Autodesk Inc. (NASDAQ: ADSK) saw its shares decline 4.1% in premarket trading on Friday, slipping to $259.50, after the software maker issued a third-quarter profit outlook that fell short of Wall Street's expectations. The drop, which occurred ahead of the market open, erased roughly $2.34 billion in implied market value, based on the company's 211 million shares outstanding.
The sell-off came despite a robust fiscal second-quarter performance, where Autodesk reported adjusted earnings of $3.30 per share, beating the consensus estimate of $3.12. Revenue for the quarter climbed 16% year-over-year to $2.046 billion, surpassing the $2.01 billion analysts had projected. Free cash flow also surged 24% to $561 million, reflecting strong operational execution.
However, management's guidance for the current quarter disappointed investors. Autodesk forecast adjusted earnings per share in the range of $3.04 to $3.09, below the $3.14 consensus. The revenue projection of $2.125 billion to $2.140 billion came in ahead of the $2.08 billion estimate, but the earnings miss overshadowed the top-line beat. The discrepancy between stronger sales and softer profit is largely attributed to the company's pending $3.6 billion acquisition of MaintainX, which is expected to bring additional operating and financing costs.
Chief Financial Officer Janesh Moorjani noted that core projections improved, but acquisition-related expenses partially offset those gains. The company's full-year free cash flow forecast was tightened to a range of $2.725 billion to $2.750 billion, incorporating approximately $45 million in transaction costs tied to the MaintainX deal.
Segment performance was solid across the board. The AECO (Architecture, Engineering, and Construction) segment generated $1.029 billion in revenue, up 17% year-over-year. AutoCAD and AutoCAD LT contributed $500 million, a 14% increase, while Manufacturing and Media & Entertainment each grew 15%, bringing in $385 million and $92 million, respectively.
Operational metrics also showed strength. Billings rose 10% to $1.854 billion, and the GAAP operating margin expanded by four percentage points to 29%. The company repurchased 2.1 million shares for $453 million, representing approximately 81% of its quarterly free cash flow.
Looking at the backlog, current remaining performance obligations (cRPO) increased 12% to $5.245 billion, while total RPO grew a modest 2% to $7.433 billion. Unbilled deferred revenue declined 8% as Autodesk scaled back multi-year discounts, a move that could impact long-term visibility.
For the full fiscal year, Autodesk raised its revenue outlook to $8.295 billion to $8.345 billion, with adjusted EPS projected between $12.52 and $12.60. The company's guidance reflects a balance between top-line growth and the near-term drag from the MaintainX acquisition.
Analysts remain cautiously optimistic, with a consensus rating of "Moderate Buy" and an average price target of $322.97, implying roughly 24% upside from the premarket level. The ratings breakdown includes 24 buy recommendations and six holds.
Key risks include potential margin pressure from the MaintainX integration, which could persist longer than expected, and a slowdown in RPO growth that might affect future revenue visibility. However, strong demand in the AECO sector, improved pricing power, and faster adoption of AI-driven tools could help offset these challenges.
