Autodesk (ADSK 7.95%), a global design software leader serving industries from construction to manufacturing, reported solid fiscal 2026 second-quarter results on Thursday, Aug. 28. The headline news is clear: the quarter beat most analyst expectations, with revenue hitting $1.76 billion and adjusted earnings per share reaching $2.62. Strong cash flow and steady margin expansion further supported management's raised guidance for the full year.
Compared to Wall Street targets, the results were notably ahead, helped by sustained demand in the Architecture, Engineering, Construction & Operations segment and ongoing gains from its subscription business model.
| Metric | Q2 FY26 | Q2 FY25 | Y/Y Change |
|---|---|---|---|
| Adjusted EPS | $2.62 | $2.15 | 22% |
| Revenue | $1.76 billion | $1.51 billion | 17% |
| Adj. operating margin | 39% | 37% | 2 pps |
| Free cash flow | $451 million | $203 million | 122% |
| Billings | $1.68 billion | $1.24 billion | 36% |
Source: Autodesk. Note: Fiscal 2026 second quarter ended July 31, 2025.
Company Overview and Business Focus
Autodesk provides software tools for design, engineering, construction, manufacturing, and media industries. Its most well-known product, AutoCAD, is a computer-aided design application used by architects and engineers. Over the past decade, Autodesk has expanded into building information modeling, manufacturing collaboration, cloud-based design, and media production workflows.
Recent focus areas for the company include the continued development of cloud-native software, integrating artificial intelligence into product workflows, and shifting customers to recurring subscription contracts. The transition toward a subscription-based business model is central to Autodesk's strategy, making revenues more predictable and aligning closely with customer needs. Key success factors for the business include innovation in software capabilities, smooth execution of this subscription transition, and managing global sales through a direct and partner-driven distribution network.
Quarterly Highlights: Growth, Innovation, and Strategic Progress
Revenue in Q2 jumped 17% compared to the previous year, reaching $1.76 billion. Growth was broad, led by the AECO (Architecture, Engineering, Construction & Operations) product family, which posted a 23% increase to $878 million. This segment benefited from ongoing investments in data centers, infrastructure, and industrial buildings, which offset weakness in commercial project demand.
Second quarter billings rose 36% to $1.68 billion, well above the growth rate for recognized revenue. Billings is defined as total revenue plus the net change in deferred revenue from the beginning to the end of the period. Higher billings growth is supported by up-front revenue recognition and a strong performance in the Autodesk Store. Another major contributor was subscription revenue, making up approximately 94% of all revenue in Q2.
Adjusted operating margin reached 39% in Q2 FY2026, up 2 percentage points from the prior year, while free cash flow rose 122% to $451 million. This growth in profitability is linked to higher sales and operational cost control, with a notable reduction in one-time restructuring costs.
Autodesk's investments in artificial intelligence (AI) stood out this quarter. The company made further progress deploying AI in its core design and make products. In particular, its "Make" line -- which provides tools for manufacturing planning and execution -- grew 20% year over year in Q2. In management commentary, CEO Andrew Anagnost referenced "industry-specific foundation models and products capable of understanding and reasoning about 2D and 3D geometry, design and make data, complex structures, and even physical behavior" as a source of current and future growth.
Geographically, the Americas and EMEA (Europe, Middle East, and Africa) regions continued to perform well in Q2, each delivering 19% constant currency growth. The APAC (Asia-Pacific) region was softer, up 11% year over year in Q2. Management attributes this mainly to Japan's slower transition to the new transaction model earlier in the year and wider economic challenges in China and Korea.
A notable milestone for the quarter was the resolution of prior government investigations by the U.S. Securities and Exchange Commission and U.S. Attorney’s Office. With these inquiries now closed as of August 2025, a key overhang for investors has been removed.
Looking Ahead: Guidance and Investor Focus
Management raised full-year FY2026 guidance following these results. For fiscal 2026, Revenue is now projected at $7.03 billion–$7.08 billion, up from the prior range of $6.93 billion–$6.99 billion. Billings outlook for FY26 was also lifted to $7.355 billion–$7.445 billion, and free cash flow is expected between $2.10 billion and $2.20 billion. For the third quarter, Revenue is forecast at $1.80 billion–$1.81 billion for Q3 FY2026, with adjusted EPS targeted between $2.48 and $2.51. The company cited ongoing business strength and favorable foreign exchange movements as key reasons behind these increases.
Looking into the next quarters, areas for investor attention include the continued global adoption of Autodesk's subscription platform, further roll-out of AI-powered features, and trends in key regions, especially APAC, where growth remains behind the rest of the company. Any major shifts in billings, backlog, or recurring revenue metrics are also important signals for the sustainability of current growth rates.
Revenue and net income are presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
