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SAN FRANCISCO - Autodesk, Inc. (NASDAQ: ADSK), a leader in design and make software with a market capitalization of $57.71 billion, has responded to Starboard Value LP’s criticisms by highlighting its strong financial performance and commitment to shareholder value. According to InvestingPro data, the company announced significant year-over-year growth, with FY 2025 revenue reaching $6.1 billion, representing an 11.53% increase. Analysts remain optimistic about the company’s prospects, with 18 analysts recently revising their earnings estimates upward.
The company’s non-GAAP operating margins have seen a substantial rise of over 2,400 basis points since FY 2019, with expectations of further expansion between 200 to 300 basis points in FY 2026. InvestingPro analysis reveals an impressive gross profit margin of 91.96%, highlighting the company’s operational efficiency. Autodesk also reported a 22% growth in free cash flow from FY 2024, reaching $1.6 billion in FY 2025, and set an ambitious target for FY 2026 of between $2.075 billion and $2.175 billion.
In addition to financial growth, Autodesk has increased its share repurchase program, planning to buy back stock worth between $1.1 billion and $1.2 billion in FY 2026, marking a 30-40% increase over the previous fiscal year. With analyst price targets ranging from $275 to $430, and an overall "Buy" consensus recommendation of 1.81 on InvestingPro, the company’s stock appears positioned for potential growth. The platform offers 15 additional exclusive ProTips and a comprehensive Pro Research Report for deeper insights into Autodesk’s market position and future prospects. The company attributes these strong results to the successful launch and optimization of a new go-to-market approach, which is expected to continue driving growth and margin expansion.
Autodesk’s Board of Directors has been proactively strengthened with the recent appointment of two independent directors, both with proven track records of value creation. The company has engaged in dialogue with investors representing more than half of its outstanding shares, despite what it describes as "persistent and concerning tactics" by Starboard, including selling down nearly half of its position in Autodesk during its campaign.
Starboard’s actions, including an attempted proxy fight and a lawsuit against Autodesk to reopen the nomination deadline, which was rejected by the Delaware Court as frivolous, have been characterized by Autodesk as opportunistic and not necessarily aligned with the interests of long-term shareholders.
Autodesk remains open to meeting with nominees suggested by Starboard, despite concerns about their alignment with Starboard’s interests. The Board will review these nominees and make recommendations in due course, maintaining a focus on acting in the best interests of Autodesk and all shareholders.
This report is based on a press release statement from Autodesk, Inc. and enhanced with financial metrics from InvestingPro, which rates Autodesk’s overall financial health as "GOOD" with a score of 2.99. For comprehensive analysis of Autodesk and 1,400+ other US stocks, including detailed valuation metrics and expert insights, consider accessing the full Pro Research Report available on InvestingPro.
In other recent news, Autodesk Inc. reported an 11.6% year-over-year revenue growth for the fourth quarter of fiscal year 2025, meeting consensus expectations. The Architecture, Engineering, and Construction segment showed notable strength with a 15.2% increase. Autodesk also announced a restructuring program, aiming to enhance profitability, and projected 8-9% constant currency organic revenue growth for fiscal year 2026. Despite these developments, Stifel adjusted its price target for Autodesk shares to $350 from $360, maintaining a Buy rating, citing concerns over the lower-than-anticipated revenue growth guidance. Meanwhile, Berenberg reiterated a Hold rating on Autodesk with a $299 price target, highlighting the necessity of removing outdated mid-term guidance.
In another development, Starboard Value LP, a major shareholder, has announced plans to nominate three new candidates for Autodesk’s board of directors, citing the need for improved accountability. Autodesk responded by affirming its commitment to shareholder interests and reported a significant increase in its non-GAAP operating margin for fiscal year 2025. The company also noted ongoing board evolution, with two directors not seeking re-election. Engagement with Starboard has been described as proactive, though Starboard declined to participate in the director selection process. The outcome of these board nominations will be determined at Autodesk’s 2025 annual meeting.
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