Susan Smith has worked as an editor and writer in the technology industry for over 16 years. As an editor she has been responsible for the launch of a number of technology trade publications, both in print and online. Currently, Susan is the Editor of GISCafe and AECCafe, as well as those sites’ … More »
Autodesk’s Q1 Fiscal 2010 Results
June 1st, 2009 by Susan Smith
On May 21st Autodesk announced their Q1 fiscal 2010 results, reporting revenues of $426 million, a decrease of 29 percent compared to the first quarter of fiscal 2010.
This announcement seemed to rock not only the AEC industry where Autodesk is #1, but also the GIS and MCAD industries as well and, in fact, every industry that relies on Autodesk products. The revenues reflect what is happening globally – other technology providers also report significant decreases, but the drop of revenues for a bastion of the industry marks a change that has appeared imminent in recent months.
“Our revenue results for the quarter continue to reflect the global economic downturn, which is impacting our business on almost every front,” said Carl Bass, Autodesk president and CEO in the press release. “We made significant progress in our continued effort to improve our cost structure and ongoing efficiencies, which resulted in lower than expected operating costs for the quarter and greater than expected earnings per share and cash flow.”
See press release
Autodesk jumps after results, Reuters, May 22, 2009
Autodesk swings to loss, will cut about 430 jobs Marketwatch, May 21, 2009
Back at AU last November, Bass had stated in a press conference the company has $1 billion in assets and no debt, well positioned to weather economic strife. Bass said that Autodesk produces 150 products, most of which generate almost no revenue. Selling them standalone is not a good idea, and the company is looking into bundling some of them. This was a red flag that the company would have to trim the fat — whatever that fat might be.
A scale back was to be expected. Autodesk continues to make acquisitions, but they are also selling some of their assets: for example, the sale of the assets of LocationLogic to TeleCommunication Systems, Inc. ( TCS) for approximately $25 million. In terms of business, according to a recent article, substantially all of the LocationLogic revenue stream is recurring service revenue from hosted infrastructure software and location-based applications.
One can only guess that these decisions weren’t made lightly; looking at the numbers, products that are not earning sufficient revenue or which might present significant challenges in integration may be let go or drop by the wayside.
Already eager to bring attention to the wavering numbers of the Q1 results, some competing vendors have suggested that Autodesk customers may want to jump ship and move to their less popular products in an I’ll-show-you move. To me, this doesn’t make sense. Most Autodesk shops are heavily invested in Autodesk products, not just one or two seats of AutoCAD but numerous products that are well integrated with the primary bodybuilder, AutoCAD. Customers may be open to trying free software from the less expensive, less well known vendors, but they’ll be hard pressed to get their systems folks to change. Fact is, competing software companies are also feeling the pinch so customers may feel safer sticking with the known quantity.
It’s difficult to tell at this point how much this will affect the GIS industry. Autodesk provides some valuable geospatial products that complement their CAD offerings, but it is not the #1 GIS provider.
Title: GISCafe Today