Shares in Autodesk Inc. dropped in late trading after the computer-aided design software company issued a lower-than-expected outlook in its latest earnings report.

For the third quarter that ended Oct. 31, Autodesk reported earnings before costs such as stock compensation of $1.70 per share on revenue of $1.28 billion, up 14% year-over-year. The figures aligned with analyst predictions of $1.70 and $1.281 billion.

Total billings in the quarter rose 16% year-over-year to $1.36 billion, driven by positive growth in Design revenue, up 14% to $1.087 billion, and Make revenue, up 24% to $117 million. Subscription plan revenue also rose 14%, to $1.188 billion. Net revenue retention remains in the range of 100% to 110%.

Total adjusted operating income was $465 million, up from $365 million in the third quarter of last year. Deferred revenue rose 13%, to $3.78 billion.

“We recently announced Autodesk Fusion, Forma and Flow, our three industry clouds, which will connect data, teams and workflows in the cloud on our trusted platform,” Autodesk Chief Executive Andrew Anagnost said in a statement. “Increasing our engineering velocity, moving data from files to the cloud and expanding our third-party ecosystem will enable Autodesk to further increase customer value by delivering even greater efficiency and sustainability.”

Although it’s somewhat rare for any tech company to report results nearly dead in line with analysts’ expectations, it’s Autodesk’s outlook that investors were more interested in.

For its fiscal 2023 fourth quarter, Autodesk predicts adjusted earnings per share of $1.77 to $1.83 on revenue of $1.303 billion to $1.318 billion. For the full fiscal year 2023, Autodesk expects earnings per share of $6.56 to $6.62 on revenue of $5.57 billion to $5.67 billion. The full-year outlook was below what Autodesk had previously predicted. In August, the company said it was expecting an EPS of $6.52 to $6.71 on revenue of $5.7 billion to $5.8 billion.

The lower-than-expected outlook was addressed by Autodesk Chief Financial Officer Debbie Clifford, who noted a more challenging macroeconomic environment.

“Our fiscal ’23 revenue, margin and earnings per share guidance remains close to the previous midpoints at constant exchange rates and comfortably within our prior guidance ranges,” Clifford said. “Our lower billings and free cash flow guidance primarily reflect less demand for multiyear upfront and more demand for annual contracts than we expected.”

The revised outlook may have been close to previous figures, but it was enough to spook investors. Autodesk shares fell about 9% after the bell.

Image: Autodesk