Jay Vleeschhouwer: Very good. Thank you Andrew. Thank you Debbie.
Andrew Anagnost: You’re very welcome.
Operator: Thank you. Our next question comes from the line of Joe Vruwink of Baird. Please go ahead Joe.
Joe Vruwink: Great. Hi everyone. Thanks for taking my questions. I wanted to ask — so Autodesk has framed growth rates over the long arc of time in that 10% to 15% range. 2025 guidance is obviously holding to the 10%. When you think about 10% conceptually, is that ultimately, as you would expect, just given the nature of your businesses being exposed to certain end markets that are perhaps now closer to their bottoming or troughing point in a given cycle? And if that maybe is the case and this is the bottoming point, what indications are you watching over coming quarters to maybe set the stage for a recovery scenario, which, of course, your markets typically do after they reach that bottoming point?
Debbie Clifford: Thanks. So, we continue to target that 10% to 15% revenue growth algorithm and you’re right, the midpoint for fiscal 2025 was right at that 10% coming off a year where we did 13% growth in constant currency. And really what we’ve said is that where we end up in that 10% to 15% range is going to be contingent upon the macroeconomic backdrop that we operate in, as well as our ability to harvest the opportunities that we have before us across AEC, manufacturing and so on. And so, the things that we’re watching as we proceed through this year with that 10% midpoint are some of the things that we’ve been talking about for a while now. So, new business growth is really important indicator of future revenue performance for the company and we said in this last quarter that new business growth grew, but it was relatively soft, consistent with what we had seen over the previous several quarters.
So, definitely being impacted by macro and that’s one of the factors that’s driving the 10% revenue growth midpoint in fiscal 2025, so we’ll continue to watch that closely. We also watch product usage, we watch bidding activity on our BuildingConnected platform, and we stay close to our channel partners, try and understand what they’re seeing in terms of their demand. So those are the things that we’re going to be watching to see how this year progresses and beyond.
Joe Vruwink: Okay thanks. That’s helpful. And then I wanted to follow-up on the free cash flow. I think I heard $2.05 billion for fiscal 2026. At one point there was a comment that the progression between FY 2024 and 2026, that was going to be linear, of course, if you normalize for that $200 million effect benefit last year and then comes out this year. I guess as I look at that and the $2.05 billion, it’s not quite linear. It would seem like FY 2026 is actually maybe a bit stronger. Did something change in kind of the modeling out of the progression? Just any color there?
Debbie Clifford: Nothing’s changed Joe. So we said that we anticipate that cash flow would grow greater in fiscal 2026 than what we saw in fiscal 2025. And when you think about modeling the growth rate, just remember that you have to remove the $200 million in fiscal 2024 before we stopped selling multi-year contracts upfront.
Joe Vruwink: Okay, I’ll leave it there. Thank you very much.
Operator: Thank you. Our next question comes from the line of Jason Celino of KeyBanc Capital Markets. Your line is open, Jason.
Jason Celino: Great. Thanks for taking my question. Maybe first for Andrew, just on the acquisition of Payapps and they were a great partner of yours. Just curious on what drove the decision to acquire them outright versus just extending the partnership? Thanks.
Andrew Anagnost: Yes. All right, so since you opened up the door there, let’s talk a little bit about construction in general, because I think it’s important to kind of highlight what’s been going on there. We had a great EBA quarter for construction. Construction saw strong growth in our largest accounts, which is really important for the long term health of construction. And at a really high level we also saw an increase in $100,000 deals and $1 million deals both in the US and internationally and that’s really important. And this is where — one of the things where Payapps comes in, right? Remember, we’re going end-to-end with our solutions here from design all the way to make. And we want to make sure that we get into the preconstruction planning and other types of our customers processes.
It takes 83 days for our customers to process payments in their environment that’s just too long. Now, we’re not getting into the transaction business. What we’re doing is, we’re getting into the business of helping them automate and track those payments across their entire life cycle so that they can get, quicker return, reduce that 83 days to be faster, and increase their cash flows. This has to be something we tightly integrate into our solution. So, we intend to tightly integrate this in just like we rebuilt some of the other solutions we acquired previously into what is today Autodesk Build, which is a new modern platform for doing some of these things. So we thought it was very important to own this so that we can integrate it. And then we went out there and we bought a premium asset.
It’s a leader. It’s a global leader in payment processors. It’s not a small company, it’s not what we could afford, it’s what we needed. And I think that’s really important. So, when we look forward at construction right now, we see tools like this being critical as well as our pre-construction tools and we actually see the deal cycles maybe getting a little longer, but we’re competing head-to-head a lot more. And I want to again highlight that Fortis deal out of Oregon, which was a head-to-head competitive deal with a pilot period that ended up going fully to Autodesk. So what we see right now in our business is building momentum driven by the end-to-end solution and kind of acquisitions, like Payapps as well. So, when we look forward into next year, we don’t see deceleration of the business, we see acceleration.
Jason Celino: Okay. No, that’s very helpful. And then my quick follow up for Debbie. Sorry if I missed it, but the 13% constant currency growth we did this year, did you mention how much was from the strong renewal cohort and then maybe any upfront revenues? I’m just trying to understand the several points of decel embedded in the 2025 guide? Thanks.
Debbie Clifford: Yes. So the early renewal cohort didn’t have any impact to revenue really, that had more of an impact on billings than it would have on revenue. And then the strength that we saw in enterprise represented about 1 point of growth.
Jason Celino: Okay, great. Thank you.
Operator: Thank you. Our next question comes from the line of Tyler Radke of Citi. Please go ahead Tyler.
Tyler Radke: Yes. Thanks for taking the question. Along the similar lines of Jason’s question on construction Andrew. I’m just wondering if you could provide us an update on the go-to-market changes that you made, I believe last year and how you’re expecting that business and you talked about acceleration, obviously make revenue is growing in the teens. Is this a business you think can be 20% over the medium term? Just help us frame what you’re seeing both from the go-to-market and pipeline perspective? Thank you.
Andrew Anagnost: Yes. So, as you know, last year was the full year of integrating the sales force back into the mainline sales force. We went through some of the integration efforts to do that. There were obviously some slowdowns in the business related to integration of those things. Those things are past us now, the business is fully integrated. It’s starting the year off, not only fully integrated from the get-go, but with all of the processes, plans and capabilities all lined up according to how we want to grow the business heading into the year. And one of the things I wanted you to notice in my previous commentary is that, we’re seeing deal activity going up. So, the pipeline is actually firming up really well and we’re in more deals and some of these deals are more competitive, but we embrace that because when we’re in a competitive deals, that means we’re showing up in places we weren’t showing up before because people are calling us in.
That’s a really important part of this whole entire process. People are starting to ask themselves what solution do they need for the next 10 years, 15 years versus what’s available out there today. And the end-to-end capabilities we’re delivering, especially leaning more heavily into our preconstruction capabilities, which lock in a lot of the cost and complexity and risk of a construction project, this is where we’re leaning into this year and this is where we’re going to be driving the growth. So I think we’re past integration issues moving forward into pure execution at scale inside the mainline salesforce. The EBA success is a great example of that.
Tyler Radke: That’s helpful. And maybe a follow up for Debbie and apologies I’ve been jumping around calls, but can you just frame how you’re thinking about the relative drivers of the top line growth outlook for FY 2025 between subs growth and pricing and the usual factors that build up to that? Thank you.
Debbie Clifford: Sure. So, we typically are trying to target roughly 50-50 split of growth coming from volume and it’s either price mix or margin basically, partner margin is how we think about it. So, across volume and price, again, our target is to do roughly 50-50 in fiscal 2025 that would continue to be our goal. Now there’s certainly years where it’s going to vacillate between one or the other and we’ve talked about how this past year our new business was growing slower than we would anticipate in a more normal macroeconomic environment. As we look ahead, we’re hoping to get that growth coming from roughly equally across those two, volume and price. So that’s how we’re thinking about it.
Tyler Radke: Thanks, Debbie.
Operator: Thank you. Our next question comes from the line of Michael Funk of Bank of America. Your question, please, Michael?
Michael Funk: Yes. Thank you for the questions. So first, one of your competitors mentioned pressure on projected seat growth due to the declining ranks of engineers. Are you seeing a similar impact or is that not impacting your customers?
Andrew Anagnost: We are not seeing a decline in our growth rates because of any pressure out there associated with engineers. As a matter of fact, one of the things that’s really important because we’re moving into design and make processes, we have a pretty broad swath of people that we’re able to touch. Also, we continue to displace competitive products, especially with Fusion in the manufacturing space. So, we’re not seeing that kind of effect declining bases. We do see customers at times optimizing their installations with Autodesk to try to right size things, but not because they’re downsizing their employment base.
Michael Funk: Thank you for that. Then one for you Debbie, and thank you for the clarity and moving pieces in 2025. In the press release, you mentioned that the guidance for growth in 2025, you said adjusting for FX, EBA acquisitions, transaction model you gave additional data points on the call, is the right way to think about it that guidance, constant currency ex-EBA transaction model and acquisitions is basically 9.5% to 11.5% growth rate in 2025, is that the right very basic math?
Debbie Clifford: So what we talked about was a point of headwind from FX, a point of headwind from the absence of EBA true-ups, half a point of tailwind from acquisitions, and a point of tailwind from the new transaction model. So the net effect of that is half a point. So, yes.
Michael Funk: Great. Thank you very much.
Operator: Thank you. Our next question comes from the line of Stephen Tusa of JP Morgan. Your question please, Stephen.
Stephen Tusa: Hey, guys. Congrats on a good quarter. What would do you think is in the kind of crystal ball to drive you to the low end of the range? Like what are you concerned about that you can see today? I assume that’s part of the macro, but what within the macro would get you to the low end of the range?
Debbie Clifford: We’ll continue to watch that new business grow. That’s something that we’re laser focused on and if macroeconomic conditions were to shift, then that would be probably one of the first things that we’d be impacted and that can take us to the lower end of the range. We’re watching end market demand pretty closely so that’s why we talk about bid activity on BuildingConnected and it continues to be at record highs. But of course, if that were to take a turn, that can have an impact on us. And then we monitor these sentiment that we’re hearing from our channel partners to understand how they’re seeing end market demand and what the impacts might be for our business. So, those are the types of things that could inform whether or not we would be at the lower end of the range.
Stephen Tusa: Okay and just to be clear, I thought it was when you went through some of the other moving parts on guidance that it netted out to kind of a point of tailwind. I guess you’re throwing in the EBA true ups, or at least adjusting those out to get to an underlying rate. Is that part of the calc there?
Debbie Clifford: Yes. And sorry to go back to the last question, because there’s a lot of moving parts here, and it has been confusing. So for revenue in the guide, it’s 1 point of headwind from FX, 1 point of headwind from the absence of EBA true-ups, 0.5 point of tailwind from the acquisitions, and 1 point of tailwind from the new transaction model, which is a net negative. So net 0.5 negative headwind as we look into the guide for fiscal 2025.
Stephen Tusa: Okay. And then just one last quick one on the subs. I guess they’re up 12 for the year, if I have that number right. Your constant currency was 13 can you maybe explain what you mean by half coming from volume and half coming from price? It seems like that’s a lot from — much more from volume there maybe there’s some mix or something like that?
