The 2016 layoffs of similar magnitude didn't seem to make a noticeable impact in their software's update cadence. They are a company formed though an old sediment of mergers and acquisitions and I'm not surprised they've built up inefficiencies.
Well, organizations are made of people, and organizations can and do have inefficiencies. I completely understand what you're saying, but wouldn't we just be using code words if we said something else?
That’s not how I read the comment. I took it as “inefficiencies in procedures or how departments communicate.”
But it’s true that making the place more efficient will lead to layoffs. It doesn’t have to; they could just as easily use the same people to do more, but apparently the managers don’t have any ideas for what else to do.
I don't think the update cadence will change, their yearly release numbers are a big marketing point that they're locked into. Press coverage from skipping one wouldn't be good, especially since people feel like that cadence is what they're paying for with the subscriptions.
That said, Autodesk has entire industries locked into subscription pricing with very little real competition. If they wanted to cut costs, they could slow the rate of development and get away with it (at least in the short term). Still yearly releases, but without as much in them. What are you going to do, cancel your AutoCAD and Revit licenses? Good luck working on any architecture projects!
They have only picked up development speed in the last 5-8 years or so. There was the previous ten years where things were largely stagnant. They used their market position to scoop up everything industrial design. Hell, they even bought EagleCad.
As a person who makes these decisions in an engineering company, I can tell you for the first time management is now coming around to the fact that the autodesk licensing model needs to be contained and reduced. For a good 50% of drafting (perhaps much more), zwcad will do. It has a .NET and lisp dev environment, and many tools run natively. Most importantly, the application can be purchased permanently.
The autocad product for almost all drafting is essentially unchanged in 15 years, and yet the yearly licensing cost is now more than the total capital cost that was originally incurred.
Autodesk is really starting to look like they're pricing their own product out of the market. Will it be completely removed? Probably not. But if you can translate CAD formats from consultancies into the format for your work, and then transfer them back, and the solution to doing that costs 50K to develop, and saves you 150K a year, it's hard to ignore. The only reason I think it hasn't happened up until now is the boiling frog situation. But the frog can't take much more heat.
I only helped support an arch/design firm in terms of CAD/Revit. I'm surprised I hadn't heard of this earlier but it wasn't my job to make those decisions and, as much as it was a struggle to get the executives on board with Revit, going to an 'unknown' brand like ZWCAD might have taken some teeth pulling (or maybe an entire root canal). They were also a firm willing to have bought and installed the suit for each year on certain machines.
I think it's great if there is this competitor in the market. Most of the architects experienced in CAD lamented that it was their only option and that instead of improving the product, Autodesk just continued to add different ways of doing the same thing.
I hope this doesn't effect the team working on EAGLE. EAGLE sucks, but it has gotten much better since Autodesk took over and actually started making improvements.
I hope the same for the teams working on 3DS and Maya.
For the ordinary product design/CNC workflow, Solidworks has been knocking the pants off of Autodesk for the past several updates. It's overwhelmingly more popular with new engineers.
They do have a few electrical and civil engineering products that are hard to find elsewhere (and very hard to migrate from), but the bread and butter of a CAD software company is that Inventor/AutoCAD/Fusion CAM workflow, and Solidworks is just so much easier to use and equally powerful.
I was a heavy user of Solidworks. I switched over to Fusion 360.
In my experience, I found Fusion 360 to be a better experience. The ability to do parametric modeling, surfacing, CNC toolpaths,PDM data storage, "cloud" FEA solving. Everything just works. I don't need to manage licensees from multiple vendors. Set up runboxes for simulations. Manage my own PDM server (PITA).Or re-learn 3rd party vendor specific UI/terminology.
On boarding new team members to projects is as easy entering their email address.
Pricing is transparent,straight forward, and reasonable. All my data is auto backed up to "the cloud".
Free for personal use, and commercial use under 100k of revenue. After that the pricing is very reasonable and straightforward. $300 year for basic, $1500/year for ultimate.
The Ultimate version includes shape optimization, 5 axis machining toolpaths, and a few other things. If you had to piece that together from vendors. Your looking at $40k a year per seat. The value is incredibility hard to beat.
Solidworks does have the lead in having a huge 3rd party plugin system,weldements, wire routing. I did get thrown off from the idea of a "mate to the idea of a "joint". It forces you not to use hacky practices when building assemblies.
I feel that Fusion 360 has better product direction compared to Solidworks, and with their SAAS based model can update users more frequently, when compared to Solidwork's yearly basis. But honestly both products are VERY good in general.
Note:Not affiliated with Autodesk in anyway shape or form, other than as an end user. I just really like Fusion 360.
I heard about it. I have never tried it. I believe the guy that started Solidworks and sold it to Dassault Systemes is behind it.
I'll give OnShape a shot this weekend and report back.
I like how they have a free tier for public projects. It lowers the cost of entry dramatically for people just want to "feel" out CAD.
I remember when I was little, that I had to visit some sketchy websites to "try" out CAD. It's a great time to be alive now and play with things.
Just checked out their website. Linux support! I'm already 50% sold.
My gripe with Fusion 360 is that their is no Ubuntu support. That and Adobe CC is the only reason why I haven't dissolved my windows machine.
My overall impressions are good! The program completely redefines my thoughts for capabilities of DOM based applications and WebGL.
Pros:
Use anywhere on any device(Linux)! (DOM Based)
Free for personal use.
Scripting based design automation seems like first class citizens with the part monitoring and profiling features
Sheet metal capabilities are easy and intuitive. Something that I can't say for Solidworks.
You can straight up delete things in Onshape, Fusion 360 makes that a bit hard.
I like the fact that parts and assemblies are two explicitly different things.(Solidworks does this) It makes it easier for my brain to cut the "pie".
Fusion does it a more NX'y way where "a part is a part/assembly".
I don't have much experience with surfacing, so I can't comment about that aspect.
Git like branch/merge functionality with parts.
Cons:
It ain't the whole widget..
At the end of the day it's "just" a CAD program. Which is fine, but I feel that most consumers are getting "finer" tastes with the
advent of "the whole widget" design. Thanks Apple. (I don't mean that in a negative way either.) The thing that blew my mind about
Fusion 360, is that CAM is integrated and just works, CLOUD Based FEA/Rendering just works, FEA Analysis it's there, Topological
optimization there too. Rendering it's there also.
I see that on the apps developers on Onshape's store, are taking notice. Now you can download CAM add-on, render add-on, etc. I'm
scared that this is going the way of Solidworks/Jira/Confluence. Where you buy the base program. ($100 per month, then add CAM
/rendering/FEA separately). That $100 per month now looks like $200 per month. Now you are tied to vendor specific systems. Now you're
dependent on vendors for fixing their stuff when OnShape pushes an update. If the 3rd party vendor folds. Now all your legacy data is
effectively worthless. Or if there are problems, then 3rd party vendor blames Onshape, or Onshape blames vendor.
If Onshape makes the whole widget, then I have high confidence when an update is pushed, then CAM still works, render still works, and the UI is very
similar feeling. It makes me have trust that my "mechanical engineering workflow" just works.
When I use my mechanical engineering workflow. I want to be able to go from rough idea to CAD to FEA to render to 2d part drawings to CAM to "Part is
literally in my hand". With as little friction as possible. Adobe CC and Fusion 360 do this very well. I feel that with these industries where the data
model is incredibly complex. Own the whole pie is a requirement. Does that mean you need to lock-in your users? No. Give them escape hatches so they can use
familiar programs at whatever stage. Export as X, works well for this situation. But the main focus is making the UX/UI seamless between CAD/CAM/CAE. Fusion
360 in my opinion demolishes onShape in this regard.
Random side note. In the software engineering field, Companies that control the entire widget is "frowned upon". With good reason. The "data models" are
usually only text based (.C, .py, .js, .yaml,etc), and have open source standards associated with it. Meaning if you write Python in Visual Studio, the
same Python code will work in PyCharm. This is good. That means past the IDE stage, The files coming out are "clean and non-propriety", which allows you to
use any git-client you want. Git is open source and has a non-proprietary data model. So now you have the choice of using Github,Bitbucket,Gitlabs, etc. If
you don't like one, then switching is "painless".
Same goes for CI (Travis,Pipelines, etc,) To cloud providers (Kubernetes on Google Cloud, AWS, Azure etc). You're never locked in, since the data model at each sta...
Your 100% right. I told the original responded that I would report back. I felt obligated. :) I sent him my response via email too, so my time input wouldn't die in vain..
I've used it. It works great on FreeBSD and Chromebooks and the android app works. So far, I've never had the slightest problem with it. There's a good printed book titled "Getting started with onshape" that's not too out of date.
The irony of single price / single product marketing is I can only afford to use it for free for home woodworking projects. The commercial use license is far too expensive for occasional casual use at work.
Once you learn how to use Eagle it's great. When Autodesk bought Eagle and changed it to a subscription based sales model that required an Internet connection I started trying every alternative I could find. I've found nothing I like better in the price range.
Interesting, given how at some point they were given as an example of "old software company that actually managed to hop on the mobile train". Guess the mobile train turned to be less important than originally thought (at least from a revenue perspective).
Pre-tax income last four quarters: -$544m on $1.95b in sales
Net income for 2013 was $247m, for 2014 it was $228m, for 2015 it was $81m. For the last eight quarters, it's nearly a negative billion dollars.
Net tangible assets 2015: $676 million
Net tangible assets 3Q17: -$1.3 billion
Their business is in trouble.
To make matters worse, they've got a $24 billion market cap. When times were good in 2013, they'd have been sporting a near 100 PE ratio with that market cap. Today it's particularly crazy, given they've had net negative growth over the last five years and they're losing a lot of money.
Fair value in my opinion is closer to 70% lower than what they're trading for right now. That's assuming 30 times earnings on getting back to $230m +/- in net income. In more normal times that 30 PE would be very rich for a zero growth company. A more skeptical look at them, would be they're worth 85% to 90% less than what they're trading for today, if their business continues to contract or remains weak and they struggle to get back to something more like $80m to $100m in net income.
Looking at where their problems are on profitability.
R&D costs climbed by nearly $200 million versus five years ago (when their sales were higher than they are today). That increase is equivalent to ten percent of their sales now. By itself, that expense gain is nearly enough to wipe out their old decent profit numbers.
"Other" SG&A expenses climbed by nearly $200 million as well.
They added around 1,700 to 2,000 employees since the beginning of 2013. Going from ~7,300 to 9,000+. That's probably more than a $200 million total annual cost addition. Then contract sales by $400 or $500 million from those days, and you get a big net financial crush.
Simply put, they bet on growth showing up, which has never materialized. To put it into context, their sales for fiscal 2007 were $1.84 billion (versus $1.95 billion the last four quarters; so realistically zero growth for a decade (!)).
To throw some more onto the fire, they spent over a billion dollars buying back stock over the last 10-12 years or so ($447 million in 2006 alone). As with companies like IBM, that money obviously should have gone to improving the actual business rather than financial maneuvers (trying to fake EPS growth).
Worse yet, as of recently they were still at the faking EPS game (from a year ago):
"Autodesk, Inc. today announced a program to repurchase up to 30 million shares of the company's common stock"
So here's a company, bleeding red ink, whose balance sheet is badly eroding, sales are falling, and the people running the business are spending hundreds of millions of dollars to buy back massively over-inflated shares.
Architectural offices that still use cad, prefer ZWCAD, that is literally a Chinese copy of Autocad (with the same UI and even Lisp scripting) that you can buy for 10% of price. AutoCAD as a software is nearly done: Autocad 2017 is just a chromy version of Autocad 2007 despite their R&D efforts.
IMHO their product is nowadays REVIT (3DMax has fierce competition and is a lost battle). REVIT is a product that is still evolving and as such harder to copy/compete.
In practice not so. The design process is different: in CAD you draw 2D like you would draw by hand. In BIM you don't draw, you build a 3D model. That model will contain all the data about your building (materials, dimensions, etc) and you can analyse it on realtime. With a traditional CAD system (BIM is still CAD - Computer aided design) all data must be gathered manually.
Despite BIM existing for a long time, hardware requirements and unpolished software didn't allow it to become a true alternative to traditional CAD until recently (10y ago?) when it become good enough.
Not as big as standard architecture but landscape architecture still seems to be stuck in CAD world and relying on plugins to do its dirty work. It doesn't work out so well with Revit. So there's a market that could use a good product.
The issue our office had was getting people to put in the time to go from CAD to Revit. We went big and got a BIM manager too to help with that but even he will confess he thinks the company doesn't really know how to utilize him.
BIM also seems to come with a certain mindset and philosophy vs CAD where you would just design, which might throw people off.
I still find it surprising, like others, that Autodesk would lose money give their market dominance and I assume that's why they're switching to subscription.
I think BIM's market is large buildings that you are sure will be built. All the rest I would go for CAD or some light BIM (sketchup) without blinking. Setting up a BIM project is time intensive and you have often to fight with the software when you want to go beyond the standards - that's the reason that architects don't 'fall in love' with it and the reason why BIM managers exist.
AutoCAD is the defacto industry leader in 2D CAD (given got some 3D support too). Though as more and more companies are moving to 3D CAD, they are looking for 3D CAD software built from the ground up for 3D CAD.
3D CAD is not just 3D, it's about parametric geometric kernel, CAM, CAE.
AutoDesk's "real 3D CAD" is called Autodesk Inventor. Competitors are SolidWorks, Solid Edge, Siemens NX, PTC Creo Direct/Pro, CATIA, FreeCAD.
Could that be they now have incompetent/malicious management siphoning money out via subcontracting companies (tunels)? $1B loss in 2 years is super suspicious.
Overall it looks pretty easy to explain, such that one doesn't need to leap that far.
For example, if you build your costs for a $2.4 to $2.5 billion sales run-rate, generating $80m in net income, which is what they did for fiscal 2015. Then, you drop sales to $2 billion instead (which is now where they're at), while not reducing their operating expenses (which actually went up slightly), you get a big fat loss.
I'd attribute their mess to a wildly incompetent management and board, most of which should probably be thrown out of the company immediately. The crazy stock valuation is the sole thing keeping that from happening now; reality will catch up to that however as it almost always does. When the hammer does come down on the stock, activists will start shaking the company for changes.
The 30 million share repurchase program they proclaimed a little over a year ago, is equal to about a $3 billion cost in today's stock price. They're losing a lot of money, and they have $1.7 billion in cash in the bank, with a negative balance sheet. Then consider the zero growth for a decade and the poor prospects for turning that around near-term. Management & the board are doing something extraordinarily egregious and a large number of Autodesk employees are going to get hurt in the coming years most likely (very tragically). I can't see a scenario where Autodesk doesn't have to slash a further 1/4 to 1/3 of their staff in the next few years (they have to cut deep to get back to even on net income). When the bloom comes off this stock market bubble, their $109 stock will be a $20 or $30 stock if they don't quickly find a way to drive growth again.
Autodesk continuously touts that they are in a big transition from product sales to subscription and that huge growth is just around the corner. Do you discount those claims?
Autodesk continuously touts that they are in a big transition from product sales to subscription and that huge growth is just around the corner. Do you discount those claims?
I don't see why it would be necessary to discount such claims. The claims are worthless. They're not worth considering at all, until they prove something (and right now they're running a substantial credibility deficit).
Ten years of zero net growth, and four years of declining profitability, should tell you everything you need to know about what's actually happening. They've spent most of their profits from the last decade on faking EPS growth with buybacks while their business was languishing. Now things are so bad, they're hatcheting their most valuable resource: their people.
I think they spent ~$188 million buying back their stock in the first quarter, while losing over $100m in operating income. They paid $85 per share for those shares. Around 80 times earnings, if earnings were still at the old 2013 levels.
It's financial suicide. They're driving Autodesk into a wall at high speeds, while destroying their balance sheet trying to keep the stock propped up with buybacks far beyond what they can actually afford based on present profitability and a reasonable outlook the next few years (which is why they're firing 13% of their staff).
Or put it another way. The cost of the share buyback announced last year could cover the cost of the 13% of workers that are getting fired, for at least two decades.
Autodesk long ago got into the IBM financial engineering business. The consequences of that are getting more unavoidable by the year.
> Or put it another way. The cost of the share buyback announced last year could cover the cost of the 13% of workers that are getting fired, for at least two decades.
Do you have any pointers on how to do this kind of financial analysis of a public company?
Frankly their change to a subscription model caused me to look for alternatives to the one product I use from them; Eagle CAD. It's really ticked a lot of people off.
The growth comes from transitioning from a costly model of hiring hundreds of slick guys in suits trying to convince customers to upgrade every year or so, to a simpler model of collecting credit card data and assuming customers are going to pay annually.
What happens after the transition is a more interesting question.
Does anyone remember when Autodesk bought SocialCam? What a bizarre acquisition that was. Although it brought us Mike Seibel who's been a great YC partner.
I've seen that plenty of big companies lay off people with the left hand and continue hiring with the right - usually for different teams on different locations.
I'm not as enthusiastic to work in one of those megacorps as I once was, and yes, if they decide to do a layoff round next year you could be affected, but I guess that at the very least you'd have one year of employment there.
I'd still be hesitant. When a company is cutting jobs because they are in trouble, they become somewhat unpredictable. The hiring manager you're talking to may himself be out of job in a couple of weeks.
Example: Someone my wife knows moved to a different state to take a job with a big financial firm (Fidelity) and they got "laid off" before they even started.
Much of the layoffs tend to happen in North America and Europe and the hiring is in China I understand at Autodesk. I do not have numbers to back that up though, but it is my understanding.
I worry that Soon there will be no real investment in "professional" software, the type with a learning curve that makes us more productive rather than more ad-addicted.
(Unlike Photoshop, AutoCAD, etc, most enterprise software is insanely arbitrary one-off stuff that essentially exists as hack for $megacorp to avoid teaching their non-devs any programming.)
I don't know that it is to avoid any programming, but the point is pretty well made. Most of the internal enterprise software I've worked on was intended to follow insane and arbitrary policies that wouldn't stand up to scrutiny as a public product.
They've announced the majority of cuts involve terminating a few speculative R&D projects and cutting international sales staff.
Maya development doesn't seem slow at all. The new UV toolkit in 2018 is pretty great. On the backend, they migrated to Qt 5 last year, and 2018 introduces major changes to the plugin API aiming for greater stability and backward compatibility.
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[ 2.9 ms ] story [ 75.9 ms ] threadBut it’s true that making the place more efficient will lead to layoffs. It doesn’t have to; they could just as easily use the same people to do more, but apparently the managers don’t have any ideas for what else to do.
That said, Autodesk has entire industries locked into subscription pricing with very little real competition. If they wanted to cut costs, they could slow the rate of development and get away with it (at least in the short term). Still yearly releases, but without as much in them. What are you going to do, cancel your AutoCAD and Revit licenses? Good luck working on any architecture projects!
Autodesk is really starting to look like they're pricing their own product out of the market. Will it be completely removed? Probably not. But if you can translate CAD formats from consultancies into the format for your work, and then transfer them back, and the solution to doing that costs 50K to develop, and saves you 150K a year, it's hard to ignore. The only reason I think it hasn't happened up until now is the boiling frog situation. But the frog can't take much more heat.
I only helped support an arch/design firm in terms of CAD/Revit. I'm surprised I hadn't heard of this earlier but it wasn't my job to make those decisions and, as much as it was a struggle to get the executives on board with Revit, going to an 'unknown' brand like ZWCAD might have taken some teeth pulling (or maybe an entire root canal). They were also a firm willing to have bought and installed the suit for each year on certain machines.
I think it's great if there is this competitor in the market. Most of the architects experienced in CAD lamented that it was their only option and that instead of improving the product, Autodesk just continued to add different ways of doing the same thing.
For the ordinary product design/CNC workflow, Solidworks has been knocking the pants off of Autodesk for the past several updates. It's overwhelmingly more popular with new engineers.
They do have a few electrical and civil engineering products that are hard to find elsewhere (and very hard to migrate from), but the bread and butter of a CAD software company is that Inventor/AutoCAD/Fusion CAM workflow, and Solidworks is just so much easier to use and equally powerful.
In my experience, I found Fusion 360 to be a better experience. The ability to do parametric modeling, surfacing, CNC toolpaths,PDM data storage, "cloud" FEA solving. Everything just works. I don't need to manage licensees from multiple vendors. Set up runboxes for simulations. Manage my own PDM server (PITA).Or re-learn 3rd party vendor specific UI/terminology.
On boarding new team members to projects is as easy entering their email address.
Pricing is transparent,straight forward, and reasonable. All my data is auto backed up to "the cloud".
Free for personal use, and commercial use under 100k of revenue. After that the pricing is very reasonable and straightforward. $300 year for basic, $1500/year for ultimate.
The Ultimate version includes shape optimization, 5 axis machining toolpaths, and a few other things. If you had to piece that together from vendors. Your looking at $40k a year per seat. The value is incredibility hard to beat.
Solidworks does have the lead in having a huge 3rd party plugin system,weldements, wire routing. I did get thrown off from the idea of a "mate to the idea of a "joint". It forces you not to use hacky practices when building assemblies.
I feel that Fusion 360 has better product direction compared to Solidworks, and with their SAAS based model can update users more frequently, when compared to Solidwork's yearly basis. But honestly both products are VERY good in general.
Note:Not affiliated with Autodesk in anyway shape or form, other than as an end user. I just really like Fusion 360.
I like how they have a free tier for public projects. It lowers the cost of entry dramatically for people just want to "feel" out CAD. I remember when I was little, that I had to visit some sketchy websites to "try" out CAD. It's a great time to be alive now and play with things.
Just checked out their website. Linux support! I'm already 50% sold. My gripe with Fusion 360 is that their is no Ubuntu support. That and Adobe CC is the only reason why I haven't dissolved my windows machine.
My overall impressions are good! The program completely redefines my thoughts for capabilities of DOM based applications and WebGL.
Pros: Use anywhere on any device(Linux)! (DOM Based) Free for personal use. Scripting based design automation seems like first class citizens with the part monitoring and profiling features Sheet metal capabilities are easy and intuitive. Something that I can't say for Solidworks. You can straight up delete things in Onshape, Fusion 360 makes that a bit hard. I like the fact that parts and assemblies are two explicitly different things.(Solidworks does this) It makes it easier for my brain to cut the "pie". Fusion does it a more NX'y way where "a part is a part/assembly". I don't have much experience with surfacing, so I can't comment about that aspect. Git like branch/merge functionality with parts.
Cons:
It ain't the whole widget.. At the end of the day it's "just" a CAD program. Which is fine, but I feel that most consumers are getting "finer" tastes with the advent of "the whole widget" design. Thanks Apple. (I don't mean that in a negative way either.) The thing that blew my mind about Fusion 360, is that CAM is integrated and just works, CLOUD Based FEA/Rendering just works, FEA Analysis it's there, Topological optimization there too. Rendering it's there also.
The irony of single price / single product marketing is I can only afford to use it for free for home woodworking projects. The commercial use license is far too expensive for occasional casual use at work.
http://go.ema-eda.com/OrCADPCB4Free
It ends today though on Nov 30, 2017.
Pre-tax income 2013: $310m on $2.3b in sales
Pre-tax income 2014: $279m on $2.26b in sales
Pre-tax income 2015: $83m on $2.5b in sales
Pre-tax income 2016: -$20m on $2.46b in sales
Pre-tax income last four quarters: -$544m on $1.95b in sales
Net income for 2013 was $247m, for 2014 it was $228m, for 2015 it was $81m. For the last eight quarters, it's nearly a negative billion dollars.
Net tangible assets 2015: $676 million
Net tangible assets 3Q17: -$1.3 billion
Their business is in trouble.
To make matters worse, they've got a $24 billion market cap. When times were good in 2013, they'd have been sporting a near 100 PE ratio with that market cap. Today it's particularly crazy, given they've had net negative growth over the last five years and they're losing a lot of money.
Fair value in my opinion is closer to 70% lower than what they're trading for right now. That's assuming 30 times earnings on getting back to $230m +/- in net income. In more normal times that 30 PE would be very rich for a zero growth company. A more skeptical look at them, would be they're worth 85% to 90% less than what they're trading for today, if their business continues to contract or remains weak and they struggle to get back to something more like $80m to $100m in net income.
R&D costs climbed by nearly $200 million versus five years ago (when their sales were higher than they are today). That increase is equivalent to ten percent of their sales now. By itself, that expense gain is nearly enough to wipe out their old decent profit numbers.
"Other" SG&A expenses climbed by nearly $200 million as well.
They added around 1,700 to 2,000 employees since the beginning of 2013. Going from ~7,300 to 9,000+. That's probably more than a $200 million total annual cost addition. Then contract sales by $400 or $500 million from those days, and you get a big net financial crush.
Simply put, they bet on growth showing up, which has never materialized. To put it into context, their sales for fiscal 2007 were $1.84 billion (versus $1.95 billion the last four quarters; so realistically zero growth for a decade (!)).
To throw some more onto the fire, they spent over a billion dollars buying back stock over the last 10-12 years or so ($447 million in 2006 alone). As with companies like IBM, that money obviously should have gone to improving the actual business rather than financial maneuvers (trying to fake EPS growth).
Worse yet, as of recently they were still at the faking EPS game (from a year ago):
"Autodesk, Inc. today announced a program to repurchase up to 30 million shares of the company's common stock"
http://www.businesswire.com/news/home/20160919005222/en/Auto...
So here's a company, bleeding red ink, whose balance sheet is badly eroding, sales are falling, and the people running the business are spending hundreds of millions of dollars to buy back massively over-inflated shares.
IMHO their product is nowadays REVIT (3DMax has fierce competition and is a lost battle). REVIT is a product that is still evolving and as such harder to copy/compete.
Out of curiosity, what is the modern alternative to CAD used by architectural offices ?
https://en.wikipedia.org/wiki/Building_information_modeling
Despite BIM existing for a long time, hardware requirements and unpolished software didn't allow it to become a true alternative to traditional CAD until recently (10y ago?) when it become good enough.
The issue our office had was getting people to put in the time to go from CAD to Revit. We went big and got a BIM manager too to help with that but even he will confess he thinks the company doesn't really know how to utilize him.
BIM also seems to come with a certain mindset and philosophy vs CAD where you would just design, which might throw people off.
I still find it surprising, like others, that Autodesk would lose money give their market dominance and I assume that's why they're switching to subscription.
AutoCAD is the defacto industry leader in 2D CAD (given got some 3D support too). Though as more and more companies are moving to 3D CAD, they are looking for 3D CAD software built from the ground up for 3D CAD.
3D CAD is not just 3D, it's about parametric geometric kernel, CAM, CAE.
AutoDesk's "real 3D CAD" is called Autodesk Inventor. Competitors are SolidWorks, Solid Edge, Siemens NX, PTC Creo Direct/Pro, CATIA, FreeCAD.
For example, if you build your costs for a $2.4 to $2.5 billion sales run-rate, generating $80m in net income, which is what they did for fiscal 2015. Then, you drop sales to $2 billion instead (which is now where they're at), while not reducing their operating expenses (which actually went up slightly), you get a big fat loss.
I'd attribute their mess to a wildly incompetent management and board, most of which should probably be thrown out of the company immediately. The crazy stock valuation is the sole thing keeping that from happening now; reality will catch up to that however as it almost always does. When the hammer does come down on the stock, activists will start shaking the company for changes.
The 30 million share repurchase program they proclaimed a little over a year ago, is equal to about a $3 billion cost in today's stock price. They're losing a lot of money, and they have $1.7 billion in cash in the bank, with a negative balance sheet. Then consider the zero growth for a decade and the poor prospects for turning that around near-term. Management & the board are doing something extraordinarily egregious and a large number of Autodesk employees are going to get hurt in the coming years most likely (very tragically). I can't see a scenario where Autodesk doesn't have to slash a further 1/4 to 1/3 of their staff in the next few years (they have to cut deep to get back to even on net income). When the bloom comes off this stock market bubble, their $109 stock will be a $20 or $30 stock if they don't quickly find a way to drive growth again.
Ten years of zero net growth, and four years of declining profitability, should tell you everything you need to know about what's actually happening. They've spent most of their profits from the last decade on faking EPS growth with buybacks while their business was languishing. Now things are so bad, they're hatcheting their most valuable resource: their people.
I think they spent ~$188 million buying back their stock in the first quarter, while losing over $100m in operating income. They paid $85 per share for those shares. Around 80 times earnings, if earnings were still at the old 2013 levels.
It's financial suicide. They're driving Autodesk into a wall at high speeds, while destroying their balance sheet trying to keep the stock propped up with buybacks far beyond what they can actually afford based on present profitability and a reasonable outlook the next few years (which is why they're firing 13% of their staff).
Or put it another way. The cost of the share buyback announced last year could cover the cost of the 13% of workers that are getting fired, for at least two decades.
Autodesk long ago got into the IBM financial engineering business. The consequences of that are getting more unavoidable by the year.
Do you have any pointers on how to do this kind of financial analysis of a public company?
What happens after the transition is a more interesting question.
I'm not as enthusiastic to work in one of those megacorps as I once was, and yes, if they decide to do a layoff round next year you could be affected, but I guess that at the very least you'd have one year of employment there.
And yes, GP could likely get caught up in the next round of layoffs. These seem like reasonable concerns to me. Not sure what your point is.
Example: Someone my wife knows moved to a different state to take a job with a big financial firm (Fidelity) and they got "laid off" before they even started.
We have our offices next door and I feel sorry for them.
[1] https://www.swissinfo.ch/eng/business/software-shock_autodes...
Hopefully these employees land on their feet!
Maya development doesn't seem slow at all. The new UV toolkit in 2018 is pretty great. On the backend, they migrated to Qt 5 last year, and 2018 introduces major changes to the plugin API aiming for greater stability and backward compatibility.