Last week Autodesk announced that it added 95,000 subscribers in the first quarter of fiscal year 2016, which ended April 30, 2015, a 4.2% increase over the previous quarter. In its investor report, Carl Bass, president and CEO of the 3D design, engineering and entertainment software developer, said that half the new subscribers came from new subscription types including desktop subscriptions, cloud subscriptions, and flexible licensing for enterprises.”We had a solid start to the year with good progress on our business model transition,” said Bass. “Over the course of the next two years, we expect to transition the vast majority of our offerings to subscription, which provides our customers with greater flexibility and a better user experience.”Total net revenue for Autodesk was $647 million for the first quarter, with $320 million from subscription revenue and $327 million from licenses and other revenue. Revenue is up 9% year over year. Including its Q1 subscriptions, Autodesk now has 2.33 million total subscriptions.These positive financial results come just three months after Autodesk’s announcement that it was transitioning to a subscription-based software model.Andrew Anagnost, senior vice president of Industry Strategy & Marketing, explains, “Our customers have long asked for greater flexibility and more value from their software investments. The shift to subscription allows Autodesk to deliver both, as well as an improved user experience and easier access to a broader portfolio of technology.”To that end, Autodesk offers a variety of products and subscription programs including maintenance subscriptions, desktop subscriptions, and cloud service subscriptions with different frequencies of payment. For example, the Desktop Subscription license can be purchased on month-to-month, quarterly, annually or in two or three year increments. Autodesk will stop selling its perpetual licenses after January 31, 2016.Insider Take:As Studio Daily points out, this transition will take time, and while preliminary results are positive, there are several years of transition ahead. Once perpetual licensing ceases, big one-time payments will stop too and Autodesk is expecting a big drop in revenue. However, recurring subscription revenue will eventually replace the up-front payments for the perpetual licenses.How soon that happens will determine Autodesk’s financial success over the next few years. If done right, Autodesk could be setting itself up for steady, long-term growth and serve as an excellent example for companies wanting to transition to subscription-based models.
Autodesk Adds 95K Subscribers in Q1 2016
Last week Autodesk announced that it added 95,000 subscribers in the first quarter of fiscal year 2016, which ended April 30, 2015, a 4.2%