Michael Funk: Okay. So, in terms of trends so far this quarter to date are consistent with 2Q?
Debbie Clifford: Sorry, I didn’t hear.
Michael Funk: Your last comment about trends continuing is the interpretation there that the trend has continued in – from 2Q into this quarter of increased usage.
Debbie Clifford: We’re not commenting on Q3 at this point. Overall, the performance that we saw from our EBAs in Q2 is really strong, and we’re hopeful that it will continue.
Michael Funk: Great. Thank you, Debbie.
Operator: Thank you. Our next question comes from the line of Matt Hedberg of RBC Capital Markets.
Matt Hedberg: Great. Thanks for taking my questions. Congrats on the stability here. Really, really good to see. Maybe, Debbie, for you, maybe I missed it, but cash flow was – free cash flow was significantly better than we thought this quarter. I know you don’t guide quarterly. So maybe just – again, maybe I missed it, but a little bit more on sort of why free cash flow is so strong this quarter? And as we think about Q3, Q4 kind of the linearity there, you took the low end of the full year up a little bit. How should we kind of think about that split sort of between 3Q and 4Q?
Debbie Clifford: Yes. So Q2 was strong, primarily because of the timing of the EBA billings that I’ve been talking about as well as some favorable in-quarter linearity. So the linearity that we saw was better than we had expected. And then when we look at the back half of the year, second half free cash flow will be significantly weighted to the fourth quarter. I’ve called out the federal tax payment extension that positively impacted the first half free cash flow, and it will negatively impact Q3. Overall, we still anticipate that fiscal ’24 is going to be the free cash flow trough during this transition from upfront annual billings.
Matt Hedberg: Great. Thanks. And then, Andrew, for you, following up on earlier questions kind of on the split of your business, obviously, an extremely diversified model. But I guess regarding commercial real estate exposure, I know it’s difficult to give an exact percentage of your exposure there. But just broadly speaking, we get asked all the time, what’s Autodesk’s exposure to the category. How should we think about kind of Autodesk in the CRE market?
Andrew Anagnost: To be honest, you shouldn’t, okay? This is some of the conversations we had during the housing crisis, like, how should we think about Autodesk relative to the housing. And the question is, you shouldn’t, all right? The amount of things that need to be built and rebuilt in our customer base is ginormous, all right? They don’t have current capacity, either people-wise, dollar-wise or capability-wise, to actually work through all the things that are going on. So the momentum of the industry pivots to other areas. Now even if you look at commercial real estate, people are still reconfiguring commercial real estate within the segment in order either to make it more attractive to a shrinking pool of renters or to repurpose that space to other uses.
But in terms of exposure to Autodesk, you got to be careful about overblowing that because the money always goes somewhere else. There’s always a lot of work to be done in other sectors. That just means that people that were traditionally bidding on commercial real estate projects are now bidding and engaging on other types of projects.
Matt Hedberg: Super helpful. Thank you for that.
Operator: Thank you. Our next question comes from the line of Bhavin Shah of Deutsche Bank.
Bhavin Shah: Great. Thanks for taking my question. Andrew, we continue to hear good things from your customers and partners regarding your ability to innovate and enhance many of your acquired assets, whether it’s Innovyze, PlanGrid, et cetera. Can you just remind us of your views on go-forward M&A and your M&A philosophy. And maybe kind of what are some of the lessons we learned from prior deals?
Andrew Anagnost: Yes. So we are an acquisitive company. We will continue to be an acquisitive company. We always like when the environment gets more attractive for acquisitions, but we are always looking to make sure that a potential acquisition is strategically aligned with our priorities. That means that it’s either accelerating an effort that we’re currently working on or bringing us into an adjacency that we weren’t working on but that we see as an attractive place. Timing matters as well in terms of what timing is right for us to do these things that we keep the business reasonably focused on the things that are important and don’t try to juggle 18 balls at once, right? But we will continue to be acquisitive, and we have the cash flow and balance sheet ability here to do whatever we need to do in terms of strategic fit and expansion that we’re interested in moving forward.
So don’t expect any change. In terms of learning, look, you always learn, you can integrate some of the back office faster, all right? There’s a [indiscernible] and all these things is integrate sales and back office infrastructure quicker and you go faster.
Bhavin Shah: Super helpful there. Just on another topic, can you just talk about what you’re seeing with A&E customers as it relates to hiring. I know many of these customers have got talent shortages over the past few years. Are you seeing any easing here or any kind of other general commentary in terms of hiring within A&E customers. Thanks so much for taking my question.
Andrew Anagnost: Yes. It depends on the sector. But honestly, in construction and manufacturing, you’re seeing – they’re still seeing challenges with hiring, right? It’s one of the big things we hear from them is their ability to not only find but retain talent, especially qualified talent. So hiring continues to be an issue on the execution side of our customers, primarily towards the mix side.
Operator: Thank you. Our next question comes from the line of Ken Wong of Oppenheimer & Company.
Ken Wong: Great. Thank you for taking my question. Just a quick one for me. As we think about – I think Debbie, you mentioned new customer softness is kind of consistent with what you guys are seeing. But just wanted to make sure, relative to last quarter, I think you guys had called out a bit of an air pocket that normalized. How should we think about the way that played out this quarter in terms of adding new subs?
