What happened

Shares of Autodesk (NASDAQ:ADSK) surged on Wednesday after the software company reported fourth-quarter 2018 results that beat analyst estimates. Both revenue and earnings came in above expectations, overshadowing first-quarter 2019 guidance that fell a bit short. Autodesk stock was up about 12.6% at 10:45 a.m. EST.

So what

Autodesk reported fourth-quarter revenue of $553.8 million, up 15.7% year over year and about $9 million higher than the average analyst estimate. Subscription plan annualized recurring revenue reached $1.18 billion, up more than 100% year over year, with the company adding 371,000 new subscribers during the fourth quarter.

Autodesk Pier 9 Workshop in San Francisco.

Image source: Autodesk.

Non-GAAP earnings per share came in at a loss of $0.09, up from a loss of $0.28 in the prior-year period. The company lost $0.79 per share on a GAAP basis, with a tax benefit of $24.8 million preventing an even steeper loss. Total GAAP operating expenses were up 17.7% year over year, growing a bit faster than revenue.

Autodesk CEO Scott Herren commented on the company's ongoing shift to subscriptions: "During the quarter we reached another significant milestone in our business model transition where subscription plan ARR surpassed maintenance plan for the first time, in-line with our projections."

Now what

Autodesk expects to produce between $550 million and $560 million of revenue during the first quarter, after including the impact of a new revenue accounting standard. Analysts were expecting revenue guidance of $585 million. Non-GAAP earnings per share is expected between $0.01 and $0.04, also below analyst expectations of $0.16.

For the full year, Autodesk sees revenue between $2.455 billion and $2.505 billion, and non-GAAP EPS between $0.77 and $0.95. Analysts were expecting revenue and earnings of $2.55 billion and $1.24 per share, respectively. The company expects to add as many as 550,000 net new subscribers, with total annualized recurring revenue growth between 28% and 30%.

While Autodesk's guidance fell short of expectations, strong fourth-quarter results and significant growth in subscribers have investors pushing up the stock price.

Timothy Green has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.