Shares of Autodesk Inc. fell about 5% in late trading today after the design software company beat Wall Street targets in its fiscal 2027 second quarter and then trimmed the midpoint of its full-year free cash flow forecast.

For the quarter that ended on July 31, Autodesk reported adjusted earnings of $3.30 per share, up from $2.62 a year earlier, on revenue of $2.046 billion, up 16% year-over-year and 14% in constant currency. Analysts were expecting $3.12 per share on revenue of $2.01 billion.

Billings rose 10% year-over-year to $1.854 billion. Adjusted operating margin came in at 41%, two points better than a year ago, and net income climbed to $492 million from $313 million. Free cash flow for the quarter was $561 million, up 24%.

Design revenue grew 16%, to $1.708 billion, and Make revenue jumped 26%, to $244 million, while other revenue slipped 3%, to $94 million. The architecture, engineering, construction and operations family was the biggest of the four product groups at $1.029 billion, up 17%. AutoCAD and AutoCAD LT contributed $500 million.

Remaining performance obligations were the weak spot in the quarter’s contract metrics, growing just 2%, to $7.433 billion. Autodesk attributed that to its program of reducing multiyear discounts, which includes winding down multiyear Maintenance-to-Subscription renewals. Fewer long contracts means less revenue booked but not yet billed. The company said the drag is temporary. The current portion, due inside 12 months, rose 12%, to $5.245 billion.

Autodesk closed its purchase of MaintainX Inc. on Aug. 3, days after the quarter ended. It agreed in May to buy the maintenance and operations software company for about $3.6 billion in cash, and the deal is now inside the full-year guidance.

“AI turns connected data and context into actionable project intelligence that can ease endemic capacity constraints, raise the bar on what’s possible in the physical world, and help our customers do more with scarce resources,” Chief Executive Andrew Anagnost said in the earnings release. He argued the future of AI for the built world will go to whichever platform pairs the richest context with the right models, and said Autodesk gets there by spanning design, manufacturing and operations in a single flow of data.

Chief Financial Officer Janesh Moorjani said Autodesk had lifted its billings and revenue growth guidance for the year on “higher underlying growth expectations” as well as the incremental contribution from MaintainX. The adjusted margin outlook is unchanged, he said, with operating leverage offsetting dilution from the acquisition.

Autodesk guided to third-quarter revenue of $2.125 billion to $2.14 billion and adjusted earnings of $3.04 to $3.09 per share. Full-year revenue is now pegged at $8.295 billion to $8.345 billion, up from the $8.155 billion to $8.215 billion range issued three months ago, a range that excluded MaintainX, with adjusted earnings of $12.52 to $12.60 per share and billings of $8.575 billion to $8.65 billion.

Cash flow was the sore point. The company now expects free cash flow of $2.725 billion to $2.75 billion for the year, roughly $25 million below the midpoint it gave investors in May. About $45 million of transaction expenses tied to the MaintainX deal sit inside that number.

Photo: Autodesk