Autodesk Shares Drop 5% on Worse Than Expected Outlook

Autodesk (NASDAQ:ADSK) shares fell more than 5% on Wednesday following the company’s Q3 earnings release. While both EPS of $1.70 and revenue of $1.28 billion were in-line with the Street estimates, the company's outlook was soft due to the macro and worsening FX headwinds.

While commentary and the majority of Q3 numbers suggest the business is holding up near plan in this environment (i.e. strong retention rates, usage rates solid, continued Autodesk Construction Cloud performance), management noted (1) changing dynamics at the low end with LT, (2) new business trends are starting to decelerate in Q3 and (3) the pace of customers signing multi-year upfront contracts is starting to wane given the macro backdrop.

The company expects Q4/23 EPS to be in the range of $1.77-$1.83, compared to the Street estimate of $1.83. Revenue is expected in the range of $1.303-1.318 billion, compared to the Street estimate of $1.33 billion.