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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 April 30, 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)
(415507-5000
(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 May 24, 2024, registrant had outstanding approximately 216 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 April 30,
 20242023
Net revenue:
Subscription$1,330 $1,193 
Maintenance 11 14 
Total subscription and maintenance revenue1,341 1,207 
Other76 62 
Total net revenue1,417 1,269 
Cost of revenue:
Cost of subscription and maintenance revenue100 96 
Cost of other revenue20 20 
Amortization of developed technologies17 11 
Total cost of revenue137 127 
Gross profit1,280 1,142 
Operating expenses:
Marketing and sales469 456 
Research and development346 327 
General and administrative155 132 
Amortization of purchased intangibles 11 10 
Total operating expenses981 925 
Income from operations299 217 
Interest and other income, net10 4 
Income before income taxes309 221 
Provision for income taxes(57)(60)
Net income $252 $161 
Basic net income per share$1.17 $0.75 
Diluted net income per share$1.16 $0.75 
Weighted average shares used in computing basic net income per share215 215 
Weighted average shares used in computing diluted net income per share217 216 

See accompanying Notes to Condensed Consolidated Financial Statements.

4

AUTODESK, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In millions)
(Unaudited)
Three Months Ended April 30,
20242023
Net income $252 $161 
Other comprehensive loss, net of reclassifications:
Net gain (loss) on derivative instruments (net of tax effect of zero and $2, respectively)
2 (13)
Change in net unrealized (loss) gain on available-for-sale debt securities (net of tax effect of zero for all periods presented)
(2)2 
Net change in cumulative foreign currency translation loss (net of tax effect of zero and $5 , respectively)
(29)(4)
Total other comprehensive loss(29)(15)
Total comprehensive income $223 $146 

See accompanying Notes to Condensed Consolidated Financial Statements.

5

AUTODESK, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions)
(Unaudited)
 
April 30, 2024January 31, 2024
ASSETS
Current assets:
Cash and cash equivalents$1,681 $1,892 
Marketable securities308 354 
Accounts receivable, net353 876 
Prepaid expenses and other current assets468 457 
Total current assets2,810 3,579 
Long-term marketable securities238 234 
Computer equipment, software, furniture and leasehold improvements, net117 121 
Operating lease right-of-use assets214 224 
Intangible assets, net572 406 
Goodwill4,133 3,653 
Deferred income taxes, net1,126 1,093 
Long-term other assets620 602 
Total assets$9,830 $9,912 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable$163 $100 
Accrued compensation326 476 
Accrued income taxes59 36 
Deferred revenue3,362 3,500 
Operating lease liabilities66 67 
Other accrued liabilities121 172 
Total current liabilities4,097 4,351 
Long-term deferred revenue600 764 
Long-term operating lease liabilities263 275 
Long-term income taxes payable178 168 
Long-term deferred income taxes 42 25 
Long-term notes payable, net2,285 2,284 
Long-term other liabilities204 190 
Stockholders’ equity:
Common stock and additional paid-in capital3,894 3,802 
Accumulated other comprehensive loss(263)(234)
Accumulated deficit(1,470)(1,713)
Total stockholders’ equity 2,161 1,855 
Total liabilities and stockholders’ equity $9,830 $9,912 

See accompanying Notes to Condensed Consolidated Financial Statements.

6

AUTODESK, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
 
 Three Months Ended April 30,
 20242023
Operating activities:
Net income $252 $161 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and accretion40 33 
Stock-based compensation expense149 165 
Amortization of costs to obtain a contract with a customer41 30 
Deferred income taxes(25)(30)
Other18 (11)
Changes in operating assets and liabilities, net of business combinations:
Accounts receivable526 630 
Prepaid expenses and other assets (69)(73)
Accounts payable and other liabilities (166)(157)
Deferred revenue(305)(98)
Accrued income taxes33 73 
Net cash provided by operating activities
494 723 
Investing activities:
Purchases of marketable securities(220)(342)
Sales and maturities of marketable securities262 163 
Capital expenditures(7)(9)
Purchases of intangible assets(34)(6)
Business combinations, net of cash acquired(637)(26)
Other investing activities(2)(10)
Net cash used in investing activities(638)(230)
Financing activities:
Proceeds from issuance of common stock, net of issuance costs71 71 
Taxes paid related to net share settlement of equity awards (123)(82)
Repurchases of common stock(9)(512)
Net cash used in financing activities(61)(523)
Effect of exchange rate changes on cash and cash equivalents(6)(8)
Net decrease in cash and cash equivalents(211)(38)
Cash and cash equivalents at beginning of period1,892 1,947 
Cash and cash equivalents at end of period$1,681 $1,909 
Supplemental cash flow disclosure:
Non-cash financing activities:
Fair value of common stock issued to settle liability-classified restricted common stock$3 $1 

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 April 30, 2024, and for the three months ended April 30, 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 months ended April 30, 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 quarter ended April 30, 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 quarter ended April 30, 2023 was $30 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 three months ended April 30, 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 April 30,
20242023
Net revenue by product family:
Architecture, Engineering and Construction $674 $582 
AutoCAD and AutoCAD LT 376 349 
Manufacturing268 246 
Media and Entertainment71 71 
Other 28 21 
Total net revenue$1,417 $1,269 
Net revenue by geographic area:
Americas
U.S.$509 $456 
Other Americas110 97 
Total Americas619 553 
Europe, Middle East and Africa534 474 
Asia Pacific264 242 
Total net revenue$1,417 $1,269 
Net revenue by sales channel:
Indirect$880 $820 
Direct537 449 
Total net revenue$1,417 $1,269 
Net revenue by product type:
Design$1,196 $1,086 
Make145 121 
Other76 62 
Total net revenue$1,417 $1,269 
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 upfront 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 April 30, 2024, Autodesk had remaining performance obligations of $5.89 billion, which represents the total contract price allocated to remaining performance obligations, which are generally recognized over the next three years. We expect to recognize $3.92 billion or 66% of our remaining performance obligations as revenue during the next 12 months. We expect to recognize the remaining $1.97 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 April 30, 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 April 30, 2024 and 2023, that was included in the deferred revenue balances at January 31, 2024 and 2023, was $1.19 billion and $1.06 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 38% and 40% of Autodesk’s total net revenue during the three months ended April 30, 2024 and 2023, respectively. 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 22% and 18% of trade accounts receivable at April 30, 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 April 30, 2024, and January 31, 2024:
April 30, 2024
Amortized CostGross Unrealized GainsGross Unrealized LossesFair Value
Cash equivalents (1):
Money market funds$592 $— $— $592 
Commercial paper 278 — — 278 
Certificates of deposit83 — — 83 
U.S. government securities12 — — 12 
Corporate debt securities 10 — — 10 
Marketable securities:
Short-term
Commercial paper141 — — 141 
Corporate debt securities73 — — 73 
U.S. government securities54 — — 54 
Asset-backed securities25 — — 25 
Other (2)15 — — 15 
Long-term
Corporate debt securities108  (1)107 
Asset-backed securities62   62 
Agency mortgage backed securities39  (1)38 
U.S. government securities25  (1)24 
Other (3)7   7 
Mutual funds (4) (5)95 13 (1)107 
Total$1,619 $13 $(4)$1,628 
___________________ 
(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, mortgage-backed securities, agency bonds, and certificates of deposit.
(3)Consists of agency collateralized mortgage obligations, agency bonds, and mortgage-backed securities.
(4)See Note 12, “Deferred Compensation” for more information.
(5)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 April 30, 2024:
Fair Value
Due within 1 year$276 
Due in 1 year through 5 years232 
Due in 5 years through 10 years13 
Due after 10 years25 
Total
$546 
    
As of both April 30, 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 three months ended April 30, 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 April 30, 2024, and January 31, 2024. There were no write offs of accrued interest receivables for both the three months ended April 30, 2024 and 2023.

There were no material realized gain or loss for the sales or redemptions of marketable debt securities during both the three months ended April 30, 2024 and 2023. Realized gains and losses from the sales or redemptions of marketable debt securities are recorded in “Interest and other income, 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 April 30,
20242023
Marketable debt securities$262 $163 

Strategic investments in equity securities

As of April 30, 2024, and January 31, 2024, Autodesk had $163 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, net” on the Company's Condensed Consolidated Statements of Operations. These adjustments were as follows:
 Three Months Ended April 30,Cumulative Amount as of
20242023April 30, 2024
Upward adjustments$ $ $29 
Negative adjustments, including impairments   (114)
Net unrealized adjustments$ $ $(85)

Realized gains for the disposition of strategic investment equity securities for both the three months ended April 30, 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 April 30, 2024, and January 31, 2024:  
April 30, 2024
Level 1Level 2Level 3Total
Assets:
Cash equivalents (1):
Money market funds$592 $ $ $592 
Commercial paper  278  278 
Certificates of deposit 83  83 
U.S. government securities 12  12 
Corporate debt securities  10  10 
Marketable securities:
Short-term
Commercial paper 141  141 
Corporate debt securities 73  73 
U.S. government securities 54  54 
Asset-backed securities 25  25 
Other (2) 15  15 
Long-term
Corporate debt securities 107  107 
Asset-backed securities 62  62 
Agency mortgage backed securities 38  38 
U.S. government securities 24  24 
Other (3) 7  7 
Long-term other assets:
Mutual funds (4)(5)107   107 
Derivative assets:
Derivative contract assets (5) 19  19 
Derivative liabilities:
Derivative contract liabilities (6) (14) (14)
Total$699 $934 $ $1,633 
____________________ 
(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, mortgage-backed securities, agency bonds, and certificates of deposit.
(3)Consists of agency collateralized mortgage obligations, agency bonds, and mortgage-backed securities.
(4)See Note 12, “Deferred Compensation” for more information.
(5)Included in “Prepaid expenses and other current assets” or “Long-term other assets” in the accompanying Condensed Consolidated Balance Sheets.
(6)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 three months ended April 30, 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 
Granted2,280 239.60 
Vested(1,527)207.80 
Canceled/Forfeited(92)205.06 
        Performance Adjustment (1)(32)194.63 
Unvested restricted stock units at April 30, 2024
6,000 $217.06 
_______________
(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 three months ended April 30, 2024 and 2023, was $396 million and $274 million, respectively.

During the three months ended April 30, 2024, Autodesk granted 2 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 $127 million and $130 million during the three months ended April 30, 2024 and 2023, respectively.

During the three months ended April 30, 2024, Autodesk granted 7 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 service and performance period.

The performance criteria for the performance stock units vested during the three months ended April 30, 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 $6 million and $11 million for the three months ended April 30, 2024 and 2023, respectively.

Common Stock

Autodesk recorded stock-based compensation expense related to common stock shares of $1 million and $6 million for the three months ended April 30, 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.

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A summary of the ESPP activity for the three months ended April 30, 2024 and 2023, is as follows:
Three Months Ended April 30,
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 months ended April 30, 2024 and 2023, as follows:
Three Months Ended April 30,
20242023
Cost of subscription and maintenance revenue$9 $9 
Cost of other revenue3 3 
Marketing and sales53 62 
Research and development66 69 
General and administrative18 22 
Stock-based compensation expense related to stock awards and ESPP purchases
149 165 
Tax (benefit) expense(15)1 
Stock-based compensation expense related to stock awards and ESPP purchases, net of tax
$134 $166 
 
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:
Three Months Ended April 30, 2024Three Months Ended April 30, 2023
Performance Stock Units (1)ESPP Performance Stock Units ESPP
Range of expected volatility
N/A
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 dividendsN/A%%%
Range of risk-free interest rates
N/A
4.6 - 5.4%
4.3 - 4.7%
4.3 - 5.0%
(1)There were no performance stock units granted during the three months ended April 30, 2024, where the fair value was estimated by a Monte Carlo simulation.
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.

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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.

7. Income Tax

 Autodesk had income tax expense of $57 million, relative to pre-tax income of $309 million for the three months ended April 30, 2024, and income tax expense of $60 million, relative to pre-tax income of $221 million for the three months ended April 30, 2023. Income tax expense for the three months ended April 30, 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.

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 Portugal, New Zealand, California, Massachusetts, and Michigan deferred tax assets and deferred tax assets that will convert to a capital loss upon reversal in Australia and U.S., as we do not have sufficient income of the appropriate character to benefit these deferred tax assets. Autodesk also established a valuation allowance on the remaining deferred tax assets in Australia as it is more-likely-than-not that these deferred tax assets will not be realized.

As of April 30, 2024, the Company had $267 million of gross unrecognized tax benefits, of which $224 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 stock-based 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.

Purchase Price Allocation

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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 in an approximate range of $180 million to $190 million is expected to be deductible for U.S. income tax purposes for PIX. Goodwill expected to be deductible for U.S. income tax purposes for Payapps is pending and not yet finalized. 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 business combinations that were completed during the three months ended April 30, 2024:
PayappsPIXTotal
Developed technologies$53 $37 $90 
Customer relationships 34 33 67 
Trade name5  5 
Goodwill300 191 491 
Deferred revenue and long-term deferred revenue(4)(2)(6)
Long-term deferred income taxes(12) (12)
Net tangible assets5 7 12 
Total$381 $266 $647 

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.

9. Intangible Assets, Net

The following tables summarize the Company's intangible assets, net, as of April 30, 2024, and January 31, 2024:
April 30, 2024
Gross Carrying Amount (1)Accumulated AmortizationNet
Customer relationships$729 $(446)$283 
Developed technologies1,056 (782)274 
Trade names and patents121 (113)8 
Other7  7 
Total intangible assets$1,913 $(1,341)$572 
 _______________ 
(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)$406 
 _______________ 
(1)Includes the effects of foreign currency translation.


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10. Cloud Computing Arrangements

Autodesk enters into certain cloud-based software hosting arrangements that are accounted for as service contracts. Costs incurred for these arrangements are capitalized for application development activities, if material, and immediately expensed for preliminary project activities and post-implementation activities. Autodesk amortizes the capitalized development costs straight-line over the fixed, non-cancellable term of the associated hosting arrangement plus any reasonably certain renewal periods. The capitalized costs are included in “Prepaid expenses and other current assets” and “Long-term other assets” on our Condensed Consolidated Balance Sheets. Capitalized costs were $271 million and $254 million at April 30, 2024, and January 31, 2024, respectively. Accumulated amortization was $96 million and $83 million at April 30, 2024, and January 31, 2024, respectively. Amortization expense for the three months ended April 30, 2024 and 2023, was $13 million and $9 million, respectively.

11. Goodwill

Goodwill consists of the excess of the consideration transferred over the fair value of net assets acquired in business combinations. The following table summarizes the changes in the carrying amount of goodwill for the three months ended April 30, 2024, (in millions):
 
Balance as of January 31, 2024 (1)3,653 
Additions arising from acquisitions during the period491 
Effect of foreign currency translation and measurement period adjustments (2)(11)
Balance as of April 30, 2024 (1)$4,133 
_______________ 
(1)Accumulated impairment losses as of both January 31, 2024 and April 30, 2024, were $149 million.
(2)Measurement period adjustments reflect revisions made to the Company's preliminary determination of estimated fair value of assets and liabilities assumed.
 
12. Deferred Compensation

At April 30, 2024, Autodesk had investments in debt and equity securities that are held in a rabbi trust under non-qualified deferred compensation plans and a corresponding deferred compensation liability totaling $107 million. Of this amount, $10 million was classified as current and $97 million was classified as non-current in the Condensed Consolidated Balance Sheets. Of the $100 million related to the investments in a rabbi trust as of January 31, 2024, $10 million was classified as current and $90 million was classified as non-current. The current and non-current asset portions of the investments in debt and equity securities that are held in a rabbi trust under non-qualified deferred compensation plans are recorded in the Condensed Consolidated Balance Sheets under “Prepaid expenses and other current assets” and “Long-term other assets,” respectively. The current and non-current portions of the liability are recorded in the Condensed Consolidated Balance Sheets under “Accrued compensation” and “Long-term other liabilities,” respectively.

Costs to obtain a contract with a customer

Sales commissions earned by our internal sales personnel and our solution providers are considered incremental and recoverable costs of obtaining a contract with a customer. The ending balance of assets recognized from costs to obtain a contract with a customer was $217 million as of April 30, 2024, and $210 million as of January 31, 2024. These assets are recorded in “Prepaid expenses and other current assets” and “Long-term other assets” in the Condensed Consolidated Balance Sheet. Of the total amount as of April 30, 2024, $151 million was recorded in “Prepaid expenses and other current assets” and $66 million was recorded in “Long-term other assets” in the Condensed Consolidated Balance Sheets. Amortization expense related to assets recognized from costs to obtain a contract with a customer was $41 million and $30 million during the three months ended April 30, 2024 and 2023, respectively. Autodesk did not recognize any contract cost impairment losses during the three months ended April 30, 2024 and 2023.

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13. Computer Equipment, Software, Furniture, and Leasehold Improvements, Net

Computer equipment, software, furniture and equipment, and leasehold improvements, and the related accumulated depreciation were as follows: 
April 30, 2024January 31, 2024
Computer hardware, at cost$118 $117 
Computer software, at cost48 48 
Furniture and equipment, at cost96 100 
Leasehold improvements, land and buildings, at cost331 357 
593 622 
Less: Accumulated depreciation(476)(501)
Computer equipment, software, furniture, and leasehold improvements, net$117 $121 

14. Borrowing Arrangements

In November 2022, the Company entered into an Amended and Restated Credit Agreement (the “Credit Agreement”) by and among the Company, the lenders party thereto and Citibank, N.A. (“Citibank”), as administrative agent, which provides for an unsecured revolving loan facility in the aggregate principal amount of $1.5 billion, with an option to be increased up to $2.0 billion. The revolving credit facility is available for working capital or other business needs. The Credit Agreement contains customary covenants that could, among other things, restrict the imposition of liens on Autodesk’s assets, and restrict Autodesk’s ability to incur additional indebtedness or make dispositions of assets if Autodesk fails to maintain compliance with the financial covenants. The Credit Agreement requires the Company to maintain a maximum leverage ratio of Consolidated Covenant Debt to Consolidated EBITDA (each as defined in the Credit Agreement) no greater than 3.50:1.00 during the term of the credit facility, subject to adjustment following the consummation of certain acquisitions up to 4.00:1.00 for up to four consecutive fiscal quarters. Per the Credit Agreement, Autodesk is required to issue annual audited consolidated financial statements within 90 days after the end of Autodesk’s fiscal year. On April 26, 2024, Autodesk obtained lender consent to extend the period to provide annual audited consolidated financial statements to June 14, 2024. At April 30, 2024, Autodesk was in compliance with all other Credit Agreement covenants. At April 30, 2024, Autodesk had no outstanding borrowings under the Credit Agreement. Revolving loans under the Credit Agreement will bear interest, at the Company’s option, at either (i) a per annum rate equal to the Base Rate (as defined in the Credit Agreement) plus a margin of between 0.000% and 0.375%, depending on the Company’s Public Debt Rating (as defined in the Credit Agreement), or (ii) a per annum rate equal to the rate at which dollar deposits are offered in the Secured Overnight Financing Rate, plus a margin of between 0.785% and 1.375%, depending on Company’s Public Debt Rating. The interest rates for the revolving credit facility are subject to upward or downward adjustments, on an annual basis, if the Company achieves, or fails to achieve, certain sustainability-linked targets based on two key performance indicator metrics: (i) the amount of scope 1 and 2 greenhouse gas emissions from the global operations of the Company and its subsidiaries during a fiscal year less qualified emissions reduction instruments and (ii) the percentage of employees of the Company and its subsidiaries identifying as female working in technical roles. The maturity date on the Credit Agreement is September 30, 2026.

In October 2021, Autodesk issued $1.0 billion aggregate principal amount of 2.4% notes due December 15, 2031 (“2021 Notes”). Net of a discount of $3 million and issuance costs of $9 million, Autodesk received net proceeds of $988 million from issuance of the 2021 Notes. Both the discount and issuance costs are being amortized to interest expense over the term of the 2021 Notes using the effective interest method. The 2021 Notes were designated as sustainability bonds, the net proceeds of which are used to fund environmentally and socially responsible projects in the following areas: eco-efficient products, production technologies, and processes, sustainable water and wastewater management, renewable energy & energy efficiency, green buildings, pollution prevention and control, and socioeconomic advancement and empowerment.

In January 2020, Autodesk issued $500 million aggregate principal amount of 2.85% notes due January 15, 2030 (“2020 Notes”). Net of a discount of $1 million and issuance costs of $5 million, Autodesk received net proceeds of $494 million from issuance of the 2020 Notes. Both the discount and issuance costs are being amortized to interest expense over the term of the 2020 Notes using the effective interest method. The proceeds of the 2020 Notes were used for the repayment of $450 million of debt due June 15, 2020, and the remainder is available for general corporate purposes.
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In June 2017, Autodesk issued $500 million aggregate principal amount of 3.5% notes due June 15, 2027 (the “2017 Notes”). Net of a discount of $3 million and issuance costs of $5 million, Autodesk received net proceeds of $492 million from issuance of the 2017 Notes. Both the discount and issuance costs are being amortized to interest expense over the term of the 2017 Notes using the effective interest method. The proceeds of the 2017 Notes have been used for the repayment of $400 million of debt due December 15, 2017, and the remainder is available for general corporate purposes.

In June 2015, Autodesk issued $300 million aggregate principal amount of 4.375% notes due June 15, 2025 (“2015 Notes”). Net of a discount of $1 million, and issuance costs of $3 million, Autodesk received net proceeds of $296 million from issuance of the 2015 Notes. Both the discount and issuance costs are being amortized to interest expense over the respective term of the 2015 Notes using the effective interest method. The proceeds of the 2015 Notes are available for general corporate purposes.

The 2021 Notes, 2020 Notes, 2017 Notes, and the 2015 Notes may all be redeemed at any time, subject to a make whole premium. In addition, upon the occurrence of certain change of control triggering events, Autodesk may be required to repurchase all the aforementioned notes, at a price equal to 101% of their principal amount, plus accrued and unpaid interest to the date of repurchase. All notes contain restrictive covenants that limit Autodesk's ability to create certain liens, to enter into certain sale and leaseback transactions and to consolidate or merge with, or convey, transfer, or lease all or substantially all of its assets, subject to important qualifications and exceptions.

Based on the quoted market prices, the approximate fair value of the notes as of April 30, 2024, were as follows:
Aggregate Principal AmountFair value
2015 Notes$300 $296 
2017 Notes500 474 
2020 Notes500 436 
2021 Notes1,000 808 

The expected future principal payments for all borrowings as of April 30, 2024, were as follows (in millions):
Fiscal year ending
2025 (remainder)$ 
2026300 
2027 
2028500 
2029 
Thereafter1,500 
Total principal outstanding$2,300 

15. Leases

Autodesk has operating leases for real estate and certain equipment. Leases have remaining lease terms of less than 1 year to 66 years, some of which include options to extend the lease with renewal terms from 1 year to 8 years and some of which include options to terminate the leases from less than 1 year to 6 years. Options to extend or terminate the lease are considered in determining the lease term when it is reasonably certain that the option will be exercised. Payments under our lease arrangements are primarily fixed; however, certain lease agreements contain variable payments, which are expensed as incurred and not included in the operating lease assets and liabilities. These amounts include payments affected by the Consumer Price Index, payments for common area maintenance that are subject to annual reconciliation, and payments for maintenance and utilities. The Company’s leases do not contain residual value guarantees or material restrictive covenants. Short-term leases are recognized in the Condensed Consolidated Statements of Operations on a straight-line basis over the lease term. Short-term lease expense was not material for the periods presented. Changes in operating lease right-of-use assets and operating lease liabilities are presented net in the “Accounts payable and other liabilities” line in the Condensed Consolidated Statements of Cash Flows with the exception of “Lease-related asset impairments” which is presented in “Adjustments to reconcile net income to net cash provided by operating activities”.

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The components of lease cost were as follows:
Three Months Ended April 30, 2024
Cost of subscription and maintenance revenueCost of other revenueMarketing and salesResearch and developmentGeneral and administrativeTotal
Operating lease cost$2 $ $7 $5 $3 $17 
Variable lease cost  2 1 1 4 
Three Months Ended April 30, 2023
Cost of subscription and maintenance revenueCost of other revenueMarketing and salesResearch and developmentGeneral and administrativeTotal
Operating lease cost$2 $1 $7 $6 $2 $18 
Variable lease cost  2 1 1 4 
  
Supplemental operating cash flow information related to leases is as follows:
Three Months Ended April 30,
20242023
Cash paid for operating leases included in operating cash flows (1)
$23 $28 
Non-cash operating lease liabilities arising from obtaining operating lease right-of-use assets
5 38 
  _______________
(1) Includes $4 million in variable lease payments for both the three months ended April 30, 2024 and 2023, respectively, not included in “Operating lease liabilities” and “Long-term operating lease liabilities” on the Condensed Consolidated Balance Sheets.

The weighted average remaining lease term for operating leases is 6.0 and 6.2 years at April 30, 2024, and January 31, 2024, respectively. The weighted average discount rate was 2.89% and 2.86% at April 30, 2024, and January 31, 2024, respectively.

Maturities of operating lease liabilities were as follows:
Fiscal year ending
2025 (remainder)$55 
202679 
202758 
202848 
202940 
Thereafter78 
358 
Less imputed interest29 
Present value of operating lease liabilities$329 
 
Autodesk has subleased certain office space to a third party and has classified the sublease as an operating lease. The sublease has a remaining lease term of 7.8 years. Sublease income was $2 million for both the three months ended April 30, 2024 and 2023. Sublease income is recorded as a reduction of lease expense in the Company’s Condensed Consolidated Statements of Operations.

Operating lease amounts in the table above do not include sublease income payments of $70 million. Autodesk expects to receive sublease income payments of approximately $40 million for remaining fiscal 2025 through fiscal 2029 and $30 million thereafter.

As of April 30, 2024, Autodesk had no material additional operating lease minimum lease payments for executed leases that have not yet commenced.

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16. Derivative Instruments

The fair values of derivative instruments in Autodesk’s Condensed Consolidated Balance Sheets were as follows as of April 30, 2024, and January 31, 2024:
 Balance Sheet LocationFair Value at
April 30, 2024January 31, 2024
Derivative Assets
Foreign currency contracts designated as cash flow hedges
Prepaid expenses and other current assets$13 $8 
Derivatives not designated as hedging instrumentsPrepaid expenses and other current assets6 13 
Total derivative assets$19 $21 
Derivative Liabilities
Foreign currency contracts designated as cash flow hedges
Other accrued liabilities$8 $8 
Derivatives not designated as hedging instrumentsOther accrued liabilities6 7 
Total derivative liabilities$14 $15 

The effects of derivatives designated as hedging instruments on Autodesk’s Condensed Consolidated Statements of Operations were as follows for the three months ended April 30, 2024 and 2023 (amounts presented include any income tax effects):
Three Months Ended April 30,
20242023
Amount of gain (loss) recognized in accumulated other comprehensive income, net of tax, (effective portion)
$2 $(13)
Amount and location of gain (loss) reclassified from accumulated other comprehensive loss into income (effective portion)
Net revenue$5 $20 
Cost of revenue  
Operating expenses(2)