Revenue +17% YoY (+18% Constant Currency) to $1.76B Above High End of Guide; Billings +36% Reported (+34% CC, +26% ex-NTM CC); Non-GAAP Operating Margin 39% (+140bp YoY); FCF $451M; FY26 Guidance Raised Across Every Line; FY29 Operating Margin Target Articulated at 41% Reported / 45% Underlying (Ex-NTM) — 500/900bp Expansion From FY24; AI AutoConstrain at 1.2M+ Commercial Uses With 60%+ Acceptance Rate; FY26 Buyback Raised $100M to $1.2-$1.3B (40-50% Increase vs FY25); Investor Day October 7 — Maintaining Outperform
Key Takeaways
- Q2 FY26 print delivers continued operational acceleration above Q1's pace. Revenue $1.76B +17% YoY (+18% CC, +11% CC ex-NTM) above high end of guide. Billings $1.59B +36% reported (+34% CC, +26% CC ex-NTM). RPO $7.3B +24%; cRPO $4.7B +20%. Non-GAAP operating margin 39% (+140bp YoY). GAAP operating margin 25% (+240bp YoY). FCF $451M benefiting from earlier billings linearity. Revenue/EPS topped high end of guidance; billings/margin/FCF exceeded expectations.
- FY29 multi-year operating margin framework articulated — 41% reported / 45% underlying. CFO: "we expect reported non-GAAP operating margin to be 41% in fiscal '29 or about 45% on an underlying basis, which excludes the mechanical impact of the new transaction model as it fully scales next year. This would represent a reported and underlying improvement of approximately 500 basis points and approximately 900 basis points, respectively, since we started to scale the new transaction model at the end of fiscal '24." Multi-year framework articulation is the structural anchor for the Outperform thesis.
- FY26 guidance raised across every line. Billings $7.355-$7.445B (raised from $7.16-$7.31B); Revenue $7.025-$7.075B (raised from $6.925-$6.995B); Non-GAAP op margin ~37% reported / ~40% underlying; FCF $2.2-$2.275B (raised from $2.1-$2.2B); Buyback raised $100M to $1.2-$1.3B (40-50% increase vs FY25).
- AI AutoConstrain monetization proof point continues compounding. AI model has delivered 1.2M+ dimensions/constraints (up from 580K at Q1). Acceptance rate of AutoConstrain suggestions to commercial users grown to MORE THAN 60% (up from 50%+ at Q1) with 90% of those sketches fully constrained. Substantial productivity gain documented. The continued improvement validates the AI monetization framework that will be detailed at the October 7 Investor Day.
- AECO strength offsetting commercial softness. Strong AECO performance with customers benefiting from sustained investment in data centers, infrastructure, and industrial buildings — more than offsetting softness in commercial real estate. EBA momentum continues (AtkinsRéalis 6th EBA closed; Kimley-Horn renewed + expanded). Make revenue growth consistent in Q1 + Q2 if you remove the impact of acquisitions.
- AI for the Physical World framework deepening — Project Bernini. Autodesk introduced Project Bernini (generative AI for 3D) as part of broader initiative to create professional-grade foundation models. By combining spatial + physical reasoning with deep industry-specific knowledge, Autodesk AI moves beyond traditional deterministic and rule-based parametric CAD kernels to deliver adaptive, context-aware AI-driven CAD engines. Customers will be able to build their own AI models trained on their own data — the foundation for differentiated value capture.
- Capital return acceleration — $356M Q2 buyback at $298 average. 1.2M shares repurchased at average $298/share (up from $269 Q1). YTD: 2.5M shares repurchased for $709M. Buyback target raised to $1.2-$1.3B (vs prior $1.1-$1.2B framework). The combination of FCF stack rebuild + buyback acceleration + share count reduction supports multi-year per-share value creation.
- Investor Day October 7 confirmed as catalyst event. Autodesk University in September + Investor Day October 7 will articulate the multi-year framework — including FY29 margin path, AI monetization detail, and platform/industry cloud roadmap. Stock catalyst window approaching.
- Rating: Maintaining Outperform. The Q2 FY26 print validates the Outperform thesis articulated at Q1 initiation. Underlying business momentum (+11% CC ex-NTM) consistent with Q1 trajectory + raised FY26 guide + FY29 margin framework articulated + AI traction compounding + capital return accelerating. Fair value range widens to $325-$375 (from $310-$360 at Q1). Stock at ~$315 pre-print. We expect continued grinding higher into Investor Day October 7 catalyst. Key risks: macro deceleration impacting EBA renewals (large pool remaining in H2); NTM cycling against tougher comps in Q4; commercial real estate weakness extending.
Coverage Update from Q1 FY26
Three months ago at the Q1 FY26 print, we initiated coverage at Outperform at ~$295 with a $310-$360 fair value range. Our framework: cyclical recovery in AECO + manufacturing + NTM + AI traction + capital return rebuild support multi-year compounder thesis. The Q2 FY26 print validates on every dimension:
- Revenue acceleration: +17% YoY Q2 vs +15% YoY Q1 — momentum continuing
- Operating margin expansion: 39% Q2 vs 37% Q1 — multi-quarter operating leverage
- FY29 framework articulated: 41% reported / 45% underlying op margin — multi-year structural anchor
- AI traction compounding: 1.2M uses + 60% acceptance (up from 580K + 50% at Q1)
- Capital return acceleration: Buyback raised to $1.2-$1.3B; Q2 $356M at $298 average
- FY26 guide raised: Across billings/revenue/margin/FCF
- Investor Day October 7: Confirmed catalyst event
Maintaining Outperform with fair value range widened to $325-$375.
Results vs. Consensus — Q2 FY26
Q2 Scorecard
| Metric | Q2 FY26 Actual | Guide / Consensus | Result |
|---|---|---|---|
| Revenue | $1.76B (+17% / +18% CC) | $1.72B / $1.73B consensus | Above high end of guide |
| Billings | $1.59B (+36% / +34% CC) | — | Exceeded expectations |
| Non-GAAP op margin | 39% | ~37% | +200bp above |
| GAAP op margin | 25% | ~23% | +200bp above |
| Non-GAAP EPS | $2.62 (estimated) | $2.45 / $2.50 consensus | Above high end |
| FCF | $451M | — | Strong cash flow |
| RPO | $7.3B (+24%) | — | Forward visibility |
| Buyback | $356M (1.2M shares at $298) | — | Continued acceleration |
FY26 Guide Update vs. Prior
| Metric | FY26 Updated (Q2) | FY26 Q1 Guide | Change |
|---|---|---|---|
| Billings | $7.355-$7.445B | $7.16-$7.31B | +$195M / +$135M raised |
| Revenue | $7.025-$7.075B | $6.925-$6.995B | +$100M / +$80M raised |
| Non-GAAP op margin | ~37% / ~40% underlying | ~36-37% | ~100bp raise at midpoint |
| FCF | $2.2-$2.275B | $2.1-$2.2B | +$88M midpoint raise |
| Buyback | $1.2-$1.3B (+$100M) | $1.1-$1.2B | +$100M raise / 40-50% vs FY25 |
| FY29 op margin target (NEW) | 41% reported / 45% underlying | — | Multi-year framework |
Quality-of-Print Callout
Segment Performance
AECO — Strong with Data Center/Infrastructure Strength
AECO continued strong performance with customers benefiting from sustained investment in data centers, infrastructure, and industrial buildings — more than offsetting softness in commercial real estate. AtkinsRéalis (engineering services + nuclear company) signed 6th EBA. Kimley-Horn (planning + design consulting) renewed and expanded relationship to accelerate BIM solutions adoption + Autodesk Construction Cloud. Dynamic Energy (full-service solar developer) selected Autodesk Construction Cloud to replace competitive solution.
Assessment: AECO is the multi-year growth engine driven by infrastructure + data center + industrial buildings — three secular tailwinds. Commercial softness contained. We model AECO continuing to drive +15-17% segment revenue growth through FY26.
Manufacturing — Fusion Multi-Seat Wins Continuing
Multiple customer wins in Q2: European research institution for aerospace/energy/transportation adopting Product Design & Manufacturing Collection; MotorScrubber (floor cleaning machines) adopting Fusion with simulation/design/data management extensions to replace competitive CAD; leading multinational biopharmaceutical adopting Fusion for spare parts supply chain resiliency. Fusion driving strong growth with extension attach rates increasing + ASP higher.
Assessment: Manufacturing momentum continuing — Fusion competitive displacements + extension attach + multi-seat enterprise deals. Mid-to-high teens segment growth expected through FY26.
Education + Strategic Programs
Anna University, Chennai (India) signed strategic engagement to enhance student employability across 400+ affiliated colleges — Design and Make Innovation Center at College of Engineering, Guindy. Flex consumption continued momentum with iconic high-performance automotive manufacturer renewing with combined named user subscriptions + Flex consumption tokens — hybrid model supporting enterprise digital transformation.
FY29 Multi-Year Operating Margin Framework
The Q2 FY26 CFO commentary articulated the multi-year operating margin path explicitly:
| Metric | FY24 Baseline | FY29 Target | Expansion |
|---|---|---|---|
| Reported non-GAAP op margin | ~36% (when NTM scaling began end-FY24) | 41% | +500bp |
| Underlying non-GAAP op margin (ex-NTM) | ~36% (FY24 baseline) | ~45% | +900bp |
The expansion drivers: (a) operating leverage on revenue growth; (b) sales and marketing efficiency program (initiated optimization phase February 2025); (c) ongoing cost discipline; (d) AI productivity gains in operations; (e) NTM efficiency gains from direct customer integration + reduced channel duplication. Investor Day October 7 will detail the multi-year framework.
Key Topics & Management Commentary
Overall Management Tone: Confident on operational execution + multi-year framework articulation. CEO Anagnost framing the AI revolution as Autodesk's key positioning with "we've been at the forefront of innovation for more than a decade — in BIM, SaaS, generative design, and now in generative AI." Multi-year framework signaling extends into Investor Day catalyst.
1. FY29 Operating Margin Framework — The Multi-Year Anchor
"As you are aware, we initiated the optimization phase of our sales and marketing efficiency plan in February. We are making good progress and are on track to realize its expected benefits. These efficiency gains, combined with inherent operating leverage set us up well to expand our operating margin over time. Assuming no material change in the external environment, we expect reported non-GAAP operating margin to be 41% in fiscal '29 or about 45% on an underlying basis."
— Janesh Moorjani, CFO
The FY29 operating margin framework is the multi-year structural anchor for the Outperform thesis. 41% reported / 45% underlying represents 500/900bp expansion from FY24 baseline. The combination of sales/marketing optimization + operating leverage + AI productivity + NTM efficiency supports the multi-year path.
Assessment: The FY29 framework is structurally bullish. Multi-year operating margin expansion compounds with revenue growth to drive substantial EPS growth over the framework period.
2. AI for the Physical World — Project Bernini
"For more than a decade, Autodesk has been at the forefront of innovation — in BIM, SaaS, generative design, and now in generative AI. We have been building industry-specific foundation models and products capable of understanding and reasoning about 2D and 3D geometry, design and make data, complex structures and even physical behavior. For example, last year, we introduced Project Bernini, a generative AI model for 3D, as part of a broader initiative to create professional-grade foundation models."
— Andrew Anagnost, CEO
Project Bernini is Autodesk's foundational AI initiative for 3D. The combination of spatial + physical reasoning with deep industry-specific knowledge positions Autodesk AI to move beyond traditional deterministic and rule-based parametric CAD kernels toward adaptive, context-aware AI-driven CAD engines. Customers will be able to build their own AI models trained on their own data — the foundation for differentiated value capture in customer workflows.
Assessment: The AI for Physical World framework supports multi-year monetization. The data + context + expertise advantages compound over the multi-year framework.
3. AECO Strength — Data Center / Infrastructure / Industrial Offsetting Commercial
"We saw strength in AECO where our customers are benefiting from sustained investment in data centers, infrastructure and industrial buildings, which is more than offsetting softness in commercial."
— Janesh Moorjani, CFO
AECO segment dynamics: data center + infrastructure + industrial building strength > commercial real estate weakness. The three secular tailwinds support continued segment growth. EBA momentum continues (AtkinsRéalis 6th EBA; Kimley-Horn renewal + expansion).
Assessment: AECO is structurally well-positioned across cycle. We expect continued multi-quarter segment growth supported by infrastructure spending + data center buildout + industrial automation.
4. AI AutoConstrain — Compounding Adoption
"We have continued to see success with our AI-powered Sketch AutoConstrain in Fusion. Since its launch this year, the AI model has delivered over 1.2 million dimensions and has been retrained, and the UX improved along the way. The acceptance rates of AutoConstrain suggestion to commercial users has grown to more than 60%, with 90% of those sketches fully constrained."
— Andrew Anagnost, CEO
AI AutoConstrain compounding: 1.2M+ commercial constraints (up from 580K at Q1); 60%+ acceptance rate (up from 50%+ at Q1); 90% of sketches fully constrained. Continuous improvement on retraining + UX.
Assessment: The compounding adoption + improvement validates the AI monetization framework. Investor Day will detail framework + path to commercial monetization.
5. Capital Return Acceleration — Buyback Raised $100M
"We've also raised our fiscal '26 share buyback targets by $100 million to between approximately $1.2 billion and $1.3 billion, which is a 40% to 50% increase compared to fiscal '25."
— Janesh Moorjani, CFO
Buyback raised $100M to $1.2-$1.3B (40-50% increase vs FY25). Q2 $356M buyback at $298 average (1.2M shares). YTD: 2.5M shares for $709M. FCF stack rebuild supports continued buyback acceleration.
Assessment: Capital return acceleration is structurally bullish. We expect continued buyback acceleration through FY27 + FY28 as FCF stack rebuild completes.
6. Investor Day October 7 — Multi-Year Framework Articulation
Investor Day October 7, 2025 confirmed as catalyst event. Autodesk University in September will showcase platform/products. October Investor Day will detail multi-year operating margin path, AI monetization framework, platform/industry cloud roadmap, capital allocation framework.
Assessment: Investor Day is the structural near-term catalyst. We expect framework articulation supportive of continued multi-year compounder thesis.
7. M&A Appetite + Targeted Tuck-Ins
"We continue to make the right decisions to drive long-term shareholder value. We remain focused on executing our established strategic priorities in cloud, platform and AI, optimizing our sales and marketing to drive higher operating margins and allocating capital to organic investments, targeted and tuck-in acquisitions and continuing our share repurchase program as our free cash flow grows."
— Andrew Anagnost, CEO
Targeted + tuck-in acquisitions framework reiterated. M&A appetite focused on capability expansion vs. transformative large deals. The flexible capital allocation framework supports organic investment + acquisitions + buyback.
Assessment: M&A discipline supports the operating margin expansion framework. Targeted tuck-ins likely focus on AI capabilities + platform extensions.
8. NTM Cycling vs. Tougher Q4 Comps
"We will also start cycling against tougher new transaction model billings and revenue growth comparisons with last year, particularly in the fourth quarter."
— Janesh Moorjani, CFO
NTM mechanical effect will face tougher comparisons in Q4 FY26 as the model's first full year of scale laps against initial implementation phase. The comparison effect will be most pronounced in Q4 — H2 FY26 underlying growth less dependent on NTM mechanical lift.
Assessment: The Q4 NTM comparison is a known headwind. Underlying business momentum + EBA renewals + AECO strength + AI traction continue to support fundamental trajectory.
9. Fusion ASP Expansion — Extension Attach Rates Increasing
Fusion driving strong growth with extension attach rates increasing and driving average sales prices higher. Multiple Q2 examples of Fusion competitive displacement: MotorScrubber (Fusion + extensions vs competitive CAD); biopharmaceutical company (Fusion for spare parts). Customer demand shift toward unified workflows + multi-seat environments.
10. Sales/Marketing Optimization Phase Progress
Sales/marketing efficiency plan in optimization phase initiated February 2025. Good progress made; expected benefits on track. New CRO Andy Elder settled into role rapidly per Q1 commentary. The optimization framework supports the FY29 operating margin path.
11. Forma + Construction Cloud Roadmap — Industry Cloud Investment
Investment in Forma + Construction Cloud + industry-specific platform supports the convergence strategy. Customer wins reflect the industry cloud value proposition: Hitachi Energy (renewable energy integration); Kimley-Horn (BIM + Construction Cloud); Dynamic Energy (solar developer Construction Cloud).
Analyst Q&A Highlights
M&A Appetite and Strategic Direction
Q: "Given some of the headlines out there this quarter, I was wondering if you could just talk to us a little bit about your appetite for transformative M&A."
— Saket Kalia, Barclays
A: "We continue to make the right decisions to drive long-term shareholder value. … We remain focused on executing our established strategic priorities in cloud, platform and AI, optimizing our sales and marketing to drive higher operating margins and allocating capital to organic investments, targeted and tuck-in acquisitions and continuing our share repurchase program as our free cash flow grows."
— Andrew Anagnost, CEO
Assessment: M&A framework is disciplined toward targeted tuck-ins rather than transformative deals.
FY29 Operating Margin Framework Composition
Q: "Can you help us understand the FY29 operating margin framework composition — what's the contribution from sales/marketing efficiency vs. operating leverage vs. NTM?"
— Various analysts (paraphrased)
A: "We are making good progress and are on track to realize its expected benefits. These efficiency gains, combined with inherent operating leverage set us up well to expand our operating margin over time. … We will tell you more about our plans at our Investor Day on October 7."
— Janesh Moorjani, CFO
Assessment: Framework detail deferred to Investor Day. The 500/900bp expansion path is multi-driver — sales/marketing efficiency + operating leverage + AI productivity + NTM efficiency.
NTM Cycling and Q4 Comp Difficulty
Q: "Can you frame the NTM cycling effect in Q4 FY26 and the underlying business trajectory ex-NTM?"
— Various analysts (paraphrased)
A: "We will also start cycling against tougher new transaction model billings and revenue growth comparisons with last year, particularly in the fourth quarter."
— Janesh Moorjani, CFO
Assessment: Q4 NTM comparison is known headwind. Underlying business momentum remains strong.
AI Monetization Path
Q: "Can you frame the AI monetization framework given the AutoConstrain traction?"
— Various analysts (paraphrased)
A: "These engines will dramatically expand what's possible across the entire project life cycle, while eliminating much of the repetitive work and rework that slows projects down today. As we integrate these capabilities into our platform, Autodesk customers will be able to build their own AI models trained on their own data and infused with their unique context, unlocking new, differentiated sources of value, efficiency and competitive advantage."
— Andrew Anagnost, CEO
Assessment: AI monetization framework will be detailed at Investor Day. Customer data + context advantages support multi-year value capture.
Capital Return Pace
Q: "Can you frame the multi-year buyback acceleration vs. the FCF rebuild?"
— Various analysts (paraphrased)
A: "We've also raised our fiscal '26 share buyback targets by $100 million to between approximately $1.2 billion and $1.3 billion, which is a 40% to 50% increase compared to fiscal '25."
— Janesh Moorjani, CFO
Assessment: Buyback acceleration supports continued share count reduction. We expect $1.2-$1.4B annual pace through FY28.
What They're NOT Saying
- FY27 specific revenue/EPS framework. Multi-year framework references; specifics likely at Investor Day or Q4 FY26 print.
- Specific NTM Q4 magnitude. Qualitative "tougher comparisons" without specific dollar quantification.
- AI monetization specific framework / pricing. Deferred to Investor Day October 7.
- Specific competitive positioning vs. Bentley, PTC, ANSS. Qualitative framing only.
- Commercial real estate exposure magnitude. "More than offset" framing without quantification.
- M&A pipeline specifics. "Targeted tuck-ins" framework without specific targets.
- EBA renewal H2 specifics. "Large pool" framing without specific magnitude.
- SBC trajectory below 10% specifics. Target articulated; specific quarter not detailed.
Market Reaction
- Pre-print setup: ADSK closed Aug 28, 2025 at ~$315. YTD +12%; trailing 30-day +7%; trailing 12-month +5%. Stock recovering through Q2 on operational momentum.
- After-hours / next-session move: Stock indicated +3-6% AH on beat + raised guide + FY29 framework + buyback raise.
- Volume: Pre-market volume elevated to ~2-3x average.
- Peers: ANSS, PTC, Cadence trading +1-2%; Bentley flat to +1%.
Interpretive read: Market processing the print as continued multi-year framework validation. Investor Day October 7 catalyst window approaching. We expect continued grinding higher into October.
Street Perspective
Debate 1: Is FY29 Operating Margin Target Achievable?
Bull view: 500/900bp expansion path supported by multi-driver framework (sales/marketing efficiency + operating leverage + AI productivity + NTM efficiency). Multi-year track record of execution discipline. Investor Day will detail framework. Achievable with conservative assumptions.
Bear view: 41% reported / 45% underlying margin is at the high end of historical software margins. AI investment costs may compress margin. Macro deceleration could pressure revenue growth supporting the leverage.
Our take: Framework achievable but execution-dependent. We model FY28 op margin at 40-41% reported. Multi-year compounding with operating leverage.
Debate 2: Does AI Monetization Materialize at Scale?
Bull view: AutoConstrain compounding + Project Bernini + customer data/context advantages support multi-year monetization. Investor Day framework will detail specifics.
Bear view: AI monetization timing uncertain. Customers may resist incremental AI pricing.
Our take: AI monetization real multi-year lever. We model 200-300bp operating margin contribution by FY28.
Debate 3: Can Capital Return Acceleration Continue?
Bull view: FCF stack rebuild + buyback discipline supports continued acceleration through FY28.
Bear view: M&A appetite may compete with buyback. Restructuring costs reduce flex.
Our take: Capital return continues at $1.2-$1.4B annual pace through FY28.
Model Implications & Thesis Scorecard
Model Update
- FY26 estimates (raised): Revenue $7.05B (+16%); non-GAAP op margin 37% / 40% underlying; FCF $2.24B
- FY27 estimates: Revenue $7.7-$7.9B (+9-12%); op margin 38-39%; FCF $2.5-$2.7B
- FY29 estimates (framework): Op margin 41% reported / 45% underlying — multi-year structural anchor
Thesis Scorecard
| Thesis Pillar | Q2 FY26 Status |
|---|---|
| Revenue acceleration | +17% Q2 vs +15% Q1 |
| Operating margin expansion | 39% Q2 +140bp YoY |
| FY29 framework articulated | 41% reported / 45% underlying |
| AI traction compounding | 1.2M uses, 60%+ acceptance |
| FY26 guide raised across lines | Multi-line raise |
| Capital return acceleration | $1.2-$1.3B buyback (40-50% vs FY25) |
| Investor Day October 7 | Confirmed catalyst |
| AECO strength offsetting commercial | Data center + infra + industrial |
| EBA momentum | AtkinsRéalis 6th EBA + multiple expansions |
| Fusion ASP expansion | Extension attach + multi-seat |
| Project Bernini AI framework | 3D foundation model differentiator |
| NTM Q4 comp difficulty | Known headwind H2 |
Rating & Action
Maintaining Outperform. Q2 FY26 print delivers continued operational acceleration above Q1's pace + FY29 multi-year framework articulation + AI traction compounding + capital return acceleration. Investor Day October 7 catalyst window approaching.
Fair value range widens to $325-$375 (from $310-$360 at Q1). Stock at ~$315 pre-print.
Key watch items into Q3 FY26 (November 2025) + Investor Day October 7:
- Investor Day framework articulation (October 7)
- Q3 results vs. raised FY26 guide
- NTM cycling vs. Q4 comp difficulty
- AI monetization framework detail
- EBA renewal H2 cycle
- Continued AECO strength + commercial trend
- Capital return execution
- Fusion + Forma roadmap delivery