Autodesk, Inc. (NASDAQ:ADSK) reported a narrower-than-expected adjusted Q1 loss and higher sales. ADSK stock is up more than 8.5% this morning in pre-market trading.
The software maker reported a loss of 16 cents a share compared with a loss of 10 cents a share a year ago, according to a company announcement. Analysts had expected an adjusted loss of 23 cents a share on sales of $470 million. Revenue was $486 million, down 5% from last year.
San Rafael, Calif.-based Autodesk is in the midst of a business model transition, consequently, revenue is negatively impacted as more revenue is recognized ratably rather than up front and as new offerings generally have a lower initial purchase price, the company noted.
“We’re executing well and making significant progress on our business model transition as evidenced by our first quarter results,” said Andrew Anagnost, Autodesk co-CEO and chief marketing officer. “We’re starting the year from a position of strength and are excited to kick off the next phase of our transition when we offer our maintenance customers a simple, cost effective path to product subscriptions starting next month.”
Total recurring revenue in Q1 was 90% of total revenue compared to 72% of total revenue in the comparable quarter last year. “Recurring revenue jumped to 90% of total revenue, which is a significant milestone considering it was less than half that before we started the move to subscription,” said Scott Herren, chief financial officer, in the announcement. “Strong transition-related metrics coupled with better than expected revenue and diligent cost control led to a terrific first quarter and provide us with confidence in achieving our transition-related targets. I also want to draw attention to our new format for revenue reporting, which greatly improves transparency.”
Autodesk said it expected Q2 sales between $488 million and $500 million and a per-share GAAP loss between 66 cents and 60 cents.
ADSK stock is up almost 30% this year, compared with a similar gain for rival Adobe Systems Incorporated (NASDAQ:ADBE) and less than half that for Oracle Corporation (NYSE:ORCL), whose shares have increased 14.8%