William Blair initiated research coverage of Autodesk, Inc. (ADSK $196.31), a leading enterprise software provider of design, planning, and execution tools for the manufacturing; architecture, engineering, and construction (AEC); and media and entertainment end-markets.
Analyst Dylan Becker stated that total revenue for the company grew 14% (15% in constant currency) in fiscal year 2023 to $5 billion, and estimated that revenue would grow by roughly 8% (about 13% in constant currency) and 11% for fiscal years 2024 and 2025, respectively, reaching roughly $6 billion by fiscal 2025.
“Founded in 1982, Autodesk began largely as a design software vendor selling perpetual licenses to the manufacturing space, introducing its flagship AutoCAD offering, which today is featured across a multitude of industries,” said Becker. “Over the past several decades, the company has expanded into a number of adjacent verticals, including AEC, media and entertainment, and deeper into the manufacturing space, while also successfully transitioning to a ratable, subscription revenue model that has added incremental visibility and mitigated some exposure to end-market cyclicality given the solution’s mission-critical nature. We believe that the ratable, cloud-based subscription pricing model shift offers customers a more meaningful value proposition with better configurability, uptime, and ongoing innovation relative to the historical perpetual license model.
“The company features several core growth drivers, including noncompliant user conversion, generative design and
simulation proliferation, construction industry digitization, and a growing emphasis on a direct sales effort, all of which should contribute to and layer into the company’s durable growth profile,” added Becker. “In addition, we believe incremental product adoption, seat penetration, perpetual conversions, and geographic expansion will aid in the business capturing greater customer wallet share over time. From an innovation standpoint, Autodesk has shown a historical track record of both organic and inorganic platform expansion, which we believe will continue, driven by the company’s ability to capture incremental wallet share tied to ongoing value creation among its customer base, while also leveraging its growing integrated data asset to introduce new monetization opportunities in the future.”
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