UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
x☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended October 31, 20172021
or
¨☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from             to            
Commission File Number: 0-14338
AUTODESK, INC.
(Exact name of registrant as specified in its charter)
Delaware94-2819853
(State or other jurisdiction of

incorporation or organization)
(I.R.S. employer

Identification No.)
111 McInnis Parkway,
San Rafael, California
94903
San Rafael,California94903
(Address of principal executive offices)(Zip Code)
(415) 507-5000
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.01 per shareADSKThe Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x☒    No  ¨☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x☒    No  ¨☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging‘emerging growth company"company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer☒Accelerated filer☐
Large accelerated filerxAccelerated filer¨
Non-accelerated filer¨☐Smaller reporting company¨☐
Emerging growth company¨☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨☐

Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act). Yes ¨☐ No x☒

As of November 30, 2017,2021, registrant had outstanding 220,266,822219,973,417 shares of common stock.




AUTODESK, INC. FORM 10-Q
TABLE OF CONTENTS

Page No.
PART I. FINANCIAL INFORMATION
Item 1.Page No.
PART I. FINANCIAL INFORMATION
Item 1.
Condensed Consolidated Statements of Operations for the Three and Nine Months Ended October 31, 20172021 and 20162020
34
45
56
67
78
Item 2.
2633
Item 3.
4953
Item 4.
5054
PART II. OTHER INFORMATION
Item 1.
5155
Item 1A.
5155
Item 2.
6772
Item 3.
6772
Item 4.
6772
Item 5.
6772
Item 6.
6873
6974





PART I. FINANCIAL INFORMATION
 
ITEM 1.FINANCIAL STATEMENTS

ITEM 1.FINANCIAL STATEMENTS

AUTODESK, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share data)
(Unaudited)
 
 Three Months Ended October 31,Nine Months Ended October 31,
 2021202020212020
Net revenue:
Subscription$1,070.7 $884.4 $3,034.9 $2,528.6 
Maintenance17.6 39.8 53.6 153.1 
Total subscription and maintenance revenue1,088.3 924.2 3,088.5 2,681.7 
Other37.5 28.2 86.3 69.5 
Total net revenue1,125.8 952.4 3,174.8 2,751.2 
Cost of revenue:
Cost of subscription and maintenance revenue74.8 60.7 219.3 176.6 
Cost of other revenue17.7 15.4 47.6 47.5 
Amortization of developed technologies14.6 7.6 38.4 22.4 
Total cost of revenue107.1 83.7 305.3 246.5 
Gross profit1,018.7 868.7 2,869.5 2,504.7 
Operating expenses:
Marketing and sales419.4 359.3 1,195.3 1,051.5 
Research and development282.1 233.0 824.5 682.9 
General and administrative112.8 98.8 344.1 296.8 
Amortization of purchased intangibles11.1 9.6 30.4 28.8 
Total operating expenses825.4 700.7 2,394.3 2,060.0 
Income from operations193.3 168.0 475.2 444.7 
Interest and other expense, net(5.9)(11.9)(17.6)(69.1)
Income before income taxes187.4 156.1 457.6 375.6 
Provision for income taxes(50.7)(23.9)(49.7)(78.7)
Net income$136.7 $132.2 $407.9 $296.9 
Basic net income per share$0.62 $0.60 $1.86 $1.35 
Diluted net income per share$0.61 $0.59 $1.83 $1.34 
Weighted average shares used in computing basic net income per share220.0 219.6 219.8 219.4 
Weighted average shares used in computing diluted net income per share222.5 222.3 222.3 222.1 
 Three Months Ended October 31, Nine Months Ended October 31,
 2017 2016 2017 2016
Net revenue:       
Maintenance$244.4
 $273.2
 $769.8
 $835.1
Subscription231.1
 112.4
 600.6
 299.7
Total maintenance and subscription revenue475.5
 385.6
 1,370.4
 1,134.8
License and other39.8
 104.0
 132.4
 417.4
Total net revenue515.3
 489.6

1,502.8
 1,552.2
Cost of revenue:
 
 
 
Cost of maintenance and subscription revenue53.9
 46.8
 161.6
 140.2
Cost of license and other revenue19.6
 24.3
 56.0
 86.8
Amortization of developed technology4.0
 10.4
 12.7
 32.0
Total cost of revenue77.5
 81.5

230.3
 259.0
Gross profit437.8
 408.1

1,272.5
 1,293.2
Operating expenses:    
 
Marketing and sales272.5
 255.0
 785.8
 738.9
Research and development191.8
 192.6
 573.3
 579.1
General and administrative68.8
 70.4
 225.1
 213.7
Amortization of purchased intangibles4.7
 6.8
 15.3
 22.5
Restructuring charges and other facility exit costs, net—
 3.2
 0.2
 71.5
Total operating expenses537.8
 528.0

1,599.7
 1,625.7
Loss from operations(100.0) (119.9)
(327.2) (332.5)
Interest and other expense, net(11.2) (9.4) (31.8) (23.1)
Loss before income taxes(111.2) (129.3)
(359.0) (355.6)
Provision for income taxes(8.6) (13.5) (34.4) (53.1)
Net loss$(119.8) $(142.8)
$(393.4) $(408.7)
Basic net loss per share$(0.55) $(0.64) $(1.79) $(1.83)
Diluted net loss per share$(0.55) $(0.64) $(1.79) $(1.83)
Weighted average shares used in computing basic net loss per share219.6
 222.3
 219.7
 223.3
Weighted average shares used in computing diluted net loss per share219.6
 222.3
 219.7
 223.3

See accompanying Notes to Condensed Consolidated Financial Statements.


4

AUTODESK, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSSINCOME
(In millions)
(Unaudited)

Three Months Ended October 31,Nine Months Ended October 31,
2021202020212020
Net income$136.7 $132.2 $407.9 $296.9 
Other comprehensive income (loss), net of reclassifications:
Net gain (loss) on derivative instruments (net of tax effect of $(3.3), $(0.4), $(6.7) and $1.5, respectively)18.8 3.9 38.3 (11.6)
Change in net unrealized (loss) gain on available-for-sale debt securities (net of tax effect of zero, zero, zero and $0.1, respectively)(0.7)0.6 7.1 1.9 
Change in defined benefit pension items (net of tax effect of zero for all periods presented)0.1 0.3 0.3 — 
Net change in cumulative foreign currency translation (loss) gain (net of tax effect of $(0.3), $0.1, $(0.9) and $(0.3), respectively)(7.2)(6.7)(22.2)13.6 
Total other comprehensive income (loss)11.0 (1.9)23.5 3.9 
Total comprehensive income$147.7 $130.3 $431.4 $300.8 
 Three Months Ended October 31, Nine Months Ended October 31,
 2017 2016 2017 2016
Net loss$(119.8) $(142.8) $(393.4) $(408.7)
Other comprehensive (loss) income, net of reclassifications:       
Net loss on derivative instruments (net of tax effect of $0.3, $0.2, $1.7 and ($0.6), respectively)(2.4) (0.7) (15.4) (11.7)
Change in net unrealized gain (loss) on available-for-sale securities (net of tax effect of ($0.4), $0.0, ($0.3), and ($0.6), respectively)0.2
 (1.6) 0.4
 1.8
Change in defined benefit pension items (net of tax effect of $0.0, $0.0, $0.0, and ($0.2), respectively)0.2
 0.3
 —
 0.6
Net change in cumulative foreign currency translation (loss) gain (net of tax effect of $0.0, ($0.5), ($0.9) and ($0.5), respectively)(0.6) (55.7) 38.0
 (57.1)
Total other comprehensive (loss) income(2.6) (57.7) 23.0
 (66.4)
Total comprehensive loss$(122.4) $(200.5) $(370.4) $(475.1)


See accompanying Notes to Condensed Consolidated Financial Statements.


5

AUTODESK, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions)
(Unaudited)
 
October 31, 2021January 31, 2021
ASSETS
Current assets:
Cash and cash equivalents$1,748.9 $1,772.2 
Marketable securities43.2 4.0 
Accounts receivable, net580.3 643.1 
Prepaid expenses and other current assets282.4 206.2 
Total current assets2,654.8 2,625.5 
Long-term marketable securities19.7 — 
Computer equipment, software, furniture and leasehold improvements, net193.6 192.8 
Operating lease right-of-use assets361.8 416.7 
Intangible assets, net498.2 199.3 
Goodwill3,579.2 2,706.5 
Deferred income taxes, net740.4 763.1 
Long-term other assets483.3 375.9 
Total assets$8,531.0 $7,279.8 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable$133.6 $122.5 
Accrued compensation284.3 322.6 
Accrued income taxes52.6 42.6 
Deferred revenue2,563.0 2,500.9 
Operating lease liabilities89.7 71.4 
Other accrued liabilities158.3 194.7 
Total current liabilities3,281.5 3,254.7 
Long-term deferred revenue779.9 859.3 
Long-term operating lease liabilities333.0 396.0 
Long-term income taxes payable22.0 15.9 
Long-term deferred income taxes52.0 11.4 
Long-term notes payable, net2,626.8 1,637.2 
Long-term other liabilities155.9 139.8 
Stockholders’ equity:
Common stock and additional paid-in capital2,821.4 2,578.9 
Accumulated other comprehensive loss(102.4)(125.9)
Accumulated deficit(1,439.1)(1,487.5)
Total stockholders’ equity1,279.9 965.5 
Total liabilities and stockholders’ equity$8,531.0 $7,279.8 
 October 31, 2017 January 31, 2017
ASSETS   
Current assets:


Cash and cash equivalents$1,025.2

$1,213.1
Marketable securities428.7

686.8
Accounts receivable, net307.8

452.3
Prepaid expenses and other current assets110.2

108.4
Total current assets1,871.9

2,460.6
Marketable securities264.3

306.2
Computer equipment, software, furniture and leasehold improvements, net148.1

158.6
Developed technologies, net29.9

45.7
Goodwill1,588.7

1,561.1
Deferred income taxes, net64.7

63.9
Other assets184.4

202.0
Total assets$4,152.0

$4,798.1
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
Current liabilities:


Accounts payable$93.3

$93.5
Accrued compensation195.9

238.2
Accrued income taxes21.7

50.0
Deferred revenue1,333.1

1,270.1
Current portion of long-term notes payable, net—
 398.7
Other accrued liabilities106.0

134.9
Total current liabilities1,750.0

2,185.4
Long-term deferred revenue430.8

517.9
Long-term income taxes payable31.3

39.3
Long-term deferred income taxes97.9
 91.5
Long-term notes payable, net1,585.4
 1,092.0
Other liabilities149.3

138.4
Stockholders’ equity:


Common stock and additional paid-in capital1,930.8

1,876.3
Accumulated other comprehensive loss(155.5)
(178.5)
Accumulated deficit(1,668.0)
(964.2)
Total stockholders’ equity107.3

733.6
Total liabilities and stockholders' equity$4,152.0

$4,798.1

See accompanying Notes to Condensed Consolidated Financial Statements.


6

AUTODESK, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
 
 Nine Months Ended October 31,
 20212020
Operating activities:
Net income$407.9 $296.9 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and accretion113.9 92.2 
Stock-based compensation expense409.8 291.5 
Deferred income taxes15.4 13.0 
Other13.1 48.6 
Changes in operating assets and liabilities, net of business combinations:
Accounts receivable70.0 112.8 
Prepaid expenses and other assets(138.8)(61.6)
Accounts payable and other liabilities(67.4)42.3 
Deferred revenue(28.4)(78.3)
Accrued income taxes13.0 22.2 
Net cash provided by operating activities808.5 779.6 
Investing activities:
Purchases of marketable securities(56.5)(21.0)
Sales and maturities of marketable securities4.0 17.0 
Capital expenditures(49.5)(67.6)
Purchases of developed technologies(9.6)(4.8)
Business combinations, net of cash acquired(1,185.1)(44.8)
Other investing activities(2.3)(55.5)
Net cash used in investing activities(1,299.0)(176.7)
Financing activities:
Proceeds from issuance of common stock, net of issuance costs113.3 112.9 
Taxes paid related to net share settlement of equity awards(147.8)(105.0)
Repurchases of common stock(482.7)(399.4)
Proceeds from debt, net of discount997.0 — 
Repayment of debt— (450.0)
Other financing activities(6.5)(2.5)
Net cash provided by (used in) financing activities473.3 (844.0)
Effect of exchange rate changes on cash and cash equivalents(6.1)3.4 
Net decrease in cash and cash equivalents(23.3)(237.7)
Cash and cash equivalents at beginning of period1,772.2 1,774.7 
Cash and cash equivalents at end of period$1,748.9 $1,537.0 
Supplemental cash flow disclosure:
Non-cash financing activities:
Fair value of common stock issued to settle liability-classified restricted stock units$2.7 $28.7 
Fair value of common stock issued related to business combination (See Note 8)$2.6 $— 
 Nine Months Ended October 31,
 2017 2016
Operating activities:


Net loss$(393.4)
$(408.7)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:


Depreciation, amortization and accretion81.5

104.5
Stock-based compensation expense199.5

162.5
Deferred income taxes7.3
 (39.6)
Restructuring charges and other facility exit costs, net0.2

71.5
Other operating activities18.1

3.4
Changes in operating assets and liabilities, net of acquisitions: 


Accounts receivable143.3
 393.8
Prepaid expenses and other current assets(6.5) (12.7)
Accounts payable and accrued liabilities(69.3) (71.9)
Deferred revenue(21.8) 15.6
Accrued income taxes(37.3) (64.3)
Net cash (used in) provided by operating activities(78.4)
154.1
Investing activities:


Purchases of marketable securities(419.6)
(1,106.4)
Sales of marketable securities199.2

544.7
Maturities of marketable securities530.1

1,012.6
Capital expenditures(39.3)
(65.1)
Acquisitions, net of cash acquired—

(85.2)
Other investing activities(11.5)
(14.8)
Net cash provided by investing activities258.9

285.8
Financing activities:


Proceeds from issuance of common stock, net of issuance costs93.2

102.2
Taxes paid related to net share settlement of equity awards(120.6)
(58.9)
Repurchases of common stock(437.9)
(397.6)
Proceeds from debt, net of discount496.9

—
Repayment of debt(400.0)
—
Other financing activities(5.8)
—
Net cash used in financing activities(374.2)
(354.3)
Effect of exchange rate changes on cash and cash equivalents5.8

(2.1)
Net (decrease) increase in cash and cash equivalents(187.9)
83.5
Cash and cash equivalents at beginning of period1,213.1

1,353.0
Cash and cash equivalents at end of period$1,025.2

$1,436.5

See accompanying Notes to Condensed Consolidated Financial Statements.


7

AUTODESK, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Tables in millions, except share and per share data, or as otherwise noted)
 
1. Basis of Presentation

The accompanying unaudited Condensed Consolidated Financial Statements of Autodesk, Inc. (“Autodesk,” “we,” “us,” “our,” or the “Company”) as of October 31, 2017,2021, and for the three and nine months ended October 31, 20172021 and 2016,2020, have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP"(“GAAP”) for interim financial information along with the instructions to Form 10-Q and Article 10 of Securities and Exchange Commission (“SEC”) Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for annual financial statements. In management’s opinion, Autodesk made all adjustments (consisting of normal, recurring and non-recurring adjustments) during the quarter that were considered necessary for the fair statement of the financial position and operating results of the Company. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported amounts in the financial statements and accompanying notes. Actual results could differ from those estimates. In March 2020, the World Health Organization declared the outbreak of a disease caused by a novel strain of the coronavirus (COVID-19) to be a pandemic. This pandemic has created and may continue to create significant uncertainty in the macroeconomic environment which, in addition to other unforeseen effects of this pandemic, may adversely impact our results of operations. As the COVID-19 pandemic continues to develop, many of our estimates could require increased judgment and carry a higher degree of variability and volatility. As events continue to evolve our estimates may change materially in future periods. In addition, the results of operations for the three and nine months ended October 31, 20172021, are not necessarily indicative of the results for the entire fiscal year ending January 31, 2018,2022, or for any other period. Further, the balance sheet as of January 31, 20172021, has been derived from the audited balance sheetConsolidated Balance Sheet as of this date. There have been no material changes, other than what is discussed herein, to Autodesk's significant accounting policies as compared to the significant accounting policies disclosed in the Annual Report on Form 10-K for the fiscal year ended January 31, 2017.2021. These unaudited Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and related notes, together with management’s discussion and analysis of financial position and results of operations, contained in Autodesk’s Annual Report on Form 10-K for the fiscal year ended January 31, 2017,2021, filed on March 21, 2017.19, 2021.

Change in Presentationpresentation and immaterial correction of an error

During the first quarter of fiscal 2018,ended July 31, 2021, the Company changed its historical presentation of its revenue and cost of revenue categories.

Previously, the Company presented revenue and cost of revenue on two lines: subscription, and license and other. Included within subscription was maintenance revenue for all our software products and revenue for our cloud service offerings. License and other revenue included product license revenue, standalone consulting services, and other immaterial items. Also, included within license and other revenue was an allocation of the estimated value of the software license from our term-based product subscriptions and enterprise offerings, which contain a software license, maintenance and cloud services. For these arrangements, as there is no vendor-specific-objective evidence ("VSOE") for the related maintenance, the arrangement consideration was allocated between the license and maintenance deliverables based on best estimated selling prices in our condensed consolidated statements of operations. The Company performed the allocation because it provided a meaningful presentation to investors based on the Company's then current product mix.
As part of the Company's technological and business model transition, the Company discontinued the sale of most of its perpetual licenses, transitioning away from selling a mix of perpetual licenses and term-based product subscriptions to a single subscription model involving more highly interrelated software and cloud functionalities. Fiscal 2018 marks the first full year in the Company's history that it will sell substantially term-based product subscriptions. To better reflect this shift in our business, the Company adopted a revised presentation in the first quarter of fiscal 2018, including the separation of subscription revenue and maintenance revenue on distinct line items on the Company's condensed consolidated statement of operations.

Subscription revenue now consists of our full term-based product subscriptions, cloud service offerings, and flexible enterprise business arrangements. Note that with the change in our presentation of revenue in our condensed consolidated statement of operations in the first quarter of fiscal 2018, our term-based product subscriptions and flexible enterprise business arrangements are classified andCondensed Consolidated Balance Sheet for intangible assets. These amounts were previously presented in a single line item.

Maintenance revenue is“Developed technologies, net” and “Long-term other assets” and are now presented as a separate line item in the new presentation and consists of revenue from our existing maintenance plan agreements and related renewals.

License and other revenue will continue to be presented as a separate line item and include any residual perpetual licenses sold, standalone consulting services, and other immaterial items.



In connection with these revisions, the Company also revised its cost of revenue classification to present cost of subscription and maintenance revenue and amortization of developed technology separately. Cost of license and other revenue will continue to be presented as a separate line item.

This change in presentation does not affect our total net revenues, total cost of net revenues or overall gross margin. The following table shows“Intangible assets, net.” Accordingly, prior period amounts have been reclassified amounts to conform to the current period presentation:presentation. This presentation change did not impact “Total assets” on the Condensed Consolidated Balance Sheets and had no impact on the Company's Condensed Consolidated Statements of Operations, Condensed Consolidated Statements of Comprehensive Income, and Condensed Consolidated Statements of Cash Flows.

The effects of the change on the Consolidated Balance Sheet as of January 31, 2021, was as follows:

 As Reported January 31, 2021Effect of Change in PresentationAs Adjusted January 31, 2021
Intangible assets, net$88.6 $110.7 $199.3 
Long-term other assets486.6 (110.7)375.9 
Total assets7,279.8 — 7,279.8 

During the quarter ended April 30, 2021, the Company changed its presentation on the Condensed Consolidated Balance Sheets for investments in debt and equity securities that are held in a rabbi trust under non-qualified deferred compensation plans, including correcting the classification as current and non-current assets. These amounts were previously presented as current “Marketable securities” and are now presented as “Prepaid expenses and other current assets” and “Long-term other assets” on the Condensed Consolidated Balance Sheets. Accordingly, prior period amounts have been reclassified to conform to the current period presentation. These presentation and classification changes did not impact “Total assets” on the Condensed Consolidated Balance Sheets and had no impact on the Company's Condensed Consolidated Statements of Operations, Condensed Consolidated Statements of Comprehensive Income and Condensed Consolidated Statement of Cash Flows.

8

 Three Months Ended October 31, 2016 Nine Months Ended October 31, 2016
 Previously Reported Change in Presentation Reclassification Current Presentation Previously Reported Change in Presentation Reclassification Current Presentation
Net revenue:           
Maintenance (1)N/A
 $273.2
 $273.2
 N/A
 $835.1
 $835.1
Subscription$319.5
 (207.1) 112.4
 $967.5
 (667.8) 299.7
License and other170.1
 (66.1) 104.0
 584.7
 (167.3) 417.4
Total$489.6
 $—
 $489.6
 $1,552.2
 $—
 $1,552.2
         
  
Cost of revenue:        
  
Maintenance and subscription (2)$35.1
 $11.7
 $46.8
 $113.1
 $27.1
 $140.2
License and other46.4
 (22.1) 24.3
 145.9
 (59.1) 86.8
Amortization of developed technology (1)N/A
 10.4
 10.4 N/A
 32.0
 32.0
Total$81.5
 $—
 $81.5
 $259.0
 $—
 $259.0
The effects of the changes on the Consolidated Balance Sheets as of January 31, 2021, were as follows:
 _______________
(1)These lines were not previously reported in the Condensed Consolidated Statement of Operations.
(2)Previously, titled "Subscription."

 As Reported January 31, 2021Effect of Changes in PresentationAs Adjusted January 31, 2021
Marketable securities$85.0 $(81.0)$4.0 
Prepaid and other current assets198.9 7.3 206.2 
Long-term other assets412.9 73.7 486.6 
Total current assets2,699.2 (73.7)2,625.5 
Total assets7,279.8 — 7,279.8 

2. Recently Issued Accounting Standards

With the exception of those discussed below, there have been no recent changes in accounting pronouncements issued by the Financial Accounting Standards Board (“FASB”) or adopted by the Company during the nine months ended October 31, 2017,2021, that are of significance, or potential significance,applicable to the Company.

Accounting standardRecently issued accounting standards not yet adopted in the current fiscal year

Autodesk adopted FASB'sIn March 2020, FASB issued Accounting Standards Update (“ASU”) No. 2017-04 ("ASU 2017-04"), "Intangibles—Goodwill and Other2020-04, “Reference Rate Reform (Topic 350)848): Simplifying the Test for Goodwill Impairment" during the three months ended April 30, 2017. The ASU simplifies the accounting for goodwill impairment by removing Step 2Facilitation of the goodwill impairment test. Under current guidance, Step 2Effects of Reference Rate Reform on Financial Reporting” (“ASU No. 2020-04”), which provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The amendments are effective for all entities as of March 12, 2020, through December 31, 2022. The expedients and exceptions provided by the amendments do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022, except for hedging relationships existing as of December 31, 2022, that an entity has elected certain optional expedients for and that are retained through the end of the goodwill impairment test requires entities to calculate the implied fair value of goodwill in the same manner as the amount of goodwill recognized in a business combination by assigning the fair value of a reporting unit to all of the assets and liabilities of the reporting unit. The carrying value in excess of the implied fair value is recognized as goodwill impairment. Under the new standard, goodwill impairment is recognized based on Step 1 of the current guidance, which calculates the carrying value in excess of the reporting unit’s fair value. The new guidance is required to be applied on a prospective basis and as such,hedging relationship. Autodesk will useapply the simplified testexpedients in its annual fourth fiscal quarter testing or more often if circumstances indicate a potential impairment may exist, or if events have affected the composition of reporting units.ASU No. 2020-04 through December 31, 2022. Autodesk does not believe ASU 2017-04No. 2020-04 will have a material impact on its consolidated financial statements.

Recently issued accounting standards but not yet adopted

In August 2017,November 2021, FASB issued Accounting Standards UpdateASU No. 2017-12 ("ASU 2017-12"), "Derivatives and Hedging2021-08, “Business Combinations (Topic 815): Targeted Improvements to805), Accounting for Hedging Activities."  The targeted amendments help simplify certain aspects of hedge accountingContract Assets and resultContract Liabilities from Contracts with Customers” (“ASU No. 2021-08”), which requires contract assets and contract liabilities (i.e., deferred revenue) acquired in a more accurate portrayal ofbusiness combination to be recognized and measured by the economics ofacquirer on the acquisition date in accordance with ASC 606 “Revenue from Contracts with Customers” (Topic 606). ASU No. 2021-08 allows an entity’s risk management activitiesacquirer to assess how the acquiree applied Topic 606 to determine what to record for acquired revenue contracts. Historically, such amounts were recognized by the acquirer at fair value in its financial statements.  For cash flow and net investment hedges as of the adoption date, the guidance requires a modified retrospective approach. The amended presentation and disclosure guidance is required only prospectively.accordance with Topic 805. The amendments are effective for Autodesk's fiscal year beginning February 1, 2019, with early2023. Early adoption permitted.is permitted, including in interim periods, for any financial statements that have not yet been issued. Autodesk is currently evaluating the accounting, transition, and disclosure requirements ofimpact that the standard and cannot currently estimate the financial statement impact of adoption.



In February 2017, FASB issued Accounting Standards Update No. 2017-05 ("ASU 2017-05"), "Other Income– Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets." The ASU, among other things, clarifies the scope of the derecognition of nonfinancial assets, the definition of in substance financial assets, and impacts the accounting for partial sales of nonfinancial assets by requiring full gain recognition upon the sale. The amendments are effective for Autodesk's fiscal year beginning February 1, 2018. The guidance may be applied retrospectively for all periods presented or retrospectively with a cumulative-effect adjustment at the date of adoption. The effect of the implementation will depend upon the nature of the Company's future acquisitions or dispositions, if any. The adoption of the guidance would notASU No. 2021-08 will have had a material impact on acquisitions prior to the current period and on the Company'sits consolidated statements of financial condition and results of operations.

In January 2017, FASB issued Accounting Standards Update No. 2017-01 ("ASU 2017-01"
3. Revenue Recognition

Revenue Disaggregation

Autodesk recognizes revenue from the sale of (1) product subscriptions, cloud service offerings, and enterprise business agreements (“EBAs”), "Business Combinations: Clarifying(2) renewal fees for existing maintenance plan agreements that were initially purchased with a perpetual software license, and (3) consulting, training, and other goods and services. The 3 categories are presented as line items on Autodesk's Condensed Consolidated Statements of Operations.

9

Information regarding the Definitioncomponents of a Business"Autodesk's net revenue from contracts with customers by product family, geographic location, sales channel, and product type is as follows:
 Three Months Ended October 31,Nine Months Ended October 31,
2021202020212020
Net revenue by product family:
Architecture, Engineering and Construction$511.1 $419.4 $1,432.4 $1,199.1 
AutoCAD and AutoCAD LT318.4 278.8 907.9 812.9 
Manufacturing225.0 194.1 630.0 562.5 
Media and Entertainment63.0 54.0 176.5 159.9 
Other8.3 6.1 28.0 16.8 
Total net revenue$1,125.8 $952.4 $3,174.8 $2,751.2 
Net revenue by geographic area:
Americas
U.S.$383.2 $328.5 $1,054.5 $938.6 
Other Americas78.7 64.4 221.9 188.0 
Total Americas461.9 392.9 1,276.4 1,126.6 
Europe, Middle East and Africa433.2 364.3 1,225.9 1,063.8 
Asia Pacific230.7 195.2 672.5 560.8 
Total net revenue$1,125.8 $952.4 $3,174.8 $2,751.2 
Net revenue by sales channel:
Indirect$729.3 $656.2 $2,092.8 $1,918.9 
Direct396.5 296.2 1,082.0 832.3 
Total net revenue$1,125.8 $952.4 $3,174.8 $2,751.2 
Net revenue by product type:
Design$994.4 $847.7 $2,823.5 $2,466.8 
Make93.9 76.5 265.0 214.9 
Other37.5 28.2 86.3 69.5 
Total net revenue$1,125.8 $952.4 $3,174.8 $2,751.2 

Payments for product subscriptions, industry collections, cloud subscriptions, and maintenance subscriptions are typically due up front with payment terms of 30 to 45 days. Payments on EBAs are typically due in annual installments over the contract term, with payment terms of 30 to 60 days. Autodesk does not have any material variable consideration, such as obligations for returns, refunds, warranties, or amounts due to customers for which provides a more robust framework to use in determining when a set of assets and activitiessignificant estimation or judgment is considered a business. The amendments will be effective for Autodesk's fiscal year beginning February 1, 2018. The new guidance is required to be applied on a prospective basis. The effect of the implementation will depend upon the nature of the Company's future acquisitions, if any.

In October 2016, FASB issued Accounting Standards Update No. 2016-16 ("ASU 2016-16"), “Income Taxes: Intra-Entity Transfers of Assets Other than Inventory” which requires that entities recognize the income tax consequences of an intra-entity transfer of an asset, other than inventory, when the transfer occurs. The amendments will be effective for Autodesk's fiscal year beginning February 1, 2018. The new guidance is required to be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginningreporting date.

Remaining performance obligations consist of total short-term, long-term, and unbilled deferred revenue. As of October 31, 2021, Autodesk had remaining performance obligations of $4.23 billion, which represents the periodtotal contract price allocated to remaining performance obligations, which are generally recognized over the next three years. We expect to recognize $2.88 billion or 68% of adoption. Autodesk is currently evaluatingour remaining performance obligations as revenue during the accountingnext 12 months. We expect to recognize the remaining $1.35 billion or 32% of our remaining performance obligations as revenue thereafter.

The amount of remaining performance obligations may be impacted by the specific timing, duration, and disclosure requirementssize of customer subscription and support agreements, varying billing cycles of such agreements, the standard. Furthermore, the actual impactspecific timing of implementation will largely dependcustomer renewals, and foreign currency fluctuations.

Contract Balances

We receive payments from customers based on future intra-entity asset transfers, if any.

In June 2016, FASB issued Accounting Standards Update No. 2016-13 ("ASU 2016-13") regarding ASC Topic 326, "Financial Instruments - Credit Losses," which modifies the measurementa billing schedule as established in our contracts. Contract assets relate to performance completed in advance of expected credit losses of certain financial instruments. Autodesk plans to adopt ASU 2016-13scheduled billings. Contract assets were not material as of October 31, 2021. Deferred
10

revenue relates to billings in advance of performance under the effective date which represents Autodesk’s fiscal year beginning February 1, 2020. Autodesk does not believe the ASU will have a material impact on its consolidated financial statements.

In February 2016, FASB issued Accounting Standards Update No. 2016-02 ("ASU 2016-02") regarding ASC Topic 842, "Leases."contract. The amendmentsprimary changes in this ASU require balance sheet recognition of leaseour contract assets and lease liabilities by lessees for leases classified as operating leases, with an optional policy electiondeferred revenues are due to not recognize lease assetsour performance under the contracts and lease liabilities for leases with a term of 12billings.

Revenue recognized during the three months or less. The amendments also require new disclosures, including qualitativeended October 31, 2021 and quantitative requirements, providing additional information about the amounts recorded2020, that was included in the financial statements. Autodesk plans to adopt ASU 2016-02 in Autodesk’s fiscal year beginning February 1, 2019. The amendments require a modified retrospective approach with optional practical expedients. Autodesk is currently evaluatingdeferred revenue balances at January 31, 2021 and 2020, was $568.9 million and $481.9 million, respectively. Revenue recognized during the accounting, transition,nine months ended October 31, 2021 and disclosure requirements of the standard and cannot currently estimate the financial statement impact of adoption.

In January 2016, FASB issued Accounting Standards Update No. 2016-01 ("ASU 2016-01") regarding ASC Topic 825-10, "Financial Instruments - Overall." The amendments address certain aspects of recognition, measurement, presentation, and disclosure of financial instruments, and require equity securities to be measured at fair value with changes in fair value recognized through net income. The amendments also simplify the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment for impairment quarterly at each reporting period. The amendments in ASU 2016-01 will be effective for Autodesk's fiscal year beginning February 1, 2018. An entity should apply the amendments by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption, with prospective adoption of the amendments related to equity securities without readily determinable fair values existing as of the date of adoption. Autodesk does not believe ASU 2016-01 will have a material impact on its consolidated financial statements.

In May 2014, FASB issued Accounting Standards Update No. 2014-09 (regarding ASC Topic 606, “Revenue from Contracts with Customers.” ASU 2014-09 provides principles for recognizing revenue to depict the transfer of promised goods or services to customers in an amount2020, that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In August 2015, FASB issued Accounting Standards Update No. 2015-14 to defer the effective date by one year with early adoption permitted as of the original effective date. In addition, FASB issued Accounting Standards Update No. 2016-08, Accounting Standards Update No. 2016-10, Accounting Standards Update No. 2016-12, and Accounting Standard Update No. 2016-20 in March 2016, April 2016, May 2016, and December 2016, respectively, to help provide interpretive clarifications on the new guidance in ASC Topic 606.



Autodesk currently plans to adopt ASU 2014-09 as of February 1, 2018, using the modified retrospective transition method.

In terms of Autodesk's evaluation efforts, the Company has assigned internal resources in addition to the engagement of third party service providers to assistwas included in the evaluation.deferred revenue balances at January 31, 2021 and 2020, was $2.13 billion and $1.91 billion, respectively. The Company's preliminary assessment is that there should be no material change in the timing and amountsatisfaction of the recognition ofperformance obligations typically lags behind payments received under revenue for the majority of the Company's product subscription offerings and enterprise arrangements. This preliminary assessment is based on the Company's analysis that the related software and cloud services in a majority of the product subscription and enterprise arrangements are not distinct in the context of the contract as they are considered highly interrelated and represent a single combined performance obligation that should be recognized over time. Due to the complexity of certain contracts the actual revenue recognition treatment required under the new standard for these arrangements may be dependent on contract-specific terms and vary in some instances.

A limited number of Autodesk's product subscriptions do not incorporate substantial cloud services, and under ASU 2014-09 will be recognized as distinct license and service performance obligations. Revenue allocated to the licenses in these offerings will be recognized at a point in time instead of over the contract term. While we are still evaluating, Autodesk believes the impact of the change to timing of revenue recognition for these limited offerings, and other revenue streams that Autodesk is currently evaluating, may have a material balance sheet impact on the adoption date with the application of the modified retrospective transition method. It is not expected to have a material impact to reported revenue in subsequent reporting periods.

Another significant provision under ASU 2014-09 includes the capitalization and amortization of costs associated with obtaining a contract, such as sales commission. The Company expects there to be a material balance sheet impact at the period of adoption capturing the sales commission capitalization and is currently evaluating the magnitude at implementation.

Furthermore, the Company has made and will continue to make investments in systems and processes to enable timely and accurate reporting under the new standard. The Company currently expects that necessary operational and internal control structural changes will be implemented prior to the adoption date.

from customers.
3
4. Concentration of Credit Risk
    
Autodesk places its cash, cash equivalents, and marketable securities in highly liquid instruments with, and in the custody of, multiple diversified financial institutions globally with high credit ratings, and limits the amounts invested with any one institution, type of security, and issuer. Autodesk’s primary commercial banking relationship is with Citigroup Inc. and its global affiliates. Citibank, N.A., an affiliate of Citigroup, is one of the lead lenders and an agent in the syndicate of Autodesk’s $400.0 million line of$1.5 billion revolving credit facility. See Note 14, “Borrowing Arrangements,” in the Notes to Condensed Consolidated Financial Statements for further discussion.


Total sales to the Company's largest distributor Tech Data Corporation and its global affiliates (“Tech Data”) accounted for 32%37% and 31%36% of Autodesk’s total net revenue for the three and nine months ended October 31, 2017 and 2016, respectively, and 31% and 30%2021, respectively. Total sales to Tech Data accounted for 37% of Autodesk’s total net revenue for both the three and nine months ended October 31, 2017 and 2016, respectively.2020. The majority of the net revenue from sales to Tech Data is for sales made outside of the United States. In addition, Tech Data accounted for 28%22% and 20%26% of trade accounts receivable at October 31, 20172021, and January 31, 20172021, respectively. Ingram Micro Inc. (“Ingram Micro”) accounted for 9% of Autodesk's total net revenue during both the three and nine months ended October 31, 2021. Total sales to Ingram Micro accounted for 10% of Autodesk’s total net revenue for both the three and nine months ended October 31, 2020. No other customer accounted for more than 10% of Autodesk's total net revenue or trade accounts receivable for each of the respective periods.
, respectively.


11

45. Financial Instruments

The following tables summarize the Company's financial instruments' amortized cost, gross unrealized gains, gross unrealized losses, and fair value by significant investment category as of October 31, 20172021, and January 31, 2017:2021:
 
   October 31, 2017
   Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Level 1 Level 2 Level 3
Cash equivalents (1):             
 Certificates of deposit63.1
 —
 —
 63.1
 63.1
 —
 —
 Corporate debt securities8.0
 —
 —
 8.0
 8.0
 —
 —
 Commercial paper166.5
 —
 —
 166.5
 —
 166.5
 —
 Custody cash deposit0.9
 —
 —
 0.9
 0.9
 —
 —
 Money market funds144.8
 —
 —
 144.8
 —
 144.8
 —
 U.S. government securities250.0
 —
 —
 250.0
 250.0
 —
 —
Marketable securities:             
 Short-term available-for-sale             
  Agency bonds7.5
 —
 —
 7.5
 7.5
 —
 —
  Asset backed securities30.4
 —
 —
 30.4
 —
 30.4
 —
  Certificates of deposit4.0
 —
 —
 4.0
 4.0
 —
 —
  Commercial paper31.3
 —
 —
 31.3
 —
 31.3
 —
  Corporate debt securities218.7
 0.1
 (0.1) 218.7
 218.7
 —
 —
  Municipal bonds15.5
 

 —
 15.5
 15.5
 —
 —
  Sovereign debt6.0
 —
 —
 6.0
 —
 6.0
 —
  U.S. government securities58.8
 —
 —
 58.8
 58.8
 —
 —
 Short-term trading securities             
  Mutual funds49.1
 7.4
 —
 56.5
 56.5
 —
 —
 Long-term available-for-sale             
  Agency bonds12.2
 —
 —
 12.2
 12.2
 —
 —
  Asset backed securities60.8
 —
 (0.1) 60.7
 —
 60.7
 —
  Corporate debt securities143.1
 0.2
 (0.1) 143.2
 143.2
 —
 —
  Municipal bonds12.8
 —
 (0.1) 12.7
 12.7
 —
 —
  Sovereign debt2.7
 —
 —
 2.7
 —
 2.7
 —
  U.S. government securities32.9
 —
 (0.1) 32.8
 32.8
 —
 —
Convertible debt securities (2)8.4
 0.6
 —
 9.0
 —
 —
 9.0
Derivative contract assets (3)2.4
 7.2
 (0.5) 9.1
 —
 7.1
 2.0
Derivative contract liabilities (4)—
 —
 (8.9) (8.9) —
 (8.9) —
  Total$1,329.9

$15.5

$(9.9)
$1,335.5

$883.9

$440.6

$11.0
October 31, 2021
Amortized CostGross Unrealized GainsGross Unrealized LossesFair ValueLevel 1Level 2Level 3
Cash equivalents (1):
Money market funds$1,016.8 $— $— $1,016.8 $1,016.8 $— $— 
U.S. government securities20.0 — — 20.0 — 20.0 — 
Commercial paper18.2 — — 18.2 — 18.2 — 
Municipal bonds5.0— — 5.0 — 5.0 — 
Other (2)3.0 — — 3.0 1.9 1.1 — 
Marketable securities:
Short-term
Commercial paper28.0 — — 28.0 — 28.0 — 
Corporate debt securities8.8 — — 8.8 — 8.8 — 
Common stock— 6.4 — 6.4 6.4 — — 
Long-term
Corporate debt securities19.7 — — 19.7 — 19.7 — 
Mutual funds (3) (4)71.7 24.6 — 96.3 96.3 — — 
Strategic investments derivative assets (4)0.1 0.4 (0.3)0.2 — — 0.2 
Derivative contract assets (4)0.6 26.2 (0.1)26.7 — 26.7 — 
Derivative contract liabilities (5)— — (7.8)(7.8)— (7.8)— 
Total$1,191.9 $57.6 $(8.2)$1,241.3 $1,121.4 $119.7 $0.2 
____________________ 
(1)Included in “Cash and cash equivalents” in the accompanying Condensed Consolidated Balance Sheets. These investments are classified as debt securities.
(2)Consists of custody cash deposits, corporate debt securities, and certificates of deposit.
(3)See Note 12, “Deferred Compensation” for more information.
(4)Included in “Prepaid expenses and other current assets” or “Long-term other assets” in the accompanying Condensed Consolidated Balance Sheets.
(5)Included in “Other accrued liabilities” in the accompanying Condensed Consolidated Balance Sheets.

January 31, 2021
Amortized CostGross Unrealized GainsGross Unrealized LossesFair ValueLevel 1Level 2Level 3
Cash equivalents (1):
Commercial paper$36.0 $— $— $36.0 $— $36.0 $— 
Money market funds686.9 — — 686.9 686.9 — — 
Other (2)4.4 — — 4.4 4.0 0.4 — 
Marketable securities:
Short-term
Other (3)4.0 — — 4.0 — 4.0 — 
Mutual funds (4) (5)64.5 16.5 — 81.0 81.0 — — 
Strategic investments derivative asset (5)0.1 0.4 (0.3)0.2 — — 0.2 
Derivative contract assets (5)0.4 9.8 (0.4)9.8 — 9.8 — 
Derivative contract liabilities (6)— — (17.5)(17.5)— (17.5)— 
Total$796.3 $26.7 $(18.2)$804.8 $771.9 $32.7 $0.2 
12

____________________ 
(1)Included in “Cash and cash equivalents” in the accompanying Condensed Consolidated Balance Sheets. These investments are classified as debt securities.
(2)Consists of custody cash deposits and certificates of deposit.
(3)Consists of commercial paper and municipal bonds.
(4)See Note 12, “Deferred Compensation” for more information.
(5)Included in “Prepaid expenses and other current assets,” or “Long-term other assets,” in the accompanying Condensed Consolidated Balance Sheets.
(6)Included in “Other accrued liabilities” in the accompanying Condensed Consolidated Balance Sheets.

The following table summarizes the fair values of investments classified as marketable debt securities by contractual         maturity date as of October 31, 2021:
Fair Value
Due within 1 year$36.8 
Due in 1 year through 5 years19.7
(1)
Included in “Cash and cash equivalents” in the accompanying Condensed Consolidated Balance Sheets.
(2)Total
Considered “available-for-sale” and included in “$
Other assets56.5 ” in the accompanying Condensed Consolidated Balance Sheets.
(3)
Included in “Prepaid expenses and other current assets” or “Other assets” in the accompanying Condensed Consolidated Balance Sheets.
(4)Included in “Other accrued liabilities” in the accompanying Condensed Consolidated Balance Sheets.



   January 31, 2017
   Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Level 1 Level 2 Level 3
Cash equivalents (1):             
 Agency bonds$6.0
 $—
 $—
 $6.0
 $6.0
 $—
 $—
 Certificates of deposit63.1
 —
 —
 63.1
 63.1
 —
 —
 Commercial paper207.4
 —
 —
 207.4
 —
 207.4
 —
 Corporate debt securities40.2
 —
 —
 40.2
 40.2
 —
 —
 Custody cash deposit3.2
 —
 —
 3.2
 3.2
 —
 —
 Money Market funds256.5
 —
 —
 256.5
 —
 256.5
 —
 Municipal bonds5.0
 —
 —
 5.0
 5.0
 —
 —
 Sovereign debt15.0
 —
 —
 15.0
 —
 15.0
 —
 U.S. government securities309.5
 —
 —
 309.5
 309.5
 —
 —
Marketable securities:             
 Short-term available-for-sale             
  Agency bonds13.2
 —
 

 13.2
 13.2
 —
 —
  Asset backed securities19.6
 —
 —
 19.6
 —
 19.6
 —
  Certificates of deposit157.3
 —
 —
 157.3
 157.3
 —
 —
  Commercial paper109.2
 —
 —
 109.2
 —
 109.2
 —
  Corporate debt securities234.7
 —
 (0.2) 234.5
 234.5
 —
 —
  Municipal bonds43.4
 —
 —
 43.4
 43.4
 —
 —
  Sovereign debt30.0
 —
 —
 30.0
 —
 30.0
 —
  U.S. government securities32.3
 —
 —
 32.3
 32.3
 —
 —
 Short-term trading securities             
  Mutual funds44.8
 2.5
 —
 47.3
 47.3
 —
 —
 Long-term available-for-sale             
  Agency bonds7.1
 —
 —
 7.1
 7.1
 —
 —
  Asset backed securities65.8
 0.1
 —
 65.9
 —
 65.9
 —
  Corporate debt securities172.1
 0.1
 (0.1) 172.1
 172.1
 —
 —
  Municipal bonds10.7
 —
 —
 10.7
 10.7
 —
 —
  Sovereign debt1.5
 —
 —
 1.5
 —
 1.5
 —
  U.S. government securities48.8
 0.1
 —
 48.9
 48.9
 —
 —
Convertible debt securities (2)4.9
 2.3
 (1.6) 5.6
 —
 —
 5.6
Derivative contract assets (3)2.2
 12.3
 (1.3) 13.2
 —
 11.9
 1.3
Derivative contract liabilities (4)—
 —
 (10.4) (10.4) —
 (10.4) —
  Total$1,903.5
 $17.4
 $(13.6) $1,907.3
 $1,193.8
 $706.6
 $6.9
____________________ 
(1)
Included in “Cash and cash equivalents” in the accompanying Condensed Consolidated Balance Sheets.
(2)
Considered “available-for-sale” and included in “Other assets” in the accompanying Condensed Consolidated Balance Sheets.
(3)
Included in “Prepaid expenses and other current assets,” “Other assets,” or “Other accrued liabilities” in the accompanying Condensed Consolidated Balance Sheets.
(4)Included in “Other accrued liabilities” in the accompanying Condensed Consolidated Balance Sheets.
Autodesk classifies its marketable securities as either short-term or long-term based on each instrument’s underlying contractual maturity date. Marketable securities with remaining maturities of up to 12 months are classified as short-term and marketable securities with remaining maturities greater than 12 months are classified as long-term. Autodesk may sell certain of its marketable securities prior to their stated maturities for strategic purposes or in anticipation of credit deterioration.

Autodesk applies fair value accounting for certain financial assets and liabilities, which consist of cash equivalents, marketable securities, and other financial instruments, that are recognized or disclosed at fair value in the financial statements on a recurring basis. The Company defines fair value as the price that would be received from selling an asset or paid to transfer


a liability in an orderly transaction between market participants at the measurement date. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: (Level 1) observable inputs such as quoted prices in active markets; (Level 2) inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and (Level 3) unobservable inputs for which there is little or no market data, which require Autodesk to develop its own assumptions. When determining fair value, Autodesk uses observable market data and relies on unobservable inputs only when observable market data is not available. There have been no transfers between fair value measurement levels during the nine months ended October 31, 2017.

Autodesk's cash equivalents, marketable securities and financial instruments are primarily classified within Level 1 or Level 2 of the fair value hierarchy. Autodesk values its available-for-sale securities on pricing from pricing vendors, who may use quoted prices in active markets for identical assets (Level 1) or inputs other than quoted prices that are observable either directly or indirectly in determining fair value (Level 2). Autodesk's Level 2 securities are valued primarily using observable inputs other than quoted prices in active markets for identical assets and liabilities. Autodesk's Level 3 securities consist of investments held in convertible debt securities and derivative contracts which are valued using probability weighted discounted cash flow models as some of the inputs to the models are unobservable in the market.

A reconciliation of the change in Autodesk’s Level 3 items for the nine months ended October 31, 2017 follows:

 
Fair Value Measurements Using
Significant Unobservable Inputs
 (Level 3)
  Derivative Contracts Convertible Debt Securities Total
Balances, January 31, 2017 $1.3
 $5.6
 $6.9
Purchases 1.1
 5.9
 7.0
Losses included in earnings (0.4) (2.4) (2.8)
Losses included in OCI —
 (0.1) (0.1)
Balances, October 31, 2017 $2.0
 $9.0
 $11.0


The following table summarizes the estimated fair value of Autodesk's “available-for-sale securities” classified by the contractual maturity date of the security:

 October 31, 2017
 Cost Fair Value
Due within 1 year$377.4
 $377.9
Due in 1 year through 5 years259.4
 259.3
Due in 5 years through 10 years5.7
 5.7
Due after 10 years2.6
 2.6
Total$645.1
 $645.5


As of both October 31, 20172021, and January 31, 2017,2021, Autodesk had no securities,material unrealized losses, individually and in the aggregate, for marketable debt securities that are in a continuous unrealized loss position for greater than twelve12 months. Total unrealized gains for securities with net gains in accumulated other comprehensive income were not material for the nine months ended October 31, 2021.

Autodesk monitors all marketable debt securities for potential credit losses by reviewing indicators such as, but not limited to, current credit rating, change in credit rating, credit outlook, and default risk. There were no allowances for credit losses as of both October 31, 2021, and January 31, 2021. There were no write offs of accrued interest receivables for the nine months ended October 31, 2021 and 2020.

There was no realized gain or loss for the sales or redemptions of marketable debt securities during both the nine months ended October 31, 2021 and 2020. Realized gains and losses from the sales or redemptions of marketable debt securities are recorded in “Interest and other expense, net” on the Company's Condensed Consolidated Statements of Operations.

Proceeds from the sale and maturity of marketable debt securities for the three and nine months ended October 31, 2021, were none and $4.0 million, respectively. Proceeds from the sale and maturity of marketable debt securities for the three and nine months ended October 31, 2020, were $6.0 million and $17.0 million, respectively.

Strategic investment equity securities

As of October 31, 20172021, and January 31, 2017,2021, Autodesk had $116.2$139.8 million and $117.2$134.1 million, respectively, in direct investments in privately held companies accountedcompanies. These strategic investment equity securities do not have readily determined fair values, and Autodesk uses the measurement alternative to account for under the cost method, which are periodically assessed for other-than-temporary impairment. Other than the amounts disclosedadjustment to these investments in the following paragraph, Autodesk does not intend to sell these cost method investments and it is not more likely than not that Autodesk will be required to sell the investment before recovery of the amortized cost bases, which may be maturity. Therefore, Autodesk does not consider those investments to be other-than-temporarily impaired at October 31, 2017. Autodesk estimates fair value of its cost method investments considering available information such as pricing in recent rounds of financing, current cash positions, earnings and cash flow forecasts, recent operational performance and any other readily available market data.



a given quarter. If Autodesk determines that an other-than-temporary impairment has occurred, Autodesk writes down the investment to its fair value. During

13

Adjustments to the three and nine months ended October 31, 2017, Autodesk recorded $3.9 million and $8.0 million, respectively, in other-than-temporary impairments on its privately held investments. Duringcarrying value of our strategic investment equity securities with no readily determined fair values measured using the measurement alternative were as follows:three months ended October 31, 2016, Autodesk recorded no other-than-temporary impairments on its privately held investments. During the nine months ended October 31, 2016, Autodesk recorded $0.3 million in other-than-temporary impairments on its privately held investments.
 Nine Months Ended October 31,Cumulative Amount as of
20212020October 31, 2021
Upward adjustments (1)$7.2 $3.0 $23.2 
Negative adjustments, including impairments (1)(10.5)(36.2)(71.1)
Net adjustments$(3.3)$(33.2)$(47.9)

____________________ 
There was no loss or gain for the sales or redemptions of “available-for-sale securities” during the nine months ended October 31, 2017. The sales or redemptions of “available-for-sale securities” during the nine months ended October 31, 2016 resulted in a gain of $0.7 million. Gains and losses resulting from the sale or redemption of "available-for-sale securities" are recorded(1)Included in “Interest and other expense, net” on the Company's Condensed Consolidated Statements of Operations.

Proceeds fromDuring the salethree and maturity of marketable securities for the nine months ended October 31, 20172021, Autodesk recognized gains of none and 2016$8.1 million on the disposition of strategic investment equity securities, respectively. There were $729.3 millionno gains or losses recognized on the disposition of strategic investment equity securities for both the three and $1,557.3 million, respectively.nine months ended October 31, 2020.

Derivative Financial Instruments

Under its risk management strategy, Autodesk uses derivative instruments to manage its short-term exposures to fluctuations in foreign currency exchange rates which exist as part of ongoing business operations. Autodesk's general practice is to hedge a portion of transaction exposures denominated in euros, Japanese yen, Swiss francs, British pounds, Canadian dollars and Australian dollars. These instruments have maturities between one and twelve months in the future. Autodesk does not enter into derivative instrument transactions for trading or speculative purposes.

The bank counterparties to the derivative contracts potentially expose Autodesk to credit-related losses in the event of their nonperformance. However, to mitigate that risk, Autodesk only contracts with counterparties who meet the Company's minimum requirements under its counterparty risk assessment process. Autodesk monitors ratings, credit spreads and potential downgrades on at least a quarterly basis. Based on Autodesk's ongoing assessment of counterparty risk, the Company will adjust its exposure to various counterparties. Autodesk generally enters into master netting arrangements, which reduce credit risk by permitting net settlement of transactions with the same counterparty.  However, Autodesk does not have any master netting arrangements in place with collateral features.

Foreign currency contracts designated as cash flow hedges


Autodesk uses foreign currency contracts to reduce the exchange rate impact on a portion of the net revenue or operating expense of certain anticipated transactions. These currency collars and forward contracts are designated and documented as cash flow hedges. The effectiveness of the cash flow hedge contracts is assessed quarterly using regression analysis as well as other timing and probability criteria. To receive cash flow hedge accounting treatment, all hedging relationships are formally documented at the inception of the hedge and the hedges are expected to be highly effective in offsetting changes to future cash flows on hedged transactions. The gross gains and losses on these hedges are included in “Accumulated other comprehensive loss” and are reclassified into earnings at the time the forecasted revenue or expense is recognized. In the event the underlying forecasted transaction does not occur, or it becomes probable that it will not occur, Autodesk reclassifies the gain or loss on the related cash flow hedge from “Accumulated other comprehensive loss” to “Interest and other expense, net” in the Company's Condensed Consolidated Financial Statements at that time.

The net notional amounts of these contracts are presented net settled and were $613.6$941.3 million at October 31, 20172021, and $369.4 million$1.14 billion at January 31, 2017.2021. Outstanding contracts are recognized as either assets or liabilities on the balance sheetCompany's Condensed Consolidated Balance Sheet at fair value. The majority of the net lossgain of $0.8$14.2 million remaining in “Accumulated“Accumulated other comprehensive loss”loss” as of October 31, 20172021, is expected to be recognized into earnings within the next twelve24 months.

14

The location and amount of gain or loss recognized in income on cash flow hedges together with the total amount of income or expense presented in the Company's Condensed Consolidated Statements of Operations where the effects of the hedge are recorded were as follows for the three and nine months ended October 31, 2021 and 2020:

Three Months Ended October 31, 2021
Net revenueCost of revenueOperating expenses
Subscription revenueMaintenance revenueCost of subscription and maintenance revenueMarketing and salesResearch and developmentGeneral and administrative
Total amounts of income and expense line items presented in the condensed consolidated statements of operations in which the effects of cash flow hedges are recorded$1,070.7$17.6$74.8$419.4$282.1$112.8
(Loss) on cash flow hedging relationships in Subtopic ASC 815-20
Foreign exchange contracts
Amount of (loss) reclassified from accumulated other comprehensive income into income$(3.0)$—$(0.3)$(1.0)$(0.3)$(0.5)

Nine Months Ended October 31, 2021


Net revenueCost of revenueOperating expenses


Subscription revenueMaintenance RevenueCost of subscription and maintenance revenueMarketing and salesResearch and developmentGeneral and administrative
Total amounts of income and expense line items presented in the condensed consolidated statements of operations in which the effects of cash flow hedges are recorded

$3,034.9

$53.6

$219.3

$1,195.3

$824.5

$344.1













(Loss) on cash flow hedging relationships in Subtopic ASC 815-20












Foreign exchange contracts












Amount of (loss) reclassified from accumulated other comprehensive income into income

$(12.4)

$(1.2)

$—

$(0.4)

$(0.5)

$(0.1)
15

Three Months Ended October 31, 2020
Net RevenueCost of revenueOperating expenses
Subscription RevenueMaintenance RevenueCost of subscription and maintenance revenueMarketing and salesResearch and developmentGeneral and administrative
Total amounts of income and expense line items presented in the condensed consolidated statements of operations in which the effects of cash flow hedges are recorded$884.4$39.8$60.7$359.3$233.0$98.8
Gain (loss) on cash flow hedging relationships in Subtopic ASC 815-20
Foreign exchange contracts
Amount of gain (loss) reclassified from accumulated other comprehensive income into income$(0.3)$0.1$0.4$1.6$0.3$0.7
Nine Months Ended October 31, 2020
Net revenueCost of revenueOperating expenses
Subscription revenueMaintenance RevenueCost of subscription and maintenance revenueMarketing and salesResearch and developmentGeneral and administrative
Total amounts of income and expense line items presented in the condensed consolidated statements of operations in which the effects of cash flow hedges are recorded$2,528.6$153.1$176.6$1,051.5$682.9$296.8
Gain (loss) on cash flow hedging relationships in Subtopic ASC 815-20
Foreign exchange contracts
Amount of gain (loss) reclassified from accumulated other comprehensive income into income$3.4$0.7$0.1$0.3$0.2$0.1

Interest rate locks designated as cash flow hedges

During the fiscal quarter ended October 31, 2021, Autodesk entered into interest rate lock arrangements to mitigate the risk of changes in interest rates prior to completion of a debt offering. The interest rate locks hedged the cash flow risk for each of the interest payments on the planned fixed-rate debt issue. The interest rate lock hedges were terminated in October 2021 in connection with the debt offering completed in that month. See Note 14, “Borrowing Arrangements,” for further discussion. The aggregate fair value of the terminated interest rate lock hedges, net of tax, in the amount of $4.0 million have been classified as an increase to accumulated other comprehensive income and will be amortized as a reduction to interest expense over the term of the related debt issuance. The Company had cash inflows of $4.0 million in the fiscal quarter ended October 31, 2021, associated with the termination of the interest rate lock arrangements, included in “Other financing activities” in our Condensed Consolidated Statement of Cash Flows.

Derivatives not designated as hedging instruments

Autodesk uses foreign currency contracts that are not designated as hedging instruments to reduce the exchange rate risk associated primarily with foreign currency denominated receivables, payables, and payables. These forward contracts are marked-to-market at the end of each fiscal quarter with gains and losses recognized as “Interest and other expense, net.” These derivative instruments do not subject the Company to material balance sheet risk due to exchange rate movements because gains and losses on these derivative instruments are intended to offset the gains or losses resulting from the settlement of the underlying foreign currency denominated receivables and payables.cash. The net notional amounts of these foreign currency contracts are presented net settled and were $189.0$71.2 million at October 31, 20172021, and $270.6$434.5 million at January 31, 20172021.
.

16


In addition to these foreign currency contracts, Autodesk holds derivative instruments issued by privately held companies, which are not designated as hedging instruments. These derivatives consist of certain conversion options on the convertible debt securities held by Autodesk and an option to acquire a privately held company. These derivatives are recorded at fair value as of each balance sheet date and are recorded in “Other assets.” Changes in the fair values of these instruments are recognized in “Interest and other expense, net.”

Fair Value of Derivative Instruments

The fair values of derivative instruments in Autodesk’s Condensed Consolidated Balance Sheets were as follows as of October 31, 20172021, and January 31, 2017:2021:

 Balance Sheet LocationFair Value at
October 31, 2021January 31, 2021
Derivative Assets
Foreign currency contracts designated as cash flow hedgesPrepaid expenses and other current assets$18.2 $4.7 
Derivatives not designated as hedging instrumentsPrepaid expenses and other current assets and long-term other assets8.7 5.3 
Total derivative assets$26.9 $10.0 
Derivative Liabilities
Foreign currency contracts designated as cash flow hedgesOther accrued liabilities$5.9 $16.5 
Derivatives not designated as hedging instrumentsOther accrued liabilities1.9 1.0 
Total derivative liabilities$7.8 $17.5 
 Balance Sheet Location Fair Value at
 October 31, 2017 January 31, 2017
Derivative Assets     
Foreign currency contracts designated as cash flow hedgesPrepaid expenses and other current assets $4.4
 $10.1
Derivatives not designated as hedging instrumentsPrepaid expenses and other current assets and Other assets 4.7
 3.2
Total derivative assets  $9.1
 $13.3
Derivative Liabilities     
Foreign currency contracts designated as cash flow hedgesOther accrued liabilities $8.5
 $4.5
Derivatives not designated as hedging instrumentsOther accrued liabilities 0.4
 6.0
Total derivative liabilities  $8.9
 $10.5


The effects of derivatives designated as hedging instruments on Autodesk’s Condensed Consolidated Statements of Operations were as follows for the three and nine months ended October 31, 20172021 and 20162020 (amounts presented include any income tax effects):
Three Months Ended October 31,Nine Months Ended October 31,
2021202020212020
Amount of gain (loss) recognized in accumulated other comprehensive income on derivatives (effective portion)
$14.7 $6.7 $24.6 $(6.8)
Amount and location of (loss) gain reclassified from accumulated other comprehensive loss into income (effective portion)
Net revenue$(3.0)$(0.2)$(13.6)$4.1 
Cost of revenue(0.3)0.4 — 0.1 
Operating expenses(1.8)2.6 (1.0)0.6 
Total$(5.1)$2.8 $(14.6)$4.8 


 Foreign Currency Contracts
 Three Months Ended October 31, Nine Months Ended October 31,
 2017 2016 2017 2016
Amount of gain (loss) recognized in accumulated other comprehensive (loss) income on derivatives (effective portion)
$2.9
 $1.8
 $(8.5) $(3.1)
Amount and location of gain (loss) reclassified from accumulated other comprehensive (loss) income into (loss) income (effective portion)       
Net revenue$2.4
 $1.0
 $7.2
 $8.4
Operating expenses2.9
 1.5
 (0.3) 0.2
Total$5.3
 $2.5
 $6.9
 $8.6
Amount and location of gain (loss) recognized in (loss) income on derivatives (ineffective portion and amount excluded from effectiveness testing)       
Interest and other expense, net$—
 $(0.1) $(0.1) $(0.5)

The effects of derivatives not designated as hedging instruments on Autodesk’s Condensed Consolidated Statements of Operations were as follows for the three and nine months ended October 31, 20172021 and 20162020 (amounts presented include any income tax effects):

 Three Months Ended October 31,Nine Months Ended October 31,
2021202020212020
Amount and location of (loss) gain recognized on derivatives in net income
Interest and other expense, net$5.9 $(0.8)$11.1 $(6.2)
 Three Months Ended October 31, Nine Months Ended October 31,
 2017 2016 2017 2016
Amount and location of gain (loss) recognized in (loss) income on derivatives       
Interest and other expense, net$0.9
 $(1.4) $(7.4) $(12.3)



17

6. Equity Compensation
5. Stock-based Compensation Expense

Restricted Stock Units:Units

A summary of restricted stock activity for the nine months ended October 31, 20172021, is as follows:
 
Unvested
Restricted
Stock Units
 
Weighted
average grant
date fair value
per share
 (in thousands)  
Unvested restricted stock units at January 31, 20177,622.4
 $60.13
Granted2,036.6
 106.45
Vested(3,156.6) 57.21
Canceled/Forfeited(534.3) 67.05
        Performance Adjustment (1)24.7
 61.79
Unvested restricted stock units at October 31, 20175,992.8
 $78.94

Unvested
restricted
stock units		Weighted
average grant
date fair value
per share
 (in thousands) 
Unvested restricted stock units at January 31, 20214,503.9 $191.91 
Granted1,895.0 290.63 
Vested(1,847.8)177.88 
Canceled/Forfeited(430.3)221.52 
        Performance Adjustment (1)(7.9)137.02 
Unvested restricted stock units at October 31, 20214,112.9 $243.72 
 _______________
(1)Based on Autodesk's financial results and relative total stockholder return for the fiscal 2017 performance period. The performance stock units were attained at rates ranging from 99.7% to 114.7% of the target award.
(1)Based on Autodesk's financial results and relative total stockholder return for the fiscal 2021 performance period. The performance stock units were attained at rates ranging from 103.0% to 108.0% of the target award.

The fair value of the shares vested during the nine months ended October 31, 20172021 and 20162020, was $332.8$516.5 million and $180.3$400.6 million, respectively.

During the nine months ended October 31, 2017,2021, Autodesk granted 1.81.6 million restricted stock units. Restricted stock units are not considered outstanding stock at the time of grant, as the holders of these units are not entitled to any of the rights of a stockholder, including voting right.

Autodesk recorded stock-based compensation expense related to restricted stock units of $51.5$109.9 million and $45.2$74.7 million during the three months ended October 31, 20172021 and 2016,2020, respectively. Autodesk recorded stock-based compensation expense related to restricted stock units of $153.5$314.4 million and $125.5$222.9 million during the nine months ended October 31, 20172021 and 2016,2020, respectively. The $153.5 million of stock-based compensation expense for the nine months ended October 31, 2017 includes $9.1 million related to the acceleration of eligible restricted stock awards in conjunction with the Company's CEO transition.

During the nine months ended October 31, 2017,2021 and 2020, Autodesk settled liability-classified awards in the amount of $2.7 million and $28.7 million, respectively. The ultimate number of shares earned was based on the Autodesk closing stock price on the vesting date. As these awards were settled in a fixed dollar amount of shares, the awards were accounted for as a liability-classified award and were expensed using the straight-line method over the vesting period.

During the nine months ended October 31, 2021, Autodesk granted 0.2 million performance stock units for which the ultimate number of shares earned is determined based on the achievement of performance criteria at the end of the stated service and performance period. During the period, we granted two different types of performance stock units.

The performance criteria for the first type of performance stock units werevested during the nine months ended October 31, 2021, are based on a mix of net subscription additions, Annualized Recurring Revenue ("ARR"), non-GAAP total spend,revenue and total subscription renewal ratefree cash flow goals adopted by the Compensation and Human Resource Committee and, as well asapplicable, total stockholder return compared against companies in the S&P Computer Software Select Index or the S&P North American Technology Software Index with a market capitalization over $2.0 billion (“Relative TSR”). TheseThe fair value of the performance stock units vestis expensed using the accelerated attribution method over athe three-year vesting period and have the following vesting schedule:

•Up to one third of the performance stock units may vest following year one, depending upon the achievement of the performance criteria for fiscal 20182022 as well as 1-year Relative TSR (covering year one).

•Up to one third of the performance stock units may vest following year two, depending upon the achievement of the performance criteria for year two as well as 2-year Relative TSR (covering years one and two).

•Up to one third of the performance stock units may vest following year three, depending upon the achievement of the performance criteria for year three as well as 3-year Relative TSR (covering years one, two and three).

The performance criteria for the second type of performance stock units granted to our Chief Executive OfficerAdditionally, during the nine months ended October 31, 2017 were2021, Autodesk granted 0.1 million performance stock units, as part of a program offering certain employees the option to receive equity in lieu of the opportunity to receive an annual cash incentive award. The ultimate number of shares earned is determined based on fiscal 2020 free cash flow per sharethe achievement of performance criteria at the end of the stated service and ARR goalsperformance period. The performance criteria for the performance stock units are based on revenue
18

and Non-GAAP income from operations targets adopted by the Compensation and Human Resource Committee. TheseThe fair value of these performance stock units vest in March 2020 based onis expensed using the Company’s fiscal 2020 performance againstaccelerated attribution method over the performance criteria.one-year vesting period.

Performance stock units are not considered outstanding stock at the time of grant, as the holders of these units are not entitled to any of the rights of a stockholder, including voting rights. Autodesk has determined the grant date fair value for these awards using stock price on the date of grant or if the awards are also subject to a market condition, a Monte Carlo simulation



model. The fair value of the performance stock units is expensed using the accelerated attribution over the vesting period. Autodesk recorded stock-based compensation expense related to performance stock units of $7.1$18.1 million and $4.9$8.7 million for the three months ended October 31, 20172021 and 2016,2020, respectively. Autodesk recorded stock-based compensation expense related to performance stock units of $27.7$50.1 million and $17.1$26.2 million for the nine months ended October 31, 20172021 and 2016,2020, respectively.

Common Stock

Autodesk agreed to issue a fixed amount of $4.9 million in common stock at a future date to certain employees in connection with a fiscal 2021 acquisition. Issuance of the common stock is dependent on the respective employees’ continued employment through the vesting period. The $27.7 millionnumber of shares to be issued will be determined based on the closing price of Autodesk’s common stock at the issuance date. During the three months ended October 31, 2021, Autodesk issued 8,300 shares at an aggregate fair value of $2.7 million. Remaining shares to be issued are estimated to be 8,000 based on the closing price of Autodesk’s common stock on October 29, 2021, the last trading day of the fiscal quarter. The awards are accounted for as liability-classified awards and are recognized as compensation expense using the straight-line method over the vesting period.

Autodesk issued 73,632 shares of restricted common stock to certain employees in connection with a fiscal 2021 acquisition. These shares of restricted common stock are subject to forfeiture by the employee if employment terminates prior to the three-year employment period. The fair value of the restricted common stock is recorded as compensation for post-acquisition services and recognized as expense using the straight-line method over the three-year repurchase period.

Autodesk issued 9,277 shares of restricted common stock to certain employees in connection with a fiscal 2022 acquisition. These shares of restricted common stock were recorded as “Prepaid expenses and other current assets” and “Long-term other assets” on our Condensed Consolidated Balance Sheets and will be amortized to stock-based compensation expense for post-acquisition services using the straight-line method over the two-year vesting period. See Note 8, “Acquisitions,” for further discussion.

Autodesk agreed to issue a fixed amount of $13.1 million in shares of common stock to certain employees in connection with a fiscal 2022 acquisition. Issuance of the common stock is dependent on the respective employees’ continued employment through the vesting period. The number of shares to be issued will be determined based on the volume weighted average closing price (“VWAP”) of Autodesk’s common stock for the 90 consecutive trading day period ending on the release date. Shares to be issued are estimated to be 43,000 based on the VWAP of Autodesk’s common stock for the 90 consecutive trading day period ending October 29, 2021, the last trading day of the fiscal quarter. The awards are accrued as liability-classified awards and are recognized as compensation expense using the straight-line method over the vesting period. See Note 8, “Acquisitions,” for further discussion.

Autodesk recorded stock-based compensation expense related to common stock shares of $4.7 million and $11.6 million for the three and nine months ended October 31, 2017 includes $7.5 million2021, respectively. Autodesk recorded no stock-based compensation expense related to common stock shares for both the acceleration of eligible performance stock awards in conjunction with the Company's CEO transition.three and nine months ended October 31, 2020.

1998 Employee Qualified Stock Purchase Plan (“ESPP”)

Under Autodesk’s ESPP, which was approved by stockholders in 1998, eligible employees may purchase shares of Autodesk’s common stock at their discretion using up to 15% of their eligible compensation, subject to certain limitations, at 85% of the lower of Autodesk's closing price (fair market value) on the offering date or the exercise date. The offering period for ESPP awards consists of four,4, six-month exercise periods within a 24-month offering period.

19

A summary of the ESPP activity for the three and nine months ended October 31, 20172021 and 20162020, is as follows:

  Three Months Ended October 31, Nine Months Ended October 31,
  2017 2016 2017 2016
Issued shares 0.9
 1.1
 2.0
 2.3
Average price of issued shares $39.92
 $37.36
 $39.03
 $36.99
Weighted average grant date fair value of awards granted under the ESPP (1) $33.04
 $20.75
 $32.41
 $19.20
Three Months Ended October 31,Nine Months Ended October 31,
2021202020212020
Issued shares (in millions)0.4 0.4 0.9 0.9 
Average price of issued shares$133.00 $122.93 $130.13 $122.73 
Weighted average grant date fair value of shares granted under the ESPP (1)$83.75 $78.26 $84.21 $55.98 
 _______________
(1)Calculated as of the award grant date using the Black-Scholes Merton (“BSM") option pricing model.
(1)Calculated as of the award grant date using the Black-Scholes Merton (“BSM”) option pricing model.

Stock-based Compensation Expense

The following table summarizes stock-based compensation expense for the three and nine months ended October 31, 20172021 and 2016,2020, respectively, as follows:
 Three Months Ended October 31, Nine Months Ended October 31,
 2017 2016 2017 2016
Cost of maintenance and subscription revenue (1)$2.8
 $2.2
 $8.5
 $6.2
Cost of license and other revenue (1)1.0
 1.3
 3.1
 4.1
Marketing and sales27.7
 24.2
 80.1
 69.0
Research and development20.1
 20.9
 61.7
 60.0
General and administrative13.5
 8.0
 46.1
 23.2
Stock-based compensation expense related to stock awards and ESPP purchases65.1
 56.6
 199.5
 162.5
Tax benefit(1.3) —
 (1.6) —
Stock-based compensation expense related to stock awards and ESPP purchases, net of tax$63.8
 $56.6
 $197.9
 $162.5

Three Months Ended October 31,Nine Months Ended October 31,
2021202020212020
Cost of subscription and maintenance revenue$5.5 $4.5 $18.3 $12.3 
Cost of other revenue2.3 1.6 6.5 4.7 
Marketing and sales60.0 45.4 172.8 129.5 
Research and development56.6 35.4 163.4 103.6 
General and administrative19.3 10.5 51.7 41.4 
Stock-based compensation expense related to stock awards and ESPP purchases143.7 97.4 412.7 291.5 
Tax benefit(26.3)(2.0)(46.4)(2.3)
Stock-based compensation expense related to stock awards and ESPP purchases, net of tax$117.4 $95.4 $366.3 $289.2 
 _______________
(1)Prior periods have been adjusted to conform with the current period's presentation. See Note 1, "Basis of Presentation," for additional information.



Stock-based Compensation Expense Assumptions

Autodesk determines the grant date fair value of its share-based payment awards using a BSM option pricing model or the quoted stock price on the date of grant, unless the awards are subject to market conditions, in which case Autodesk uses a binomial-lattice model (e.g., Monte Carlo simulation model). The Monte Carlo simulation model uses multiple input variables to estimate the probability that market conditions will be achieved. Autodesk uses the following assumptions to estimate the fair value of stock-based awards:
Three Months Ended October 31, 2021Three Months Ended October 31, 2020
Performance Stock UnitsESPPPerformance Stock UnitsESPP
Range of expected volatilityN/A29.5 - 36.6%N/A41.5 - 45.0%
Range of expected lives (in years)N/A0.5- 2.0N/A0.5 - 2.0
Expected dividendsN/A—%N/A—%
Range of risk-free interest ratesN/A0.1- 0.2%N/A0.1%
 Nine Months Ended October 31, 2021Nine Months Ended October 31, 2020
 Performance Stock UnitsESPPPerformance Stock UnitsESPP
Range of expected volatilities36.9%29.5 - 41.8%50.7%39.4 - 45.8%
Range of expected lives (in years)N/A0.5 - 2.0N/A0.5 - 2.0
Expected dividends—%—%—%—%
Range of risk-free interest rates0.1%0.1 - 0.2%0.3%0.1 - 0.5%
Three Months Ended October 31, 2017Three Months Ended October 31, 2016
Performance Stock Unit (1)ESPPPerformance Stock Unit (1)ESPP
Range of expected volatilitiesN/A31.7 - 33.4%N/A31.0 - 33.9%
Range of expected lives (in years)N/A0.5 - 2.0N/A0.5 - 2.0
Expected dividendsN/A—%N/A—%
Range of risk-free interest ratesN/A1.2 - 1.4%N/A0.5 - 0.8%
Nine Months Ended October 31, 2017
Nine Months Ended October 31, 2016
Performance Stock Unit
ESPP
Performance Stock Unit
ESPP
Range of expected volatilities31.8%31.4 - 33.7%38.4 - 38.6%30.0 - 40.2%
Range of expected lives (in years)N/A0.5 - 2.0N/A0.5 - 2.0
Expected dividends—%—%—%—%
Range of risk-free interest rates1.0 - 1.2%0.9 - 1.4%0.6 - 0.7%0.5 - 0.9%

 _______________
(1)Autodesk did not grant PSUs that were subject to market conditions in the three months ended October 31, 2017 or 2016.

Autodesk estimates expected volatility for stock-based awards based on the average of the following two measures: (1) a measure of historical volatility in the trading market for the Company’s common stock, and (2) the implied volatility of traded forward call options to purchase shares of the Company’s common stock. The expected volatility for performance stock units subject to market conditions includes the expected volatility of Autodesk's peer companies within the S&P Computer Software Select Index or S&P North American Technology Software Index with a market capitalization over $2.00$2.0 billion, depending on the award type.
20


The range of expected lives of ESPP awards are based upon the four,4 six-month exercise periods within a 24-month offering period.

Autodesk does not currently pay, and does not anticipate paying in the foreseeable future, any cash dividends. Consequently, an expected dividend yield of zero is used in the BSM option pricing model and the Monte Carlo simulation model.

The risk-free interest rate used in the BSM option pricing model and the Monte Carlo simulation model for stock-based awards is the historical yield on U.S. Treasury securities with equivalent remaining lives.

Autodesk recognizes expense only for the stock-based awards that ultimately vest. As permitted by ASU 2016-09, Autodesk accounts for forfeitures of our stock-based awards as those forfeitures occur.



7. Income Tax
6. Income Tax

 Autodesk's Autodesk had income tax expense was $8.6of $50.7 million, and $13.5relative to pre-tax income of $187.4 million for the three months ended October 31, 20172021, and 2016, respectively,income tax expense of $23.9 million, relative to pre-tax lossesincome of $111.2$156.1 million and $129.3 million, respectively, for the same periods. The decrease in income tax expense was primarily due to the lower forecasted worldwide tax expense as the result of changes in the geographic mix of worldwide pre-tax book income. For the three months ended October 31, 2016, the discrete items were primarily from tax benefit on acceleration of revenue while the discrete items for the three months ended October 31, 2017 related to2020. Income tax expense for the expirationthree months ended October 31, 2021, reflects an increase in tax expense as a result of the statutejurisdictional mix of limitations related to an uncertain tax position andyear-to-date earnings. The quarter over quarter comparison also reflects the excess tax benefitU.S. valuation allowance release as of stock compensation. Autodesk'sJanuary 31, 2021.

Autodesk had income tax expense was $34.4of $49.7 million, and $53.1relative to pre-tax income of $457.6 million for the nine months ended October 31, 20172021, and 2016, respectively,income tax expense of $78.7 million, relative to pre-tax lossesincome of $359.0$375.6 million and $355.6 million, respectively, for the same periods. The decrease in income tax expense was primarily discrete items in the quarter related to the expiration of the statute of limitations related to an uncertain tax position, the excess tax benefit of stock compensation and the reversal of foreign withholding tax accruals.nine months ended October 31, 2020. Income tax expense consists primarily of foreign taxes, U.S.for the nine months ended October 31, 2021, reflects a decrease in tax expense due to a discrete tax benefit primarily related to indefinite-lived intangibles,a Supreme Court decision in India on the taxability of software license payments to nonresidents and the associated withholding taxes.taxes, offset by an increase in tax expense from jurisdictional mix of year-to-date earnings.

Autodesk regularly assesses the need for a valuation allowance against its deferred tax assets. In making that assessment, Autodesk considers both positive and negative evidence related to the likelihood of realization of the deferred tax assets to determine, based on the weight of available evidence, whether it is more likely than not that some or all of the deferred tax assets will not be realized. In evaluating the need forWe have maintained a valuation allowance Autodesk considered cumulative losses in the United States arising from the Company's business model transition as a significant piece of negative evidenceon our Netherlands, Canada, California, Michigan and established a valuation allowance against the Company’s U.S. capital loss deferred tax assets in fiscal 2016. Based onas it is more likely than not that some or all of the positive and negative evidence as of October 31, 2017, the Company continues to maintain a valuation allowance for the U.S. deferred tax assets.assets will not be realized.

As of October 31, 2017,2021, the Company had $291.4$204.6 million of gross unrecognized tax benefits, excluding interest, of which approximately $277.4$33.5 million represents the amount of unrecognized tax benefits thatwould reduce our valuation allowance, if recognized. The remaining $171.1 million would impact the effective tax rate, if recognized. However, this rate impact would be $30.8 million to the extent that recognition of unrecognized tax benefits currently presented as a reduction of deferred tax assets would increase the valuation allowance. It is possible that the amount of unrecognized tax benefits will changedecrease in the next twelve months; however,12 months for an estimateaudit settlement of the range of the possible change cannot be made at this time.approximately $8.0 million.

8. Acquisitions

The Internal Revenue Service has started an examinationresults of the Company's U.S. consolidated federal income tax returns for fiscal years 2014 and 2015.  While it is possible that the Company's tax positions may be challenged, the Company believes its positions are consistent with the tax law, and the balance sheet reflects appropriate liabilities for uncertain federal tax positionsoperations for the years being examined.

following acquisitions are included in the accompanying Condensed Consolidated Statements of Operations since their respective acquisition dates. Pro forma results of operations have not been presented because the effects of these acquisitions were not material to Autodesk’s Condensed Consolidated Financial Statements.
7.     Acquisitions

During the ninethree months ended October 31, 2017,2021, Autodesk did not complete anycompleted 1 business combinations or technology acquisitions.combination. The acquisition-date fair value of the consideration transferred totaled $33.5 million, which consisted of $33.3 million of cash and $0.2 million of assumed liabilities on behalf of the seller.

ForUpchain

On May 11, 2021, Autodesk acquired 100% of the outstanding stock of Upchain Inc. (“Upchain”), a cloud-based provider of product lifecycle management and product data management systems, for approximately $126.7 million in cash and Autodesk will issue a fixed amount of $13.1 million in common stock at future dates to certain employees in connection with the acquisition for a total consideration of $139.8 million. Of the total consideration transferred, $123.6 million is considered purchase consideration. Of the remaining amount, $13.1 million is accounted for as liability-classified awards and recognized as compensation expense using the straight-line method over the vesting period, and $3.1 million was recorded as stock-based compensation expense during the fiscal quarter ended July 31, 2021. Issuance of the $13.1 million fixed value in common
21

stock is dependent on the respective employees’ continued employment and vests 40% and 60% on the first and second anniversaries of the closing date, respectively. The number of shares will be determined based on the VWAP of Autodesk’s common stock for the 90 consecutive trading day period ending on the release date.The number of shares is estimated to be 43,000 based on the VWAP of Autodesk’s common stock for the 90 consecutive trading day period ending October 29, 2021, the last trading day of the fiscal quarter. See also Note 6, “Equity Compensation”.

Autodesk expects to integrate Upchain’s unified cloud platform in Autodesk solutions to centralize data management and process management.

Innovyze

On March 31, 2021, Autodesk acquired all of the outstanding stock of Storm UK Holdco Limited, the parent of Innovyze, Inc. (“Innovyze”), a global leader in water infrastructure software. Innovyze is expected to provide comprehensive water modeling solutions that augment Autodesk’s BIM offerings in civil engineering, and is expected to extend Autodesk’s presence into operations and maintenance of water infrastructure assets.

The acquisition-date fair value of the consideration transferred totaled $1,038.1 million, which consisted of $1,035.5 million of cash and 9,277 shares of Autodesk’s restricted common stock at an aggregate fair value of $2.6 million. Of the total consideration transferred, $1,035.5 million is considered purchase consideration. The remaining amount of $2.6 million was recorded in “Prepaid expenses and other current assets” and “Long-term other assets”. The 9,277 shares of restricted common stock are subject to forfeiture until the second anniversary of the acquisition closing date. 50% are released from restriction on both the first and second anniversaries subject to continued employment. See also Note 6, “Equity Compensation”.

Purchase Price Allocation

The acquisitions were accounted for as business combinations, and Autodesk recordsrecorded the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values at the date of the respective acquisition. The fair values assigned to the identifiable intangible assets acquired were based on estimates and assumptions determined by management. Autodesk recordsrecorded the excess of consideration transferred over the aggregate fair values as goodwill. The goodwill recorded iswas primarily attributable to synergies expected to arise after the acquisitions.respective acquisition. Goodwill of $86.7 million and $376.2 million is deductible for U.S. income tax purposes for Upchain and Innovyze, respectively. The transaction costs related to the acquisitions were not material.

The following table summarizes the fair value of the assets acquired and liabilities assumed by major class for the business combinations that were completed during the three and nine months ended October 31, 2021:
Innovyze (1)UpchainOtherTotal
Developed technologies$93.0 $17.6 $9.4 $120.0 
Customer relationships221.0 10.4 — 231.4 
Trade name4.0 0.4 — 4.4 
Backlog0.5 — — 0.5 
Goodwill764.4 98.3 24.1 886.8 
Deferred revenue and long-term deferred revenue(12.3)(2.6)— (14.9)
Long-term deferred income taxes(42.4)(0.7)— (43.1)
Net tangible assets7.3 0.2 07.5 
Total$1,035.5 $123.6 $33.5 $1,192.6 
_______________
(1) During the three and nine months ended October 31, 2021, Autodesk recorded an adjustment to the purchase price of the Innovyze acquisition. This adjustment reduced goodwill and decreased the purchase price by $2.8 million.

For the business combinations, the allocation of purchase price consideration to certain assets and liabilities as well as the final amount of purchase consideration are not yet finalized. For the items not yet finalized, Autodesk's estimates and assumptions are subject to change within the measurement period (up to one year from the acquisition date). The primary areas of the preliminary purchase price allocation that are not yet finalized are amounts for tax assets and liabilities, deferred revenue, and residual goodwill.


22

8. Other Intangible Assets, Net

Other intangible assets including developed technologies, customer relationships, trade names, patents, user lists and the related accumulated amortization were as follows:

 October 31, 2017 January 31, 2017
Developed technologies, at cost$577.0
 $583.6
Customer relationships, trade names, patents, and user lists, at cost (1)367.1
 375.9
Other intangible assets, at cost (2)944.1
 959.5
Less: Accumulated amortization(882.5) (862.0)
Other intangible assets, net$61.6
 $97.5
_______________ 
(1)Included in “Other assets” in the accompanying Condensed Consolidated Balance Sheets.
(2)Includes the effects of foreign currency translation.

9. GoodwillIntangible Assets, Net

The following tables summarize the Company's intangible assets, net, as of October 31, 2021, and January 31, 2021:
October 31, 2021
Gross Carrying Amount (1)Accumulated AmortizationNet
Customer relationships$666.7 $(367.8)$298.9 
Developed technologies829.7 (647.6)182.1 
Trade names and patents115.9 (98.7)17.2 
Other0.3 (0.3)— 
Total intangible assets$1,612.6 $(1,114.4)$498.2 
 _______________ 
(1)Includes the effects of foreign currency translation.

January 31, 2021
Gross Carrying Amount (1)Accumulated AmortizationNet
Customer relationships$437.3 $(345.1)$92.2 
Developed technologies698.4 (609.8)88.6 
Trade names and patents111.5 (93.0)18.5 
Total intangible assets$1,247.2 $(1,047.9)$199.3 
 _______________ 
(1)Includes the effects of foreign currency translation.


10. Cloud Computing Arrangements

Autodesk enters into certain cloud-based software hosting arrangements that are accounted for as service contracts. Costs incurred for these arrangements are capitalized for application development activities, if material, and immediately expensed for preliminary project activities and post-implementation activities. Autodesk amortizes the capitalized development costs straight-line over the fixed, non-cancellable term of the associated hosting arrangement plus any reasonably certain renewal periods. The capitalized costs are included in “Prepaid expenses and other current assets” and “Long-term other assets” on our Condensed Consolidated Balance Sheets. Capitalized costs were $116.5 million and $72.2 million at October 31, 2021, and January 31, 2021, respectively. Accumulated amortization was $11.4 million and $4.9 million at October 31, 2021, and January 31, 2021, respectively. Amortization expense for the three months ended October 31, 2021 and 2020, was $3.7 million and $1.0 million, respectively. Amortization expense for the nine months ended October 31, 2021 and 2020, was $6.5 million and $2.7 million, respectively.

11. Goodwill

Goodwill consists of the excess of the consideration transferred over the fair value of net assets acquired in business combinations. The following table summarizes the changes in the carrying amount of goodwill for the nine months ended October 31, 2017:2021, (in millions):
 
Balance as of January 31, 2021$2,855.7 
Less: accumulated impairment losses as of January 31, 2021(149.2)
Net balance as of January 31, 20212,706.5 
Additions arising from acquisitions during the period886.8 
Effect of foreign currency translation and measurement period adjustments (1)(14.1)
Balance as of October 31, 2021$3,579.2 
 _______________ 
Balance as of January 31, 2017$1,710.3
Less: accumulated impairment losses as of January 31, 2017(149.2)
Net balance as of January 31, 20171,561.1
Additions arising from acquisitions during the period—
Effect of foreign currency translation, purchase accounting adjustments, and other during the period27.6
Balance as of October 31, 2017$1,588.7
(1)Measurement period adjustments reflect revisions made to the Company's preliminary determination of estimated fair value of assets and liabilities assumed and adjustments to the acquisition purchase price.


23

Autodesk operates as a single operating segment and single reporting unit. As such, when Autodesk tests goodwill for impairment annually in its fourth fiscal quarter, it is performed on the Company's single reporting unit. Autodesk performs impairment testing more often if circumstances indicate a potential impairment may exist, or if events have affected the composition of reporting units.

When goodwill is assessed for impairment, Autodesk has the option to perform an assessment of qualitative factors of impairment (“optional assessment”) prior to necessitating a quantitative impairment test. Should the optional assessment be used for any given fiscal year, qualitative factors to consider include cost factors; financial performance; legal, regulatory, contractual, political, business, or other factors; entity specific factors; industry and market considerations, macroeconomic conditions, and other relevant events and factors affecting the reporting unit. If, after assessing the totality of events or circumstances, it is more likely than not that the fair value of the reporting unit is greater than its carrying value, then performing the quantitative impairment test is unnecessary.

The quantitative impairment test is necessary when either Autodesk does not use the optional assessment or, as a result of the optional assessment, it is not more likely than not that the fair value of the reporting unit is greater than its carrying value.

As described in Note 2, "Recently Issued Accounting Standards," Autodesk early adopted ASU 2017-04, which simplifies the subsequent measurement of goodwill to eliminate Step 2 from the goodwill impairment test, removing the need to determine the implied fair value of goodwill and comparing it to the carrying amount of that goodwill to measure the impairment loss, if any. In situations in which an entity'sentity’s reporting unit is publicly traded, the fair value of the Companycompany may be approximated by its market capitalization in performing the quantitative impairment test.

Goodwill impairment exists when the estimated fair value of goodwill is less than its carrying value. If impairment exists, the carrying value of the goodwill is reduced to fair value through an impairment charge recorded in our statementsCondensed Consolidated Statements of operations.Operations. The process of evaluating the potential impairment of goodwill is subjective and requires significant judgment at many points during the analysis. The value of Autodesk’s goodwill could also be impacted by future adverse changes such as:


(i) declines in Autodesk’s actual financial results, (ii) a sustained decline in Autodesk’s market capitalization, (iii) a significant slowdown in the worldwide economy or the industries Autodesk serves, or (iv) changes in Autodesk’s business strategy.

There was no0 goodwill impairment during both the three and nine months ended October 31, 2017.

2021 and 2020.
10
.
12. Deferred Compensation


At October 31, 2017,2021, Autodesk had marketable securities totaling $693.0 million, of which $56.5 million related to investments in debt and equity securities that are held in a rabbi trust under non-qualified deferred compensation plans. The total relatedplans and a corresponding deferred compensation liability was $56.5 million at October 31, 2017, of which $3.8totaling $96.3 million. Of this amount, $7.9 million was classified as current and $52.7$88.4 million was classified as non-current liabilities. The totalin the Condensed Consolidated Balance Sheets. Of the $81.0 million related deferred compensation liability at to the investments in a rabbi trust as of January 31, 2017 was $47.32021, $7.3 million, of which $3.1 million was classified as current and $44.2$73.7 million was classified as non-current. The current and non-current liabilities. Theasset portions of the investments in debt and equity securities that are held in a rabbi trust under non-qualified deferred compensation plans are recorded in the Condensed Consolidated Balance Sheets under the“Prepaid expenses and other current portion of "Marketable securities."assets” and “Long-term other assets,” respectively. The current and non-current portions of the liability are recorded in the Condensed Consolidated Balance Sheets under “Accrued compensation” and “Other“Long-term other liabilities,” respectively. See Note 1 “Basis of Presentation” for a change in the presentation and immaterial correction of an error on the Condensed Consolidated Balance Sheets for investments in debt and equity securities that are held in a rabbi trust.


Costs to obtain a contract with a customer
11
Sales commissions earned by our internal sales personnel and our reseller partners are considered incremental and recoverable costs of obtaining a contract with a customer. The ending balance of assets recognized from costs to obtain a contract with a customer was $110.8 million as of October 31, 2021, and $120.9 million as of January 31, 2021. These assets are recorded in “Prepaid expenses and other current assets” and “Long-term other assets” in the Condensed Consolidated Balance Sheets. Amortization expense related to assets recognized from costs to obtain a contract with a customer was $29.6 million and $83.6 million during the three and nine months ended October 31, 2021, respectively. Amortization expense related to assets recognized from costs to obtain a contract with a customer was $23.8 million and $70.2 million during the three and nine months ended October 31, 2020, respectively. Autodesk did not recognize any contract cost impairment losses during the three and nine months ended October 31, 2021 and 2020.
.
24

13. Computer Equipment, Software, Furniture and Leasehold Improvements, and Furniture, Net


Computer equipment, software, furniture, leasehold improvements, and furniture and equipment and the related accumulated depreciation were as follows:
October 31, 2021January 31, 2021
Computer hardware, at cost$133.1 $153.3 
Computer software, at cost55.1 57.9 
Leasehold improvements, land and buildings, at cost343.7 335.9 
Furniture and equipment, at cost98.8 88.4 
630.7 635.5 
Less: Accumulated depreciation(437.1)(442.7)
Computer hardware, software, leasehold improvements, and furniture and equipment, net$193.6 $192.8 
 October 31, 2017 January 31, 2017
Computer hardware, at cost$210.8
 $206.1
Computer software, at cost70.5
 73.5
Leasehold improvements, land and buildings, at cost221.9
 206.3
Furniture and equipment, at cost61.9
 58.2
 565.1

544.1
Less: Accumulated depreciation(417.0) (385.5)
Computer software, hardware, leasehold improvements, furniture and equipment, net$148.1
 $158.6


14. Borrowing Arrangements
12. Borrowing Arrangements
In October 2021, Autodesk issued $1.0 billion aggregate principal amount of 2.4% notes due December 15, 2031 (“2021 Notes”). Net of a discount of $3.0 million and issuance costs of $9.2 million, Autodesk received net proceeds of $987.8 million from issuance of the 2021 Notes. Both the discount and issuance costs are being amortized to interest expense over the term of the 2021 Notes using the effective interest method. The 2021 Notes were designated as sustainability bonds, the net proceeds of which are used to fund environmentally and socially responsible projects in the following areas: eco-efficient products, production technologies, and processes, sustainable water and wastewater management, renewable energy & energy efficiency, green buildings, pollution prevention and control, and socioeconomic advancement and empowerment.

In September 2021, the Company entered into an Amended and Restated Credit Agreement (the “Credit Agreement”) by and among the Company, the lenders party thereto and Citibank, N.A. (“Citibank”), as administrative agent, which provides for an unsecured revolving loan facility in the aggregate principal amount of $1.5 billion, with an option to be increased up to $2.0 billion. The Credit Agreement replaced and terminated the Company’s existing $650.0 million Amended and Restated Credit Agreement, with an option to be increased up to $1.0 billion, dated as of December 17, 2018, among the Company, the lenders party thereto and Citibank, N.A., as administrative agent. The revolving credit facility is available for working capital or other business needs. The Credit Agreement contains customary covenants that could, among other things, restrict the imposition of liens on Autodesk’s assets, and restrict Autodesk’s ability to incur additional indebtedness or make dispositions of assets if Autodesk fails to maintain compliance with the financial covenants. The Credit Agreement requires the Company to maintain a maximum leverage ratio of Consolidated Covenant Debt to Consolidated EBITDA (each as defined in the Credit Agreement) no greater than 3.50:1.00 during the term of the credit facility, subject to adjustment following the consummation of certain acquisitions up to 4.00:1.00 for up to four consecutive fiscal quarters. At October 31, 2021, Autodesk was in compliance with the Credit Agreement covenants. Revolving loans under the Credit Agreement will bear interest, at the Company’s option, at either (i) a per annum rate equal to the Base Rate (as defined in the Credit Agreement) plus a margin of between 0.000% and 0.375%, depending on the Company’s Public Debt Rating (as defined in the Credit Agreement), or (ii) a per annum rate equal to the rate at which dollar deposits are offered in the London interbank market, plus a margin of between 0.785% and 1.375%, depending on Company’s Public Debt Rating. The Credit Agreement includes customary provisions to provide for the eventual replacement of LIBOR as a benchmark interest rate. The interest rates for the revolving credit facility are subject to upward or downward adjustments, on an annual basis, if the Company achieves, or fails to achieve, certain sustainability-linked targets based on two key performance indicator metrics: (i) the amount of scope 1 and 2 greenhouse gas emissions from the global operations of the Company and its subsidiaries during a fiscal year less qualified emissions reduction instruments and (ii) the percentage of employees of the Company and its subsidiaries identifying as female working in technical roles. The maturity date on the Credit Agreement is September 30, 2026. At October 31, 2021, Autodesk had no outstanding borrowings under the Credit Agreement.

In January 2020, Autodesk issued $500.0 million aggregate principal amount of 2.85% notes due January 15, 2030 (“2020 Notes”). Net of a discount of $1.1 million and issuance costs of $4.8 million, Autodesk received net proceeds of $494.1 million from issuance of the 2020 Notes. Both the discount and issuance costs are being amortized to interest expense over the term of the 2020 Notes using the effective interest method. The proceeds of the 2020 Notes were used for the repayment of the $450.0 million 2015 Notes, as defined below, and the remainder is available for general corporate purposes.
25


In June 2017, Autodesk issued $500.0 million aggregate principal amount of 3.5% notes due June 15, 2027 (collectively, the(the “2017 Notes”). Net of a discount of $3.1 million and issuance costs of $4.9 million, Autodesk received net proceeds of $492.0 million from issuance of the 2017 Notes. Both the discount and issuance costs are being amortized to interest expense over the term of the 2017 Notes using the effective interest method. The proceeds of the 2017 Notes have been used for the repayment of $400.0 million of debt due December 15, 2017, and the remainder is available for general corporate purposes.

In June 2015, Autodesk may redeemissued $300.0 million aggregate principal amount of 4.375% notes due June 15, 2025 (“2015 Notes”). Net of a discount of $1.1 million, and issuance costs of $2.5 million, Autodesk received net proceeds of $296.4 million from issuance of the 2015 Notes. Both the discount and issuance costs are being amortized to interest expense over the respective term of the 2015 Notes using the effective interest method. The proceeds of the 2015 Notes are available for general corporate purposes.

In December 2012, Autodesk issued $350.0 million aggregate principal amount of 3.6% notes due December 15, 2022 (“2012 Notes”). Autodesk received net proceeds of $346.7 million from issuance of the 2012 Notes, net of a discount of $0.5 million and issuance costs of $2.8 million. Both the discount and issuance costs are being amortized to interest expense over the respective terms of the 2012 Notes using the effective interest method. The proceeds of the 2012 Notes are available for general corporate purposes.

The 2021 Notes, 2020 Notes, 2017 Notes, 2015 Notes and the 2012 Notes may all be redeemed at any time, subject to a make whole premium. In addition, upon the occurrence of certain change of control triggering events, Autodesk may be required to repurchase all the 2017 Notesaforementioned notes, at a price equal to 101% of their principal amount, plus accrued and unpaid interest to the date of repurchase. The 2017 NotesAll notes contain restrictive covenants that limit Autodesk's ability to create certain liens, to enter into certain sale and leaseback transactions and to consolidate or merge with, or convey, transfer, or lease all or substantially all of its assets, subject to important qualifications and exceptions. Based on quoted market prices, the fair value of the 2017 Notes was approximately $502.7 million as of October 31, 2017.

In June 2015, Autodesk issued $450.0 million aggregate principal amount of 3.125% notes due June 15, 2020 and $300.0 million aggregate principal amount of 4.375% notes due June 15, 2025 (collectively, the “2015 Notes”). Net of a discount of $1.7 million and issuance costs of $6.3 million, Autodesk received net proceeds of $742.0 million from issuance of the 2015 Notes. Both the discount and issuance costs are being amortized to interest expense over the respective terms of the 2015 Notes using the effective interest method. The proceeds of the 2015 Notes are available for general corporate purposes. Autodesk may redeem the 2015 Notes at any time, subject to a make whole premium. In addition, upon the occurrence of certain change of control triggering events, Autodesk may be required to repurchase the 2015 Notes at a price equal to 101% of their principal amount, plus accrued and unpaid interest to the date of repurchase. The 2015 Notes contain restrictive covenants that limit Autodesk's ability to create certain liens, to enter into certain sale and leaseback transactions and to consolidate or merge with, or convey, transfer or lease all or substantially all of its assets, subject to important qualifications and exceptions. Based on quoted market prices, the fair value of the 2015 Notes was approximately $781.9 million as of October 31, 2017.



In December 2012, Autodesk issued $400.0 million aggregate principal amount of 1.95% notes due December 15, 2017 and $350.0 million aggregate principal amount of 3.6% notes due December 15, 2022 (collectively, the “2012 Notes”). Autodesk received net proceeds of $739.3 million from issuance of the 2012 Notes, net of a discount of $4.5 million and issuance costs of $6.1 million. Both the discount and issuance costs are being amortized to interest expense over the respective terms of the 2012 Notes using the effective interest method. The proceeds of the 2012 Notes are available for general corporate purposes. On July 27, 2017, Autodesk redeemed in full $400.0 million in aggregate principal amount of its outstanding 1.95% senior notes due December 15, 2017. The redemption was completed pursuant to the optional redemption provisions of the first supplemental indenture dated December 13, 2012. To redeem the notes, Autodesk used the proceeds of the 2017 Notes to pay a redemption price of approximately $400.9 million, plus accrued and unpaid interest. Total cash repayment was $401.8 million. The Company did not incur any additional early termination penalties in connection with such redemption. Based on the quoted market price,prices, the approximate fair value of the remaining 2012 Notes was approximately $360.8 millionnotes as of October 31, 2017.2021, were as follows:

Aggregate Principal AmountFair value
2012 Notes$350.0 $358.4 
2015 Notes300.0 329.4 
2017 Notes500.0 546.8 
2020 Notes500.0 519.6 
2021 Notes1,000.0987.1 
Autodesk’s line of credit facility permits unsecured short-term borrowings of up to $400.0 million, with an option to request an increase in the amount of the credit facility by up to an additional $100.0 million, and is available for working capital or other business needs. This credit agreement contains customary covenants that could restrict the imposition of liens on Autodesk’s assets, and restrict the Company’s ability to incur additional indebtedness or make dispositions of assets if Autodesk fails to maintain the financial covenants. As the result of a forecasted inability to comply with the credit agreement's minimum interest coverage ratio in the first quarter of fiscal 2018, the Company renegotiated the credit agreement's financial covenants in April 2017. The financial covenants now consist of a maximum debt to total cash ratio, a fixed charge coverage ratio through April 30, 2018, and after April 30, 2018, a minimum interest coverage ratio.

The lineexpected future principal payments for all borrowings as of credit is syndicated with various financial institutions, including Citibank, N.A., an affiliate of Citigroup, which is one of the lead lenders and an agent. The maturity date on the line of credit is May 2020. At October 31, 2017, Autodesk was in compliance with the credit facility's covenants and had no outstanding borrowings on this line of credit.2021, were as follows (in millions):

Fiscal year ending
2022 (remainder)$— 
2023350.0 
2024— 
2025— 
2026300.0 
Thereafter2,000.0 
Total principal outstanding$2,650.0 
13
15. Restructuring chargesLeases

Autodesk has operating leases for real estate, vehicles, and certain equipment. Leases have remaining lease terms of less than 1 year to 68 years, some of which include options to extend the lease with renewal terms from 1 year to 10 yearsand some of which include options to terminate the leases from less than 1 year to 9 years. Options to extend or terminate the lease are considered in determining the lease term when it is reasonably certain that the option will be exercised. Payments under our lease arrangements are primarily fixed; however, certain lease agreements contain variable payments, which are expensed as incurred and not included in the operating lease assets and liabilities. These amounts include payments affected by the Consumer Price Index, payments for common area maintenance that are subject to annual reconciliation, and payments for
26

maintenance and utilities. The Company’s leases do not contain residual value guarantees or material restrictive covenants. Short-term leases are recognized in the Condensed Consolidated Statements of Operations on a straight-line basis over the lease term. Short-term lease expense was not material for the periods presented. Changes in operating lease right-of-use assets and operating lease liabilities are presented net in the “accounts payable and other facility exit costs, netliabilities” line in the Condensed Consolidated Statements of Cash Flows.

In February 2016, the Board of Directors approved a world-wide restructuring plan (“Fiscal 2017 Plan”) in order to re-balance staffing levels and reduce operating expenses to better align them with the evolving needs of the business.   The Company paid substantially all of the employee termination benefits and facility related liabilities under the Fiscal 2017 Plan by the end of fiscal 2017.

The following table sets forth the restructuring chargescomponents of lease cost were as follows:
Three Months Ended October 31, 2021
Cost of subscription and maintenance revenueCost of other revenueMarketing and salesResearch and developmentGeneral and administrativeTotal
Operating lease cost$2.1 $0.6 $11.0 $7.4 $3.7 $24.8 
Variable lease cost0.5 0.1 3.0 2.1 1.0 6.7 
Nine Months Ended October 31, 2021
Cost of subscription and maintenance revenueCost of other revenueMarketing and salesResearch and developmentGeneral and administrativeTotal
Operating lease cost$6.1 $1.6 $32.5 $23.1 $11.0 $74.3 
Variable lease cost1.3 0.4 7.2 5.2 2.4 16.5 
Three Months Ended October 31, 2020
Cost of subscription and maintenance revenueCost of other revenueMarketing and salesResearch and developmentGeneral and administrativeTotal
Operating lease cost$1.9 $0.6 $11.9 $8.6 $2.9 $25.9 
Variable lease cost0.2 0.1 1.5 1.0 0.4 3.2 
Nine Months Ended October 31, 2020
Cost of subscription and maintenance revenueCost of other revenueMarketing and salesResearch and developmentGeneral and administrativeTotal
Operating lease cost$5.6 $1.7 $34.0 $24.3 $10.5 $76.1 
Variable lease cost0.6 0.2 4.0 2.8 1.3 8.9 
Supplemental operating cash flow information related to leases is as follows:
Nine Months Ended October 31,
20212020
Cash paid for operating leases included in operating cash flows (1)$84.4 $74.7 
Non-cash operating lease liabilities arising from obtaining operating lease right-of-use assets12.2 50.8 
  _______________
(1) Includes $16.5 million and other$8.9 million in variable lease termination exit costs duringpayments for the nine months ended October 31, 2017:2021 and 2020, respectively, not included in “Operating lease liabilities” and “Long-term operating lease liabilities” on the Condensed Consolidated Balance Sheets.

The weighted average remaining lease term for operating leases is 6.9 and 7.3 years at October 31, 2021, and January 31, 2021, respectively. The weighted average discount rate was 2.59% and 2.69% at October 31, 2021, and January 31, 2021, respectively.

27

 Balances, January 31, 2017 Additions Payments Adjustments (1) Balances, October 31, 2017
Fiscal 2017 Plan         
Employee termination costs$1.1
 $0.1
 $(1.4) $0.2
 $—
Lease termination and other exit costs1.9
 0.1
 (1.4) (0.3) 0.3
Other Lease Termination Costs         
Lease termination costs4.5
 0.3
 (2.3) (0.2) 2.3
Total$7.5
 $0.5
 $(5.1) $(0.3) $2.6
Current portion (2)$5.9
       $2.4
Non-current portion (2)1.6
       0.2
Total$7.5
       $2.6
Maturities of operating lease liabilities were as follows:
____________________
(1)Adjustments primarily include the impact from a change in sublease assumptions related to certain lease terminations.
(2)
The current and non-current portions of the reserve are recorded in the Condensed Consolidated Balance Sheets under “Other accrued liabilities” and “Other liabilities,” respectively.

Fiscal year ending
2022 (remainder)$21.8 
202399.1 
202481.6 
202560.7 
202645.9 
Thereafter148.2 
457.3 
Less imputed interest34.6 
Present value of operating lease liabilities$422.7 


As of October 31, 2021, Autodesk had additional operating lease minimum lease payments of $21.4 million for executed leases that have not yet commenced, primarily for office locations.
14
.
16. Commitments and Contingencies

Guarantees and Indemnifications

In the normal course of business, Autodesk provides indemnifications of varying scopes, including limited product warranties and indemnification of customers against claims of intellectual property infringement made by third parties arising from the use of its products or services. Autodesk accrues for known indemnification issues if a loss is probable and can be reasonably estimated. Historically, costs related to these indemnifications have not been significant, and because potential future costs are highly variable, Autodesk is unable to estimate the maximum potential impact of these indemnifications on its future results of operations.

In connection with the purchase, sale, or license of assets or businesses with third parties, Autodesk has entered into or assumed customary indemnification agreements related to the assets or businesses purchased, sold, or licensed. Historically, costs related to these indemnifications have not been significant, and because potential future costs are highly variable, Autodesk is unable to estimate the maximum potential impact of these indemnifications on its future results of operations.

As permitted under Delaware law, Autodesk has agreements whereby it indemnifies its officers and directors for certain events or occurrences while the officer or director is, or was, serving at Autodesk’s request in such capacity. The maximum potential amount of future payments Autodesk could be required to make under these indemnification agreements is unlimited; however, Autodesk has directors’ and officers’ liability insurance coverage that is intended to reduce its financial exposure and may enable Autodesk to recover a portion of any future amounts paid. Autodesk believes the estimated fair value of these indemnification agreements in excess of applicable insurance coverage is minimal.

Legal Proceedings

Autodesk is involved in a variety of claims, suits, investigations, inquiries, and proceedings in the normal course of business activities including claims of alleged infringement of intellectual property rights, commercial, employment, piracytax, prosecution of unauthorized use, business practices, and other matters. Autodesk routinely reviews the status of each significant matter and assesses its potential financial exposure. If the potential loss from any matter is considered probable and the amount can be reasonably estimated, Autodesk records a liability for the estimated loss. Because of inherent uncertainties related to these legal matters, Autodesk bases its loss accruals on the best information available at the time. As additional information becomes available, Autodesk reassesses its potential liability and may revise its estimates. In the Company's opinion, resolution of pending matters is not expected to have a material adverse impact on its consolidated results of operations, cash flows, or its financial position. Given the unpredictable nature of legal proceedings, there is a reasonable possibility that an unfavorable resolution of one or more such proceedings could in the future materially affect the Company's results of operations, cash flows, or financial position in a particular period, however, based on the information known by the Company as of the date of this filing and the rules and regulations applicable to the preparation of the Company's financial statements, any such amount is either immaterial or it is not possible to provide an estimated amount of any such potential loss.

28

17. Stockholders' Equity
15. Common Stock Repurchase Program

Changes in stockholders' equity by component, net of tax, as of October 31, 2021, are as follows:
Common stock and additional paid-in capitalAccumulated other comprehensive lossAccumulated deficitTotal stockholders' equity
SharesAmount
Balances, January 31, 2021219.6 $2,578.9 $(125.9)$(1,487.5)$965.5 
Common shares issued under stock plans0.9 9.0 9.0 
Stock-based compensation expense114.1 114.1 
Post-combination expense related to equity awards assumed0.1 0.1 
Shares issued related to business combination2.6 2.6 
Net income155.6 155.6 
Other comprehensive income24.2 24.2 
Repurchase and retirement of common shares (1)(0.5)(65.3)(77.4)(142.7)
Balances, April 30, 2021220.0 2,639.4 (101.7)(1,409.3)1,128.4 
Common shares issued under stock plans0.1 (6.5)(6.5)
Stock-based compensation expense148.2 148.2 
Post-combination expense related to equity awards assumed0.1 0.1 
Net income115.6 115.6 
Other comprehensive loss(11.7)(11.7)
Repurchase and retirement of common shares (1)(0.2)(0.5)(45.8)(46.3)
Balances, July 31, 2021219.9 2,780.7 (113.4)(1,339.5)1,327.8 
Common shares issued under stock plans1.3 (51.4)(51.4)
Stock-based compensation expense140.2 140.2 
Post-combination expense related to equity awards assumed(0.1)(0.1)
Settlement of liability-classified restricted stock units2.7 2.7 
Net income136.7 136.7 
Other comprehensive income11.0 11.0 
Repurchase and retirement of common shares (1)(1.0)(50.7)(236.3)(287.0)
Balances, October 31, 2021220.2 $2,821.4 $(102.4)$(1,439.1)$1,279.9 
 ________________
Autodesk has a stock repurchase program that is used to offset dilution from the issuance of stock under the Company’s employee stock plans and for such other purposes as may be in the interests of Autodesk and its stockholders. Stock repurchases have the effect of returning excess cash generated from the Company’s business to stockholders. (1)During the three and nine months ended October 31, 2017,2021, Autodesk repurchased and retired 1.0 million and 4.41.7 million shares at an average repurchase price of $112.97$292.91 and $96.39$286.95 per share, respectively. Common stock and additional paid-in capital and accumulated deficit were reduced by $35.6 million and $81.7 million, respectively, during the three months ended October 31, 2017. Common stock and additional paid-in capital and accumulated deficit were reduced by $117.6 million and $310.3 million, respectively, during the nine months ended October 31, 2017.

At October 31, 2017, 22.12021, 10.4 million shares remained available for repurchase under the repurchase program approved by the Board of Directors.

29

Changes in stockholders' equity (deficit) by component, net of tax, as of October 31, 2020, are as follows:
Common stock and additional paid-in capitalAccumulated other comprehensive lossAccumulated deficitTotal stockholders' equity (deficit)
SharesAmount
Balances, January 31, 2020219.4 $2,317.0 $(160.3)$(2,295.8)$(139.1)
Common shares issued under stock plans1.0 24.3 — — 24.3 
Stock-based compensation expense— 88.2 — — 88.2 
Settlement of liability-classified restricted stock units— 28.7 — — 28.7 
Post-combination expense related to equity awards assumed— 0.1 — — 0.1 
Net income— — — 66.5 66.5 
Other comprehensive loss— — (18.8)— (18.8)
Repurchase and retirement of common shares (1)(1.2)(57.0)— (132.0)(189.0)
Balances, April 30, 2020219.2 2,401.3 (179.1)(2,361.3)(139.1)
Common shares issued under stock plans0.2 (4.6)— — (4.6)
Stock-based compensation expense— 95.9 — — 95.9 
Post combination expense related to equity awards assumed— 0.1 — — 0.1 
Net income— — — 98.2 98.2 
Other comprehensive income— — 24.6 — 24.6 
Repurchase and retirement of common shares (1)(0.1)— — (7.8)(7.8)
Balances, July 31, 2020219.3 2,492.7 (154.5)(2,270.9)67.3 
Common shares issued under stock plans1.2 (29.3)— — (29.3)
Stock-based compensation expense— 97.0 — — 97.0 
Post combination expense related to equity awards assumed— 0.1 — — 0.1 
Net income— — — 132.2 132.2 
Other comprehensive loss— — (1.9)— (1.9)
Repurchase and retirement of common shares (1)(0.8)(53.4)— (142.7)(196.1)
Balances, October 31, 2020219.7 $2,507.1 $(156.4)$(2,281.4)$69.3 
 ________________
(1)During the three and nine months ended October 31, 2017,2020, Autodesk repurchased its common stock through open market purchases. The number of0.8 million and 2.1 million shares acquired and the timing of the purchases are based on several factors, including general market and economic conditions, the number of employee stock option exercises and stock issuances, the tradingat an average repurchase price of Autodesk common stock, cash on hand231.26 and $185.69 per share, respectively. At October 31, 2020, 12.6 million shares remained available infor repurchase under the United States, cash requirements for acquisitions, and Company defined trading windows.

repurchase program approved by the Board of Directors.

30

16. 18. Accumulated Other Comprehensive Loss


Accumulated other comprehensive loss,, net of taxes, consisted of the following at October 31, 2017:2021:

Net Unrealized Gains (Losses) on Derivative InstrumentsNet Unrealized Gains on Available-for-Sale Debt SecuritiesDefined Benefit Pension ComponentsForeign Currency Translation AdjustmentsTotal
Balances, January 31, 2021$(24.1)$6.4 $(21.3)$(86.9)$(125.9)
Other comprehensive income (loss) before reclassifications30.4 7.1 — (21.3)16.2 
Pre-tax losses reclassified from accumulated other comprehensive loss14.6 — 0.3 — 14.9 
Tax effects(6.7)— — (0.9)(7.6)
Net current period other comprehensive income (loss)38.3 7.1 0.3 (22.2)23.5 
Balances, October 31, 2021$14.2 $13.5 $(21.0)$(109.1)$(102.4)
 Net Unrealized Gains (Losses) on Derivative Instruments Net Unrealized Gains (Losses) on Available-for-Sale Securities Defined Benefit Pension Components Foreign Currency Translation Adjustments Total
Balances, January 31, 2017$14.6
 $1.5
 $(33.8) $(160.8) $(178.5)
Other comprehensive (loss) income before reclassifications(10.2) 0.7
 (0.1) 38.8
 29.2
Pre-tax (gains) losses reclassified from accumulated other comprehensive loss(6.9) —
 0.1
 0.1
 (6.7)
Tax effects1.7
 (0.3) —
 (0.9) 0.5
Net current period other comprehensive (loss) income(15.4) 0.4
 —
 38.0
 23.0
Balances, October 31, 2017$(0.8) $1.9
 $(33.8) $(122.8) $(155.5)


Accumulated other comprehensive loss, net of taxes, consisted of the following at October 31, 2020:
Net Unrealized Gains (Losses) on Derivative InstrumentsNet Unrealized Gains on Available-for-Sale Debt SecuritiesDefined Benefit Pension ComponentsForeign Currency Translation AdjustmentsTotal
Balances, January 31, 2020$8.4 $4.7 $(22.8)$(150.6)$(160.3)
Other comprehensive (loss) income before reclassifications(8.3)1.7 — 13.9 7.3 
Pre-tax (gains) losses reclassified from accumulated other comprehensive loss(4.8)0.1 — — (4.7)
Tax effects1.5 0.1 — (0.3)1.3 
Net current period other comprehensive (loss) income(11.6)1.9 — 13.6 3.9 
Balances, October 31, 2020$(3.2)$6.6 $(22.8)$(137.0)$(156.4)

Reclassifications related to gains and losses on available-for-sale debt securities are included in "Interest“Interest and other expense, net."net.” Refer to Note 4, "Financial5, “Financial Instruments,"” for the amount and location of reclassifications related to derivative instruments. Reclassifications of the defined benefit pension components are included in the computation of net periodic benefit cost. For further information, see the "Retirement Benefit Plans" notecost are included in Part II, Item 8 of our Annual Report on Form 10-K for the fiscal year ended January 31, 2017.“Interest and other expense, net.”
 
31

1719. Net LossIncome Per Share

Basic net lossincome per share is computed using the weighted average number of shares of common stock outstanding for the period, excluding stock options and restricted stock units.period. Diluted net lossincome per share is based uponcomputed using the weighted average number of shares of common stock outstanding for the period and potentially dilutive common shares, including the effect of stock options and restricted stock units, underperformance share awards, and stock options using the treasury stock method. The following table sets forth the computation of the numerators and denominators used in the basic and diluted net lossincome per share amounts:

 Three Months Ended October 31,Nine Months Ended October 31,
2021202020212020
Numerator:
Net income$136.7 $132.2 $407.9 $296.9 
Denominator:
Denominator for basic net income per share—weighted average shares220.0 219.6 219.8 219.4 
Effect of dilutive securities2.5 2.7 2.5 2.7 
Denominator for dilutive net income per share222.5 222.3 222.3 222.1 
Basic net income per share$0.62 $0.60 $1.86 $1.35 
Diluted net income per share$0.61 $0.59 $1.83 $1.34 
 Three Months Ended October 31, Nine Months Ended October 31,
 2017 2016 2017 2016
Numerator:       
Net loss$(119.8) $(142.8) $(393.4) $(408.7)
Denominator:       
Denominator for basic net loss per share—weighted average shares219.6
 222.3
 219.7
 223.3
Effect of dilutive securities (1)—
 —
 —
 —
Denominator for dilutive net loss per share219.6
 222.3
 219.7
 223.3
Basic net loss per share$(0.55) $(0.64) $(1.79) $(1.83)
Diluted net loss per share$(0.55) $(0.64) $(1.79) $(1.83)

____________________ 
(1)The effect of dilutive securities of 4.1 million and 4.4 million shares in the three months ended October 31, 2017 and 2016, respectively, have been excluded from the calculation of diluted net loss per share as those shares would have been anti-dilutive due to the net loss incurred during those periods. The effect of dilutive securities of 4.4 million and 4.0 million shares in the nine months ended October 31, 2017 and 2016, respectively, have been excluded from the calculation of diluted net loss per share as those shares would have been anti-dilutive due to the net loss incurred during those periods.

The computation of diluted net lossincome per share does not include shares that are anti-dilutive under the treasury stock method because their exercise prices are higher than the average market value of Autodesk’s stock during the period.periods. For both the three and nine months ended October 31, 20172021, there were 0 and 2016, zero0.1 million potentially anti-dilutive shares were excluded from the computation of diluted net lossincome per share.share, respectively. For the three and nine months ended October 31, 2017 and 2016,2020, there were 0.3 million and 0.40.2 million potentially anti-dilutive shares were excluded from the computation of diluted net lossincome per share, respectively.



20. Segments
18
. Segment, Geographic
Autodesk operates in 1 operating segment and Product Family Information

accordingly, all required financial segment information is included in the condensed consolidated financial statements. Operating segments are defined as components of an enterprise for which separate financial information is evaluated regularly by the chief operating decision makers (“CODM”) in deciding how to allocate resources and assess performance. Autodesk reports segment information based on the “management” approach. The management approach designates the internal reporting used by management for making decisions, allocating resources, and assessing performance as the source of the Company’s reportable segments. The Company's chief operating decision maker ("CODM")Company’s CODM allocates resources and assesses the operating performance of the Company as a whole. As such, Autodesk has one segment manager (the CODM), and one operating segment.

Information regarding Autodesk’s revenuelong-lived assets by geographic area and product family is as follows:
October 31, 2021January 31, 2021
Long-lived assets (1):
Americas
U.S.$391.5 $423.6 
Other Americas26.5 29.5 
Total Americas418.0 453.1 
Europe, Middle East, and Africa100.4 109.7 
Asia Pacific37.0 46.7 
Total long-lived assets$555.4 $609.5 
____________________
 Three Months Ended October 31, Nine Months Ended October 31,
 2017 2016 2017 2016
Net revenue by geographic area:       
Americas       
U.S.$182.4
 $182.2
 $546.8
 $562.1
Other Americas32.2
 31.1
 91.9
 99.0
Total Americas214.6
 213.3
 638.7
 661.1
Europe, Middle East and Africa205.4
 191.0
 594.4
 614.1
Asia Pacific95.3
 85.3
 269.7
 277.0
Total net revenue$515.3
 $489.6
 $1,502.8
 $1,552.2
        
Net revenue by product family:       
Architecture, Engineering and Construction$215.4
 $212.3
 $628.7
 $684.4
Manufacturing146.9
 146.6
 436.0
 481.5
AutoCAD and AutoCAD LT102.7
 80.1
 290.7
 239.1
Media and Entertainment37.7
 34.2
 112.1
 103.6
Other12.6
 16.4
 35.3
 43.6
 $515.3
 $489.6
 $1,502.8
 $1,552.2
(1)Long-lived assets exclude deferred tax assets, marketable securities, goodwill, and intangible assets.



32

19. Subsequent Events

On November 22, 2017, the Company's Board of Directors approved a restructuring plan to support the Company's strategic priorities of completing the subscription transition, digitizing the Company, and re-imagining manufacturing, construction, and production. Through the restructuring, Autodesk seeks to reduce its investments in areas not aligned with its strategic priorities, including in areas related to research and development and go-to-market activities. At the same time, Autodesk plans to further invest in strategic priority areas related to digital infrastructure, customer success, and construction. By re-balancing resources to better align with the Company’s strategic priorities, Autodesk is positioning itself to meet its long-term goals. This world-wide restructuring plan includes a reduction in force that will result in the termination of approximately 13% of the Company’s workforce, or approximately 1,150 employees, and the consolidation of certain leased facilities.

The Company expects to substantially complete the reduction in force and the facilities consolidation by the end of its fourth quarter of fiscal 2019 (which fiscal quarter ends January 31, 2019). The Company anticipates incurring pre-tax restructuring charges of $135 million to $149 million, substantially all of which would result in cash expenditures, $124 million to $137 million of which would be for one-time employee termination benefits, and $11 million to $12 million of which would be for facilities-related and other costs. The Company expects to expense these pre-tax charges in the following periods:

Fiscal QuarterApproximate pre-tax restructuring charge (in millions)
Q4 FY18 (ending January 31, 2018)$91 - $100
Q1 FY19 (ending April 30, 2018)$21 - $24
Q2 FY19 (ending July 31, 2018)$14 - $15
Q3 FY19 (ending October 31, 2018)$8 - $9
Q4 FY19 (ending January 31, 2019)$1


ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The discussion in our MD&A and elsewhere in this Form 10-Q contains trend analyses and other forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are any statements that look to future events and consist of, among other things, our business strategies, including those discussed in “Strategy” and“Strategy,” “Overview of the Three and Nine Months Ended October 31, 20172021,” and 2016” below,in “Results of Operations-Impacts of COVID-19 to Autodesk’s Business.” Examples of such forward-looking statements may relate to items such as future net revenue, operating expenses, recurring revenue, annualized recurringnet revenue annualized revenue per subscription,retention rate, cash flow, remaining performance obligations, and other future financial results (by product type and geography) and subscriptions, the effectiveness of our restructuring efforts,, the effectiveness of our efforts to successfully manage transitions to new business models and markets, our expectations regarding the continued transition of our business model, expectations for our maintenance plan and subscription plan subscriptions,markets; our ability to increase our subscription base,base; expected market trends, including the growth of cloud and mobile computing,computing; the availability of credit; the effect of unemployment, the availability of credit, our expectations for our restructuring,unemployment; the effects of mixed global economic conditions, including from an economic downturn or recession in the United States or in other countries around the world; the effects of revenue recognition,recognition; the effects of recently issued accounting standards; expected trends in certain financial metrics, including expenses, the impact of acquisitions and investment activities,expenses; expectations regarding our cash needs,needs; the effects of fluctuations in exchange rates and our hedging activities on our financial results,results; our ability to successfully expand adoption of our products,products; our ability to gain market acceptance of new businessesbusiness and sales initiatives,initiatives; the impact of past acquisitions, including our integration efforts and expected synergies; the impact of economic volatility and geopolitical activities in certain countries, particularly emerging economy countries,countries; the timing and amount of purchases under our stock buy-back plan,plan; and the effects of potential non-cash charges on our financial results and the resulting effect on our financial results. In addition, forward-looking statements also consist of statements involving expectations regarding product capability and acceptance, remediation to our controls environment, statements regarding our liquidity and short-term and long-term cash requirements, as well as statements involving trend analyses and statements including such words as “may,” “believe,” “could,” “anticipate,” “would,” “might,” “plan,” “expect,” and similar expressions or the negative of these terms or other comparable terminology. These forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q and are subject to business and economic risks. As such, our actual results could differ materially from those set forth in the forward-looking statements as a result of a number of factors, including those set forth below in Part II, Item 1A, “Risk Factors,” and in our other reports filed with the U.S. Securities and Exchange Commission. We assume no obligation to update the forward-looking statements to reflect events that occur or circumstances that exist after the date on which they were made, except as required by law.

Note: A glossary of terms used in this Form 10-Q appears at the end of this Item 2.




Strategy

Autodesk makes softwareis changing how the world is designed and made. Our technology spans architecture, engineering, construction, product design, manufacturing, media and entertainment, empowering innovators everywhere to solve challenges big and small. From greener buildings to smarter products to more mesmerizing blockbusters, Autodesk technology helps our customers to design and make a better world for people whoall.

Our strategy is to build enduring relationships with customers, delivering innovative technology that provides valuable automation and insight into their design and make things. If you have ever driven a high-performance car, admired a towering skyscraper, used a smartphone, or watched a great film, chancesprocess. To drive execution of our strategy, we are you have experienced what millionsfocused on three strategic priorities: delivering on the promise of Autodesk customers are doingsubscription, digitizing the company, and reimagining construction, manufacturing, and production.

We equip and inspire our users with our software. Autodesk gives youthe tailored tools, services, and access they need for success today and tomorrow. At every step, we help users harness the power of data to make anything.build upon their ideas and explore new ways of imagining, collaborating, and creating to achieve better outcomes for their customers, for society, and for the world. And because creativity can’t flourish in silos, we connect what matters - from steps in a project to collaborators on a unified platform.

Autodesk was founded during the platform transition from mainframe computers and engineering workstations to personal computers. We have developed and sustained a compelling value proposition based upon desktop software for the personal computer. Just as the transition from mainframes to personal computers transformed the industry over 30 years ago, we believe ourthe software industry is undergoinghas undergone a similar transition from the personal computerdeveloping and selling perpetual licenses and on-premises products to subscriptions and cloud-enabled technologies.





33

Product Evolution

We offer subscriptions for individual products and Industry Collections, enterprise business arrangements (“EBAs”), and cloud mobile,service offerings (collectively referred to as “subscription plan”). Subscription plans are designed to give our customers more flexibility with how they use our offerings and social computing. To address this transition we have accelerated our move to the cloudattract a broader range of customers, such as project-based users and mobile devices and are offering more flexible licensing. small businesses.

Our product subscriptionssubscription plans currently represent a hybrid of desktop software and cloud-basedcloud functionality, which provides a device-independent, collaborative design workflow for designers makers, and their stakeholders. Our cloud service offerings, for example, BIM 360, Shotgun, Fusion 360, Shotgrid (formerly Shotgun), AutoCAD web app, and AutoCAD 360 Pro,mobile app, provide tools, including mobile and socialcollaboration capabilities, to streamline design, collaboration, building and manufacturing, and data management processes. We believe that customer adoption of these newlatest offerings will continue to grow as customers across a range of industries begin to take advantage of the scalable computing power and flexibility provided through these new services.

Our strategy is to lead the industries we serve to cloud-based technologies and business models. This entails both a technological shift and a business model shift. As part of the transition, we discontinued selling new perpetual licenses of most individual software products effective February 1, 2016, and discontinued selling new perpetual licenses of suites while introducing industry collections effective August 1, 2016. Industry collections allowCollections provide our customers with access to a broad setbroader selection of productsAutodesk solutions and services, that exceeds those previously available in suites - simplifying the customercustomers’ ability to get access tobenefit from a complete set of tools for their industry.

Our strategy includes improving our product functionality and expanding our product offerings through internal development as well as through the acquisition of products, technology, and businesses. Acquisitions often increase the speed at which we can deliver product functionality to our customers; however, they entail cost and integration challenges and may, in certain instances, negatively impact our operating margins. We now offer subscriptions for individual products and industry collections, cloud service offerings, and flexible enterprise business agreements (collectively referred to as "subscription plan" and previously called "new model subscription offerings"). These subscription plan offerings are designed to give our customers more flexibility with how they use our products and service offerings and to attract a broader range of customers, such as project-based users and small businesses.

With the discontinuation of the sale of most perpetual licenses,continually review these factors in making decisions regarding acquisitions. We currently anticipate that we have transitioned away from selling a mix of perpetual licenses and term-based product subscriptions toward a single subscription model. On June 15, 2017, we commenced a program to incentivize maintenance plan customers to move to subscription plan offerings. Through this program we offer discounts to those maintenance customers that move to a subscription plan, while at the same time will increase maintenance plan pricing over time for customers that remain on maintenance.

To provide more meaningful information as to the performance of different categories of product and services, we have changed our presentation of revenue and cost of revenue on our Condensed Consolidated Statements of Operations effective the first quarter of fiscal 2018. See Note 1, "Basis of Presentation," for additional information.

During the transition, revenue, margins, EPS, deferred revenue and cash flow from operations have been and will continue to be impactedacquire products, technology, and businesses as more revenue is recognized ratably rather than upfront and as subscription plan offerings generally have a lower initial purchase price.compelling opportunities become available.


As we progress through the business model transition, reported revenue is less relevant to measure the success of the business as perpetual license sales have been discontinued in favor of subscription offerings, which have considerably lower upfront prices. Annualized recurring revenue ("ARR") and growth of total subscriptions better reflect business momentum and provide additional transparency into the transition. To further analyze progress, we disaggregate our growth in these metrics between the original maintenance model ("maintenance plan") and the subscription plan. Maintenance plan subscriptions peaked in the fourth quarter of our fiscal 2016 as we discontinued selling new maintenance plan subscriptions in fiscal 2017, and we expect them to decline slowly over time as maintenance plan customers continue to convert to our subscription plan.

In order to support our strategic prioritiespriority of completingre-imagining Architecture, Engineering, and Construction (“AEC”), we are strengthening the subscription transition, digitizingfoundation of our AEC solutions with both organic and inorganic investments. In the Company,fiscal quarter ended April 30, 2021, we acquired Storm UK Holdco Limited, the parent of Innovyze, Inc. (“Innovyze”), which provideswater infrastructure software. Combining Innovyze’s hydraulic modeling, simulation, asset performance management and re-imaginingoperational analytics solutions with Autodesk’s design and analysis solutions (including Autodesk Civil 3D, Autodesk InfraWorks, and the Autodesk Construction Cloud) enables us to deliver end-to-end, cloud-based solutions for our water infrastructure customers that drive efficiency and sustainability. In fiscal 2021, we acquired Spacemaker which uses cloud-based, artificial intelligence (AI), and generative design to help architects, urban designers, and real estate developers make faster and more informed early-stage design decisions which can help maximize the long-term sustainability and return from property investments. Other acquisitions in fiscal 2021 included solutions that use artificial intelligence and machine learning to extract and process data from project plans and specifications allowing general contractors, subcontractors, and owners to automate workflows such as submittals and project closeout.

In Manufacturing, our strategy is to combine organic and acquired software in existing and adjacent verticals to create end-to-end, cloud-based solutions for our customers that drive efficiency and sustainability. We continue to attract both global manufacturing construction,leaders and production,disruptive startups with our generative design and cloud-based Fusion 360 that converges the process of design with manufacturing. A fiscal 2021 acquisition included a leading provider of post-processing and machine simulation solutions. In May 2021, we commenced a world-wide restructuring planacquired Upchain, an instant-on, cloud-based data management technology that allows product design and manufacturing customers to collaborate in the fourth quarter of fiscal 2018. Through the restructuring, we seekcloud across their value chains and bring products to reduce our investments in areas not aligned with our strategic priorities, including in areas related to research and development and go-to-market activities. At the same time, we plan to further invest in strategic priority areas related to digital infrastructure, customer success, and construction. By re-balancing resources to better align with our strategic priorities, we are positioning ourselves to meet our long-term goals, while keeping non-GAAP spend flat in fiscal 2019. We anticipate incurring pre-tax restructuring charges of $135 million to $149 million, substantially allmarket faster.



Global Reach
of which would result in cash expenditures, $124 million to $137 million of which would be for one-time employee termination benefits, and $11 million to $12 million of which would be for facilities-related and other costs. If we are unable to successfully complete our reorganizational efforts we may need to undertake additional restructuring efforts, and our business and operating results may be harmed.

We sell our products and services globally, through a combination of indirect and direct channels. Our indirect channels include value added resellers, direct market resellers, distributors, computer manufacturers, and other software developers. Our direct channels include internal sales resources dedicated to selling in our largest accounts, our highly specialized products,solutions, and business transacted through our online Autodesk branded store. The following chart showsSee Note 3, “Revenue Recognition” in the Notes to the Condensed Consolidated Financial Statements for further detail on the results of our split between indirect and direct channelschannel sales for the three and nine months ended October 31, 20172021 and 2016:2020.


chart-e8008afdd51cab9a39fa01.jpg


We anticipate that our channel mix will continue to change as we scale our online Autodesk branded store business and our largest accounts shift towards direct-only business models. However, we expect our indirect channel will continue to transact and support the majority of our customers and revenue as we move beyond the business model transition.revenue. We employ a variety of incentive programs and promotions to align our direct and indirect channels with our business strategies. In addition, we have a worldwide user group organization and we have created online user communities dedicated to the exchange of information related to the use of our products.
34


One of our key strategies is to maintain an open-architecture design of our software products to facilitate third-party development of complementary products and industry-specific software solutions. This approach enables customers and third parties to customize solutions for a wide variety of highly specific uses. We offer several programs that provide strategic investment funding, technological platforms, user communities, technical support, forums, and events to developers who develop add-on applications for our products. For example, we have established the Autodesk Forge programdeveloper platform to support innovators that build solutions to facilitate the development of a single connected ecosystem for the future of how things are designed, made, and used as well as support ideas that push the boundaries of 3D printing.

In addition to the competitive advantages afforded by our technology, our large global network of distributors, resellers, third-party developers, customers, educators, educational institutions, educators,learning partners, and students is a key competitive advantage which has been cultivated over an extensive period of time.period. This network of partners and relationships provides us with a broad and deep reach into volume markets around the world. Our distributor and reseller network is extensive and provides our customers with


the resources to purchase, deploy, learn, and support our productssolutions quickly and easily. We have a significant number of registered third-party developers who create products that work well with our productssolutions and extend them for a variety of specialized applications.

Impact at Autodesk

Autodesk is committed to helping fueladvancing a lifelong passionmore sustainable, resilient, and equitable world. We don’t believe in waiting for designprogress, we believe in students of all ages.making it. We offer free educational subscriptions of Autodesk software worldwide to students, educators,take action as a business and educational institutions. Through Autodesk Design Academy, we provide secondary and postsecondary school markets hundreds of standards-aligned class projects to support design-based disciplinesour employees, customers, and communities in Science, Technology, Engineering, Digital Arts,our collective opportunity to design and Math (STEAM) while using Autodesk's professional-grade 3Dmake a better world for all.

We focus our efforts to advance positive outcomes across three primary areas: energy and materials, health and resilience, and work and prosperity. These impact opportunity areas are derived from the UN Sustainable Development Goals (“SDGs”) and have been focused through a multi-pronged process to align the top needs of our stakeholders, the important issues of our business, and the areas we are best placed to accelerate positive impact at scale.

These opportunities manifest as outcomes through how our customers leverage our technology to design engineering and entertainmentmake net-zero carbon buildings, resilient infrastructure, more sustainable products, and a thriving workforce. We realize these opportunities in our business through our 100% renewable and net-zero greenhouse gas operations and inclusive culture. We advance these opportunities with industry innovators through collaboration, grants, software used in industry. We also have madedonations, and training.

The Autodesk Design Academy curricula available on iTunes U. Our intentionFoundation (the “Foundation”), a privately funded 501(c)(3) charity organization established and solely funded by us, leads our philanthropic efforts. The purpose of the Foundation is twofold: to support employees to make Autodeska better world by matching employees’ volunteer time and/or donations to nonprofit organizations; and to support organizations and individuals using design to drive positive social and environmental impact. On our behalf, the Foundation also administers a discounted software ubiquitousdonation program to nonprofit organizations, social and theenvironmental entrepreneurs, and others who are developing design softwaresolutions that will shape a more sustainable future.

Additional information about our environmental, social, and governance program is available in our annual impact report on our website at www.autodesk.com. Information contained on or accessible through our website is not part of choice for those poised to become the next generation of professional users.

Our strategy includes improving our product functionality and expanding our product offerings through internal development as well as through the acquisition of products, technology, and businesses. Acquisitions often increase the speed at which we can deliver product functionality to our customers; however, they entail cost and integration challenges and may, in certain instances, negatively impact our operating margins. We continually review these trade-offs in making decisions regarding acquisitions. We currently anticipate that we will continue to acquire products, technology, and businesses as compelling opportunities become available.

or incorporated by reference into this report.

Assumptions Behind Our Strategy

Our strategy depends upon a number of assumptions, to successfully make the transition toward new cloud and mobile platforms, including: the related technology and business model shifts; making our technology available to mainstream markets; leveraging our large global network of distributors, resellers, third-party developers, customers, educators, educational institutions, learning partners, and students; improving the performance and functionality of our products; and adequately protecting our intellectual property. If the outcome of any of these assumptions differs from our expectations, we may not be able to implement our strategy, which could potentially adversely affect our business. For further discussion regarding these and related risks, see Part II,, Item 1A, “Risk Factors.”
, “Risk Factors.”

Critical Accounting Policies and Estimates

Our Condensed Consolidated Financial Statements are prepared in conformity with U.S. generally accepted accounting principles ("GAAP"(“GAAP”). In preparing our Condensed Consolidated Financial Statements, we make assumptions, judgments, and estimates that can have a significant impact on amounts reported in our Condensed Consolidated Financial Statements. We evaluate our estimates and assumptions on an ongoing basis. We base our assumptions, judgments, and estimates on historical
35

experience and various other factors that we believe to be reasonable under the circumstances. Actual results could differ materially from these estimates under different assumptions or conditions. We regularly reevaluate our assumptions, judgments and estimates. Our significant accounting policies are described in Note 1, “Business and Summary of Significant Accounting Policies,” in the Notes to Consolidated Financial Statements in our Form 10-K for the fiscal year ended January 31, 20172021.

. In addition, we
An accounting policy is deemed to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, if different estimates reasonably could have been used, or if changes in the estimate that are reasonably possible could materially impact the financial statements. We highlighted those policies that involve a higher degree of judgment and complexity with further discussion in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”Operations,” in our Form 10-K. There have been no material changes to our critical accounting policies and estimates during the three and nine months ended October 31, 20172021, as compared to the those disclosed in our Form 10-K for the fiscal year ended January 31, 2017.2021. We believe these policies are the most critical to aid in fully understanding and evaluating our financial condition and results of operations.




Overview of the Three and Nine Months Ended October 31, 2017 and 20162021
 
(in millions)Three Months Ended October 31, 2017 
As a % of Net
Revenue
 Change compared to
prior fiscal year		 Three Months Ended October 31, 2016 
As a % of Net
Revenue
   $ %      
Net Revenue$515.3
 100 % $25.7
 5 % $489.6
 100 %
Cost of revenue77.5
 15 % (4.0) (5)% 81.5
 17 %
Gross Profit437.8
 85 % 29.7
 7 % 408.1
 83 %
Operating expenses537.8
 104 % 9.8
 2 % 528.0
 108 %
Loss from operations$(100.0) (19)% $19.9
 17 % $(119.9) (24)%
          
 Nine Months Ended October 31, 2017 
As a��% of Net
Revenue
 Change compared to
prior fiscal year		 Nine Months Ended October 31, 2016 
As a % of Net
Revenue
   $ %      
Net Revenue$1,502.8
 100 % $(49.4) (3)% $1,552.2
 100 %
Cost of revenue230.3
 15 % (28.7) (11)% 259.0
 17 %
Gross Profit1,272.5
 85 % (20.7) (2)% 1,293.2
 83 %
Operating expenses1,599.7
 106 % (26.0) (2)% 1,625.7
 105 %
Loss from operations$(327.2) (22)% $5.3
 2 % $(332.5) (21)%
•Total net revenue increased 18% and 15% to $1,125.8 million and $3,174.8 million for the three and nine months ended October 31, 2021, respectively, compared to the same periods in the prior fiscal year.
We are undergoing•Recurring revenue as a business model transitionpercentage of net revenue was 97% for both the three and nine months ended October 31, 2021, and remained flat as compared to both periods in which we have discontinued selling new perpetual licenses for mostthe prior fiscal year.
•Net revenue retention rate (“NR3”) was within the range of our products100% and 110% as of both October 31, 2021 and 2020.
•Deferred revenue was $3.34 billion, a decrease of 0.5% compared to the fourth quarter in favor of subscriptions. During the transition, revenue, margins, EPS,prior fiscal year.
•Remaining performance obligations (short-term and long-term deferred revenue and cash flow from operations have been and will continueplus unbilled deferred revenue) (“RPO”) was $4.23 billion, a decrease of 0.2% compared to be impacted as more revenue is recognized ratably rather than upfront and as subscription plan offerings generally have a lower initial purchase price.the fourth quarter in the prior fiscal year.
•Current remaining performance obligations were $2.88 billion, an increase of 5% compared to the fourth quarter in the prior fiscal year.

Revenue Analysis

Net revenue increased during the three and nine months ended October 31, 2017,2021, as compared to the same period in the prior fiscal year, primarily due to a 106%the respective 21% and 20% increase in subscription revenue, partially offset by a 62%the respective 56% and 65% decrease in license and other revenue. Net revenue decreased during the nine months ended October 31, 2017, as compared to the same period in the prior fiscal year, primarily due to a 68% decrease in license and other revenue, partially offset by a 100% increase in subscriptionmaintenance revenue.

The increases in the respective three and nine months ended October 31, 2017 within subscription revenue were driven by increases in the number of subscriptions across all subscription plan types, primarily led by product subscription. The decreases in license and other revenue in the respective three and nine months ended October 31, 2017 were primarily a result of the discontinuation of new perpetual licenses of suites effective August 1, 2016.

FurtherFor further discussion of the drivers of these results, are discussedsee below under the heading “Results of Operations.”

We rely significantly upon major distributors and resellers in both the U.S. and international regions, including Tech Data Corporation and its global affiliates (collectively, “Tech Data”) and Ingram Micro Inc. (“Ingram Micro”). Total sales to Tech Data accounted for 32%37% and 31%36% of Autodesk’sour total net revenue for the three and nine months ended October 31, 2017, respectively. Total sales to Tech Data accounted for 31%2021, respectively, and 30%37% of Autodesk’sour total net revenue for both the three and nine months ended October 31, 2016, respectively.2020. During both the three and nine months ended October 31, 2021, Ingram Micro accounted for 9% of Autodesk's total net revenue. During both the three and nine months ended October 31, 2020, Ingram Micro accounted for 10% of Autodesk’s total net revenue. Our customers through Tech Data and Ingram Micro are the resellers and end users who purchase our software licensessubscriptions and services. Should any of our agreements with Tech Data or Ingram Micro be terminated for any reason, we believe the resellers and end users who currently purchase our products through Tech Data or Ingram Micro would be able to continue to do so under substantially the same terms from one of our many other distributors without substantial disruption to our revenue. Consequently, we believe our business is not substantially dependent on Tech Data.Data or Ingram Micro.

Operating Margin AnalysisRecurring Revenue and Net Revenue Retention Rate

Our operating margin increased to (19)% for the three months ended October 31, 2017 from (24)% for the three months ended October 31, 2016. The increase in operating margin was primarily driven by an increase in revenue partially offset by an increase in total spend during the three months ended October 31, 2017. Our operating margin decreased to (22)% for the nine months ended October 31, 2017 from (21)% for the nine months ended October 31, 2016, primarily driven by a decrease in revenue, partially offset by a decrease in total spend during the nine months ended October 31, 2017. Further discussion regarding the spend drivers are discussed below under the heading “Results of Operations.” In addition, during November


2017, our Board of Directions approved a world-wide restructuring plan that will result in material restructuring charges or other non-recurring charges that will have the effect of reducing our operating margins and increasing our net loss for the remainder of fiscal 2018 and into fiscal 2019 on a GAAP basis.

Business Model Transition Metrics

In order to help better understand our financial performance during and after the business model transition, we use several key performance metrics including recurring revenue total subscriptions, ARR, and annualized revenue per subscription ("ARPS"). ARR, ARPS, and recurring revenueNR3. These metrics are key performance metrics and should be viewed independently of revenue and deferred revenue as ARR, ARPS, and recurring revenuethese metrics are not intended to be combined with those items. We use these metrics to monitor the strength of our recurring business. We believe these metrics are useful to investors because they can help in monitoring the long-term health of our business. Our determination and presentation of these metrics may differ from that of other companies. The presentation of these metrics is meant to be considered in addition to, not as a substitute for or in isolation from, our financial measures prepared in accordance with GAAP. Please refer to the Glossary of Terms for the definitions of these metrics.

36

The following table outlines our recurring revenue metric for the three and nine months ended October 31, 20172021 and 2016:2020:

Three Months Ended October 31, 2021Change compared to
prior fiscal year		Three Months Ended October 31, 2020
(In millions, except percentage data)Three Months Ended October 31, 2017 Change compared to
prior fiscal year		 Three Months Ended October 31, 2016 (1)(In millions, except percentage data)$%    
 $ %     
Recurring Revenue (2)
$475.5
 $91.5
 24% $384.0
Recurring revenue (1)
Recurring revenue (1)
$1,088.3 $164.1 18 %$924.2 
As a percentage of net revenue92% N/A
 N/A
 78%As a percentage of net revenue97 %N/AN/A97 %
       
Nine Months Ended October 31, 2017 Change compared to
prior fiscal year		 Nine Months Ended October 31, 2016 (1)Nine Months Ended October 31, 2021Change compared to
prior fiscal year		Nine Months Ended October 31, 2020
 $ %     $%    
Recurring Revenue (2)
$1,368.8
 $238.4
 21% $1,130.4
Recurring Revenue (1)
Recurring Revenue (1)
$3,088.5 $406.8 15 %$2,681.7 
As a percentage of net revenue91% N/A
 N/A
 73%As a percentage of net revenue97 %N/AN/A97 %
 ________________
(1)Prior periods have been adjusted to conform with the current period's presentation.
(2)
The acquisition of a business may cause variability in the comparison of recurring revenue in this table above and recurring revenue derived from the revenue reported in the Condensed Consolidated Statement
(1)The acquisition of a business may cause variability in the comparison of recurring revenue in this table above and recurring revenue derived from the revenue reported in the Condensed Consolidated Statements of Operations.



The following table outlines our ARR, subscriptionsNR3 was within the range of 100% and ARPS metrics110% as of both October 31, 2017, July 31, 2017,2021, and January 31, 2017:

 Balances, October 31, 2017 Change compared to
prior quarter end		 Balances, July 31, 2017 Balances, October 31, 2017 Change compared to
prior fiscal year end		 Balances, January 31, 2017 (1)
  $ %       $ %     
ARR (in millions)
               
Subscription plan ARR$924.0
 $140.3
 18 % $783.7
 $924.0
 $352.6
 62 % $571.4
Maintenance plan ARR$977.8
 $(68.2) (7)% $1,046.0
 $977.8
 $(90.2) (8)% $1,068.0
Total ARR (2)$1,901.8
 $72.1
 4 % $1,829.7
 $1,901.8
 $262.4
 16 % $1,639.4
                
Number of Subscriptions (in thousands)
         

  
Subscription plan1,896.0
 306.8
 19 % 1,589.2
 1,896.0
 808.9
 74 % 1,087.1
Maintenance plan1,693.2
 (160.8) (9)% 1,854.0
 1,693.2
 (324.8) (16)% 2,018.0
Total subscriptions3,589.2
 146.0
 4 % 3,443.2
 3,589.2
 484.1
 16 % 3,105.1
                
ARPS (ARR divided by number of Subscriptions)
            
Subscription plan ARPS$487
 $(6) (1)% $493
 $487
 $(39) (7)% $526
Maintenance plan ARPS$577
 $13
 2 % $564
 $577
 $48
 9 % $529
Total ARPS (3)$530
 $(1) — % $531
 $530
 $2
 — % $528
 ________________
(1)Prior periods have been adjusted to conform with the current period's presentation.
(2)
The acquisition of a business may cause variability in the comparison of ARR reported in this table above and ARR derived from the revenue reported in the Condensed Consolidated Statement of Operations.
(3)There are small variances between ARR and total subscriptions due in part to the inherent limitation with collecting all subscriptions information. For example, Buzzsaw and Constructware are included with ARR but not in total subscriptions due to these inherent limitations. We do not view these variances as meaningful to amounts or quarterly comparisons presented here for ARPS.

Total ARR increased 4%, as of October 31, 2017 as compared to the three months ended July 31, 2017, and 16%, as compared to the end of fiscal 2017, primarily due to a 18% and 62% increase, in the respective periods, in subscription plan ARR driven by growth in all subscription plan types, led by product subscription. The increase was partially offset by a 7% and 8% decrease, in the respective periods, in maintenance plan ARR driven by the migration from maintenance plan subscriptions to subscription plan subscriptions.

Subscription plan subscriptions increased 19% or approximately 306,800 as compared to the previous quarter and 74% or approximately 808,900 as compared to the end of fiscal 2017, driven by growth in all subscription plan types, led by new product subscriptions. Subscription plan subscriptions benefited from approximately 110,300 and 173,500 maintenance subscribers that were converted to product subscription under the maintenance-to-subscription program during the three and nine months ended October 31, 2017, respectively.

Maintenance plan subscriptions decreased 9% or approximately 160,800 from the previous quarter and 16% or approximately 324,800 from the end of fiscal 2017, primarily as a result of the discontinuation of new maintenance agreement sales as well as the maintenance-to-subscription program in which approximately 110,300 and 173,500 maintenance plan subscriptions converted to product subscription during the three and nine months ended October 31, 2017, respectively. The net decrease is expected and we expect to see ongoing declines in maintenance plan subscriptions going forward as part of the business model transition. The rate of decline will vary based on the number of subscriptions subject to renewal, the renewal rate, and our ability to incentivize customers to switch over to enterprise business agreements ("EBAs") or product subscriptions.

ARPS as of October 31, 2017 was $530, a slight decrease compared to the previous quarter primarily driven by a decrease in subscription plan ARPS. The decrease in subscription plan ARPS was driven by a decrease in both EBA and cloud subscription ARPS, partially offset by a growth in product subscription ARPS. Offsetting the decline in subscription plan ARPS was growth in maintenance plan ARPS driven by the maintenance-to-subscription program.



ARPS had a slight increase compared to the end of fiscal 2017 due to an increase in maintenance plan ARPS primarily driven by the maintenance-to-subscription program. ARPS also benefited from an increase in product subscription ARPS, partially offset by decreases in both EBAs and cloud service offerings ARPS.

When adjusted for the impact of the maintenance-to-subscription program, subscription plan ARPS and maintenance plan ARPS would have been $496 and $561, respectively.

2020.
Our ARPS is currently, and will continue to be, affected by various factors including subscription term-length, migration from maintenance plan subscriptions, geography and product mix, promotions, sales linearity within a quarter, pricing changes, and foreign currency. We expect to see ARPS fluctuate up or down on a quarterly basis. As we progress on our business model transition, we expect all of the impacts of these factors to start to stabilize.

Foreign Currency Analysis

We generate a significant amount of our revenue in the United States, Japan, Germany, Japan, the United Kingdom and Canada.Finland.

The following table shows the impact of foreign exchangesexchange rate changes on our net revenue and total spend:

 Three Months Ended October 31, 2017 Nine Months Ended October 31, 2017
 Percent change compared to
prior fiscal year		 Constant Currency percent change compared to
prior fiscal year (2)		 Positive/Negative/Neutral impact from foreign exchange rate changes Percent change compared to
prior fiscal year		 Constant Currency percent change compared to
prior fiscal year (2)		 Positive/Negative/Neutral impact from foreign exchange rate changes
Revenue5% 6% Negative (3)% (2)% Negative
Spend (1)1% —% Negative (3)% (3)% Neutral
Three Months Ended October 31, 2021Nine Months Ended October 31, 2021
Percent change compared to
prior fiscal year		Constant Currency percent change compared to
prior fiscal year (1)		Positive/Negative/Neutral impact from foreign exchange rate changesPercent change compared to
prior fiscal year		Constant Currency percent change compared to
prior fiscal year (1)		Positive/Negative/Neutral impact from foreign exchange rate changes
Net revenue18 %17 %Positive15 %14 %Positive
Total spend19 %18 %Negative17 %15 %Negative
 ________________
(1)Our total spend is defined as cost of revenue plus operating expenses.
(2)Please refer to the Glossary of Terms for the definitions of our constant currency growth rates.
(1)Please refer to the Glossary of Terms for the definitions of our constant currency growth rates.

Changes in the value of the U.S. dollar may have a significant effect on net revenue, total spend, and income (loss) from operations in future periods. We use foreign currency contracts to reduce the exchange rate effect on a portion of the net revenue of certain anticipated transactions but do not attempt to completely mitigate the impact of fluctuations of such foreign currency against the U.S. dollar.

Deferred Revenue and Unbilled Deferred RevenueRemaining Performance Obligations

OurRPO represents deferred revenue balance at October 31, 2017 was $1.76 billion and primarily relates to subscription and maintenance agreements invoiced for which the revenue has not yet been recognized but will be recognized as revenue ratably over the life of the contracts. The term of our subscription contracts is typically between one and three years.

We define unbilled deferred revenue as contractually stated or committed orders under early renewal and multi-year billing plans for subscription, services, license, and maintenance for which the associated deferred revenue has not yet been recognized and the customer has not been invoiced.recognized. Unbilled deferred revenue is not included as a receivable or deferred revenue on our Condensed Consolidated Balance Sheet until invoiced toSheets. See Note 3, “Revenue Recognition,” for more details on Autodesk's performance obligations.
(in millions)October 31, 2021January 31, 2021
Deferred revenue$3,342.9 $3,360.2 
Unbilled deferred revenue888.5 880.5 
RPO$4,231.4 $4,240.7 

37

RPO consisted of the customer.following:
(in millions)October 31, 2021January 31, 2021
Current RPO$2,877.0 $2,738.0 
Non-current RPO1,354.4 1,502.7 
RPO$4,231.4 $4,240.7 

 Nine Months Ended
(in millions)October 31, 2017
Deferred revenue$1,763.9
Unbilled deferred revenue (1)147.9
              Total$1,911.8
 ________________
(1)This is our first year presenting this metric and we are not able to provide historical information at this time. Comparative information will not be available until our first quarter of fiscal 2019.



We expect that the amount of unbilled deferred revenue and deferred revenueRPO will change from quarter to quarter for several reasons, including the specific timing, duration, and size of large customer subscription and support agreements, varying billing cycles of such agreements, the specific timing of customer renewals, and foreign currency fluctuationsfluctuations. Historically, we have had increased EBA sales activity in our fourth fiscal quarter and this seasonality may affect the timingrelative value of when unbilled deferred revenue is recognized as revenue.our billings, RPO, and collections in the fourth and first fiscal quarters.

Balance Sheet and Cash Flow Items

At October 31, 2017,2021, we had $1.72 billion$1,811.8 million in cash, cash equivalents, and marketable securities. This amount includes the aggregate net proceeds of $492.0 million, after deducting the underwriting discounts and related offering expenses, from our June 2017 registered underwritten public offering of $500.0 million aggregate principal amount of 3.5% notes due June 15, 2027. On July 27, 2017, we redeemed in full $400.0 million in aggregate principal amount of outstanding 1.95% senior notes due December 15, 2017. To redeem the notes, we used a portion of the proceeds of the 2017 notes to pay a redemption price of approximately $400.9 million, plus accrued and unpaid interest from June 15, 2017 to, but excluding, the redemption date. Total cash repayment was $401.8 million.

We completed the nine months ended October 31, 2017 with lower accounts receivable and deferred revenue balances as compared to the fiscal year ended January 31, 2017.

Our cash flow used infrom operations was $78.4increased to $808.5 million a decrease of 151% for the nine months ended October 31, 20172021, compared to $154.1$779.6 million of cash flow provided by operations infor the nine months ended October 31, 2016.

Further2020. We repurchased 1.7 million shares of our common stock for $476.0 million during the nine months ended October 31, 2021. Comparatively, we repurchased 2.1 million shares of our common stock for $392.9 million during the nine months ended October 31, 2020. See further discussion regarding the balance sheet and cash flow activities are discussed below under the heading “Liquidity and Capital Resources.”

Results of Operations

Impacts of COVID-19 to Autodesk’s Business

We are continuing to conduct business during the COVID-19 pandemic with substantial modifications to employee travel, employee work locations, and virtualization, postponement or cancellation of certain sales and marketing events, among other modifications. We will continue to invest in critical areas such as research and development, construction, and digitizing the company to ensure our future success as we come out of the pandemic. We have observed other companies, as well as many governments continuing to take precautionary measures to address COVID-19, and they may take further actions that alter their normal business operations. While government authorities in some geographies are removing or adding COVID-19 related business operations restrictions, we continue to actively monitor the situation and may take further actions that alter our business operations as may be required by federal, state, or local authorities, or that we determine are in the best interests of our employees, customers, partners, suppliers, and stockholders, including in response to outbreaks and variants. 

Additionally, the COVID-19 pandemic has spurred changes in the way we work as we move to a more hybrid workforce resulting in an evaluation of our office space needs. Accordingly, we expect to reduce our facilities portfolio worldwide and expect to incur impairments to assets associated with our operating leases for real estate over the next several quarters, which we currently estimate could result in impairment charges that would range up to approximately $180 million depending on the then-current market conditions. Optimizing our facilities costs will allow us to better deploy capital to further our strategy and drive growth. However, there is no guarantee that we will realize any anticipated benefits to our business, including any cost savings or operational efficiencies, or that our impairment charges would be limited to that amount.

We believe our investment in cloud products and a subscription business model, backed by a strong balance sheet, give us a robust foundation to successfully navigate the economic challenges of COVID-19. However, supply chain disruption and resulting inflationary pressures, a global labor shortage, and the ebb and flow of COVID, including in specific geographies, are currently impacting the pace of our recovery and our outlook. The extent of the impact on our business in fiscal 2022 and beyond will depend on several factors, including the full duration and the extent of the pandemic, including as a result of outbreaks and variants; actions taken by governments, businesses, and consumers in response to the pandemic; speed and timing of economic recovery, including in specific geographies; speed of rollout of COVID-19 vaccines, lifting of restrictions on movement, and normalization of full-time return to work and social events; our billings and renewal rates, including new business close rates, rate of multi-year contracts, pace of closing larger transactions, and new unit volume growth; and effect of the pandemic on margins and cash flow. All of these factors continue to evolve and remain uncertain at this time, and some of these factors are not within our control. Further discussion of the potential impacts of COVID-19 on our business can be found in Part II, Item 1A, “Risk Factors.”
38


Net Revenue

Net Revenue by Income Statement Presentation

Subscription revenue consists of our term-based product subscriptions, cloud service offerings, and flexible EBAs. Revenue from these arrangements is predominately recognized ratably over the contract term commencing with the date our service is made available to customers and when all other revenue recognition criteria have been satisfied.

Maintenance revenue consists of renewal fees for existing maintenance plan agreements that were initially purchased with a perpetual software license. Under our maintenance plan, customers are eligible to receive unspecified upgrades, when and if available, and technical support. We recognize maintenance revenue ratably over the term of the agreements, which is generally between one and three years. Subscriptionyear.

Other revenue consists of our term-based product subscriptions, cloud service offerings, and flexible enterprise business arrangements. Note that with the change in our presentation of revenue in our condensed consolidated statement of operations in the first quarter of fiscal 2018, our term-based product subscriptions and flexible enterprise business arrangements are classified and presented in a single line item. Revenue from these arrangements is recognized ratably over the contract term. Revenue for our cloud service offerings is recognized ratably over the contract term commencing with the date our service is made available to customers.

Licenseconsulting, training, and other revenue consists of (1) perpetual license revenueproducts and (2) other revenue. Perpetual license revenue includes software license revenue from the sale of perpetual licenses and Creative Finishing. Other revenue includes revenue such as consulting and training,services, and is recognized over time as the products are delivered and services are performed.



 Three Months Ended Change compared to
prior fiscal year		 Three Months Ended Management Comments
(in millions)October 31, 2017$     %     October 31, 2016 
Net Revenue:         
Maintenance (1)$244.4
 $(28.8) (11)% $273.2
 The decrease in maintenance revenue is driven by the discontinuation of new maintenance agreements. We expect maintenance revenue will slowly decline; however, the rate of decline will vary based on the number of renewals, the renewal rate, and our ability to incentivize maintenance plan customers to switch over to subscription plan offerings.
Subscription (1)231.1
 118.7
 106 % 112.4
 The increase in subscription revenue is primarily a result of the business model transition. We saw growth across all subscription plan types, led by product subscriptions and enterprise business agreements.
     Total maintenance and subscription revenue475.5
 89.9
 23 % 385.6
  
License and other (1) (2)39.8
 (64.2) (62)% 104.0
 The decrease in license revenue is driven by the business model transition and the discontinuation of perpetual suite license sales in fiscal 2017, resulting in a decrease in revenue from perpetual licenses.
 $515.3
 $25.7
 5 % $489.6
  
          
 Nine Months Ended Change compared to
prior fiscal year		 Nine Months Ended Management Comments
 October 31, 2017$ %     October 31, 2016 
Net Revenue:         
Maintenance (1)$769.8
 $(65.3) (8)% $835.1
 The decrease in maintenance revenue is driven by the discontinuation of new maintenance agreements. We expect maintenance revenue will slowly decline; however, the rate of decline will vary based on the number of renewals, the renewal rate, and our ability to incentivize maintenance plan customers to switch over to subscription plan offerings.
Subscription (1)600.6
 300.9
 100 % 299.7
 The increase in subscription revenue is primarily a result of the business model transition. We saw growth across all subscription plan types, led by product subscriptions and enterprise business agreements.
     Total maintenance and subscription revenue1,370.4
 235.6
 21 % 1,134.8
  
License and other (1) (2)132.4
 (285.0) (68)% 417.4
 The decrease in license revenue is driven by the business model transition, and the discontinuation of suite license sales, resulting in a decrease in revenue from perpetual license.
 $1,502.8
 $(49.4) (3)% $1,552.2
  
 Three Months EndedChange Compared to Prior Fiscal YearThree Months EndedManagement comments
(In millions, except percentages)October 31, 2021$    %    October 31, 2020
Net Revenue:
Subscription$1,070.7 $186.3 21 %$884.4 Increase due to growth across subscription types, led by product subscription renewal revenue. Also contributing to the growth was an increase in revenue from EBA offerings.
Maintenance (1)17.6 (22.2)(56)%39.8 
     Total subscription and maintenance revenue1,088.3 164.1 18 %924.2 
Other37.5 9.3 33 %28.2 
$1,125.8 $173.4 18 %$952.4 
 Nine Months EndedChange compared to
prior fiscal year		Nine Months EndedManagement Comments
October 31, 2021$%    October 31, 2020
Net Revenue:
Subscription
$3,034.9 $506.3 20 %$2,528.6 Increase due to growth across subscription types, led by product subscription renewal revenue. Also contributing to the growth was an increase in revenue from EBA offerings.
Maintenance (1)
53.6 (99.5)(65)%153.1 
     Total subscription and maintenance revenue3,088.5 406.8 15 %2,681.7 
Other86.3 16.8 24 %69.5 
$3,174.8 $423.6 15 %$2,751.2 
____________________
(1)Prior periods have been adjusted to conform with current period's presentation. See Note 1, "Basis of Presentation", of our condensed consolidated financial statements for additional information.
(2)Within license and other revenue, there was a 16% decrease and 19% decrease in other revenue during the three and nine months ended October 31, 2017, respectively, as compared to the same periods in the prior fiscal year. Other revenue represented 5% of total net revenue for both the three and nine months ended October 31, 2017 as compared to 6% for both the three and nine months ended October 31, 2016, respectively.

(1)We expect maintenance revenue will slowly decline; however, the rate of decline will vary based on the number of renewals, the renewal rate, and our ability to incentivize maintenance plan customers to transition to subscription plan offerings.


39

Net Revenue by Product Family

Our product offerings are focused in four primary product families: AEC, MFG, ACAD,Architecture, Engineering and M&E. During the business model transition, revenue has beenConstruction (“AEC”), AutoCAD and will be negatively impacted as more revenue is recognized ratably rather than upfrontAutoCAD LT, Manufacturing (“MFG”), and as new product offerings generally have a lower initial purchase price. As noted in the discussion under the heading "Strategy," we discontinued selling new perpetual licenses of most individual software products in fiscal 2017Media and we discontinued selling new perpetual licenses of suites as of August 1, 2016 with the introduction of industry collections. These broad impacts are reflected in the summary below.Entertainment (“M&E”).
 Three Months EndedChange compared to
prior fiscal year		Three Months EndedManagement comments
(In millions, except percentages)October 31, 2021$    %    October 31, 2020
Net Revenue by Product Family:
AEC$511.1 $91.7 22 %$419.4 Increase due to growth in revenue from AEC Collections, EBAs, Revit and Innovyze.
AutoCAD and AutoCAD LT318.4 39.6 14 %278.8 Increase due to growth in revenue from both AutoCAD LT and AutoCAD.
MFG225.0 30.9 16 %194.1 Increase due to growth in revenue from EBAs, Fusion360, and MFG Collections.
M&E63.0 9.0 17 %54.0 Increase due to growth in revenue from ShotGrid, Maya, and 3DS Max.
Other8.3 2.2 36 %6.1 
Total Net Revenue$1,125.8 $173.4 18 %$952.4 
Nine Months EndedChange compared to
prior fiscal year		Nine Months Ended
October 31, 2021$%    October 31, 2020
Net Revenue by Product Family:
AEC$1,432.4 $233.3 19 %$1,199.1 Increase due to growth in revenue from AEC Collections, EBAs, Innovyze, and Revit.
ACAD and AutoCAD LT907.9 95.0 12 %812.9 Increase due to growth in revenue from both AutoCAD LT and AutoCAD.
MFG630.0 67.5 12 %562.5 Increase due to growth in revenue fromEBAs, Fusion360, and MFG Collections.
M&E176.5 16.6 10 %159.9 Increase due to growth in revenue from Maya, ShotGrid, and M&E Collections.
Other28.0 11.2 67 %16.8 
Total Net Revenue$3,174.8 $423.6 15 %$2,751.2 


40
 Three Months Ended Change compared to
prior fiscal year		 Three Months Ended Management Comments
(in millions)October 31, 2017$     %     October 31, 2016 
Net Revenue by Product Family:         
Architecture, Engineering and Construction ("AEC")$215.4
 $3.1
 1 % $212.3
 Driven by an increase in revenue from AEC EBAs, partially offset by a net decrease in AEC collections and legacy suites.
Manufacturing ("MFG")146.9
 0.3
 — % 146.6
 Driven by an increase in revenue from MFG EBAs, partially offset by a net decrease in MFG collections and legacy suites.
AutoCAD and AutoCAD LT ("ACAD")102.7
 22.6
 28 % 80.1
 Driven by increases in both AutoCAD LT and AutoCAD.
Media and Entertainment ("M&E")37.7
 3.5
 10 % 34.2
 Driven by an increase in Animation, partially offset by a decrease in Creative Finishing.
Other12.6
 (3.8) (23)% 16.4
  
 $515.3
 $25.7
 5 % $489.6
  
          
 Nine Months Ended Change compared to
prior fiscal year		 Nine Months Ended  
 October 31, 2017$ %     October 31, 2016  
Net Revenue by Product Family:         
Architecture, Engineering and Construction ("AEC")$628.7
 $(55.7) (8)% $684.4
 Driven by a net decrease in AEC collections and legacy suites, partially offset by an increase in revenue from AEC EBAs.
Manufacturing ("MFG")436.0
 (45.5) (9)% 481.5
 Driven by a net decrease in MFG collections and legacy suites, partially offset by an increase in revenue from MFG EBAs.
AutoCAD and AutoCAD LT ("ACAD")290.7
 51.6
 22 % 239.1
 Driven by increases in both AutoCAD LT and AutoCAD.
Media and Entertainment ("M&E")112.1
 8.5
 8 % 103.6
 Driven by an increase in Animation, partially offset by a decrease in Creative Finishing.
Other35.3
 (8.3) (19)% 43.6
  
 $1,502.8
 $(49.4) (3)% $1,552.2
  



Net Revenue by Geographic Area

Three Months Ended October 31, 2021Change compared to
prior fiscal year		Constant currency change compared to prior fiscal yearThree Months Ended October 31, 2020
(in millions)Three Months Ended October 31, 2017 Change compared to
prior fiscal year		 Constant Currency Change compared to prior fiscal year Three Months Ended October 31, 2016
 $     %     %     
(In millions, except percentages)(In millions, except percentages)Three Months Ended October 31, 2021$    %    %    Three Months Ended October 31, 2020
Net Revenue:         Net Revenue:
Americas  
 
    Americas
U.S.$182.4
 $0.2
 — % *
 $182.2
U.S.$383.2 $54.7 17 %*$328.5 
Other Americas32.2
 1.1
 4 % *
 31.1
Other Americas78.7 14.3 22 %*64.4 
Total Americas214.6
 1.3
 1 % 1 % 213.3
Total Americas461.9 69 18 %17 %392.9 
Europe, Middle East and Africa ("EMEA")205.4
 14.4
 8 % 10 % 191.0
Asia Pacific ("APAC")95.3
 10.0
 12 % 10 % 85.3
Total Net Revenue (1)$515.3
 $25.7
 5 % 6 % $489.6
EMEAEMEA433.2 68.9 19 %16 %364.3 
APACAPAC230.7 35.5 18 %17 %195.2 
Total Net RevenueTotal Net Revenue$1,125.8 $173.4 18 %17 %$952.4 
         
Emerging Economies$57.8
 $1.2
 2 % 3 % $56.6
Emerging Economies$139.7 $24.8 22 %20 %$114.9 
         
(in millions)Nine Months Ended October 31, 2017 Change compared to
prior fiscal year		 Constant currency change compared to prior fiscal year Nine Months Ended October 31, 2016
Nine Months Ended October 31, 2021Change compared to
prior fiscal year		Constant currency change compared to prior fiscal yearNine Months Ended October 31, 2020
(In millions, except percentages)(In millions, except percentages)$    %    %    
Net Revenue:Nine Months Ended October 31, 2017 $     %     %     Nine Months Ended October 31, 2016Net Revenue:
Americas       Americas
U.S.$546.8
 $(15.3) (3)% *
 $562.1
U.S.$1,054.5 $115.9 12 %*$938.6 
Other Americas91.9
 (7.1) (7)% *
 99.0
Other Americas221.9 33.9 18 %*188.0 
Total Americas638.7
 (22.4) (3)% (3)% 661.1
Total Americas1,276.4 149.8 13 %13 %1,126.6 
EMEA594.4
 (19.7) (3)% (1)% 614.1
EMEA1,225.9 162.1 15 %12 %1,063.8 
APAC269.7
 (7.3) (3)% (3)% 277.0
APAC672.5 111.7 20 %18 %560.8 
Total Net Revenue$1,502.8
 $(49.4) (3)% (2)% $1,552.2
Total Net Revenue$3,174.8 $423.6 15 %14 %$2,751.2 
         
Emerging Economies$162.5
 $(11.7) (7)% (6)% $174.2
Emerging Economies$393.6 $53.6 16 %15 %$340.0 
____________________ 
(1)Totals may not sum due to rounding.
* Constant currency data not provided at this level.

We believe that international revenue will continue to comprise a majority of our net revenue. Unfavorable economic conditions in the countries that contribute a significant portion of our net revenue, including in emerging economies such as Brazil, Russia, India, and China, and including as a result of the COVID-19 pandemic, may have an adverse effect on our business in those countries and our overall financial performance. Changes in the value of the U.S. dollar relative to other currencies have significantly affected, and could continue to significantly affect, our financial results for a given period even though we hedge a portion of our current and projected revenue. Increases to the levels of political and economic unpredictability or protectionism in the global market may impact our future financial results. Additionally, during the business model transition, revenue has been and will be negatively impacted as more revenue is recognized ratably rather than upfront and as new product offerings generally have a lower initial purchase price. This transition has a particular impact to emerging economies as sales of perpetual licenses have historically comprised a greater percentage of total emerging economy sales in comparison to mature markets.

41

Net Revenue by Sales Channel
 Three Months EndedChange compared to
prior fiscal year		Three Months EndedManagement Comments
(In millions, except percentages)October 31, 2021$    %    October 31, 2020
Net Revenue by Sales Channel:
Indirect$729.3 $73.1 11 %$656.2 Increase due to growth in subscription revenue.
Direct396.5 100.3 34 %296.2 Increase due to an increase in EBAs and our online Autodesk branded store.
Total Net Revenue$1,125.8 $173.4 18 %$952.4 
Nine Months EndedChange compared to
prior fiscal year		Nine Months EndedManagement Comments
October 31, 2021$%    October 31, 2020
Net Revenue by Sales Channel:
Indirect$2,092.8 $173.9 9 %$1,918.9 Increase due to growth in subscription revenue.
Direct1,082.0 249.7 30 %832.3 Increase due to an increase in EBAs and our online Autodesk branded store.
Total Net Revenue$3,174.8 $423.6 15 %$2,751.2 

Net Revenue by Product Type
Three Months Ended October 31, 2021Change compared to
prior fiscal year		Three Months Ended October 31, 2020
(In millions, except percentages)$    %    Management Comments
Net Revenue by Product Type:
Design$994.4 $146.7 17 %$847.7 Increase due to growth in EBA offerings, AEC & MFG collections, AutoCAD LT, and AutoCAD Family.
Make93.9 17.4 23 %76.5 Increase primarily due to growth in revenue from BIM Family, Fusion 360, and Plangrid products.
Other37.5 9.3 33 %28.2 
Total Net Revenue$1,125.8 $173.4 18 %$952.4 
Nine Months Ended October 31, 2021Change compared to
prior fiscal year		Nine Months Ended October 31, 2020
(In millions, except percentages)$    %    Management Comments
Net Revenue:
Design$2,823.5 $356.7 14 %$2,466.8 Increase due to growth in EBA offerings, AEC & MFG collections, AutoCAD LT, and AutoCAD Family.
Make265.0 50.1 23 %214.9 Increase primarily due to growth in revenue from BIM Family, Fusion 360, and Plangrid products.
Other86.3 16.8 24 %69.5 
Total Net Revenue$3,174.8 $423.6 15 %$2,751.2 

42

Cost of Revenue and Operating Expenses

Cost of maintenancesubscription and subscriptionmaintenance revenue includes the labor costs of providing product support to our subscription and maintenance and subscription customers, includingSaaS vendor costs and allocated IT andcosts, facilities costs, shipping and handling costs, professional services fees related to operating our network and cloud infrastructure, royalties, depreciation expense and operating lease payments associated with computer equipment, data center costs, salaries, related expenses of network operations, and stock-based compensation expense.expense, and gains and losses on our operating expense cash flow hedges.

Cost of license and other revenue includes labor costs associated with product setup, and fulfillment for perpetual licenses and costs of consulting and training services contracts, and collaborative project management services contracts. Cost of license


and other revenue also includes stock-based compensation expense, direct material and overhead charges, allocated IT and facilities costs, professional services fees, and royalties. Direct materialgains and overhead charges include the cost associated with electronic and physical fulfillment.losses on our operating expense cash flow hedges.

Cost of revenue, at least over the near term, is affected by labor costs, hosting costs for our cloud offerings, the volume and mix of product sales, fluctuations in consulting costs, amortization of developed technology, new customer support offerings, royalty rates for licensed technology embedded in our products, and employee stock-based compensation expense.expense, and gains and losses on our operating expense cash flow hedges.

Marketing and sales expenses include salaries, bonuses, benefits, and stock-based compensation expense for our marketing and sales employees, the expense of travel, entertainment, and training for such personnel, sales and dealer commissions, and the costs of programs aimed at increasing revenue, such as advertising, trade shows and expositions, and various sales and promotional programs. Marketing and sales expenses also include laborSaaS vendor costs associated with sales and order management, sales and dealer commissions,allocated IT costs, payment processing fees, the cost of supplies and equipment, gains and losses on our operating expense cash flow hedges, facilities costs, and allocated ITlabor costs associated with sales and facilities costs.order management.

Research and development expenses, which are expensed as incurred, consist primarily of salaries, bonuses, benefits, and stock-based compensation expense for research and development employees, and the expense of travel, entertainment, and training for such personnel, professional services such as fees paid to software development firms and independent contractors, SaaS vendor costs and allocated IT costs, gains and losses on our operating expense cash flow hedges, and allocated IT and facilities costs.

General and administrative expenses include salaries, bonuses, transition costs, benefits, and stock-based compensation expense for our CEO, finance, human resources, and legal employees, as well as professional fees for legal and accounting services, SaaS vendor costs and net IT costs, certain foreign business taxes, gains and losses on our operating expense cash flow hedges, expense of travel, entertainment, and training, net IT and facilities costs, acquisition-related costs, and the cost of supplies and equipment.

 Three Months EndedChange compared to
prior fiscal year		Three Months EndedManagement comments
(In millions, except percentages)October 31, 2021$    %    October 31, 2020
Cost of revenue:
Subscription and maintenance$74.8 $14.1 23 %$60.7 Increase primarily due to an increase in cloud hosting costs and employee-related costs driven by higher headcount as well as an increase in stock-based compensation.
Other17.7 2.3 15 %15.4 Increase primarily due to an increase in employee-related costs driven by higher headcount as well as an increase in stock-based compensation.
Amortization of developed technologies14.6 7.0 92 %7.6 Increase due to growth in amortization expense from acquired developed technologies as a result of our acquisitions in the fourth quarter of fiscal 2021 and first and second quarter of fiscal 2022.
Total cost of revenue$107.1 $23.4 28 %$83.7 
Operating expenses:
Marketing and sales$419.4 $60.1 17 %$359.3 Increase primarily due to an increase in employee-related costs driven by higher headcount, an increase in advertisement and promotion costs mainly due to new company branding campaign as well as an increase in stock-based compensation.
Research and development282.1 49.1 21 %233.0 Increase primarily due to an increase in stock-based compensation as well as an increase in employee-related costs due to higher headcount and an increase in professional fees.
43

General and administrative112.8 14.0 14 %98.8 Increase primarily due to an increase in stock-based compensation as well as an increase in cloud hosting costs and employee-related costs driven by higher headcount.
Amortization of purchased intangibles11.1 1.5 16 %9.6 Increase due to growth in amortization expense from acquired intangibles as a result of our acquisitions in the fourth quarter of fiscal 2021 and first and second quarter of fiscal 2022.
Total operating expenses$825.4 $124.7 18 %$700.7 
Nine Months EndedChange  compared to
prior fiscal year		Nine Months EndedManagement comments
October 31, 2021$%    October 31, 2020
Cost of revenue:
Subscription and maintenance$219.3 $42.7 24 %$176.6 Increase primarily due to an increase in cloud hosting costs, employee-related costs driven by higher headcount, as well as an increase in stock-based compensation.
Other47.6 0.1 0.2 %47.5 Other cost of revenue remained flat as compared to the prior period.
Amortization of developed technologies38.4 16.0 71 %22.4 Increase due to growth in amortization expense from acquired developed technologies as a result of our acquisitions in the fourth quarter of fiscal 2021 and first and second quarter of fiscal 2022.
Total cost of revenue$305.3 $58.8 24 %$246.5 
Operating expenses:
Marketing and sales$1,195.3 $143.8 14 %$1,051.5 Increase primarily due to an increase in employee-related costs driven by higher headcount, an increase in advertisement and promotion costs due to new company branding campaign as well as an increase in stock-based compensation, cloud hosting costs and professional fees.
Research and development824.5 141.6 21 %682.9 Increase primarily due to an increase in employee-related costs driven by higher headcount, an increase in stock-based compensation, as well as an increase in professional fees and cloud hosting costs.
General and administrative344.1 47.3 16 %296.8 Increase primarily due to an increase in employee-related costs driven by higher headcount, an increase in stock-based compensation and acquisition-related costs, as well as an increase in cloud hosting costs, and professional fees, partially offset by capitalized software costs.
Amortization of purchased intangibles30.4 1.6 6 %28.8 Increase due to growth in amortization expense from acquired intangibles as a result of our acquisitions in the fourth quarter of fiscal 2021 and first and second quarter of fiscal 2022.
Total operating expenses$2,394.3 $334.3 16 %$2,060.0 

 Three Months Ended Change compared to
prior fiscal year		 Three Months Ended Management comments
(in millions)October 31, 2017$     %     October 31, 2016 
Cost of revenue:         
Maintenance and subscription (1)$53.9
 $7.1
 15 % $46.8
 Up due to an increase in employee-related costs driven by increased headcount associated with maintenance and subscription services in support of the business model transition
License and other (1)19.6
 (4.7) (19)% 24.3
 Down due to lower employee-related costs from reduced headcount associated with license and other revenue products and services as a result of our move to a subscription based business model
Amortization of developed technology (1)4.0
 (6.4) (62)% 10.4
 Down as previously acquired developed technologies continue to become fully amortized and there were no acquisitions in the current period
Total cost of revenue$77.5
 $(4.0) (5)% $81.5
  
   

 

    
Operating expenses:  

 

    
Marketing and sales$272.5
 $17.5
 7 % $255.0
 Up due to an increase in employee-related costs as a result of increased headcount as well as an increase in stock-based compensation expense due to a higher fair value of awards granted
Research and development191.8
 (0.8) — % 192.6
 Down due to a decrease in employee-related costs and in stock-based compensation expense as a result of reduced headcount
General and administrative68.8
 (1.6) (2)% 70.4
 Down due to a decrease in professional fees, partially offset by an increase in stock-based compensation expense due to an increase in the fair value of awards granted
Amortization of purchased intangibles4.7
 (2.1) (31)% 6.8
 Down as previously acquired intangible assets continue to become fully amortized and there were no acquisitions in the current period
Restructuring charges and other facility exit costs, net (2) (3)—
 (3.2) (100)% 3.2
 Down as the majority of the Fiscal 2017 Plan was recognized during the first half of fiscal 2017
Total operating expenses$537.8
 $9.8
 2 % $528.0
  


          
 Nine Months Ended Change compared to
prior fiscal year		 Nine Months Ended Management comments
 October 31, 2017$ %     October 31, 2016 
Cost of revenue:         
Maintenance and subscription (1)$161.6
 $21.4
 15 % $140.2
 Up due to an increase in employee-related costs driven by increased headcount associated with maintenance and subscription services in support of the business model transition
License and other (1)56.0
 (30.8) (35)% 86.8
 Down due to lower employee-related costs from reduced headcount associated with license and other revenue products and services as a result of the business model transition
Amortization of developed technology (1)12.7
 (19.3) (60)% 32.0
 Down as previously acquired developed technologies continue to become fully amortized and there were no acquisitions in the current period
Total cost of revenue$230.3
 $(28.7) (11)% $259.0
  
          
Operating expenses:         
Marketing and sales$785.8
 $46.9
 6 % $738.9
 Driven by employee-related costs on increased headcount and increased stock-based compensation expense due to an increase in fair value of awards granted, partially offset by a decrease in advertising and promotional costs.
Research and development573.3
 (5.8) (1)% 579.1
 Driven by a decrease in employee-related costs on lower headcount
General and administrative225.1
 11.4
 5 % 213.7
 Driven by costs associated with the CEO transition and an increase in stock-based compensation expense on a higher fair value of awards granted, partially offset by a decrease in professional fees
Amortization of purchased intangibles15.3
 (7.2) (32)% 22.5
 Down as previously acquired intangible assets continue to become fully amortized and there were no acquisitions in the current period
Restructuring charges and other facility exit costs, net (2) (3)0.2
 (71.3) (100)% 71.5
 Down as the majority of the Fiscal 2017 Plan was recognized during fiscal 2017
Total operating expenses$1,599.7
 $(26.0) (2)% $1,625.7
  
____________________
(1)Prior periods have been adjusted to conform with current period's presentation. See Note 1, "Basis of Presentation," of our condensed consolidated financial statements for additional information.
(2)See Note 13, "Restructuring charges and other facility exit costs, net" in the Notes to Condensed Consolidated Financial Statements for additional information.
(3)On November 27, 2017, our Board of Directors approved a world-wide restructuring plan that includes a reduction in force that will result in the termination of approximately 13% of the Company’s workforce, or approximately 1,150 employees, and the consolidation of certain leased facilities. See Note 19, "Subsequent Events," for further discussion regarding the anticipated amount and timing of the expenditures related to this action.

The following table highlights our expectation for the absolute dollar change and percent of revenue change between the fourth quarter of fiscal 2018,2022, as compared to the fourth quarter of fiscal 2017:

2021:
Absolute dollar impactPercent of net revenue impact
Cost of RevenuerevenueDecreaseIncreaseDecreaseFlat
Marketing and salesIncreaseDecrease
Research and developmentIncreaseDecreaseFlat
General and administrativeDecreaseIncreaseDecreaseFlat
Amortization of purchased intangiblesDecreaseIncreaseDecreaseFlat


44

Interest and Other Expense, Net

The following table sets forth the components of interest and other expense, net:
 Three Months Ended October 31, Nine Months Ended October 31,
(in millions)2017 2016 2017 2016
Interest and investment expense, net$(9.2) $(9.7) $(26.1) $(22.5)
(Loss) gain on foreign currency(0.5) 0.4
 (1.2) (2.7)
(Loss) gain on strategic investments and dispositions(1.7) 0.4
 (9.5) 0.6
Other income (expense)0.2
 (0.5) 5.0
 1.5
Interest and other expense, net$(11.2) $(9.4)
$(31.8) $(23.1)

Three Months Ended October 31,Nine Months Ended October 31,
(in millions)2021202020212020
Interest and investment expense, net$(15.8)$(14.6)$(39.2)$(44.9)
Gain (loss) on foreign currency2.5 (1.0)3.1 1.9 
Gain (loss) on strategic investments6.5 (0.3)12.3 (31.2)
Other income0.9 4.0 6.2 5.1 
Interest and other expense, net$(5.9)$(11.9)$(17.6)$(69.1)

Interest and other expense, net, increased $1.8 decreased by $6.0 million and $51.5 million during the three and nine months ended October 31, 2021, as compared to the same periods in the prior fiscal year. The decrease in the three months ended October 31, 2017,2021, as compared to the same period in the prior fiscal year was primarily due to impairmentstrategic investment equity securities measurement alternative adjustment gains and mark-to-market gains in the current period, compared to losses on certain of our privately-held strategic investments.

Interestin the prior period, and a decrease in other expense, net increased $8.7 million duringincome. The decrease in the nine months ended October 31, 2017,2021, as compared to the same period in the prior fiscal year was primarily due to non-recurring realized lossesdisposition and mark-to-market gains and a decrease in impairments of strategic investment equity securities in the current period as compared to the prior period and an increase in mark-to market gains on certain dispositionsdebt and impairment losses on certain of our privately-held strategic investments.equity securities held in a rabbi trust under non-qualified deferred compensation plans in the current period compared to the prior period.

Interest expense and investment income fluctuates based on average cash, marketable securities, and debt balances, average maturities, and interest rates.

Gains and losses on foreign currency are primarily due to the impact of re-measuring foreign currency transactions and net monetary assets into the functional currency of the corresponding entity. The amount of the gain or loss on foreign currency is driven by the volume of foreign currency transactions and the foreign currency exchange rates for the period.

Provision for Income Taxes

We account for income taxes and the related accounts under the liability method. Deferred tax liabilities and assets are determined based on the difference between the financial statement and tax bases of assets and liabilities, using enacted rates expected to be in effect during the year in which the basis differences reverse.

IncomeWe had an income tax expense was $8.6of $50.7 million, and $13.5relative to pre-tax income of $187.4 million for the three months ended October 31, 20172021, and 2016, respectively.an income tax expense of $23.9 million, relative to pre-tax income of $156.1 million for the three months ended October 31, 2020. Income tax expense was $34.4for the three months ended October 31, 2021, reflects an increase in tax expense as a result of the jurisdictional mix of year-to-date earnings. The quarter over quarter comparison also reflects the U.S. valuation allowance release as of January 31, 2021.

We had an income tax expense of $49.7 million, and $53.1relative to pre-tax income of $457.6 million for the nine months ended October 31, 20172021, and 2016, respectively.an income tax expense of $78.7 million, relative to pre-tax income of $375.6 million for the nine months ended October 31, 2020. Income tax expense consists primarily of foreign taxes, U.S.for the nine months ended October 31, 2021, reflects a decrease in tax expense due to a discrete tax benefit primarily related to indefinite-lived intangibles,a Supreme Court decision in India on the taxability of software license payments to nonresidents and the associated withholding taxes, offset by an increase in tax expense from jurisdictional mix of year-to-date earnings.
.

AWe regularly assess the need for a valuation allowance is recorded to reduceagainst our deferred tax assets when management cannot concludeassets. In making that it is more likely than not that the net deferred tax asset will be recovered. The valuation allowance is determined by assessingassessment, we consider both positive and negative evidence related to the likelihood of realization of the deferred tax assets to determine, based on the weight of available evidence, whether it is more likely than not that deferred tax assets are recoverable; such assessment is required on a jurisdiction-by-jurisdiction basis. Significant judgment is required in determining whether the valuation allowance should be recorded against deferred tax assets. In assessing the need for a valuation allowance, we considersome or all available evidence including past operating results and estimates of future taxable income. Beginning in the second quarter of fiscal 2016, we considered recent cumulative losses in the United States arising from the Company's business model transition as a significant source of negative evidence. Considering this negative evidence and the absence of sufficient positive objective evidence that we would generate sufficient taxable income in our United States tax jurisdiction to realize the deferred tax assets we determined thatwill not be realized. We have maintained a valuation allowance on our Netherlands, Canada, California, Michigan and U.S. capital loss deferred tax assets as it was notis more likely than not that some or all of the Company would realize the U.S. federal and state deferred tax assets and recorded a full valuation allowance. will not be realized.

As we continually strive to optimize our overall business model, tax planning strategies may become feasible whereby management may determine that it is more likely than not thatand prudent allowing us to realize many of the federal and state deferred tax assets will be realized; asthat are offset by a result,valuation allowance; therefore, we will continue to evaluate the realizability of our netability to utilize the deferred tax assets each quarter, both in the U.S. and in foreign jurisdictions, based on all available evidence, both positive and negative.
45


As of October 31, 2017,2021, we had $291.4$204.6 million of gross unrecognized tax benefits, excluding interest, of which approximately $277.4$33.5 million represents the amount of unrecognized tax benefits thatwould reduce our valuation allowance, if recognized. The remaining $171.1 million would impact the effective tax rate, if recognized. However, this rate impact would be $30.8 million to the extent that recognition of unrecognized tax benefits


currently presented as a reduction of deferred tax assets would increase the valuation allowance. It is possible that the amount of unrecognized tax benefits will changedecrease in the next twelve months; however,12 months for an estimateaudit settlement of approximately $8.0 million.

We anticipate that the U.S. Department of Treasury will continue to interpret or issue guidance on how provisions of the range ofU.S. Tax Cuts and Jobs Act (“Tax Act”) will be applied or otherwise administered. As future guidance is issued, we may make adjustments to the possible change cannot be made at this time.amounts that we have previously recorded that may materially impact our financial statements.

Our future effective annual tax rate may be materially impacted by the amount of benefits and charges from tax amounts associated with our foreign earnings that are taxed at rates different from the federal statutory rate, research credits, state income taxes, thechanges in valuation allowances, level of profit before tax, impact of stock-based compensation, accounting for uncertain tax positions, business combinations, U.S. Manufacturer's deduction, closure of statute of limitations or settlement of tax audits, changes in valuation allowances and changes in tax laws including possible U.S. tax law changes that, if enacted, could significantly impact how U.S. multinational companies are taxed on foreign subsidiary earnings.impacts of the Tax Act. A significant amount of our earnings is generated by our Europe and APACAsia Pacific subsidiaries. Our future effective tax rates may be adversely affected to the extent earnings are lower than anticipated in countries where we have lower statutory tax rates or we repatriate certain foreign earnings on which U.S. taxes have not previously been provided. rates.

The Internal Revenue Service has started an examinationOn June 29, 2020, California enacted Assembly Bill No. 85, suspending utilization of the Company's U.S. consolidated federalnet operating losses and limiting R&D credits utilization against California taxable income tax returns for fiscal years 2014 and 2015.  While it is possible that the Company's tax positions may be challenged, the Company believes its positions are consistent with the tax law, and the balance sheet reflects appropriate liabilities for uncertain federal tax positionsin excess of $5.0 million for the years being examined.remaining 2 years. The enactment of this state legislature may result in an increase in California taxes for Autodesk.


Other Financial Information

In addition to our results determined under GAAP discussed above, we believe the following non-GAAP measures are useful to investors in evaluating our operating performance. For the three and nine months ended October 31, 20172021 and 2016,2020, our gross profit, gross margin, lossincome from operations, operating margin, net loss,income, and diluted net lossincome per share and diluted shares used in per share calculation on a GAAP and non-GAAP basis were as follows (in millions except for gross margin, operating margin and per share data):

 Three Months Ended October 31,Nine Months Ended October 31,
 2021202020212020
 (Unaudited)
Gross profit$1,018.7 $868.7 $2,869.5 $2,504.7 
Non-GAAP gross profit$1,040.2 $882.6 $2,932.2 $2,544.6 
Income from operations$193.3 $168.0 $475.2 $444.7 
Non-GAAP income from operations$365.0 $287.1 $975.8 $797.3 
Operating margin17 %18 %15 %16 %
Non-GAAP operating margin32 %30 %31 %29 %
Net income$136.7 $132.2 $407.9 $296.9 
Non-GAAP net income$296.1 $231.5 $794.5 $637.9 
GAAP diluted net income per share$0.61 $0.59 $1.83 $1.34 
Non-GAAP diluted net income per share$1.33 $1.04 $3.57 $2.87 
 Three Months Ended October 31, Nine Months Ended October 31,
 2017 2016 2017 2016
 (Unaudited)
Gross profit$437.8
 $408.1
 $1,272.5
 $1,293.2
Non-GAAP gross profit$445.7
 $422.0
 $1,296.8
 $1,335.5
Gross margin85 % 83 % 85 % 83 %
Non-GAAP gross margin86 % 86 % 86 % 86 %
Loss from operations$(100.0) $(119.9) $(327.2) $(332.5)
Non-GAAP loss from operations$(26.2) $(42.9) $(94.5) $(44.0)
Operating margin(19)% (24)% (22)% (21)%
Non-GAAP operating margin(5)% (9)% (6)% (3)%
Net loss$(119.8) $(142.8) $(393.4) $(408.7)
Non-GAAP net loss$(26.4) $(39.0) $(86.4) $(50.1)
GAAP diluted net loss per share (1)$(0.55) $(0.64) $(1.79) $(1.83)
Non-GAAP diluted net loss per share (1)$(0.12) $(0.18) $(0.39) $(0.22)
GAAP diluted shares used in per share calculation219.6
 222.3
 219.7
 223.3
Non-GAAP diluted weighted average shares used in per share calculation219.6
 222.3
 219.7
 223.3
_______________
(1)
Net loss per share was computed independently for each of the periods presented; therefore the sum of the net loss per share amount for the quarters may not equal the total for the year.

For our internal budgeting and resource allocation process and as a means to evaluateprovide consistency in period-to-period comparisons, we use non-GAAP measures to supplement our condensed consolidated financial statements presented on a GAAP basis. These non-GAAP measures do not include certain items that may have a material impact upon our reported financial results. We also use non-GAAP measures in making operating decisions because we believe those measures provide meaningful supplemental information regarding our earning potential and performance for management by excluding certain benefits, credits, expenses, and charges that may not be indicative of our core business operating results. For the reasons set forth below, we believe these non-GAAP financial measures are useful to investors both because (1) they allow for greater transparency with respect to key metrics used


by management in its financial and operational decision-making and (2) they are used by our institutional investors and the analyst community to help them analyze the health of our business. This allows investors and others to better understand and evaluate our operating results and future prospects in the same manner as management, compare financial results across accounting periods and to those of peer companies, and to better understand the long-term performance of our core business. We also use some of these measures for purposes of determining company-wide incentive compensation.

46

There are limitations in using non-GAAP financial measures because non-GAAP financial measures are not prepared in accordance with GAAP and may be different from non-GAAP financial measures used by other companies. The non-GAAP financial measures included above are limited in value because they exclude certain items that may have a material impact upon our reported financial results. In addition, they are subject to inherent limitations as they reflect the exercise of judgments by management about which charges are excluded from the non-GAAP financial measures. We compensate for these limitations by analyzing current and future results on a GAAP basis as well as a non-GAAP basis and also by providing GAAP measures in our public disclosures. The presentation of non-GAAP financial information is meant to be considered in addition to, not as a substitute for or in isolation from, the directly comparable financial measures prepared in accordance with GAAP. We urge investors to review the reconciliation of our non-GAAP financial measures to the comparable GAAP financial measures included below, and not to rely on any single financial measure to evaluate our business.



Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures

(In millions except for gross margin, operating margin and per share data): 

Three Months Ended October 31,Nine Months Ended October 31,
 2021202020212020
 (Unaudited)
Gross profit$1,018.7 $868.7 $2,869.5 $2,504.7 
Stock-based compensation expense7.8 6.1 24.8 17.0 
Amortization of developed technologies13.5 7.6 37.3 22.4 
Acquisition-related costs0.2 0.2 0.6 0.5 
Non-GAAP gross profit$1,040.2 $882.6 $2,932.2 $2,544.6 
Income from operations$193.3 $168.0 $475.2 $444.7 
Stock-based compensation expense143.7 97.4 412.7 291.5 
Amortization of developed technologies13.5 7.6 37.3 22.4 
Amortization of purchased intangibles10.8 9.6 30.1 28.8 
Acquisition-related costs3.7 4.5 20.5 9.9 
Non-GAAP income from operations$365.0 $287.1 $975.8 $797.3 
Operating margin17 %18 %15 %16 %
Stock-based compensation expense13 %10 %13 %11 %
Amortization of developed technologies1 %1 %1 %1 %
Amortization of purchased intangibles1 %1 %1 %1 %
Acquisition-related costs— %— %1 %— %
Non-GAAP operating margin (1)32 %30 %31 %29 %
Net income$136.7 $132.2 $407.9 $296.9 
Stock-based compensation expense143.7 97.4 412.7 291.5 
Amortization of developed technologies13.5 7.6 37.3 22.4 
Amortization of purchased intangibles10.8 9.6 30.1 28.8 
Acquisition-related costs3.7 4.5 20.5 9.9 
(Gain) loss on strategic investments and dispositions, net(6.5)0.3 (12.3)31.2 
Discrete tax (provision) benefit items(5.4)3.7 (61.4)4.8 
Income tax effect of non-GAAP adjustments(0.4)(23.8)(40.3)(47.6)
Non-GAAP net income$296.1 $231.5 $794.5 $637.9 
47

 Three Months Ended October 31, Nine Months Ended October 31,
 2017 2016 2017 2016
 (Unaudited)
Gross profit$437.8
 $408.1
 $1,272.5
 $1,293.2
Stock-based compensation expense3.9
 3.5
 11.6
 10.3
Amortization of developed technologies4.0
 10.4
 12.7
 32.0
Non-GAAP gross profit$445.7
 $422.0
 $1,296.8
 $1,335.5
Gross margin85 % 83 % 85 % 83 %
Stock-based compensation expense1 % 1 % 1 % 1 %
Amortization of developed technologies1 % 2 % 1 % 2 %
Non-GAAP gross margin (2)86 % 86 % 86 % 86 %
Loss from operations$(100.0) $(119.9) $(327.2) $(332.5)
Stock-based compensation expense65.1
 56.6
 182.9
 162.5
Amortization of developed technologies4.0
 10.4
 12.7
 32.0
Amortization of purchased intangibles4.7
 6.8
 15.3
 22.5
CEO transition costs (1)—
 —
 21.6
 —
Restructuring charges and other facility exit costs, net—
 3.2
 0.2
 71.5
Non-GAAP loss from operations$(26.2) $(42.9) $(94.5) $(44.0)
Operating margin(19)% (24)% (22)% (21)%
Stock-based compensation expense13 % 11 % 12 % 10 %
Amortization of developed technologies1 % 2 % 1 % 2 %
Amortization of purchased intangibles1 % 1 % 1 % 1 %
CEO transition costs (1)— % — % 1 % — %
Restructuring charges and other facility exit costs, net— % 1 % — % 5 %
Non-GAAP operating margin (2)(5)% (9)% (6)% (3)%
Net loss$(119.8) $(142.8) $(393.4) $(408.7)
Stock-based compensation expense65.1
 56.6
 182.9
 162.5
Amortization of developed technologies4.0
 10.4
 12.7
 32.0
Amortization of purchased intangibles4.7
 6.8
 15.3
 22.5
CEO transition costs (1)—
 —
 21.6
 —
Restructuring charges and other facility exit costs, net—
 3.2
 0.2
 71.5
Loss (gain) on strategic investments and dispositions1.7
 (0.4) 9.5
 (0.6)
Discrete tax items(2.5) (9.0) (10.2) 4.0
Income tax effect of non-GAAP adjustments20.4
 36.2
 75.0
 66.7
Non-GAAP net loss$(26.4) $(39.0) $(86.4) $(50.1)




 Three Months Ended October 31, Nine Months Ended October 31,
 2017 2016 2017 2016
 (Unaudited)
GAAP diluted net loss per share (3)$(0.55) $(0.64) $(1.79) $(1.83)
Stock-based compensation expense0.30
 0.25
 0.83
 0.73
Amortization of developed technologies0.02
 0.05
 0.06
 0.14
Amortization of purchased intangibles0.02
 0.03
 0.07
 0.10
CEO transition costs (1)—
 —
 0.09
 —
Restructuring charges and other facility exit costs, net—
 0.01
 —
 0.32
Loss on strategic investments and dispositions0.01
 —
 0.05
 —
Discrete tax items(0.01) (0.03) (0.04) 0.02
Income tax effect of non-GAAP adjustments0.09
 0.15
 0.34
 0.30
Non-GAAP diluted net loss per share (3)$(0.12) $(0.18) $(0.39) $(0.22)
Three Months Ended October 31,Nine Months Ended October 31,
 2021202020212020
 (Unaudited)
Diluted net income per share$0.61 $0.59 $1.83 $1.34 
Stock-based compensation expense0.65 0.44 1.86 1.31 
Amortization of developed technologies0.06 0.04 0.17 0.10 
Amortization of purchased intangibles0.05 0.04 0.14 0.13 
Acquisition-related costs0.01 0.02 0.09 0.04 
(Gain) loss on strategic investments and dispositions, net(0.03)— (0.06)0.14 
Discrete tax (provision) benefit items(0.03)0.02 (0.28)0.02 
Income tax effect of non-GAAP adjustments0.01 (0.11)(0.18)(0.21)
Non-GAAP diluted net income per share$1.33 $1.04 $3.57 $2.87 
____________________ 
(1)CEO transition costs include stock-based compensation of $16.6 million related to the acceleration of eligible stock awards in the nine months ended October 31, 2017.
(2)Totals may not sum due to rounding.
(3)
Net loss per share was computed independently for each of the periods presented; therefore the sum of the net loss per share amount for the quarters may not equal the total for the year.
(1)Totals may not sum due to rounding.


Our non-GAAP financial measures may exclude the following:following, as applicable:

Stock-based compensation expenses. We exclude stock-based compensation expenses from non-GAAP measures primarily because they are non-cash expenses and management finds it useful to exclude certain non-cash charges to assess the appropriate level of various operating expenses to assist in budgeting, planning, and forecasting future periods. Moreover, because of varying available valuation methodologies, subjective assumptions, and the variety of award types that companies can use under FASB ASC Topic 718, we believe excluding stock-based compensation expenses allows investors to make meaningful comparisons between our recurring core business operating results and those of other companies.

Amortization of developed technologies and purchased intangibles. We incur amortization of acquisition-related developed technologytechnologies and purchased intangibles in connection with acquisitions of certain businesses and technologies. Amortization of developed technologies and purchased intangibles is inconsistent in amount and frequency and is significantly affected by the timing and size of our acquisitions. Management finds it useful to exclude these variable charges from our cost of revenues to assist in budgeting, planning, and forecasting future periods. Investors should note that the use of intangible assets contributed to our revenues earned during the periods presented and will contribute to our future period revenues as well. Amortization of developed technologies and purchased intangible assets will recur in future periods.

CEO transition costs. We exclude amounts paid to the Company'sCompany’s former CEOs upon departure under the terms of their transition agreements, including severance payments, acceleration of restricted stock units, and continued vesting of performance stock units, and legal fees incurred with the transition. Also excluded from our non-GAAP measures are recruiting costs related to the search for a new CEO. These costs represent non-recurring expenses and are not indicative of our ongoing operating expenses. We further believe that excluding the CEO transition costs from our non-GAAP results is useful to investors in that it allows for period-over-period comparability.

Goodwill impairment. This is a non-cash charge to write-downwrite down goodwill to fair value when there was an indication that the asset was impaired. As explained above, management finds it useful to exclude certain non-cash charges to assess the appropriate level of various operating expenses to assist in budgeting, planning, and forecasting future periods.

Restructuring charges and other facility exit costs, (benefits), net. These expenses are associated with realigning our business strategies based on current economic conditions. In connection with these restructuring actions or other exit actions, we recognize costs related to termination benefits for former employees whose positions were eliminated, the closure of facilities, and cancellation of certain contracts. We exclude these charges because these expenses are not reflective of ongoing business and operating results. We believe it is useful for investors to understand the effects of these items on our total operating expenses.


Acquisition-related costs. We exclude certain acquisition-related costs, including due diligence costs, professional fees in connection with an acquisition, certain financing costs, and certain integration-related expenses. These expenses are unpredictable, and dependent on factors that may be outside of our control and unrelated to the continuing operations of the acquired business or our Company. In addition, the size and complexity of an acquisition, which often drives the magnitude of acquisition-related costs, may not be indicative of such future costs. We believe excluding acquisition-related costs facilitates the comparison of our financial results to the Company's historical operating results and to other companies in our industry.
48


Loss (gain) on strategic investments and dispositions. We exclude gains and losses related to our strategic investments and dispositions of strategic investments, purchased intangibles, and businesses from our non-GAAP measures primarily because management finds it useful to exclude these variable gains and losses on these investments and dispositions in assessing our financial results. Included in these amounts are non-cash unrealized gains and losses on the derivative components, dividends received, realized gains and losses on the sales or losses on the impairment of these investments, and gain and loss on dispositions. We believe excluding these items is useful to investors because these excluded items do not correlate to the underlying performance of our business and these losses or gains were incurred in connection with strategic investments and dispositions which do not occur regularly.

Discrete tax provision items. We exclude the GAAP tax provision, including discrete items, from the non-GAAP measure of net income (loss) income,, and include a non-GAAP tax provision based upon the projected annual non-GAAP effective tax rate. Discrete tax items include income tax expenses or benefits that do not relate to ordinary income from continuing operations in the current fiscal year, unusual or infrequently occurring items, or the tax impact of certain stock-based compensation. Examples of discrete tax items include, but are not limited to, certain changes in judgment and changes in estimates of tax matters related to prior fiscal years, certain costs related to business combinations, certain changes in the realizability of deferred tax assets, or changes in tax law. Management believes this approach assists investors in understanding the tax provision and the effective tax rate related to ongoing operations. We believe the exclusion of these discrete tax items provides investors with useful supplemental information about our operational performance.

Establishment (release) of a valuation allowance on certain net deferred tax assets. This is a non-cash charge to record or to release a valuation allowance on certain deferred tax assets. As explained above, management finds it useful to exclude certain non-cash charges to assess the appropriate level of various cash expenses to assist in budgeting, planning, and forecasting future periods.

Income tax effects on the difference between GAAP and non-GAAP costs and expenses. The income tax effects that are excluded from the non-GAAP measures relate to the tax impact on the difference between GAAP and non-GAAP expenses, primarily due to stock-based compensation, amortization of purchased intangibles, and restructuring charges and other facilities exit costs (benefits) for GAAP and non-GAAP measures.

Liquidity and Capital Resources

Our primary source of cash is from the sale of our software and related services. Our primary use of cash is payment of our operating costs, which consist primarily of employee-related expenses, such as compensation and benefits, as well as general operating expenses for marketing, facilities, and overhead costs. In addition toLong-term cash requirements for items other than normal operating expenses we also use cashare anticipated for the following: the acquisition of businesses, software products, or technologies complementary to fund our business; repayment of debt; common stock repurchase programrepurchases; and invest in our growth initiatives, which include acquisitionscapital expenditures, including the purchase and implementation of products, technology and businesses. See further discussion of these items below.internal-use software applications.

At October 31, 2017,2021, our principal sources of liquidity were cash, cash equivalents, and marketable securities totaling $1.72 billion$1,811.8 million and net accounts receivable of $307.8$580.3 million. Net of our senior notes, we have cash, cash equivalents, and marketable securities totaling $132.8 million at October 31, 2017.

In June 2017, we issued $500.0 millionSeptember 2021, Autodesk entered into an amended and restated credit agreement (“Credit Agreement”) by and among Autodesk, the lenders party thereto, and Citibank, N.A., as agent, that provides for a revolving credit facility in the aggregate principal amount of 3.5% notes due June 15, 2027. In June 2015, we issued $450.0 million$1.50 billion with an option to be increased up to $2.0 billion which increased from an aggregate principal amount of 3.125% notes due June 15, 2020 and $300.0$650.0 million, aggregate principal amount of 4.375% notes due June 15, 2025. In December 2012, we issued $400.0 million aggregate principal amount of 1.95% notes due December 15, 2017 and $350.0 million aggregate principal amount of 3.6% notes due December 15, 2022 (all five series of notes collectively,with an option to be increased up to $1.0 billion, under our previous credit agreement. The revolving credit facility is available for working capital or other business needs. The maturity date on the “Notes”). On July 27, 2017, we redeemed in full $400.0 million in aggregate principal amount of outstanding 1.95% senior notes due December 15, 2017 . The redemption was completed pursuant to the optional redemption provisions of the first supplemental indenture dated December 13, 2012. To redeem the notes, we used a portion of the proceeds of the 2017 Notes to pay a redemption price of approximately $400.9 million, plus accrued and unpaid interest. Total cash repayment was $401.8 million. The Company did not incur any additional early termination penalties in connection with such redemption.

As ofCredit Agreement is September 30, 2026. At October 31, 2017, we have $1.6 billion aggregate principal amount of Notes outstanding. In addition, we have a line of credit facility that permits unsecured short-term2021, Autodesk had no outstanding borrowings of up to $400.0 million with a May 2020 maturity date. This credit agreement contains customary covenants that could restrictunder the imposition of liens on our assets, and restrict the Company’s ability to incur additional indebtedness or make dispositions of assets if we fail to maintain the financial covenants. The financial covenants consist of a maximum debt to total cash ratio, a fixed charge coverage ratio through April 30, 2018, and after April 30, 2018, a minimum interest coverage ratio. AsCredit Agreement. Additionally, as of December 5, 2017,3, 2021, we have no amounts outstanding under the credit facility. BorrowingsCredit Agreement. See Part I, Item 1, Note 14, “Borrowing Arrangements,” in the Notes to Condensed Consolidated Financial Statements for further discussion on our covenant requirements. If we are unable to remain in compliance with the covenants under the Credit Agreement, we will not be able to draw on our revolving credit facility and the net proceeds from the offeringfacility.

As of October 31, 2021, we have $2.65 billion aggregate principal amount of notes outstanding. See Part I, Item 1, Note 14, “Borrowing Arrangements,” in the Notes are availableto Condensed Consolidated Financial Statements for general corporate purposes.further discussion.



Our cash and cash equivalents are held by diversified financial institutions globally. Our primary commercial banking relationship is with Citigroup and its global affiliates. In addition, Citibank N.A., an affiliate of Citigroup, is one of the lead lenders and agent in the syndicate of our $400.0 million line of credit.$1.50 billion revolving credit facility.
49

Long-term cash requirements for items other than normal operating expenses are anticipated for the following: repayment of debt; common stock repurchases; the acquisition of businesses, software products, or technologies complementary to our business; and capital expenditures, including the purchase and implementation of internal-use software applications.

Our strategy includes improving our product functionality and expanding our product offerings through internal development as well as through the acquisition of products, technology, and businesses. Acquisitions often increase the speed at which we can deliver product functionality to our customers; however, they entail cost and integration challenges and, in certain instances, negatively impact our operating margins. We continually review these trade-offs in making decisions regarding acquisitions. We currently anticipate that we will continue to acquire products, technology, and businesses as compelling opportunities become available. Our decision to acquire businesses or technology is dependent on our business needs, the availability of suitable sellers and technology, and our own financial condition.

As of October 31, 2017, other than what was previously discussed in this section regarding our latest debt issuance and repayment, there have been no material changes in our contractual obligations or commercial commitments compared to those we disclosed in management’s discussion and analysis of financial condition and results of operations included in our Annual Report on Form 10-K for the fiscal year ended January 31, 2017.

Our cash and cash equivalents and marketable securities balances are concentrated in a few locations around the world, with substantial amounts held outside of the United States. As of October 31, 2017,2021, approximately 80%32% of our total cash or cash equivalents and marketable securities are located in foreign jurisdictions and that percentage will fluctuate subject to business needs. There are several factors that can impact our ability to utilize foreign cash balances, such as foreign exchange restrictions, foreign regulatory restrictions, or adverse tax costs. Our intent is that amounts relatedThe Tax Act included a mandatory one-time tax on accumulated earnings of foreign subsidiaries and generally eliminated U.S. taxes on foreign subsidiary distributions in future periods. As a result, earnings in foreign jurisdictions are generally available for distribution to foreign earnings permanently reinvested outside the U.S. will remain outside the United States. We expectStates with little to meet ourno incremental U.S. liquidity needs through ongoing cash flows, foreign cash for which U.S. federal income taxes have been provided, external borrowings, or a combination.taxes. We regularly review our capital structure and consider a variety of potential financing alternatives and planning strategies to ensure we have the proper liquidity available in the locations in which it is needed. We expect to meet our liquidity needs through or in combination of current cash balances, ongoing cash flows, and external borrowings.

Cash from operations could also be affected by various risks and uncertainties, including, but not limited to, the risks detailed in Part II, Item 1A titled “Risk Factors.” However, basedWe currently expect to have sufficient liquidity to manage through the COVID-19 pandemic but we will continue to monitor the impact of potential disruptions beyond our control. Based on our current business plan, planned acquisitions, and revenue prospects, we believe that our existing balances,cash and cash equivalents, our anticipated cash flows from operations, and our available revolving credit facility will be sufficient to meet our working capital and operating resource expenditure requirements for at least the next 12 months.

Our revenue, earnings, cash flows, receivables, and payables are subject to fluctuations due to changes in foreign currency exchange rates, for which we have put in place foreign currency contracts as part of our risk management strategy. See Part II,I, Item 7A,3, “Quantitative and Qualitative Disclosures aboutAbout Market Risk” for further discussion.

Nine Months Ended October 31,
(in millions)20212020
Net cash provided by operating activities$808.5 $779.6 
Net cash used in investing activities(1,299.0)(176.7)
Net cash provided by (used in) financing activities473.3 (844.0)
 Nine Months Ended October 31,
(in millions)2017 2016
Net cash (used in) provided by operating activities$(78.4) $154.1
Net cash provided by investing activities258.9
 285.8
Net cash used in financing activities(374.2) (354.3)

Net cash used inprovided by operating activities of $78.4$808.5 million for the nine months ended October 31, 20172021, primarily consisted of $407.9 million of our net loss of $393.4income adjusted for $552.2 million partially offset by $288.3 million of non-cash expenses, includingitems such as stock-based compensation expense, and depreciation, amortization, and accretion expense.

The primarydecrease in cash provided by working capital sourcewas primarily due to an increase in prepaid expenses and other assets of cash was$138.8 million, due to timing of prepaid operating expenses, and a decrease in accounts payable and other liabilities of $67.4 million, due to the timing of payments related to employee compensation and related costs, offset by a decrease in accounts receivable from $452.3of $70.0 million asdue to the seasonality of January 31, 2017 to $307.8 million as of October 31, 2017. The primary working capital usesour billings in the fourth fiscal quarter and timing of cash were decreases in accrued compensation and other accrued liabilities.collections from customers.



Net cash provided by investing was $258.9operating activities of $779.6 million for the nine months ended October 31, 20172020, primarily consisted of $296.9 million of our net income adjusted for $445.3 million non-cash items such as stock-based compensation expense, and depreciation, amortization, and accretion expense. The increase in cash provided by changes in working capital was primarilydue to a decrease in accounts receivable of $112.8 million due to the saleseasonality of our billings in the fourth fiscal quarter and maturitiestiming of marketable securities. These cash inflows werecollections from customers partially offset by purchasesa decrease in deferred revenue of marketable securities and capital expenditures.$78.3 million driven by a decrease in multi-year billings.

At October 31, 2017, our short-term investment portfolio had an estimated fair value of $428.7 million and a cost basis of $421.3 million. The portfolio fair value consists of $218.7 million invested in corporate debt securities, $58.8 million invested in U.S. government securities, $31.3 million invested in commercial paper, $30.4 million invested in asset backed securities, $15.5 million invested in municipal bonds, $7.5 million invested in agency bonds, $6.0 million invested in sovereign debt, and $4.0 million invested in certificates of deposit.

At October 31, 2017, $56.5 million of short-term trading securities were invested in a defined set of mutual funds as directed by the participants in our Deferred Compensation Plan (see Note 10, “Deferred Compensation,” in the Notes to Condensed Consolidated Financial Statements for further discussion).

Net cash used in financinginvesting activities was $374.2$1,299.0 million for the nine months ended October 31, 20172021, primarily due to business combinations, net of cash acquired. Net cash used in investing activities was $176.7 million for the nine months ended October 31, 2020, and was primarily due to purchases of capital expenditures, strategic investments equity securities, and acquisitions, net of cash acquired.

Net cash provided by financing activities was $473.3 million for the nine months ended October 31, 2021, primarily due to the proceeds from debt issuance, net of discount. These cash inflows were offset in part by repurchases of common stock andstock. Net cash used in financing activities was $844.0 million for the nine months ended October 31, 2020, primary due to the repayment of debt noted earlier in this section.and the repurchases of common stock. These cash outflows were offset in part by cash proceeds from the issuance of debt also noted earlier in this section.common stock.

50

Issuer Purchases of Equity Securities

Autodesk's stock repurchase program provides Autodesk with the ability to offset the dilution from the issuance of stock under our employee stock plans and reduce shares outstanding over time, and has the effect of returning excess cash generated from our business to stockholders. Under the share repurchase program, Autodesk may repurchase shares from time to time in open market transactions, privately-negotiatedprivately negotiated transactions, accelerated share repurchase programs, tender offers, or by other means. The share repurchase program does not have an expiration date and the pace and timing of repurchases will depend on factors such as cash generation from operations, available surplus, the volume of employee stock plan activity, remaining shares available in the authorized pool, cash requirements for acquisitions, economic and market conditions, stock price, and legal and regulatory requirements.

During the three and nine months ended October 31, 2017, we repurchased 1.0 million and 4.4 million shares of our common stock, respectively. At October 31, 2017, 22.1 million shares remained available for repurchase under the repurchase program approved by the Board of Directors. These programs do not have a fixed expiration date. See Note 15, “Common Stock Repurchase Program,” in the Notes to Condensed Consolidated Financial Statements for further discussion.

The following table provides information about the repurchase of common stock in open-market transactions during the quarter ended October 31, 2017:
(Shares in millions)
Total Number of
Shares
Purchased
 
Average Price
Paid per Share
 Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (2)
August 1 - August 310.4
 $109.66
 0.4
 22.7
September 1 - September 300.3
 112.59
 0.3
 22.4
October 1 - October 310.3
 117.47
 0.3
 22.1
Total1.0
 $112.97
 1.0
 

 ________________
(1)Represents shares purchased in open-market transactions under the stock repurchase plan approved by the Board of Directors.
(2)These amounts correspond to the plan approved by the Board of Directors in September 2016 that authorized the repurchase of 30.0 million shares. The plan does not have a fixed expiration date.

There were no sales of unregistered securities during the ninethree months ended October 31, 2017.2021:

(Shares in millions)Total Number of
Shares
Purchased		Average Price
Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (2)
August 1 - August 310.2 $316.51 0.2 11.2 
September 1 - September 300.5 289.78 0.5 10.7 
October 1- October 310.3 284.72 0.3 10.4 
Total1.0 $292.91 1.0 
 ________________
(1)This represents shares purchased in open-market transactions under the stock repurchase plan approved by the Board of Directors.
(2)These amounts correspond to the plan publicly announced and approved by the Board of Directors in September 2016 that authorized the repurchase of 30.0 million shares. The plan does not have a fixed expiration date. See Note 17, “Stockholders' Equity ,” in the Notes to the Condensed Consolidated Financial Statements for further discussion.

Off-Balance Sheet Arrangements

As of October 31, 2017,2021, we did not have any significant off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of Regulation S-K.



Glossary of Terms

Annualized Recurring Revenue (ARR)—Billings: RepresentsTotal revenue plus the annualized value of our average monthly recurringnet change in deferred revenue forfrom the preceding three months. "Maintenance plan ARR” captures ARR relating to traditional maintenance attached to perpetual licenses. "Subscription plan ARR" captures ARR relating to subscription offerings. Referbeginning to the definition of recurring revenue below for more details on what is included within ARR. Recurring revenue acquired with the acquisition of a business is captured when total subscriptions are captured in our systems and may cause variability in the comparison of this calculation.

ARR is currently one of our key performance metrics to assess the health and trajectory of our business. ARR should be viewed independently of revenue and deferred revenue as ARR is a performance metric and is not intended to be combined with any of these items.

Annualized Revenue Per Subscription (ARPS)—Is calculated by dividing our annualized recurring revenue by the total number of subscriptions.

Building Information Modeling (BIM)—Describes a model-based technology linked with a database of project information, and is the process of generating and managing information throughout the life cycle of a building. BIM is used as a digital representationend of the building process to facilitate exchange and interoperability of information in digital formats.period.

Cloud Service Offerings—: Represents individual term-based offerings deployed through web browser technologies or in a hybrid software and cloud configuration. Cloud service offerings that are bundled with other product offerings are not captured as a separate cloud service offering.

Constant Currency (CC) Growth Rates—Rates: We attempt to represent the changes in the underlying business operations by eliminating fluctuations caused by changes in foreign currency exchange rates as well as eliminating hedge gains or losses recorded within the current and comparative periods. We calculate constant currency growth rates by (i) applying the applicable prior period exchange rates to current period results and (ii) excluding any gains or losses from foreign currency hedge contracts that are reported in the current and comparative periods.

Design Business: Represents the combination of maintenance, product subscriptions, and all EBAs. Main products include, but are not limited to, AutoCAD, AutoCAD LT, Industry Collections, Revit, Inventor, Maya and 3ds Max. Certain products, such as our computer aided manufacturing solutions, incorporate both Design and Make functionality and are classified as Design.

Enterprise Business Agreements (EBAs):—Represents programs providing enterprise customers with token-based access or a fixed maximum number of seats to a broad pool of Autodesk products over a defined contract term.

Free Cash Flow:Cash flow from operating activities minus capital expenditures.

51

Industry CollectionsCollections:—Autodesk industry collectionsIndustry Collections are a combination of products and services that target a specific user objective and support a set of workflows for that objective. Our Industry Collections consist of: Autodesk Architecture, Engineering and Construction Collection, Autodesk Product Design & Manufacturing Collection, and Autodesk Media and Entertainment Collection. We introduced industry collections effective August 1, 2016 to replace our suites.

License and Other Revenue—Represents (1) perpetual license revenue and (2) other revenue. Perpetual license revenue includes software license revenue from the sale of perpetual licenses, and Creative Finishing. Other revenue includes revenue such as standalone consulting and training, and is recognized over time as the services are performed.

Subscription Plans—Comprises our term-based product subscriptions, cloud service offerings, and enterprise business agreements (EBAs). Subscriptions represent a hybrid of desktop and SaaS functionality which provides a device-independent, collaborative design workflow for designers and their stakeholders. With subscription, customers can use our software anytime, anywhere, and get access to the latest updates to previous versions.

Maintenance Plans—Plan: Our maintenance plans provide our customers with a cost effective and predictable budgetary option to obtain the productivity benefits of our new releases and enhancements when and if released during the term of their contracts. Under our maintenance plans, customers are eligible to receive unspecified upgrades when and if available, and technical support. We recognize maintenance revenue over the term of the agreements, generally between one and three years.year.

Make Business: Represents certain cloud-based product subscriptions. Main products include, but are not limited to, Assemble, Autodesk Build, BuildingConnected, Fusion 360 and Shotgrid. Certain products, such as Fusion 360, incorporate both Design and Make functionality and are classified as Make.

Net Revenue Retention Rate (NR3): Measures the year-over-year change in subscription and maintenance revenue for the population of customers that existed one year ago (“base customers”). Net revenue retention rate is calculated by dividing the current quarter subscription and maintenance revenue related to base customers by the total corresponding quarter subscription and maintenance revenue from one year ago. Subscription and maintenance revenue is based on USD reported revenue, and fluctuations caused by changes in foreign currency exchange rates and hedge gains or losses have not been eliminated. Subscription and maintenance revenue related to acquired companies, one year after acquisition, has been captured as existing customers until such data conforms to the calculation methodology. This may cause variability in the comparison.

Other Revenue: Consists of revenue from consulting, training, and other products and services, and is recognized as the products are delivered and services are performed.

Product Subscription:Provides customers a flexible, cost-effective way to access and manage 3D design, engineering, and entertainment software tools. Our product subscriptions currently represent a hybrid of desktop and cloud functionality, which provides a device-independent, collaborative design workflow for designers and their stakeholders.

Recurring revenueRevenue:—Consists of the revenue for the period from our traditional maintenance plans and revenue from our subscription plan offerings. It excludes subscription revenue related to consumer product offerings, select Creative Finishing product offerings, education offerings, and third partythird-party products. Recurring revenue acquired with the acquisition of a business is captured when total subscriptions are captured in our systems and may cause variability in the comparison of this calculation.

Remaining Performance Obligations (RPO): The sum of total short-term, long-term, and unbilled deferred revenue. Current remaining performance obligations is the amount of revenue we expect to recognize in the next twelve months.

Spend: The sum of cost of revenue and operating expenses.

Subscription revenuePlan: —Includes subscription fees fromComprises our term-based product subscriptions, flexible enterprise business arrangementscloud service offerings, and all other services as partEBAs. Subscriptions represent a combined hybrid offering of desktop software and cloud functionality which provides a bundleddevice-independent, collaborative design workflow for designers and their stakeholders. With subscription, agreement accounted for as a single unit of accounting. (i.e. cloud services, maintenance,customers can use our software anytime, anywhere, and consulting).get access to the latest updates to previous versions.



Total SubscriptionsSubscription Revenue: —Consists ofIncludes our term-based product subscriptions, from our maintenance plans and subscription plan offerings that are active and paid as of the quarter end date. For certain cloud service offerings, and flexible enterprise business arrangements, subscriptions represent the monthly average activity reported within the last three months of the quarter end date. Total subscriptions do not include education offerings, consumer product offerings, select Creative Finishing product offerings, Autodesk Buzzsaw, Autodesk Constructware, and third party products. Subscriptions acquired with the acquisition of a business are captured once the data conforms to our subscription count methodology and when added, may cause variability in the comparison of this calculation.EBAs.

Unbilled deferred revenue—Deferred Revenue: Unbilled deferred revenue represents contractually stated or committed orders under early renewal and multi-year billing plans for subscription, services, license and maintenance for which the associated deferred revenue has not been recognized and the customer has not been invoiced. Unbilledrecognized. Under FASB Accounting Standards Codification ("ASC") Topic 606, unbilled deferred revenue is not included as a receivable or deferred revenue on our Condensed Consolidated Balance Sheet until invoiced to the customer.Sheet.

52

ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Foreign currency exchange risk

Currency Exchange Risk

Our revenue, earnings, cash flows, receivables, and payables are subject to fluctuations due to changes in foreign currency exchange rates. Our risk management strategy utilizes foreign currency contracts to manage our exposure to foreign currency volatility that exists as part of our ongoing business operations. We utilize cash flow hedge contracts to reduce the exchange rate impact on a portion of the net revenue or operating expense of certain anticipated transactions. In addition, we use balance sheet hedge contracts to reduce the exchange rate risk associated primarily with foreign currency denominated receivables and payables. As of October 31, 20172021, and January 31, 2017,2021, we had open cash flow and balance sheet hedge contracts with future settlements generally within one to twelve12 months. Contracts were primarily denominated in euros, Japanese yen, Swiss francs, British pounds, Canadian dollars, Australian dollars, Singapore dollars, Swiss francs, Swedish krona, and Australian dollars.Czech koruna. We do not enter into any foreign exchange derivative instruments for trading or speculative purposes. The net notional amount of our

Our option and foreign exchange forward contracts was outstanding as of the respective period-ends are summarized in U.S. dollar equivalents as follows (in millions):
October 31, 2021January 31, 2021
Notional AmountFair ValueNotional AmountFair Value
Forward Contracts:
Purchased$669.3 $0.8 $686.0 $3.6 
Sold1,099.5 0.3 1,172.1 2.2 
Option Contracts:
Purchased1,240.1 21.7 1,044.4 5.2 
Sold1,293.7 3.9 1,092.1 (18.6)
$802.6 million and $640.0 million at October 31, 2017 and January 31, 2017, respectively.

We use foreign currency contracts to reduce the exchange rate impact on the net revenue and operating expenses of certain anticipated transactions. A sensitivity analysis performed on our hedging portfolio as of October 31, 20172021, indicated that a hypothetical 10% appreciation of the U.S. dollar from its value at October 31, 20172021, and January 31, 20172021, would increase the fair value of our foreign currency contracts by $58.2$175.6 million and $60.9$118.6 million,, respectively. A hypothetical 10% depreciation of the dollar from its value at October 31, 20172021, and January 31, 20172021, would decrease the fair value of our foreign currency contracts by $60.8$103.9 million and $32.5$149.2 million, respectively.

Interest Rate Risk

Interest rate movements affect both the interest income we earn on our short termshort-term investments and the market value of certain longer termlonger-term securities. At October 31, 2017,2021, we had $1.33$1.13 billion of cash equivalents and marketable securities, including $428.7 million classified as short-term marketable securities and $264.3 million classified as long-term marketable securities. If interest rates were to move up or down by 50 or 100 basis points over a twelve month12-month period, the market value change of our marketablethese securities would not have an unrealized gain or lossa material impact on our results of $2.4 million and $4.7 million, respectively.operations.

Other Market Risk

From time to time, we make direct investments in privately held companies. Privately held company investments generally are considered inherently risky. The technologies and products these companies have under development are typically in the early stages and may never materialize, which could result in a loss of all or a substantial part of our initial investment in these companies. The evaluation of privately held companies is based on information that we request from these companies, which is not subject to the same disclosure regulations as U.S. publicly traded companies, and as such, the basis for these evaluations is subject to the timing and accuracy of the data received from these companies. See Note 4, "Financial5, “Financial Instruments,"” for further discussion regarding our privately heldthese strategic investments.


53

ITEM 4.CONTROLS AND PROCEDURES
ITEM 4.CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain “disclosure controls and procedures,” as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Our disclosure controls and procedures are designed to ensure that information required to be disclosed in our Exchange Act reports is (i) recorded, processed, summarized, and reported within the time periods specified in the rules of the Securities and Exchange Commission, and (ii) accumulated and communicated to Autodesk management, including our CEO and CFO, to allow timely decisions regarding required disclosure. We conducted an evaluation, under the supervision and with the participation of our CEO and CFO, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10-Q. Based upon this evaluation, our CEO and CFO have concluded that our disclosure controls and procedures were effective to meet the objective for which they were designed and operated at the reasonable assurance level.

Our disclosure controls and procedures include components of our internal control over financial reporting. Our management, including our CEO and CFO, does not expect that our disclosure controls and procedures or our internal control over financial reporting will necessarily prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within Autodesk have been detected.

Changes in Internal Control Over Financial Reporting

During the three months ended October 31, 2021, we completed the second phase of a multi-year implementation of our new enterprise resource planning (“ERP”) system, which included a digital platform that simplifies order management, reporting, offerings, and go-to-market processes. Accordingly, we have made changes to our internal control processes relating to the new ERP system.There were no additional changes in our internal controlscontrol over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarterthree months endedOctober 31, 20172021, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.




54

PART II. OTHER INFORMATION
 
ITEM 1.LEGAL PROCEEDINGS
ITEM 1.LEGAL PROCEEDINGS

We are involved in a variety of claims, suits, investigations, inquiries and proceedings in the normal course of business activities including claims of alleged infringement of intellectual property rights, commercial, employment, piracytax, prosecution of unauthorized use, business practices, and other matters. In our opinion, resolution of pending matters is not expected to have a material adverse impact on our consolidated results of operations, cash flows, or financial position. Given the unpredictable nature of legal proceedings, there is a reasonable possibility that an unfavorable resolution of one or more such proceedings could in the future materially affect our results of operations, cash flows, or financial position in a particular period,period; however, based on the information known by us as of the date of this filing and the rules and regulations applicable to the preparation of our financial statements, any such amount is either immaterial or it is not possible to provide an estimated amount of any such potential loss.

ITEM 1A.RISK FACTORS
ITEM 1A.RISK FACTORS

We operate in a rapidly changing environment that involves significant risks, a number of which are beyond our control. In addition to the other information contained in this Form 10-Q, the following discussion highlights some of these risks and the possible impact of these factors on our business, financial condition, and future results of operations. If any of the following risks actually occur, our business, financial condition, or results of operations may be adversely impacted, causing the trading price of our common stock to decline. In addition, these risks and uncertainties may impact the “forward-looking”forward-looking statements described elsewhere in this Form 10-Q and in the documents incorporated herein by reference. They could affect our actual results of operations, causing them to differ materially from those expressed in “forward-looking”forward-looking statements.

Global economic and political conditions may further impact our industries, business and financial results.Summary of Risk Factors

Our overall performance depends largely upon domestic and worldwide economic and political conditions. The United States and other international economies have experienced cyclical downturns from time to time in which economic activity was impacted by falling demand for a variety of goods and services, restricted credit, poor liquidity, decreased government spending, reduced corporate profitability, volatility in credit, equity and foreign exchange markets, bankruptcies and overall uncertainty with respect to the economy. These economic conditions can occur abruptly. If economic growth in countries where we do business slows or if such countries experience further economic recessions, customers may delay or reduce technology purchases. Our customers include government entities, including the U.S. federal government, and if spending cuts impede the ability of governments to purchase our products and services, our revenue could decline. In addition, a number of our customers rely, directly and indirectly, on government spending.

Geopolitical trends toward nationalism and protectionism and the weakening or dissolution of international trade pacts may increase the cost of, or otherwise interfere with, conducting business. These trends have increased levels of political and economic unpredictability globally, and may increase the volatility of global financial markets; the impact of such developments on the global economy remains uncertain. Political instability or adverse political developments in any of the countries in which we do business could harm our business, results of operations and financial condition.

A financial sector credit crisis could impair credit availability and the financial stability of our customers, including our distribution partners and channels. A disruption in the financial markets may also have an effect on our derivative counterparties and could also impair our banking partners, on which we rely for operating cash management. Any of these events could harm our business, results of operations and financial condition.

If we fail to successfully manage our business model transition to cloud-based products and more flexible product licenses, our results of operations could be negatively impacted.

To address the industry transition from personal computer to cloud, mobile, and social computing, we accelerated our move to the cloud and are offering more flexible product licenses. To support our transition, we discontinued selling new perpetual licenses of most individual software products effective February 1, 2016, and discontinued selling new perpetual licenses of suites effective August 1, 2016. On June 15, 2017, we commenced a program to incentivize maintenance plan customers to move to subscription plan offerings. Through this program we offer discounts to those maintenance plan customers that move to subscription plan offerings, while at the same time will increase maintenance plan pricing over time for customers that remain on maintenance.

As a result, we expect to derive an increasing portion of our revenues in the future from subscriptions. This subscription model prices and delivers our products in a way that differs from the historical perpetual pricing and delivery methods. These


changes reflect a significant shift from perpetual license sales and distribution of our software in favor of providing our customers the right to access certain of our software in a hosted environment or use downloaded software for a specified subscription period. During our transition, revenue, billings, gross margin, operating margin, net income (loss), earnings (loss) per share, deferred revenue, and cash flow from operations will be impacted as more revenue is recognized ratably rather than upfront and as new offerings bring a wider variety of price points.

Our ability to achieve our financial objectives is subject to risks and uncertainties. The new offerings require a considerable investment of technical, financial, legal, and sales resources, and a scalable organization. Market acceptance of such offerings is affected by a variety of factors, including but not limited to: security, reliability, performance, current license terms, customer preference, social/community engagement, customer concerns with entrusting a third party to store and manage their data, public concerns regarding privacy and the enactment of restrictive laws or regulations. Whether our business model transition will prove successful and will accomplish our business and financial objectives is subject to numerous risks and uncertainties includingthat you should consider before investing in our securities. These risks are described more fully below and include, but are not limited to:to, risks relating to the following:
•Our strategy to develop and introduce new products and services, exposing us to risks such as limited customer demand, attachacceptance, costs related to product defects, and large expenditures.
•The effects of the COVID-19 pandemic and related public health measures.
•Global economic and political conditions.
•Costs and challenges associated with strategic acquisitions and investments.
•Dependency on international revenue and operations, exposing us to significant international regulatory, economic, intellectual property, collections, currency exchange rate, taxation, political, and other risks.
•Inability to predict subscription renewal rates channel acceptance,and their impact on our future revenue and operating results.
•Existing and increased competition and rapidly evolving technological changes.
•Fluctuation of our financial results, key metrics and other operating metrics.
•Deriving a substantial portion of our net revenue from a small number of solutions, including our AutoCAD-based software products and collections.
•Any failure to successfully execute and manage initiatives to realign or introduce new business and sales initiatives.
•Net revenue, billings, earnings, cash flow, or subscriptions shortfalls or volatility of the market causing the market price of our stock to decline.
•Social and ethical issues relating to the use of artificial intelligence in our offerings.
•Security incidents compromising the integrity of our or our customers’ offerings, services, data, or intellectual property.
•Reliance on third parties to provide us with a number of operational and technical services as well as software.
•Our highly complex software, which may contain undetected errors, defects, or vulnerabilities.
•Increasing regulatory focus on privacy issues and expanding laws.
55

•Governmental export and import controls that could impair our ability to further develop and scale infrastructure, our abilitycompete in international markets or subject us to include functionality and usability in such offerings that address customer requirements, tax and accounting implications, pricing, and our costs. In addition,liability if we violate the metrics we use to gauge the statuscontrols.
•Protection of our business model transition may evolve over the courseintellectual property rights and intellectual property infringement claims from others.
•The government procurement process.
•Fluctuations in currency exchange rates.
•Our debt service obligations.
•Our investment portfolio consisting of the transition as significanta variety of investment vehicles that are subject to interest rate trends, emerge. If we are unablemarket volatility, and other economic factors.

Risks Relating to successfully establish these new offeringsOur Business and navigate our business model transition in light of the foregoing risks and uncertainties, our results of operations could be negatively impacted.Strategy

Our strategy to develop and introduce new products and services exposes us to risks such as limited customer acceptance, costs related to product defects, and large expenditures, each of which may not result in no additional net revenue or could result in decreased net revenue.

RapidThe software industry is characterized by rapid technological changes as well as changes in customer requirements and preferences, characterizepreferences. In recent years, the software industry. Just as theindustry has undergone a transition from mainframesdeveloping and selling perpetual licenses and on-premises products to personal computers transformed the industry 30 years ago, we believe our industry is undergoing a similar transition from the personal computer to cloud, mobile,subscriptions and social computing.cloud-enabled technologies. Customers are also reconsidering the manner in whichhow they licensepurchase software products, which requires us to constantly evaluate our business model and strategy. In response, we are focused on providing solutions to enable our customers to be more agile and collaborative on their projects. We devote significant resources to the development of new technologies. In addition, we frequently introduce new business models or methods that require a considerable investment of technical and financial resources, such as our introduction of flexible licensesubscription and service offerings.offerings and our transition of multi-subscription plans to named-user plans. It is uncertain whether these strategies, including our product and pricing changes, will proveaccurately reflect customer demand or be successful, or whether we will be able to develop the necessary infrastructure and business models more quickly than our competitors. We are makingmake such investments through further development and enhancement of our existing products and services, as well as through acquisitions of new product lines.acquisitions. Such investments may not result in sufficient revenue generation to justify their costs and could result in decreased net revenue.revenue or profitability. If we are not able to meet customer requirements, either with respect to our software or hardware products or the manner in which we provide such products, or if we are not able to adapt our business model to meet our customers'customers’ requirements, our business, financial condition, or results of operations may be adversely impacted.

In particular, a critical component of our growth strategy is to have customers of our AutoCAD and AutoCAD LT products, as well as other individual Autodesk products, expand their portfolios to include our other offerings and cloud-based services. We want customers using individual Autodesk products to expand their portfolio with our other offerings and cloud-based services,functionality, and we are taking steps to accelerate this migration. At times, sales of licenses of our AutoCAD and AutoCAD LT or individual Autodesk flagship products have decreased without a corresponding increase in industry collectionsIndustry Collections or cloud-based servicesfunctionality revenue, or without purchases of customer seats to our industry collections.Industry Collections. Should this continue, our results of operations will be adversely affected. Also, adoption of our cloud and mobile computing offerings and changes in the delivery of our software and services to our customers, such as product subscription offerings, will change the way in which we recognize revenue relating to our software and services, with a potential negative impact on our financial performance. The accounting impact of these offerings and other business decisions are expected to result in an increase in the percentage of our ratable revenue, as well as recurring revenue, making for a more predictable business over time, while potentially reducing our upfront perpetual revenue stream.

Our executive management team must continuously act quickly continuously, and with vision, given the rapidly changing customer expectations and technology advancements inherent in the software industry, the extensive and complex efforts required to create useful and widely accepted products, and the rapid evolution of cloud computing, mobile devices, new computing platforms, and other technologies, such as consumer products. Although we have articulated a strategy that we believe will fulfill these challenges, if we fail to execute properly on that strategy or adapt thatthe strategy as market conditions evolve, we may fail to meet our customers'customers’ expectations, failbe unable to compete with our competitors' products and technology, and lose the confidence of our channel partners and employees. This in turn could adversely affect our business and financial performance.


The effects of the COVID-19 pandemic and related public health measures have affected how we and our customers are operating our respective businesses, and the extent of the impact on our business and results of operations remains uncertain.

A significant portionWe are continuing to conduct business during the COVID-19 pandemic with substantial modifications to employee travel and work locations, as well as virtualization, postponement, or cancellation of certain sales and marketing events, among other changes. We have observed other companies as well as governments taking precautionary measures to address COVID-19. While government authorities in some geographies are removing COVID-19 related business operations restrictions, we continue to actively monitor the situation and may take further actions to alter our business operations as may be required by federal, state, or local authorities, or that we determine are in the best interests of our revenue is generated through maintenance revenue;employees, customers, partners, suppliers, and stockholders, including in response to outbreaks and variants. The extent of the impact of any such
56

modifications on our business, including the effects on our customers and prospects, and on our financial results, remains uncertain.

In particular, if decreases in maintenance revenuewe are not offset by increases in subscription revenue, our future revenueable to retain current customers and financial results will be negatively impacted.

Our maintenance customers have no obligation to renew their maintenanceattract new business, including multi-year contracts, after the expiration of their maintenance period, which is typically one year. The discontinuance of our perpetual licenses for most individual software products on February 1, 2016 and for perpetual suites on August 1, 2016 resulted in the loss of future maintenance attach opportunities. On June 15, 2017, we commenced a program to incentivize maintenance plan customers to move to subscription plan offerings. As a result, we expector if customer renewal rates will decline or fluctuate, over timeit could have a material adverse effect upon our business and results of operations. During fiscal 2021, we took a number of actions to support our customers, including extending payment terms to 60 days through the beginning of August 2020, offering free commercial use of our cloud collaboration products through June 2020, delaying the transition from multi-user licenses to named-user licenses from May to August 2020 to minimize disruption, and deferring a 20% maintenance price increase from May to August 2020. These actions have affected our cash flow, and if these actions as well as our other sales and marketing activities are not successful in retaining current customers and in closing new business, our business and results of operations could be materially adversely affected.

We will continue to invest in critical areas such as research and development, construction, and digitizing the company to support our future success as we come out of the pandemic. If we are not able to successfully manage our spending and investment, it could have a material adverse effect on our cash balances, business, and results of operations.

Although recent vaccine approvals and rollouts have raised hopes of a turnaround in the COVID-19 pandemic, renewed waves and new variants as well as delays in vaccinations pose risks to recovery and our outlook. In addition, supply chain disruption and resulting inflationary pressures, a global labor shortage, and the ebb and flow of COVID, including in specific geographies, are currently impacting the pace of our recovery and our outlook. Growth may slow if virus outbreaks (including from new variants) prove difficult to contain, infections and deaths mount rapidly before vaccines are widely available, and social distancing measures and/or lockdowns return and are more stringent than anticipated. Moreover, if economic policy support is insufficient or withdrawn before full economic recovery, bankruptcies of viable but illiquid companies could mount, leading to further or renewed employment and income losses and a more protracted recovery. Together, these uncertainties and risks could have a material adverse impact on our financial condition, business and results of operations.

Global economic and political conditions may further impact our industries, business, and financial results.

Our overall performance depends largely upon domestic and worldwide economic and political conditions. The United States and other countries’ economies have experienced cyclical downturns, in which economic activity was impacted by falling demand for a variety of goods and services, restricted credit, poor liquidity, decreased government spending, reduced corporate profitability, volatility in credit, equity, and foreign exchange markets, bankruptcies, and overall uncertainty. These economic conditions can occur abruptly. For example, the coronavirus (COVID-19) pandemic has caused additional uncertainty in the global economy, and an economic downturn or recession in the United States or in other countries may occur or has already occurred and may continue. The extent to which COVID-19 will impact our financial condition or results of operations is still uncertain and will continue to depend on developments such as the impact on our customers, vendors, distributors, and resellers, such as the supply chain disruption and resulting inflationary pressures and global labor shortage that we have seen recently, as well as other factors, including the full duration and the extent of the pandemic, including as a result of outbreaks and variants; actions taken by governments, businesses, and consumers in response to the pandemic; speed and timing of economic recovery, including in specific geographies; speed of rollout of COVID-19 vaccines, lifting of restrictions on movement, and normalization of full-time return to work and social events; our billings and renewal rates, including new business close rates, rate of multi-year contracts, pace of closing larger transactions, and new unit volume growth; and effect of the pandemic on margins and cash flow. All of these factors continue to evolve and remain uncertain at this time, and some of these factors are not within our control. Due to our subscription-based business model, the effect of COVID-19 may not be fully reflected in our results of operations until future periods, if at all. If economic growth in countries where we do business slows or if such countries experience further economic recessions, customers may delay or reduce technology purchases, which we have seen recently in certain countries including China. Our customers include government entities, including the U.S. federal government, and if spending cuts impede the ability of governments to purchase our products and services, our revenue could decline. In addition, a number of our customers rely, directly and indirectly, on government spending.

As described elsewhere in these risk factors, includingwe are dependent on international revenue and operations and are subject to related risks of conducting business globally. Trends toward nationalism and protectionism and the overallweakening or dissolution of international trade pacts may increase the cost of, or otherwise interfere with, conducting business. These trends have increased political and economic unpredictability globally and may increase the volatility of global financial markets, and the impact of such developments on the global economy the health of their businesses, the perceived valueremains uncertain. Political instability or adverse political developments in any of the maintenance programcountries in which we do business could harm our business, results of operations, and planned maintenance pricing increases. Iffinancial condition. A financial sector credit crisis could impair credit availability and the financial stability of our non-renewing maintenance customers, do not transitionincluding our distribution partners and channels. A disruption in the financial markets may also have an effect on our derivative counter-parties and could also impair our banking partners, on which we rely for operating cash management. Any of these events could harm our business, results of operations, and financial condition.

57

Our business could be adversely impacted by the costs and challenges associated with strategic acquisitions and investments.

We regularly acquire or invest in businesses, software solutions, and technologies that are complementary to our subscriptions, our futurebusiness through acquisitions, strategic alliances, or equity or debt investments, including several transactions in fiscal 2021. The risks associated with such acquisitions include the difficulty of integrating solutions, operations, and personnel; inheriting liabilities such as intellectual property infringement claims; failure to realize anticipated revenue and financial results will be negatively impacted.cost projections and expected synergies; the requirement to test and assimilate the internal control processes of the acquired business in accordance with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002; and diversion of management's time and attention. In addition, such acquisitions and investments involve other risks such as:

Revenue from our offerings may be difficult•the inability to predict during ourretain customers, key employees, vendors, distributors, business model transition.partners, and other entities associated with the acquired business;

•the potential that due diligence of the acquired business or solution does not identify significant problems;
The discontinuance•exposure to litigation or other claims in connection with, or inheritance of our perpetual licenses for most individual software products on February 1, 2016 and for perpetual suites on August 1, 2016 has and will continue to result in the loss of future upfront licensing revenue. This also has frozen the growth of our maintenance revenue because there will be no further opportunities to attach maintenance licensing. On June 15, 2017, we commenced a program to incentivize maintenance plan customers to move to subscription plan offerings. Asclaims or litigation risk as a result we expect our maintenance revenue to decline over time, but it may decline more quicklyof, an acquisition, including claims from terminated employees, customers, or other third parties;
•the potential for incompatible business cultures;
•significantly higher than anticipated duetransaction or integration-related costs;
•potential additional exposure to low maintenance renewals. At economic, tax, currency, political, legal, and regulatory risks associated with specific countries; and
•the same time, our subscription (formerly new model) revenue may not growpotential impact on relationships with existing customers, vendors, and distributors as rapidlybusiness partners as anticipated. Our subscription pricing allows customers to use our offerings at a lower initial cost when compared to the saleresult of a perpetual license. Although our subscriptions are designed to increase the number of customers who purchase offerings and create a recurring revenue stream that is more predictable over time, it creates risks related to the timing of revenue recognition and expected reductions in cash flows in the near term.acquiring another business.

We may not be able to predict subscription renewal ratessuccessful in overcoming such risks, and theirsuch acquisitions and investments may negatively impact on our future revenue and operating results.

Our customers are not obligated to renew their subscriptions for our offerings, and they may elect not to renew. We cannot assure renewal rates, or the mix of subscriptions renewals. Customer renewal rates may decline or fluctuate due to a number of factors, including offering pricing, competitive offerings, customer satisfaction, and reductions in customer spending levels or customer activity due to economic downturns or financial markets uncertainty. If our customersbusiness. In addition, if we do not renew their subscriptionscomplete an announced acquisition transaction or if they renew on less favorable terms, our revenues may decline.

Actions thatintegrate an acquired business successfully and in a timely manner, we are taking to restructure our business in alignment with our strategic priorities may not be as effective asrealize the benefits of the acquisition to the extent anticipated.

During the fourth quarter of fiscal 2018, we commenced a world-wide restructuring plan to support the Company's strategic priorities of completing the subscription transition; digitizing the Company; Acquisitions and re-imagining manufacturing, construction, and production. Through the restructuring, we seek to reduce our investment in areas not aligned with our strategic priorities, including in areas related to research and development and go to market activities. At the same time, we plan to further invest in strategic priority areas related to as digital infrastructure, customer success, and construction.

We may encounter challengesinvestments have in the executionpast and may in the future contribute to fluctuations in our quarterly financial results. These fluctuations could arise from transaction-related costs and charges associated with eliminating redundant expenses or write-offs of these efforts,impaired assets recorded in connection with acquisitions and these challengesinvestments, and could negatively impact our financial results. If we are unable to successfully complete our restructuring efforts, our business and operating results may be harmed. As a result of these actions, we will incur additional costs in the short term that will have the effect of reducing our GAAP operating margins.



We are dependent on international revenue and operations, exposing us to significant international regulatory, global economic, intellectual property, collections, currency exchange rate, taxation, political, instability and other risks, which could adversely impact our financial results.

We are dependent on our international operations for a significant portion of our revenue. International net revenue represented 64%67% and 66% of our net revenue for both the nine months ended October 31, 20172021 and 2016.2020, respectively. Our international revenue, including thatsome of which comes from emerging economies, is subject to general economic and political conditions in foreign markets, including conditions in foreign marketsthose resulting from economic and political conditions in the U.S.United States, as well as country-specific conditions related to COVID-19, such as varied speed of recovery in different geographies. For example, we have recently seen a deceleration in growth in certain geographies including China. Our total revenue is also impacted by the relative geographical and country mix of our revenue over time. At times, these factors adversely impact our international revenue, and consequently our business as a whole. Our dependency on international revenue makes us much more exposed to global economic and political trends, which can negatively impact our financial results even if our results in the U.S.United States are strong for a particular period. Further, a significant portion of our earnings from our international operations may not be freely transferable to the U.S. due to remittance restrictions, adverse tax consequences or other factors.

We anticipate that our international operations will continue to account for a significant portion of our net revenue and, as we expand our international development, sales, and marketing expertise, will provide significant support to our overall efforts in countries outside of the U.S.

United States. Risks inherent in our international operations include:

•economic volatility;

•tariffs, quotas, and other trade barriers and restrictions;
•fluctuating currency exchange rates, including devaluations, currency controls, and inflation, and risks related to any hedging activities we undertake;

unexpected •changes in regulatory requirements and practices;

•delays resulting from difficulty in obtaining export licenses for certain technology;

•different purchase patterns as compared to the developed world;

tariffs, quotas, and other trade barriers and restrictions;

•operating in locations with a higher incidence of corruption and fraudulent business practices, particularly in emerging economies;
58

increasing enforcement by•compliance with the U.S. under the Foreign Corrupt Practices Act, the U.K. Bribery Act, and adoption of stricterother anti-corruption laws in certain countries, including the United Kingdom;laws;

•difficulties in staffing and managing foreign sales and development operations;

•local competition;

•longer collection cycles for accounts receivable;

potential changes in tax laws, including possible •U.S. and foreign tax law changes that, if enacted, could significantly impact how multinational companies are taxed;and the complexities of tax reporting;

tax arrangements with foreign governments, including our ability to meet and renew the terms of those tax arrangements;

•laws regarding the free flow of data across international borders and management of and access to data and public networks;

•possible future limitations upon foreign ownedforeign-owned businesses;

•increased financial accounting and reporting burdens and complexities;

•inadequate local infrastructure;



•greater difficulty in protecting intellectual property;

•software piracy; and

•other factors beyond our control, including popular uprisings, terrorism, war, natural disasters, and diseases.

diseases and pandemics, such as COVID-19.
Some of our business partners also have international operations and are subject to the risks described above.

The Brexit voteUnited Kingdom’s exit from the European Union (“Brexit”) has exacerbated and may further exacerbate many of the risks and uncertainties described above. The proposed withdrawalapplication of the Trade and Cooperation Agreement between the European Union, the European Atomic Energy Community, and the United Kingdom from the European Unionsigned in December 2020 (the “TCA”), which took effect January 1, 2021, could among other potential outcomes, adversely affect thehave adverse tax, tax treaty, currency,banking, operational, legal, and regulatory, regimes to whichor other impacts on our businesses in the region are subject.region. The withdrawal could also, among other potential outcomes, create currency volatility; disrupt the free movement of goods, services, and people between the United Kingdom and the European UnionUnion; and significantly disrupt trade between the United Kingdom and the European Union and other parties. Further, uncertaintyUncertainty around these and related issues could lead to adverse effects on the economy of the United Kingdom economy, the European Union economies, and the other economies in which we operate.

In addition, in recent years, the United States has instituted or proposed changes to foreign trade policy, including the negotiation or termination of trade agreements, the imposition of tariffs on products imported from certain countries, economic sanctions on individuals, corporations, or countries, and other government regulations affecting trade between the United States and other countries in which we do business. New or increased tariffs and other changes in U.S. trade policy could trigger retaliatory actions by affected countries, and certain foreign governments, including the Chinese government, have instituted or considered imposing trade sanctions on certain U.S.-manufactured goods. The escalation of protectionist or retaliatory trade measures in either the United States or any other countries in which we do business, such as a change in tariff structures, export compliance, or other trade policies, may increase the cost of, or otherwise interfere with, the conduct of our business.

Even if we are able to successfully manage the risks of international operations, our business may be adversely affected if our business partners are not able to successfully manage these risks.

We may not be able to predict subscription renewal rates and their impact on our future revenue and operating results.
We are subject to governmental export and import controls that could impair our ability to compete in international markets or subject us to liability if we violate the controls
.
Our offeringscustomers are subjectnot obligated to U.S. export controls and economic sanctions laws and regulations that prohibit the shipment of certain products and services without the required export authorizations or export to locations, governments, and persons targeted by U.S. sanctions. While we have processes in place to preventrenew their subscriptions for our offerings, from being exportedand they may elect not to renew, upgrade, or expand their subscriptions. We cannot assure renewal rates or the mix of subscriptions renewals. Customer renewal rates may decline or fluctuate due to a number of factors, including offering pricing; competitive offerings; customer satisfaction; and reductions in violationcustomer spending levels, customer activity, or number of these laws,users due to economic downturns, including obtaining authorizations as appropriate and screening against U.S. Government and international lists of restricted and prohibited persons, we cannot guarantee that these processes will prevent all violations of export control and sanctions laws.
We also note that if our channel partners fail to obtain appropriate import, export or re-export licenses or permits, we may also be adversely affected, through reputational harm as well as other negative consequences including government investigations and penalties. We presently incorporate export control and sanctions compliance requirements in our channel partner agreements. Complying with export control and sanctions regulations for a particular sale may be time-consuming and may result in the delay or loss of sales opportunities.

Violations of U.S. sanctions or export control laws can result in fines or penalties, including civil penalties of up to $284,582 or twice the value of the transaction, whichever is greater, per violation. In the event of criminal knowing and willful violations of these laws, fines of up to $1 million per violation and possible incarceration for responsible employees and managers could be imposed.current COVID-19 pandemic, or financial markets uncertainty. If our customers do not renew their subscriptions or if they renew on less favorable terms, our revenues may decline.

While we have extensive compliance procedures in place, licensing of our product offerings may have been made in potential violation of the export control and economic sanctions laws. We filed a Voluntary Self Disclosure in December 2016 with the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”) with respect to the sale of certain licenses in an aggregate amount of less than $700,000. We are currently waiting for OFAC to complete its review of this matter. We could be subject to monetary penalties or other sanctions by OFAC in connection with its review of this issue.

Our software is highly complex and may contain undetected errors, defects or vulnerabilities, each of which could harm our business and financial performance.

The software products that we offer are complex, and despite extensive testing and quality control, may contain errors, defects or vulnerabilities. Some errors, defects and vulnerabilities in our software products may only be discovered after the product or service has been released. Any errors, defects or vulnerabilities could result in the need for corrective releases to our software products, damage to our reputation, loss of revenue, an increase in product returns or lack of market acceptance of our products, any of which would likely harm our business and financial performance.

Existing and increased competition and rapidly evolving technological changes may reduce our revenue and profits.

The software industry has limited barriers to entry, and the availability of computing devices with continually expanding performance at progressively lower prices contributes to the ease of market entry. The industry is presently undergoinghas undergone a


platform shift transition from the personal computerdeveloping and selling perpetual licenses and on-premises products to cloudsubscriptions and mobile computing.cloud-enabled technologies. This shift further lowers barriers to entry and poses a disruptive challenge to established software companies. The markets in which we compete
59

operate are characterized by vigorous competition, both by entry of competitorsentrants with innovative technologies and by consolidation of companies with complementary productsofferings and technologies. In addition, someSome of our competitors in certain markets have greater financial, technical, sales and marketing, and other resources. Furthermore, a reduction in the number and availability of compatible third-party applications or our inability to rapidly adapt to technological and customer preference changes, including those related to cloud computing, mobile devices, and new computing platforms, may adversely affect the sale of our products.solutions. Because of these and other factors, competitive conditions in the industry are likely to intensify in the future. Increased competition could result in price reductions, reduced net revenue and profit margins, and loss of market share, any of which would likely harm our business.

We are exposed to fluctuations in currency exchange rates that could negatively impact our financial results and cash flows.

Because we conduct a substantial portion of our business outside the U.S. and we make certain business and resource decisions based on assumptions about foreign currency, we face exposure to adverse movements in foreign currency exchange rates. These exposures may change over time as business practices evolve and economic conditions change. For example, the June 23, 2016 announcement of Brexit caused significant volatility in global stock markets and currency exchange rate fluctuations that resulted in the strengthening of the U.S. dollar against foreign currencies in which we conduct business. Our exposure to adverse movements in foreign currency exchange rates could have a material adverse impact on our financial results and cash flows.

We use derivative instruments to manage a portion of our cash flow exposure to fluctuations in foreign currency exchange rates. As part of our risk management strategy, we use foreign currency contracts to manage a portion of our exposures of underlying assets, liabilities, and other obligations, which exist as part of our ongoing business operations. These foreign currency instruments have maturities that extend for one to twelve months in the future, and provide us with some protection against currency exposures. However, our attempts to hedge against these risks may not be completely successful, resulting in an adverse impact on our financial results.

The fluctuations of currencies in which we conduct business can both increase and decrease our overall revenue and expenses for any given fiscal period. Although our foreign currency cash flow hedge program extends beyond the current quarter in order to reduce our exposure to foreign currency volatility, we do not attempt to completely mitigate this risk, and in any case, will incur transaction fees in adopting such hedging programs. Such volatility, even when it increases our revenues or decreases our expenses, impacts our ability to accurately predict our future results and earnings.

A breach of security in our products, services or computer systems may compromise the integrity of our products or services, harm our reputation, create additional liability and adversely impact our financial results.

We make significant efforts to maintain the security and integrity of our source code and computer systems. The risk of a security breach or disruption, particularly through cyber attack or cyber intrusion, including by computer hackers, foreign governments and cyber terrorists, has increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased. These threats include but are not limited to identity theft, unauthorized access, DNS attacks, wireless network attacks, viruses and worms, advanced persistent threat (APT), application centric attacks, peer-to-peer attacks, phishing, backdoor trojans and distributed denial of service (DDoS) attacks. Any of the foregoing could attack our products, services or computer systems. Despite significant efforts to create security barriers to such programs, it is virtually impossible for us to entirely eliminate this risk. Like all software, our software is vulnerable to cyber attacks. In the past, hackers have targeted our software, and they may do so in the future. The impact of cyber attacks could disrupt the proper functioning of our software products or services, cause errors in the output of our customers' work, allow unauthorized access to sensitive, proprietary or confidential information of ours or our customers, and other destructive outcomes. Moreover, as we continue to invest in new lines of consumer products and services we are exposed to increased security risks and the potential for unauthorized access to, or improper use of, the information of our consumer users. For example, cyber attacks could make our customers hesitant to adopt our cloud-based hosted subscription services, which could negatively impact our business model transition. If any of the foregoing were to occur, our reputation may suffer, customers may stop buying our products or services, we could face lawsuits and potential liability, and our financial performance could be negatively impacted.

Changes in laws or regulations related to the Internet, local data storage or related to privacy and data security concerns may impact our business or expose us to increased liability.

The future success of our business depends upon the continued use of the Internet as a primary medium for commerce, communication, and business applications. Federal, state, or foreign government bodies or agencies have in the past adopted, and may in the future adopt, laws or regulations affecting data privacy and the transmission of certain types of content using the


Internet. For example, the State of California has adopted legislation requiring operators of commercial websites and mobile applications that collect personal information from California residents to conspicuously post and comply with privacy policies that satisfy certain requirements. Several other U.S. states have adopted legislation requiring companies to protect the security of personal information that they collect from consumers over the Internet, and more states may adopt similar legislation in the future. Additionally, the Federal Trade Commission has used its authority under Section 5 of the Federal Trade Commission Act to bring actions against companies for failing to maintain adequate security for personal information collected from consumers over the Internet and for failing to comply with privacy- related representations made to Internet users. The U.S. Congress has at various times proposed federal legislation intended to protect the privacy of Internet users and the security of personal information collected from Internet users that would impose additional compliance burdens upon companies collecting personal information from Internet users, and the U.S. Congress may adopt such legislation in the future. The European Union also has adopted various directives regulating data privacy and security and the transmission of content using the Internet involving residents of the European Union, including those directives known as the Data Protection Directive, the E-Privacy Directive, and the Privacy and Electronic Communications Directive, and may adopt similar directives in the future. Other countries, including Canada and several Latin American and Asian countries, have constitutional protections for, or have adopted legislation protecting, individuals' personal information. Additionally, some federal, state, or foreign governmental bodies have established laws that seek to censor the transmission of certain types of content over the Internet or require that individuals be provided with the ability to permanently delete all electronic personal information, such as the German Multimedia Law of 1997 and the California “Eraser law” for minors. Additionally, some foreign governmental bodies (such as Russia and China) have established laws or have proposed laws that seek to require local data storage.

In addition, new laws and industry self-regulatory codes have been enacted and more are being considered that may affect our ability to reach current and prospective customers, to understand how our products and services are being used, to respond to customer requests allowed under the laws, and to implement our new business models effectively. These new laws and regulations would similarly affect our competitors as well as our customers.

Given the variety of global privacy and data protection regimes, it is possible we may find ourselves subject to inconsistent obligations. For instance, the USA Patriot Act is considered by some to be in conflict with certain directives of the European Union. Situations such as these require that we make prospective determinations regarding compliance with conflicting regulations. Increased enforcement of existing laws and regulations, as well as any laws, regulations or changes that may be adopted or implemented in the future, could limit the growth of the use of public cloud applications or communications generally, result in a decline in the use of the Internet and the viability of Internet-based applications, and require us to implement additional technological safeguards.

In addition, in October 2015 the European Court of Justice issued a ruling immediately invalidating the U.S.-EU Safe Harbor Framework, which facilitated personal data transfers to the U.S. in compliance with applicable EU data protection laws. In February 2016, the European Commission and the United States agreed on a new framework for transatlantic data flows: the EU-U.S. Privacy Shield. We rely on other legal mechanisms for data transfer and continue to comply with the previous U.S.-EU Safe Harbor Framework and U.S.-Swiss Safe Harbor Framework as set forth by the U.S. Department of Commerce regarding the collection, use, and retention of personal information from European Union member countries and Switzerland. 

Increasing regulatory focus on privacy issues could impact our new business models and expose us to increased liability.

Governments, privacy advocates and class action attorneys are increasingly scrutinizing how companies collect, process, use, store, share or transmit personal data. Any perception of our practices or products as an invasion of privacy, whether or not consistent with current regulations and industry practices, may subject us to public criticism, class action lawsuits, reputational harm or claims by regulators, industry groups or other third parties, all of which could disrupt our business and expose us to increased liability.

We rely on third-parties to provide us with a number of operational services, including hosting and delivery and certain of our customer services and other operations and processing of data; any interruption or delay in service from these third parties, breaches of security or privacy could expose us to liability, harm our reputation and adversely impact our financial performance.

We increasingly rely on hosted computer services from third parties for services that we provide our customers and computer operations for our internal use. As we gather customer data and host certain customer data in third-party facilities, a security breach could compromise the integrity or availability or result in the theft of customer data. In addition, our operations could be negatively affected in the event of a security breach, and we could be subject to the loss or theft of confidential or proprietary information, including source code.



Unauthorized access to this data may be obtained through break-ins, breaches of our secure networks by unauthorized parties, employee theft or misuse, or other misconduct. We rely on a number of third party suppliers in the operation of our business for the provision of various services and materials that we use in the operation of our business and production of our products. We may from time to time rely on a single or limited number of suppliers, or upon suppliers in a single country, for these services or materials. The inability of such third parties to satisfy our requirements could disrupt our business operations or make it more difficult for us to implement our business strategy. If any of these situations were to occur, our reputation could be harmed, we could be subject to third party liability, including under data protection and privacy laws in certain jurisdictions, and our financial performance could be negatively impacted.

If we do not maintain good relationships with the members of our distribution channel, or achieve anticipated levels of sell-through, our ability to generate revenue will be adversely affected. If our distribution channel suffers financial losses, becomes financially unstable or insolvent, or is not provided the right mix of incentives to sell our products, our ability to generate revenue will be adversely affected.

We sell our software products both directly to end-users and through a network of distributors and resellers. For the nine months ended October 31, 2017 and 2016, approximately 70% and 74%, respectively, of our revenue was derived from indirect channel sales through distributors and resellers and we expect that the majority of our revenue will continue to be derived from indirect channel sales in the future. Our ability to effectively distribute our products depends in part upon the financial and business condition of our distributor and reseller network. Computer software distributors and resellers typically are not highly capitalized, have previously experienced difficulties during times of economic contraction and experienced difficulties during the past several years. We have processes to ensure that we assess the creditworthiness of distributors and resellers prior to our sales to them. In the past we have taken steps to support them, and may take additional steps in the future, such as extending credit terms and providing temporary discounts. These steps, if taken, could harm our financial results. If our distributors and resellers were to become insolvent, they would not be able to maintain their business and sales, or provide customer support services, which would negatively impact our business and revenue.

We rely significantly upon major distributors and resellers in both the U.S. and international regions, including the distributor Tech Data. Tech Data accounted for 31% and 30% of our total net revenue for the nine months ended October 31, 2017 and October 31, 2016, respectively. Although we believe that we are not substantially dependent on Tech Data, if Tech Data were to experience a significant disruption with its business or if our relationship with Tech Data were to significantly deteriorate, it is possible that our ability to sell to end users would be, at least temporarily, negatively impacted. This could in turn negatively impact our financial results.

Over time, we have modified and will continue to modify aspects of our relationship with our distributors and resellers, such as their incentive programs, pricing to them and our distribution model to motivate and reward them for aligning their businesses with our strategy and business objectives. Changes in these relationships and underlying programs could negatively impact their business and harm our business. In addition, the loss of or a significant reduction in business with those distributors or resellers or the failure to achieve anticipated levels of sell-through with any one of our major international distributors or large resellers could harm our business. In particular, if one or more of such distributors or resellers were unable to meet their obligations with respect to accounts payable to us, we could be forced to write off such accounts and may be required to delay the recognition of revenue on future sales to these customers. These events could have a material adverse effect on our financial results.

Our financial results, key metrics, and other operating metrics fluctuate within each quarter and from quarter to quarter, making our future revenue and financial results difficult to predict.

Our quarterly financial results, key metrics, and other operating metrics have fluctuated in the past and will continue to do so in the future. These fluctuations could cause our stock price to change significantly or experience declines. We also provide investors with quarterly and annual financial forward-looking guidance that could prove to be inaccurate as a result of these fluctuations. In addition to the other factorsrisks described in this Part II, Item 1A,these risk factors, some of the factors that could cause our financial results, key metrics, and other operating metrics to fluctuate include:

•general market, economic, business, and political conditions in particular geographies, including Europe, APAC, and emerging economies;economies, including from an economic downturn or recession in the United States or other countries;

•failure to produce sufficient revenue, billings, or subscription, profitability, and cash flow growth, and profitability;

failure to achieve anticipated levels of customer acceptance of our business model transition, including the impactas a result of the end of perpetual licenses and the introduction of our maintenance to subscription program;COVID-19 pandemic;



restructuring or other accounting charges and unexpected costs or other operating expenses;

changes in product mix, pricing pressure or changes in product pricing;

weak or negative growth in one or more of the industries we serve, including AEC, manufacturing, and digital media and entertainment markets;

the success of new business or sales initiatives;

security breaches and potential financial penalties to customers and government entities;

timing of additional investments in the development of our platform or deployment of our services;

changes in revenue recognition or other accounting guidelines employed by us and/or established by the Financial Accounting Standards Board or other rule-making bodies;

fluctuations in foreign currency exchange rates and the effectiveness of our hedging activity;

failure to achieve and maintain cost reductions and productivity increases;

dependence on and the timing of large transactions;

changes in billings linearity;

adjustments arising from ongoing or future tax examinations;

the ability of governments around the world to adopt fiscal policies, meet their financial and debt obligations, and to finance infrastructure projects;

lower renewals of our maintenance program;

failure to expand our AutoCAD and AutoCAD LT customer base to related design products and services;

our ability to rapidly adapt to technological and customer preference changes, including those related to cloud computing, mobile devices, new computing platforms, and 3D printing;

the timing of the introduction of new products by us or our competitors;

the financial and business condition of our reseller and distribution channels;

•failure to accurately predict the impact of acquired businesses or to identify and realize the anticipated benefits of acquisitions, and successfully integrate such acquired businesses and technologies;

•potential goodwill impairment charges related to prior acquisitions;
•failure to manage spend;
•changes in billings linearity;
•changes in subscription mix, pricing pressure, or changes in subscription pricing;
•weak or negative growth in one or more of the industries we serve, including AEC, manufacturing, and digital media and entertainment markets;
•the success of new business or sales initiatives;
•security breaches, related reputational harm, and potential financial penalties to customers and government entities;
•restructuring or other accounting charges and unexpected costs or other operating expenses;
•timing of additional investments in our technologies or deployment of our services;
•changes in revenue recognition or other accounting guidelines employed by us and/or established by the Financial Accounting Standards Board, Securities and Exchange Commission, or other rulemaking bodies;
•fluctuations in foreign currency exchange rates and the effectiveness of our hedging activity;
•dependence on and timing of large transactions;
•adjustments arising from ongoing or future tax examinations;
•the ability of governments around the world to adopt fiscal policies, meet their financial and debt obligations, and finance infrastructure projects;
•failure to expand our AutoCAD and AutoCAD LT customer base to related design products and services;
•our ability to rapidly adapt to technological and customer preference changes, including those related to cloud computing, mobile devices, and new computing platforms;
•timing of the introduction of new products by us or our competitors;
•the financial and business condition of our reseller and distribution channels;
•perceived or actual technical or other problems with a product or combination of products;subscriptions;

•unexpected or negative outcomes of matters and expenses relating to litigation or regulatory inquiries;

•increases in cloud services-relatedfunctionality-related expenses;
60

•timing of product releases and retirements;retirements of offerings;

•changes in tax laws or regulations, tax arrangements with foreign governments or accounting rules and regulations, such as increased use of fair value measures;

•changes in sales compensation practices;

•failure to effectively implement and maintain our copyright legalization programs, especially in developing countries;

failure to achieve sufficient sell-through in our channels for new or existing products;



•renegotiation or termination of royalty or intellectual property arrangements;

•interruptions or terminations in the business of our consultants or third-party developers;

the •timing and degree of expected investments in growth and efficiency opportunities;

•failure to achieve continued success in technology advancements;

•catastrophic events, natural disasters, or natural disasters;public health events, such as pandemics and epidemics, including COVID-19;

•regulatory compliance costs; and

potential goodwill impairment charges related to prior acquisitions; and

•failure to appropriately estimate the scope of services under consulting arrangements.

We have also experienced fluctuations in financial results in interim periods in certain geographic regions due to seasonality or regional economic or political conditions. In particular, our financial results in Europe during our third quarter are usually affected by a slower summer period, and our APAC operations typically experience seasonal slowing in our third and fourth quarters.

Our operating expenses are based in part on our expectations for future revenue and are relatively fixed in the short term. Accordingly, any revenue shortfall below expectations has had, and in the future could have, an immediate and significant adverse effect on our profitability. Greater than anticipated expenses or a failure to maintain rigorous cost controls would also negatively affect profitability.

Our business could suffer as a result of risks, costs, charges and integration risks associated with strategic acquisitions and investments.

We regularly acquire or invest in businesses, software products and technologies that are complementary to our business through acquisitions, strategic alliances or equity or debt investments. The risks associated with such acquisitions include, among others, the difficulty of assimilating products, operations and personnel, inheriting liabilities such as intellectual property infringement claims, the failure to realize anticipated revenue and cost projections, the requirement to test and assimilate the internal control processes of the acquired business in accordance with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002, and the diversion of management's time and attention.

In addition, such acquisitions and investments involve other risks such as:

the inability to retain customers, key employees, vendors, distributors, business partners, and other entities associated with the acquired business;

the potential that due diligence of the acquired business or product does not identify significant problems;

exposure to litigation or other claims in connection with, or inheritance of claims or litigation risk as a result of, an acquisition, including but not limited to, claims from terminated employees, customers, or other third parties;

the potential for incompatible business cultures;

significantly higher than anticipated transaction or integration-related costs;

potential additional exposure to fluctuations in currency exchange rates; and

the potential impact on relationships with existing customers, vendors, and distributors as business partners as a result of acquiring another business.

We may not be successful in overcoming such risks, and such acquisitions and investments may negatively impact our business. In addition, such acquisitions and investments have in the past and may in the future contribute to potential fluctuations in our quarterly financial results. These fluctuations could arise from transaction-related costs and charges


associated with eliminating redundant expenses or write-offs of impaired assets recorded in connection with acquisitions and investments. These costs or charges could negatively impact our financial results for a given period, cause quarter to quarter variability in our financial results or negatively impact our financial results for several future periods.

Because we derive a substantial portion of our net revenue from a small number of products,solutions, including our AutoCAD-based software products and collections, and if these productsofferings are not successful, our revenue willwould be adversely affected.

We derive a substantial portion of our net revenue from sales of licensessubscriptions of a limited number of our products,offerings, including AutoCAD software, productssolutions based on AutoCAD, which include our collections that serve specific markets, and products that are interoperable with AutoCAD. Any factor adversely affecting sales of these products,subscriptions, including the product release cycle, market acceptance, product competition, performance and reliability, reputation, price competition, economic and market conditions, and the availability of third-party applications, would likely harm our financial results. During the nine months ended October 31, 2017,2021 and 2020, combined revenue from our AutoCAD and AutoCAD LT family products, not including collections (formerly suites) having AutoCAD or AutoCAD LT as a component, represented 19% 29%and 30%of our total net revenue, compared to 15% during the nine months ended October 31, 2016.respectively.

If we are not able to adequately protect our proprietary rights, our business could be harmed.

We rely on a combination of patent, copyright and trademark laws, trade secret protections, confidentiality procedures and contractual provisions to protect our proprietary rights. Despite such efforts to protect our proprietary rights, unauthorized parties from time to time have copied aspects of our software products or have obtained and used information that we regard as proprietary. Policing unauthorized use of our software products is time-consuming and costly. We are unable to measure the extent to which piracy of our software products exists and we expect that software piracy will remain a persistent problem, particularly in emerging economies. Furthermore, our means of protecting our proprietary rights may not be adequate.

Additionally, we actively protect the secrecy of our confidential information and trade secrets, including our source code. If unauthorized disclosure of our source code occurs, we could potentially lose future trade secret protection for that source code. The loss of future trade secret protection could make it easier for third-parties to compete with our products by copying functionality, which could adversely affect our financial performance and our reputation. We also seek to protect our confidential information and trade secrets through the use of non-disclosure agreements with our customers, contractors, vendors and partners. However, it is possible that our confidential information and trade secrets may be disclosed or published without our authorization. If this were to occur, it may be difficult and/or costly for us to enforce our rights, and our financial performance and reputation could be negatively impacted.

We may face intellectual property infringement claims that could be costly to defend and result in the loss of significant rights.

As more software patents are granted worldwide, the number of products and competitors in our industry segments grows and the functionality of products in different industry segments overlaps, we expect that software product developers will be increasingly subject to infringement claims. Infringement or misappropriation claims have in the past been, and may in the future be, asserted against us, and any such assertions could harm our business. Additionally, certain patent holders without products have become more aggressive in threatening and pursuing litigation in attempts to obtain fees for licensing the right to use patents. Any such claims or threats, whether with or without merit, have been and could in the future be time-consuming to defend, result in costly litigation and diversion of resources, cause product shipment delays or require us to enter into royalty or licensing agreements. In addition, such royalty or license agreements, if required, may not be available on acceptable terms, if at all, which would likely harm our business.

From time to time we realign or introduce new business and sales initiatives; if we fail to successfully execute and manage these initiatives, our results of operations could be negatively impacted.

As part of our effort to accommodate our customers'customers’ needs and demands and the rapid evolution of technology, we from time to time we evolve our business and sales initiatives, such as realigning our development and marketing organizations, offering software as a service, and realigning our internal resources in an effort to improve efficiency. We may take such actions without clear indications that they will prove successful and, at times, we have been met with short-term challenges in the execution of such initiatives. Market acceptance of any new business or sales initiative is dependent on our ability to match our customers'customers’ needs at the right time and price. Often, we have limited prior experience and operating history in these new areas of emphasis. If any of our assumptions about expenses, revenue, or revenue recognition principles from these initiatives proves incorrect, or our attempts to improve efficiency are not successful, our actual results may vary materially from those anticipated, and our financial results will be negatively impacted.



Although we believe we currently have adequate internal control over financial reporting, we are required to evaluate our internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act of 2002 and any adverse results from such evaluation could result in a loss of investor confidence in our financial reports and have an adverse effect on our stock price.

Pursuant to Section 404, we are required to furnish a report by our management on our internal control over financial reporting. The report contains, among other matters, an assessment of the effectiveness of our internal control over financial reporting as of the end of our fiscal year, including a statement as to whether or not our internal control over financial reporting is effective. This assessment must include disclosure of any material weaknesses in our internal control over financial reporting identified by management.

In connection with the preparation of our Condensed Consolidated Financial Statements for the fiscal quarter ended October 31, 2015, our management identified a material weakness in our internal control over financial reporting related to our controls over the technical review of our reconciliation of our deferred tax accounts and the effective tax rate. As of April 30, 2017, management believed it had sufficient evidence to conclude that the changes, initiated over the preceding 18 months that were designed to remediate the material weakness, had been completely implemented and the material weakness had been remediated.
If our management or independent registered public accounting firm identifies one or more material weaknesses in our internal control over financial reporting, we would be unable to assert that such internal control over financial reporting is effective. If we are unable to assert that our internal control over financial reporting is effective (or if our independent registered public accounting firm is unable to express an opinion that our internal controls are effective), we could lose investor confidence in the accuracy and completeness of our financial reports, which could have an adverse effect on our business and stock price.

Net revenue, billings, earnings, cash flow, or subscriptions shortfalls or the volatility of the market generally may cause the market price of our stock to decline.

The market price for our common stock has experienced significant fluctuations and may continue to fluctuate significantly. The market price for our common stock may be affected by a number of factors, including the other factorsrisks described in this Part II, Item 1Athese risk factors and the following:
61

•shortfalls in our expected financial results, including net revenue, ARR, ARPS,billings, earnings, subscriptions,and cash flow or other key performance metrics;metrics, such as subscriptions, including as a result of the current COVID-19 pandemic, and how those results compare to securities analyst expectations, including whether those results fail to meet, exceed, or significantly exceed securities analyst expectations;

results and future projections related to our business model transition;

•quarterly variations in our or our competitors'competitors’ results of operations;

•general socio-economic,socioeconomic, political, or market conditions;conditions, including from an economic downturn or recession in the United States or in other countries;

•changes in forward-looking estimates of future results, how those estimates compare to securities analyst expectations, or changes in recommendations or confusion on the part of analysts and investors about the short-termshort- and long-term impact to our business resulting from our business model transition;business;

•uncertainty about certain governments'governments’ abilities to repay debt or effect fiscal policy;

the announcement•announcements of new productsofferings or product enhancements by us or our competitors;

•unusual events such as significant acquisitions, divestitures, regulatory actions, and litigation;

•changes in laws, rules, or regulations applicable to our business;

•outstanding debt service obligations; and

•other factors, including factors unrelated to our operating performance, such as instability affecting the economy or the operating performance of our competitors.



Significant changes in the price of our common stock could expose us to costly and time-consuming litigation. Historically, after periods of volatility in the market price of a company's securities, a company becomes more susceptible to securities class action litigation. This type of litigation is often expensive and diverts management'smanagement’s attention and resources.

As a result of our strategy of partnering with other companies for product development, our product delivery schedules could be adversely affected if we experience difficulties with our product development partners.

We partner with certain independent firms and contractors to perform some of our product development activities. We believe our partnering strategy allows us to achieve efficiencies in developing new products and maintaining and enhancing existing product offerings. This strategy creates a dependency on independent developers. Independent developers, including those who currently develop solutions for us in the United States and throughout the world, may not be able or willing to provide development support to us in the future. In addition, use of development resources through consulting relationships, particularly in non-U.S. jurisdictions with developing legal systems, may be adversely impacted by, and expose us to risks relating to, evolving employment, export, and intellectual property laws. These risks could, among other things, expose our intellectual property to misappropriation and result in disruptions to product delivery schedules.

Social and ethical issues relating to the use of artificial intelligence in our offerings may result in reputational harm or liability.

Social and ethical issues relating to the use of new and evolving technologies such as artificial intelligence (“AI”) in our offerings, may result in reputational harm and liability, and may cause us to incur additional research and development costs to resolve such issues. We are increasingly building AI into many of our offerings. As with many innovations, AI presents risks and challenges that could affect its adoption, and therefore our business. AI presents emerging ethical issues and if we enable or offer solutions that draw controversy due to their perceived or actual impact on society, we may experience brand or reputational harm, competitive harm, or legal liability. Potential government regulation in the space of AI ethics may also increase the burden and cost of research and development in this area, subjecting us to brand or reputational harm, competitive harm, or legal liability. Failure to address AI ethics issues by us or others in our industry could undermine public confidence in AI and slow adoption of AI in our products and services.

Risks Relating to Our Operations
Security incidents may compromise the integrity of our or our customers’ offerings, services, data, or intellectual property, harm our reputation, damage our competitiveness, create additional liability, and adversely impact our financial results.
As we digitize Autodesk and use cloud- and web-based technologies to leverage customer data to deliver the total customer experience, we are exposed to increased security risks and the potential for unauthorized access to, or improper use of, our and our customers’ information. Like other software offerings and systems, ours are vulnerable to security incidents. We devote resources to maintain the security and integrity of our systems, offerings, services, and applications (online, mobile, and
62

desktop). We accomplish this by enhancing security features, conducting penetration tests, code hardening, releasing security vulnerability updates, and accelerating our incident response time. We also provide annual information security training to our employees. Despite these efforts, we may not prevent security incidents, and we may face delays or other difficulties in identifying, responding to, or remediating security incidents.
Hackers regularly have targeted our systems, offerings, services, and applications, and we expect them to do so in the future. Security incidents could disrupt the proper functioning of our systems, solutions, or services; cause errors in the output of our customers’ work; allow unauthorized access to sensitive data or intellectual property, including proprietary or confidential information of ours or our customers; or cause other destructive outcomes. The risk of a security incident, particularly through cyber attack or cyber intrusion, including by computer hackers, foreign governments, and cyber terrorists, has increased as the number, intensity, and sophistication of attempted attacks and intrusions from around the world have increased. These threats include identity theft, unauthorized access, DNS attacks, wireless network attacks, viruses and worms, advanced persistent threat (APT), application-centric attacks, peer-to-peer attacks, phishing, malicious file uploads, backdoor trojans, and distributed denial of service (DDoS) attacks. For example, in December 2020 it was widely reported that SolarWinds, an information technology company, was the subject of a cyberattack that created security vulnerabilities for thousands of its clients. We identified a compromised SolarWinds server and promptly took steps to contain and remediate the incidents. While we believe that no customer operations or Autodesk products were disrupted as a result of this attack, other, similar attacks could have a significant negative impact on our systems and operations. In addition, third parties may attempt to fraudulently induce our employees, vendors, partners, or users to disclose information to gain access to our data or our users’ data and there is the risk of employee, contractor, or vendor error or malfeasance. This existing risk is compounded given the COVID-19 pandemic and the resulting shift to work-from-home arrangements for a large population of employees and contractors. Despite efforts to create security barriers to such threats, it is impossible for us to entirely eliminate these risks.
If any of the foregoing security incidents were to occur or to be perceived to have occurred, our reputation may suffer, our competitive position may be diminished, customers may stop paying for our solutions and services, we could be required to expend significant capital and other resources to evaluate and alleviate the security incident and to try to prevent further or additional incidents, and we could face regulatory inquiry, lawsuits, and potential liability. We could incur significant costs and liabilities, including due to litigation, indemnity obligations, damages for contract breach, penalties for violation of applicable laws or regulations, and costs for remediation and other incentives offered to customers or other business partners in an effort to maintain business relationships after a breach, and our financial performance could be negatively impacted.
We cannot assure you that any limitations of liability provisions in our contracts would be enforceable or adequate or would otherwise protect us from any liabilities or damages with respect to any particular claim relating to a security breach or other security incident. We also cannot be sure that our existing insurance coverage will continue to be available on acceptable terms or will be available in sufficient amounts to cover one or more large claims related to a security breach, or that the insurer will not deny coverage as to any future claim. The successful assertion of one or more large claims against us that exceed available insurance coverage, or the occurrence of changes in our insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements, could have a material adverse effect on our business, including our financial condition, operating results, and reputation.

We rely on third parties to provide us with a number of operational and technical services; third-party security incidents could expose us to liability, harm our reputation, damage our competitiveness, and adversely impact our financial results.

We rely on third parties, such as Amazon Web Services, to provide us with operational and technical services. These third parties may have access to our systems, provide hosting services, or otherwise process data about us or our customers, employees, or partners. Any third-party security incident could compromise the integrity or availability of, or result in the theft of, data. In addition, our operations or the operations of our customers or partners could be negatively affected in the event of a security breach, and could be subject to the loss or theft of confidential or proprietary information, including source code. Unauthorized access to data and other confidential or proprietary information may be obtained through break-ins, network breaches by unauthorized parties, employee theft or misuse, or other misconduct. If any of the foregoing were to occur or to be perceived to occur, our reputation may suffer, our competitive position may be diminished, customers may buy fewer of our offerings and services, we could face lawsuits and potential liability, and our financial results could be negatively impacted.

Delays in service from third-party service providers could expose us to liability, harm our reputation, damage our competitiveness, and adversely impact our financial results.

From time to time, we may rely on a single or limited number of suppliers, or upon suppliers in a single country, for the provision of services and materials that we use in the operation of our business and production of our solutions. Inability of such third parties to satisfy our requirements could disrupt our operations or make it more difficult for us to implement our
63

strategy. If any of these situations were to occur, our reputation could be harmed, we could be subject to third-party liability, including under data protection and privacy laws in certain jurisdictions, and our financial results could be negatively impacted.

We are investing in resources to update and improve our information technology systems to digitize Autodesk and support our customers. Should our investments not succeed, or if delays or other issues with new or existing information technology systems disrupt our operations, our business could be harmed.

We rely on our network and data center infrastructure, technology systems, and websites for our development, marketing, operational, support, sales, accounting, and financial reporting activities. We continually invest resources to update and improve these systems to meet the evolving requirements of our business and customers. In particular, our transition to cloud-based products and a subscription-only business model involves considerable investment in the development of technologies, as well as back-office systems for technical, financial, compliance, and sales resources. Such improvements are often complex, costly, and time consuming. In addition, such improvements can be challenging to integrate with our existing technology systems, or may uncover problems with those systems. Unsuccessful implementation of hardware or software updates and improvements could result in disruption in our business operations, loss of customers, loss of revenue, errors in our accounting and financial reporting, or damage to our reputation, all of which could harm our business.

Our software is highly complex and may contain undetected errors, defects, or vulnerabilities, each of which could harm our business and financial performance.

The software solutions that we offer are complex and, despite extensive testing and quality control, may contain errors, defects, or vulnerabilities. Some errors, defects, or vulnerabilities in our software solutions may only be discovered after they have been released. Any errors, defects, or vulnerabilities could result in the need for corrective releases to our software solutions, damage to our reputation, loss of revenue, an increase in subscription cancellations, or lack of market acceptance of our offerings, any of which would likely harm our business and financial performance.

If we do not maintain good relationships with the members of our distribution channel, or if our distribution channel suffers financial losses, becomes financially unstable or insolvent, or is not provided the right mix of incentives to sell our subscriptions, our ability to generate revenue will be adversely affected.

We sell our software products both directly to end users and through a network of distributors and resellers. For the nine months ended October 31, 2021 and 2020, approximately 66% and 70%, respectively, of our revenue was derived from indirect channel sales through distributors and resellers, and we expect that the majority of our revenue will continue to be derived from indirect channel sales in the near future. Our ability to effectively distribute our solutions depends in part upon the financial and business condition of our distributor and reseller network. Computer software distributors and resellers typically are not highly capitalized, and have previously experienced difficulties during times of economic contraction as well as during the past several years. We have processes to ensure that we assess the creditworthiness of distributors and resellers prior to our sales to them. In the past we have taken steps to support them, and may take additional steps in the future, such as extending credit terms and adjusting our incentives. These steps, if taken, could harm our financial results. If our distributors and resellers were to become insolvent, they would not be able to maintain their business and sales or provide customer support services, which would negatively impact our business and revenue.

We rely significantly upon major distributors and resellers in both the U.S. and international regions, including the distributors Tech Data and Ingram Micro. Tech Data accounted for 36% and 37% of our total net revenue for the nine months ended October 31, 2021 and 2020, respectively, and Ingram Micro accounted for 9% and 10% of our total net revenue for nine months ended October 31, 2021 and 2020, respectively. Should any of our agreements with Tech Data or Ingram Micro be terminated, we believe the resellers and end users who currently purchase our products through Tech Data or Ingram Micro would be able to continue to do so under substantially the same terms from one of our many other distributors without substantial disruption to our revenue. Consequently, we believe our business is not substantially dependent on either Tech Data or Ingram Micro. However, if either distributor were to experience a significant business disruption or if our relationship with either were to significantly deteriorate, it is possible that our ability to sell to end users would, at least temporarily, be negatively impacted. This could, in turn, negatively impact our financial results. For example, in June 2020, an affiliate of funds managed by affiliates of Apollo Global Management, a global alternative investment manager, acquired Tech Data, and in July 2021, Platinum Equity, a global investment firm, acquired Ingram Micro from HNA Technology Co., Ltd. If there is any reseller or end user uncertainty caused by either acquisition, our ability to sell to these resellers and end users could, at least temporarily, be negatively impacted.

Over time, we have modified and will continue to modify aspects of our relationship with our distributors and resellers, such as their incentive programs, pricing to them, and our distribution model to motivate and reward them for aligning their
64

businesses with our strategy and business objectives. Changes in these relationships and underlying programs could negatively impact their business and harm our business. Further, our distributors and resellers may lose confidence in our business, move to competitive products, or not have the skills or ability to support customers. The loss of or a significant reduction in business with those distributors or resellers could harm our business. In particular, if one or more of such distributors or resellers were unable to meet their obligations with respect to accounts payable to us, we could be forced to write off such accounts and may be required to delay the recognition of revenue on future sales to these customers. These events could have a material adverse effect on our financial results.

We rely on software from third parties, and a failure to properly manage our use of third-party software could result in increased costs or loss of revenue.

Many of our products are designed to include software licensed from third parties. Such third-party software includes software licensed from commercial suppliers and under public open source licenses. While we have internal processes to manage our use of such third-party software, if such processes are inadequate, we may be subject to copyright infringement or other third-party claims. If we are non-compliant with a license for commercial software, we may be required to pay penalties or undergo costly audits pursuant to the license agreement. In the case of open-source software licensed under certain “copyleft” licenses, the license itself, or a court-imposed remedy for non-compliant use of the open source software, may require that proprietary portions of our own software be publicly disclosed or licensed. This could result in a loss of intellectual property rights, increased costs, re-engineering of our software, damage to our reputation, or loss of revenue.

In addition to risks related to license requirements, usage of open source software can lead to greater risks than use of third-party commercial software, as open source licensors generally do not provide warranties, support, indemnities, assurances of title or controls on origin of the software, or other contractual protections regarding infringement claims or the quality of the code. Likewise, some open source projects have known security and other vulnerabilities and architectural instabilities, or are otherwise subject to security attacks due to their wide availability, and are provided on an “as-is” basis.

Our business could be adversely affected if we are unable to attract and retain key personnel.

Our success and ability to invest and grow depend largely on our ability to attract and retain highly skilled technical, professional, managerial, sales, and marketing personnel. Historically, competition for these key personnel has been intense. The loss of services of any of our key personnel, (includingincluding key personnel joining our company through acquisitions), theacquisitions, inability to retain and attract qualified personnelemployees in the future, or delays in hiring required personnel, particularly engineering and sales personnel, could make it difficult to meet key objectives, such as timely and effective product introductions and financial goals.

We rely on third-party technologies and if we are unable to use or integrate these technologies, our solutions and service development may be delayed and our financial results negatively impacted.

We rely on certain software that we license from third parties, including software that is integrated with internally developed software and used in our offerings to perform key functions. These third-party software licenses may not continue to be available on commercially reasonable terms, and the software may not be appropriately supported, maintained, or enhanced by the licensors. The loss of licenses to, or inability to support, maintain, and enhance any such software could result in increased costs or delays until equivalent software can be developed, identified, licensed, and integrated, which would likely harm our business.

Disruptions in licensing relationships and with third-party developers could adversely impact our business.

We license certain key technologies from third parties. Licenses may be restricted in the term or the use of such technology in ways that negatively affect our business. Similarly, we may not be able to obtain or renew license agreements for key technology on favorable terms, if at all, and any failure to do so could harm our business. Our business strategy has historically depended in part on our relationships with third-party developers who provide products that expand the functionality of our design software. Some developers may elect to support other products or may experience disruption in product development and delivery cycles or financial pressure during periods of economic downturn. In particular markets, such disruptions have in the past, and would likely in the future, negatively impact these third-party developers and end users, which could harm our business.

Technology created by outsourced product development, whether outsourced to third parties or developed externally and transferred to us through business or technology acquisitions, involves additional risks such as effective integration into existing products, adequate transfer of technology know-how, and ownership and protection of transferred intellectual property.

65

Risks Relating to Laws and Regulations

Increasing regulatory focus on privacy issues and expanding laws may impact our business or expose us to increased liability.

Our strategy to digitize Autodesk involves increasing our use of cloud- and web-based technologies and applications to leverage customer data to improve our offerings for the benefit of our customers. To accomplish this strategy, we must collect and otherwise process customer data, which may include personal data. Federal, state, and foreign privacy and data security laws apply to the treatment of personal data; the regulatory framework for data privacy and security issues is rapidly evolving and is likely to remain uncertain for the foreseeable future. Governments, regulators, plaintiffs’ attorneys, privacy advocates, and customers have increased their focus on how companies collect, process, use, store, share, and transmit personal data.

The General Data Protection Regulation (EU) 2016/679 (“GDPR”) is applicable in all European Union member states and introduced new data protection requirements in the European Union and substantial fines for non-compliance. The GDPR generally prohibits the transfer of personal data of European Economic Area (“EEA”) data subjects outside of the EEA to countries whose laws do not ensure an adequate level of protection, unless a lawful data transfer solution has been implemented or an Article 49 GDPR derogation applies. We have modified our privacy practices to comply with the GDPR and make use of standard contractual clauses approved by the European Commission in relation to the transfer of personal data from the European Union to the United States. On July 16, 2020, the Court of Justice of the European Union (“CJEU”) invalidated the EU-U.S. Privacy Shield as a valid data transfer mechanism (the “Schrems II Ruling”). The decision upheld the use of the European Commission standard contractual clauses (“SCCs”) as a valid data transfer mechanism, but required organizations to take supplementary measures where relying on the SCCs. We do not anticipate any immediate change in our customers’ ability to continue to use our services and transfer data between the EU and the United States as a result of the Schrems II Ruling. In the decision, the CJEU imposed additional obligations on companies when relying on SCCs to transfer personal data. This decision may result in European data protection regulators applying differing standards for, and requiring ad hoc verification of, transfers of personal data from Europe to the United States. In November 2020, the European Commission released a draft of revised SCCs addressing the CJEU concerns. The European Data Protection Board also issued recommendations that, together with the revised SCCs, may require us to implement additional contractual and technical safeguards for any personal data transferred out of the EEA, which may increase compliance costs, lead to increased regulatory scrutiny or liability, and adversely impact our business, financial condition, and operating results. Furthermore, on June 4, 2021, the European Commission published a new set of modular SCCs, providing for an 18-month implementation period, which became effective on June 29, 2021 and imposes on companies obligations relating to data transfers, including the obligation to conduct a transfer impact assessment and, depending on a party’s role in the transfer, to implement additional security measures and to update internal privacy practices. The new SCCs also introduce the possibility of transfer of personal data from data processors in the EU to data controllers outside the EU. If we elect to rely on the new SCCs for data transfers, we may be required to incur significant time and expend significant resources to update our contractual arrangements and to comply with new obligations. If we are unable to implement a valid mechanism for personal data transfers from the EU, we will face increased exposure to regulatory actions, substantial fines and injunctions against processing personal data from the EU. In addition, the UK’s exit from the EU, and ongoing developments in the UK, have created uncertainty with regard to data protection regulation in the UK. As of January 1, 2021, following the expiry of transitional arrangements agreed to between the UK and EU, data processing in the UK is now governed by the UK General Data Protection Regulation and supplemented by other domestic data protection laws, such as the UK Data Protection Act 2018. We are accordingly exposed to two regimes, each of which authorizes similar and separate fines (ranging from €10 million (£8.7 million) to €20 million (£17.5 million) or 2% to 4% of annual global revenue, whichever is higher) and potentially divergent enforcement actions for certain violations. Furthermore, the new SCCs apply only to the transfer of data outside the EEA and not the UK. Although the European Commission adopted an adequacy decision for the UK on June 28, 2021, allowing the continued flow of personal data from Europe to the UK, this decision will be regularly reviewed going forward and may be revoked if the UK diverges from its current adequate data protection laws following its exit from the European Union. The UK’s Information Commissioner’s Office is currently undergoing a period of public consultation on its own UK-specific international data transfer agreement. We are monitoring these developments, but we may, in addition to other impacts, experience additional costs associated with increased compliance burdens and be required to engage in new contract negotiations with third parties that aid in processing data on our behalf or localize certain data.

In the European Union and the UK, regulators are increasingly focusing on compliance with requirements in the online behavioral advertising ecosystem, and current national laws that implement the ePrivacy Directive are highly likely to be replaced by an EU regulation known as the ePrivacy Regulation, which will significantly increase fines for non-compliance. Recent guidance and case law in the European Union and the UK require opt-in, informed consent for the placement of a cookie or similar tracking technologies on a customer’s device and for direct electronic marketing. The GDPR also imposes conditions on obtaining valid consent, such as a prohibition on pre-checked consents and a requirement to ensure separate consents are
66

sought for each type of cookie or tracking technology. While the text of the ePrivacy Regulation is still under development, recent European case law and regulators’ recent guidance are driving increased attention to cookies and tracking technologies. This could lead to substantial costs, require significant system changes, limit the effectiveness of our marketing activities, divert the attention of our technology personnel, adversely affect our margins, increase costs and subject us to additional liabilities. Regulation of cookies and similar technologies, and any decline of cookies or similar online tracking technologies as a means to identify and potentially target users, may lead to broader restrictions and impairments on our marketing and personalization activities and may negatively impact our efforts to understand our customers.

In addition, in June 2018, California enacted the California Consumer Privacy Act (the “CCPA”), which took effect in January 2020. The CCPA, among other things, gives California residents expanded rights to access and delete their personal information, opt out of certain personal information sharing, and receive detailed information about how their personal information is used. In November 2020, California voters passed the California Privacy Rights Act (the “CPRA”). The CPRA, which becomes effective on January 1, 2023, significantly expands the CCPA, including by introducing additional obligations such as data minimization and storage limitations, granting additional rights to consumers such as correction of personal information and additional opt-out rights, and creates a new entity to implement and enforce the law. The CCPA and CPRA will require us to modify our data processing practices and policies and may cause us to incur substantial costs and expenses in order to comply. The final form and impact of these new laws and this new agency, and any regulations promulgated thereunder, remain unclear and may create further uncertainty and require us to incur additional costs and expenses in an effort to comply. There has also been privacy legislation proposed or enacted at the federal state levels, such as in Nevada, New Hampshire, Washington, Illinois and Nebraska, as well as in Virginia, where such legislation, the Virginia Consumer Data Protection Act (“VCDPA”), was signed into law on March 2, 2021 with an effective date of January 1, 2023 and in Colorado, where such legislation, the Colorado Privacy Act (“CPA”), was signed into law on July 8, 2021 with an effective date of July 1, 2023. Laws in all 50 states require businesses to provide notice under certain circumstances to customers whose personal information has been disclosed as a result of a data breach. Additionally, the FTC and many state attorneys general are interpreting federal, state and international consumer protection laws to impose standards for the collection, use, dissemination and security of data. In addition to government activity, privacy advocacy groups and technology and other industries are considering various new, additional or different self-regulatory standards that may place additional burdens on us. The VCDPA, the CPA, other proposed legislations, if enacted, and the interplay of federal and state laws may be subject to varying interpretations by courts and government agencies, creating complex compliance issues for us and data we receive, use and share, and have and may cause variation in requirements, increase restrictions and potential legal risk and impact strategies and the availability of previously useful data, potentially exposing us to additional expense, adverse publicity and liability. Several other countries, including Australia, New Zealand, Brazil, and Japan, have also established specific legal requirements for cross-border transfers of personal information.

The GDPR, CCPA, and other state and global laws and regulations increased our responsibility and potential liability in relation to personal data, and we have and will continue to put in place additional processes and programs to demonstrate compliance. New privacy laws and regulations are under development at the U.S. federal and state level and many international jurisdictions. Any actual or perceived failure to comply with the GDPR, the CCPA, or other data privacy laws or regulations, or related contractual or other obligations, or any perceived privacy rights violation, could lead to investigations, claims, and proceedings by governmental entities and private parties, damages for contract breach, and other significant costs, penalties, and other liabilities, as well as harm to our reputation and market position.
Additionally, we store customer information and content and if our customers fail to comply with contractual obligations or applicable laws, it could result in litigation or reputational harm to us. The GDPR, CCPA, and other laws and self-regulatory codes may affect our ability to reach current and prospective customers, understand how our offerings and services are being used, respond to customer requests allowed under the laws, and implement our new business models effectively. These new laws and regulations would similarly affect our competitors as well as our customers. These requirements could impact demand for our offerings and services and result in more onerous contract obligations.
There is also an increasing trend towards data localization policies. For example, in 2015, Russia introduced data localization laws, and other countries such as India and China are considering data localization requirements. If this trend continues and countries implement more restrictive regulations for cross-border data transfers (or do not permit data to leave the country of origin), our business, financial condition, and results of operations in those jurisdictions could be impacted.

We are subject to governmental export and import controls that could impair our ability to compete in international markets or subject us to liability if we violate the controls.
Our offerings are subject to U.S. export controls and economic sanctions laws and regulations that prohibit the delivery of certain solutions and services without the required export authorizations or export to locations, governments, and persons targeted by U.S. sanctions. While we have processes to prevent our offerings from being exported in violation of these laws,
67

including obtaining authorizations as appropriate and screening against U.S. government and international lists of restricted and prohibited persons, we cannot guarantee that these processes will prevent all violations of export control and sanctions laws.
If our channel partners fail to obtain appropriate import, export, or re-export licenses or permits, we may also be adversely affected, through reputational harm as well as other negative consequences including government investigations and penalties. We presently incorporate export control and sanctions compliance requirements in our channel partner agreements. Complying with export control and sanctions regulations for a particular sale may be time-consuming and may result in the delay or loss of sales opportunities. Violations of U.S. sanctions or export control laws can result in fines or penalties.

If we are not able to adequately protect our proprietary rights, our business could be harmed.

We rely on a combination of patent, copyright, and trademark laws, trade secret protections, confidentiality procedures, and contractual provisions to protect our proprietary rights. However, the steps we take to protect our intellectual property rights may be inadequate. While we have patent applications pending in the United States and throughout the world, we may be unable to obtain patent protection for the technology covered in our patent applications. In addition, any patents issued to us in the future may not provide us with competitive advantages or may be successfully challenged by third parties. Furthermore, legal standards relating to the validity, enforceability, and scope of protection of intellectual property rights are uncertain. Despite our efforts to protect our proprietary rights, unauthorized parties from time to time have copied or reverse engineered aspects of our software or have obtained and used information that we regard as proprietary. Policing unauthorized use of our software is time-consuming and costly. We are unable to measure the extent to which unauthorized use of our software exists and we expect that unauthorized use of software will remain a persistent problem, particularly in emerging economies.

Additionally, we actively protect the secrecy of our confidential information and trade secrets, including our source code. If unauthorized disclosure of our source code occurs, we could potentially lose future trade secret protection for that source code. Unauthorized disclosure of our source code could make it easier for third parties to compete with our offerings by copying functionality, which could adversely affect our financial performance and our reputation. We also seek to protect our confidential information and trade secrets through the use of non-disclosure agreements with our employees, customers, contractors, vendors, and partners. However, it is possible that our confidential information and trade secrets may be disclosed or published without our authorization. If this were to occur, it may be difficult and/or costly for us to enforce our rights, and our financial performance and reputation could be negatively impacted.

We may face intellectual property infringement claims that could be costly to defend and result in the loss of significant rights.

Our competitors, as well as a number of other entities and individuals, may own or claim to own intellectual property relating to our business. Third parties may claim that we are infringing upon or misappropriating their intellectual property rights, and we may be found to be infringing upon such rights, even if we are unaware of the intellectual property rights claimed against us. As more software patents are granted worldwide, the number of offerings and competitors in our industries grows, and the functionality of products in different industries overlaps, we expect that software developers will be increasingly subject to infringement claims. Additionally, certain patent assertion entities have become more aggressive in threatening and pursuing litigation in attempts to obtain fees for licensing the right to use patents.

Any claims or threats of infringement or misappropriation, whether with or without merit, have been and could in the future be time-consuming to defend, result in costly litigation and diversion of resources, cause product delays, require us to change our products or business practices, prevent us from offering our software and services, or require us to enter into royalty or licensing agreements. In addition, such royalty or license agreements, if required, may not be available on acceptable terms, if at all, which would likely harm our business. We may also be obligated to indemnify our customers or business partners or pay substantial settlement costs, including royalty payments, in connection with any such claim or litigation and to obtain licenses, modify applications, or refund fees, which could be costly. Furthermore, from time to time we may introduce or acquire new products, including in areas where we historically have not competed, which could increase our exposure to patent and other intellectual property claims.

Contracting with government entities exposes us to additional risks inherent in the government procurement process.

We provide products and services, directly and indirectly, to a variety of government entities. Risks associated with licensing and selling products and services to government entities include extended sales and collection cycles, varying governmental budgeting processes, and adherence to complex procurement regulations and other government-specific contractual requirements. We may be subject to audits and investigations relating to our government contracts and any
68

violations could result in civil and criminal penalties and administrative sanctions, including termination of contracts, payment of fines, and suspension or debarment from future government business, as well as harm to our reputation and financial results.

Risks Relating to Financial Developments

We are exposed to fluctuations in currency exchange rates that could negatively impact our financial results and cash flows.

Because we conduct a substantial portion of our business outside the United States, we face exposure to adverse movements in foreign currency exchange rates, which could have a material adverse impact on our financial results and cash flows. These exposures may change over time as business practices evolve and economic conditions change. We use derivative instruments to manage a portion of our cash flow exposure to fluctuations in foreign currency exchange rates. As part of our risk management strategy, we use foreign currency contracts to manage a portion of our exposures of underlying assets, liabilities, and other obligations, which exist as part of our ongoing business operations. These foreign currency instruments may have maturities that extend for one to 18 months in the future and provide us with some protection against currency exposures. However, our attempts to hedge against these risks may not be completely successful, resulting in an adverse impact on our financial results.

The fluctuations of currencies in which we conduct business can both increase and decrease our overall revenue and expenses for any given period. Although our foreign currency cash flow hedge program extends beyond the current quarter in order to reduce our exposure to foreign currency volatility, we do not attempt to completely mitigate this risk, and in any case, will incur transaction fees in adopting such hedging programs. Such volatility, even when it increases our revenues or decreases our expenses, impacts our ability to accurately predict our future results and earnings.

In addition, global events, including the sudden and unexpected effects of the COVID-19 pandemic as well as geopolitical developments, may contribute to volatility in foreign exchange markets, which we may not be able to effectively manage, and our financial results could be adversely impacted. Additionally, countries in which we operate may be classified as highly inflationary economies, requiring special accounting and financial reporting treatment for such operations, or such countries’ currencies may be devalued, or both, which may adversely impact our business operations and financial results.

Our debt service obligations may adversely affect our financial condition and cash flows from operations.

We have $2.65 billion of principal debt, consisting of notes due at various times from December 2022 to December 2031, as of October 31, 2021, as described in Part 1, Item 1, Note 14 Borrowing Arrangements. We also entered into a credit agreement that provides for an unsecured revolving loan facility in the aggregate principal amount of $1.5 billion, with an option to be increased up to $2.0 billion, as described in Part I, Item 1. Maintenance of our indebtedness, contractual restrictions, and additional issuances of indebtedness could:
•cause us to dedicate a substantial portion of our cash flows from operations towards debt service obligations and principal repayments;
•increase our vulnerability to adverse changes in general economic, industry, and competitive conditions;
•limit our flexibility in planning for, or reacting to, changes in our business and our industry;
•impair our ability to obtain future financing for working capital, capital expenditures, acquisitions, general corporate, or other purposes; and
•due to limitations within the debt instruments, restrict our ability to grant liens on property, enter into certain mergers, dispose of all or substantially all of the assets of Autodesk and its subsidiaries, taken as a whole, materially change our business, and incur subsidiary indebtedness, subject to customary exceptions.

We are required to comply with the covenants set forth in our credit agreement. If we breach any of the covenants and do not obtain a waiver from the note holders or lenders, then, subject to applicable cure periods, we would not be able to incur additional indebtedness under the credit agreement described in Part 1, Item 1, Note 14 Borrowing Arrangements, and any outstanding indebtedness under the credit agreement may be declared immediately due and payable. In addition, changes by any rating agency to our credit rating may negatively impact the value and liquidity of our securities. Under certain circumstances, if our credit ratings are downgraded or other negative action is taken, the interest rate payable by us under our credit agreement could increase. Downgrades in our credit ratings could also restrict our ability to obtain additional financing in the future and could affect the terms of any such financing.

69

Our investment portfolio consists of a variety of investment vehicles in a number of countries that are subject to interest rate trends, market volatility, and other economic factors. If general economic conditions decline, this could cause the credit ratings of our investments to deteriorate and illiquidity in the financial marketplace, and we may experience a decline in interest income and an inability to sell our investments, leading to impairment in the value of our investments.

It is our policy to invest our cash, cash equivalents, and marketable securities in highly liquid instruments with, and in the custody of, financial institutions with high credit ratings and to limit the amounts invested with any one institution, type of security, andor issuer. However, we are subject to general economic conditions, interest rate trends, and volatility in the financial marketplace that can affect the income that we receive from our investments, the net realizable value of our investments (including our cash, cash equivalents, and marketable securities), and our ability to sell them. In the U.S., for example, the yields on our portfolio securities are very low due to general economic conditions. Any one of these factors could reduce our investment income or result in material charges, which in turn could impact our overall net income (loss) and earnings (loss) per share.

From time to time we make direct investments in privately held companies. PrivatelyInvestments in privately held company investmentscompanies are considered inherently risky. The technologies and products these companies have under development are typically in the early stages and may never materialize, which could result in a loss of all or a substantial part of our initial investment in these companies. The evaluation of privately held companies is based on information that we request from these companies, which is not subject to the same disclosure regulations as U.S. publicly traded companies and, as such, the basis for these evaluations is subject to the timing and accuracy of the data received from these companies.

A loss on any of our investments may cause us to record an other-than-temporary impairment charge. The effect of this charge could impact our overall net income (loss) and earnings (loss) per share. In any of these scenarios, our liquidity may be negatively impacted, which in turn may prohibit us from making investments in our business, taking advantage of opportunities, and potentially meeting our financial obligations as they come due.

We are subject to legal proceedingsChanges in tax rules and regulatory inquiries,regulations, and we may be nameduncertainties in additional legal proceedings or become involved in regulatory inquiries in the future, all of which are costly, distracting tointerpretation and application, could materially affect our core businesstax obligations and could result in an unfavorable outcome, or a material adverse effect on our business, financial condition, results of operations, cash flows or the trading prices for our securities.effective tax rate.

We are involved in legal proceedings and receive inquiries from regulatory agencies. As the global economy has changed and our business has evolved, we have seen an increase in litigation activity and regulatory inquiries. Like many other high technology companies, the number and frequency of inquiries from U.S. and foreign regulatory agencies we have received regarding our business and our business practices, and the business practices of others in our industry, have increased in recent years. In the event that we are involved in significant disputes or are the subject of a formal action by a regulatory agency, we could be exposed to costly and time consuming legal proceedings that could result in any number of outcomes. Any claims or regulatory actions initiated by or against us, whether successful or not, could result in expensive costs of defense, costly damage awards, injunctive relief, increased costs of business, fines or orders to change certain business practices, significant dedication of management time, diversion of significant operational resources, or otherwise harm our business. In any of these cases, our financial results, results of operations, cash flows or the trading prices for our securities could be negatively impacted.



We are subject to risks related to taxation in multiple jurisdictions.

We are a U.S.-based multinational company subject to tax in multiple U.S. and foreign tax jurisdictions. Our effective tax rate is primarily based on our expected geographic mix of earnings,earnings; statutory rates,rates; intercompany arrangements, including the manner in which we develop, value, and license our intellectual property,property; and enacted tax rules. Significant judgment is required in determining our effective tax rate and in evaluating our tax positions on a worldwide basis. While we believe our tax positions, including intercompany transfer pricing policies, are consistent with the tax laws in the jurisdictions in which we conduct our business, it is possible that these positions may be overturned by jurisdictional tax authorities and may have a significant impact on our effective tax rate.rate and cash taxes.

Tax laws in the United States and in foreign tax jurisdictions are dynamic and subject to change as new laws are passed and new interpretations of the law are issued or applied. For example, the U.S. government enacted significant tax law changes in December 2017, the U.S. Tax Cuts and Jobs Act (“TCJA”), which impacted our tax obligations and effective tax rate beginning in our fiscal 2018 tax year, and significant tax legislation was included in the March 2020 CARES Act and subsequent Consolidated Appropriations Act in December 2020. Due to the complexity and varying interpretations of the TCJA and the CARES Act, the U.S. Department of Treasury and other standard-setting bodies have been issuing and will continue to issue regulations and interpretative guidance that could significantly impact how we will apply the law and the ultimate effect on our results of operations from both the TCJA and the CARES Act, including for our prior tax years.In addition, increases in corporate taxation proposals are being consideredtax rates, such as have been proposed by the current U.S. Congress the outcomeadministration, could increase our effective tax rate and have an adverse effect on our results of which is uncertain. operations.

Increasingly, governmental tax authorities are scrutinizing existing corporate tax strategies.regulatory and legal regimes. Many countries in the European Union as well as a number of other countries and organizations such as the Organization for Economic Cooperation and Development are actively considering new taxing regimes and changes to existing tax laws that if enacted, could increaseare contrary to the way we have interpreted and historically applied the rules and regulations in our tax obligations in many countries where we do business.returns for such jurisdictions. If U.S. or other foreign tax authorities change applicable tax laws or successfully challenge the manner in whichhow or where our profits are currently recognized, our overall taxes could increase, and our business, financial condition, or results of operations may be adversely impacted.

Changes in existing financial accounting standardsIf we were required to record an impairment charge related to the value of our long-lived assets or practices, or taxation rules or practices may adversely affectan additional valuation allowance against our results of operations.

Changes in existing accounting or taxation rules or practices, new accounting pronouncements or taxation rules, or varying interpretations of current accounting pronouncements or taxation practice could have a significant adverse effect ondeferred tax assets, our results of operations orwould be adversely affected.

Our long-lived assets are tested for impairment if indicators of impairment exist. If impairment testing shows that the manner in whichcarrying value of our long-lived assets exceeds their estimated fair values, we conduct our business. Further, such changes could potentially affect our reporting of transactions completed before such changes are effective.

For example, the U.S.-based Financial Accounting Standards Board (“FASB”) is currently working together with the International Accounting Standards Board (“IASB”) on several projects to further align accounting principles and facilitate more comparable financial reporting between companies who arewould be required to followrecord a non-cash
70

impairment charge, which would decrease the carrying value of our long-lived assets, adversely affecting our results of operations. Our deferred tax assets include net operating loss, amortizable tax assets, and tax credit carryforwards that can be used to offset taxable income and reduce income taxes payable in future periods. Each quarter, we assess the need for a valuation allowance, considering both positive and negative evidence to determine whether all or a portion of the deferred tax assets are more likely than not to be realized. We continue to have a full valuation allowance against certain U.S. Generally Accepted Accounting Principles (“GAAP”) under SEC regulations and those who are required to follow International Financial Reporting Standards ("IFRS") outsideforeign deferred tax assets. Changes in the amount of the U.S. These efforts by FASB and IASB mayforeign jurisdictions valuation allowance could also result in different accounting principles under GAAP that may resulta material non-cash expense or benefit in the period in which the valuation allowance is adjusted, and our results of operations could be materially different financial results for us in areas including, but not limitedaffected. We will continue to principles for recognizing revenue and lease accounting.

Furthermore, in May 2014, FASB issued ASU 2014-09, Revenue from Contracts with Customers, which supersedes nearly all existing revenue recognition guidance under U.S. GAAP.  This standard establishes a principle for recognizing revenue upon the transfer of promised goods or services to customers, in an amount that reflects the expected consideration received in exchange for those goods or services.  The standard also provides guidance on the recognition of costs related to obtaining and fulfilling customer contracts.  In August 2015, FASB subsequently issued ASU 2015-14, which deferred the effectiveness of ASU 2014-09, so that it will now be effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period.  The revised effective date for the Company under the new standard will be the beginning of fiscal 2019. We are assessing the impactperform these tests on our consolidated financial statements, defining our operational requirements, and implementing changes to our policies, procedures and systems. This new standard is both technical and complex, and we expect to incur significant ongoing costs to implement and maintain compliance with this new standard. In addition, there may be greater uncertainty with respect to projecting revenue results from future operations as we work through the new revenue recognition standard. 

Adoption of ASU 2014-09 along with any other changes in accounting principles or interpretations could have a significant effect on our reported financial results and could affect the reporting of transactions completed before the announcement of a change.  Any difficulties in the implementation of new or changed accounting standards including ASU 2014-09 could cause us to fail to meet our financial reporting obligations. If our estimates relating to our critical accounting policies are based on assumptions or judgments that change or prove to be incorrect, our operating results could fall below expectations of securities analysts and investors, resulting in a decline in our stock price. In addition, as we evolve and change our business and sales models, we are currently unable to determine how these potential changes may impact our new models, particularly in the area of revenue recognition.



We are investing in resources to update and improve our information technology systems. Should our investments not succeed, or if delays or other issues with new or existing internal technology systems disrupt our operations, our business model transition could be compromised and our business could be harmed.

We rely on our network and data center infrastructure, technology systems and our websites for our development, marketing, operational, support, sales, accounting and financial reporting activities. We continually invest resources to update and improve these systems and environments in order to meet the growing and evolving requirements of our business and customers. In particular, our transition to cloud-based products and a subscription only business model requires considerable investment in the development of technologies, and back office systems for technical, financial, compliance and sales resources to enable a scalable organization.

Such improvements are often complex, costly and time consuming. In addition, such improvements can be challenging to integrate with our existing technology systems, or uncover problems with our existing technology systems. Unsuccessful implementation of hardware or software updates and improvements could result in disruption in our business operations, loss of revenue, errors in our accounting and financial reporting or damage to our reputation and could compromise our business model transition.

In preparing our financial statements we make certain assumptions, judgments and estimates that affect amounts reported in our consolidated financial statements, which, if not accurate, may significantly impact our financial results.

We make assumptions, judgments and estimates for a number of items, including the fair value of financial instruments, goodwill, long-lived assets and other intangible assets, the realizability ofworldwide deferred tax assets, and any future adjustments to the fair valuerealizability of stock awards. We also make assumptions, judgments and estimates in determining the accruals for employee related liabilities including commissions, bonuses, and sabbaticals; and in determining the accruals for uncertainour deferred tax positions, partner incentive programs, product returns reserves, allowances for doubtful accounts, asset retirement obligations and legal contingencies. These assumptions, judgments and estimates are drawn from historical experience and various other factors that we believe are reasonable under the circumstances as of the date of the consolidated financial statements. Actual results could differ materially from our estimates, and such differences could significantly impactassets may have a material effect on our financial results.condition and results of operations.

We rely on third party technologies and if we are unable to use or integrate these technologies, our product and service development may be delayed and our financial results negatively impacted.General Risk Factors

We rely on certain software that we license from third parties, including software that is integrated with internally developed software and used in our products to perform key functions. These third-party software licenses may not continue to be available on commercially reasonable terms, and the software may not be appropriately supported, maintained or enhanced by the licensors. The loss of licenses to, or inability to support, maintain and enhance any such software could result in increased costs, or in delays or reductions in product shipments until equivalent software can be developed, identified, licensed and integrated, which would likely harm our business.

Disruptions with licensing relationships and third party developers could adversely impact our business.

We license certain key technologies from third parties. Licenses may be restricted in the term or the use of such technology in ways that negatively affect our business. Similarly, we may not be able to obtain or renew license agreements for key technology on favorable terms, if at all, and any failure to do so could harm our business.

Our business strategy has historically depended in part on our relationships with third-party developers who provide products that expand the functionality of our design software. Some developers may elect to support other products or may experience disruption in product development and delivery cycles or financial pressure during periods of economic downturn. In particular markets, such disruptions have in the past, and would likely in the future, negatively impact these third-party developers and end users, which could harm our business.

Additionally, technology created by outsourced product development, whether outsourced to third parties or developed externally and transferred to us through business or technology acquisitions, has certain additional risks such as effective integration into existing products, adequate transfer of technology know-how and ownership and protection of transferred intellectual property.



As a result of our strategy of partnering with other companies for product development, our product delivery schedules could be adversely affected if we experience difficulties with our product development partners.

We partner with certain independent firms and contractors to perform some of our product development activities. We believe our partnering strategy allows us to, among other things, achieve efficiencies in developing new products and maintaining and enhancing existing product offerings. Our partnering strategy creates a dependency on such independent developers. Independent developers, including those who currently develop products for us in the U.S. and throughout the world, may not be able or willing to provide development support to us in the future. In addition, use of development resources through consulting relationships, particularly in non-U.S. jurisdictions with developing legal systems, may be adversely impacted by, and expose us to risks relating to, evolving employment, export and intellectual property laws. These risks could, among other things, expose our intellectual property to misappropriation and result in disruptions to product delivery schedules.

Our business may be significantly disrupted upon the occurrence of a catastrophic event.

Our business is highly automated and relies extensively on the availability of our network and data center infrastructure, our internal technology systems, and our websites. We also rely on hosted computer services from third parties for services that we provide to our customers and computer operations for our internal use. The failure of our systems or hosted computer services due to a catastrophic event, such as an earthquake, fire, flood, tsunami, weather event, telecommunications failure, power failure, cyber attack, terrorism or war, or business interruption from epidemics or pandemics, or the fear of such events, could adversely impact our business, financial results, and financial condition. For example, our corporate headquarters and executive offices are located near major seismic faults in the San Francisco Bay Area and face annual periods of wildfire danger, which increase the probability of power outages and may impact employees’ abilities to commute to work or to work from home. We have developed disaster recovery plans and maintain backup systems in order to reduce the potential impact of a catastrophic event,event; however, there can be no assurance that these plans and systems would enable us to return to normal business operations. In addition, any such event could negatively impact a country or region in which we sell our products. This could in turn decrease that country'scountry’s or region'sregion’s demand for our products, thereby negatively impacting our financial results.

IfWe are subject to legal proceedings and regulatory inquiries, and we were requiredmay be named in additional legal proceedings or become involved in regulatory inquiries in the future, all of which are costly, distracting to recordour core business, and could result in an impairment charge relatedunfavorable outcome or a material adverse effect on our business, financial condition, results of operations, cash flows, or the trading prices for our securities.

We are involved in legal proceedings and receive inquiries from regulatory agencies. As the global economy has changed and our business has evolved, we have seen an increase in litigation activity and regulatory inquiries. Like many other technology companies, the number and frequency of inquiries from U.S. and foreign regulatory agencies we have received regarding our business and our business practices, as well as the business practices of others in our industry, have increased in recent years. In the event we are involved in significant disputes or are the subject of a formal action by a regulatory agency, we could be exposed to the valuecostly and time-consuming legal proceedings that could result in any number of outcomes. Any claims or regulatory actions initiated by or against us, whether successful or not, could result in high defense costs, damage awards, injunctive relief, increased costs of business, fines or orders to change certain business practices, significant dedication of management time, diversion of operational resources, or otherwise harm our long-lived assets,business. In any such event, our financial results, results of operations, cash flows, or an additional valuation allowance againsttrading prices for our deferred tax assets,securities could be negatively impacted.

Changes in existing financial accounting standards or practices, or taxation rules or practices may adversely affect our results of operations.

Changes in existing accounting or taxation rules or practices, new accounting pronouncements or taxation rules, or varying interpretations of current accounting pronouncements or taxation practices could have a significant adverse effect on our results of operations would be adversely affected.

Our long-lived assets are tested for impairment if indicators of impairment exist. If impairment testing shows thator the carrying value ofway we conduct our long-lived assets exceeds their estimated fair values, we would be required to record a non-cash impairment charge, which would decrease the carrying value of our long-lived assets, as the case may be, and our results of operations would be adversely affected. Our deferred tax assets include net operating loss, amortizable tax assets and tax credit carryforwards that can be used to offset taxable income and reduce income taxes payable in future periods. Each quarter, we assess the need for a valuation allowance, considering both positive and negative evidence to determine whether all or a portion of the deferred tax assets are more likely than not to be realized. In fiscal 2016, we determined that it was more likely than not that the Company would not realize our U.S. deferred tax assets and established a valuation allowance against our U.S. deferred tax assets. We continued to have a full valuation allowance against our U.S. deferred tax assets in fiscal 2017 and increased the amount of the valuation allowance to include deferred tax assets generated in fiscal 2017, including deferred tax assets that were established as a result of the adoption of ASU 2016-09 in the second quarter of fiscal 2017. Changes in the amount of the valuation allowancebusiness. Further, such changes could result in a material non-cash expense or benefit in the period in which the valuation allowance is adjusted and our results of operations could be materially affected. We will continue to perform these tests and any future adjustments may have a material effect on our financial condition and results of operations.

We issued $1.6 billion aggregate principal amount of unsecured notes in debt offerings and have an existing $400.0 million revolving credit facility, and expect to incur other debt in the future, which may adverselypotentially affect our financial condition and future financial results.reporting of transactions completed before such changes are effective.

In June 2017, we issued $500.0 million aggregate principal amount of 3.5% notes due June 15, 2027. In June 2015, we issued 3.125% notes due June 15, 2020 in an aggregate principal amount of $450.0 million and 4.375% notes due June 15, 2025 in an aggregate principal amount of $300.0 million. In December 2012, we issued 3.6% notes due December 15, 2022 in an aggregate principal amount of $350.0 million. As the debt matures, we will have to expend significant resources to either repay or refinance these notes. For example, in July 2017, we redeemed outstanding senior notes due December 15, 2017 for a total cash repayment of $401.8 million by using the proceeds the from the notes we issued in 2017. If we decide to refinance notes in the future, we may be required to do so on different or less favorable terms or we may be unable to refinance the notes at all, both of which may adversely affect our financial condition.

We also have a $400.0 million revolving credit facility. As of October 31, 2017, we had no outstanding borrowings on the line of credit. Although we have no current plans to borrow under this credit facility, we may use the proceeds of any future borrowing for general corporate purposes, or for future acquisitions or expansion of our business. Our existing and future levels of indebtedness may adversely affect our financial condition and future financial results by, among other things:



increasing our vulnerability to adverse changes in general economic, industry and competitive conditions;

requiring the dedication of a greater than expected portion of our expected cash from operations to service our indebtedness, thereby reducing the amount of expected cash flow available for other purposes, including capital expenditures and acquisitions; and

limiting our flexibility in planning for, or reacting to, changes in our business and our industry.

This credit agreement contains customary covenants that could restrict the imposition of liens on Autodesk’s assets, and restrict the Company’s ability to incur additional indebtedness or make dispositions of assets if Autodesk fails to maintain the financial covenants. The financial covenants consist of a maximum debt to total cash ratio, a fixed charge coverage ratio through April 30, 2018, and after April 30, 2018 a minimum interest coverage ratio.

We are required to comply withevaluate our internal control over financial reporting under Section 404 of the covenants set forthSarbanes-Oxley Act of 2002 and any adverse results from such evaluation could result in a loss of investor confidence in our unsecured notesfinancial reports and revolving credit facility. Our abilityhave an adverse effect on our stock price.

Pursuant to comply with these covenants may be affected by events beyond our control. If we breach anySection 404 of the covenants and do not obtainSarbanes-Oxley Act of 2002, we are required to furnish a waiver fromreport by our management on our internal control over financial reporting, including an assessment of the note holders or lenders, then, subject to applicable cure periods, any outstanding indebtedness may be declared immediately due and payable. In addition, changes by any rating agency to our credit rating may negatively impact the value and liquidityeffectiveness of our securities. Under certain circumstances, ifinternal control over financial
71

reporting as of the end of our credit ratings are downgradedfiscal year. This assessment must include a statement as to whether or other negative actionnot our internal control over financial reporting is taken, the interest rate payable by us under our revolving credit facility could increase. Downgradeseffective and disclosure of any material weaknesses in our credit ratingsinternal control over financial reporting identified by management. If our management or independent registered public accounting firm identifies one or more material weaknesses in our internal control over financial reporting, we are unable to assert that our internal control over financial reporting is effective, or our independent registered public accounting firm is unable to express an opinion that our internal controls are effective, investors could also restrict our ability to obtain additional financinglose confidence in the futureaccuracy and completeness of our financial reports, which could have an adverse effect on our business and stock price.

In preparing our financial statements we make certain assumptions, judgments, and estimates that affect amounts reported in our consolidated financial statements which, if not accurate, may significantly impact our financial results.

We make assumptions, judgments, and estimates for a number of items, including revenue recognition for product subscriptions and enterprise business arrangements (“EBAs”), the termsdetermination of anythe fair value of acquired assets and liabilities, goodwill, financial instruments including strategic investments, long-lived assets, and intangible assets, the realizability of deferred tax assets, and the fair value of stock awards. We also make assumptions, judgments, and estimates in determining the accruals for uncertain tax positions, variable compensation, partner incentive programs, product returns reserves, allowances for credit losses, asset retirement obligations, legal contingencies, and operating lease liabilities. These assumptions, judgments, and estimates are drawn from historical experience and various other factors that we believe are reasonable under the circumstances as of the date of the consolidated financial statements. Actual results could differ materially from our estimates, and such financing.differences could significantly impact our financial results.

ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

There were no sales of unregistered securities during the three months ended October 31, 2017.2021.

The information concerning issuer purchases of equity securities required by this Item is incorporated by reference herein to the section of this Report entitled “Issuer"Issuer Purchases of Equity Securities”Securities" in Part I, Item 2 above.

ITEM 3.DEFAULTS UPON SENIOR SECURITIES
ITEM 3.DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4.MINE SAFETY DISCLOSURES
ITEM 4.MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5.OTHER INFORMATION
ITEM 5.OTHER INFORMATION

None.


72

ITEM 6.EXHIBITS
ITEM 6.EXHIBITS

The Exhibits listed below are filed or incorporated by reference as part of this Form 10-Q.
 
Exhibit No.Description
Exhibit No.Description
4.1
10.1*
10.1
31.1
31.1
31.2
32.1 †
101.INS ††XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH ††XBRL Taxonomy Extension Schema
101.CAL ††XBRL Taxonomy Extension Calculation Linkbase
101.DEF ††XBRL Taxonomy Definition Linkbase
101.LAB ††XBRL Taxonomy Extension Label Linkbase
101.PRE ††XBRL Taxonomy Extension Presentation Linkbase
104 ††Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
*
*Denotes a management contract or compensatory plan or arrangement.
†The certifications attached as Exhibit 32 that accompany this Quarterly Report on Form 10-Q are not deemed filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of Autodesk, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Form 10-Q, irrespective of any general incorporation language contained in such filing.
††The financial information contained in these XBRL documents is unaudited.


73

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Dated: December 5, 20173, 2021
 
AUTODESK, INC.
AUTODESK, INC.(Registrant)
(Registrant)
/s/ STEPHEN W. HOPE
/s/    PAUL UNDERWOOD  Stephen W. Hope
Paul Underwood
Vice President and Corporate ControllerChief Accounting Officer
(Principal Accounting Officer)


69
74