Cloud Computing Arrangements

6 Months Ended

Jul. 31, 2023

Capitalized Contract Cost [Abstract]

Cloud Computing Arrangements

Revenue Recognition

Revenue Disaggregation

Autodesk recognizes revenue from the sale of (1) product subscriptions, cloud service offerings, and enterprise business agreements (“EBAs”), (2) renewal fees for existing maintenance plan agreements that were initially purchased with a perpetual software license, and (3) consulting, training, and other products and services. The three categories are presented as line items on Autodesk's Condensed Consolidated Statements of Operations.

Information regarding the components of Autodesk's net revenue from contracts with customers by product family, geographic location, sales channel, and product type is as follows: 

	Three Months Ended July 31,				Six Months Ended July 31,
	2023		2022		2023		2022
Net revenue by product family:
Architecture, Engineering and Construction	$	627	$	564	$	1,209	$	1,101
AutoCAD and AutoCAD LT	364		344		713		671
Manufacturing	256		242		502		467
Media and Entertainment	74		71		145		139
Other	24		16		45		29
Total net revenue	$	1,345	$	1,237	$	2,614	$	2,407
Net revenue by geographic area:
Americas
U.S.	$	485	$	424	$	941	$	822
Other Americas	104		91		201		177
Total Americas	589		515		1,142		999
Europe, Middle East and Africa	506		473		980		922
Asia Pacific	250		249		492		486
Total net revenue	$	1,345	$	1,237	$	2,614	$	2,407
Net revenue by sales channel:
Indirect	$	850	$	816	$	1,670	$	1,585
Direct	495		421		944		822
Total net revenue	$	1,345	$	1,237	$	2,614	$	2,407
Net revenue by product type:
Design	$	1,154	$	1,064	$	2,240	$	2,068
Make	130		113		251		216
Other	61		60		123		123
Total net revenue	$	1,345	$	1,237	$	2,614	$	2,407

Payments for product subscriptions, industry collections, cloud subscriptions, and maintenance subscriptions are typically due up front with payment terms of 30 to 45 days. Payments on EBAs are typically due in annual installments over the contract term, with payment terms of 30 to 60 days. Autodesk does not have any material variable consideration, such as obligations for returns, refunds, warranties, or amounts due to customers for which significant estimation or judgment is required as of the reporting date.

Remaining performance obligations consist of total short-term, long-term, and unbilled deferred revenue. As of July 31, 2023, Autodesk had remaining performance obligations of $5.22 billion, which represents the total contract price allocated to remaining performance obligations, which are generally recognized over the next three years. We expect to recognize $3.51 billion or 67% of our remaining performance obligations as revenue during the next 12 months. We expect to recognize the remaining $1.71 billion or 33% of our remaining performance obligations as revenue thereafter.

The amount of remaining performance obligations may be impacted by the specific timing, duration, and size of customer subscription and support agreements, the specific timing of customer renewals, and foreign currency fluctuations.

Contract Balances

We receive payments from customers based on a billing schedule as established in our contracts. Contract assets relate to performance completed in advance of scheduled billings. Contract assets were not material as of July 31, 2023. Deferred

revenue relates to billings in advance of performance under the contract. The primary changes in our contract assets and deferred revenues are due to our performance under the contracts and billings.

Revenue recognized during the three months ended July 31, 2023 and 2022, that was included in the deferred revenue balances at January 31, 2023 and 2022, was $913 million and $828 million, respectively. Revenue recognized during the six months ended July 31, 2023 and 2022, that was included in the deferred revenue balances at January 31, 2023 and 2022, was $1.98 billion and $1.82 billion, respectively. The satisfaction of performance obligations typically lags behind payments received under revenue contracts from customers.

Cloud Computing Arrangements Autodesk enters into certain cloud-based software hosting arrangements that are accounted for as service contracts. Costs incurred for these arrangements are capitalized for application development activities, if material, and immediately expensed for preliminary project activities and post-implementation activities. Autodesk amortizes the capitalized development costs straight-line over the fixed, non-cancellable term of the associated hosting arrangement plus any reasonably certain renewal periods. The capitalized costs are included in “Prepaid expenses and other current assets” and “Long-term other assets” on our Condensed Consolidated Balance Sheets. Capitalized costs were $220 million and $190 million at July 31, 2023, and January 31, 2023, respectively. Accumulated amortization was $59 million and $41 million at July 31, 2023, and January 31, 2023, respectively. Amortization expense for the three months ended July 31, 2023 and 2022, was $9 million and $5 million, respectively. Amortization expense for the six months ended July 31, 2023 and 2022 was $18 million and $9 million, respectively.