Thank you for standing by, and welcome to Autodesk third -quarter fiscal year 2022 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one on your telephone. Please be advised that today's conference may be recorded. Should you require any further assistance, please press star zero. I would now like to hand the conference over to the VP of Investor Relations, Simon Mays-Smith. Please go ahead. Thanks, operator, and good afternoon. Thanks for joining our conference call to discuss the results of our third quarter of fiscal year 2022. On the line with me are Andrew Anagnost, our CEO, and Debbie Clifford, our Chief Financial Officer. Today's conference call is being broadcast live via webcast. In addition, a replay of the call will be available at autodesk.com/investor. You can find the earnings press release, slide presentation, and transcript of today's opening commentary on our investor relations website following this call. During the course of this call, we may make forward-looking statements about our outlook, future results, and related assumptions, acquisitions, products and product capabilities, and strategies. These statements reflect our best judgment based on currently known factors. Actual events or results could differ materially. Please refer to our SEC filings, including our most recent Form 10-K for important risks and other factors, including developments in the COVID-19 pandemic and the resulting impact on our business and operations that may cause our actual results to differ from those in our forward-looking statements. Forward-looking statements made during the call are being made as of today. If this call is replayed or reviewed after today, the information presented during the call may not contain current or accurate information. Autodesk disclaims any obligation to update or revise any forward-looking statements. During the call, we will quote a number of numeric or growth changes as we discuss our financial performance. Unless otherwise noted, each such reference represents a year-over-year comparison. All non-GAAP numbers referenced in today's call are reconciled in our press release to Excel financials and other supplemental materials available on our investor relations website. Now, I will turn the call over to Andrew. Thank you, Simon, and welcome everyone to the call. Our third quarter results were strong, driven by one of our best -ever quarters for new subscriptions, record subscription renewal rates, a net revenue retention rate toward the high end of our range, and a solid competitive performance. We also grew RPO and billings 18% and 16% respectively, despite a tougher compare versus last year. Relative to the first and second quarters, the rate of improvement decelerated during the third quarter more than we expected. While demand is robust, we believe supply chain disruption and resulting inflationary pressures, a global labor shortage, making it harder for our customers to staff new projects, and the ebb and flow of COVID are contributing to the deceleration, as well as documented country-specific disruption to AEC in China. Our conversations with customers and channel partners reinforce our view. We're encouraged that embracing digital transformation to drive efficiency and sustainability remains a priority for our customers. Our end-to-end solution, business model flexibility, and platform position us well competitively and enable more customers to enter and remain in our ecosystem. As you heard at our recent Investor Day and in Autodesk University, we are rapidly innovating and optimizing our business to increase and realize the opportunity ahead. Notable milestones during the quarter included the launch of our Flex consumption model and our plans to combine technologies, connect processes, automate workflows, and unlock valuable insights for customers through our Forge platform. The recent report from the Intergovernmental Panel on Climate Change and the United Nations Climate Change COP26 meeting in Glasgow both underscored the urgency of reducing carbon in Earth's atmosphere and the role that everyone, including corporations, needs to play. Sustainability needs to be designed, made, and in many cases, retrofitted in construction and manufacturing. This cannot be achieved efficiently or effectively without end-to-end software like ours to drive the process. This organizing principle affects not just how we deploy capital, for example, through our investments to develop sustainable tools and our recent acquisition of Innovyze, but also how we source capital. Many of our largest equity holders already align to our sustainability goals. In the third quarter, we began to align our debt holders by issuing our first sustainability bond that links to our sustainability goals. Now let me turn the call over to Debbie to take you through the details of our quarterly financial performance and guidance for the year. I'll then come back to provide an update on our strategic growth initiatives. Thanks, Andrew. As Andrew said, our third -quarter results were strong. Several factors contributed to that, including robust growth in new product subscriptions, rapidly expanding digital sales, and increasing subscription renewal rates. Total revenue growth in the quarter accelerated to 18% and 17% in constant currency, with subscription revenue growing by 21%. Looking at revenue by product, the growth we saw was broad-based. AutoCAD and AutoCAD LT revenue grew 14%, AEC revenue grew 22%, and manufacturing revenue grew 16%. M&E revenue grew 17%. Across the globe, revenue grew 18% in the Americas, 19% in EMEA, and 18% in APAC. Direct revenue increased 34% and represented 35% of our total revenue, up from 31% last year, due to strength from both enterprise and e-commerce. As you heard at our Investor Day, about three-quarters of new customers to Autodesk are now generated through our digital channels, reflecting the strength of our simplified buying experiences. Our product subscription renewal rates reached record highs, and our net revenue retention rate was toward the high end of our 100%-110% range. Billings increased 16% to $1.2 billion, reflecting robust underlying demand and a tough comparison versus last year, when we signed two of our largest ever EBAs, including a nine-digit deal. Total deferred revenue grew 14% to $3.3 billion. Total RPO of $4.2 billion and current RPO of $2.9 billion grew 18% and 21%, respectively. Turning to the P&L, non-GAAP gross margin remained broadly level at 92%, while non-GAAP operating margin increased by two percentage points to approximately 32%, reflecting strong revenue growth and ongoing cost discipline. We delivered healthy free cash flow of $257 million during the quarter against a tough comparison from last year, which benefited from pandemic-related payment term extensions. Consistent with our capital allocation strategy, we continued to repurchase shares to offset dilution from our equity plans. During the third quarter, we purchased 980,000 shares for $287 million at an average price of approximately $293 per share. Year -to -date, we've repurchased 1.66 million shares at an average price of approximately $287 per share for total spend of $476 million. Looking forward, as Andrew said, we're rapidly innovating and optimizing our business to realize the opportunities ahead. As we discussed last quarter, the shift of multiyear contracts to annual billings as we move into fiscal 2024 will drive more predictable free cash flow and better price realization over time, which will make Autodesk a more valuable company. This quarter, we took steps to optimize our capital structure by issuing our first sustainability bond, which aligns our capital strategy with our sustainability goals while also extending our debt maturity profile by almost two years and reducing our weighted average cost of debt by 40 basis points. As we enter Q4, we intend to take steps to reduce our real estate footprint because the pandemic has spurred changes in the way we work, and we've moved to a hybrid workforce. As a result, we anticipate we will reduce the square footage of our facilities portfolio by approximately 20% worldwide, and that we will take a GAAP-only charge of up to approximately $180 million, the bulk of which will be recognized over the next several months as we execute our plan. Optimizing our facilities costs will allow us to better deploy capital to further our strategy and drive growth. Now, let me finish with guidance. Demand was robust in Q3, and we expect it to remain so in Q4. However, as Andrew said, macroeconomic headwinds such as supply chain disruptions and resulting inflationary pressures, a global labor shortage, the ebb and flow of COVID, and AEC in China are impacting the pace of our recovery. As an example, the growth in new product subscription volumes decelerated from approximately 30% in the first half to mid-20s% in Q3, which is more than normal seasonality and a tougher comparison versus last year would suggest. This dynamic drove strong billings growth in Q3 that nonetheless fell short of our expectations. In light of this macroeconomic uncertainty, as we enter Q4, we're taking a pragmatic approach and are assuming that the supply chain, labor, COVID, and country-specific challenges will persist. As a result, we're reducing the midpoint of our billings and free cash flow guidance by approximately $150 million and $100 million, respectively, for FY 2022. Given the nature of our subscription business model and the greater degree of near-term visibility it provides to us, and our expectation of continued strong spend discipline, the midpoint of our full -year revenue and margin guidance is broadly unchanged. We continue to target $2.4 billion of free cash flow in FY 2023 in constant currency because we believe the current macro headwinds we're seeing are transient. If the growth deceleration and strengthened dollar continue through next year, we could see potential risk to that target of about $100 million-$200 million based on what we know today. FX volatility is a big factor. Rate moves in the first half of the year created about $55 million in potential headwinds to fiscal 2023 cash flow. Since then, and in the last 90 days alone, further rate moves created about another $45 million in potential headwind to cash flow. We're obviously watching FX rates closely, but it's clear that if the current rates persist through next year, that risk could materialize in free cash flow. Beyond cash flow, if you further take the risk into account, revenue growth could end up at the low end of the CAGR we talked about at Investor Day, and fiscal 2023 margin could be impacted by about a point. We will, of course, update you on our next earnings call when we expect to have more visibility into any impacts from macro or FX movement on our fiscal 2023 outlook. We remain optimistic about our growth potential beyond fiscal 2023. Continue to target double-digit revenue growth, non-GAAP operating margins in the 38%-40% range, and double-digit free cash flow growth on a compound annual basis. These metrics are intended to provide a floor to our revenue growth ambitions and a ceiling to our spend growth expectations. Andrew, back to you. Thank you, Debbie. Now, let me turn to our strategic growth initiatives. Sustained and purposeful innovation to enable digital transformation in the industries we serve has changed our relationship with our customers from software vendor to strategic partner, and that is enabling us to create more value through end-to-end cloud-based solutions that connect data and workflows and through business model evolution. Our model is scalable and extensible into adjacent verticals, from architecture and engineering to construction and owners, and from product engineering to product manufacturing and product and data lifecycle management. By helping our customers grow and navigate their digital transformation, we will grow too. For example, Bouygues Construction, and Colas are leading construction and infrastructure firms based in France, with over 100,000 construction employees operating in 60 countries across the globe. In the third quarter, they significantly increased their commitment to Autodesk products such as Revit, AutoCAD, and Civil 3D, following an accelerated move to BIM and digital workflows over the last three years, which significantly increased monthly average users. Similarly, Obayashi Corporation, one of the largest construction firms in Japan, which operates in 16 countries worldwide, is accelerating its global consolidation around BIM and a unified 3D technology platform to enable greater efficiency and sustainability. In the third quarter, it expanded its EBA with us. Over the last two years, it has more than doubled the number of Revit users and expanded its usage of Autodesk Construction Cloud to connect workflows from design through construction. We are further extending our reach into the construction mid-market with the recent launch of Autodesk Build, introduction of an account-based pricing business model, and distribution to our channel partners. For example, this quarter, Jacobsen Construction Company, an ENR Top 400 general contractor in the United States, was looking for a long-term technology partner and to consolidate around a single project management solution that would increase the efficiency of its field teams while also seamlessly integrating with its accounting solution. While it previously used a competitor solution for some projects, Jacobsen ultimately chose Autodesk Construction Cloud because of Autodesk Build's robust field and cost management functionality and the opportunity to integrate it smoothly with existing technology. With new Autodesk Build features and capabilities launched every two months or so, and the recently launched ACC bundles for pre-construction and construction operations, we remain optimistic about the opportunities ahead. We're connecting the document infrastructure, too. For example, the Administrator of Railway Infrastructures in Spain, or ADIF, selected Autodesk products over competitor offerings to support its digital transformation. Backed by our common data environment, ADIF will leverage the Autodesk Construction Cloud to collaborate on project information, on-site development, and model coordination to ensure efficient and accurate construction of their railway network. Infrastructure remains an important opportunity for Autodesk across the globe. Our end-to-end solutions, which boost the efficiency and sustainability of customers like ADIF, as well as our ability to seamlessly integrate vertical and horizontal design and construction, give us a competitive advantage. Much-needed additional investment in infrastructure in the United States and across the globe will restore aging infrastructure and increase the productivity of the economy. Perhaps more consequentially, in the long term, provisions in the U.S. infrastructure bill, which encourages Department of Transportation to digitize their processes, should accelerate adoption of digital workflows and enable all infrastructure investment to become more efficient and sustainable. Turning to manufacturing, we sustained strong momentum in our manufacturing portfolio this quarter. In automotive, we continue to grow our footprint beyond the design studio into manufacturing and connected factories as automotive OEMs seek to break down work silos and shorten handoff and design cycles. Ford, one of the largest automotive OEMs in the world, renewed and expanded its EBA with Autodesk during the third quarter, growing users in Alias and VRED in design and AutoCAD, Inventor, and Navisworks in manufacturing, while adding Autodesk Construction Cloud and Autodesk Build in facilities and manufacturing to enable field access to plant drawings during maintenance and operations and equipment changeovers. Fusion 360 commercial subscribers again grew strongly without any systematic sales promotions, ending the quarter with 175,000 subscribers. While still early days, our new extensions, including machining, generative design, and nesting and fabrication, are performing well, and there is major interest in our upcoming simulation and design extensions. Fewer promotions and growing demand for Fusion 360's extensions are enabling us to capture more of the potential market opportunity and accelerate our growth. Fast Radius is a leading digital manufacturing and supply chain company. The company's proprietary cloud manufacturing platform combines software and advanced microfactories that enable its customers to flexibly design, make, and move certified products. Fast Radius already uses several Autodesk products. This quarter, it added Fusion 360 with the machining extension to support its in-house CNC operation and integrate it alongside its existing additive manufacturing offerings. Fusion 360 enables Fast Radius to program a wide variety of parts more quickly, resulting in faster product cycle times. Outside of commercial use, there is a large and rapidly growing ecosystem of users that are taking Fusion 360 from education and home into the workplace. These will fuel commercial usage in the future. As one measure of this ecosystem, we ended the third quarter with 1 million monthly active users, up over 50% year-over-year, and they are doing some amazing work. On September 12, the Technical University of Munich's TUM Boring team beat more than 400 applicants and 12 finalists to win the inaugural Not-a-Boring Competition. As Haokun Zheng, one of the five leads responsible for project operations said, quote, "Fusion 360's cloud-based solution enabled our 60-member team to collaborate remotely during the pandemic and design and build an award-winning 40-foot-long, 22-ton tunneling machine. Throughout the year, we were repeatedly told by industry experts that the timeline we were aiming for was borderline impossible. But Fusion 360's ease of use and integrated CAD, CAM, and FEM enabled rapid simulation and improved the speed and efficiency of the design workflow." End quote. Finally, we continue to enable more users to participate in our ecosystem more productively through business model innovation and our license compliance initiatives. For example, a sustainable building engineering design solutions consultant in Australia, which has been an Autodesk AEC customer for more than a decade, added our premium offering in the third quarter to enable it to better manage its subscriptions and provide more secure single sign-on across multiple offices. Across Autodesk, the number of premium subscribers increased more than 500% year-over-year. In the Middle East, a large telecoms company undertaking its own digital transformation was seeking to increase efficiency and sustainability by adopting BIM standards and streamlining digital workflows while also ensuring license compliance across a fragmented employee base. During the process, we became the trusted partner of choice, resulting in a significant investment in AEC Collection, AutoCAD, Revit, and 3ds Max. Year-to-date, license compliance billings across Autodesk as a whole are up 20% when compared to the same period two years ago, and almost 50% year-over-year. In speaking with customers, partners, and employees, we are very optimistic about the future. They have demonstrated grit and determination, inspiration and innovation, and agility and transformation during the pandemic. While there will certainly be twists and turns on the road ahead, in many ways, the pandemic has accelerated the future and increased my confidence that we are on the right path. We are executing well in challenging times and believe we have only significant opportunities ahead of us. I am reminded again that Autodesk's purpose has never been more important or urgent. Empowering innovators with design and make technology so that they can achieve the new possible also enables them to build and manufacture efficiently and sustainably. Together, we can meet the challenges posed by carbon, water, and waste while also advancing equity and access to the in-demand skills of the future. Autodesk's central role in meeting these challenges underpins my confidence this year and my confidence in the future. Operator, we would now like to open the call for questions. As a reminder, to ask a question, you will need to press star one on your telephone. To withdraw your question, press the pound key. Please stand by while we compile the Q&A roster. Our first question comes from the line of Saket Kalia of Barclays. Your line is open. Okay, great. Hey, guys. Thanks for taking my questions here. Debbie, maybe we'll just start with you, just given some of the moving parts. I'd love to zoom in on the FY 2022 guidance a bit. You know, you touched on this a little bit in your prepared remarks, but can you just talk about, you know, what drove the change to guide in billings and free cash flow specifically? You know, you talked about supply chain and FX. I was wondering if you could just go one level deeper and just help us parse that out a little bit. Does that make sense? It does. I think we'll start with Andrew here. Yeah. Let me start, and then Debbie and I will kind of tag team here on some of this. First off, Saket, let's make sure we all kind of level set on the business is strong. All right? You saw the numbers. We're seeing tremendous growth. We're seeing record renewal rates. We're approaching net revenue retention rates at the high end of our guide, and they're continuing to go up. All right? That's super important here, and we feel pretty good about where the business is going. The business is strong, and we're seeing a lot of strength there. If you look at what we're talking about here, we saw several things happen during the quarter, and we got this reinforced by our customers and by our channel partners. We saw a deceleration in what we were seeing around monthly active usage and all the things associated with that. That then translated into us kind of looking at our guide and looking at things going forward. We pragmatically just assumed at this point that what we saw in the quarter is gonna continue into Q4. That's what you're seeing, a pragmatic assessment that, hey, this kind of supply chain pressure, this inflationary pressure that's kind of squeezing the margins of some of our customers is gonna continue into Q4. If we look forward in terms of the guide, in terms of what's going on into next year, look, we assume two things. One, this interesting FX environment we're in, which I want Debbie to kind of comment on again and to kind of reinforce some of the things she said in the opening commentary, presents some potential risks. We wanna flag those risks. In addition, if some of these supply chain issues bleed over into the beginning of next year, we wanted to flag some additional risk there. There's certainly a large currency headwind that we're seeing. I'd like Debbie to just kind of reiterate some of the things she said in the opening commentary, so we can all get on the same page about that. Yeah. Let me go back to the fiscal 2022 guide first, because I think one of the metrics that I talked about in the opening commentary pretty much says it all. That is that for our new volume growth, we saw 30% growth for the first half of fiscal 2022, and then in Q3 it was in the mid-20s. It was still very strong growth. It just fell short of our expectations. As we look ahead, we did highlight the potential risk that we see to fiscal 2023 free cash flow. It's true that FX, based on what we know today, is a big factor. It's been highly volatile. The rate moves that we saw in the first half of the year created about $55 million in potential headwind to fiscal 2023 cash flow. Since then, and in the last 90 days alone, further rate moves created about another $45 million in potential headwind to cash flow. As you can imagine, we're obviously watching FX rates closely, but it's clear that if the current rates persist through next year, that risk could materialize in free cash flow. Our goal today was just to highlight the risk, as we look ahead to next year, but it's important to remind that overall the strategy is working, and we have numerous growth levers to capitalize on over the long term. Got it. That makes a ton of. We still see a path, a constant currency path to $2.4 billion next year, but we wanna flag these risks because we think that's a prudent thing to do at this time, given what we're seeing today, right now. It's not a guide. It's a risk flag. Understood. I think that is prudent. Andrew, maybe just for the follow-up for you know, just to maybe zoom out from the numbers and some of the moving parts as we start to think about next year and the years after. You know, one of the things I'd love to just get your view on is, you know, now that we have an infrastructure bill in the U.S., you know, can you just talk about a couple of the components that you feel could be particularly helpful for Autodesk's business? Maybe when you think we start to see some of that benefit in your customer base. Yeah. Yeah, Saket. First off, let's be very clear, we don't have any infrastructure uplift built in any of our guidance or any things we're talking about right now, okay? These things play out over multiple years. This is a great bill. We're really happy to see it. Included in the bill is a $100 million fund to accelerate investment in digital tools for Department of Transportation. We feel that that's a good thing, and it's an important part of this bill from our perspective, because it's going to change the ecosystem. These things play out over long term. We're certainly really happy about the fact that we have invested in water ahead of these critical investments in infrastructure, because water is going to matter a lot. Clean water management in terms of flooding or storage of water, wastewater processing, all these things, water is going to be a big deal. We're gonna see our engagement in water projects probably increase over the next couple of years. I wanna make sure that we're all clear that we don't build these into our numbers right now, and we're gonna wait and see how these things play out over the next couple of years. We will absolutely see some of our investments in road, rail, and water pay off over a multi-year period here. We're pretty excited about it. This bill was a long time coming, and I think the emphasis on digital transformation inside the infrastructure industry is going to be an important catalyst to modernizing and expanding what's happening in our infrastructure growth in the United States. Very helpful. Thanks, guys. Thank you. Our next question comes from Adam Borg of Stifel. Your line is open. Hey, guys. Thanks so much for taking the question. Andrew, I'd love to kinda just go maybe another step deeper on what Saket was talking about. You know, for much of the year, we've talked about this unwinding of uncertainty, and w e've talked about several factors today of where sounds like uncertainty has kind of gotten higher again. Could you just talk maybe a little bit more about like an example or two of how, you know, supply chain issues or even pricing is impacting or inflation is having a direct impact on the ability to close deals? Just kinda help give an example of like what's happening from that'd be really great. Yeah. Yeah, Adam. It's an excellent question. Let's kind of like back up to three months ago and set some of the context too so that we kinda get a sense for this. Three months ago, you know, we were heading into the quarter seeing strong renewal rates, projecting strong renewal rates heading in. We saw those strong renewal rates. We're at record renewal rates. We're continuing to see those things. We also saw monthly active usage increasing robustly heading into the quarter. As the quarter progressed, that increase in monthly active usage decelerated a little bit. It continued to grow, it's just the second derivative kind of went negative on us, and it didn't continue to accelerate at the pace we expected to see. What's driving that? All right. For a lot of our customers, the book of business they're seeing is robust. They have more demand than they're actually able to fulfill on right now. You can see it in all the indices and all the indicators. You also saw during the quarter, these supply chain backlogs and these inflationary pressures peaked in the quarter and continued persistently throughout the quarter. While they have this big book of business or they have existing ongoing projects, if you're on the AEC side and say you're on a fixed bid contract, you're gonna see margin pressure because your cost of goods to deliver the project that you're working on is going up, as is your cost of labor, and actually your labor pool is tight and constrained. You're seeing all these factors increase, pinching your margins, and it's affecting your buying behavior sometimes. Even in this environment, where we saw all of these forces, including the labor shortages and things associated with that, we actually continued to grow robustly, just not where we expected to. Now, if you're on the manufacturing side, which you notice we did in very well, and especially relative to our competitors, even there, they're not able to fulfill on all of the demand they have heading into their businesses. They're not collecting cash as fast because they're not shipping the products that they're getting orders from their customers. All of these things are playing out. It didn't stop people from buying technology, but it certainly slowed down some of the activity relative to our expectations around people buying and investing in their technology portfolio. Does that make sense? Yeah. That was really helpful. Maybe just as a quick follow-up, obviously, you know, at Investor Day, we talked about some changes around billing terms, and you referenced that a little bit earlier in the call. Just curious how kind of early reseller receptivity has been with customers, as you kind of explain to them the changes that are coming. Thanks again. Look, our moves with regards to changing billing terms and smoothing out our free cash flow trajectory over multiple years are unchanged by any of this. We believe those are right for the business. We believe it's right for our customers. Customers are generally positive around these things because they prefer annual billings for, in most cases. They don't wanna have to pay upfront if they don't have to. Also, you know, a lot of these things we've been talking about with regards to supply chain pressures are viewed as pretty transient by us. You know, these are not going to be persistent types of things. Customers view these fairly well. Our partners are getting themselves around some of these activities right now. Those plans are completely unchanged relative to anything we're seeing right now, and it's all full steam ahead on that transition. Great. Thanks again for the color. I appreciate it. Thank you. Thank you. Our next question comes from Jay Vleeschhouwer of Griffin Securities. Please go ahead. Yeah. Thank you. Good evening. Andrew, let me start with the circumstantial question, and that is, are there any operational changes that you foresee having to make? You just said that the circumstances are perhaps transitory, but in terms of, let's say, what you called your early warning system, your usage telemetry, anything along those lines, that you feel need to be updated, modified, amended in some way to at least take account of the current circumstances. To the point you made with regard to customers having a robust pipeline themselves, do you expect to be able to recoup at some point, or over time, the delta in the billings guidance that you've given now for fiscal 2022? Do you think that amount of billings can come back to Autodesk? A follow-up for you. Yeah. First off, let me comment on the tracking. We believe our tracking is good because it actually showed us the outcome as the quarter progressed. We saw the kneed over of the growth in month-over-month active usage and the associated impact there. It wasn't lifting the way we expected it to in the second half. In fact, like I said, the second derivative changed. It kneed over a little bit, right? These predictors, these tracking mechanisms we have, I think are still valid. They're powerful. They actually gave us indications of things that were going on. I think we're also, frankly, tracking the inflationary environment a bit more right now, trying to make sure what's happening with the goods and labor pool that our customers are engaging with. We're gonna be paying attention to that. There's hopeful signs out there that some of this is loosening up in some respects, but, you know, we're gonna be watching that. Now, with regards with some of the business coming back, it is absolutely possible that that's the case. All right? Our customers are definitely looking at a backlog of projects and a backlog of orders and all the things associated with that. I think it's prudent at this point for us to kind of, with the information we have right now, assume that we're just gonna see kind of an ongoing kind of impact to these things until something changes. It is possible that some of this could come back as a result of releasing pressure, okay? It's not, I don't think it's prudent right now to declare that. I think we should watch this because, you know, we were all kind of surprised by the pace at which these supply chain pressures put pressure on our customers. Right. Understood. Now, the longer term, looking past these circumstances, I'd like to ask you about something you said in your remarks at AU, last month. You said, quote, "Autodesk will fundamentally shift how the company delivers value," end quote. My question for that is, was that another way simply of referring to subscriptions, and consumption, and Flex? Were you referring to something else, besides just the licensing model, in terms of how you're thinking about delivering that fundamental value over time? Yeah, actually, Jay, that statement was not related to the business models. While the business models will help facilitate delivering some of that value, what we were really talking about was how the platform and the tools are going to become these co-designers with our customers. How we're gonna be driving much more facilitated action with our customers through our products. There's gonna be a lot more real-time data visibility, real-time option visibility, real-time collaboration between the system and the designer or the engineer. That's the major value driver change that we're talking about. It's not the business model changes per se. Those are enablers. They allow us to get some of this capability more effectively to a broader set of customers, which we're actually pretty happy about. It's that fundamental relationship with the product, this notion of co-designing with a computer, and with a system that's really going to change the way we deliver value. Understood. Thank you very much. Thank you. Thank you. Our next question comes from Gal Munda of Berenberg. Please go ahead. Hey, thank you for taking my question. The first one, I'd just like to kind of focus on the reduced free cash flow outlook in 2022 and then how that potentially translates in 2023. The way I read your or listened to your remarks was that FY 2023 risk, not the change in outlook, so the risk is kind of all to do with the FX rates rather than the impact that you're seeing on the lower billings for FY 2022. Is that correct to understand it that way? Or do you think there's a carry-on momentum from lower billings in FY 2022 based on supply chain shortage and all that stuff into free cash flow for 2023? Yeah. Gal, the answer is that it's a bit of a mix. Oh, go ahead, Andrew. Sorry. Okay. The answer is that it's a bit of a mix. The way to think about it, I highlighted risk of approximately $100 million-$200 million based on what we know today. Part of it relates to the subscription basis of our business model. Given that billings are falling short of our expectations for this year, we're flowing through that risk into the free cash flow that we're talking about next year. The other part of it is FX. It's roughly half and half. That's really helpful and very clear. Thank you. Just wanna really focus on the different drivers of that kind of changed outlook, especially for this year. You know, the long-term deferred revenue as a proportion of total deferred revenue is falling, kind of just below that mid, well, whatever we say mid-20s% in terms of like, let's say 23% is kind of towards the lower end of that. Is that something you'd expect in Q4 to kind of pick up towards the 25%? Do you think that the acceleration of the transition away from multi-year billings is also something that is really driving the outlook for the billings itself because the revenue numbers seem to be strong? Yeah. The way that we think about deferred revenue and the long-term contribution to deferred revenue being in roughly that mid-20s% is not gonna change. What we're seeing here is an impact from macro on our billings outlook for this year that we're then highlighting risk as we get into next year. The proportion of our business from multi-year contracts billed up front for this year and into next year is in line with our expectations. We've been monitoring the multi-year cohort this year, and even in Q3, it was quite strong. That's not something that's changing, and so the follow-on impact to deferred revenue is that that wouldn't change as well. We still would see roughly 20%, being that long-term deferred revenue. The multi-year billings contribution change didn't have any impact on the billings outlook change that you have? That's correct. Yes. Okay, perfect. Thank you so much. Thank you. Our next question comes from Matt Hedberg of RBC Capital Markets. Your question, please. Hey, thanks for taking my question. Debbie, maybe just a clarification for you. I think you noted in your script that you believe the fiscal 2020 to fiscal 2023 revenue CAGR will be at the lower end of that 16%-18% guide. If I do some quick math, does that imply fiscal 2023 revenue will grow about 17%, per your comment? Well, you are interpreting correctly that I said that if the risk materializes that we're seeing today in our numbers next year, we would be at the low end of the revenue CAGR of 16%-18% that we talked about at our Investor Day. While we're not providing specific guidance on revenue for next year, directionally, your math computes. Got it. Okay. Then maybe just one other. You know, I think we're all kind of looking at CRPO as a helpful metric, you know, to kind of judge the business as well. You know, and I know you don't guide to CRPO, but any sort of commentary on how that might trend into 4Q? Yeah. Let's start with Q3. The CRPO growth decelerated mainly because of declining contribution from multi-year EBA deals that closed in fiscal 2020, which are entering the final year of their term. That growth deceleration was in line with our expectations and is something that we signaled on our last earnings call. We anticipate over time that the growth rates for CRPO and revenue will gradually converge over time, but also that RPO growth rate is gonna continue to be influenced by the timing and volume of EBAs. Given that Q4 is a big EBA quarter for us, that's gonna have a big impact on the growth rate next quarter. Got it. Thanks very much. Thank you. Our next question comes from Phil Winslow of Credit Suisse. Please go ahead. Hey. Yeah, thanks for taking my question. You know, Andrew, just wanted to dig in a little bit on where you're seeing those changes in second derivative, particularly in the AEC side of the house. One of the things you talk about a lot is that Autodesk has solutions in different parts of the life cycle in the AEC world, you know, planning, actually putting you know the nail in the wood, et cetera. When you look at those second derivatives, you know, where did you see that in the life cycle, and how are you thinking about that in Q4? Yeah. Again, you know, I wanna make sure that we're clear on some of these things. The business was very strong, all right. That second derivative was a slowing down of the acceleration that we were expecting to see coming into the second half of the year. All right, it's a slowing down, it's not a decline, okay. I just wanna be super clear on that so that we can get all positioned on that. Now in terms of where we think this is gonna head out, we continue to think that these monthly active usage rates are gonna continue to grow, and that we're gonna continue to see increases associated with these things. We're just prudently assuming that what we saw in Q3 continues into Q4. Because based on what we wanted to see was like this uplift in monthly active usage at a higher rate than what we saw, it's probably a safe bet to just assume this is gonna coast into Q4. If something changes, if these pressures start to relieve and start to relax, we could absolutely see an improving environment. The business is strong. The renewal rates are strong. The underlying fundamentals of the business are strong. The net retention revenues rates are strong. The slowdown was rather broad brushed, except for the country-specific issues that we highlighted in China. There was no one product area that saw a slowing. I want you to note something pretty important here. Look at the competitive position that we came out of this year, particularly in manufacturing and other places. We're growing much more robustly than any of our competition in this space. It's just, we have high expectations, and we wanted to see some of those high expectations fulfilled. That's how we view this right now, and that's how we're viewing it heading into the rest of the year. Does that answer your question, or did you wanna clarify something? No, that's helpful. Thank you. Then also just help me drill in just in the markets by geography. I mean, obviously we have the reported numbers, but anything you'd sort of call out, you know, within that, whether it be by vertical, by geography, or how you're thinking about Q4, and then I'll go back in the queue. Thanks. Yeah. You know, the one thing I'll just highlight, let's say, you know, we talked about the softness in China. That was specifically in AEC. We actually did well in manufacturing in China, so the softness was not uniform in China across all of our businesses. In general, what we saw was a kind of a broad brush impact, okay? I couldn't point to one or two in any particular country that was kind of different or offset from anything else we were seeing. It was kind of a broader impact and kind of the slowing down of the acceleration that we saw. Great. All right, thanks. I'll go back in the queue. Thank you. Our next question comes from Joe Vruwink of Baird. Your question, please. Great. Hi, everyone. I'm curious, as the persona of customer that you think about as being kind of key to Autodesk new business growth, is that customer more susceptible to some of the macro issues you're calling out? You know, if I'm understanding all the detail right, the established base is growing nicely. There is moderation on the incremental growth. I suppose a question might be, are there risks of the latter starting to impact the former and starting to maybe trickle into the installed base at the same time? That's not what we're seeing. I mean, if that's what we were seeing, the net revenue retention rate trend that we saw during the quarter would've been different, okay? You know, I wanted to focus you back on, remember, we came in at the high end of our range on net revenue retention, and what that does is it shows a kind of strong affinity and willingness to keep upping their game with regards to our products and offering. That did not soften, okay? If anything, that's continuing to strengthen. That feels really good. It really was affecting the new book of business, which kind of bleeds into the long tail of our business at some points and at some levels, which is to be expected in environments like this. You know, those who are most cash flow constrained tend to slow their buying down the most. I don't see any bleed over potential. In fact, in a lot of our newer businesses, we saw robust growth associated with some of these things. I do not see a crossover or a bleed over between these things. In fact, we continue to expect continued strengthening of net revenue retention rates in the base. Okay, that's helpful. Then on the supply chain topic, this was addressed at the Investor Day as maybe being a risk area, but also an opportunity perhaps for technology adoption. Even recently, it seems like engineering firms are acknowledging that hiring support, bigger backlogs might be tough, but, you know, technology, again, could be an opportunity. I guess the question is, how do you think about the new seat contribution for your growth algorithm in the context of double digits being sustainable? Would you expect a bigger contribution from the application and content side of the growth model, and how to think about seats given the current macro backdrop? Yeah. We absolutely think that we continue to see digitization tailwinds here, okay? Customers are absolutely turning to technology to wrestle with some of these problems and solve some of these things. If you look at the strategy around double-digit growth and where we're going, you see a lot of things working. First off, let's just pause, and I don't wanna say this too many times, but you know, the business is doing strong, and that's setting a floor on some of our growth. Also, I wanted you to notice some of the things that happened with non-compliant revenue. We grew 50% year-over-year, reflecting the compare to kind of the slowdown we did in the COVID year, in the 2020 and around the pandemic. We normalized to kind of like a 20% growth over the two-year period, which shows nice, steady growth in some of these things. You look at the business, you see a lot of things working really well. If you look at the long-term trends that are gonna contribute and be additive in terms of driving the double-digit growth, the digitization's there. The tailwinds continue. Customers are telling us more and more they wanna go deeper, deeper in digitization. We're seeing strong adoption, like for instance, in construction with our largest EBA customers and some of our largest GCs. We're seeing strong adoption of Construction Cloud. We're integrating Construction Cloud more deeply into some of these relationships. If you look at some of the incremental drivers we were talking about with regards to business model capabilities and some of the things associated with this, we're continuing to see strong growth there in terms of new types of subscription models, non-compliant users. When we talk about the long tail, while it's really early days with the Flex model, and I wanna make sure that we all understand it's early days with the Flex model, one of the things we're seeing with Flex is exactly what we expected to see. We're seeing a large percent of Flex business coming in as net new. Another chunk of Flex business coming in as these occasional usage buyers, people that classically bought network licenses previously. Another chunk of business were people trying and using more advanced products and products they weren't going to use previously. Those trends are exactly the kind of trends we wanna see with offerings like this. As time goes on, and we get more experience with Flex, we expect those trends to continue. All of the things that we're pursuing to drive double-digit growth are working right now, and that's what gives us confidence as we move forward into the FY 2023, 2024, and 2025 and beyond, is that everything we're doing right now is working. If something was showing softness or not working, then I wouldn't have the confidence I have right now. Everything is working in terms of the things we're pursuing. These transient impacts that we're seeing right now, they're obvious, they're systemic. Everybody's seeing them. You can measure them systematically in terms of what's going on and out there. These will pass. The question is when will they pass? Great. Thank you very much. Thank you. Our next question comes from Sterling Auty of JP Morgan. Your question, please. Yeah, thanks. Hi, guys. Andrew, if you put yourself in the seat of the investor, we're all seeing the headlines of the supply chain constraints, et cetera. What, if you were an investor, would you be looking at to help us monitor to possibly get a handle on when some of these pressures are alleviating, and your business is starting to inflect upward again? Yeah. Okay. You're asking me to kind of be the predictor of when some of these supply chain pressures are gonna unwind. Look, I'll tell you what we're looking at- No. I'm not asking for a time. I'm asking for what are some of the, you know, the data points that would signal that. Okay. It's getting better all the time? Look, one of the data points we look at is the cost of freight, okay? For instance, the cost of freight has been going up and up and up as you've been seeing this capacity compaction with regards to moving things. You know, that's one metric you just sit there and look at and say, "Hey, if the cost of freight goes down, that's a sign that flow through and throughput is starting to soften up." Okay? That's one thing that's out there. Another thing is some of the costs of the core commodities that our customers. I mean, let's face it, wood, okay? I mean, I know that sounds trivial, but the cost of wood in some of our AECs, it's a big deal, right? If your cost of wood or wood-based materials goes up 20%, 30%, 40% on a fixed bid contract, what is that doing to your ability to execute? You look at cost of freight, you look at cost of wood, and the things associated with that, and those have direct impact. The cost of any commodity going into manufacturing is going to have impacts. The last thing that I think is really interesting with regards to manufacturing is some of these chip shipments starting to loosen up and allowing people to kind of finish their machines and make sure all the electronics are actually assembled and together. These are some of the things that all of us can look at to see how things are going, the cost of freight being right up there, the cost of wood and commodities associated with building things being out in front. We're gonna continue to look at the monthly active usage, because for us, that's a predictor of people doing more with the products, and that will probably follow some of these other indicators changing. Does that make sense, Sterling? It does. Thank you. You're welcome. Thank you. At this time, I'd like to turn the call back over to Simon Mays-Smith for closing remarks. Sir? Simon will close in a minute, as soon as his mute button works properly here. Sorry, I was muted. I apologize. I'll repeat myself. Thanks. Thank you, Latif. Thanks, everyone, for attending. We'll look forward to catching up with you next quarter. If you have any follow-up questions, please do ping the IR team. In the meantime, have a very happy Thanksgiving and happy holidays.