Autodesk Inc (NASDAQ:ADSK) Q2 2020 Earnings Conference Call - Final Transcript
Aug 27, 2019 • 05:00 pm ET
Thank you, sir. [Operator Instructions] Our first question comes from the line of Saket Kalia of Barclays. Your line is open.
Hi, guys. Thanks for taking my questions here.
Hey, Scott. Hey, Andrew. Hey, Andrew, maybe just to start with you slightly higher level question on the macro. I know we spoke about some of the regional items that we've seen whether it was [Phonetic] UK, China or Central Europe, but I want to maybe think about the macro from a different lens. Clearly a lot of concern out there about the manufacturing economy. And as we know, not all of Autodesk's business is levered to the manufacturing space. But for the part that is, can you just give us some color on the verticals that Autodesk sells into, whether that's auto or aerospace for example. Just to sort of get a sense for where Autodesk kind of sits with regards to different sub-segments of manufacturing, specifically?
Hey, Saket. Before we jump into that, I'd like to clear out something, we've heard that there is some confusion in our guidance metrics from the press release footnotes. So what our current guidance for free cash flow for fiscal '20 is $1.3 billion. If we get there by saying, free cash flow from operations -- cash flow from operations will be $1.37 billion, netted [Phonetic] $70 million of free cash flow to get to $1.3 billion. So I think that the footnote creates confusion that the $1.3 billion wasn't already netted for capex? It is. So it's $1.37 billion before capex as cash flow from ops, $1.3 billion is the free cash flow guidance for the year.
Okay. Go ahead. Scott?
R. Scott Herren
Yeah. So let me address your question about verticals and manufacturing in particular. First off just let me kind of just frame a few things. Our manufacturing business actually did pretty well, grew 20%, a lot better than any of our competitors. That has a lot to do with the way we're diversified. It also has a lot to do with the price points and the upfront, the reduced upfront cost of our offerings are pretty attractive to a lot of people. And we're also seeing acceleration in the CAM space due to the Fusion 360 portfolio and the way it integrates design and CAM along with the generative capability. So we're seeing is pretty strong performance in manufacturing, but to your point about which verticals we're exposed you know that our biggest vertical in manufacturing is what we call industrial machinery, and this is machinery of all manner and type. It's machines, you'll see inside automotive factories, but it's also machines you see the package serial, or to wrap toys, or to do any manner of things make paper in large industrial machines. It's our single biggest segment. Another really big segment for us is what's called building product manufacturers. And these are the people that build things that go into buildings and there are also the people that