Thank you for standing by, and welcome to Autodesk's first quarter fiscal year 2025 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 one on your telephone. To remove yourself from the queue, you may press star one one again. I would now like to hand the call over to Simon Mays-Smith, VP Investor Relations. Please go ahead. Thanks, operator, and good afternoon. Thank you for joining our conference call to discuss the first quarter results of Autodesk's fiscal 2025. On the line with me is Andrew Anagnost, our CEO. During this call, we will make forward-looking statements, including outlook and related assumptions, products, and strategies. Actual events or results could differ materially. Please refer to our SEC filings, including our most recent Form 10-K and 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. We will quote several numerical growth changes during this call as we discuss our financial performance. Unless otherwise noted, each such reference represents a year-on-year 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. As I'm sure you can appreciate with legal matters like this, I'm restricted in what I can say regarding the Audit Committee investigation, but let me say what I can. The summary findings of the Audit Committee investigation are in our May thirty-first press release and recently filed Form 10-K. Please refer to those documents for details. We don't have further commentary beyond what we have described there. Regarding the process, we also covered that in detail in our press release. The investigation took time to complete because it was rigorous and covered all three years included in the 10-K. Betsy Rafael has been appointed by the board as Interim Chief Financial Officer. We have initiated a selection process for a new Chief Financial Officer. The board and I are very focused on finding the right candidate. In the interim, we are in great hands with Betsy, and Debbie will continue to contribute to the business in her new capacity as Chief Strategy Officer. With the conclusion of the investigation, we have determined that there will be no restatement or adjustment of any audited or unaudited, filed or previously announced GAAP or non-GAAP financial statements. As we'll discuss in more detail shortly, we are already underway in the transition to annual billing with the trough and free cash flow behind us. The mechanical stacking of multi-year contracts, a larger enterprise cohort, and our largest product subscription cohort will provide a tailwind to free cash flow in fiscal 2026. We appreciate your patience as we work through this important process. We take situations like this very seriously and are grateful to put the investigation behind us. Now let's move on to our strong first quarter results. Autodesk's resilience, discipline, and opportunity again underpinned our robust financial and competitive performance. Our resilience is fortified by our subscription business model and our diversified product and customer portfolio. Renewal rates remain solid, and the momentum of new business growth and key performance indicators are consistent with the previous quarter, evidenced by increased product usage, record bid activity on BuildingConnected, and cautious optimism from our channel partners. Our disciplined and focused approach in executing our strategy and deploying capital throughout the economic cycle empowers Autodesk to realize the significant benefits of its strategy while mitigating the risk of expensive catch-up investments in the future. As our customers migrate to our industry clouds and utilize our high-value AI products and services, our investments in the cloud will continue to grow. At the same time, the new transaction model will allow us to optimize our sales and marketing, and we expect Autodesk Platform Services will, over time, boost the velocity and efficiency of our R&D. By optimizing the allocation of our resources, we can invest to compound revenue growth and market share gains while also driving margin improvement and free cash flow growth over time. Reductions in stock-based compensation as a proportion of revenue will provide an additional tailwind to GAAP margins, while our transition to annual billings from multi-year contracts will amplify free cash flow growth over the next few years. We believe that constant resource optimization and our long-term investment horizon has positioned us ahead of our peers in cloud, platform, and AI. We intend to retain and extend that lead while also driving to an industry-leading Rule of 40 ratio of 45 or more. Our Project Bernini announcement on May 8 is a great example of what I mean. Bernini uses generative AI to quickly generate functional 3D shapes from a variety of inputs, including 2D images, text, voxels, and point clouds. Bernini is different from other AI models in five important ways. First, Bernini is trained on 3D data rather than commoditized external imagery, and it's therefore capable of reasoning on the internal structure of an object. Second, Bernini generates shape and texture separately and does not confuse or meld those variables. Third, Bernini can be conditioned on multiple types of input data and is therefore applicable across a much greater spectrum of workflows.... Fourth, Bernini generates many design options from a single set of inputs, which better serves the creative process of designers. And fifth, Bernini can be quickly and cost-effectively fine-tuned on a customer's existing 3D repository to align to the unique creative needs of a particular organization. Autodesk AI will enable Autodesk, its customers, and partners to create more valuable, data-driven, and connected products and services. It will automate low-value and repetitive tasks and generate more high-value, complex designs more rapidly and with greater consistency. Over time, Autodesk Platform Services will enable greater engineering velocity and efficiency and support a much broader developer ecosystem and marketplace. Autodesk is ahead of its peers in 3D AI and industry cloud, platform, and business model evolution that will be needed to deliver 3D AI products and services at scale. We are well on the way to reasoning about all CAD geometry. We will update you as we make further progress. Let's move on to our quarterly financial performance and guidance for the second quarter and the full year. Q1 was a strong quarter. We generated broad-based growth across products and regions in AEC and manufacturing, which was partly offset by softness in China and in media and entertainment, the latter being primarily due to the lingering effects of the Hollywood strike. Overall, macroeconomic, policy, and geopolitical challenges and the underlying momentum of the business were consistent with the last few quarters. If we compare first quarter revenue with guidance, the outperformance was mainly due to that broad strength, with the timing of price increases also improving revenue linearity during the quarter. The impact of the new transaction model was immaterial in the first quarter. Total revenue grew 12% and 13% in constant currency. By product in constant currency, AutoCAD and AutoCAD LT revenue grew 10%, AEC revenue grew 17%, manufacturing revenue grew 11%, and M&E grew 3%. By region in constant currency, revenue grew 12% in the Americas, 14% in EMEA, and 14% in APAC. Direct revenue increased 20% and represented 38% of total revenue, up 3 percentage points from last year, benefiting from strong growth in both EBAs and the Autodesk Store. Net revenue retention rate remained within the 100%-110% range at constant exchange rates. As expected, billings declined 5% in the quarter as a result of the transition from upfront to annual billings for multiyear contracts. For the same reason, total deferred revenue decreased 12% to $4 billion. Total RPO of $5.9 billion and current RPO of $3.9 billion grew 9% and 12%, respectively, which continued to benefit from the EBA strength we saw in the second half of fiscal 2024, and current RPO also benefited by about 1 percentage point from early renewals. Turning to our P&L. GAAP and non-GAAP gross margin were broadly level, while GAAP and non-GAAP operating margin increased by 4 and 3 percentage points, respectively, in part reflecting the absence of costs we incurred last year to repurpose roles. At current course and speed, the ratio of stock-based compensation as a% of revenue peaked in fiscal 2024, will fall by more than 1 percentage point in fiscal 2025, and will be below 10% over time. Free cash flow for the quarter was $487 million, driven by collections of prior quarter billings and strong results in the current quarter. Turning to capital allocation. We continue to actively manage capital within our framework and deploy it with discipline and focus through the economic cycle to drive long-term shareholder value. In the quarter, we acquired Payapps and PIX for a total of $653 million, which, with the late filing of our Form 10-K, meant we only purchased approximately 30,000 shares for $9 million at an average price of approximately $255 per share during the quarter. We will continue to repurchase shares opportunistically to offset dilution from stock-based compensation when it makes sense to do so. Moving on to guidance. Overall, end market demand has remained pretty consistent over many quarters. Macroeconomic and one-off factors, like the Hollywood strike, have dragged on new business growth and continue to drag on revenue growth, but Autodesk's resilience and robust underlying demand for its products and services reinforce its long-term growth, momentum, and potential. With regards to revenue guidance, we highlighted some puts and takes last quarter that impact fiscal 25 revenue growth and refer you back to our comments then. The new transaction model implementation is on track. Australia and New Zealand are performing in line with our expectations. North America went live yesterday. As we said last quarter, our fiscal 25 guidance assumes the new transaction model is deployed in North America and provides about a 1 percentage point tailwind to Autodesk's revenue growth and a 3%-4% tailwind to billings growth. Once the North America launch is successfully underway, we will likely start communicating our plans to channel partners and customers in parts of EMEA and Japan. We modeled various possible scenarios at the start of the year, reflecting different potential launch dates, channel partner behavior ahead of launch, the mechanics of the transition, and a host of other factors, and we are executing within our modeled scenarios. Longer term, we remain excited by the benefits this more direct relationship with our customers and partners offer, an ability to understand and serve them, enriched by data, with more automation and self-service and greater predictability. Our fiscal revenue guidance between $5.99 billion and $6.09 billion is unchanged and still translates into revenue growth of about 9%-11% compared to fiscal 2024. Our strong start sets us up well to achieve our goals for the year. Moving on to margins. We still expect non-GAAP operating margins between the range of 35%-36% in fiscal 2025, and roughly level with fiscal 2024. This includes a roughly one percentage point underlying margin improvement that we expect will be broadly offset by the margin headwinds from the new transaction model. As a reminder, as we transition to the new transaction model, we'll see operating margin headwinds from the accounting change of moving reseller costs from contra revenue to sales and marketing expense. We'll also have incremental investment in people, processes, and automation. But over the long term, we expect that this transition to the new transaction model will enable us to further optimize our business, which we anticipate will provide a tailwind to revenue, operating income, and free cash flow dollars, even after the incremental costs we expect to incur. Moving on to free cash flow. We still expect to generate between $1.43 billion and $1.5 billion of free cash flow in fiscal 2025, excluding $200 million from fiscal 2024 free cash flow from multiyear upfront billings, which are now billed annually. In fiscal 2025, we expect free cash flow growth of about 35% at the midpoint of our guidance. We expect faster free cash flow growth in fiscal 2026 because of the return of our largest multi-year renewal cohort, the mechanical stacking of multi-year contracts billed annually, and a larger EBA cohort. As discussed last quarter, the transition and rollout will create noise in the P&L, making free cash flow the best measure of our performance. With our current trajectory, we estimate free cash flow in fiscal 2026 to be around $2.05 billion at the midpoint. In the context of significant macroeconomic, geopolitical, policy, health, and climate uncertainty, the mechanical rebuilding of our free cash flow as we transition to annual billing for multi-year contracts, gives Autodesk an enviable source of visibility and certainty. We continue to manage our business using a Rule of 40 framework with a goal of reaching 45% or more over time. We are taking significant steps towards our goal this year and next. We think this balance between compounding revenue 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, and we intend to remain one of them. The slide deck on our website has more details on modeling assumptions for Q2 and full year fiscal 2025. Let me finish by updating you on our strong progress in the first quarter. We continue to see good momentum in AEC, particularly in infrastructure and construction, fueled by customers consolidating onto our solutions to connect and optimize previously siloed workflows through the cloud. The cornerstone of that growing interest is our comprehensive end-to-end solution, encompassing design, pre-construction, field execution, to handover and into operation. This breadth of connected capability enables us to extend our footprint further into infrastructure and construction, and also expand our reach into the mid-market. As a sign of that growing momentum, our construction business had one of its best net new customer quarters. Let me give you a few examples. BL Harbert International provides design, build, construction management, and general contracting services to national and international clients. It leverages advanced technology to maintain its most crucial customer and partner relationships and enhance its in-house capabilities. We have built a trusted partnership with the company over many years and share its integrated platform vision for the industry. In the first quarter, it decided to standardize on Autodesk Construction Cloud across all regions for its design build process, signing its first EBA and increasing its investment in Autodesk. Meriton Designs develops and builds residential apartment towers and is the largest residential apartment developer in Australia. After a competitive process, it chose Autodesk to replace six point solutions and unify its operations, from design through to maintenance and asset management. This comprehensive solution will enable Meriton to have one common data environment, streamline its workflows, and have access to real-time insights. State Window Corporation offers complete design, engineering, manufacturing, and installation of custom window wall systems. It is standardizing on Autodesk AEC and manufacturing products so that it can effectively manage inventory levels, improve cash flow, and reduce waste caused by siloed data and disconnected workflows. Leveraging Revit for 3D design, our Manufacturing Collection for PDM and PLM, and Autodesk Build for installation, State Window will have an end-to-end solution connecting data and workflow across design, manufacture, and build. Again, these stories are a common theme, managing people, processes, and data across the project lifecycle to increase efficiency and sustainability while decreasing risk. Over time, we expect the majority of all projects to be managed this way, and we remain focused on enabling that transition through our industry clouds. Moving on to manufacturing, we made excellent progress on our strategic initiatives. Customers continue to invest in their digital transformations and consolidate our Design and Make Platform for both products and factories to grow their business and make it more resilient. A multi-format packing solutions manufacturer in Europe had been leveraging our advanced manufacturing portfolio, including Inventor and Vault, for its machine design and product data management. In the first quarter, it expanded its partnership with Autodesk to include factory design, which digitizes complete factory layout to reduce the potential for delays and rework during the delivery process. As an existing FlexSim customer for factory simulation, the manufacturer will now have a comprehensive, connected, end-to-end solution that helps increase efficiency, throughput, and quality. A major multi-product maintenance, repair, and overhaul, or MRO provider, began using Fusion to convert and visualize 3D models of third-party files. With those files now in the Fusion ecosystem, it added the Fusion Manufacturing Extension in the first quarter to leverage Fusion for light repair and part testing. Fusion remains one of the fastest-growing products in the manufacturing industry, with double-digit commercial subscriber growth, driven by the growing number of customers who recognize the value of cloud-based workflows in enhancing efficiency, sustainability, and resilience within their organizations. With over 1 million monthly active users, a vast amount of contextual data is generated within Fusion. For example, on average, 33 million new component designs were being produced in Fusion each month over the last 12 months. This data can help us train the next generation of generative AI products and services. For example, our recently launched drawing automation tool in Fusion, which is powered by AI, has generated 2.7 million automatic dimensions since its launch earlier this year. In education, we are preparing future engineers to drive innovation through next-generation design, analysis, and manufacturing solutions. The Katayanagi Institute in Japan is a leading provider of technical education that equips its students with industry-relevant education and helps address the growing skills gap across the Design and Make industries. In the first quarter, it made Fusion the standard Design and Make solution for its 5,000-plus students, faculty, and affiliated institutions, replacing two legacy solutions to leverage Fusion AI design and cloud collaboration capabilities. Lastly, we continue to work with our customers to ensure they are using the latest and most secure versions of our software. Through a collaborative process, we helped a large European infrastructure and railway operator achieve compliance, providing visibility into existing usage, and by understanding its true needs, delivering a tailored solution that included upgrading to newer versions of our software and the addition of more subscription licenses. Let me finish with a story. The opening ceremony of the Summer Olympic Games will take place on the banks of the River Seine in Paris on the evening of July twenty-sixth. Over the following months, many of the approximately 10,500 athletes and 8,000 para-athletes will reside in the Athletes' Village on the Île-Saint-Denis, a suburb of Paris. This is, in part, a story about innovative architects, engineers, and construction professionals collaborating efficiently and effectively in the cloud, enabled by open file formats and using modularized industrial construction techniques to seamlessly span AEC and manufacturing. It is also a story about embracing complexity, managing wastewater and risk in a sensitive ecosystem of the River Seine, and change by minimizing embodied carbon today and creating a built environment that embraces a warmer climate tomorrow. But it's also a story about regeneration and hope. The Saint-Denis suburb of Paris is one of the poorest in France, with a young, diverse population with higher-than-average unemployment rates. After the games, the village will become a neighborhood with new homes and social housing, offices, neighborhood shops, a student residence, and a hotel, enveloped within gardens and parklands. Two years ago, I told you about Autodesk's role in the reconstruction of Notre Dame Cathedral, which will be completed on schedule later this year. I share the Athletes' Village story because I'm reminded again of Autodesk's purpose: to design and make a better world for everyone. That purpose has never been more important or urgent. Together, we can meet the generational challenges posed by carbon, water, and waste. Autodesk's central role in meeting these challenges underpins my confidence this year and my optimism for the future. Operator, we would now like to open the call up for questions. Thank you. As a reminder, to ask a question, you will need to press star one one on your telephone. To remove yourself from the queue, you may press star one one again. Please limit yourself to one question and one follow-up. Please stand by while we compile the Q&A roster. Our first question comes from the line of Jason Celino of KeyBanc Capital Markets. Great. Hey, Andrew. Good afternoon- Hello, Jason. You know, I know you said that you couldn't say much about the 10-K process, but how would you summarize the key takeaways for investors? Yeah, well, the first thing you know, I've never been more excited about having an earnings call in my entire career at Autodesk, but that's not exactly what you're asking, but I am excited to be here. So look, there's a few things I can just put in plain English, all right? The first thing, and I can't state how important this is, is we don't have to restate any of our financial results. The results that happened historically in the company are the results that the business delivered, and that's really important. The second thing I wanna highlight is that the company did not obfuscate the underlying strength of the business. Now, you take those two things together, and you can trust the integrity of Autodesk financials, all right? I think that's kind of the net I want you to take from all of that language. You know, and personally, from my point of view, I think that doesn't—that means that nobody's investment thesis in Autodesk is fundamentally altered by any of this information. ... Okay. Yeah, I think that's a good, you know, clarification. Maybe the next question, my follow-up. So Q1 performance, you know, is strong. Q2 guide, probably a little bit better than consensus expectations. But given the full year revenue guidance isn't really changing, you know, I'm wondering how you're thinking about growth in the second half of the year. Yeah. Well, first off, it's only Q1, so, you know, we've got three more, three more quarters left, all right? So it's only Q1. And we also have a few big things coming in front of us here, all right? We just went live in the US transaction model. So far, so good. It's proceeding as we expect. If we learn what we expect to learn from that, we're gonna go live in Europe as well, but we're waiting to see what happens in the Americas and how it performs. So those things, those are some big uncertainties out there that we wanna pay attention to. But the great thing about the results in Q1 is it's really set us up strong to hit the results for the full year. I feel really confident about the position we have right now in terms of hitting our goals. Okay, great. Thank you very much. Thank you. Our next question comes from the line of Jay Vleeschhouwer of Griffin Securities. Please, go ahead. Thank you. Good evening. Andrew, what would you have to see over the next number of months in the Americas transition that began yesterday, to commence the transition in EMEA as early as, say, mid Q3? If you don't launch in Q3, and it makes no sense to launch in Q4, should we assume that you would then do EMEA in, let's say, early fiscal 2026, and then Asia, perhaps 3-6 months after that? Yeah. It—So the last part, I'll just say yes, that's probably the way it would happen, all right? Based on the results. But let me tell you what we're looking for in terms of the U.S. One, we're looking for performance at scale. So when we did the tests in Australia and New Zealand, we tested out the functionality, the capability, the processes, the training we needed to deliver to the channel partners, and frankly, the training we needed to deliver to the customers to make sure they knew how to set us up as a vendor in their systems, okay? So we learned all of that. We executed on new functionality over the course of the period. We tested that functionality in Australia and New Zealand before going live in the Americas. So now we're gonna test all that functionality, and we're gonna watch and see how it operates at scale and see the issues that get produced or don't get produced. So far, so good. One of the things I wanna make sure that we all remember is: why are we doing this? All right. It's really important to understand why we're doing this. This is a fundamental shift in how we will have visibility and connection to our customers. Not only are we gonna have full visibility of the fully loaded sales and marketing costs of the company, which will allow us to optimize these costs over time, but it's going to enable our customers to engage with us in self-service models that they've, they've never been able to engage with us before, and it's gonna give us more visibility and insight into our customers. So not only are we gonna be looking about how the systems are working, we're gonna be testing out all of those new capabilities that we want to use to engage with our customers more effectively. So that's kind of what we'll be looking at. If we see some problems with scale, which we are not anticipating, but, you know, you never know, yes, we will, we will delay those rollouts, kind of similar to the way you highlighted it in your question. Okay. As follow-up, you used a, an intriguing comment in your script when you referred to, quote, "velocity and efficiency of R&D." What does that mean? How would we see that? Would it manifest, for example, first in AEC or otherwise manufacturing? And, you know, given the scale of your R&D, which is still the biggest in your peer group, you know, how do you, how do you think that plays out over time? What did you mean by that? Yeah. So that goes back to the platform services capabilities, all right? And as you know, we're continuing to invest in the platform services to make sure that the teams are using shared services to not only move faster, but also move better moving forward. We're making more and more progress on this. We're getting more and more shared services out there that are shared across various parts of the company. There's some really interesting ones that'll be coming out in the next year or so that I won't pre-announce, but they're shared services that will allow us to do some things that provide kind of common project visibility across various industries and things like that. These are exciting things that used to get built in individual silos inside the company. So it's really important that we have these large-scale shared services that not only prevent people from rebuilding the same thing multiple times, but also allow people to start up and spin up new things quickly. And that includes some of our incubations and other things. So, so watch as this happens. You'll start to see more and more of these shared services, and I think we're starting to hit kind of a, a sweet spot of momentum in terms of some of the work we're doing on the platform services. Thank you, Andrew. Thank you, Jay. Thank you. Our next question comes from the line of Adam Borg of Stifel. Awesome. Awesome. Thanks so much for taking the question. Maybe just on the macro, Andrew, you talked about, you know, it's a relatively stable backdrop. Yep. I know in fiscal 2024, it was a softer year for net new seats. So just curious if you could talk about, you know, how you're thinking about new seat growth in 2025 relative to 2024? ... Yeah, you know, it's hard to predict what's gonna happen in 2025. What I can say right now is we've seen broadly consistent performance for many, many quarters now. All right? It's this whole conversation we've been having about last quarter was fairly consistent with the previous quarter, with some puts and takes, has been going on through all sorts of manners of changes and machinations out there in the macro environment. Right now, I would anticipate to keep seeing some of those environments with the kind of puts and takes that we're seeing now. Just to remind you about the puts and takes in this quarter, right? We saw a lot of strength in EMEA. We saw a lot of strength in Australia and Japan. It was offset by weakness in China and Korea. And in the industries, you know, AEC and manufacturing were strong and M&E was kind of weak. These kinds of changes, I expect, will continue throughout the quarter, so that we'll kind of continue throughout the quarter. So we'll continue to see some of these ongoing kind of stability, but just with different puts and takes each quarter. Incredibly helpful. Maybe just a quick follow-up on Project Bernini. It seems super interesting as a long-term opportunity. How, how should we think about kind of, A, the timing of this across the three, you know, three industry clouds? And kind of what's the what does the dream, the dream look like in terms of the impact it could have, for, for organizations as they look to, take advantage of these capabilities? Thanks so much. Yeah. So what I would do is I would think of Project Bernini as our first foundation model, and each foundation model that we do will be providing a certain set of capabilities or automations for our customers. Bernini is a shape interpretation tool. It takes 2D geometry, voxel geometry, descriptions, pictures, all of these things, and creates intelligent 3D geometry that it understands 3D geometry. And we're gonna be looking to partner with some of our customers to make it even smarter and better. But that tool can become a core tool used across industries to provide preliminary initial geometries of all types. But it's gonna be one of several foundation models, because we're gonna need multiple types of foundation models to automate the things that are important to our customers. What Bernini shows is that not only are we ahead of our competitors in this area, we're producing high-quality results that are getting attention and, in helping us engage more tightly with some of our customers on where these tools are gonna go in the future. Awesome. Thanks again. Thank you. Our next question comes from the line of Matt Hedberg of RBC. Great, thanks for taking my questions. Andrew, maybe just following up on that last one. When we think about these foundation, these GenAI foundational models, Bernini, I know it's still early, but what is, what is sort of the philosophy on pricing? And, and do you suspect there eventually to be a consumption element to maybe offset some additional compute costs? Yeah. So, you know, Matt, it is a little early to speculate on how we make money and how we go to market with some of these things. However, you know that, I've been a big fan of consumption models for a long time. I think consumption is directionally, always been setting us up well for the future of AI-driven automations and outcome-based designs. I've talked about these things for a long time. I definitely see consumption as a critical part of monetizing these models. I also see other critical aspects of it as being able to customize these models for individual customers and individual companies, just like we get a customized version of Autopilot and GitHub for Autodesk, and GitHub Copilot for Autodesk, okay? So not gonna exactly say how it'll be monetized, but I would be very surprised if consumption doesn't play an important role in the future of using these generative models to automate a lot of complexity for our customers. Got it. Thank you for that. That's super helpful. And then maybe just on the early renewals you saw in Q1, I assume that was mostly in anticipation of the transition, the direct transition. Was that largely a US function that you all saw? Matt, it's Simon. It was more to do with the timing of the price increase. Yeah ... and ahead of that, what we flagged last quarter, is that we'll expect a bit of early renewal, as we saw in Australia, ahead of implementation in the U.S. of the new transaction model. Got it. Thanks a lot, guys. Thank you. Our next question comes from the line of Joe Vruwink of Baird. Great. Thanks. Thanks, everyone. If my hearing is sound, I think I heard Australia, not one of the strongest regions in the quarter, at the same time, also subject to this agency transition. So I guess my question- Oh, yeah, Joe, let's correct you immediately. Ask your question, then I'll... Yeah. Well, it gets to the point of obviously, it sounds like you have a model in place for this transition, and so far, the assumptions are holding. I'm wondering how you've stress-tested the model. So let's say, here in the States, the macro does suddenly get worse. Does that influence the intended rollout? Does it change some of the strategies you look to employ, or is it really business as usual in terms of how you're approaching this? Okay, so first off, Joe, your ears were not working. Australia's great. Australia was one of the strong points, okay? So Australia is back where it was pre the business model. The new transaction model. So it's going great. So it's a nice proof point of some of the capabilities we have. Now, in terms of macro, macro is not going to impact our decision in terms of how we move forward with the new transaction model. It's all about the capability of our partners and the ability of our customers to absorb these things and have the systems, the whole system work correctly. That's what's gonna be the governor on how we roll these things out. The macro could go all sorts of directions. We're still gonna move forward as long as our systems are functioning the way we expect them to. Like I said, so far, so good, but it's only been a day. Okay. My, my ear's not working is a, a common refrain, so I'll, I'll happily move on from that one. It's okay. No worries, Joe. Second question. I appreciate Autodesk is a pretty diversified business by end markets, and so sometimes it's fruitless to ask these questions. But I did wanna ask about your data center exposure specifically, because I think it's an example where you can tackle it through the AEC side of the business. You're also very involved with some of the product companies that end up in the data centers, and that's in the manufacturing side of Autodesk. So I'm just wondering if you're seeing more real-time convergence happening, and Autodesk actually has a somewhat consequential role to play in the data center build-out that's underway. Joe, I love this question. Yes. The answer is yes, yes, yes, okay? We are actively involved in lots of data centers. I won't say whose data centers we're involved in, but we are involved in data centers. We're helping people build data centers and build multiple data centers that are similar. They're using our construction tools. Some of them are using our manufacturing tools. And adjacent to the data centers is also the factory boom in the US. We're involved in building out factories with certain customers as well. And in all of these, you are absolutely seeing a convergence of our manufacturing portfolio and our AEC and construction portfolio. And that is happening in real time, and we expect to see more of it. There was a great article in the New York Times recently about how Europe managed to pull off what America was talking about for so long, the Scandinavian countries building prefabricated housing and factories, using our products, by the way, to do that. And, you know, I'm hoping that will all come to the US soon as well, so that we see the convergence of AEC and manufacturing in terms of building prefabricated components of houses. That day is gonna come, too, but right now, you're right. Data centers and factories are very interesting places. Great. Thank you very much. Thank you. Our next question comes from Ken Wong of Oppenheimer & Co. Hi, thank you for taking my question. Just a quick question back on the investigation. My reading of your commentary was that, obviously, you guys completed the audit, and the SEC kind of may or may not investigate. I guess I just wanted to kind of get clarification from you guys, whether or not there is any progress on that front. Yeah. So just so you know, when we kicked off the investigation, we voluntarily engaged with the SEC, and we have shared information about the investigation. So, if they want more information, and they wanna engage more, we will cooperate with them to the fullest extent of our ability. Okay, perfect. And then second, just on the... You know, I couldn't help but notice you guys commented on just record construction seat growth. Any color on kind of where, where you're seeing that? Obviously, the kind of construction KPIs macro-wide seem a little mixed, but you guys are showing considerable strength there. Yeah, first off, you know, one of the things that's important to look at in construction is the backlog. There's still the backlog's still pretty solid in construction. Yeah, the rise in new accounts was broad-based across all the regions that we were working in. So it's broad-based. We saw strength everywhere, and we continue to see great adoption of our tools, and we're continuing to do competitive wins. I mean, I love the Meriton example in Australia because it's a perfect example of how somebody uses our solution to track the entire process, all the way from design through pre-construction, down to construction management. It really captures the notion of what our competitive advantage is. We provide the end-to-end solution, we provide it in such a way that's economically viable for the customer, and we deliver some of the best pre-construction tools in the industry. It's a great example. It's a great example of what we're seeing, and yeah, we see ourselves accelerating, not decelerating. So we're feeling fairly bullish about our construction business. Great. Thanks for the context. Thank you. Our next question comes from the line of Tyler Radke of Citi. Thanks for taking the question. Andrew, could you talk about the EBA performance in the quarter? I think the license and other line outperformed expectations by quite a bit. Was that related to some EBA strength that you saw? And then, just given that we had seen some of these EBA contracts come in with multiyear billing, is that something that you're expecting to see as EBA deals come up for renewal later this year and in the next...? Thank you. All right. So Tyler, I wanna make sure I understood your question. So with regards to the EBAs, all of our EBAs are multiyear contracts, okay? And we saw. So I just wanna make sure I understood what your question was. Yeah. The question was specifically around the invoicing duration and the billing duration. I understand they're contractually multiyear in nature, but do you still plan to invoice them multi-year in advance. But the first part of the question was really- Oh! Was there outsized EBA strength or any true- ups to call out in the quarter? No, there was no outsized. Okay, good. Okay, thank you. That's what I just wanted to clarify. There was no outsized EBA strength in the quarter, and the vast majority of EBAs are multi-year contracts that are gonna be billed annually. Okay? It doesn't mean there- Um- There aren't some that are done up front. Customers ask for them sometimes. But the vast majority are done multiyear and billed annually. And Tyler, just for clarification, remember, the true- ups appear in the subscription line, and it's the upfront is the non-cloud enabled, primarily last year, that was from non-cloud enabled automotive products, which goes in the other line. So just to make sure you've got sort of geography there. But the general thing is Q1, we don't guide by sub-segment, as you know. Q1 was exactly where we expected it to be. Yeah. Okay. Helpful clarification. And, the second question, Andrew, I realize may be more of a CFO question, so apologies if it's a little down the weeds. But, just as we're looking at the billings number in Q1, certainly can appreciate there's headwinds. It's a messy number, just given the multi-year strength that you saw a year ago. But if we-- investors are doing the calculation around short-term billings, looking at the change in short-term deferred revenue, which, you know, theoretically doesn't have any impact from the multi-year. You know, that metric, short-term billings growth, looked a lot weaker than many of the other indicators like revenue and bookings. Is there anything to call out in terms of maybe why that short-term deferred revenue performance was not as strong, any? I'm gonna give this one- -going forward. I'm gonna give this one to Simon, Tyler. Okay. Yeah, Tyler, we can. This is a sort of slightly inside baseball. But for general point, as we've said, there's a lot of noise as we switch from multi-year upfront to multi-year annual. So that's the first thing that's causing noise. The second noise is seasonality. Obviously, we have a bigger Q3 and Q4 than Q1. And then in addition to that, there's a bit of noise from FX as well, over time. So what that means is, and the reason we've been pointing you to CRPO, is probably the better metric. Just on billings specifically, what I'd flag is, and this is primarily the multi-year to annual, we were obviously +4%, Q1 last year, 'cause we had still two months of multi-year upfront in Q1 last year, 'cause we ended it on March twenty-eighth. And then billings was down 8% in Q2, down, eleven percent in Q3, and down 19% in Q4. And so to put that in context, the Q1 of -5%, as we begin to cycle against the easier comparables, gives you context for that. So it's actually improving. It may be, it may be it wasn't quite where consensus was, but remember, we don't guide to, to billings. But what you can actually see is the improvement in trend, and obviously, as we cycle against the easier comps in Q2 and beyond, that will then make more sense in the context of our annual guidance. Thank you very much. There you go. Thank you. Our next question comes from the line of Joshua Tilton of Wolfe Research. Hey, guys, can you hear me? Yep, Joshua, we can hear you fine. Yep. I apologize for any of the background noise. But I kind of want to go back to the investigation. And I know I'm definitely not the smartest guy on the call tonight. But if I read through some of the bullet points that you guys put out there for investors, it sounded like there were some choices made around collections, and that maybe those choices had to change going forward. And I do really appreciate that you guys reiterated, you know, your confidence in that FY 2026 cash number. But I guess, was there any change around collections, or practices related to collections that you previously undertook, that you can no longer take going forward, that maybe changes your confidence interval around hitting that cash number in FY 2026? Yeah, so first off, I just wanna make clear, there's no changes in our financials, all right? And there was no obfuscation of the strength in the underlying business, all right? So any changes or practices that we are making do not impact the trajectory of our business at all. All right? There is no change in our confidence in the free cash flow target this year or the free cash flow target for next year. Which is helpful. Then maybe, maybe just a quick follow-up, and actually just nitpicking here, but, you know, you kind of referred to the macro environment as a one-off factor to the business. But as you also mentioned, right, we've kind of been in this state for many quarters now. So I guess, how do you think about the trajectory of the business over the next few years, in the context of what might just be a new norm from a macro perspective and not necessarily things getting better? I guess, when you guys think about beyond the next few quarters, right, like, is the going rate assumption for Autodesk that, you know, this is one-off and things do get better? Or are you guys playing ball in terms of this game that we've been playing for the last few quarters and just assuming the macro is the way it is, and maybe this is more of a new norm? So let me be super clear about something. The long-range plan for our business is completely unchanged. All right? So in terms of what we're looking at, you know, 10%-50% revenue growth, the long-term targets for the business, completely unchanged. And the mechanical business buildup of free cash flow that we're gonna see now, as a result of the large renewal cohort we have next year, plus which is the largest renewal cohort of product subscriptions we have next year, plus the large renewal cohort of EBAs we have next year, all with the mechanical buildup of what will get billed from multi-year subscriptions booked this year. I mean, a recognized order this year. We see a nice buildup in the business. The answer to your question is, things, things with regard to our long-range plan are absolutely unchanged. Thanks, guys. I appreciate the feedback. Thank you. Our next question comes from the line of Nay Soe Naing of Berenberg. Your line is open, Nay Soe Naing. Hi. Hi, hi, Andrew. Hi, Simon. Thank you for taking my questions. Hi. My first question is around your platform cloud offerings. You know, you've been investing in these offerings, and by the sound of it, you will continue to invest into them as well. If you could speak a little bit more to what sort of R&D commitments that we should expect as a result of that. So taking R&D as a percentage of revenue here, should we expect that intensity, R&D intensity to remain at FY 2024 levels in the near future? Or, should we expect that to tick up as a result of the investments in your cloud offerings, cloud platform offerings, specifically? And then, linking to that, when do you expect these offerings, these new offerings, to become, to start to contribute meaningfully in your top-line growth, please? Thank you. All right. So first off, you know, I wouldn't anchor on the R&D as a percent of revenue. That will drift where it's going to drift. I would pay more attention over time to the sales and marketing as a percent of revenue, because that's the place where we're gonna be looking for optimization and ongoing kind of performance and productivity changes moving forward. So I would encourage you to think about that part of the business as we move forward, because we're. R&D investment is really important to us, and we'll continue to invest in R&D appropriately. With regards to the new offerings, I'm, I just wanna make sure I understand what new offerings you're talking about. Are you talking about platform services in terms of billable platform services? We already actually provide access to some of our services on a per-pay basis, but there's gonna be a whole set of services that continue to roll out over the next couple of years that will be available to our customers on a per-charge basis. So it... I just, I'm just not sure what particular capabilities you were asking about. I was referring to the three cloud offerings, three industry cloud platform. Oh, Fusion, Forma, and Flow. Yes. Oh, okay. Yes, those ones. All right. Okay. All right. Well, Fusion's already a growing business for the company, and it's already accelerating. I think Forma and Flow are very nascent. All right? Forma is in the stage where we're focusing on product-market fit, user adoption, and getting people excited about outcome-based design and the new paradigms we're gonna be pioneering with Forma. And then, of course, integrating it tightly with Revit, so it's the best Revit companion out there in the market, so that it provides not only next-gen cloud-based capabilities and AI capabilities, but it works incredibly well with Revit. So the focus on Forma right now is adoption. The focus on Flow right now is actually getting Flow out the door. And the initial capabilities are gonna be focused on more on asset management and the capabilities of managing assets in the media and entertainment place. But they're not yet generating the revenue growth that we care about. Fusion, on the other hand, is a growing franchise. It continues to grow. It's taking share from our competitors, and I continue to encourage you to watch that space. But over the next three years, all of these industry clouds are gonna start contributing meaningfully to Autodesk's growth strategy. That's really helpful. Thank you very much. And on R&D, just wanted to make sure that I understood you correctly here. So the R&D as a percentage of revenue, as an intensity, that should remain at current level because R&D is really important for the business. But should we expect that to tick up given that, you know, you're obviously investing in the platform services and also you're complementing your ACC offering overall as well? You know, I'm not gonna speculate on the future trajectory of the R&D as a% of revenue. I think I would really encourage you to focus more on the sales and marketing numbers at this point. All right? Right now, we're definitely a product company, and R&D is very important to us, so we're gonna continue to invest, but we're gonna invest prudently and appropriately, all right? So I wanna make sure that, you know, you understand that we're gonna keep these things within reasonable bounds, but sales and marketing might be something you wanna pay attention to in the future. Right. Okay, understood. Thank you very much. Thank you. Next question comes from the line of Keith Weiss of Morgan Stanley. Hi, this is Elizabeth Porter on for Keith Weiss. I wanted to ask on just the cadence of M&A. We've seen some recent activity with Wonder Dynamics and PIX adding to Payapps. So how should we think about this as a lever in driving faster innovation in the portfolio? And then related, I think the prior guidance assumed about a half point tailwind from acquisitions. Is it fair to still think about that number, just given some of the more recent announcements? Thank you. Yeah. So look, our acquisition strategy is unchanged. We always pursue interesting adjacencies and tech tuck-ins according to our strategy, and we do it in a prudent and disciplined way. I'm very excited about Payapps because it's an important extension of our construction portfolio. It's an industry-leading payment solution, and it helps us integrate all the way through the process and add the payment capabilities. PIX. PIX is exciting because it puts us on the set and puts us in the business of capturing data on the set and interacting with the directors and furthering our script- to- screen vision for the media and entertainment vision. Wonder Dynamics is a great example of a leading-edge AI company doing amazing things that are really gonna be transformative in the media and entertainment space, and they're going to be doing great things at Autodesk over multiple years. They're all part of our strategy. They're all connected directly to our strategy. I think you can expect to see us continue down this path of doing acquisitions that make sense with regards to our strategy or the adjacencies that we're trying to target for our business. Great. And then just another one on the transaction model. I believe you've referenced just the potential for some uncertainty around rolling out the model and leaving room for that in the full year guide. I just wanna better understand what those friction points would be, you know, whether they were partners or customers, what they look like. And then just double click on the guardrails or processes you have in place to mitigate that risk. Yeah, Elizabeth, it's really to do with the timing of the US rollout. As you know, we went live yesterday. So far, it's all pretty quiet, which is good, because it means everything's okay. And we're just gonna see how that goes, and then that will determine what we do and the rate of rollout, as Andrew was saying earlier. So it's really to do with that, the timing of the rollout, and that's determined on how things go in the US. Great. Thank you. Thank you. The next question comes from the line of Siti Panigrahi of Mizuho. Hi, this is Sameer calling in for Siti. The couple of questions I have. One is the strength in construction. Given there were some recent consolidation talks in the industry, I was wondering if there was any benefit to you from that dynamic in terms of talks starting and then not going through? Hello? I can't hear... Sorry, can you hear, Andrew? Sorry, I was— Yeah. I was muted. I apologize for that. No, actually, the, there's no connection whatsoever between those dynamics and what's going on in our construction business. What you're seeing is growing momentum in our construction business related to the quality of our solution and the increasing capabilities of our go-to-market, and frankly, competitive wins. So, it's purely related to that. There's no other talks that... No, no other impact, that we're having impact on us. It's purely execution. Thank you. And a quick one. You did mention that there are gonna be some contracts that are gonna stay legacy on-prem, multi-year billing. Is there like a floor that's gonna be there all the time in terms of multi-year upfront billings? No, there's no particular floor. You know, some customers may prefer to pay upfront. Some partners may prefer to sell upfront. As long as we offer it, somebody's gonna do it, but the important thing is it's gonna be the exception, not the rule. We're well past the world where multi-year billings up front, multi-year subscriptions billed up front were like a large chunk of our business. That era is over, but that doesn't mean that people won't do this, and we won't end up with some multi-year contracts billed up front. Got it. Billed up front. 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? Thanks, everyone, for joining us. Sorry, we've been quiet for a while. Very much looking forward to seeing many of you and talking to you over the coming weeks. If you do have questions, please just ping me as you always do, and I'll be happy to jump on a call and have a chat. Otherwise, we'll look forward to catching up with you next quarter, and look forward to chatting then. Thanks, all. This concludes today's conference call. Thank you.