Autodesk, Inc. (NASDAQ:ADSK) Q3 2023 Earnings Call Transcript

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Andrew Anagnost: Yes. So, first off, one of the things we did to just start Forma, as you might recall at the beginning of the pandemic, we acquired a Norwegian company called Spacemaker. And we have continued to invest in that team, and we will continue to expand that team either by repurposing existing resources to work with that team or by adding additional resources to that team to make sure that we are on track. But one of the foundational investments that supports all of the things we are trying to do with our investment in data. And that’s an ongoing investment in trying to break up Revit files and make them more accessible in the cloud as granular data. Forma and €“ by nature is built net native on the cloud and it has granular data at its core.

So, that’s one of the kind of core vectors that we will be doing. But we will be incrementally investing to ensure that we are heading on the right path with this solution. But we have done some of that already. And we have kind of absorbed some of those investments today. Now, I think the question about timeline is a really good one because these kind of transformations €“ what we are doing with Forma is different, right. What we are doing with Revit to improve its performance and improve its capabilities based on what our customers are asking us to do is making their current tools better. But what Forma is doing, especially with its connection €“ its native connections to downstream process is different. It takes time for different to penetrate the industry, just like different took time with Fusion.

It was €“ we have been working on Fusion for over a decade, alright, roughly speaking a decade. So, you can expect that it’s going to take 5 years for Forma to mature and even longer for it to totally replace what our customers are doing. However, our goal is to incrementally add value to the process as time goes on, just like we did with Fusion. Fusion, we added incremental value with the connection to downstream manufacturing. In Forma, we are going to add incremental value with regards to the data platforms and the connection to the downstream construction processes. So, that’s all connected, but it is going to take time similar to what we saw with Fusion.

Tyler Radke: That’s helpful. And Debbie, maybe a question for you. So, just on current RPO, it looked like that did pick up a bit quarter-over-quarter if you back out the currency. Can you just help us understand I guess first, do you kind of view that as the best leading indicator given the headwinds in billings? And just remind us how you are thinking about the puts and takes on that just as you do €“ renew these large EBA customers in the coming quarters. Just anything we should be mindful of there? Thank you.

Debbie Clifford: Yes. Sure. So yes, I mean current RPO is a very important metric in monitoring our business performance. And you are right, particularly when you normalize for the currency impacts that growth was in a healthy zone. So, I want to just continue to stress that FX has been really volatile, and that’s going to continue to impact the growth rate. So, definitely look at the constant currency growth rates over time. Also, the timing and volume of our EBAs impacts the growth rate period-to-period. And so sometimes what you see is that when we have large cohorts of our EBAs coming up for renewal, it tends to be back-end loaded in our fiscal years and most often in our Q4, we start to see growth impacts as the year progresses, in many cases, deceleration Q1 to Q3 that would tick back up as those cohorts for EBAs come back up for renewal.

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