Autodesk (ADSK +3.49%) announced third-quarter earnings numbers this week that included the first year-over-year sales improvement since it shifted to a subscription-only business model in late 2016. The design software specialist posted healthy revenue growth and continued net losses as the management team announced a major new restructuring plan.

More on those cost cuts in a moment. First, here's how Autodesk's headline numbers stacked up against the prior-year period:

Data source: Autodesk financial filings.

What happened this quarter?

Sales rose for the first time in over a year thanks to strong customer growth trends. Autodesk's gross and net profitability improved slightly, but the company still generated significant losses due to elevated operating expenses.

Image source: Getty Images.

Highlights of the quarter include:

• The $515 million in revenue hit the high end of the guidance range that management issued back in late August. The $0.55-per-share loss was also slightly better than executives had predicted.
• Subscriptions rose to 3.6 million as Autodesk's subscription plan base surpassed its maintenance plan base for the first time.
• Recurring revenue grew 25% to account for 92% of sales, up from 78% a year ago and 91% in the prior quarter.
• Total expenses rose at a slower pace than revenue, inching higher by 1%.
• Deferred revenue grew by 15% to mark a step back from the prior quarter's 17% growth pace.

What management had to say

Executives highlighted success around Autodesk's move from a product-purchase business model to cloud-based, subscription sales that produce lower initial revenue in exchange for steadier revenue over time. "We're experiencing healthy trends in several key transition metrics," CEO Andrew Anagnost said in a press release, "including [annual recurring revenue] and deferred revenue growth, as customers continue to embrace our new subscription offerings."

"We are excited to have reached a significant milestone where the base of subscription plan subscriptions has surpassed the base of maintenance plan subscriptions for the first time," Chief Financial Officer Scott Herren added. "Our third quarter results mark our return to revenue growth as we reached the one year mark of subscription only sales," he explained.

Looking forward

Executives said the latest operating trends gave them confidence in both their short-term and long-term business goals. As a result, they left the bulk of their full-year sales and profit forecasts unchanged. Management did lower its subscriber target slightly, though, as executives now see the base rising by between 625,000 and 650,000 (compared to the prior target of 625,000 to 675,000).

However, Anagnost and his team aren't satisfied with the company's spending structure, and so they announced an aggressive plan to cut staffing by 1,150, or 13%, while closing several of Autodesk's operating facilities. The restructuring isn't aimed at reducing overall costs, they said, but instead is focused on shifting spending toward the company's growth priorities.

Management sought to cast the reorganization as an offensive move rather simply a reaction to weak demand. The company is taking the action "from a position of strength," Anagnost said. Investors were concerned that the restructuring move implied weaker sales and profit trends ahead, though, and they sent Autodesk's shares down by more than 10% immediately following the earnings announcement. That dip erased just a small portion of the stock's strong rally over the past year.