cash flow all performed ahead of expectations during the second quarter. Overall demand in our end markets was solid during the quarter, as indicated by our strong billings and revenue growth. Growth was driven by both volume and pricing, which is a result of the strong uptake of our products by new users as well as increased usage with existing customers. Sales volume of AutoCAD LT also remained strong. This has historically been a leading indicator of a potential demand slowdown. And as you can see, revenue from our AutoCAD and AutoCAD LT products grew 31% in the second quarter. AEC and Manufacturing revenue rose 37% and 20%, respectively. Geographically, we saw broad-based strength across all regions. Revenue grew 32% in the Americas, 27% in EMEA and 33% in APAC, with strength across almost all countries. We also saw strength in direct revenue, which rose 38% versus last year and represented 30% of our total sales, up from 28% in the second quarter of last year.
Before I comment on ARR, I want to remind you how we define it. ARR is the annualized value of our actual recurring revenue for the quarter, or said another way, it is the reported recurring revenue for the quarter multiplied by four. Total ARR of $3.1 billion continued to grow steadily and was up 31%. Adjusting for our fourth quarter acquisitions, total ARR was up 27%. Within Core ARR, growth was roughly in line with total organic growth and was driven by the strength in product subscriptions. In Cloud, ARR grew 175%, propelled by our strong performance in Construction. Excluding $98 million of ARR from our fourth quarter acquisitions, growth in organic Cloud ARR, which is primarily made up of