# How Autodesk makes money

CXProWealth Business Lens · Autodesk (ADSK) · Q2 FY2027

Read from the 10-Q for the period 2026-05-01 to 2026-07-31, filed 2026-08-28 with the SEC (accession 0000769397-26-000061): https://www.sec.gov/Archives/edgar/data/769397/000076939726000061/

Business Lens explains how a company earns, spends and keeps its money, from its own filings. It is insight and context, never a view on the shares, a target, or advice. Figures are raw units as filed; percentages are percentage points.

## Headline figures

- Revenue: $2.0B (+25.3% on the year)
- Operating income: $599.0M (operating margin 29.3%)
- Net income: $492.0M (net margin 24.0%)
- Gross margin: 91.4%
- Free cash flow: $561.0M (27.4% of revenue)
- Cash conversion (operating cash flow / net income): 1.17x
- Capital expenditure: 0.7% of revenue

## Where the money goes (Q2 FY2027)

- Architecture, Engineering, Construction and Operations → Total net revenue: $1.0B
- AutoCAD and AutoCAD LT → Total net revenue: $500.0M
- Manufacturing → Total net revenue: $385.0M
- Media and Entertainment → Total net revenue: $92.0M
- Other → Total net revenue: $40.0M
- Total net revenue → Total cost of revenue: $176.0M
- Total cost of revenue → Cost of goods and services sold: $152.0M
- Total cost of revenue → Amortization of developed technologies: $24.0M
- Total net revenue → Gross profit: $1.9B
- Gross profit → Total operating expenses: $1.3B
- Total operating expenses → Marketing and sales: $616.0M
- Total operating expenses → Research and development: $464.0M
- Total operating expenses → General and administrative: $179.0M
- Total operating expenses → Amortization of purchased intangibles: $13.0M
- Restructuring, other exit costs, and facility reductions → Total operating expenses: $1.0M
- Gross profit → Income from operations: $599.0M
- Income from operations → Interest and other income (expense), net: $6.0M
- Income from operations → Income before income taxes: $593.0M
- Income before income taxes → Provision for income taxes: $101.0M
- Income before income taxes → Net income: $492.0M

## Where the revenue comes from

### Products and services (Revenue Recognition - Schedule of Contract Revenue (Details))

| Member | Value | Share |
|---|---:|---:|
| Architecture, Engineering, Construction and Operations | $1.0B | 50.3% |
| AutoCAD and AutoCAD LT | $500.0M | 24.4% |
| Manufacturing | $385.0M | 18.8% |
| Media and Entertainment | $92.0M | 4.5% |
| Other | $40.0M | 2.0% |

The members sum to total revenue.

### Regions (Revenue Recognition - Schedule of Contract Revenue (Details))

| Member | Value | Share |
|---|---:|---:|
| Europe, Middle East and Africa | $804.0M | 39.3% |
| Asia Pacific | $344.0M | 16.8% |
| Other Americas | $171.0M | 8.4% |

The members do not sum to total revenue.

### ContractWithCustomerResearchDevelopmentChannel (Revenue Recognition - Schedule of Contract Revenue (Details))

| Member | Value | Share |
|---|---:|---:|
| Design | $1.7B | 83.5% |
| Make | $244.0M | 11.9% |
| Other | $94.0M | 4.6% |

The members sum to total revenue.

## Income statement, as filed

| Line | Q2 FY2027 | Of revenue |
|---|---:|---:|
| Total net revenue | $2.0B | 100% |
|   Cost of subscription revenue | $2.0B | 95.4% |
|   Other | $94.0M | 4.6% |
| Cost of subscription revenue | $130.0M | 6.4% |
| Other | $22.0M | 1.1% |
| Amortization of developed technologies | $24.0M | 1.2% |
| **Total cost of revenue** | $176.0M | 8.6% |
| **Gross profit** | $1.9B | 91.4% |
| Marketing and sales | $616.0M | 30.1% |
| Research and development | $464.0M | 22.7% |
| General and administrative | $179.0M | 8.7% |
| Amortization of purchased intangibles | $13.0M | 0.6% |
| Restructuring, other exit costs, and facility reductions | -$1.0M | 0.0% |
| **Total operating expenses** | $1.3B | 62.1% |
| **Income from operations** | $599.0M | 29.3% |
| Interest and other income (expense), net | -$6.0M | 0.3% |
| **Income before income taxes** | $593.0M | 29.0% |
| Provision for income taxes | ($101.0M) | 4.9% |
| **Net income** | $492.0M | 24.0% |
| Basic net income per share (in usd per share) | $2 | 0.0% |
| Diluted net income per share (in usd per share) | $2 | 0.0% |
| Weighted average shares used in computing basic net income per share (in shares) | 210,000,000 |  |
| Weighted average shares used in computing diluted net income per share (in shares) | 211,000,000 |  |

## History

| Period | Revenue | Operating income | Net income | Operating cash flow | Capital expenditure | Free cash flow |
|---|---:|---:|---:|---:|---:|---:|
| FY2008 | $2.2B | $445.6M | $356.2M | $708.5M | $43.3M | $665.2M |
| FY2009 | $2.3B | $244.5M | $183.6M | $593.9M | $78.4M | $515.5M |
| FY2010 | $1.7B | $65.6M | $58.0M | $246.8M | $31.7M | $215.1M |
| FY2011 | $2.0B | $271.4M | $212.0M | $540.8M | $28.3M | $512.5M |
| FY2012 | $2.2B | $355.6M | $285.3M | $573.5M | $63.0M | $510.5M |
| FY2013 | $2.3B | $305.9M | $247.4M | $559.1M | $56.4M | $502.7M |
| FY2014 | $2.3B | $284.8M | $228.8M | $563.5M | $64.2M | $499.3M |
| FY2015 | $2.5B | $120.7M | $81.8M | $708.6M | $75.5M | $633.1M |
| FY2016 | $2.5B | $1.3M | -$330.5M | $414.0M | $72.4M | $341.6M |
| FY2017 | $2.0B | -$499.6M | -$582.1M | $169.7M | $76.0M | $93.7M |
| FY2018 | $2.1B | -$509.1M | -$566.9M | $900.0K | $50.7M | -$49.8M |
| FY2019 | $2.6B | -$25.0M | -$80.8M | $377.1M | $67.0M | $310.1M |
| FY2020 | $3.3B | $343.0M | $214.5M | $1.4B | $53.2M | $1.4B |
| FY2021 | $3.8B | $629.0M | $1.2B | $1.4B | $91.0M | $1.3B |
| FY2022 | $4.4B | $618.0M | $497.0M | $1.5B | $56.0M | $1.5B |
| FY2023 | $5.0B | $989.0M | $823.0M | $2.1B | $40.0M | $2.0B |
| FY2024 | $5.5B | $1.1B | $906.0M | $1.3B | $31.0M | $1.3B |
| FY2025 | $6.1B | $1.4B | $1.1B | $1.6B | $40.0M | $1.6B |
| FY2026 | $7.2B | $1.6B | $1.1B | $2.5B | $43.0M | $2.4B |

Latest trend (the newest full year against the year before; a reading, not a forecast):

- Revenue: +17.5% (year before +11.5%): accelerating
- Operating income: +16.5% (year before +20.0%): slowing
- Net income: +1.1% (year before +22.7%): slowing
- Free cash flow: +53.7% (year before +22.2%): accelerating

## Operating figures stated in the filing

- Recurring revenue as a share of net revenue: 97.0% (as of 2026-07-31). "Recurring revenue as a percentage of net revenue was 97% and 98% for the three months ended July 31, 2026 and 2025, respectively, and 97% for both the six months ended July 31, 2026 and 2025." (Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS)
- Recurring revenue as a share of net revenue: 98.0% (as of 2025-07-31). "Recurring revenue as a percentage of net revenue was 97% and 98% for the three months ended July 31, 2026 and 2025, respectively, and 97% for both the six months ended July 31, 2026 and 2025." (Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS)
- Share of net revenue through the largest distributor (TD Synnex): 8.0% (as of 2026-07-31). "Total revenue from TD Synnex accounted for 8% of Autodesk's total net revenue during both the three and six months ended July 31, 2026." (Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS)
- Share of net revenue through the largest distributor (TD Synnex): 16.0% (as of 2025-07-31). "Total revenue from TD Synnex accounted for 16% and 18% of Autodesk's total net revenue during the three and six months ended July 31, 2025, respectively." (Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS)

## Key insights

### Operating income grew 34.9% on 16.1% revenue growth

Operating expenses fell to 62.2% of revenue from 65.8%, lifting operating margin to 29.3% from 25.2% as every major cost line lost share.

Revenue rose to $2.05B from $1.76B. Operating expenses rose to $1,271M from $1,160M, but as a share of revenue they fell to 62.2% from 65.8%. Operating income rose 34.9% to $599M from $444M, so operating margin reached 29.3%, against 25.2% a year earlier. _(from the filing)_
The gain was broad. Marketing and sales gave up 1.6 points of revenue share, to 30.1%; research and development 0.75 points, to 22.7%; general and administrative 0.78 points, to 8.75%. Gross margin also edged up 0.42 points, to 91.4%. Restructuring was a $1M credit, against a $6M charge a year earlier. _(from the filing)_
Over the eight fiscal years shown, operating income went from a $25M loss in FY2019 to $1.58B in FY2026, 21.9% of that year's revenue of $7.21B. The filing says exchange rates added to reported revenue growth this quarter and worked against costs. _(from the filing)_
The filing expects cost of revenue, marketing and sales, research and development, and amortization of purchased intangibles to rise in the third quarter, partly from the MaintainX acquisition and continued investment in cloud, platform and AI, with general and administrative growing slower than revenue. _(from the filing)_
Analysis: this is one quarter, and part of the gain came from a restructuring credit and lower stock-based pay in selling. The margin carries forward only if revenue keeps outgrowing a cost base the company itself says is about to grow. _(analysis)_

### A lower tax rate drove net income's 57.2% jump

Pre-tax income rose 30.0%, but tax took 17.0% of it against 31.4% a year earlier, so net income rose 57.2% to $492M.

Pre-tax income rose 30.0% to $593M from $456M. The tax provision fell to $101M from $143M: 17.0% of pre-tax income, against 31.4% a year earlier. Net income rose 57.2% to $492M from $313M, and net margin reached 24.05%, up 6.29 points. _(from the filing)_
The filing ties the year-ago charge to a U.S. election on the timing of taxation of revenue, which reduced the benefit from the FDDEI regime and raised tax tied to NCTI. The company also anticipates that a pending IRS accounting method change, not yet recognized, will lower its tax provision. _(from the filing)_
Between the two lines, interest and other turned to a $6M expense from $12M of income, which the filing puts mainly down to losses on strategic investments. Diluted earnings per share rose to $2.33 from $1.46, helped slightly by diluted shares falling to 211M from 215M as repurchases continued. _(from the filing)_
Analysis: the operating line, up 34.9%, is the cleaner read of the business. Much of the gap between that and the 57.2% net income growth reflects an unusually heavy tax charge in the comparison quarter, not a change in how the company earns. _(analysis)_

### The largest distributor's share halved as Autodesk sells direct

TD Synnex fell to 8% of revenue from 16%, yet marketing and sales still shrank to 30.1% of revenue despite higher partner commissions.

TD Synnex, the largest distributor, accounted for 8% of net revenue in the quarter, against 16% a year earlier. The filing explains: "We are increasingly transacting directly with customers due to the growth of our online store and sales with Solution Providers," and concludes the business is not substantially dependent on TD Synnex. _(from the filing)_
Marketing and sales rose 10.2% to $616M from $559M, primarily on sales commissions to Solution Providers and higher advertising, partly offset by lower employee-related costs and stock-based pay. As a share of revenue it still fell 1.6 points, to 30.1%. _(from the filing)_
Analysis: when Autodesk bills the customer and pays the partner a commission, the partner's cut stops reducing the price Autodesk records and appears as a selling cost instead. That lifts revenue and marketing expense together without any change in demand, and the filing does not size it. Such a gross-up tends to dilute margin, so the margin gain held despite it. _(analysis)_
Analysis: transacting directly gives Autodesk the customer relationship, the pricing and the usage data, which is what its plan to move single-product users into collections and cloud tools depends on. Partners keep local reach and are paid for it. _(analysis)_

### Competitive edge

- **Recurring revenue of 97% at a 91.4% gross margin** Nearly all revenue renews and cost of revenue was 8.6% of it, so most of each added subscription dollar reaches gross profit.
- **The buildings business now brings in half of revenue** AECO grew 17.2% to $1.03B, 50.3% of revenue, which the filing credits to AEC Collections, Forma and Revit, while standalone AutoCAD lost share.
- **Customers pay ahead, so cash outruns reported profit** Free cash flow was $561M, 27.4% of revenue, and operating cash flow was 1.17 times net income, on capital spending of 0.68% of revenue.

### What to watch

- **A quarter of revenue still rides on AutoCAD** AutoCAD and AutoCAD LT brought in $500M, 24.4% of revenue, and grew 13.6% against 16.1% for the whole, so the migration plan carries weight.
- **Renewal trouble would reach revenue late and profit fast** Revenue is recognized over each contract, so weak renewals surface quarters later, and with largely fixed operating costs a shortfall reaches profit quickly.
- **MaintainX adds costs the 29.3% margin did not carry** The acquisition closed after the quarter, funded with a term loan, commercial paper and cash, and the filing expects several cost lines to rise with it.

## Investor view

**Autodesk's operating margin rose 4.1 points from a year earlier as its costs grew slower than its subscription revenue**

### How it makes money

Autodesk rents its design software by subscription. Recurring revenue was 97% of net revenue in the quarter, against 98% a year earlier. Subscription revenue is recognized ratably over each contract, so, in the filing's words, "most of the revenue we report in each quarter is the result of subscriptions entered into during previous quarters." _(from the filing)_
The buildings business is the largest. Architecture, Engineering, Construction and Operations brought in $1.03B, 50.3% of the quarter's $2.05B revenue. AutoCAD and AutoCAD LT, the drafting products the company grew up on, added $500M, or 24.4%. Manufacturing contributed $385M (18.8%) and Media and Entertainment $92M (4.5%). _(from the filing)_
Software costs little to deliver. Cost of revenue was $176M, leaving a gross margin of 91.4%. Its largest piece, cost of subscription revenue at $130M, rose mainly on cloud hosting, per the filing. The money goes to selling and building: marketing and sales took $616M, 30.1% of revenue, and research and development $464M, 22.7%. _(from the filing)_
The filing also splits revenue into Design, the desktop subscriptions and enterprise agreements, at $1.71B or 83.5% of revenue, and Make, cloud products such as Autodesk Build, Forma and Fusion, at $244M or 11.9%. By region, Europe, the Middle East and Africa supplied $804M, 39.3% of revenue, and Asia Pacific $344M, 16.8%. _(from the filing)_

### What shifted

Revenue rose 16.1% to $2.05B from $1.76B a year earlier. The filing puts the rise in subscription revenue down to "growth in subscriptions from our existing customer base", and says exchange rates helped. Every product family grew: AECO by 17.2%, AutoCAD and AutoCAD LT by 13.6%, Manufacturing by 15.3% and Media and Entertainment by 15.0%. _(from the filing)_
Costs grew slower than revenue. Operating expenses rose to $1,271M from $1,160M but fell to 62.2% of revenue, down 4.0 points. Marketing and sales gave up 1.6 points of share, research and development 0.75 and general and administrative 0.78. Operating income rose 34.9% to $599M from $444M, and operating margin reached 29.3%, against 25.2% a year earlier. _(from the filing)_
Net income rose faster still, up 57.2% to $492M from $313M, mostly through tax. The provision fell to $101M from $143M: 17.0% of pre-tax income of $593M, against 31.4% of $456M. The filing ties the year-ago charge to a U.S. election on the timing of taxation of revenue. Below the operating line, interest and other turned to a $6M expense from $12M of income, on losses on strategic investments. _(from the filing)_
The route to customers changed. TD Synnex, the largest distributor, accounted for 8% of net revenue, against 16% a year earlier. The filing says: "We are increasingly transacting directly with customers due to the growth of our online store and sales with Solution Providers." Marketing and sales rose 10.2% to $616M, "primarily due to an increase in sales commissions to Solution Providers" and higher advertising. _(from the filing)_
Diluted earnings per share rose to $2.33 from $1.46. Part of that is a smaller share count: diluted weighted shares fell to 211M from 215M as the company kept repurchasing stock. Free cash flow for the quarter was $561M, 27.4% of revenue, against $451M a year earlier. _(from the filing)_

### Risks in the filing

Concentration in AutoCAD. A substantial portion of revenue comes from AutoCAD-based products and collections, and AutoCAD and AutoCAD LT alone were 24.4% of the quarter's revenue. The growth plan depends on moving those users into collections and cloud products, and the filing concedes that at times flagship sales "have decreased without a corresponding increase in Industry Collections or cloud-based functionality revenue". _(from the filing)_
Customers may not renew. They are not obligated to renew, upgrade or expand, and renewal rates can fall with pricing, competition, satisfaction or weaker spending. Because revenue is recognized over the contract, a drop in new or renewed subscriptions hurts later quarters more than the one in which it happens. Operating expenses are relatively fixed in the short term, so a revenue shortfall reaches profit quickly. _(from the filing)_
Competition and AI. The company says software has limited barriers to entry, that some competitors have greater resources, and that AI could alter the market for its products in unpredictable ways and reduce demand. It also names the cost of its own AI work, which could exceed the benefits for a time, and growing AI regulation, citing the European Union's AI Act. _(from the filing)_
Global exposure and execution. Most revenue comes from outside the United States, so tariffs, trade disputes, sanctions and currency swings reach results directly; Europe, the Middle East and Africa alone supplied 39.3% of revenue. The filing also names acquisition risk, now including MaintainX, the execution of its restructuring plans, security incidents, reliance on third parties such as Amazon Web Services, and a securities suit over its free cash flow and non-GAAP margin practices that was dismissed and is on appeal. _(from the filing)_
Of these, the numbers show the AutoCAD risk moving the company's way this quarter: the AutoCAD family grew more slowly than the whole and lost share, while the collection-led AECO business gained share. Renewal risk cannot show up yet, by the company's own account of the lag. The channel shift is visible in the falling distributor share and in commission-driven selling costs. _(analysis)_

## Founder view: mechanisms

### A recurring base that outgrows its costs

Nearly all revenue renews, and each added subscriber costs little to serve. The large costs, engineering and the sales organization, are set in advance and do not rise one for one with revenue. When a renewing base keeps growing and those fixed costs grow more slowly, each extra dollar of revenue carries a high share of profit. This is operating leverage built on a subscription base rather than on unit volume. _(analysis)_

### Land on a standard, expand into suites

AutoCAD made Autodesk's format a working standard in drafting. The strategy is to move those users from a single product into Industry Collections, bundles for a whole workflow, and then into cloud platforms such as Forma, Fusion and Flow, where design data carries into construction, manufacturing and operations. Each step raises revenue per customer and makes switching harder, because the customer's projects and data live in the connected tools. _(analysis)_

### Direct transactions, partner reach

Autodesk is moving from selling through distributors to transacting directly with end customers, while Solution Providers still quote, advise and support. The partner becomes an agent paid a commission instead of a reseller who owns the sale. Autodesk gains the customer relationship, the pricing and the usage data; the partner keeps its local expertise and is paid for it. _(analysis)_

### Billing terms fund the business

Subscribers pay in advance, annually or upfront, and revenue follows over the term. Cash arrives before the cost of serving the customer, so the customer base finances the company's operations. Changing billing terms moves cash between years without changing the underlying business, which is why the cash line and the revenue line can part ways. _(analysis)_

## Member research

Signed-in members read, on the page: what Autodesk's numbers depend on from here, and the playbook behind each mechanism (what needs scale, what transfers, how to test it, the metric that would show it).

## Sources

- Autodesk 10-Q for the period to 2026-07-31: https://www.sec.gov/Archives/edgar/data/769397/000076939726000061/ (2026-08-28)

Methodology business-lens-1.0 · schema 1.2.0 · run business-lens-2026-11-02 · as of 2026-11-02