Autodesk Reports Record Revenues of $373 Million

Raises Guidance for Fiscal 2006

SAN RAFAEL, Calif., Aug. 18 /PRNewswire-FirstCall/ -- Autodesk, Inc. (NASDAQ:ADSK) today announced financial results for its second fiscal quarter ended July 31, 2005. For the second quarter, Autodesk reported record net revenues of $373 million, a 33 percent increase over $280 million reported in the second quarter of the prior year.

Second quarter net income was $75 million, or $0.30 per diluted share, on a GAAP basis and $73 million, or $0.29 per diluted share on a non-GAAP basis. Non-GAAP net income excludes a $2 million tax benefit which was the only adjustment for non-GAAP purposes in the current quarter. Net income in the second quarter of the prior year was $39 million, or $0.16 per diluted share, on a GAAP basis, and $44 million, or $0.18 per diluted share on a non-GAAP basis.

"Autodesk had a remarkable quarter, and we are once again raising guidance for fiscal 2006," said Carol Bartz, Autodesk chairman and CEO. "We saw strong demand across all divisions and all markets. Our customers need real improvements in productivity and efficiency. Autodesk is meeting those needs."

Autodesk's performance was driven by strong growth in revenues from new seats, upgrades and subscriptions, increasing penetration of its vertical and 3D products and continued improvement in profitability.

Second quarter revenues from new seats increased 24 percent over the prior year. Revenues from new commercial seats of AutoCAD increased 32 percent over the prior year.

The retirement of the AutoCAD 2002 based family of products contributed to a 54 percent increase in upgrade revenues compared to the second quarter of fiscal 2005. Subscription revenues, which are called maintenance in the financial statements, increased 55 percent. Combined revenues from subscriptions and upgrades continue to represent approximately one-third of total revenues.

The company's vertical and 3D products continue to increase their market penetration. Revenues from Autodesk Architectural Desktop and Autodesk Map 3D increased 39 percent and 25 percent respectively over the second quarter of the prior year. Combined revenues from AutoCAD Mechanical and AutoCAD Electrical software increased 46 percent over last year. Revenues from new commercial seats of Autodesk's 3D products -- Autodesk Inventor Series, Autodesk Inventor Professional, Autodesk Revit Building, Autodesk AutoCAD Revit Series, and Autodesk Civil 3D -- increased 93 percent over the prior year.

During the quarter Autodesk continued to improve its profitability. Operating margins increased to 24 percent on a GAAP and non-GAAP basis. Operating margins in the second quarter of fiscal 2005 were 18 percent on a GAAP basis and 19 percent on a non-GAAP basis.

In response to feedback from customers, resellers and the sales force, the company also announced a change to the timing of annual product retirements to synchronize more closely with annual product releases in March. The change is being implemented with the retirement of AutoCAD 2002 based products. The previously announced retirement date has been extended from January 15 to March 15, 2006. In addition to improving customer satisfaction, the company believes this change will increase the total number of customers who take advantage of the opportunity to move to new releases.

"Autodesk has never been better positioned for the future," said Bartz. "Our refreshed product line provides the quick implementation, ease of use and fast return on investment that our customers demand. Our continued focus on improving our productivity and efficiency is yielding strong results. We feel confident about growing revenues in double digits again next year. Our business prospects have never been better."

A reconciliation of the above non-GAAP operating margin, net income and EPS amounts to the corresponding GAAP amounts is provided at the end of this press release.

Business Outlook

The following statements are forward looking statements which are based on current expectations and which involve risks and uncertainties some of which are set forth below.

Third Quarter Fiscal 2006

Net revenues for the third quarter of fiscal 2006 are currently expected to be approximately flat with the second quarter. GAAP and non-GAAP earnings per diluted share are currently expected to be approximately flat with non- GAAP earnings per diluted share for the second quarter.

Full Year Fiscal 2006

For fiscal year 2006, net revenues are currently expected to be in the range of $1.49 billion to $1.51 billion. GAAP earnings per diluted share are expected to be in the range of $1.20 to $1.25.

All fiscal 2006 EPS guidance ranges are based on the company's 20 percent estimated tax rate. The company currently believes that its effective tax rate will revert back to a 24 percent effective tax rate in fiscal year 2007.

Safe Harbor Statement

This press release contains forward-looking statements that involve risks and uncertainties, including statements in the paragraphs under "Business Outlook" above, statements regarding our expected effective tax rate and other statements regarding our anticipated performance. Factors that could cause actual results to differ materially include the following: general market and business conditions, the timing and degree of expected investments in growth opportunities, the timing of product releases and retirements, failure to successfully integrate new or acquired businesses and technologies, failure to achieve sufficient sell-through in our channels for new or existing products, failure of key new applications to achieve anticipated levels of customer acceptance, pricing pressure, failure to achieve continued cost reductions and productivity increases, failure to achieve continued migration from 2D products to 3D products, unanticipated changes in tax rates and tax laws, failure to achieve continued success in technology advancements, changes in foreign currency exchange rates, the financial and business condition of our reseller and distribution channels, renegotiation or termination of royalty or intellectual property arrangements, interruptions or terminations in the business of the company's third party developers, failure to achieve continued migration from 2D products to 3D products, failure to grow lifecycle management or collaboration products, and unanticipated impact of accounting for technology acquisitions.

Further information on potential factors that could affect the financial results of Autodesk are included in the company's report on Form 10-K for the year ended January 31, 2005 and Form 10-Q for the quarter ended April 30, 2005 which is on file with the Securities and Exchange Commission.

About Autodesk

Autodesk, Inc. is wholly focused on ensuring that great ideas are turned into reality. With six million users, Autodesk is the world's leading software and services company for the building, manufacturing, infrastructure, digital media, and wireless data services fields. Autodesk's solutions help customers create, manage, and share their data and digital assets more effectively. As a result, customers turn ideas into competitive advantage by becoming more productive, streamlining project efficiency, and maximizing profits. Founded in 1982, Autodesk is headquartered in San Rafael, California. 

www.autodesk.com

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