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The best architecture software helps you render 3D building designs that accurately match your vision.
For professionals undertaking business information modeling (BIM), design software for architects creates more efficient home design workflows through 3D modeling tools.
In a study (opens in new tab) from top architecture software developer Autodesk, 70% of architects say using BIM reduces project errors; 64% say it helps deliver higher quality, creative projects; 56% say it increases client satisfaction.
When you’re designing eye-catching architecture, graphic design software and digital art tools are useful for sketching ideas. But the best architecture software lets you do so much more - from drawing, redesigning, saving, and printing plans to including engineering information to ensure structures are viable in a real-world environment. Dedicated software for architecture can even be used to set up workflow management.
To help you find the right tools, we’ve tested the best architecture software for building design - so you can focus on creating the worlds you want. To make our informed choices we've looked at each software's top features, including shortcuts, ease-of-use, platform compatibility, available plugins, and cloud integrations.
Power-up performance by running your building design software on the best laptops for engineering students.
Why you can trust TechRadar Our expert reviewers spend hours testing and comparing products and services so you can choose the best for you. Find out more about how we test.
AutoCAD has long been a staple of construction engineers and architects, thanks to developer Autodesk including specific building design and architecture toolkits. This isn’t just another computer-aided design (CAD) program - it's one of the best architecture software tools you can get.
Using AutoCAD, architecture professionals can expect greater efficiencies. The program speeds up the design process with the addition of automated object generation and pre-built objects. This lets you quickly place walls, doors and windows, and mechanisms for creating elevations, sections and plans from model geometry.
You’ll also find many other architectural programs are compatible with standard AutoCAD files - although, equipped with the right tools, you can convert AutoCAD to PDF (or PDF to AutoCAD).
There’s a major caveat. AutoCAD is most commonly used as a 2D architecture tool, even as many in the building design trade are shifting towards true BIM application. For BIM-oriented customers, Autodesk offers Revit.
Chief Architect’s Architectural Home Design Software is a great choice for those focusing on residential over commercial properties.
One of the best architecture software programs for designing properties inside and out, Chief Architect is ready-made for professionals, from architects and remodelers to interior design specialists. 2D and 3D drawings, floor plans, 3D renderings, construction drawings - the software offers a good range of tools to get your project off the ground.
The architectural software is available in two versions for home design professionals: ‘Interiors’ for those working inside the house and ‘Premier’, which allows detailed exterior and interior design.
Useful, then, for those who have more specific needs (and want a powerful professional tool to deliver specific results).
Both editions let you rapidly construct 3D models of exterior and interior spaces, then project those into 2D plans and elevations.
Chief Architect can be purchased outright, or via a monthly subscription.
Read our full Chief Architect Home Designer Suite review.
3DS Max is another offering from Autodesk, and one of the best building design tools for 3D modeling, especially for architects looking to create photorealistic open spaces.
The creative tool was one of the first to offer hardware-accelerated rendering of 3D images. Today, its value lies in creating stunning visuals and fly-through animations, making it one of the best architectural rendering software programs to promote your project. And it’s packed with automation features to keep the design process on track.
Alongside the base 3DS Max subscription package, you can choose between three ‘Industry Collections’ to match your use: Product Design, Media & Entertainment, and the Architecture, Engineering and Construction collection.
This last collection bundles top architect software like AutoCAD, Civil 3D, and Revit. It also has tools for structural analysis, steel detailing, building performance analysis, and even vehicle path calculations.
That level of control and capability means 3DS Max, as a whole, has a steeper learning curve than other architecture software on the list. But once mastered, it’s the ideal program for architects crafting rich environments in 3D.
Civil 3D - another top architecture program from the Autodesk toolbox - goes beyond modeling and drawing CAD functionalities demanded by most architects and builders.
Giving the platform a civil engineering twist, Civil 3D lets you create 3D model-based designs and environments. If you work with BIM workflows, you’ll find the tool also offers a streamlined, design-driven documentation pipeline to keep collaborative projects on course,
The civil engineering design tool is designed to work with other Autodesk products - particularly AutoCAD, Revit, and 3DS Max. This makes it one of the best architecture software programs for professionals deep inside the Autodesk ecosphere.
One useful ability is the integration of survey images with terrain modeling, roads, service schematics, and constructional geometry. All these elements are placed into a single, highly annotated package. That allows engineers to focus on a specific area, while monitoring how design changes might impact other areas.
CATIA started life as a tool for precision modeling military hardware. And that makes it more than capable at handling complex architectural needs and generating finely detailed models.
Since its launch thirty years ago, the software has proved to be a bit of a trailblazer. While plenty of architecture software programs have added collaboration features and security-controlled distribution, CATIA had these tools from the beginning.
And it continues to move with the times, receiving performance-enhancing updates that expand on existing coordination features and embrace cloud functionality.
The program’s interface is pleasingly clean - if you’re broadly familiar with other software for architects, you should find CATIA easy enough to dive into, even if the learning curve is steeper than others (that’s the trade-off for military-grade precision modeling).
With this powerful, fully featured architect software, there’s no standard pricing. Instead, your firm will need to request a quote tailored to your needs and usage.
Revit, another Autodesk design tool for architects, is the company’s BIM-oriented offering. If you like AutoCAD, but need Building Information Modeling capabilities, this is one of the best architect software programs available.
It has industry utility beyond architecture alone. Structural and MEP engineers, and those in construction will also benefit from the 3D architectural software, which enables building design, modeling, and coordination and collaboration features when the team is working on the same scheme.
Designers using Revit work with objects, not a vector between two points. That means they can work quickly and with confidence. And, just like Autodesk’s Civil 3D, documentation can be streamlined to ease BIM workflows.
However, if you’re graduating from AutoCAD to Revit, you may find the transition a little overwhelming at first. But once you’ve scaled the steeper learning curve, the architecture software unlocks a serious competitive edge over traditional design applications.
Rhino is a powerful 3D rendering program for those modeling curved surfaces and softening a building’s image.
While most CAD programs are great at rectilineal architecture, Rhino was designed from the start to handle curved lines, meshes, and NURBS surfaces of high complexity, like those in the features of a human face or the sweeping curves of a super-car.
For architectural design, Rhino can easily model the complex intersections of curved roofing or any part of the structure that isn’t inherently straight.
As a platform, it isn’t a specialized tool. Instead, it uses add-ons, like the one for BIM functionality, and the Grasshopper visual programming system to tailor the program for specific users and tasks.
This makes Rhino a highly flexible tool that can be tweaked to automate complex modeling and detailing operations for those projects that need them.
Unusually for CAD architecture software, you are not forced to upgrade to the next release and upgrades generally cost half that of a new license.
SketchUp is about as easy as CAD gets, making it a great entry point if you’re new to 3D modeling.
The design program for architects started life as a Google-backed project. And while it’s changed hands since then, the clean, easy-to-use experience that defines the Google product suite remains.
After a few simple tutorials, designers should be able to work rapidly to construct complex solid geometry using it. It might not be suitable for designing a building entirely, but it is an excellent tool for rapidly prototyping a design when it is still at a conceptual stage.
But what really makes SketchUp stand out is the offer of genuinely free 3D architecture software. It’s limited, of course, but gives professionals a feel for the product before committing to a commercial license.
The free building design offer has made SketchUp one of the best architecture software tools, generating a large and active community of users on hand to help the inexperienced. That community spirit continues with an extensive user-generated object library; a vast resource of pre-constructed parts to drop into any project.
Read our full SketchUp review
While we've featured some of the most powerful and popular AutoCAD and 3D design software programs in this roundup, especially for use in building designs and interior designs, there are plenty of alternative architecture software to consider.
Some of these are worth looking at because they better serve as an introduction for beginners, while others are notable for being free 3D architecture software packed with useful features you won’t have to pay for.
TurboCAD Deluxe (opens in new tab) is one of the best programs for beginners and intermediate users. A lower price tag and greater accessibility offsets the comprehensive featureset found in some of the best architecture software. It’s worth trying in order to simply get used to basic functions, though you won’t find command line options here, which are typically offered by more advanced architect programs.
FreeCAD (opens in new tab) is an open-source, free 3D modeler, and it’s especially good for reverse engineering models and seeing how changing parameters can affect the whole design. While it's not as feature-rich as professional, paid-for programs, it’s a well-supported platform with complex features to explore. Best of all, it offers cross-platform support across Windows, macOS, and Linux.
SolidWorks (opens in new tab) is a powerful CAD program that strikes a balance between ease-of-use and advanced features. There's still a learning curve, though it's not overly steep. Watch out for a clever wizard tool that inspects building designs for structural weaknesses. However, it is a general 3D modeling tool rather than specific to architecture itself, so it might be better used for materials modeling rather than buildings.
Tinkercad (opens in new tab) is free 3D design tool that’s tailored to beginners. So, if you’re not quite ready to tackle grand projects, this software helps you develop your skills in basic handling and features before moving on to more advanced architecture programs. Treat it like a design sandbox to nurture your skills.
CorelCAD (opens in new tab) is a dedicated CAD program from the team behind creative design tools like VideoStudio Ultimate and Corel Painter. It's a 2D drafting and 3D design platform that’s not as complex as the best architecture software on our list. As you'd expect from Corel, this is a good all-rounder that brings together a strong toolkit – especially the creation and manipulation of vector graphics – for a modest cost. It also supports .stl files for 3D printing.
Architecture software is designed to aid professional architects in their job of designing buildings and models.
The best software helps architects outline their ideas and brings their visions to life virtually on a computer, allowing them to analyse and stress test their designs through intelligent software before unleashing their creations in a real-world environment.
The best architecture software lets you boost the quality of designs and make workflows more efficient. Choosing the right architecture tools means assessing how you intend to use it, how you’re comfortable using it, and your skill-level.
AutoCAD is an amazing computed-aided design tool for professionals, for example. But there’s a very steep learning curve to getting the most from it. If you’re new to architecture software, you may prefer a simpler tool like Chief Architect. Check if your chosen tool uses object- or vector-based design.
You’ll want to check whether the software has BIM capabilities - not all architecture software is alike. And its 3D modeling prowess. Some tools even go beyond the four walls, adding interior design and landscaping. If your business delivers more than architectural plans, investing in an all-in-one package may work better than getting the best interior design software and the best landscape design software separately.
Factor in budget and pricing models. Autodesk offer subscription packages for its architecture and modeling products, while alternatives like Chief Architect and Rhino have one-time-buy licenses.
Finally, select the architecture software that best suits your creative flow.
When testing the very best architecture software, we judge the tool on interface, performance, power, and available tools. Users rightly expect premium computer-aided design software to be powerful, feature-rich, and easy to use (if not easy to learn - comprehensive architecture software is naturally more complex).
There are different grades of architecture software, with professionals and consumer products to fit a range of needs. In reviewing CAD software for architects, we don’t expect all tools to mirror functionalities, but we test to see how well each one performs for its intended audience and its intended use.
Make mock-ups on a budget with the best free drawing software
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What is Regenerative Architecture? Limits of Sustainable Design, System Thinking Approach and the Future
A heavily cited fact within the architecture industry is that the built environment accounts for 40% of global carbon emissions. The concerning statistic puts immense responsibility on construction professionals. The idea of sustainability in architecture urgently emerged as a way of bandaging environmental damage. A wide range of sustainability practices aims no higher than making buildings “less bad”, serving as inadequate measures for current and future architecture. The problem with sustainable architecture is that it stops with ‘sustaining’.
In order to maintain the current state of the environment, the architecture community has been working towards greener means of production. Conventionally, a green building employs active or passive features as a tool for reduction and conservation. Most sustainable designs view buildings as a vessel of their own rather than integrated parts of their ecosystem. With the planet’s current needs, this approach is not enough. It is not enough to sustain the natural environment, but also restore its processes.
In biology, regeneration refers to the ability to renew, restore or grow tissues in organisms and ecosystems in accordance with natural fluctuations. When applied to building design, this can look like structures that mimic restorative aspects found in nature. Regenerative architecture is the practice of engaging the natural world as the medium for and generator of architecture. Living systems on the site become the building blocks of the structure built in harmony with the overall ecosystem.
Regenerative architecture demands a forward-thinking approach. In contrast to sustainably designed buildings, regenerative buildings are designed and operated to reverse ecological damage and have a net-positive impact on the natural environment. Shifting from a sustainability lens to a regenerative one means that architects should question how we can design structures that not only use limited resources but also restore them. Regeneration also seeks to facilitate a more resilient environment that can resist natural challenges.
Sustainable and regenerative design may seem like different approaches - sustainability limits resource use, while regeneration replenishes them. Sustainability, however, is a subset of a larger regenerative model. Both methods overlap and incorporate similar practices, each emphasizing different green goals. Just as ‘reduce’, ‘reuse’ and ‘recycle’ can’t operate in isolation, sustainability practices lend a hand towards regenerative goals by forming the first step towards replenishing resources - limiting their consumption.
One way both practices differ is in their scale of interventions. Regenerative design demands architecture be seen as an extension of the place, the site, the flora and fauna, and the ecosystem. Buildings are treated as part of a larger system, helping to produce and share resources like clean water, energy, and food. For example, Splitterwerk and ARUP’s SolarLeaf bio-reactive façade generates renewable energy from algal biomass and solar heat. The energy generated can be used by the building, stored for future use, or provided to the utility grid.
When designing a regenerative environment, it is important to adopt a systems approach to thinking. All relevant and contributing entities must be considered, measuring their networks of impact on the overall ecosystem. The design must account for how a building relates to the microclimate, or how the soil can support local flora. The designed system must allow for mutually supportive relationships between entities, making sure that there is equal give and take. Each relationship builds on the other to create a strong, thriving human-nature ecosystem.
“Sustainability is all about systems and making sure we’re thinking about the entire picture so we can address a problem from all angles”, writes Nabil Nasr, the Director of the Golisano Institute for Sustainability. Rather than employing sustainable design elements as a method of greenwashing, architects must develop a deeper understanding of eco-architecture through a systems approach. Architects must move away from being mere object creators and be involved in the design of broader systems for our future. Systems thinking allows architects to recognize how the built world exists within social, environmental, and business networks, which are changing at a rate that traditional architecture must rush to support.
The regenerative design process is fundamentally rooted in a system thinking approach. Interventions may include biomimicry to imitate nature, air-cleansing building skins, water-purifying structures, or carbon-capturing architecture. Shifting thoughts from sustainable to regenerative architecture will account for a better strategy to tackle the climate and biodiversity emergency that plagues society today. The regenerative architecture will allow the construction industry to “do good” rather than merely “less bad”.
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Autodesk, Inc. (NASDAQ:ADSK) Wells Fargo 6th Annual TMT Summit November 29, 2022 4:10 PM ET
Company Participants
Debbie Clifford – Chief Financial Officer
Jeff Kinder – Executive Vice President, Product Development and Manufacturing Solutions
Conference Call Participants
Michael Turrin – Wells Fargo
Michael Turrin
Everyone, thanks for joining, busy day for everyone across software at Day 1 of Wells Fargo TMT Summit. Michael Turrin, Software Analyst. Very pleased to have Autodesk with us. Debbie Clifford, CFO of the company since 2021, longtime finance member of the team; and then Jeff Kinder, EVP of Product Development, Manufacturing Solutions, previously Chief Digital Officer, helped work on a few key initiatives, which we’ll talk about here in a moment. But thank you both for joining today. I appreciate the time.
Debbie Clifford
Thanks for having us. We’re happy to be here.
Michael Turrin
Excellent. I think, I mean, it makes sense to start – obviously, there’s a lot to – we can go into the gist with last week and the earnings results, I think, you had a lot of useful context in unpacking some of the drivers, some of the impacts that you’re seeing on multiple sides. So maybe you can just start with the highlights for those who aren’t necessarily as familiar up to speed and then I can ask some follow-ons from there.
Debbie Clifford
Sure. So – yes, we reported our Q3 results last week. And overall, our Q3 results were strong. We then also talked a little bit about the macroeconomic backdrop that’s impacting our business. The business is performing as we would expect in this kind of environment, solid overall results, but we did start to see some deceleration in our new business growth during Q3. That’s different than what we had seen in the previous four quarters. It was most notably in Europe and predominantly in manufacturing within Europe. And that had a nominal follow-on implication to our Q4 revenue guide, where we moved the midpoint at single-digit million midpoint adjustment. So not huge, but wanted to be transparent about the slight shift that we saw in the macroeconomic situation for us at Autodesk. But overall, the business continues to be resilient, it’s performing as we would expect in this kind of environment, and we’re bullish about the long-term growth opportunities for the company.
Michael Turrin
That’s great to hear. I think maybe that’s a bit of a contrast to what we’re hearing across technology, where there is a lot of commonality around sales elongation some things that almost feel more tech-centric than maybe what your customer base is seeing. But Autodesk I think is generally viewed as somewhat of a macro bellwether, someone that has unique insights into what’s happening. So what do you attribute the resilience? You had some good renewal commentary on the call. To what do you ascribe that so far? And what informs your guidance in that context as well?
Debbie Clifford
Sure. So for those of you that may not be as close to our story, we embarked on a business model transition from perpetual software licenses to subscription. We completed that transition a couple of years ago, and there are many benefits to that transition. But being a 100% subscription model at this point gives us a resiliency that we’re really benefiting from now as the macroeconomic conditions evolve. We also benefit from very strong renewal rates. We’ve had consistently strong renewal rates, and it’s that renewals business that’s fueling us through slightly choppier economic water. So that combined with the fact that our software is highly sticky, our customers need our software in order to get their jobs done, and that’s evidenced by those renewal rates and some of the metrics that we talked about.
The last thing I would say is that one of the other benefits of being in a subscription business model versus where we had been before in a perpetual license model and that perpetual license model, customers could purchase a perpetual license and continue to use the software even without paying us anything in a subscription business model, a customer needs to be paying us on an annual basis in order for us in order to be able to use their software, which, as I said, is software that they need in order to get their jobs done. So it’s that stickiness. It’s that need to be using our software that shields us a bit more in this macroeconomic context versus what we might have seen back in the global financial crisis.
Michael Turrin
Yes. And that’s great. Jeff, correct me if I’m wrong, but you were a key architect in this as Chief Digital Officer as well and transitioning some of the business model towards subscription. So just playing out as you would have expected? Maybe you can just provide some context around that transition and now the stress test that you’re seeing? Is it giving you confidence in the direction that you’ve taken there?
Jeff Kinder
Sure. The – as Chief Digital Officer, I oversaw business models. So, one of the areas was our transition to subscription, which had begun before I even took on that role. So I got to carry that through it. It is playing out. It’s playing out how we had expected and described it. And then we added in this notion of consumption, right? So what we think really gives our customers flexibility, which helps in any kind of macroeconomic downturn is flexibility. We want to align value with usage and the customer outcomes that they see. And that combination of the two is we think serving customers very well.
Michael Turrin
That’s great. One more on just the macro and then I promise I’ll move on. But you’re also...
Debbie Clifford
It’s syllabu du jour.
Michael Turrin
Sure, you’re well versed...
Debbie Clifford
Yes, we’re very ready to talk about.
Michael Turrin
I mean, you’re also a company that has the advantage of having seen cycles before. So does that give you confidence in the signals that you’re looking at? Can you just describe some of the inputs that you look at that inform your forecasting process and just historical context that maybe you have that is helpful in a time like this?
Debbie Clifford
Yes. So there’s a number of leading indicators in our business that we monitor to give us insights into our future outlook. A number – if not, we talk about on our earnings calls on a regular basis. So the first is product usage worldwide. So the more users on our platform, the more that our products are being used the more likelihood that the economic situation is positive for us. And obviously, the inverse is true. To the extent we see product usage start to drop off, that can be indicative of less projects or less business activity on the part of our customers. So that’s something that we monitor quite closely.
Similar is our new business results. So we look at new business for us, that’s both a volume and a price mix, partner compensation metric for us. So we define it as our annualized contract value and how much of that new business how much it’s growing. And so that’s why when we were talking about it on this last earnings call, we saw a slight deceleration, as I mentioned before, but it was still growing. So overall, signs are good. They were just slightly less good than what we had seen in previous periods.
In our Construction business, specifically, in preconstruction, we have an offering called BuildingConnected where we get insight into bidding activity with general contractors and their subs. And bidding activity is a good indicator for us of downstream construction volume when [indiscernible] will become shovel ready. And so we continue to see record high bidding activity on our BuildingConnected platform. That’s something that we that we continue to watch.
So there is a number of things that give us insight. Obviously, nothing is as good as a crystal ball. We don’t have a crystal ball, but we do monitor a lot of these indicators to give ourselves a sense of how we should be thinking about the overall outlook for the company.
Michael Turrin
Very helpful. Jeff, I’m going to give you a couple on the product side. There’s a lot that you’ve been working on. Maybe we can start with Fusion and just the overall move towards cloud. What are just some of the key attributes you’d highlight for those that aren’t as familiar benefits from a customer perspective? And then just any comments around adoption trends you’re seeing there currently?
Jeff Kinder
Sure. So Fusion, for those of you who may not be familiar, that is our industry cloud for manufacturing. And we’ve been at Fusion for ten years. The vision that we had and have had for a long time, is this convergence of design and make. You think about manufacturing process, you design products and then you manufacture them. Historically, those have been point solutions, different software solutions along the way. We see a world where through the cloud, all of this comes together and the data flows seamlessly throughout the process. We think that unlocks efficiency, productivity, fewer errors in the overall production process.
And so that’s been our vision for Fusion and it’s somewhat flattering, we see some of our competition starting to mimic that as well. But design and make, convergence of design to make. That brings it up, automation, it allows for collaboration, so folks in different locations, remote locations as we’ve all lived can collaborate more easily. All of that has to happen when this is connected through the cloud. So that’s the premise behind Fusion.
The other thing that’s interesting is we priced Fusion in a way that is disruptive. And it serves customers who want to come in like SMB customers end-to-end conserve their end-to-end needs to design and make products. We’ve also set it up to where if you have more sophisticated needs as your needs become more sophisticated, and say, designing or machining, you can buy an extension. So we see greater monetization. And actually, that’s been playing out.
To your question on adoption, our growth rates have been fantastic in leading the industry in terms of adoption of the Fusion platform. What we’re also starting to see now as we’ve rolled out extension is we’re increasing the monetization per user, and that has been part of the vision from the get-go.
We’ve had a machining extension. We also just launched a signal integrity extension in partnership with Ansys for us to get into consumer electronics, you need to look at the interference that’s in the PCB. And so this extension, anybody who is building consumer electronics with our software who wants to use that extension, ends up paying us for it.
Michael Turrin
And can you just expand on the visibility you have into, you mentioned monetization and the different levers that you have in place, is the move towards Fusion and just a bigger focus on cloud giving more visibility into customer usage patterns? And does that help fuel just some of the monetization that you have in front of you?
Jeff Kinder
Yes, I mean we have greater visibility into kind of usage across the products. That’s something that folks in the cloud as opposed to on-premise perpetual license that we had before, we get much greater visibility into overall usage. It helps give us indications where we should be adding extensions, where customers will most demand. That also, by the way, sits alongside us talking to customers. So we look at segments that seem underserved, we talk to customers and we add capabilities in those areas.
Michael Turrin
You renamed Forge Platform Services.
Jeff Kinder
We did.
Michael Turrin
Platform services is something...
Jeff Kinder
Yes, Autodesk Platform Services.
Michael Turrin
Yes. I think we all have intuition of what that means as from a software-centric viewpoint that – maybe you can talk more about the business model there and how that extends your reach and creates more customization potentially?
Jeff Kinder
Sure. I lobbied for calling an Autodesk web services, but somebody told me AWS was taken. Yes, so it’s Autodesk Platform Services, formerly known as Forge. And look, what we find is our customers and developers want to build on top of our software. And we love that because it just expands our ecosystem. And what they are doing is they are creating customizations or capabilities or integrations that wouldn’t be scalable for us to do ourselves.
So, what we do is we expose these robust APIs, data and capabilities to customers. And then they go build capabilities on top of that. I will give you a couple of examples. We had a partner in Europe that tapped into our cloud information model for manufacturing. They basically pulled manufacturing data out. They built an integration into SAP for the end customer and did it in record time. We also bought a company that does production planning on the shop floor, and they were able – something it would have taken months to do, within days they were able to take that tap into that same API for cloud integration model and then create a production plan for the shop floor.
So that just makes it our products more sticky and more integrated into our customers’ workflow. We do think there’ll be opportunities around business model as non kind of direct users of the product start to tap in, but we’re really trying to help drive usage of the APIs and of the platform services at this time.
Michael Turrin
No, it all makes sense. I guess, a question for you then is how this informs your growth algorithm with perspective on what you’re forecasting for the future? How much of it comes from some of the new product innovations that you’re working towards versus opportunity for price and retention? You have, I think, the true north of sustaining double-digit revenue growth even beyond the $5 billion run rate the business is currently operating at. So maybe you can just speak to the growth perspective on some of the new product initiatives.
Debbie Clifford
Yes, sure. I just want to qualify – I apologize for my froggy voice. And I have – I’m getting over a lingering cold. So I don’t normally sound like this. So thank you for your patience. And if it sounds like I’m eating...
Michael Turrin
It’s an important footnote.
Debbie Clifford
Yes, if it sounds like I’m eating candy, it’s because I have a cough drop. So the alternative is better or is worse if I didn’t have cough drops. So again, thank you for your patience. Well, maybe I’ll start by extending from where Jeff was and talking about the industry clouds and Autodesk Platform Services. First, this is a vision that we have about driving the capabilities and customer outcomes that Jeff described, but not something in the short and medium-term that we’re anticipating is going to be a significant contributor to our growth.
We believe this is something that we need to be doing from a technical standpoint. It’s a long journey for us. We’ve talked about our need to invest. So there are margin implications that we’ve been vocal about, where we feel the need to invest, which will limit the operating margin expansion over the next couple of years, while we invest to further this strategy, but we think it’s very important for us to do this work.
At our Autodesk University, Andrew, our CEO, talked about the need for us to disrupt ourselves and that’s what we’re trying to do is to disrupt ourselves. But I want to make it clear that we don’t have any assumptions baked into our long-term growth projections that that’s going to be a material contributor to revenue. Over the long-term, yes, when we have a broader developer ecosystem and things like that, we’ll be able to monetize in more ways. But right now, that’s not part of our short-term plans.
What is part of our short-term plans? Well, let’s think about the different industries that we operate in. we operate in Architecture, Engineering and Construction, Manufacturing and Media and Entertainment predominantly. In Architecture, Engineering and Construction, our growth levers start with the proliferation of building information modeling, or BIM, mandates around the world.
There is a 100% saturation of BIM use around the world. So that continues to be a growth driver for us as we see more and more countries and customers expand their usage of them. We invented them, that is a growth driver for us. We’ve been investing in adjacent market opportunities like water infrastructure with our acquisition of Innovyze that got us into the design phase for water infrastructure specifically. And given the water waste that is happening around the world from aging infrastructure, we believe that this is a real opportunity for us to capitalize on a growth lever for the company, but also to drive more sustainable outcomes for the world in the form of less water waste. I’m really happy to get into sustainability at any point, but it’s really a big part of what we do.
In construction, we’ve been actively investing. So we were highly acquisitive over the last five years in construction. We invested in our own digital capabilities in construction. And as we think about our journey there, we have been working for some time on creating our vision of seamless interoperability across all stages of the construction life cycle from design to pre-construction to field management solutions to owners and operations. And you can see that we have offerings across each of those stages of the life cycle, it’s more nascent in owners and operations at this point. But we have an offering there with our tandem digital twin offering.
And our goal is to drive digitization of the entirety of the workflow, and we continue to see success there, and we’re pleased with the momentum that we’re seeing in construction. That’s some examples in AEC. Jeff talked about the growth drivers and some of the things that we’re seeing in manufacturing. I can turn it over to him if you’d like more information there. I think I would just close by saying Media and Entertainment, it’s interesting. It’s a part of our business, but it’s a dark course growth area.
For us, it’s been exhibiting hyper growth in comparison to the rest of Autodesk. And this is because we are running the same play effectively, which is to leverage the technical capabilities of the cloud capitalize on distributed workflows, users working around the world, needing to leverage cloud capabilities to get their jobs done. The same happens in AEC. I talked about that workflow. The same happens in manufacturing. The same too is happening in Media and Entertainment.
When you think about film production, we’ve long had a position in post production and special effects. What we’ve been doing is making small acquisitions to get us upstream and onset, but it’s effectively the same play, where the content is being created, how you manage that content, the digital workflows, all the way to finished product, and then management of that finished product, it’s a digitization of that workflow. And so these are some examples of the drivers of growth that we see at Autodesk.
Michael Turrin
Super comprehensive. I want to go back to sustainability, but I also want to give Debbie a chance to take a breath. Given the context and just let Jeff on the manufacturing side, is there anything you would add based on what she said.
Jeff Kinder
I’ll add two things to manufacturing. First is data – data products. I mean, the data in the manufacturing system is very complex and historically, I mean, people will take a thumb drive from one machine to the next machine. And so there’s a lot of investment we’re seeing in data and our customers – the demand is high, it’s growing faster than any of our other manufacturing products. Our portfolio of data products are growing faster than our design products, for example.
And so we think that’s going to continue and that’s one of the reasons that we’re investing in these cloud information models and then further integrating the design and make. The second piece – and this is – maybe less obvious, but in a softening manufacturing economy, what we’ve seen historically is we tend to take share. And so partly that is – partly that’s our price point, our disruptive kind of price points.
The second piece is, when you think about it and talking to some of our customers, what they do is they tend to inflation – not that we’ve been inflation environments in a long time, but what they pull back on when the cost of capital goes up is buying new equipment. So the software in a manufacturing environment is a much lower percent of the overall cost. So capital outlays for big new equipment, they might delay buying a new machine, but they’re still going to need the software. And in fact, when wages go up and they get squeezed more, they need efficiency that our software brings. They need that more than ever. So we are not immune, but we are – we get a little bit of softer impact.
Michael Turrin
That’s great. Going back to sustainability for a moment. It’s something that comes up a lot, but it’s very core to what you’re enabling and the water example is very tangible. And so maybe from the CFO perspective, you can talk more about the sustainability focus and what that – the takeaway is what the benefits are from the investors side, given this is an investor conference and there’s a lot of cohesion there.
Debbie Clifford
Yes. So sustainability is in infused into everything that we do at Autodesk. It’s very much a part of our values and it’s a part of how we think about developing our software, selling our software, and making an impact. We believe that our software truly will have a positive impact on the world and driving more sustainable customer outcomes. What does that actually mean? Well, first, if you think about the industries that we operate in, let’s just take AEC and manufacturing as the two primary examples.
These are two of the most wasteful industries on the planet. They create a lot of waste that contributes to carbon in the atmosphere. If you digitize those workflows, you reduce waste. If you find out on the construction site as one example that something doesn’t fit or that you’ve purchased the wrong component or things like that, you can avoid it by having the right design decisions upstream.
You can avoid it by having a direct connection between what you’re seeing on the field, on the construction site and connecting it back to the design. That’s just one example. But digitizing these workflows reduces waste and reducing waste drives more sustainable outcomes for the planet. We also have technology that gives our customers insight into the environmental impact that their designs could or will have on the planet. So things like our insights carbon calculator, when they’re – when a customer is creating a design in the AEC space, they can get estimates around what the carbon output would be from a particular design, and make design decisions at the beginning that would reduce the downstream carbon footprint.
These are some examples of things that we do to focus on sustainability and sustainable outcomes. Obviously, we’re very serious about what we do around sustainability and ESG, broadly speaking as a company that like most companies, but the distinguishing factor for us is really this connection that we have to our customers and to particular industries and driving more sustainable outcomes for the planet and we’re very passionate about it.
Michael Turrin
Great. Five minutes left. I want to spend one more kind of focused on the near-term and some of the indicators that you’re seeing, and then we’ll zoom out big picture. But you provided some context on the call, in the earnings call just around fiscal 2024 and a few things to think about in the context of the growth margin tradeoffs. And so just thinking about the near-term obvious growth opportunities you have in front of you and the margin profile you have today versus the target levels. Can you just put a little bit more context around how you’re thinking about that trade-off both now and into the upcoming year?
Debbie Clifford
Yes. So to reiterate some of the things that we said on the call last week, first, I mean it’s an interesting world in particular with FX. So we highlighted the fact that all else remaining equal, we see, at this point, a 5 percentage point revenue growth headwind next year from the continued strength of the U.S. dollar. So that’s out of the gate. That’s an exogenous factor outside of our control out of the gate.
The second is that from our exit of the Russia market, we see a follow-on incremental 1 point headwind to our revenue growth next year from that exit. So out of the gate, we have 6 percentage points of headwinds for our revenue growth next year. We wanted to be transparent about that. We’re in the planning process as we speak. So how that plays into where we ultimately guide is work that we’re doing now, and we’ll talk more about on our February call. But as you can imagine, against that backdrop with those kinds of headwinds and it will make it difficult for us to grow much beyond double digits as we get into next year on the top line.
Now on margin, we’re also in the planning process and seeing through some of the trade-offs there. I think the key, and I mentioned some of this on the call, we want to make sure that we keep an eye on delivering a healthy margin, but also not be too short-term in our thinking. We have a strong balance sheet – the business is performing well. It’s resilient in this environment. We feel like it’s important that we continue to invest, we believe in our strategy, we believe in the long-term growth prospects of the company. So we want to continue to invest in the midst of that strategy versus the alternative, which could be reducing our cost structure to offset FX volatility.
We don’t think that, that makes sense in the short-term, and that’s more than anything else what we wanted to signal. Obviously, we’ve demonstrated a track record of delivering on our operating margin goals and are – it’s important to us to continue to demonstrate that we deliver on those goals. So that’s something that we’re thinking through as we think about our margin target for next year. But there’s a lot of trade-offs here, and we just want to make sure that we’re not being too short term in our thinking, I’ll also be transparent about what we’re seeing today.
Michael Turrin
It’s well appreciated. Jeff, the closing question for you, and then I’ll come back to Debbie with a similar line of thinking, is just – a lot of change in the air. 2023 planning cycle is upon us. What are some of the key points of focus that you’re thinking about and what are the key priorities that you’re focused on that you would expect if we’re having this conversation next year, we’d be touching on, that are incremental and different than maybe what we’ve touched on here today?
Jeff Kinder
Yes, a couple of things. I mean, we continue to see healthy growth in the products that have been leading our markets for years. And so we’ll continue to invest in those products and delight the customers of those products. At the same time, we are really focused on our industry cloud, which we unveiled at Autodesk University as well as our cloud formation models and data seamlessly flowing through those. And what we do is we strike the balance in those investments to keep customers happy and like I said, delighted and renewing with our market-leading products, offer market-leading products and then investing in the future because, as Debbie said earlier, like we think that long-term, that’s where customers need to go and we want to lead the way for them.
Michael Turrin
Great. Debbie, key focus areas for next year? Any last minute takeaways you’d like for investors to take away from the conversation here today?
Debbie Clifford
I think, I mean, if you take away anything, I think, take away this that Autodesk is a resilient company with strong growth prospects over the medium- and long-term. We are well positioned to execute in the midst of virtually any macroeconomic cycle, but certainly the one that we find ourselves in now. And one of the things that we didn’t talk about a whole lot is the transition that we’re executing on starting next year to move our multiyear contract base to annual billings.
And I won’t get into too much of the details except to say that if you believe in that vision, and we believe in that vision, what it means is that one of the outcomes over the medium- and long-term is that as we normalize our free cash flow pattern, today we believe we’re trading at a discount on our free cash flow multiple because of the volatility that we see in our free cash flow, and ultimately we are looking to remove that volatility. It’s easier for us to manage the business, our customers want it, and it should make it so that over time, Autodesk becomes a more valuable company.
So next year is the trough year when we think about the free cash flow during that transition, all else being equal, it should be by years of successive growth, all in these – in service of delivering on our growth objectives, which for free cash flow were to deliver double-digit compound annual growth through the period of fiscal 2026. So if you believe in that vision, that’s a good time to be thinking about the long-term.
Michael Turrin
Very well said. A lot to go through, I promise I have that on my list, but I’m glad you brought that up. I appreciate you both making the time today, spending some time with us in Vegas. Thank you. Thank you, both.
Debbie Clifford
Thank you very much.
Question-and-Answer Session
Q -
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Autodesk's (ADSK 3.52%) stock tumbled 6% on Nov. 23 in response to its latest earnings report. For the third quarter of its fiscal 2023 (ended on Oct. 31), the software company's revenue rose 14% year over year to $1.28 billion and matched analysts' expectations. Its adjusted earnings increased 27% to $1.70 per share and also met the consensus forecast.
For the fourth quarter, Autodesk expects its revenue to rise 8% to 9% year over year and for its adjusted EPS to grow 18% to 22%. Wall Street had expected its revenue and adjusted EPS to rise 10% and 22%, respectively.
Autodesk's headline numbers weren't disastrous, but they failed to reverse the stock's decline of more than 30% over the past 12 months. Let's see why investors ditched Autodesk -- and if it they're likely to turn bullish again next year.
Image source: Getty Images.
Autodesk splits its software portfolio into four categories: Architecture, Engineering, and Construction (AEC); AutoCAD and AutoCAD LT; Manufacturing (MFG); and Media and Entertainment (M&E). Its business remained resilient throughout the pandemic for two reasons. It provides mission-critical software for most of those markets, which naturally insulates it from the competition; and it locks in its users with sticky cloud-based subscriptions.
During the third quarter, Autodesk generated 45% of its revenue from the AEC segment, 28% from AutoCAD, 20% from MFG, and 6% from the M&E division. But as the following table illustrates, the year-over-year growth of its three largest segments all decelerated significantly from the second quarter.
Segment |
Q3 2022 |
Q4 2022 |
Q1 2023 |
Q2 2023 |
Q3 2023 |
---|---|---|---|---|---|
AEC Revenue Growth (YOY) |
22% |
17% |
17% |
18% |
13% |
AutoCAD Revenue Growth (YOY) |
14% |
20% |
21% |
13% |
10% |
MFG Revenue Growth (YOY) |
16% |
4% |
14% |
16% |
13% |
M&E Revenue Growth (YOY) |
17% |
38% |
24% |
20% |
24% |
Total Revenue Growth (YOY) |
18% |
17% |
18% |
17% |
14% |
Data source: Autodesk. YOY = Year-over-year.
Autodesk attributed that slowdown to macroeconomic and COVID-related headwinds, a higher mix of shorter-term annual contracts as opposed to multi-year contracts (which require bigger upfront payments) amid all that uncertainty, and tough currency headwinds.
Its sluggish growth in Europe -- which had been rocked by the economic shockwaves of the Russo-Ukrainian war over the past year -- has also been offsetting its stronger growth in the U.S. and Asia.
During the conference call, CFO Debbie Clifford said Autodesk's core business remained strong with "resilient subscription renewal rates, healthy new business growth, and a strong competitive performance." However, its forecast for the fourth quarter indicates that the slowdown will continue.
For the full year, Autodesk expects its revenue to rise approximately 14%, compared to its 16% in both fiscal 2022 and fiscal 2021. That slowdown seems mild, but analysts expect just 10% growth in fiscal 2024.
As Autodesk's top-line growth cools off, it's focusing on renewing its subscriptions, maintaining its pricing power, and reining in its spending. Its net revenue retention rate remained between 100% and 110% in the third quarter, so it's still clearly locking in its users with renewals, while its adjusted gross margin expanded by a percentage point year over year and sequentially to 93% -- which indicates it has plenty of pricing power in its core markets.
As for its adjusted operating margin, it stayed flat sequentially but improved four percentage points year over year to 36% in the third quarter. For the full year, Autodesk expects its adjusted operating margin to expand four percentage points year over year to 36%, and for that expansion to boost its adjusted EPS 29% to 31%. Analysts expect its adjusted earnings to increase 30% this year, but to grow just 12% in fiscal 2024 as its revenue growth decelerates.
Autodesk doesn't plan to provide a clearer outlook for fiscal 2024 until it reports its fourth-quarter earnings. But during the conference call, CEO Andrew Anagnost predicted the lower-end market could remain soft next year as the macro issues dragged on, but that its retention rates would hold steady.
The company is still growing, but its stock isn't particularly cheap at 27 times forward earnings. By comparison, its industry peer Adobe (ADBE 2.21%) -- which faces many of the same headwinds but spooked the bulls with its plans to buy Figma for $20 billion earlier this year -- trades at 21 times forward earnings.
Therefore, Autodesk's stock seems reasonably valued right now -- and its year-to-date decline merely cleared away the froth that had accumulated during the feverish rally in growth stocks last year. I don't think Autodesk's stock will decline much further, but I also don't think it will rally significantly over the next 12 months unless the macro situation improves.
Leo Sun has positions in Adobe Inc. The Motley Fool has positions in and recommends Adobe Inc. and Autodesk. The Motley Fool recommends the following options: long January 2024 $420 calls on Adobe Inc. and short January 2024 $430 calls on Adobe Inc. The Motley Fool has a disclosure policy.
SAN FRANCISCO, Nov. 22, 2022 /PRNewswire/ -- Autodesk, Inc. (NASDAQ: ADSK) today reported financial results for the third quarter of fiscal 2023.
All growth rates are compared to the third quarter of fiscal 2022, unless otherwise noted. A reconciliation of GAAP to non-GAAP results is provided in the accompanying tables. For definitions, please view the Glossary of Terms later in this document.
Third Quarter Fiscal 2023 Financial Highlights
"We recently announced Autodesk Fusion, Forma, and Flow, our three industry clouds, which will connect data, teams and workflows in the cloud on our trusted platform," said Andrew Anagnost, Autodesk president and CEO. "Increasing our engineering velocity, moving data from files to the cloud, and expanding our third-party ecosystem, will enable Autodesk to further increase customer value by delivering even greater efficiency and sustainability."
"In a more challenging macroeconomic environment, Autodesk performed in line with our expectations in the third quarter, excluding the impact of in-quarter currency movements on revenue. Subscription renewal rates remained strong, as did our competitive performance," said Debbie Clifford, Autodesk CFO. "Our fiscal 23 revenue, margin, and earnings per share guidance remains close to the previous mid-points at constant exchange rates and comfortably within our prior guidance ranges. Our lower billings and free cash flow guidance primarily reflect less demand for multi-year, up-front and more demand for annual contracts than we expected."
Additional Financial Details
Third |
Net Revenue by Geographic Area |
Three Months Ended October 31, 2022 |
Three Months Ended October 31, 2021 |
Change compared to prior fiscal year |
Constant currency change compared to prior fiscal year |
||||||
(In millions, except percentages) (1) | $ | % | % | ||||||
Net Revenue: | |||||||||
Americas | |||||||||
U.S. | $ 447 | $ 383 | $ 64 | 17 % | * | ||||
Other Americas | 94 | 79 | 15 | 19 % | * | ||||
Total Americas | 541 | 462 | 79 | 17 % | 17 % | ||||
EMEA | 476 | 433 | 43 | 10 % | 12 % | ||||
APAC | 263 | 231 | 32 | 14 % | 18 % | ||||
Total Net Revenue | $ 1,280 | $ 1,126 | $ 154 | 14 % | 15 % |
____________________ |
* Constant currency data not provided at this level. |
(1) In the current fiscal year, the Company changed its rounding presentation to the nearest whole number in millions of reported amounts, except per share data or as otherwise noted. The current year rounding presentation has been applied to all prior year amounts presented and, in certain circumstances, this change may adjust previously reported balances. |
Net Revenue by Product Family |
Our product offerings are focused in four primary product families: Architecture, Engineering and Construction ("AEC"), AutoCAD and AutoCAD LT, Manufacturing ("MFG"), and Media and Entertainment ("M&E"). |
Three Months Ended October 31, 2022 |
Three Months Ended October 31, 2021 |
Change compared to prior fiscal year | |||||
(In millions, except percentages) (1) | $ | % | |||||
AEC (2) | $ 575 | $ 507 | $ 68 | 13 % | |||
AutoCAD and AutoCAD LT (2) | 354 | 323 | 31 | 10 % | |||
MFG | 254 | 225 | 29 | 13 % | |||
M&E | 78 | 63 | 15 | 24 % | |||
Other | 19 | 8 | 11 | 138 % | |||
Total Net Revenue | $ 1,280 | $ 1,126 | $ 154 | 14 % |
____________________ |
(1) In the current fiscal year, the Company changed its rounding presentation to the nearest whole number in millions of reported amounts, except per share data or as otherwise noted. The current year rounding presentation has been applied to all prior year amounts presented and, in certain circumstances, this change may adjust previously reported balances. |
(2) During the current fiscal year, the Company corrected an immaterial classification error and reclassified certain revenue amounts between Architecture, Engineering and Construction and AutoCAD and AutoCAD LT. Fiscal quarters ended October 31, 2021 (presented here), January 31, 2022, and April 30, 2022 (not presented here), were updated to conform to the current period presentation. These reclassifications did not impact total net revenue. |
Stock Repurchase Authorization
In November 2022, the Board of Directors authorized the repurchase of $5 billion of the Company's common stock, in addition to the approximately 3.8 million shares remaining, as of October 31, 2022, under previously announced share repurchase programs. The repurchase program allows Autodesk to offset dilution and reduce shares outstanding over time.
Under the share repurchase program, Autodesk may repurchase shares from time to time through various 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, cash requirements for acquisitions, economic and market conditions, stock price and legal and regulatory requirements.
In the first nine months of fiscal 2023, Autodesk repurchased approximately 4.4 million shares of its common stock at an average price of approximately $200 per share.
Business Outlook
The following are forward-looking statements based on current expectations and assumptions, and involve risks and uncertainties, some of which are set forth below under "Safe Harbor Statement." Autodesk's business outlook for the fourth quarter and full-year fiscal 2023 considers the current economic environment and foreign exchange currency rate environment. A reconciliation between the fiscal 2023 GAAP and non-GAAP estimates is provided below or in the tables following this press release.
Q4 FY23 Guidance Metrics | Q4 FY23 | |
Revenue (in millions) | $1,303 - $1,318 | |
EPS GAAP | $0.99 - $1.05 | |
EPS non-GAAP (1) | $1.77 - $1.83 |
____________________ |
(1) Non-GAAP earnings per diluted share excludes $0.74 related to stock-based compensation expense, $0.11 for the amortization of purchased intangibles, $0.04 for lease-related asset impairments and other charges, and $0.01 for acquisition-related costs, partially offset by ($0.12) related to GAAP-only tax charges. |
FY23 Guidance Metrics | FY23 | |
Billings (in millions) (1) | $5,570 - $5,670 | |
Revenue (in millions) (2) | $4,990 - $5,005 | |
GAAP operating margin | Approx. 20% | |
Non-GAAP operating margin (3) | Approx. 36% | |
EPS GAAP | $3.43 - $3.49 | |
EPS non-GAAP (4) | $6.56 - $6.62 | |
Free cash flow (in millions) (5) | $1,900 - $1,980 |
____________________ |
(1) Excluding the approximately $195 million impact of foreign currency exchange rates and hedge gains/losses, billings guidance would be $5,765 - $5,865 million. |
(2) Excluding the approximately $80 million impact of foreign currency exchange rates and hedge gains/losses, revenue guidance would be $5,070 - $5,085 million. |
(3) Non-GAAP operating margin excludes approximately 13% related to stock-based compensation expense, approximately 2% for the amortization of purchased intangibles, less than 1% related to acquisition-related costs, and less than 1% related to lease-related asset impairments and other charges. |
(4) Non-GAAP earnings per diluted share excludes $3.02 related to stock-based compensation expense, $0.43 for the amortization of purchased intangibles, $0.13 related to lease-related asset impairments and other charges, and $0.04 related to acquisition-related costs, partially offset by ($0.46) related to GAAP-only tax charges and ($0.03) related to gains on strategic investments and dispositions. |
(5) Free cash flow is cash flow from operating activities less approximately $50 million of capital expenditures. |
The fourth quarter and full-year fiscal 2023 outlook assume a projected annual effective tax rate of 20 percent and 17 percent for GAAP and non-GAAP results, respectively. Shifts in geographic profitability continue to impact the annual effective tax rate due to significant differences in tax rates in various jurisdictions. Therefore, assumptions for the annual effective tax rate are evaluated regularly and may change based on the projected geographic mix of earnings.
Earnings Conference Call and Webcast
Autodesk will host its third quarter conference call today at 5 p.m. ET. The live broadcast can be accessed at autodesk.com/investor. A transcript of the opening commentary will also be available following the conference call.
A replay of the broadcast will be available at 7 p.m. ET at autodesk.com/investor. This replay will be maintained on Autodesk's website for at least 12 months.
Investor Presentation Details
An investor presentation, excel financials and other supplemental materials providing additional information can be found at autodesk.com/investor.
Key Performance Metrics
To help better understand our financial performance, we use several key performance metrics including billings, recurring revenue and net revenue retention rate ("NR3"). These metrics are key performance metrics and should be viewed independently of revenue and deferred revenue. These 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.
Glossary of Terms
Billings: Total revenue plus the net change in deferred revenue from the beginning to the end of the 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: 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 to a broad pool of Autodesk products over a defined contract term.
Free Cash Flow: Cash flow from operating activities minus capital expenditures.
Industry Collections: Autodesk Industry 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 and Manufacturing Collection, and Autodesk Media and Entertainment Collection.
Maintenance 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 one 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 Recurring Revenue for the population of customers that existed one year ago ("base customers"). Net revenue retention rate is calculated by dividing the current quarter Recurring Revenue related to base customers by the total corresponding quarter Recurring Revenue from one year ago. Recurring 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. Recurring 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 Revenue: Consists of the revenue for the period from our traditional maintenance plans, our subscription plan offerings, and certain Other revenue. It excludes subscription revenue related to third-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 Plan: Comprises our term-based product subscriptions, cloud service offerings, and EBAs. Subscriptions represent a combined hybrid offering of desktop software and cloud 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.
Subscription Revenue: Includes our cloud-enabled term-based product subscriptions, cloud service offerings, and flexible EBAs.
Unbilled Deferred Revenue: Unbilled deferred revenue represents contractually stated or committed orders under early renewal and multi-year billing plans for subscription, services, and maintenance for which the associated deferred revenue has not been recognized. Under FASB Accounting Standards Codification ("ASC") syllabu 606, unbilled deferred revenue is not included as a receivable or deferred revenue on our Condensed Consolidated Balance Sheet.
Safe Harbor Statement
This press release contains forward-looking statements that involve risks and uncertainties, including quotations from management, statements in the paragraphs under "Business Outlook" above statements about our short-term and long-term goals, statements regarding our strategies, market and product positions, performance and results, and all statements that are not historical facts. There are a significant number of factors that could cause genuine results to differ materially from statements made in this press release, including: our strategy to develop and introduce new products and services and to move to platforms and capabilities, exposing us to risks such as limited customer acceptance, 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, including foreign exchange headwinds, recessionary fears, supply chain disruptions, resulting inflationary pressures and hiring 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, including risks related to the war against Ukraine launched by Russia and our exit from Russia; inability to predict subscription renewal rates 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; social and ethical issues relating to the use of artificial intelligence in our offerings; security incidents or other 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; 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; protection of our intellectual property rights and intellectual property infringement claims from others; the government procurement process; fluctuations in currency exchange rates; our debt service obligations; and our investment portfolio consisting of a variety of investment vehicles that are subject to interest rate trends, market volatility, and other economic factors. Our estimates as to tax rate are based on current tax law, including current interpretations of the Tax Cuts and Jobs Act, and could be affected by changing interpretations of that Act, as well as additional legislation and guidance around that Act.
Further information on potential factors that could affect the financial results of Autodesk are included in Autodesk's Form 10-K and subsequent forms 10-Q, which are on file with the U.S. Securities and Exchange Commission. Autodesk disclaims any obligation to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made.
About Autodesk
Autodesk is 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 software helps our customers to design and make a better world for all. For more information visit autodesk.com or follow @autodesk.
Autodesk uses its investors.autodesk.com website as a means of disclosing material non-public information, announcing upcoming investor conferences and for complying with its disclosure obligations under Regulation FD. Accordingly, you should monitor our investor relations website in addition to following our press releases, SEC filings and public conference calls and webcasts.
Autodesk, AutoCAD, AutoCAD LT, BIM 360 and Fusion 360 are registered trademarks of Autodesk, Inc., and/or its subsidiaries and/or affiliates in the USA and/or other countries. All other brand names, product names or trademarks belong to their respective holders. Autodesk reserves the right to alter product and service offerings, and specifications and pricing at any time without notice, and is not responsible for typographical or graphical errors that may appear in this document.
© 2022 Autodesk, Inc. All rights reserved.
Autodesk, Inc. | |||||||
Condensed Consolidated Statements of Operations | |||||||
(In millions, except per share data) (1) | |||||||
Three Months Ended October 31, |
Nine Months Ended October 31, |
||||||
2022 | 2021 | 2022 | 2021 | ||||
(Unaudited) | (Unaudited) | ||||||
Net revenue (2): | |||||||
Subscription | $ 1,188 | $ 1,043 | $ 3,437 | $ 2,967 | |||
Maintenance | 16 | 18 | 51 | 54 | |||
Total subscription and maintenance revenue | 1,204 | 1,061 | 3,488 | 3,021 | |||
Other | 76 | 65 | 199 | 154 | |||
Total net revenue | 1,280 | 1,126 | 3,687 | 3,175 | |||
Cost of revenue: | |||||||
Cost of subscription and maintenance revenue | 86 | 75 | 253 | 219 | |||
Cost of other revenue | 19 | 18 | 59 | 48 | |||
Amortization of developed technologies | 15 | 15 | 44 | 39 | |||
Total cost of revenue | 120 | 108 | 356 | 306 | |||
Gross profit | 1,160 | 1,018 | 3,331 | 2,869 | |||
Operating expenses: | |||||||
Marketing and sales | 454 | 419 | 1,306 | 1,195 | |||
Research and development | 311 | 282 | 906 | 825 | |||
General and administrative | 129 | 113 | 377 | 344 | |||
Amortization of purchased intangibles | 10 | 11 | 30 | 30 | |||
Total operating expenses | 904 | 825 | 2,619 | 2,394 | |||
Income from operations | 256 | 193 | 712 | 475 | |||
Interest and other expense, net | (14) | (5) | (43) | (17) | |||
Income before income taxes | 242 | 188 | 669 | 458 | |||
Provision for income taxes | (44) | (51) | (139) | (50) | |||
Net income | $ 198 | $ 137 | $ 530 | $ 408 | |||
Basic net income per share | $ 0.92 | $ 0.62 | $ 2.44 | $ 1.85 | |||
Diluted net income per share | $ 0.91 | $ 0.62 | $ 2.43 | $ 1.84 | |||
Weighted average shares used in computing basic net income per share | 216 | 220 | 217 | 220 | |||
Weighted average shares used in computing diluted net income per share | 217 | 222 | 218 | 222 |
____________________ |
(1) In the current fiscal year, the Company changed its rounding presentation to the nearest whole number in millions of reported amounts, except per share data or as otherwise noted. The current year rounding presentation has been applied to all prior year amounts presented and, in certain circumstances, this change may adjust previously reported balances. |
(2) In current fiscal year, the Company changed its presentation of certain subscription plan offerings in our Condensed Consolidated Statement of Operations. Revenue from subscription plan offerings in which the customer does not utilize the cloud functionality or that do not incorporate substantial cloud functionality, previously recorded in "Subscription" have been reclassified to "Other" and "Maintenance," as applicable. Accordingly, prior period amounts have been reclassified to conform to the current period presentation, in all material respects. These reclassifications did not impact total net revenue. |
Autodesk, Inc. | |||
Condensed Consolidated Balance Sheets | |||
(In millions) (1) | |||
October 31, 2022 | January 31, 2022 | ||
(Unaudited) | |||
ASSETS | |||
Current assets: | |||
Cash and cash equivalents | $ 1,665 | $ 1,528 | |
Marketable securities | 139 | 236 | |
Accounts receivable, net | 642 | 716 | |
Prepaid expenses and other current assets | 342 | 284 | |
Total current assets | 2,788 | 2,764 | |
Long-term marketable securities | 37 | 45 | |
Computer equipment, software, furniture and leasehold improvements, net | 149 | 162 | |
Operating lease right-of-use assets | 271 | 305 | |
Intangible assets, net | 423 | 494 | |
Goodwill | 3,577 | 3,604 | |
Deferred income taxes, net | 836 | 741 | |
Long-term other assets | 554 | 492 | |
Total assets | $ 8,635 | $ 8,607 | |
LIABILITIES AND STOCKHOLDERS' EQUITY | |||
Current liabilities: | |||
Accounts payable | $ 134 | $ 121 | |
Accrued compensation | 293 | 341 | |
Accrued income taxes | 40 | 30 | |
Deferred revenue | 2,731 | 2,863 | |
Operating lease liabilities | 82 | 87 | |
Current portion of long-term notes payable, net | 350 | 350 | |
Other accrued liabilities | 181 | 217 | |
Total current liabilities | 3,811 | 4,009 | |
Long-term deferred revenue | 1,052 | 927 | |
Long-term operating lease liabilities | 323 | 346 | |
Long-term income taxes payable | 85 | 20 | |
Long-term deferred income taxes | 44 | 29 | |
Long-term notes payable, net | 2,280 | 2,278 | |
Long-term other liabilities | 134 | 149 | |
Stockholders' equity: | |||
Common stock and additional paid-in capital | 3,213 | 2,923 | |
Accumulated other comprehensive loss | (207) | (124) | |
Accumulated deficit | (2,100) | (1,950) | |
Total stockholders' equity | 906 | 849 | |
Total liabilities and stockholders' equity | $ 8,635 | $ 8,607 |
____________________ |
(1) In the current fiscal year, the Company changed its rounding presentation to the nearest whole number in millions of reported amounts, except per share data or as otherwise noted. The current year rounding presentation has been applied to all prior year amounts presented and, in certain circumstances, this change may adjust previously reported balances. |
Autodesk, Inc. | |||
Condensed Consolidated Statements of Cash Flows | |||
(In millions) (1) | |||
Nine Months Ended October 31, | |||
2022 | 2021 | ||
(Unaudited) | |||
Operating activities: | |||
Net income | $ 530 | $ 408 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation, amortization and accretion | 113 | 114 | |
Stock-based compensation expense | 493 | 410 | |
Deferred income taxes | (98) | 15 | |
Lease-related asset impairments | 21 | — | |
Other | 13 | 13 | |
Changes in operating assets and liabilities, net of business combinations: | |||
Accounts receivable | 70 | 70 | |
Prepaid expenses and other assets | 1 | (139) | |
Accounts payable and other liabilities | (76) | (67) | |
Deferred revenue | 14 | (28) | |
Accrued income taxes | 79 | 13 | |
Net cash provided by operating activities | 1,160 | 809 | |
Investing activities: | |||
Purchases of marketable securities | (199) | (56) | |
Sales and maturities of marketable securities | 302 | 4 | |
Capital expenditures | (32) | (50) | |
Purchases of developed technologies | (6) | (10) | |
Business combinations, net of cash acquired | (96) | (1,185) | |
Other investing activities | (53) | (2) | |
Net cash used in investing activities | (84) | (1,299) | |
Financing activities: | |||
Proceeds from issuance of common stock, net of issuance costs | 124 | 113 | |
Taxes paid related to net share settlement of equity awards | (127) | (148) | |
Repurchases of common stock | (894) | (483) | |
Proceeds from debt, net of discount | — | 997 | |
Other financing activities | — | (6) | |
Net cash (used in) provided by financing activities | (897) | 473 | |
Effect of exchange rate changes on cash and cash equivalents | (42) | (6) | |
Net increase (decrease) in cash and cash equivalents | 137 | (23) | |
Cash and cash equivalents at beginning of period | 1,528 | 1,772 | |
Cash and cash equivalents at end of period | $ 1,665 | $ 1,749 | |
Supplemental cash flow disclosure: | |||
Non-cash financing activities: | |||
Fair value of common stock issued to settle liability-classified restricted common stock | $ 8 | $ 3 | |
Fair value of common stock issued related to business combinations | $ 10 | $ 3 |
____________________ |
(1) In the current fiscal year, the Company changed its rounding presentation to the nearest whole number in millions of reported amounts, except per share data or as otherwise noted. The current year rounding presentation has been applied to all prior year amounts presented and, in certain circumstances, this change may adjust previously reported balances. |
Autodesk, Inc. | |||||||
Reconciliation of GAAP financial measures to non-GAAP financial measures | |||||||
(In millions, except per share data) (2) | |||||||
To supplement our condensed consolidated financial statements presented on a GAAP basis, we provide investors with certain non-GAAP measures including non-GAAP operating margin, non-GAAP income from operations, non-GAAP diluted net income per share, and free cash flow. For our internal budgeting and resource allocation process and as a means to evaluate 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 future reported financial results. We 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 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. | |||||||
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 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 in this presentation, and not to rely on any single financial measure to evaluate our business. | |||||||
The following table shows Autodesk's GAAP results reconciled to non-GAAP results included in this release. |
Three Months Ended October 31, | Nine Months Ended October 31, | ||||||
2022 | 2021 | 2022 | 2021 | ||||
(Unaudited) | (Unaudited) | ||||||
GAAP operating margin | 20 % | 17 % | 19 % | 15 % | |||
Stock-based compensation expense | 13 % | 13 % | 13 % | 13 % | |||
Amortization of developed technologies | 1 % | 1 % | 1 % | 1 % | |||
Amortization of purchased intangibles | 1 % | 1 % | 1 % | 1 % | |||
Acquisition-related costs | — % | — % | — % | 1 % | |||
Lease-related asset impairments and other charges | 1 % | — % | 1 % | — % | |||
Non-GAAP operating margin (1) | 36 % | 32 % | 35 % | 31 % | |||
GAAP income from operations | $ 256 | $ 193 | $ 712 | $ 475 | |||
Stock-based compensation expense | 172 | 144 | 496 | 413 | |||
Amortization of developed technologies | 14 | 14 | 41 | 38 | |||
Amortization of purchased intangibles | 10 | 11 | 30 | 30 | |||
Acquisition-related costs | 1 | 3 | 7 | 20 | |||
Lease-related asset impairments and other charges | 12 | — | 20 | — | |||
Non-GAAP income from operations | $ 465 | $ 365 | $ 1,306 | $ 976 | |||
GAAP diluted net income per share | $ 0.91 | $ 0.62 | $ 2.43 | $ 1.84 | |||
Stock-based compensation expense | 0.79 | 0.65 | 2.28 | 1.86 | |||
Amortization of developed technologies | 0.06 | 0.06 | 0.19 | 0.17 | |||
Amortization of purchased intangibles | 0.05 | 0.05 | 0.14 | 0.14 | |||
Acquisition-related costs | — | 0.01 | 0.03 | 0.08 | |||
Lease-related asset impairments and other charges | 0.06 | — | 0.09 | — | |||
Gain on strategic investments and dispositions, net | (0.03) | (0.03) | (0.04) | (0.06) | |||
Discrete GAAP tax items | 0.01 | (0.02) | (0.02) | (0.27) | |||
Income tax effect of non-GAAP adjustments | (0.15) | — | (0.32) | (0.18) | |||
Non-GAAP diluted net income per share | $ 1.70 | $ 1.34 | $ 4.78 | $ 3.58 | |||
Net cash provided by operating activities | $ 469 | $ 271 | $ 1,160 | $ 809 | |||
Capital expenditures | (9) | (14) | (32) | (50) | |||
Free cash flow | $ 460 | $ 257 | $ 1,128 | $ 759 |
____________________ |
(1) Totals may not sum due to rounding. |
(2) In the current fiscal year, the Company changed its rounding presentation to the nearest whole number in millions of reported amounts, except per share data or as otherwise noted. The current year rounding presentation has been applied to all prior year amounts presented and, in certain circumstances, this change may adjust previously reported balances. |
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SOURCE Autodesk, Inc.
Architecture Undergraduate Programs
The practice of architecture requires a unique skill set—creative thinking and aesthetic sensitivity balanced with technical knowledge, cultural understanding, and social responsibility--all coupled with the ability to communicate effectively. Drexel’s undergraduate architecture curriculum encompasses foundation courses in the applied and social sciences, the humanities, and a wide range of professional architecture courses to prepare students for careers in architecture and related fields. At the heart of the curriculum are the design studios, in which students are challenged to apply knowledge acquired from the above disciplines to consequential design problems.
Drexel Westphal’s Architecture program offers two distinct degree options for students interested in pursuing a career in architecture:
Drexel Westphal’s Bachelor of Architecture (B.Arch.) degree is designed to help you develop a comprehensive knowledge of the discipline of architecture, as well as foundational professional knowledge and a basic understanding of related fields. The NAAB-accredited B.Arch. degree at Drexel University is suitable for students who seek to earn a professional undergraduate degree that leads to professional licensure and affords them early exposure to architectural practice. While our B.Arch. degree does not participate in Drexel's signature co-op program, our students' opportunity to gain professional work experience and complete all or most of their Architectural Experience Program (AXP) requirements prior to graduation far exceeds the practice exposure of co-op. Depending on the degree path (read on to learn more about the 2+4 Option and the Part-Time Evening Option), the B.Arch. can be completed in six to seven years. Students enrolled into the B.Arch. degree have the option to pursue the Integrated Path to Architectural Licensure (IPAL) to complete the Architectural Registration Examination (ARE) and achieve professional licensure upon graduation. Due to its curriculum structure, the B.Arch. degree cannot accommodate international students on J1 visas.
The B.Arch. degree program may be right for students who:
Drexel University’s Bachelor of Science in Architectural Studies (BS in Arch. Studies) degree is a four-year, pre-professional degree. Students develop a comprehensive knowledge of the discipline of architecture, hone design skills, and expand their architectural understanding. If you’re unsure about becoming a licensed architect, this degree provides flexible avenues to combine your studies with related fields. Our BS in Architectural Studies degree can be a precursor to a dual BS/MS degree at Drexel University or a professional NAAB-accredited M.Arch. degree. The BS in Arch. Studies is a full-time degree program, which also welcomes international students. We offer both a co-op and a non-co-op option for this degree.
The BS in Architectural Studies may be right for students who:
Need help understanding the differences in undergraduate architecture degrees? Deciding which education option is the best fit for you? Our Admissions team is here to answer your questions and help you choose a path to your career in architecture. Contact us at westphaladm@drexel.edu or 215.895.1738.
The mission of the Drexel Bachelor of Architecture degree is to pursue architecture as a professional discipline by combining the rigors of the academy with the realities of contemporary architectural practice. The program does this by providing a strong, broadly based curriculum in the arts, design, humanities, social and applied sciences coupled with professional courses taught by faculty who reflect the broad diversity of architectural and design practices today.
Drexel Architecture’s work/study program is an experience-based learning model that complements and provides an alternative to traditional programs. The Drexel model provides a practical, high-quality education to those students who seek early exposure to daily architectural practice as well as an affordable alternative to students who could not otherwise be able to enter the profession.
At Drexel, there are two paths to an accredited Bachelor of Architecture degree, serving two distinct populations:
The 2+4 Option is an accelerated route designed for a class of well-prepared students entering directly from high school. In this program, two years of full-time coursework address the basic principles of architectural design and satisfy fundamental university core requirements in the arts and sciences as well as those job-related skills that are needed for entry-level professional positions. A comprehensive review of performance will take place after each year to ensure that students are making sufficient progress in all areas.
After successfully completing the minimum requirements of the full-time phase, students find professional employment in the building industry, including architecture firms, while continuing their academic program part-time in the evening for four additional years. By combining work and study, Drexel students may be able to simultaneously satisfy their required internship for licensure (IDP) while completing their professional degree, thus qualifying for the registration test on graduation in most jurisdictions.
Information on admissions to the 2+4 Option
The Part-Time Evening Option is one of only two part-time evening architecture programs in the United States, and it leads to an accredited Bachelor of Architecture degree. Designed for non-traditional and transfer students, this program offers all courses part-time in the evening, enabling students to work full-time. The part-time evening sequence is seven years, but transfer students with university-level design credits can reduce its length by meeting specific program requirements through transcript and portfolio review. All part-time evening courses are offered after 6 p.m., Monday through Thursday.
Information on Transfer Admission Requirements
Bachelor of Architecture students may be able to receive credit in the Architectural Experience Program (AXP) for work experience obtained before graduation, which is part of most state licensure requirements. The Bachelor of Architecture program is accredited by the National Architectural Accrediting Board (NAAB).
For more information on both B.Arch. pathways also visit the Drexel University Undergraduate Architecture Catalog.
In the United States, most state registration boards require a degree from an accredited professional degree program as a prerequisite for licensure. The National Architectural Accrediting Board (NAAB), which is the sole agency authorized to accredit U.S. professional degree programs in architecture, recognizes three types of degrees: the Bachelor of Architecture, the Master of Architecture, and the Doctor of Architecture. A program may be granted a 8-year, 3-year, or 2-year term of accreditation, depending on the extent of its conformance with established educational standards.
Doctor of Architecture and Master of Architecture degree programs may consist of a pre-professional undergraduate degree and a professional graduate degree that, when earned sequentially, constitute an accredited professional education. However, the pre-professional degree is not, by itself, recognized as an accredited degree.
At Drexel University, in the Westphal College of Media Arts & Design, the Department of Architecture, Design & Urbanism the following NAAB-accredited degree program:
Bachelor of Architecture 227 credits, (equivalent to 150 semester credits)
Next accreditation visit for the Program: 2026
Drexel University Architecture Program Accreditation Reports and Documents
Need help deciding which undergraduate Architecture degree is best for you? Want to tour the Architecture facilities at Drexel Westphal, or learn more about how our program prepares students for architecture careers?
The Westphal Admissions team is available to answer questions, organize a tour, or connect you with faculty. Contact us at westphaladm@drexel.edu or 215.895.1738.