Thank you for standing by, and welcome to Autodesk Q1 Fiscal 2024 Earnings Conference Call. At this time, all participants are on 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 one on your telephone. I would now like to hand the call over to Simon Mays-Smith, VP, Investor Relations. Please go ahead. Thanks, operator. Good afternoon. Thank you for joining our conference call to discuss the Q1 results of Autodesk Fiscal 2024. On the line with me are Andrew Anagnost, our CEO, and Debbie Clifford, our CFO. 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 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 and the Form 8-K filed with today's press release, for important risks and other factors 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 several numeric or growth changes as we discuss our financial performance. Unless otherwise noted, each such reference represents a YoY comparison. All non-GAAP numbers referenced in today's call are reconciled in our press release or 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. Autodesk's strong financial and competitive performance in the Q1 of fiscal 2024 is again a testament to three enduring strengths: resilience, discipline, and opportunity. In a more challenging macroeconomic policy and geopolitical environment, our resilient business model and geographic, product, and customer diversification enabled us to deliver 12% revenue growth in constant currency, healthy margins, and record Q1 free cash flow. Leading indicators remained consistent with last quarter, with product usage growing modestly, bid activity on BuildingConnected again at record levels, and continued cautious optimism from channel partners. Consistent with YoY economic momentum, we saw new subscription growth decelerate in North America and accelerate in EMEA. Our customers remain committed to transformation and to Autodesk, leveraging automation more as they see headwinds from the economy and supply chain. That commitment is reflected in larger, broader, and more strategic partnerships, improving renewal rates, consistent net revenue retention, and growing adoption and usage of our products within EBAs, all of which helped drive 12% growth in Current RPO and 15% growth in Total RPO. While macroeconomics are unpredictable in the short term, we are executing our strategy through the economic cycle with disciplined and focused capital deployment, underpinned by one of the best growth, margin, and balance sheet profiles in the industry. This enables Autodesk to remain well invested to realize the significant benefits of its strategy while mitigating the risk of having to make expensive catch-up investments later. Discipline and focus also mean making sure we are investing in the right places. This is a constant process of optimization and improvement, with increased vigilance during periods of macroeconomic uncertainty to prioritize investment and recruitment. As you heard at our recent Investor Day, we are deploying next-generation technology and services and end-to-end digital transformation within and between the industries we serve, and in so doing, shifting Autodesk from product to capabilities. Our AEC Industry Cloud Forma, launched on May eighth, is a great example of our vision. During pre-release trials, customers like CUBE 3 clearly saw how Autodesk Forma's intuitive user interface enabled rapid adoption by existing and new users, how bi-directional data flows enhanced the value of other Autodesk products like Revit, and how a single integrated environment in the cloud, enhanced by AI, accelerated modeling and response times while significantly enhancing the value delivered to its customers. While using Forma during its trial, CUBE 3 delivered more creative and valuable designs to its customers while reducing the concept design phase by 50% or more. At Investor Day, I also talked about leveraging our key growth enablers, including business model evolution, customer experience evolution, and convergence between industries, to provide more and better choices for our customers. Our Flex consumption model is a good example of this. Flex's consumption pricing means existing and new customers can try new products with less friction and also enables Autodesk to better serve infrequent users. Not surprisingly, the lion's share of the business has come from new customers or existing customers expanding their relationship with Autodesk. As Steve said at our Investor Day, we've also introduced a new transaction model for Flex, which will give Autodesk a more direct relationship with our customers and more closely integrate with our channel partners over time. During the quarter, Flex moved up to the top 10 products on our eStore, and we signed our first million-dollar Flex deal. Autodesk remains relentlessly curious for the propensity and desire to evolve and innovate. Our transformation from product to capabilities will enable us to forge broader, trusted, and more durable partnerships with our customers, gives Autodesk a longer runway of growth and free cash flow generation, and enables a better world designed and built for all. I will now 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 update you on our strategic growth initiatives. Thanks, Andrew. Amidst the more challenging macroeconomic environment and ongoing headwinds from currency in Russia, Q1 was strong. The overall momentum of the business was similar to last quarter, with new subscriber growth decelerating a bit and renewal rates improving a bit QoQ, such that current remaining performance obligation growth was the same as last quarter. Strong renewal rates demonstrate existing customers are committed to and investing in their long-term strategic partnerships with Autodesk. Some customers are also elevating their relationships with Autodesk from subsidiaries to company-wide. When this happens, it can sometimes cause quarterly timing differences for the renewal, as multiple contracts are co-termed to a single renewal date. We saw an instance of that in Q1. As a result, some of the upfront revenue we expected to hit in Q1, we now expect later in the year. Q1 revenue would have been toward the top end of our guidance range, if adjusted for this upfront revenue. Total revenue grew 8% and 12% in constant currency. By product and constant currency, AutoCAD and AutoCAD LT revenue grew 10%, AEC revenue grew 11%, manufacturing revenue grew 13%, and M&E revenue grew 9%. By region and constant currency, revenue grew 14% in the Americas, 11% in EMEA, and 8% in APAC. Direct revenue increased 15% in constant currency and represented 35% of total revenue, up one percentage point from last year due to strength in both enterprise and e-commerce. Net revenue retention rate remained the same as last quarter and within 100%-110% at constant exchange rates. As we flagged in our annual guidance given last quarter, our transition from upfront to annual billings for multi-year contracts impacts our billings growth this year. That transition started on March 28th, so we had about one month of headwind in the Q1. Billings increased 4% to $1.2 billion, primarily reflecting growing renewal rates and early renewals, partly offset by about one month of annual billings for most multi-year contracts. Total deferred revenue increased 20% to $4.5 billion. Total RPO of $5.4 billion and Current RPO of $3.5 billion grew 15% and 12%, respectively. Turning to the P&L, non-GAAP gross margin remained broadly level at 92%, while non-GAAP operating margin decreased by two percentage points to approximately 32%. This reflects ongoing cost discipline, including the expected Q1 cost of repurposing approximately 250 roles to invest in our strategic priorities, as well as the impact of exchange rate movements. GAAP operating margin decreased by 1 percentage point to approximately 17% for the same reasons. Free cash flow was $714 million in the Q1, up 69% YoY. In addition to the underlying momentum of the business, there were three factors that provided a tailwind in the Q1. First, cash collections from the last month of billings in fiscal 2023 were strong. Second, we saw favorable linearity and early renewals in the Q1, driven by the end of our multi-year build-up front program. Third, after the winter storms in California, we received a federal tax payment extension to the Q3. Turning to capital allocation, we continue to actively manage capital within our framework. Our strategy is underpinned by disciplined and focused capital deployment through the economic cycle. As Andrew said, we are being vigilant during this period of macroeconomic uncertainty, paying close attention to attrition and recruitment rates and the increased upward pressure on costs from a weakening dollar. We will continue to offset dilution from our stock-based compensation program and to opportunistically accelerate repurchases when it makes sense to do so. During Q1, we purchased 2.7 million shares for $534 million at an average price of approximately $199 per share, reducing total shares outstanding by about 3 million shares. Let me finish with guidance. The overall headlines are, the expectations embedded in our guidance range for the full year remain consistent with the underlying momentum in the business, and we expect a tailwind in the second half of the year from a strong cohort of enterprise business agreements. These EBAs last renewed three years ago at the start of the pandemic, and subsequent adoption and usage has been strong. Let me summarize some key factors we highlighted last quarter. First, foreign exchange movements will be a headwind to revenue growth and margins in fiscal 2024. Revenue headwinds from Russia and FX peak in the first half of the year. Margin headwinds from FX will persist throughout the year. Second, switching from upfront to annual billings for most multi-year customers creates a significant headwind for free cash flow in fiscal 2024, and a smaller headwind in fiscal 2025. Given this transition started on March 28, this will become more apparent from the Q2 onward. Our expectations for the billings transition are unchanged. Third, it's possible that during the transition to multi-year contracts billed annually, some customers may choose annual contracts instead. We haven't seen much evidence of this in the limited time since the annual billings program started on March 28, but it's early days, and we'll keep you updated as the year progresses. All else equal, if this were to occur, it would proportionately reduce the unbilled portion of our total remaining performance obligations and would negatively impact Total RPO growth rates. Deferred revenue, billings, current remaining performance obligations, revenue, margins, and free cash flow would remain broadly unchanged in this scenario. Annual renewals create more opportunities for us to drive adoption and upsell, but are without the price lock embedded in multi-year contracts. We still expect our cash tax rate will return to a more normalized level of approximately 31% of GAAP profit before tax in fiscal 2024, up from 25% in fiscal 2023, for the reasons we outlined last quarter. As I mentioned earlier, a federal tax payment extension after the winter storms in California means cash tax payments will shift from the first half of the year to the Q3, reducing Q3 free cash flow. The tax payment extension will change the first half, second half free cash flow linearity a little bit, but we still think we'll generate roughly half of our free cash flow in the second half of the year, with second half free cash flow generation significantly weighted to the Q4. We still anticipate fiscal 2024 to be the free cash flow trough during our transition from upfront to annual billings for multi-year contracts. Putting that all together, we still expect fiscal 2024 revenues to be between $5.36 billion and $5.46 billion, up about 8% at the midpoint, or about 13% at constant exchange rates and excluding the impact from Russia. Normal seasonality, peak Q2 currency and Russia headwinds, and as I mentioned earlier, a strong second half pipeline of enterprise agreements last renewed three years ago in the immediate aftermath of the onset of the pandemic, mean that we expect reported revenue growth to accelerate in the second half of the year. We expect non-GAAP operating margins to be similar to fiscal 2023 levels, with constant currency margin improvement offset by FX headwinds. As I said earlier, in a more challenging macroeconomic environment, we are being vigilant and proactive to sustain our margins. We expect free cash flow to be between $1.15 billion and $1.25 billion. The midpoint of that range, $1.2 billion, implies a 41% reduction in free cash flow compared to fiscal 2023, primarily due to the shift to annual billings, a smaller multi-year cohort, FX, and our cash tax rate. The slide deck on our website has more details on modeling assumptions for Q2 and full year fiscal 2024. We continue to manage our business using a Rule of 40 framework, with a goal of reaching 45% or more over time. We think this balance between compounding growth and strong free cash flow margins, captured in the Rule of 40 framework, is the hallmark of the most valuable companies in the world. We intend to remain one of them. As we said last quarter, the rate of improvement will obviously be somewhat determined by the macroeconomic backdrop. Let me be clear, we're managing the business to this metric and feel it strikes the right balance between driving top-line growth and delivering on disciplined profit and cash flow growth. We intend to make meaningful steps over time toward achieving our 45% or more goal, regardless of the macroeconomic backdrop. Andrew, back to you. Thank you, Debbie. Let me finish by updating you on our progress in the Q1. Our strategy is to transform the industries we serve with end-to-end cloud-based solutions that drive efficiency and sustainability for our customers. We continue to see good growth in AEC, fueled by customers consolidating on our solutions to connect previously siloed workflows in the cloud. HNTB, an employee-owned infrastructure solutions firm that serves public and private owners and contractors, expanded its EBA with Autodesk to help achieve its goal around design modernization, digital transformation, and digital infrastructure solutions. The ability provided by our EBA means that HNTB can easily consolidate more workflows to Autodesk. For example, in addition to adopting and integrating Autodesk Build and Innovyze, HNTB has been prototyping Autodesk Immersive Collaboration Platform. By leveraging VR collaboration, it has been able to help transportation agencies like Florida's Turnpike Enterprise use digital twins to train facility management and first responder teams on real-life scenarios from the safety of their offices instead of on busy interstate highways. HNTB sees the potential of further applications in its work on complex bridges and tunnels, as well as its work with airports and state departments of transportation across the country. In construction, we continue to benefit from our complete end-to-end solutions, which encompass design, pre-construction, and field execution through handover and into operations. DPR is among the top 10 largest general contractors and construction management firms in the U.S. and specializes in technically complex and sustainable projects. In the Q1, DPR expanded and extended its partnership with Autodesk and unified on Autodesk Construction Cloud, our construction platform that connects stakeholders throughout the project life cycle. In moving away from point solutions and onto Autodesk Common Data Environment and Cloud, DPR aims to connect all workflows, centralize communications, and improve project management and operations across the office and job site. We continue to see significant opportunities to grow our construction platform outside the U.S., benefiting from our strong international presence and reputation. In Singapore, Autodesk Build was selected over three competitive offerings as the construction management platform for what will be Singapore's tallest skyscraper. When awarding the contract to our partner, China Harbour, the project owners chose Autodesk Build because it connected the design and make processes in the cloud, centralized project schedules, and generated automated clash reports to reduce risk during construction. Of course, these stories have a common theme, managing across the project life cycle to increase efficiency and sustainability while decreasing risk, and this means our customers are renewing and expanding their relationships with us. Over time, we expect the majority of all projects to be managed this way, and we're getting ready today to scale to serve that demand. Jim talked at our Investor Day about how product innovation, go-to-market expansion, and customer success are helping us get ready. In the Q1, we took another important step by integrating our construction sales force into our worldwide sales team. While integrations of this scale inevitably cause some short-term disruption, combining the two teams will allow us to expand the scale and reach of our construction business, particularly in our design customer base, and our ability to serve our customers across the project life cycle. Moving on to manufacturing. We made excellent progress on our strategic initiatives. Customers continue to invest in their digital transformations and consolidate on our design and make platform to grow their business and make it more resilient. For example, Rittal is a leading manufacturer of electrical enclosure systems. It uses Inventor, Vault, and Moldflow to optimize and manage its product manufacturing to produce thousands of customized and configured switch cabinets daily. Rittal is focused on maximizing internal automation to accelerate its speed to market and respond more nimbly to changes in demand. In Q1, it increased its EBA with Autodesk to include Fusion to serve as its central data management system, build a more resilient supply chain, and drive competitive advantage through quicker turnaround times. Using Fusion, Rittal will be able to automatically route online customer orders through its engineers and integrated product line and make deliveries in as little as one or two days. In the U.K., a precision engineering firm was looking to update its CAM workflow to increase engineering efficiency and optimize costs. After a competitive evaluation, the customer migrated from its existing provider to Fusion with the Machining Extension because of its Fusion's intuitive UI, cloud capabilities, and simple integrations with its existing software and machines. Realizing the opportunity to drive breakthrough efficiency by consolidating all workflows on a single design and make platform, the customer is now also evaluating the migration of its CAD workflows from a competitor to Fusion. Fusion continues to grow strongly, ending the quarter with 231,000 subscribers. As more customers connect more workflows in the cloud to drive efficiency, sustainability, and resilience. In partner with higher education providers across the globe, we continue to invest in the workforce of the future. We recently partnered with the Tamil Nadu Skill Development Corporation and Anna University in India to integrate Fusion into its 20 mandatory product engineering courses and launched the Fusion Design Challenge to showcase the skills of 20,000 students. Fusion's intuitive UI and cloud-based data management make it easy for students to learn and collaborate on class projects. Autodesk is also investing in a new technology engagement center at California State University, Northridge, that will promote interdisciplinary collaboration in engineering and computer academic programs, and house the Global Hispanic Serving Institution Equity Innovation Hub, which aims to build a more diverse and inclusive engineering workforce. Finally, we continue to work with non-compliant users to ensure that they are using the latest and most secure versions of our software. In the Q1, we made substantial progress on two initiatives we outlined at Investor Day. Further hardening our systems by significantly tightening concurrent usage of named user subscriptions, and significantly expanding the precision and reach of our in-project product messaging. We expect both initiatives to drive further conversion and growth in the second half of the year and beyond. Let me finish where I started. Autodesk remains relentlessly curious, with a propensity and desire to evolve and innovate. With our AI-infused industry clouds, Fusion, Forma, and Flow, scaled on Autodesk Platform Services, our customers will be able to leverage their large, domain-specific inter- and intra-industry data sets to deliver further breakthrough productivity, operations, and sustainability gains. With intuitive UIs and the application of multimodal AI models that move beyond language models to capture sketches and reality directly into accurate 3D models, we will be able to accelerate the transition from products to capabilities that I talked about at our recent Investor Day. Our transformation from product to capabilities will enable us to forge broader, trusted, and more durable partnerships with our customers, give Autodesk a longer runway of growth and free cash flow generation, and enable a better world designed and built for all. Operator, we would now like to open the call up for questions. As a reminder, to ask a question, you will need to press star one one on your telephone. Again, that's star one one on your telephone to ask a question. Please stand by while we compile the Q&A roster. Our first question comes from the line of Saket Kalia of Barclays. Your question please, Saket. Okay, great. Hey, Andrew. Hey, Debbie, how are you doing? Thanks for taking my questions here. Andrew, maybe just for you, appreciate the macro commentary. Very helpful. You know, I think we all try to speak to, you know, at least a subset of your partners through the quarter, and frankly, through the quarter, some of those checks, albeit limited, were mixed or soft, right? Of course, reflecting the macro. Maybe the question that I have for you is, I was wondering if you saw that as well, and if you did, whether some of those trends have maybe continued here, you know, through the Q2. Saket. Good to see you, by the way. Good to talk to you. Yeah, let me tell you what we saw as consistent with what people heard from the partners. Whenever we have a large event, like ending multi-year, what happens is partners and teams tend to pack up deals into that event. They even pull pipeline forward to try to get it into the event so that they can kind of close their deal, get things trued up around the event. This happens every time consistently when we have an event like this. It's one of the reasons why we try to align these events with quarter end, so we don't have conversations like this. If that was the case, what you would have expected is that business will rebound to kind of expected levels post the end of the quarter, which is exactly what happened. It's exactly what we're seeing at the beginning of the quarter. This is rounded, and we're back to what we would expect to see on this. If you want to add anything about the macro environment that we haven't said already or anything, any commentary that might help understand how the quarter progressed? Sure. Overall, our leading indicators remain broadly the same as what we saw last quarter. We saw usage grow modestly. We saw record bid activity on BuildingConnected. We continue to see cautious optimism from our channel partners. New subscriber growth decelerated a bit QoQ, but renewal rates improved. Also, like last quarter, Europe was a bit better, the U.S. was a bit worse, Asia was about the same. Net-net, the overall momentum of the business was somewhat similar to what we saw last quarter with some puts and takes. It's all in line with the guidance expectations for the year, and it's consistent with macro trends. Current RPO growth is a good forward indicator for you. It was the same as last quarter at 12% growth. As we've said before, the business is going to grow faster in better environments and slower in more uncertain environments, but our goal continues to be to set ourselves up for success in fiscal 2024 and beyond. Got it. Got it. That's really helpful, Debbie. Debbie, maybe for my follow-up for you. great to see the cash flow strength this quarter, well ahead of what we were expecting. I was just wondering if you could just zoom into what drove that, and maybe just looking forward, how you're sort of thinking about the shape of cash flow this year, particularly where we trough here in fiscal 2024. Does that make sense? Yeah. Q1 free cash flow was strong for a couple of reasons. First, cash collections from the last month of billings in fiscal 2023 were strong. Second, we also saw favorable linearity and early renewals in Q1, that were driven by the end of multi-year build upfront. Third, as I mentioned on the call, after the winter storms in California, we received a federal tax payment extension for the Q3. Our overall expectations for free cash flow on the year, including linearity, are unchanged. We still expect that we're going to generate about half of our free cash flow in the second half of the year, with heavier weighting to Q4. Some of the factors to think about, across Q2, Q3, and Q4, we have the full quarter impact from the switch to annual billings. In Q2, remember that we had some early renewal billings that were pulled into Q1, with that tax payment extension to Q3, that has a positive impact to free cash flow in Q1 and Q2, but a negative offset in Q3. Overall, I just would reiterate that our expectations are unchanged and that we expect to generate about half of that free cash flow in the second half of the year. Got it. Very helpful, guys. Thank you. Thank you. Our next question comes from the line of Jay Vleeschhouwer of Griffin Securities. Your question, please, Jay. Thank you. Good evening. Andrew, you referenced the effect on channel behavior in the quarter as a result of the billing change. More broadly, there are some other evolutions that your sales model is going through, affecting not just the VARs, but also the VADs. I'm wondering how you're thinking about the operational or execution risks associated with that evolution, which certainly goes beyond Q1 in terms of perhaps either demand generation, fulfillment, of which you'll be doing more of on your own, perhaps the elements of channel comp as they change with the back end change. Maybe just let's talk about some of those ongoing executables that you need to get right. These are the sales model. I'll ask my follow-up. Yeah, Jay, you know, that's a great question. One of the things that I'll say, like, first up front is, you know, why are we exploring some of these things? It's a great example of what we're doing with Flex in particular. We're doing these things because our customers get a much more instant-on, self-service-like experience, kind of more like an eStore experience from all their transactions, but they also get the added bonus of support that's local and connected to them through their VARs. They get service and other types of supports from their VARs locally. It also allows us to really get a lot of visibility about what their usage patterns are, how they're using the product, and then also share that visibility with our partners and other people so that we can understand these customers better. There's lots of great things about it. More importantly, rolling out kind of changes like that and exploring these kinds of new models on something like Flex, which is, you know, a lower volume offering right now, though doing quite well, gives us a lot of opportunity to learn a lot of things and work through a lot of things. You know, Debbie, why don't you talk specifically about some of the things that we've been learning from Flex as we've been working through all of these new transaction models? Sure. As Andrew mentioned, we launched this Flex agency model in Q1. We have learned a lot. Some of the things that we've been learning are things like the importance of driving a seamless vendor setup process. These are situations where customers will have to set up Autodesk as a vendor as opposed to a partner. We're getting insights and learnings by having access to more data, and we're able to better forecast with having that access to better data. Like Andrew mentioned, as with anything in this area, we're focused on testing and learning as we go. We wanna make sure that we have scalable processes for all stakeholders in the ecosystem, and we'll continue to keep doing that. Okay. As a follow-up, Debbie, at the meeting two months ago, in your slide with regard to double-digit growth or what you call sustainable double-digit growth, you had eight different line items, referring to volume as component of your growth. When you look out over the balance of the year, what do you think might be, of those, perhaps the two or three most important, volume drivers to the business? That's an excellent question, Jay. I mean, the view that I talked about from Investor Day hasn't changed much. Granted, our Investor Day wasn't very long ago, so that's a good thing. We're gonna be looking to continue to drive volume from all the different areas or growth vectors that we have. Things like our investments in AEC, the proliferation of BIM, expansion in infrastructure, driving more growth from construction. I think what was interesting for us this quarter was really seeing continued strengthening of our renewal rates, because ultimately, with higher renewal rates, that becomes a net volume driver for us. That really goes down to the investments that we've been making in our customer success teams, who are really doing an excellent job of driving those renewal rates up, driving success with our customers, because that's a really important part of keeping the volume engine going at Autodesk. Those are some initial thoughts, Jay. Okay, great. Thank you both. Thank you, Jay. Thank you. Our next question comes from the line of Adam Borg of Stifel. Your line is open, Adam. Great, thanks so much for taking the questions. For you, Andrew, I know at Analyst Day, you talked a lot about the broadening opportunity around serving the owner market and not just in conceptual design, but during operation. I know it's still early in this journey. You could share with us how that message is resonating and as you look to expand into AEC and now obviously R. Yeah. The way the vector that we have into that space right now is through Tandem. The best way to talk about that is, you know, the increase in people using and/or modeling assets in Tandem and the monthly active usage rates that are going associated with that. We're starting to see very nice pickup with that. We're engaging with a series of owner-level customers on direct collaborations in terms of how Tandem serves some of their needs, where it has development requirements to serve some additional needs. We've got a lot of really good customer engagement, which is exactly where you'd expect to be at this point in the process. We're really happy with the progress here, and we're happy with the level of engagement with Tandem. Tandem is getting a lot of visibility, a lot of interest, and a lot of focus with owners, but also with people that serve owners that want digital twins and things associated with digital twins from, say, other types of vendors. That's really helpful. Thanks for that. Maybe, Debbie, as a quick follow-up, I think you've mentioned in the script about repurposing 250 roles in the quarter. Maybe you can provide a little bit more detail there. Thanks again. Sure. Uncertainty really just is the new normal. I think we're all living this. Since we last reported earnings, we've seen a bunch of stuff happen. There was a major regional bank crisis. We're seeing deadlock discussions about the debt ceiling in Congress. The Fed, just a few weeks ago, acknowledged that those things could have an impact on the economy, but said they didn't know how. We're in the same boat. It's very important to us to deliver on our margin goal. It's against that backdrop that we're taking a prudent approach to how we manage the business. That means tightening the belt a bit. In Q1, we did some repurposing of roles to allow us to reinvest, and in Q2 and onwards, we've proactively taken steps to slow the pace of our hiring to ensure that we don't get ahead of ourselves on spend in light of this continued macro uncertainty. We think that slowing spending earlier in the year provides more investment flexibility versus trying to slow spending later in the year. Our goal continues to be to set ourselves up for success in fiscal 24 in the long term. Excellent. Thanks again. Thank you. Our next question comes from the line of Joe Vruwink of Baird. Your question, please, Joe. Great. Hi, everyone. Maybe just a bit of clarification on near-term performance and reconciling. The comment, I think leading indicators around product usage, that's fairly consistent, but then the new sub growth decelerating in the Americas, I guess, normally, I think the leading indicators kind of predict that. Was this something around new subs that just kind of popped up in the quarter? No, it was consistent with what we were seeing in our monthly active user trends. That's how the monthly active user trends are so good at predictive behavior. We kind of expected a slight decrease in velocity in the Americas and more of an increase in Europe. It's consistent with the indicators we see, and it's consistent with the indicators moving forward as well. Okay, great, thanks for that. Just, I guess I get the AI question. Just in terms of capabilities that already exist on the platform, thinking about things like Spacemaker or the generative extension on Fusion, have you started to see kind of an uplift in interest just as more industries are studying adoption around AI? Is there anything you've seen to this point, you know, maybe specifically around video media content, where you start thinking about maybe changing product roadmaps or all just based on kind of the pace of innovation that's coming out? Yeah. Let's First, let's be very clear. We've been talking about AI for a long time, all right? We've been building machine learning models into our applications for a while now. There's already significant velocity inside of Autodesk on this issue. What changed is ChatGPT created a version of AI that everybody understood. We're all now having a common conversation about what AI can and cannot do and how it functions as an assistant or a co-creator in these processes. Make no bones about it, we've been working on these things for a while. This isn't a course and speed change for us, and I want to be super clear about that. Like I said, we've things in Construction IQ. Spacemaker is no longer a product anymore. It's Forma now, which we rolled out, which even has more enhanced underpinnings associated with machine learning. You probably, if you follow what we do in our AI lab, we've published a lot of work on kind of fairly advanced things around large models and things that you can do with creating 3D models and representations using machine learning. We've been out there with this for a while. What it does allow us to do is have a very meaningful conversation with our customers about, "Look, we've been telling you that this was going to be a co-creation technology. Take a look at what you're seeing out there with, you know, the large language models and the things that you're getting from OpenAI, and see how this kind of can be evolved to creating 3D building information models, more complex models, complex designs, sustainability decisions, optionality, all the things associated, and some of the things you're seeing inside of Forma. Customers now get it. They kinda get the connection between what we're doing and what we said it was going to do in the future, because there's an example here that everybody understands, and I think that's super powerful. It's current course and speed for us. We're gonna be probably speeding up a little bit on some of our work with more larger and complex models, but this is something we've been doing for a while. Okay. thank you, Andrew. Thank you. Our next question comes from the line of Michael Funk of Bank of America. Your line is open, Michael. Yeah, thank you for the questions. Debbie, you know, you mentioned you highlighted the slowing sub growth and usage has been strong. Can you help me understand the relationship, if any, between those two? you know, is the sub growth simply a factor of, you know, customers tightening their belts more due to the uncertain macro that you've highlighted a few times, or is there something else behind that? Yeah, thanks. The biggest factor driving the sub growth that we saw in Q1 was actually the end of sale of the multi-year upfront contracts. Andrew mentioned it at the top of this Q&A session, but remember that the demand pattern that we saw during the quarter was impacted by that end of sale. Before the launch, we saw higher volume, and then post-launch, demand was lighter. That's typical of what we see when we launch programs like this to the market. What it meant was that on a net basis, the new piece of our business decelerated as we headed out of the quarter. Andrew also mentioned that over the last several weeks in May, we've seen that demand bounce back a bit, and it's generally in line with our expectations at this point. Okay, great. Then one more. Debbie, you also mentioned, you know, tailwind in second half, one being the EBA renewal pattern, adoption, and usage has been strong there, I think you noted. Can you give us some more detail just on the moving pieces around the EBA renewals? You know, is it, you know, contract changes, pricing changes? You know, what will be driving that tailwind in the second half of the year around the renewals? Sure. Maybe I'll just take a step back and talk about revenue linearity overall, then double-click a bit into EBAs. To recap, we're expecting revenue growth deceleration in Q2, followed by growth acceleration in the back half of the year. That's consistent with historical seasonal patterns for Autodesk, and it was built into our annual guidance from the start. When we look at things by quarter in Q2, we have the peak of FX and Russia, and their drag on revenue growth. In the second half, the negative impact from exiting Russia goes away, and that drag from FX reduces as the year progresses. Then we have that big cohort of EBAs, particularly in Q4. Those are deals that renewed three years ago at the beginning of the pandemic, where subsequent adoption and usage have been strong. It's that deal flow that drives that seasonal growth acceleration, primarily in Q4. You can go back and look at our opening commentary back in fiscal 2021 for Q4, where we talked a bit about those deals. They tended to be in the auto space. We're anticipating that those deals will come through, and we think the fact that they've had good adoption and usage is a good indicator that we're going to see that behavior happen in Q4 as expected. Overall, I mean, our business, the momentum is pretty consistent with what we've seen for a while here now. The assumptions that we have embedded in our guidance reflect what we've been seeing for a while, and we remain on track to achieve our full-year financial goals. I can't reiterate enough that we continue to try and set ourselves up for success in fiscal 2024 and beyond. Great. Thank you for the questions. Thank you. Our next question comes on the line of Matt Hedberg of RBC. Your line is open, Matt. Great, thanks for taking my questions, guys. Andrew, in your prepared remarks, you talked a lot about AEC and obviously construction. You know, this is an area, obviously, as we all know, that's been sort of a lagger to adopt SaaS and cloud. Can you talk about sort of where we're at in this evolution? You know, the pandemic is behind us now, I think. But like, you know, are you starting to see, you know, some of these, you know, field workers, some of the folks that are sort of like behind the scenes on construction, starting to sort of embrace the technology more so? Is it a generational thing? Just any sort of like, incremental sort of catalyst for further construction cloud adoption? Yeah, it's a good question, the way you phrase that around incremental catalysts. I think actually the rising adoption is becoming its own catalyst in many respects. I mean, you know, obviously we're continuing to see good growth in construction. We're seeing solid adoption. We're seeing really significant adoption in our EBA accounts. You know, adoption tends to lead to more adoption because the people who adopt these technologies and start using these technologies on a regular basis tend to have higher bid precision, higher bid accuracy, tend to be able to execute more effectively during the project, manage costs better, and all the things associated with that. That's a flywheel effect, because if you're better able to manage the cost of the project, you're better able to estimate the next project, bid on that project, and win in an envelope that preserves your margins. That is kind of the biggest thing that's going on right now out there in the industry, is the flywheel effect. There's no kind of generational catalyst that's yet coming in here, I will tell you there's one other thing that's persistently out there that's driving people to look towards technology, it's they can't hire people. All right? More and more, they are not able to fully staff their sites and their jobs to the level that they were in the past. They need these productivity gains from technology. It's between that and the flywheel of competition, there's kind of a momentum here that I don't see slowing down. Super insightful. No, that's great. Thanks again for the time tonight, guys. Thank you. Our next question comes from the line of Tyler Radke of Citi. Please go ahead, Tyler. Yes, thanks for taking the question. Just a couple questions on the indicators that you saw in the quarter. Andrew, you talked about bid activity at record levels in BuildingConnected. I guess, should we be thinking about that as a sign of, you know, health in the end markets, or more of a function of BuildingConnected, you know, strong competitive position and digitization tailwinds? Just curious if you could talk about the slowdown in new subscriptions or deceleration that you saw, was that more on the AEC side or any, you know, end market or, you know, way to segment where you saw that? Okay. Let me address the next part of your question. Kind of the answer to your BuildingConnected question is kind of both. All right? BuildingConnected, certainly active. There's lots of activity going on there. Remember, it's the trend that matters. If the trends continue to indicate a large degree of bid activity, that means there's a large degree of bid activity out in the ecosystem. What also is important to recognize is, you know, our customers, and especially in the AEC land, they're still working through backlogs. I mean, every customer I talk to has the same issue or same opportunity, however you wanna look at it, that they still have to work through their backlog. They're still having trouble getting enough people to get the projects moving at the right kind of pace and so on and so forth. There's still a backlog out there, but the trend on bid activity is real, and it absolutely represents what's going on in the US market in particular. With regards to, you know, deceleration and rebalance in Q2 around volume, there was no hotspot, right? It was kind of uniformly the same across the board, right? It was more kind of the dynamics of the business rather than any kind of particular hotspot. Great. Then just on the EBA renewals, for the second half, are you expecting those to renew at kind of the typical net expansion rate that you see, for the broader company, or are you expecting anything, you know, different, just given the environment? Well, I mean, I'll let Debbie follow up on this, but one of the things that she highlighted was that a lot of these EBAs that are coming due were ones that were new during the pandemic, at a time where there was downward pressure on their activity and their usage and associated with that. Things have obviously changed significantly since then. Debbie, do you wanna comment on kind of the average relative difference with this cohort versus the rest of the company? Yeah. I mean, I would say that in terms of what we're baking into our guidance, we're assuming that these customers renew at reasonable levels. I'm not gonna get into more specifics beyond that. What's key is that they renew, and we feel good about that happening, given the fact that there's been high adoption and usage across these EBAs. It's a big cohort for us. We saw that performance back in fiscal 21. It was also an equally unusual economic time at that point. So I don't see this situation as any different, and think we've set the guidance as at a reasonable point. All right. Thank you very much. Thank you. Our next question comes from the line of Bhavin Shah of Deutsche Bank. Your question please, Bhavin. Great. Thanks for taking my question. Andy, just given what's going on with the debt ceiling, any sort of impact that we should think about regarding federal deals and the pace of that business? Then kind of related point, can you give us an update on where we are in terms of FedRAMP moderate, so for Docs and then 360 Collaborate, as well? Yeah. Let me talk a little bit about here. We've submitted all our paperwork. Our systems are ready. Autodesk systems are all ready for FedRAMP. We're just waiting for the government to come back and give us the approval and move forward. That's all proceeding ahead for us. We're waiting for the government to respond now at this point. With regards to the debt ceiling, you know, I'm not really gonna speculate on the debt ceiling. I would say that I think the things that impact us are bipartisan priorities. These are things that both parties want, infrastructure and the things associated with that. They all want this. I would suspect the things that matter a lot to Autodesk and to Autodesk business are probably not gonna be impacted by all the activity going on in D.C. right now. Helpful there. Just maybe a quick pivot to Construction Cloud, and I know you talked a little bit about combining the sales field organizations. Can you just maybe elaborate on some of the assumptions in terms of what you're expecting in terms of disruption, for how long, and then maybe when should that revert and drive better performance and productivity? Yeah. First, let me kind of clarify exactly what we did. We merged the independent construction team with the mainline sales team inside the company. We had kind of a few goals in mind there. One, we wanted to get a little bit more emphasis on the territory business that covers all of our business. We wanted to make sure that we were focused not only on pure construction accounts, but design and construction accounts, where we actually have pretty significant competitive advantage, and there's a lot of opportunity. This just kind of sharpened the pencil on kind of pursuing those opportunities in kind of a concerted way and kind of getting all the energy behind one effort. We're pretty confident that that's exactly what we're gonna get. Of course, when you do that, sales reps get new accounts, people get moved from accounts, sales get new responsibilities. It creates a little bit of short-term disruption. We absolutely expect that to work its way out over the next quarter or two, and we expect it to kind of compound benefits from doing this moving forward. Makes complete sense. Thanks for taking my questions. Thank you. Our next question comes from the line of Steve Tusa of JP Morgan. Your question please, Steve. Hey, guys. Good evening. Just if we were to see a continued decline in the things like the ABI or, you know, kind of an isolated decline in new office markets, if you will, can you just remind us of, you know, is that even a big enough exposure to matter for you guys? Would you just kind of remind us what part of your business is exposed to those trends, just on the macro? Secondly, if I just do the simple math on, you know, half over half free cash flow, that implies negative free cash flow for the Q2 to get it back to, you know, the half the year. Is that kind of the right construct? Thanks. I'll let Debbie answer the second half of that, but let me talk more broadly about, you know, what's going on in the AEC sector. With everything in these sectors, there's always puts and takes, all right? What you see is one sector sees some kind of decline in activity. Nobody's building new office buildings for whatever. And in other cases, some people are seeing increases in activity, and that's exactly what we're seeing. I'll give you a classic example of what goes on in this environment. People are pulling back from office space right now, and pretty significantly, you know, downsizing their offices. As a result, what's happening is that, you know, there's more competition for getting people to sign leases for new office space. What that's leading to is a kind of modernization of office space to accommodate new ways of working or to attract, you know, the best renters. People are spending money on that, which is offsetting money being spent in other places. We've taken all of this into account as we look forward into our business throughout the year. That kind of gives you a sense for how billings shift around and how money moves around and what our relative sensitivity is to some of these things. A lot of these indicators you talk about, they kind of tell you what's already happened, not what's going to happen necessarily. That's why we like to pay attention to kind of our leading indicators around monthly active usage of the products. Now, I'll turn it over to Debbie to discuss the other part of your question. Yeah, in terms of free cash flow, I'm not gonna get into specific guides by quarter, but I would say directionally, I think you're thinking about it in a reasonable way. Just to recap some of the things, remember, with the tax payment extension to Q3, we'll have a negative also in Q3. Some of the things that I outlined in terms of the linearity of free cash flow on the year are the things that you should be thinking about. I recommend going back and listening to some of those points, because that'll help you model free cash flow by quarter. Yeah, great. Thanks for the details. Thank you. Thank you. Our next question comes from the line of Sterling Auty of MoffettNathanson. Your question, please, Sterling. Yeah, thanks. Hi, guys. Just wondering, given the comments about the second half acceleration, does that mean that you're expecting the peak of the macro impact to really hit next quarter? Or is some of that acceleration more just due to improvement in Autodesk's execution based on some of the changes that you had mentioned during the prepared remarks? Sterling, what I would say is, you know, we're not assuming any peak or trough in macro. We have a range for our guidance in our 7%-9% range. For revenue, we have the ability to address whatever macroeconomic situation that we see. What we saw in Q1 was consistent with our general expectations on the year, and we've continued those expectations as we think about our outlook for the rest of the year. You can see that our outlook is in line. What's really driving the change in linearity in our revenue growth is some of the things that I talked about. Seasonality, the acceleration that we expect from EVAs in the back half of the year, the impact from FX, and not having the drag from the exit of Russia anymore. It's more about those things than it is about any fundamental underlying changes in our assumptions related to macro. That makes sense. Andrew, one for you. When you think about the long-term opportunity for generative AI, LLMs, conversational interfaces, et cetera, do you view this as something that's gonna ultimately raise the ARPU and/or prices for Autodesk solutions, given the additional value add? Or is it going to be more differentiation at the current price levels just so you can drive more market share? I think it's gonna be a little bit of both, all right? In some cases, we're going to be delivering significantly more value to certain types of customers, and we expect to charge for that value. In other cases, it's going to be a massive productivity enhancement for customers, and those customers are going to use that productivity to get more business, increase their book of business, and it'll be a competitive advantage for Autodesk. It's a little bit of a mix of both, all right? Either way, we're gonna be helping customers be a lot more efficient in one area and, you know, be much more creative in other areas in terms of deciding what they need to do and how they need to design things. Got it. Thank you. Thank you. That is all the time we have for Q&A today. I would now like to turn the conference back to Simon Mays-Smith for closing remarks. Sir? Thank you, Latif, and thanks, everyone, for joining us on the call. We'll look forward to catching up with you next quarter. If you have any questions, please just email us on simon@autodesk.com. Latif, back to you. Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.