What happened
Shares of Autodesk (ADSK -2.00%) slumped on Wednesday after the software specialist cut its full-year guidance despite beating analyst estimates for its second-quarter results. The company insisted that it's not being impacted by trade tensions, but the conservative outlook was enough to send the stock down about 9.1% by 11:50 a.m. EDT. Shares were down as much as 13.7% earlier in the session.
So what
Autodesk reported second-quarter revenue of $797 million, up 30% year over year and nearly $9 million higher than the average analyst estimate. Annualized recurring revenue increased by 31% to $3.07 billion, and billings jumped 48% to $893 million.
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Adjusted earnings per share came in at $0.65, up from $0.19 in the prior-year period and $0.04 better than analysts were expecting. As reported under generally accepted accounting principles (GAAP), the company earned $0.18 per share, up from a loss of $0.18 per share in the prior-year period.
"We closed a solid first half of the year with a very strong second quarter as revenue, billings, earnings, and free cash flow came in ahead of expectations," said CEO Andrew Anagnost in prepared remarks included in the earnings release.
Now what
While Autodesk remains on track to hit its longer-term fiscal 2023 goals, the company reduced its outlook for the current fiscal year. "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," said CFO Scott Herren.
Autodesk now expects full-year revenue between $3.24 billion and $3.27 billion, and adjusted EPS between $2.69 and $2.81. That's down from previous guidance calling for revenue between $3.25 billion and $3.30 billion, and non-GAAP EPS between $2.71 and $2.90.
A guidance cut is never good news; it's especially bad when the stock in question traded for more than 50 times adjusted earnings guidance prior to the cut. Autodesk is still putting up strong revenue growth numbers, but the tech company's cautious language clearly has investors worried.
