Autodesk (ADSK, Financial) just delivered third-quarter fiscal 2025 results that technically beat the Street, but investors aren't buying the celebration. Shares slid 8% in pre-market trading despite revenue hitting $1.57 billion—up 11% year-over-year and a notch above analyst forecasts of $1.56 billion. Adjusted EPS? $2.17, also topping estimates. Growth came from all the usual suspects: AEC revenue jumped 11% to $751 million, while Manufacturing revenues soared 14% to $307 million. Recurring revenue kept its steady drumbeat, contributing a whopping 97% to the total. So, what gives? Margins took a hit—non-GAAP operating margin fell 3 points to 36%—and Wall Street is feeling edgy about leadership shifts, with CFO Janesh Moorjani stepping in next month.
CEO Andrew Anagnost tried to rally confidence, touting Autodesk's successful go-to-market tweaks and rock-solid renewal rates, but macro headwinds and geopolitical jitters are clouding the narrative. Interim CFO Betsy Rafael flagged the same challenges, though she reassured investors that the business is still chugging along. To its credit, Autodesk raised the midpoint of its full-year revenue forecast to $6.12–$6.13 billion and bumped adjusted EPS expectations to $8.29–$8.35. But Wall Street analysts, including Morgan Stanley, are hung up on the lack of clarity around fiscal 2026. Their take? "Execution risk remains." Still, Wolfe Research sees the post-earnings dip as a chance to buy into a business transitioning smoothly to its agency model while riding good business momentum.
Here's the bottom line: The fundamentals remain strong. Billings surged 28% year-over-year to $1.54 billion, and industries like construction, architecture, and animation are doubling down on Autodesk's software and cloud solutions. Yet, execution risk tied to leadership changes and a tough macro environment has investors spooked for now. Whether this dip is a long-term buying opportunity or a warning sign depends on how quickly the company can prove its next phase is as solid as the last.
