Autodesk Shares Just Crashed for This Reason After Reporting Q2 Results

Shares of software maker Autodesk were headed lower on Tuesday after trade war concerns spooked investors.

The company which reported Q2 results, said that it expects annualized recurring revenue for fiscal 2020 of $3.43 billion to $3.49 billion. Traders weren’t too thrilled about the news as this was lower than a previous outlook of $3.5 billion to $3.55 billion. The company also warned that the trade war could hurt its financials in the second half of the fiscal year.

According to the company, “Autodesk’s business outlook for the third quarter and full year fiscal 2020 takes into consideration the current economic environment and foreign exchange currency rate environment.”
Shares of the stock fell over 11% in extended hours.

“While we continue to execute well and are not materially impacted by current trade tensions and macro uncertainty, we are taking a prudent stance to our second half fiscal 2020 outlook,” Autodesk said in its second-quarter earnings report.

For the quarter ended July 31, Autodesk reported earnings of 65 cents per share excluding certain items, and GAAP revenue of 18 cents per share, on revenue of $797 million. Revenue saw a growth of 30% from the year before.

Andrew Anagnost, President and Chief Executive Officer, said on the earnings call, “Our great momentum from the first quarter carried into the second quarter, resulting in strong performance, with revenue, billings, earnings and free cash flow coming in ahead of expectations. We also crossed the $3 billion mark on ARR for the first time, which was driven by solid performance across all regions and products. Our last 12 months free cash flow of $731 million is the highest amount of free cash flow we have ever generated in a four-quarter period in the company’s history. We performed well in the first half of the year, demonstrating focused execution and the strength of our recurring revenue model. Although we continue to execute well and are not materially impacted by current trade tensions and macro conditions, we are aware of the current business and geopolitical environment that is causing uncertainty in the market.”

He added, “As we look across the next six months, we are taking a prudent approach to our outlook for the remainder of fiscal ’20. However, we think the uncertainty caused by macro-related events is only a short-term issue. We remain confident in our ability to achieve the fiscal ’23 goals we have laid out for you. Our confidence is grounded in the value delivered by our products, their ability to help our customers differentiate via innovation and digitization, focused execution delivered by our partners and sales teams, and the significant strides we are making to capture the non-paying user community. I would also like to point out that although there are headlines of some impact from the current environment on a few industry verticals like Manufacturing, we outgrew competitors and gained share in the space. The construction industry is also holding steady and continues to invest in innovative solutions, and we saw ongoing strength in construction this quarter.”

Shares have so far gained 17% this year and have outperformed the S&P 500.

Disclaimer: We have no position in Autodesk, Inc. (NASDAQ: ADSK) and have not been compensated for this article.