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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended July 31, 2024
or
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from             to            
Commission File Number: 0-14338
 
AUTODESK, INC.
(Exact name of registrant as specified in its charter)
Delaware94-2819853
(State or other jurisdiction of
incorporation or organization)		(I.R.S. employer
Identification No.)
One Market Street, Ste. 400
San Francisco, California94105
(Address of principal executive offices)(Zip Code)
(415) 507-5000
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.01 per shareADSKThe Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and ‘emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer☒  Accelerated filer☐
Non-accelerated filer☐  Smaller reporting company☐
  Emerging growth company☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of August 23, 2024, registrant had outstanding 215 million shares of common stock.

AUTODESK, INC. FORM 10-Q
TABLE OF CONTENTS
  Page No.
Item 1.
Item 2.
Item 3.
Item 4.
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.


PART I. FINANCIAL INFORMATION
 
ITEM 1.FINANCIAL STATEMENTS

AUTODESK, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share data)
(Unaudited)
 
 Three Months Ended July 31,Six Months Ended July 31,
 2024202320242023
Net revenue:
Subscription$1,408 $1,270 $2,738 $2,463 
Maintenance 11 14 22 28 
Total subscription and maintenance revenue1,419 1,284 2,760 2,491 
Other86 61 162 123 
Total net revenue1,505 1,345 2,922 2,614 
Cost of revenue:
Cost of subscription and maintenance revenue100 95 200 191 
Cost of other revenue18 21 38 41 
Amortization of developed technologies22 11 39 22 
Total cost of revenue140 127 277 254 
Gross profit1,365 1,218 2,645 2,360 
Operating expenses:
Marketing and sales480 449 949 905 
Research and development368 355 714 682 
General and administrative161 141 316 273 
Amortization of purchased intangibles 13 11 24 21 
Total operating expenses1,022 956 2,003 1,881 
Income from operations343 262 642 479 
Interest and other income (expense), net9 (4)19 — 
Income before income taxes352 258 661 479 
Provision for income taxes(70)(36)(127)(96)
Net income $282 $222 $534 $383 
Basic net income per share$1.31 $1.04 $2.48 $1.79 
Diluted net income per share$1.30 $1.03 $2.46 $1.77 
Weighted average shares used in computing basic net income per share216 214 215 214 
Weighted average shares used in computing diluted net income per share217 215 217 216 

See accompanying Notes to Condensed Consolidated Financial Statements.

4
AUTODESK, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In millions)
(Unaudited)
Three Months Ended July 31,Six Months Ended July 31,
2024202320242023
Net income $282 $222 $534 $383 
Other comprehensive income (loss), net of reclassifications:
Net loss on derivative instruments (net of tax effect of $1,$1, $1, and $3, respectively)
(5)(13)(3)(26)
Change in net unrealized gain (loss) on available-for-sale debt securities (net of tax effect of zero for all periods presented)
3 (3)1 (1)
Net change in cumulative foreign currency translation gain (loss) (net of tax effect of zero, zero, zero, and $5, respectively)
16 18 (13)14 
Total other comprehensive income (loss)14 2 (15)(13)
Total comprehensive income $296 $224 $519 $370 

See accompanying Notes to Condensed Consolidated Financial Statements.

5
AUTODESK, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions)
(Unaudited)
 
July 31, 2024January 31, 2024
ASSETS
Current assets:
Cash and cash equivalents$1,513 $1,892 
Marketable securities365 354 
Accounts receivable, net402 876 
Prepaid expenses and other current assets478 457 
Total current assets2,758 3,579 
Long-term marketable securities231 234 
Computer equipment, software, furniture and leasehold improvements, net116 121 
Operating lease right-of-use assets205 224 
Intangible assets, net609 406 
Goodwill4,253 3,653 
Deferred income taxes, net1,129 1,093 
Long-term other assets659 602 
Total assets$9,960 $9,912 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable$174 $100 
Accrued compensation361 476 
Accrued income taxes48 36 
Deferred revenue3,228 3,500 
Operating lease liabilities67 67 
Current portion of long-term notes payable, net300 — 
Other accrued liabilities159 172 
Total current liabilities4,337 4,351 
Long-term deferred revenue464 764 
Long-term operating lease liabilities250 275 
Long-term income taxes payable183 168 
Long-term deferred income taxes 36 25 
Long-term notes payable, net1,986 2,284 
Long-term other liabilities230 190 
Stockholders’ equity:
Common stock and additional paid-in capital4,009 3,802 
Accumulated other comprehensive loss(249)(234)
Accumulated deficit(1,286)(1,713)
Total stockholders’ equity 2,474 1,855 
Total liabilities and stockholders’ equity $9,960 $9,912 

See accompanying Notes to Condensed Consolidated Financial Statements.

6
AUTODESK, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
 
 Six Months Ended July 31,
 20242023
Operating activities:
Net income $534 $383 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and accretion86 66 
Stock-based compensation expense316 362 
Amortization of costs to obtain a contract with a customer85 63 
Deferred income taxes(40)(65)
Lease-related asset impairments— 7 
Other(5)(33)
Changes in operating assets and liabilities, net of business combinations:
Accounts receivable477 559 
Prepaid expenses and other assets (167)(95)
Accounts payable and other liabilities (30)(106)
Deferred revenue(577)(350)
Accrued income taxes27 67 
Net cash provided by operating activities
706 858 
Investing activities:
Purchases of marketable securities(431)(687)
Sales and maturities of marketable securities430 339 
Capital expenditures(16)(16)
Purchases of intangible assets(39)(10)
Business combinations, net of cash acquired(801)(26)
Other investing activities(7)(18)
Net cash used in investing activities(864)(418)
Financing activities:
Proceeds from issuance of common stock, net of issuance costs71 71 
Taxes paid related to net share settlement of equity awards (172)(120)
Repurchases of common stock(120)(616)
Net cash used in financing activities(221)(665)
Effect of exchange rate changes on cash and cash equivalents— (8)
Net decrease in cash and cash equivalents(379)(233)
Cash and cash equivalents at beginning of period1,892 1,947 
Cash and cash equivalents at end of period$1,513 $1,714 
Supplemental cash flow disclosure:
Non-cash financing activities:
Fair value of common stock issued to settle liability-classified restricted common stock$3 $9 

See accompanying Notes to Condensed Consolidated Financial Statements.
7
AUTODESK, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(In millions, except share and per share data, or as otherwise noted)
 
1. Basis of Presentation

The accompanying unaudited Condensed Consolidated Financial Statements of Autodesk, Inc. (“Autodesk,” “we,” “us,” “our,” or the “Company”) as of July 31, 2024, and for the three and six months ended July 31, 2024 and 2023, have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information along with the instructions to Form 10-Q and Article 10 of Securities and Exchange Commission (“SEC”) Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for annual financial statements. In management’s opinion, Autodesk made all adjustments (consisting of normal, recurring and non-recurring adjustments) during the quarter that were considered necessary for the fair statement of the financial position and operating results of the Company. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported amounts in the financial statements and accompanying notes. Actual results could differ from those estimates. In addition, the results of operations for the three and six months ended July 31, 2024, are not necessarily indicative of the results for the entire fiscal year ending January 31, 2025, or for any other period. Further, the balance sheet as of January 31, 2024, has been derived from the audited Consolidated Balance Sheet as of this date. There have been no material changes, other than what is discussed herein, to Autodesk's significant accounting policies as compared to the significant accounting policies disclosed in the Annual Report on Form 10-K for the fiscal year ended January 31, 2024. These unaudited Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and related notes, together with management’s discussion and analysis of financial position and results of operations, contained in Autodesk’s Annual Report on Form 10-K for the fiscal year ended January 31, 2024, filed on June 10, 2024.

Change in presentation

During the six months ended July 31, 2024, the Company changed its presentation of the amortization of costs capitalized to obtain a contract with a customer in our Condensed Consolidated Statements of Cash Flows. Amortization of costs capitalized to obtain a contract with a customer were previously presented in “Changes in operating assets and liabilities, net of business combinations” and are now presented in “Adjustments to reconcile net income to net cash provided by operating activities.” Accordingly, prior period amounts have been reclassified to conform to the current period presentation. These reclassifications did not impact total net cash provided by operating activities. The effect of the change on the Condensed Consolidated Statement of Cash Flows for the six months ended July 31, 2023 was $63 million.

2. Recently Issued Accounting Standards

With the exception of those discussed below, there have been no recent changes in accounting pronouncements issued by the Financial Accounting Standards Board (“FASB”) or adopted by the Company during the six months ended July 31, 2024, that are applicable to the Company.

Recently Issued Accounting Standards Not Yet Adopted

In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes (Topic 740): Improvement to Income Tax Disclosures” (“ASU 2023-09”), to enhance the transparency and decision usefulness of income tax disclosures. ASU 2023-09 requires disaggregated information about a reporting entity's effective tax rate reconciliation as well as information on income taxes paid. The standard is intended to benefit investors by providing more detailed income tax disclosures that would be useful in making capital allocation decisions and applies to all entities subject to income taxes. ASU 2023-09 is effective for Autodesk’s fiscal year beginning February 1, 2025 on a prospective basis. Early adoption is permitted. Autodesk is currently evaluating the effect of adopting ASU 2023-09 on its disclosures.

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Accounting Standards Adopted

In November 2023, the FASB issued ASU No. 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures” (“ASU 2023-07”), which are intended to improve reportable segment disclosure requirements. ASU 2023-07 expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets. All disclosure requirements of ASU 2023-07 are required for entities with a single reportable segment. ASU 2023-07 is effective for Autodesk’s fiscal year beginning February 1, 2024, and interim periods for Autodesk’s fiscal year beginning February 1, 2025, and should be applied on a retrospective basis to all periods presented. Autodesk is currently evaluating the effect of adopting ASU 2023-07 on its fiscal year 2025 disclosures.

3. Revenue Recognition

Revenue Disaggregation

Autodesk recognizes revenue from the sale of (1) product subscriptions, cloud service offerings, and enterprise business agreements (“EBAs”), (2) renewal fees for existing maintenance plan agreements that were initially purchased with a perpetual software license, and (3) consulting and other products and services. The three categories are presented as line items on Autodesk's Condensed Consolidated Statements of Operations.

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Information regarding the components of Autodesk's net revenue from contracts with customers by product family, geographic location, sales channel, and product type is as follows: 
 Three Months Ended July 31,Six Months Ended July 31,
2024202320242023
Net revenue by product family:
Architecture, Engineering and Construction $713 $627 $1,387 $1,209 
AutoCAD and AutoCAD LT 389 364 765 713 
Manufacturing296 256 564 502 
Media and Entertainment77 74 148 145 
Other 30 24 58 45 
Total net revenue$1,505 $1,345 $2,922 $2,614 
Net revenue by geographic area:
Americas
U.S.$543 $485 $1,052 $941 
Other Americas119 104 229 201 
Total Americas662 589 1,281 1,142 
Europe, Middle East and Africa570 506 1,104 980 
Asia Pacific273 250 537 492 
Total net revenue$1,505 $1,345 $2,922 $2,614 
Net revenue by sales channel:
Indirect$908 $850 $1,788 $1,670 
Direct597 495 1,134 944 
Total net revenue$1,505 $1,345 $2,922 $2,614 
Net revenue by product type:
Design$1,257 $1,154 $2,453 $2,240 
Make162 130 307 251 
Other86 61 162 123 
Total net revenue$1,505 $1,345 $2,922 $2,614 
Payments for product subscriptions, cloud subscriptions, and maintenance subscriptions are typically due in annual installments or up front with payment terms of 30 to 45 days. Payments on EBAs are due up front or in annual installments over the contract term, with payment terms of 30 to 60 days. Autodesk does not have any material variable consideration, such as obligations for returns, refunds, warranties, or amounts due to customers for which significant estimation or judgment is required as of the reporting date.

Remaining performance obligations consist of total short-term, long-term, and unbilled deferred revenue. As of July 31, 2024, Autodesk had remaining performance obligations of $5.86 billion, which represents the total transaction price allocated to remaining performance obligations, which are generally recognized over the next three years. We expect to recognize $3.90 billion or 66% of our remaining performance obligations as revenue during the next 12 months. We expect to recognize the remaining $1.96 billion or 34% of our remaining performance obligations as revenue thereafter.

The amount of remaining performance obligations may be impacted by the specific timing, duration, and size of customer subscription and support agreements, the specific timing of customer renewals, and foreign currency fluctuations.

Contract Balances

We receive payments from customers based on a billing schedule as established in our contracts. Contract assets relate to performance completed in advance of scheduled billings. Contract assets were not material as of July 31, 2024. Deferred
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revenue relates to billings in advance of performance under the contract. The primary changes in our contract assets and deferred revenues are due to our performance under the contracts and billings.

Revenue recognized during the three months ended July 31, 2024 and 2023, that was included in the deferred revenue balances at January 31, 2024 and 2023, was $1.02 billion and $913 million, respectively. Revenue recognized during the six months ended July 31, 2024 and 2023, that was included in the deferred revenue balances at January 31, 2024 and 2023, was $2.21 billion and $1.98 billion, respectively. The satisfaction of performance obligations typically lags behind payments received under revenue contracts from customers.

4. Concentration of Credit Risk
    
Autodesk places its cash, cash equivalents, and marketable securities in highly liquid instruments with, and in the custody of, multiple diversified financial institutions globally with high credit ratings, and limits the amounts invested with any one institution, type of security, and issuer. Autodesk’s primary commercial banking relationship is with Citigroup Inc. and its global affiliates. Citibank, N.A., an affiliate of Citigroup, is one of the lead lenders and an agent in the syndicate of Autodesk’s $1.5 billion revolving credit facility. See Note 14, “Borrowing Arrangements,” in the Notes to Condensed Consolidated Financial Statements for further discussion.

Total revenue from the Company's largest distributor TD Synnex Corporation and its global affiliates (“TD Synnex”) accounted for 36% and 37% of Autodesk’s total net revenue during the three and six months ended July 31, 2024, respectively. Total revenue from TD Synnex accounted for 40% of Autodesk’s total net revenue during both the three and six months ended July 31, 2023. The majority of the net revenue from sales to TD Synnex is from sales outside of the United States. In addition, TD Synnex accounted for 19% and 18% of trade accounts receivable at July 31, 2024, and January 31, 2024, respectively. No other customer accounted for more than 10% of Autodesk's total net revenue or trade accounts receivable for each of the respective periods.
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5. Financial Instruments

The following tables summarize the Company's financial instruments by significant investment category as of July 31, 2024, and January 31, 2024:
July 31, 2024
Amortized CostGross Unrealized GainsGross Unrealized LossesFair Value
Cash equivalents (1):
Money market funds$456 $— $— $456 
Commercial paper 242 — — 242 
Certificates of deposit77 — — 77 
U.S. government securities18 — — 18 
Other (2)10 — — 10 
Marketable securities:
Short-term
Commercial paper188 — — 188 
Corporate debt securities93 — — 93 
U.S. government securities45 — — 45 
Asset-backed securities26 — — 26 
Other (3)13 — — 13 
Long-term
Corporate debt securities93 1 (1)93 
Asset-backed securities62 — — 62 
Agency mortgage-backed securities42 — — 42 
U.S. government securities24 — — 24 
Other (4)10 — — 10 
Mutual funds (5) (6)96 21 (1)116 
Total$1,495 $22 $(2)$1,515 
___________________ 
(1)Included in “Cash and cash equivalents” in the accompanying Condensed Consolidated Balance Sheets. These investments are classified as debt securities.
(2)Primarily consists of agency discount bonds and corporate debt securities.
(3)Primarily consists of agency discount bonds and mortgage-backed securities.
(4)Primarily consists of agency bonds and agency collateralized mortgage obligations.
(5)See Note 12, “Deferred Compensation” for more information.
(6)Included in “Prepaid expenses and other current assets” or “Long-term other assets” in the accompanying Condensed Consolidated Balance Sheets.
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January 31, 2024
Amortized CostGross Unrealized GainsGross Unrealized LossesFair Value
Cash equivalents (1):
Money market funds$693 $— $— $693 
Commercial paper250 — — 250 
U.S government securities92 — — 92 
Certificates of deposit80 — — 80 
Other (2)6 — — 6 
Marketable securities:
Short-term
Commercial paper159 — — 159 
Corporate debt securities75 — — 75 
U.S. government securities 70 — — 70 
Asset-backed securities 28 — — 28 
Other (3)22 — — 22 
Long-term
Corporate debt securities103 1 — 104 
Asset backed securities59 — — 59 
Agency mortgage-backed securities36 ——36 
U.S. government securities24 — — 24 
Other (4)11 — — 11 
Mutual funds (5) (6)89 12 (1)100 
Total$1,797 $13 $(1)$1,809 
____________________ 
(1)Included in “Cash and cash equivalents” in the accompanying Condensed Consolidated Balance Sheets. These investments are classified as debt securities.
(2)Consists primarily of mortgage-backed securities and corporate debt securities.
(3)Consists primarily of agency discount bonds, U.S. government securities, mortgage-backed securities, certificates of deposit, and agency bonds.
(4)Consists primarily of agency bonds, agency collateralized mortgage obligations, and mortgage-backed securities.
(5)See Note 12, “Deferred Compensation” for more information.
(6)Included in “Prepaid expenses and other current assets,” or “Long-term other assets,” in the accompanying Condensed Consolidated Balance Sheets.

The following table summarizes the fair values of investments classified as marketable debt securities by contractual maturity date as of July 31, 2024:
Fair Value
Due within 1 year$332 
Due in 1 year through 5 years227 
Due in 5 years through 10 years11 
Due after 10 years26 
Total
$596 
    
As of both July 31, 2024, and January 31, 2024, Autodesk had no material unrealized losses, individually and in the aggregate, for marketable debt securities that are in a continuous unrealized loss position for greater than 12 months. Total unrealized gains for securities with net gains in accumulated other comprehensive income were not material for the six months ended July 31, 2024.

Autodesk monitors all marketable debt securities for potential credit losses by reviewing indicators such as, but not limited to, current credit rating, change in credit rating, credit outlook, and default risk. There were no allowances for credit
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losses as of both July 31, 2024, and January 31, 2024. There were no write offs of accrued interest receivables for both the six months ended July 31, 2024 and 2023.

There were no material realized gains or losses for the sales or redemptions of marketable debt securities during both the six months ended July 31, 2024 and 2023. Realized gains and losses from the sales or redemptions of marketable debt securities are recorded in “Interest and other income (expense), net” on the Company's Condensed Consolidated Statements of Operations.

Proceeds from the sale and maturity of marketable debt securities were as follows:
Three Months Ended July 31,Six Months Ended July 31,
2024202320242023
Marketable debt securities$168 $176 $430 $339 

Strategic investments in equity securities

As of July 31, 2024, and January 31, 2024, Autodesk had $160 million and $162 million, respectively, in direct investments in privately held companies. These strategic investments in equity securities do not have readily determined fair values, and Autodesk uses the measurement alternative to account for the adjustment to these investments in a given quarter. If Autodesk determines that an impairment has occurred, Autodesk writes down the investment to its fair value. These strategic investments in equity securities are generally subject to a security-specific restriction which limits the sale or transfer of the respective equity security during the holding period.

Adjustments to the carrying value of our strategic investment equity securities with no readily determined fair values measured using the measurement alternative are included in “Interest and other income (expense), net” on the Company's Condensed Consolidated Statements of Operations. These adjustments were as follows:
 Six Months Ended July 31,Cumulative Amount as of
20242023July 31, 2024
Upward adjustments$— $— $29 
Negative adjustments, including impairments (6)(11)(120)
Net unrealized adjustments$(6)$(11)$(91)

Realized gains for the disposition of strategic investment equity securities for both the three and six months ended July 31, 2024 and 2023 were immaterial.

Fair Value

Autodesk applies fair value accounting for certain financial assets and liabilities, which consist of cash equivalents, marketable securities, and other financial instruments, on a recurring basis. The Company defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

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The following tables summarize the Company's financial instruments measured at fair value on a recurring basis by significant investment category as of July 31, 2024, and January 31, 2024:  
July 31, 2024
Level 1Level 2Level 3Total
Assets:
Cash equivalents (1):
Money market funds$456 $— $— $456 
Commercial paper — 242 — 242 
Certificates of deposit— 77 — 77 
U.S. government securities— 18 — 18 
Other (2)— 10 — 10 
Marketable securities:
Short-term
Commercial paper— 188 — 188 
Corporate debt securities— 93 — 93 
U.S. government securities— 45 — 45 
Asset-backed securities— 26 — 26 
Other (3)— 13 — 13 
Long-term
Corporate debt securities— 93 — 93 
Asset-backed securities— 62 — 62 
Agency mortgage-backed securities— 42 — 42 
U.S. government securities— 24 — 24 
Other (4)— 10 — 10 
Long-term other assets:
Mutual funds (5)(6)116 — — 116 
Derivative assets:
Derivative contract assets (6)— 12 — 12 
Derivative liabilities:
Derivative contract liabilities (7)— (10)— (10)
Total$572 $945 $— $1,517 
____________________ 
(1)Included in “Cash and cash equivalents” in the accompanying Condensed Consolidated Balance Sheets. These investments are classified as debt securities.
(2)Primarily consists of agency discount bonds and corporate debt securities.
(3)Primarily consists of agency discount bonds and mortgage-backed securities.
(4)Primarily consists of agency bonds and agency collateralized mortgage obligations.
(5)See Note 12, “Deferred Compensation” for more information.
(6)Included in “Prepaid expenses and other current assets” or “Long-term other assets” in the accompanying Condensed Consolidated Balance Sheets.
(7)Included in “Other accrued liabilities” in the accompanying Condensed Consolidated Balance Sheets.


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January 31, 2024
Level 1Level 2Level 3Total
Assets:
Cash equivalents (1):
Money market funds$693 $— $— $693 
Commercial paper— 250 — 250 
U.S government securities— 92 — 92 
Certificates of deposit— 80 — 80 
Other (2)— 6 — 6 
Marketable securities:
Short-term
Commercial paper— 159 — 159 
Corporate debt securities— 75 — 75 
U.S. government securities — 70 — 70 
Asset backed securities — 28 — 28 
Other (3)— 22 — 22 
Long-term
Corporate debt securities— 104 — 104 
Asset backed securities— 59 — 59 
Agency bonds— 36 — 36 
U.S. government securities— 24 — 24 
Other (4)— 11 — 11 
Long-term other assets:
Mutual funds (5) (6)100 — — 100 
Derivative assets:
Derivative contract assets (6)— 21 — 21 
Derivative liabilities:
Derivative contract liabilities (7)— (15)— (15)
Total$793 $1,022 $— $1,815 
____________________ 
(1)Included in “Cash and cash equivalents” in the accompanying Condensed Consolidated Balance Sheets. These investments are classified as debt securities.
(2)Consists primarily of mortgage-backed securities and corporate debt securities.
(3)Consists primarily of agency discount bonds, U.S. government securities, mortgage-backed securities, certificates of deposit, and agency bonds.
(4)Consists primarily of agency bonds, agency collateralized mortgage obligations, and mortgage-backed securities.
(5)See Note 12, “Deferred Compensation” for more information.
(6)Included in “Prepaid expenses and other current assets,” or “Long-term other assets,” in the accompanying Condensed Consolidated Balance Sheets.
(7)Included in “Other accrued liabilities” in the accompanying Condensed Consolidated Balance Sheets.





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6. Equity Compensation

Restricted Stock Units

A summary of restricted stock activity for the six months ended July 31, 2024, is as follows:
Unvested
restricted
stock units		Weighted
average grant
date fair value
per share
 (in thousands) 
Unvested restricted stock units at January 31, 20245,371 $203.87 
Granted2,813 241.37 
Vested(2,069)206.42 
Canceled/Forfeited(194)209.40 
        Performance Adjustment (1)(33)193.79 
Unvested restricted stock units at July 31, 2024
5,888 $221.51 
_______________
(1)Based on Autodesk's financial results and relative total stockholder return for the fiscal 2024 performance period. The performance stock units were attained at rates ranging from 75% to 96% of the target award.

The fair value of the shares vested during the six months ended July 31, 2024 and 2023, was $514 million and $373 million, respectively.

During the six months ended July 31, 2024, Autodesk granted 3 million restricted stock units. Restricted stock units are not considered outstanding stock at the time of grant, as the holders of these units are not entitled to any of the rights of a stockholder, including voting rights.

Autodesk recorded stock-based compensation expense related to restricted stock units of $153 million and $164 million during the three months ended July 31, 2024 and 2023, respectively. Autodesk recorded stock-based compensation expense related to restricted stock units of $280 million and $294 million during the six months ended July 31, 2024 and 2023, respectively.

During the six months ended July 31, 2024, Autodesk granted 279 thousand performance stock units for which the ultimate number of shares earned is determined based on the achievement of performance criteria at the end of the stated performance and service period. The performance criteria for the majority of the performance stock units are based on revenue and free cash flow goals adopted by the Compensation and Human Resource Committee and total stockholder return compared against companies in the S&P North American Technology Software Index with a market capitalization over $2.0 billion (“Relative TSR”). The fair value of the performance stock units is expensed using the accelerated attribution method over the three-year vesting period and the performance stock units have the following vesting schedule:

•Up to one third of the performance stock units may vest following year one, depending upon the achievement of the performance criteria for fiscal 2025 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).

The performance criteria for the performance stock units vested during the six months ended July 31, 2024, was based on revenue and free cash flow goals adopted by the Compensation and Human Resource Committee.

Performance stock units are not considered outstanding stock at the time of grant, as the holders of these units are not entitled to any of the rights of a stockholder, including voting rights.

Autodesk recorded stock-based compensation expense related to performance stock units of $8 million and $10 million for the three months ended July 31, 2024 and 2023, respectively. Autodesk recorded stock-based compensation expense related to performance stock units of $14 million and $21 million for the six months ended July 31, 2024 and 2023, respectively.
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Common Stock

Autodesk recorded stock-based compensation expense related to common stock shares of $3 million and $4 million for the three months ended July 31, 2024 and 2023, respectively. Autodesk recorded stock-based compensation expense related to common stock shares of $4 million and $10 million for the six months ended July 31, 2024 and 2023, respectively.

1998 Employee Qualified Stock Purchase Plan (“ESPP”)

Under Autodesk’s ESPP, which was approved by stockholders in 1998, eligible employees may purchase shares of Autodesk’s common stock at their discretion using up to 15% of their eligible compensation, subject to certain limitations, at 85% of the lower of Autodesk's closing price (fair market value) on the offering date or the exercise date. The offering period for ESPP awards consists of four, six-month exercise periods within a 24-month offering period.

A summary of the ESPP activity for the six months ended July 31, 2024 and 2023, is as follows:
Six Months Ended July 31,
20242023
Issued shares (in thousands)433 434 
Average price of issued shares$164.81 $163.59 
Weighted average grant date fair value of shares granted under the ESPP (1)$79.14 $71.34 
 _______________
(1)Calculated as of the award grant date using the Black-Scholes Merton (“BSM”) option pricing model.

Stock-based Compensation Expense

The following table summarizes stock-based compensation expense for the three and six months ended July 31, 2024 and 2023, as follows:
Three Months Ended July 31,Six Months Ended July 31,
2024202320242023
Cost of subscription and maintenance revenue$9 $10 $18 $19 
Cost of other revenue3 4 6 7 
Marketing and sales61 74 114 136 
Research and development76 86 142 155 
General and administrative21 23 39 45 
Stock-based compensation expense related to stock awards and ESPP purchases
170 197 319 362 
Tax (benefit) expense(2)2 (17)3 
Stock-based compensation expense related to stock awards and ESPP purchases, net of tax
$168 $199 $302 $365 
 
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Stock-based Compensation Expense Assumptions

Autodesk determines the grant date fair value of its share-based payment awards BSM option pricing model or the quoted stock price on the date of grant, unless the awards are subject to market conditions, in which case Autodesk uses the Monte Carlo simulation model. The Monte Carlo simulation model uses multiple input variables to estimate the probability that market conditions will be achieved. Autodesk uses the following assumptions to estimate the fair value of stock-based awards:
 Six Months Ended July 31, 2024Six Months Ended July 31, 2023
 Performance Stock UnitsESPP (1)Performance Stock Units (2)ESPP (2)
Range of expected volatilities
29.4 - 31.4%
28.7 - 34.5%
40.9 - 42.5%
40.0 - 42.4%
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
5.2%
4.6 - 5.4%
4.3 - 4.7%
4.3 - 5.0%
(1)There were no ESPP awards granted during the three months ended July 31, 2024.
(2)There were no ESPP awards or performance stock units granted during the three months ended July 31, 2023.
Autodesk estimates expected volatility for stock-based awards based on the average of the following two measures: (1) a measure of historical volatility in the trading market for the Company’s common stock, and (2) the implied volatility of traded options to purchase shares of the Company’s common stock. The expected volatility for performance stock units subject to market conditions includes the expected volatility of companies within the S&P North American Technology Software Index with a market capitalization over $2.0 billion, depending on the award type.

The range of expected lives of ESPP awards are based upon the four six-month exercise periods within a 24-month offering period.

Autodesk does not currently pay, and does not anticipate paying in the foreseeable future, any cash dividends. Consequently, an expected dividend yield of zero is used in the BSM option pricing model and the Monte Carlo simulation model.

The risk-free interest rate used in the BSM option pricing model and the Monte Carlo simulation model for stock-based awards is the historical yield on U.S. Treasury securities with equivalent remaining lives.

Autodesk recognizes expense only for the stock-based awards that ultimately vest. Autodesk accounts for forfeitures of our stock-based awards as those forfeitures occur.

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7. Income Tax

 Autodesk had income tax expense of $70 million, relative to pre-tax income of $352 million for the three months ended July 31, 2024, and income tax expense of $36 million, relative to pre-tax income of $258 million for the three months ended July 31, 2023. Income tax expense for the three months ended July 31, 2024, reflects U.S. and foreign tax expense, including withholding tax, reduced by tax-deductible stock-based compensation and the foreign derived intangibles tax benefit in the U.S. The tax expense increased compared to July 31, 2023, mainly due to a nonrecurring tax benefit in the prior year arising from the temporary relief provided by Notice 2023-55 relating to U.S. foreign tax credit regulations.

 Autodesk had income tax expense of $127 million, relative to pre-tax income of $661 million for the six months ended July 31, 2024, and income tax expense of $96 million, relative to pre-tax income of $479 million for the six months ended July 31, 2023. Income tax expense for the six months ended July 31, 2024, reflects U.S. and foreign tax expense, including withholding tax, reduced by tax-deductible stock-based compensation and the foreign derived intangibles tax benefit in the U.S. The tax expense increased compared to July 31, 2023, due to increased profit before tax, offset by an increase in tax-deductible stock-based compensation. The period to July 31, 2023 had a nonrecurring tax benefit arising from the temporary relief provided by Notice 2023-55 relating to U.S. foreign tax credit regulations.

Autodesk regularly assesses the need for a valuation allowance against its deferred tax assets. In making that assessment, Autodesk considers both positive and negative evidence related to the likelihood of realization of the deferred tax assets to determine, based on the weight of available evidence, whether it is more likely than not that some or all of the deferred tax assets will not be realized. The Company continues to retain a valuation allowance against Australia, Portugal, New Zealand, California, Massachusetts, and Michigan deferred tax assets and deferred tax assets that will convert to a capital loss upon reversal in the U.S., as we do not have sufficient income of the appropriate character to benefit these deferred tax assets.

As of July 31, 2024, the Company had $271 million of gross unrecognized tax benefits, of which $228 million would impact the effective tax rate, if recognized. The remaining $43 million would reduce our valuation allowance, if recognized. The amount of unrecognized tax benefits will immaterially decrease in the next twelve months for statute lapses.

Signed into law on August 16, 2022 in the U.S., the Inflation Reduction Act contains many revisions to the Internal Revenue Code effective in taxable years beginning after December 31, 2022, including a 15% corporate alternative minimum tax. Autodesk continues to monitor the impact of the Inflation Reduction Act on its consolidated financial statements.

Signed into law on December 18, 2023 in Ireland, the Finance (No. 2) Act 2023 provides legislation to implement tax principles arising from proposals made by the Organization for Economic Co-operation and Development to establish a global minimum tax rate of 15%. The Company’s assessment of this legislation resulted in additional tax expense having a minimal impact to the consolidated financial statements. Other countries have enacted legislation or are actively considering changes to their tax law. The Company will continue to monitor proposed and enacted legislation for potential future impact on its consolidated financial statements.

8. Acquisitions

The results of operations for the following acquisitions are included in the accompanying Condensed Consolidated Statements of Operations since the acquisition date. Pro forma results of operations have not been presented because the effects of the acquisition are not material to Autodesk’s Condensed Consolidated Financial Statements.

On February 20, 2024, Autodesk acquired 100% of the outstanding stock of Payapps Limited (“Payapps”), a leading cloud-based software platform for managing construction-related payments, for total consideration of $387 million in cash. Of the total consideration transferred, $381 million is considered purchase consideration. The remaining amount of $6 million was recorded in “Prepaid expenses and other current assets” and “Long-term other assets” on our Condensed Consolidated Balance Sheets and will be amortized to compensation expense using the straight-line method over the vesting period. Autodesk expects to deepen Autodesk Construction Cloud’s footprint and provide a robust payment management offering to serve the needs of general contractors and trade contractors. Through automating the application of the payment process, Payapps’ solution provides greater transparency, reduces risk and helps accelerate time-to-payment.

On March 15, 2024, Autodesk acquired 100% of the PIX business of X2X, LLC (“PIX”), a production management solution for secure review and content collaboration in the media and entertainment industry for total consideration of $266 million in cash. The acquisition is expected to foster broader collaboration and communication, as well as help drive greater efficiencies, in the production process.

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On May 20, 2024, Autodesk acquired 100% of Aether Media, Inc. (“Aether”), a provider of a cloud-based artificial intelligence pipeline for creating computer-generated 3D characters into live-action scenes, for total consideration of $131 million in cash. Of the total consideration transferred, $122 million is considered purchase consideration. The remaining amount of $9 million was primarily recorded in “Prepaid expenses and other current assets” and “Long-term other assets” on our Condensed Consolidated Balance Sheets and will be amortized to compensation expense using the straight-line method over the vesting period. Autodesk expects to enhance artificial intelligence capabilities for Autodesk’s visual effects (“VFX”) creation tools and democratize high end VFX work on Autodesk’s Flow platform.

Purchase Price Allocation

The acquisitions were accounted for as business combinations, and Autodesk recorded the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition. The fair values assigned to the identifiable intangible assets acquired were based on estimates and assumptions determined by management. Autodesk recorded the excess of consideration transferred over the aggregate fair values as goodwill. The goodwill recorded was primarily attributable to synergies expected to arise after the respective acquisition. Goodwill of $159 million and $188 million is expected to be deductible for U.S. income tax purposes for Payapps and PIX, respectively. No goodwill is deductible for U.S. income tax purposes for Aether. The transaction costs related to the acquisitions were not material.

The following table summarizes the fair value of the assets acquired and liabilities assumed by major class for the significant business combinations that were completed during the six months ended July 31, 2024:
PayappsPIXAetherTotal
Developed technologies$53 $37 $47 $137 
Customer relationships 34 33 3 70 
Trade name5 — — 5 
Goodwill300 191 81 572 
Deferred revenue and long-term deferred revenue(4)(2)— (6)
Long-term deferred income taxes liability(12)— — (12)
Net tangible assets (liabilities)5 7 (9)3 
Total$381 $266 $122 $769 

For the business combinations, the allocation of purchase price consideration to certain assets and liabilities as well as the final amount of purchase consideration is not yet finalized. For the items not yet finalized, Autodesk's estimates and assumptions are subject to change within the measurement period (up to one year from the acquisition date). The primary areas of the preliminary purchase price allocation that are not yet finalized include, but are not limited to, amounts for intangible assets, tax assets and liabilities, deferred revenue, and residual goodwill.

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9. Intangible Assets, Net

The following tables summarize the Company's intangible assets, net, as of July 31, 2024, and January 31, 2024:
July 31, 2024
Gross Carrying Amount (1)Accumulated AmortizationNet
Customer relationships$737 $(459)$278 
Developed technologies1,120 (804)316 
Trade names and patents122 (114)8 
Other7 — 7 
Total intangible assets$1,986 $(1,377)$609 
 _______________ 
(1)Includes the effects of foreign currency translation.

January 31, 2024
Gross Carrying Amount (1)Accumulated AmortizationNet
Customer relationships$664 $(436)$228 
Developed technologies933 (765)168 
Trade names and patents116 (113)3 
Other8 (1)7 
Total intangible assets$1,721 $(1,315)$