Autodesk Inc (ADSK), which makes computer-aided design software, forecast lower-than-expected profit and revenue for the second quarter, citing a stronger dollar.
Continue Reading Below
Shares of the company, which also cut its profit and revenue forecast for the year, fell nearly 8 percent in extended trading on Tuesday.
Autodesk, which gets nearly two-thirds of its revenue from outside the Americas, projected currency rate fluctuations to hit revenue growth by 5 percentage points for the year ending Jan. 31.
The dollar <.DXY> increased about 9 percent against a basket of major currencies in the first three months of this year.
Autodesk, known for its AutoCAD software used by construction companies, engineers and manufacturers to design products and simulate real-world performance, now expects revenue growth of 2-4 percent for the year.
The company had earlier forecast a 3-5 percent growth.
Continue Reading Below
Autodesk cut its adjusted profit forecast for the year to 95 cents-$1.10 from $1.05-$1.20.
For the second quarter, it forecast an adjusted profit of 14-19 cents per share on revenue of $600 million-$620 million.
Analysts on average were expecting a profit of 32 cents on revenue of $650 million.
The stronger dollar hurt its revenue in all regions except the Americas in the first quarter ended April 30, said Autodesk, which competes against software from Adobe Systems Inc <ADBE.O>, Ansys Inc <ANSS.O> and Dassault Systemes SA <DAST.PA>.
Revenue increased to 9.1 percent $646.5 million.
The company, which is moving from a license-based business to a cloud-based subscription model, said subscription revenue rose 15.7 percent to $319.8 million.
Subscriptions bring in less money upfront, as payment is spread over the entire period of use unlike traditional packaged software, but typically ensure more predictable recurring revenue.
The switch to the new model increased Autodesk's costs. While total cost of revenue increased 16.6 percent, total operating expenses went up 13.1 percent.
The company's net income fell to $19.1 million, or 8 cents per share, from $28.3 million, or 12 cents per share, a year earlier.
Excluding items, the company earned 30 cents per share.
Analysts on average had expected a profit of 28 cents per share on revenue of $636.6 million, according to Thomson Reuters I/B/E/S.
(Reporting by Anya George Tharakan in Bengaluru; Editing by Joyjeet Das)