Autodesk, Inc. — Call Transcript 2026

Doesn't that just make you so excited to be here and to listen to Autodesk. I'm Joe Vruwink, I cover vertical software at Baird. Very happy to have Autodesk. This is software for the built world and what architects and engineers, manufacturers, operators, they use it all. Sidharth Haksar leads the Construction Strategy. Simon Mays-Smith, Investor Relations. This is going to be a fireside chat format. If you have questions, you can email [email protected]. Let me turn it over to Simon and Sid for an intro first. Yeah. Just sort of briefly, for those of you who don't know Autodesk, what we're trying to do is connect workflows end-to-end in the cloud, with a layer of AI on top of it. Something we've been working on for almost a decade, and are years ahead of our competitors, not just in the hard stuff, the frontier, model building, but also the technology stack that sits underneath it and how we ingest and process data. We're operating, as Joe said, in AEC, in manufacturing, and media and entertainment. We're pretty excited about the future. We've also made an acquisition last week in operations, so we've had design and make and now extending into operations to complete the data across the asset life cycle. We're pretty excited about that too, but I'm sure we're going to talk about it. Why don't we talk about that? If I can channel all the questions I've gotten on this, I think, one, strategic rationale and why something like this now. Two, price paid and whether that's a fair or unfair valuation. Then three, I think a lot of investors associate Autodesk upstream with project delivery, not downstream with how these different disciplines operate after the design. Is this a totally new undertaking for you or is this more of a gap fill around things you've already been closing in on? I'll start with the last one because it also answers the first one, which is that the ultimate customer for our entire business is the owner, the asset owner. Right at the front end of the process, it's the owner that is trying to make something in manufacturing or is trying to build a building to generate a yield from it. That owner then commissions a construction company, a design company, and a construction company to build it, and then somebody to operate it. What owners want is to understand how their asset is performing across the asset life cycle. To do that, they need data. Today, data is stuck in silos, 1,000s of different silos, and not brought together. In simple terms, what we're trying to do is to create a single model from right at the beginning of the process in conceptual design through to the end, where you tear down the building and hopefully recycle and put up a new building. What we've been doing for the last, what, 15 years is building out a connected data, a common data environment, as it would be called in AEC, starting in our traditional business in design, building into construction, which Sid has been responsible for, and we can talk about a bit. The latest step is then the final stage, which is in the operations phase, which is the post-construction phase. The reason that phase is important, and the reason now, is because we've built our construction business now to a sufficient size and sufficient momentum where we're beginning to tear down the leaders in that field, and take leadership in that field, that we now have bandwidth and capacity to then now focus on operations. In terms of operations, we bought a business called MaintainX. The reason we did is that that operates in one of the core functionality bits within the operations phase, the sort of the maintenance part. The reason that's important is that that is a core piece of functionality across all operations assets. Whether it's a factory or a commercial building or a piece of infrastructure, every single one of them will need a piece of software to enable people to maintain it and keep it up and running. If you look at the sort of $40 billion TAM for operations, the biggest single chunk of it is in what's called the CMMS market. That's the key piece of software. That's why MaintainX, that is why we call it our cornerstone acquisition. It's the big chunk because it sits a central role. It sits on top of a piece of software that we already have, which is the digital twin, which is the final as-built version of a building, which you then plug into sensors, which allows you to monitor and over time with AI, predict faults in the building. What MaintainX does is when something goes wrong, it allows you to then take action and fix it, basically. That's what it is. In terms of sort of the multiple paid, a few things to think about. Firstly, as we've said, is we're following our construction playbook. The construction playbook, thank you, Sid, is we spent about $1.8 billion on our construction business. We built a business that over the last 12 months has generated about $600 million of revenue. That's 3x revenue. As you can see, it's a pretty good multiple, and it's growing more than 20%. If you look at the multiple that we've paid for MaintainX, just think about a path as we build it up, as it grows rapidly, and that multiple will come down pretty quickly. In terms of the opportunity and how we do that, there's a few things. Firstly, if you look at the construction TAM, it's about $11 billion TAM. The operations TAM is a $40 billion TAM. Much bigger market opportunity for us is the first thing. The second thing is the duration of that TAM, is that our design and make business is a years business, in terms of our interaction with an asset. The operations business is a decades long business. Once you've built the building, 80% of the cost of a building is post-construction. Managing the efficiency of that is, for the owner, is of critical importance. That's what we're trying to do. At the moment, we can only address, in terms of efficiency, 20% of the cost of a building. It's the other 80% that we're now seeking to address, with the acquisition of MaintainX building on top of Tandem, which we bought, built in organically ourselves. The sort of final thing is data. Is that the MaintainX business is a cloud-native business, mobile-first business. The vast majority of the traditional incumbents in this field are on-premise software, custom integrations, very expensive. The key thing is that getting access to the data with on-premise software is very hard. What MaintainX does is it has eight years of data, which is useful, and which we can apply our AI to, not just in the operations phase, but we can then, with inference, use that operations data, then start making inference upstream in the conceptual design phase. When you're doing conceptual design, right at the beginning of the process, if you can have something saying, "Don't install that HVAC system, because two years after construction, you're going to have a problem," that is immensely valuable information for our customers, the owner. That's what we're doing. I should probably stop there, and we can get on to the next bit. Okay. No, that's great. You kind of hinted it's growing 50% right now. But 50% also not unreasonable to think about next year as well. Yeah. It starts to work the multiple now. I'm not going to give you a revenue forecast because, or an ARR forecast, because we haven't done it, but I'm not allowed to. In terms of the opportunity, MaintainX has focused primarily on factories to start with, and is just beginning to think about a few other things where we can be quite helpful to them. The first one being AEC. As we know, we have a very, very large AEC business. As I said, the assets, the commonality of the maintenance system is transferable across into AEC as well. That's something we can help them with a lot. Secondly, we can help them with enterprise, is that they've, because they're a small startup company, been focusing on single assets and single sites. What we can do is help them up level those conversations to all of the assets owned by the owner, across the country or across the globe. The third one is international, is that they are primarily a U.S. company today. We can help them expand internationally, both with our sales teams and our eStore, but also with our channel partners, too. I think just one thing too worth adding is that while the MaintainX acquisition showed up, I think last week, we've been looking at the operations space for over four-plus years. It has been a natural progression because as we serve the needs of owners on the construction side, the next foray for them, you're targeting capital projects teams, but then their facilities teams. It's a very nice adjacency for our owner base. We also made an investment, I believe, I think it was about four years ago, in a company called Eptura that's owned by Thoma Bravo. While we've been investors in the company, we've also been learning the space very closely and understanding what's working and what's not. In a way, we've also de-risked a lot of how we think about the space going into this acquisition. To give you an example of what Sid's been working on with the New England Patriots, is that with sort of helping them build their stadium, but one of the required outputs of that project is a digital twin because they're already thinking in the construction phases how they're going to manage the asset once it's been built. Owners are thinking about this, and so are we. Okay. Maybe let's go back to the construction piece, and you talked about that $11 billion TAM. I'm going to ask two questions. One, if you look at that TAM, Autodesk has done very well, accelerated growth into the 20s, but a lot of your peers have also accelerated their growth over the last few years. There's something happening in the category itself that is allowing for more success. Maybe we can talk about what you're seeing at kind of an aggregate or macro level, and then we'll get into how Autodesk is different therein. Well, there's one that's notably decelerating in construction. Do you want to take the question? Yeah. Just generally, while there are different pockets of the industry, there's some puts and takes, right? For example, right now, data centers are on fire. There's power grid upgrades that are happening as a result of the data center and for the AI infrastructure that's coming up. There's a lot of growth there. We're seeing healthcare growing really rapidly. We're seeing also stadiums, believe it or not, at least in the U.S., are seeing a really nice ramp as people are doing big CapEx upgrade cycles. That said, the industry itself is still not as digitized as you would think. It's a very big industry. There's just this push, if you just look at within the United States still, there's plenty of opportunity of getting companies that are still sitting on either Excel or using very low-grade ERPs to manage projects. If you take a step out of just the U.S., then you start to look at, say, for example, countries like India, which is the third-largest construction market now globally. It's caught up in a very short period of time, fueled by the infrastructure boom as well. If you go and travel to India, you'll see construction really is being done using paper and Excel. It's surprising, but it is. Now those companies that operate there are seeing that in order to do a good job, you have to use technology. There's just the secular trend of people using tech, and our solutions to manage these projects. When you talk about labor shortages that are impacting the industry, schedules are compressing, projects are becoming more complex. You really need to be building right the first time. We don't see that stopping. People have to invest in tech to become more efficient and deal with it. Do you want to talk a bit about why having the design and construction tools together is so important? For us, the differentiation. That's kind of the general theme as to why not only us, but our peers as well have all benefited and grown with it. There's plenty of opportunity out there. When you bring it back to what's different from Autodesk relative to our peer group, obviously, this is one thing that we don't talk too much about, but Simon said $600 million. That's cloud. You think about how much are we generating from just the construction industry, selling them not only our cloud tools, but also our modeling desktop tools. That's in excess of $1 billion. I say that because we've already got a very strong installed base of contractors upstream using design. That's one of our key differentiators. Historically, Forma for construction wasn't as robust mature, there was a need for contractors to go use what was best in class at the time. Given where we've reached now, the story of being on one platform starts to resonate tremendously. Obviously, when you layer in opportunities with artificial intelligence, having access to your information across the project life cycle becomes that much more critical. Upstream, we've got a very strong foothold. We've matured our platform to be end-to-end. The third thing I'll add is flexibility when it comes to our business model. We are not just wedded to one particular type of model. We can be user-based pricing, we can be a percentage of construction volume, we are consumption when you look at some of our enterprise customers. That's the third piece. The fourth piece for us is really our geo footprint, and that is enabled really by our channel partners. We already have a very strong network across multiple countries. That allows us to go to market at scale. Just to sort of piggyback on the back of that connection between design and make as a competitive advantage, that same thing is true in operations because the final version of a building is the digital twin, and then extending that with things like MaintainX into operations is, it's exactly the same strategy. Yeah. Let's talk about AI and maybe to start a bit of a thought exercise. If you think about being a protein scientist or like a coder, AI has changed what you do forever. Let's rate that a 10 out of 10. When you think about construction professionals or even going into design, just the work that architects do, where would you peg them on the same 10-point scale? For us, I'll talk about construction. I think it's very early right now. One? I'd probably say between a one and two is kind of where it is. The reasons for that, obviously, adoption of new technology, it takes a little while, as we've seen. Especially when you think about where you can see a lot of the impact, I think a lot of the impact you're going to see in the field. I think people that are working out of the offices, it makes a lot of sense. You don't need to have some really complicated use cases to get value. There are some very basic use cases. One thing that we have today, just imagine for a second you're a superintendent on a job site and you're looking and making sure that everything is working in order and you find a pipe that has a crack. Now you need to create an issue of that and let people know that, hey, there's this pipe that's cracked, so we need to fix it. Typically, when you create that issue, you have to document that issue. You take a photo of the crack, and then you document it. Imagine a big job, you end up spending a lot of time documenting issues. With AI, and today we have that in our product, you can take a photo and when you take that photo, the AI will tell you what that is using our computer vision, and it will auto-populate the description of that issue. What would probably take about two minutes now gets compressed to maybe 15-20 seconds at the most. The individual just looks at it, makes sure from a quality control standpoint it's right, and then it gets sent out. That, again, is something that's not very complicated, but it saves a ton of time for people on the field when right now there's massive labor shortages, and you need that superintendent working on more impactful things than actually documenting stuff and spending time doing manual work. We do believe, just given where labor shortages are going to show up, we do expect in the field you're going to see some outsized productivity gains with the use of AI. On the flip side, in the office, we're starting to see that take off more just because the user base is more attuned to using technology and some manual tasks that can be automated, they are embracing that. The field is where I think you'll be able to get a lot of productivity gains right off the bat once this gets more mainstream. I wanted to ask on that because the use case you shared, super important, very valuable. I would say I actually see more kind of AI in pre-construction. Yes. In the scheduling aspect. Yes. where the field matters the most. What's kind of the disconnect where people are focused on kind of the edges versus what we are talking about doing in the field is most consequential? Why the focus on pre--? Why pre-construction? Yeah. Why has that been the initial focus, it seems? First of all, it's people that are in the office are more receptive to technology. The other piece I will say is projects are made or lost in pre-construction. If you end up scoping a bid inaccurately, then the margins are going to fade once you get out there on the job site. If you don't capture If your scopes of work don't match what are the specifications articulated by the architect, you may install work that then has to have a significant component of rework. You need to remove what you put in place. Again, it has an impact on margins. Getting all of that right happens in pre-construction. That's why you're seeing a lot of companies come in, or AI technologies try to make that as robust, so as a risk mitigation tool. That's what you're seeing is risk mitigation in pre-con. I think you're going to see productivity really manifest in the field. The challenge, and maybe we can talk about this, is you know, Most folks, companies lack data and context, and they also lack 3D engineering capabilities, too. Yep. That's something Autodesk has in spades, but I'll wait and see if you want to talk about that a bit. No, I think you run a survey every year around AI acceptance and where the interest is, where the pain points are, and I think the biggest pain point in the most recent survey was just system integration. You don't have anything connected, and so the data might be out there, but you have no idea how to actually use it. Exactly. This is why what Sid was saying in the connection design and make, and then what I was saying about operations, then connecting the design and make into operations. That is why that is important. What we are also starting to see increasingly within our customer base is historically, companies have had a whole hodgepodge of point solutions. That's going to start to go away as they continue to consolidate their spend in specific platforms. That's another thing, and partly is what you just raised because of data sitting in so many different silos and systems not talking to each other. Yeah. One thing I've always appreciated about Autodesk is you're making these investments before anyone is asking you to do it. Like, cloud was 2010, give or take, and then Forge, which became the Autodesk Platform Services strategy a few years later, and then you were kind of getting data ready for training before GenAI was a thing. I want to focus on Autodesk Platform Services. That began as an API strategy, and I kind of think that's morphing into the MCP server strategy to the point where when Claude is looking to embrace creative companies, Autodesk is part of that announcement. With MCP servers, you've built out kind of the important, it gets to what we're talking about of making it easier for customers to move data around, but the importance of the strategy in AI investments that are now happening. Yeah. Let me talk about that, a subject close to my heart. Just a quick detour. By the way, everything I'm about to say, if you look at our Q4, the last four pages of our Q4 opening commentary and the last four pages of our Q1 opening commentary, strongly encourage you to read them if you're interested in AI. What I'm about to say is in there. Not related to that question. You need data context to build a foundation model, to build a knowledge graph on which you can build a foundation model. Data is scarce in our industry because it's not available on the public web. It's locked up in a million and one different company's systems. If you have access to it through the cloud, which we do, most of our competitors don't because they only have on-premise software, then you can have enough data to build foundation models. You also need context because the assets that we're building are constantly changing. A building site on day 20 is different from the one on day 30 is different on the one on day 40. You have to know what's leading up to a particular point and decision and what happens after it. You have to understand the sequencing of how everything's put together. There's a bunch of context you need and data to build a knowledge graph, and those are very hard to come by in our industry. Once you've done that, you also need 3D engineering. Just to be clear, LLMs are 2D. They're sort of words and coding. They don't reason in 3D like our models do. 3D inference is really hard to do, and we know that because we've been trying to do it for almost a decade. Again, years ahead of, as Joe said, of need, so to speak. We're years ahead of our competitors on that. Doing all that stuff is hard. We've been doing it for almost a decade, and we're years ahead of our competitors. Once you're doing that and you're launching foundation models, that's when the technology stack becomes important. Just to give you sort of two examples, one of which is everyone worrying about token maxing and gross margins, something we've been talking about. Gross margin pressure is something you cannot escape as you put more workflows and high compute workflows into the cloud. What you're trying to do is to figure out how to bend the curve. Critical to that is how you ingest and process data. That's something and the reason why Autodesk Platform Services is so important is we've done a bunch of work over the efficiency with which we can ingest data and then how we process data. Give you two examples. None of this sounds very sexy, but it's critically important. One is around the data model, is that if you go into our customer systems and look at all the models, what you'll find is that the data is fragmented. They have an HVAC system in one file. They've got the structural building in another. If you turn up and scan it, you don't have a whole building to make inference on. The reason the data model is important is it brings all of that disparate data back together again and allows you to extract meaning from it. We've done that work. It's really hard math to do that. What it means is that for any given data set, we can extract more value and more meaning from it in a scalable and efficient way than anybody else. At the other end of the spectrum, when you're doing inference, if you try and put 3D inference through a stack that's built for 2D, it's very cost inefficient. It uses much more capacity and costs you more money than it needs to. What we've done is we've built our own inference stack on top of AWS, which is massively more efficient at 3D inference, cost efficient than doing the equivalent inference on 2D stacks. Virtually all of the other stacks are built for 2D inference because nobody's trying to solve our problem, or very few people are trying to solve a 3D inference problem. That's why the technology stack is so important in terms of AI. It's also important to Joe's point is around how you develop your offering. What we've been doing, and this is a sort of technical debt problem, is we built a bunch of stuff over the last 40 years, and essentially building the same functionality across the organization. What we've been doing over the last three or four years is creating more common components so that when you update something, it propagates across the entire product suite rather than having to go in and update everything at once. What it also enables us to do, with the help of AI, is to start creating new value. One of the underrated things that we were talking about last week is we have probabilistic AI models, and we're using our deterministic parametric models, which we've been using for the last 40 years, to validate our AI models. That loop, so we create a probabilistic outcome. Top tip, don't walk into a building that's been created by a probabilistic model because it might fall down. We validate it with a deterministic model, which we've had for 40 years, and that loop allows us then to improve our AI models in that loop. Again, sort of massively improvement. What we've done is those parametric models sit within our traditional products, so Revit and Fusion, et cetera. What we've been able to do is to extract just the parametric model and then plug it into our AI models to make them more efficient. Doing that a year ago would've been inconceivably hard to think about doing, but with AI and new engineering techniques, we were able to do that in three weeks, extract the parametric models from our engineering. One of our core beliefs is that AI is about doing more with the same number of people. It's not about doing the same with fewer people. What you have to do is to be able to conceive of hard stuff and hard problems to solve. I think that's going to be a key challenge for most organizations. Fortunately, one thing Autodesk loves doing is solving hard problems. That's why we started trying to solve AI 10 years ago. It's why we started to try and solve the cloud 20 years ago. We always try and solve hard problems so it plays to our strengths. How does that all get monetized? I've heard that the Autodesk direct sales team is trying to encourage their customers to Flex tokens because increasingly you can kind of get tied into that. What's the strategy there? We're not encouraging to Flex tokens and actually, and this is again, another which I will discuss with a bottle of whiskey if anybody wants to, but it's not about maximizing tokens. If you're doing that, you're going to find soon that your AI agent costs you more than a human being does. It's actually about sipping, not sucking at the tokens and building the software that enables you to do that. Otherwise, you're going to have products that are too expensive, and not doing the job that you need them to do to drive efficiency in the industries. What we are trying to do is to enable our customers to try stuff and to build stuff, and try stuff. Partly because that's for their benefit, but what also it does for us is it generates data exhausts, which are useful for us as they do that. Yes, we're trying to encourage them to do it. What we're not trying to do is to consume bad calories from it. We want them actually to become more match fit as a result of it. That's bringing customers into kind of a new subscription, different subscription than a seat tied to a model. These are bundles of API uses that you can monetize. Exactly that, I think this is, I don't know whether it's consensus, but emerging consensus is that the subscription's going to be around for a very, very long time. Included in a subscription will be a core, a level of functionality and a core level of capacity, will be included in your base subscription. If you need additional capacity for high compute workloads and high-value workloads like AI, you will essentially buy additional capacity. Very similar. A little known fact, 17% of our business is already consumption, which is a type of capacity model. There are others. It behaves financially like a subscription because essentially people buy capacity ahead of time and then consume against that capacity on a use it or lose it basis. Consumption doesn't have to be volatile. You can give the customer the benefit of flexibility, and certainty, while also enabling us to have predictable and ratable revenue streams. Maybe with the little time we have left to talk about something more recent, and you've taken control of your sales channel. You used to have a two-tier distribution model, now you're direct. What's been kind of the biggest learnings from that and benefits that you originally thought you would get? Are the benefits coming through? Yeah. I said earlier, Autodesk superpowers is we do hard stuff. This is a good example, but it's sort of a function of, and you should be asking all of our competitors this, is there's a bunch of stuff you have to do just to get onto the starting grid of AI. You have to sort out your technology stack for the reasons I talked about. You have to have cloud-based software. You have to have more direct integration with your customers, which we're going to talk about in a second. That's why I'm mentioning it. You have to have a bunch of different business models, so you can't just be subscription. You also have to have metered access models like consumption, et cetera as well. All of these things are really hard to do. Autodesk has been doing them over the last five to 10 years, which is why, and also you have to invest in AI and the engineering capabilities to build foundation models. They're all really hard to do. They all mess up your P&L, balance sheet, cash flows, margins while you're doing them. We've been doing that for the last 10 years, 15 years, in the case of the cloud, in a way that most of our competitors have not been doing. They have to do it, and the time they have available to do it is getting shorter at a faster rate because of AI. The risk of getting it wrong is greater. The most recent one we've done is our sales reorganization, but the intent is essentially to have ourselves more directly integrated with our customers, enabling that with more things like more self-service, more auto-renew, and more co-terming, et cetera, so that you have more automation essentially in the process. Then using that then to help our customers build on top of us to drive more new applications for them and more revenue opportunities for us as well over time. In terms of the hard, it is hard to do, so we had a significant restructuring earlier on this year. We also, at the same time, ripped all of the custom integrated stuff we'd built on top of Salesforce, put ourselves onto the base Salesforce platform, and then have added a lot of the AI functionality that Salesforce has introduced to enable sales, productivity, et cetera, which we weren't able to do because of the customization we had on the platform. All of that stuff is hard. It creates disruption, which we've talked about, but well within the expectations that we'd set out in February. Great. With that, we're at time. There will be a breakout session, but please join me in thanking Autodesk. Thank you.

Speaker 1: Doesn't that just make you so excited to be here and to listen to Autodesk. I'm Joe Vruwink, I cover vertical software at Baird. Very happy to have Autodesk. This is software for the built world and what architects and engineers, manufacturers, operators, they use it all. Sidharth Haksar leads the Construction Strategy. Simon Mays-Smith, Investor Relations. This is going to be a fireside chat format. If you have questions, you can email [email protected]. Let me turn it over to Simon and Sid for an intro first. Doesn't that just make you so excited to be here and to listen to Autodesk. doesn't that just make you so excited to be here and to listen to autodesk I'm Joe Vruwink, I cover vertical software at Baird. i'm joe vruwink i cover vertical software at baird Very happy to have Autodesk. very happy to have autodesk This is software for the built world and what architects and engineers, manufacturers, operators, they use it all. this is software for the built world and what architects and engineers manufacturers operators they use it all Sidharth Haksar leads the Construction Strategy. sidharth haksar leads the construction strategy Simon Mays-Smith, Investor Relations. simon mays-smith investor relations This is going to be a fireside chat format. this is going to be a fireside chat format If you have questions, you can email [email protected]. if you have questions you can email [email protected] Let me turn it over to Simon and Sid for an intro first. let me turn it over to simon and sid for an intro first

Speaker 3: Yeah. Just sort of briefly, for those of you who don't know Autodesk, what we're trying to do is connect workflows end-to-end in the cloud, with a layer of AI on top of it. Something we've been working on for almost a decade, and are years ahead of our competitors, not just in the hard stuff, the frontier, model building, but also the technology stack that sits underneath it and how we ingest and process data. We're operating, as Joe said, in AEC, in manufacturing, and media and entertainment. We're pretty excited about the future. We've also made an acquisition last week in operations, so we've had design and make and now extending into operations to complete the data across the asset life cycle. We're pretty excited about that too, but I'm sure we're going to talk about it. Yeah. yeah Just sort of briefly, for those of you who don't know Autodesk, what we're trying to do is connect workflows end-to-end in the cloud, with a layer of AI on top of it. just sort of briefly for those of you who don't know autodesk what we're trying to do is connect workflows end-to-end in the cloud with a layer of ai on top of it Something we've been working on for almost a decade, and are years ahead of our competitors, not just in the hard stuff, the frontier, model building, but also the technology stack that sits underneath it and how we ingest and process data. something we've been working on for almost a decade and are years ahead of our competitors not just in the hard stuff the frontier model building but also the technology stack that sits underneath it and how we ingest and process data We're operating, as Joe said, in AEC, in manufacturing, and media and entertainment. we're operating as joe said in aec in manufacturing and media and entertainment We're pretty excited about the future. we're pretty excited about the future We've also made an acquisition last week in operations, so we've had design and make and now extending into operations to complete the data across the asset life cycle. we've also made an acquisition last week in operations so we've had design and make and now extending into operations to complete the data across the asset life cycle We're pretty excited about that too, but I'm sure we're going to talk about it. we're pretty excited about that too but i'm sure we're going to talk about it

Speaker 1: Why don't we talk about that? If I can channel all the questions I've gotten on this, I think, one, strategic rationale and why something like this now. Two, price paid and whether that's a fair or unfair valuation. Then three, I think a lot of investors associate Autodesk upstream with project delivery, not downstream with how these different disciplines operate after the design. Is this a totally new undertaking for you or is this more of a gap fill around things you've already been closing in on? Why don't we talk about that? why don't we talk about that If I can channel all the questions I've gotten on this, I think, one, strategic rationale and why something like this now. if i can channel all the questions i've gotten on this i think one strategic rationale and why something like this now Two, price paid and whether that's a fair or unfair valuation. two price paid and whether that's a fair or unfair valuation Then three, I think a lot of investors associate Autodesk upstream with project delivery, not downstream with how these different disciplines operate after the design. then three i think a lot of investors associate autodesk upstream with project delivery not downstream with how these different disciplines operate after the design Is this a totally new undertaking for you or is this more of a gap fill around things you've already been closing in on? is this a totally new undertaking for you or is this more of a gap fill around things you've already been closing in on

Speaker 3: I'll start with the last one because it also answers the first one, which is that the ultimate customer for our entire business is the owner, the asset owner. Right at the front end of the process, it's the owner that is trying to make something in manufacturing or is trying to build a building to generate a yield from it. That owner then commissions a construction company, a design company, and a construction company to build it, and then somebody to operate it. What owners want is to understand how their asset is performing across the asset life cycle. To do that, they need data. Today, data is stuck in silos, 1,000s of different silos, and not brought together. I'll start with the last one because it also answers the first one, which is that the ultimate customer for our entire business is the owner, the asset owner. i'll start with the last one because it also answers the first one which is that the ultimate customer for our entire business is the owner the asset owner Right at the front end of the process, it's the owner that is trying to make something in manufacturing or is trying to build a building to generate a yield from it. right at the front end of the process it's the owner that is trying to make something in manufacturing or is trying to build a building to generate a yield from it That owner then commissions a construction company, a design company, and a construction company to build it, and then somebody to operate it. that owner then commissions a construction company a design company and a construction company to build it and then somebody to operate it What owners want is to understand how their asset is performing across the asset life cycle. what owners want is to understand how their asset is performing across the asset life cycle To do that, they need data. to do that they need data Today, data is stuck in silos, 1,000s of different silos, and not brought together. today data is stuck in silos 1,000s of different silos and not brought together In simple terms, what we're trying to do is to create a single model from right at the beginning of the process in conceptual design through to the end, where you tear down the building and hopefully recycle and put up a new building. What we've been doing for the last, what, 15 years is building out a connected data, a common data environment, as it would be called in AEC, starting in our traditional business in design, building into construction, which Sid has been responsible for, and we can talk about a bit. The latest step is then the final stage, which is in the operations phase, which is the post-construction phase. In simple terms, what we're trying to do is to create a single model from right at the beginning of the process in conceptual design through to the end, where you tear down the building and hopefully recycle and put up a new building. in simple terms what we're trying to do is to create a single model from right at the beginning of the process in conceptual design through to the end where you tear down the building and hopefully recycle and put up a new building What we've been doing for the last, what, 15 years is building out a connected data, a common data environment, as it would be called in AEC, starting in our traditional business in design, building into construction, which Sid has been responsible for, and we can talk about a bit. what we've been doing for the last what 15 years is building out a connected data a common data environment as it would be called in aec starting in our traditional business in design building into construction which sid has been responsible for and we can talk about a bit The latest step is then the final stage, which is in the operations phase, which is the post-construction phase. the latest step is then the final stage which is in the operations phase which is the post-construction phase The reason that phase is important, and the reason now, is because we've built our construction business now to a sufficient size and sufficient momentum where we're beginning to tear down the leaders in that field, and take leadership in that field, that we now have bandwidth and capacity to then now focus on operations. In terms of operations, we bought a business called MaintainX. The reason we did is that that operates in one of the core functionality bits within the operations phase, the sort of the maintenance part. The reason that's important is that that is a core piece of functionality across all operations assets. Whether it's a factory or a commercial building or a piece of infrastructure, every single one of them will need a piece of software to enable people to maintain it and keep it up and running. The reason that phase is important, and the reason now, is because we've built our construction business now to a sufficient size and sufficient momentum where we're beginning to tear down the leaders in that field, and take leadership in that field, that we now have bandwidth and capacity to then now focus on operations. the reason that phase is important and the reason now is because we've built our construction business now to a sufficient size and sufficient momentum where we're beginning to tear down the leaders in that field and take leadership in that field that we now have bandwidth and capacity to then now focus on operations In terms of operations, we bought a business called MaintainX. in terms of operations we bought a business called maintainx The reason we did is that that operates in one of the core functionality bits within the operations phase, the sort of the maintenance part. the reason we did is that that operates in one of the core functionality bits within the operations phase the sort of the maintenance part The reason that's important is that that is a core piece of functionality across all operations assets. the reason that's important is that that is a core piece of functionality across all operations assets Whether it's a factory or a commercial building or a piece of infrastructure, every single one of them will need a piece of software to enable people to maintain it and keep it up and running. whether it's a factory or a commercial building or a piece of infrastructure every single one of them will need a piece of software to enable people to maintain it and keep it up and running If you look at the sort of $40 billion TAM for operations, the biggest single chunk of it is in what's called the CMMS market. That's the key piece of software. That's why MaintainX, that is why we call it our cornerstone acquisition. It's the big chunk because it sits a central role. It sits on top of a piece of software that we already have, which is the digital twin, which is the final as-built version of a building, which you then plug into sensors, which allows you to monitor and over time with AI, predict faults in the building. What MaintainX does is when something goes wrong, it allows you to then take action and fix it, basically. That's what it is. In terms of sort of the multiple paid, a few things to think about. If you look at the sort of $40 billion TAM for operations, the biggest single chunk of it is in what's called the CMMS market. if you look at the sort of $40 billion tam for operations the biggest single chunk of it is in what's called the cmms market That's the key piece of software. that's the key piece of software That's why MaintainX, that is why we call it our cornerstone acquisition. that's why maintainx that is why we call it our cornerstone acquisition It's the big chunk because it sits a central role. it's the big chunk because it sits a central role It sits on top of a piece of software that we already have, which is the digital twin, which is the final as-built version of a building, which you then plug into sensors, which allows you to monitor and over time with AI, predict faults in the building. it sits on top of a piece of software that we already have which is the digital twin which is the final as-built version of a building which you then plug into sensors which allows you to monitor and over time with ai predict faults in the building What MaintainX does is when something goes wrong, it allows you to then take action and fix it, basically. what maintainx does is when something goes wrong it allows you to then take action and fix it basically That's what it is. that's what it is In terms of sort of the multiple paid, a few things to think about. in terms of sort of the multiple paid a few things to think about Firstly, as we've said, is we're following our construction playbook. The construction playbook, thank you, Sid, is we spent about $1.8 billion on our construction business. We built a business that over the last 12 months has generated about $600 million of revenue. That's 3x revenue. As you can see, it's a pretty good multiple, and it's growing more than 20%. If you look at the multiple that we've paid for MaintainX, just think about a path as we build it up, as it grows rapidly, and that multiple will come down pretty quickly. In terms of the opportunity and how we do that, there's a few things. Firstly, if you look at the construction TAM, it's about $11 billion TAM. The operations TAM is a $40 billion TAM. Much bigger market opportunity for us is the first thing. Firstly, as we've said, is we're following our construction playbook. firstly as we've said is we're following our construction playbook The construction playbook, thank you, Sid, is we spent about $1.8 billion on our construction business. the construction playbook thank you sid is we spent about $1.8 billion on our construction business We built a business that over the last 12 months has generated about $600 million of revenue. we built a business that over the last 12 months has generated about $600 million of revenue That's 3x revenue. that's 3x revenue As you can see, it's a pretty good multiple, and it's growing more than 20%. as you can see it's a pretty good multiple and it's growing more than 20% If you look at the multiple that we've paid for MaintainX, just think about a path as we build it up, as it grows rapidly, and that multiple will come down pretty quickly. if you look at the multiple that we've paid for maintainx just think about a path as we build it up as it grows rapidly and that multiple will come down pretty quickly In terms of the opportunity and how we do that, there's a few things. in terms of the opportunity and how we do that there's a few things Firstly, if you look at the construction TAM, it's about $11 billion TAM. firstly if you look at the construction tam it's about $11 billion tam The operations TAM is a $40 billion TAM. the operations tam is a $40 billion tam Much bigger market opportunity for us is the first thing. much bigger market opportunity for us is the first thing The second thing is the duration of that TAM, is that our design and make business is a years business, in terms of our interaction with an asset. The operations business is a decades long business. Once you've built the building, 80% of the cost of a building is post-construction. Managing the efficiency of that is, for the owner, is of critical importance. That's what we're trying to do. At the moment, we can only address, in terms of efficiency, 20% of the cost of a building. It's the other 80% that we're now seeking to address, with the acquisition of MaintainX building on top of Tandem, which we bought, built in organically ourselves. The sort of final thing is data. Is that the MaintainX business is a cloud-native business, mobile-first business. The second thing is the duration of that TAM, is that our design and make business is a years business, in terms of our interaction with an asset. the second thing is the duration of that tam is that our design and make business is a years business in terms of our interaction with an asset The operations business is a decades long business. the operations business is a decades long business Once you've built the building, 80% of the cost of a building is post-construction. once you've built the building 80% of the cost of a building is post-construction Managing the efficiency of that is, for the owner, is of critical importance. managing the efficiency of that is for the owner is of critical importance That's what we're trying to do. that's what we're trying to do At the moment, we can only address, in terms of efficiency, 20% of the cost of a building. at the moment we can only address in terms of efficiency 20% of the cost of a building It's the other 80% that we're now seeking to address, with the acquisition of MaintainX building on top of Tandem, which we bought, built in organically ourselves. it's the other 80% that we're now seeking to address with the acquisition of maintainx building on top of tandem which we bought built in organically ourselves The sort of final thing is data. the sort of final thing is data Is that the MaintainX business is a cloud-native business, mobile-first business. is that the maintainx business is a cloud-native business mobile-first business The vast majority of the traditional incumbents in this field are on-premise software, custom integrations, very expensive. The key thing is that getting access to the data with on-premise software is very hard. What MaintainX does is it has eight years of data, which is useful, and which we can apply our AI to, not just in the operations phase, but we can then, with inference, use that operations data, then start making inference upstream in the conceptual design phase. When you're doing conceptual design, right at the beginning of the process, if you can have something saying, "Don't install that HVAC system, because two years after construction, you're going to have a problem," that is immensely valuable information for our customers, the owner. That's what we're doing. I should probably stop there, and we can get on to the next bit. The vast majority of the traditional incumbents in this field are on-premise software, custom integrations, very expensive. the vast majority of the traditional incumbents in this field are on-premise software custom integrations very expensive The key thing is that getting access to the data with on-premise software is very hard. the key thing is that getting access to the data with on-premise software is very hard What MaintainX does is it has eight years of data, which is useful, and which we can apply our AI to, not just in the operations phase, but we can then, with inference, use that operations data, then start making inference upstream in the conceptual design phase. what maintainx does is it has eight years of data which is useful and which we can apply our ai to not just in the operations phase but we can then with inference use that operations data then start making inference upstream in the conceptual design phase When you're doing conceptual design, right at the beginning of the process, if you can have something saying, "Don't install that HVAC system, because two years after construction, you're going to have a problem," that is immensely valuable information for our customers, the owner. when you're doing conceptual design right at the beginning of the process if you can have something saying "don't install that hvac system because two years after construction you're going to have a problem," that is immensely valuable information for our customers the owner That's what we're doing. that's what we're doing I should probably stop there, and we can get on to the next bit. i should probably stop there and we can get on to the next bit

Speaker 1: Okay. No, that's great. You kind of hinted it's growing 50% right now. But 50% also not unreasonable to think about next year as well. Okay. okay No, that's great. no that's great You kind of hinted it's growing 50% right now. you kind of hinted it's growing 50% right now But 50% also not unreasonable to think about next year as well. but 50% also not unreasonable to think about next year as well

Speaker 3: Yeah. Yeah. yeah

Speaker 1: It starts to work the multiple now. It starts to work the multiple now. it starts to work the multiple now

Speaker 3: I'm not going to give you a revenue forecast because, or an ARR forecast, because we haven't done it, but I'm not allowed to. In terms of the opportunity, MaintainX has focused primarily on factories to start with, and is just beginning to think about a few other things where we can be quite helpful to them. The first one being AEC. As we know, we have a very, very large AEC business. As I said, the assets, the commonality of the maintenance system is transferable across into AEC as well. That's something we can help them with a lot. Secondly, we can help them with enterprise, is that they've, because they're a small startup company, been focusing on single assets and single sites. I'm not going to give you a revenue forecast because, or an ARR forecast, because we haven't done it, but I'm not allowed to. i'm not going to give you a revenue forecast because or an arr forecast because we haven't done it but i'm not allowed to In terms of the opportunity, MaintainX has focused primarily on factories to start with, and is just beginning to think about a few other things where we can be quite helpful to them. in terms of the opportunity maintainx has focused primarily on factories to start with and is just beginning to think about a few other things where we can be quite helpful to them The first one being AEC. the first one being aec As we know, we have a very, very large AEC business. as we know we have a very very large aec business As I said, the assets, the commonality of the maintenance system is transferable across into AEC as well. as i said the assets the commonality of the maintenance system is transferable across into aec as well That's something we can help them with a lot. that's something we can help them with a lot Secondly, we can help them with enterprise, is that they've, because they're a small startup company, been focusing on single assets and single sites. secondly we can help them with enterprise is that they've because they're a small startup company been focusing on single assets and single sites What we can do is help them up level those conversations to all of the assets owned by the owner, across the country or across the globe. The third one is international, is that they are primarily a U.S. company today. We can help them expand internationally, both with our sales teams and our eStore, but also with our channel partners, too. What we can do is help them up level those conversations to all of the assets owned by the owner, across the country or across the globe. what we can do is help them up level those conversations to all of the assets owned by the owner across the country or across the globe The third one is international, is that they are primarily a U.S. company today. the third one is international is that they are primarily a u.s company today We can help them expand internationally, both with our sales teams and our eStore, but also with our channel partners, too. we can help them expand internationally both with our sales teams and our estore but also with our channel partners too

Speaker 2: I think just one thing too worth adding is that while the MaintainX acquisition showed up, I think last week, we've been looking at the operations space for over four-plus years. It has been a natural progression because as we serve the needs of owners on the construction side, the next foray for them, you're targeting capital projects teams, but then their facilities teams. It's a very nice adjacency for our owner base. We also made an investment, I believe, I think it was about four years ago, in a company called Eptura that's owned by Thoma Bravo. While we've been investors in the company, we've also been learning the space very closely and understanding what's working and what's not. In a way, we've also de-risked a lot of how we think about the space going into this acquisition. I think just one thing too worth adding is that while the MaintainX acquisition showed up, I think last week, we've been looking at the operations space for over four-plus years. i think just one thing too worth adding is that while the maintainx acquisition showed up i think last week we've been looking at the operations space for over four-plus years It has been a natural progression because as we serve the needs of owners on the construction side, the next foray for them, you're targeting capital projects teams, but then their facilities teams. it has been a natural progression because as we serve the needs of owners on the construction side the next foray for them you're targeting capital projects teams but then their facilities teams It's a very nice adjacency for our owner base. it's a very nice adjacency for our owner base We also made an investment, I believe, I think it was about four years ago, in a company called Eptura that's owned by Thoma Bravo. we also made an investment i believe i think it was about four years ago in a company called eptura that's owned by thoma bravo While we've been investors in the company, we've also been learning the space very closely and understanding what's working and what's not. while we've been investors in the company we've also been learning the space very closely and understanding what's working and what's not In a way, we've also de-risked a lot of how we think about the space going into this acquisition. in a way we've also de-risked a lot of how we think about the space going into this acquisition

Speaker 3: To give you an example of what Sid's been working on with the New England Patriots, is that with sort of helping them build their stadium, but one of the required outputs of that project is a digital twin because they're already thinking in the construction phases how they're going to manage the asset once it's been built. Owners are thinking about this, and so are we. To give you an example of what Sid's been working on with the New England Patriots, is that with sort of helping them build their stadium, but one of the required outputs of that project is a digital twin because they're already thinking in the construction phases how they're going to manage the asset once it's been built. to give you an example of what sid's been working on with the new england patriots is that with sort of helping them build their stadium but one of the required outputs of that project is a digital twin because they're already thinking in the construction phases how they're going to manage the asset once it's been built Owners are thinking about this, and so are we. owners are thinking about this and so are we

Speaker 1: Okay. Maybe let's go back to the construction piece, and you talked about that $11 billion TAM. I'm going to ask two questions. One, if you look at that TAM, Autodesk has done very well, accelerated growth into the 20s, but a lot of your peers have also accelerated their growth over the last few years. There's something happening in the category itself that is allowing for more success. Maybe we can talk about what you're seeing at kind of an aggregate or macro level, and then we'll get into how Autodesk is different therein. Okay. okay Maybe let's go back to the construction piece, and you talked about that $11 billion TAM. maybe let's go back to the construction piece and you talked about that $11 billion tam I'm going to ask two questions. i'm going to ask two questions One, if you look at that TAM, Autodesk has done very well, accelerated growth into the 20s, but a lot of your peers have also accelerated their growth over the last few years. one if you look at that tam autodesk has done very well accelerated growth into the 20s but a lot of your peers have also accelerated their growth over the last few years There's something happening in the category itself that is allowing for more success. there's something happening in the category itself that is allowing for more success Maybe we can talk about what you're seeing at kind of an aggregate or macro level, and then we'll get into how Autodesk is different therein. maybe we can talk about what you're seeing at kind of an aggregate or macro level and then we'll get into how autodesk is different therein

Speaker 3: Well, there's one that's notably decelerating in construction. Do you want to take the question? Well, there's one that's notably decelerating in construction. well there's one that's notably decelerating in construction Do you want to take the question? do you want to take the question

Speaker 2: Yeah. Just generally, while there are different pockets of the industry, there's some puts and takes, right? For example, right now, data centers are on fire. There's power grid upgrades that are happening as a result of the data center and for the AI infrastructure that's coming up. There's a lot of growth there. We're seeing healthcare growing really rapidly. We're seeing also stadiums, believe it or not, at least in the U.S., are seeing a really nice ramp as people are doing big CapEx upgrade cycles. That said, the industry itself is still not as digitized as you would think. It's a very big industry. There's just this push, if you just look at within the United States still, there's plenty of opportunity of getting companies that are still sitting on either Excel or using very low-grade ERPs to manage projects. Yeah. yeah Just generally, while there are different pockets of the industry, there's some puts and takes, right? just generally while there are different pockets of the industry there's some puts and takes right For example, right now, data centers are on fire. for example right now data centers are on fire There's power grid upgrades that are happening as a result of the data center and for the AI infrastructure that's coming up. there's power grid upgrades that are happening as a result of the data center and for the ai infrastructure that's coming up There's a lot of growth there. there's a lot of growth there We're seeing healthcare growing really rapidly. we're seeing healthcare growing really rapidly We're seeing also stadiums, believe it or not, at least in the U.S., are seeing a really nice ramp as people are doing big CapEx upgrade cycles. we're seeing also stadiums believe it or not at least in the u.s are seeing a really nice ramp as people are doing big capex upgrade cycles That said, the industry itself is still not as digitized as you would think. that said the industry itself is still not as digitized as you would think It's a very big industry. it's a very big industry There's just this push, if you just look at within the United States still, there's plenty of opportunity of getting companies that are still sitting on either Excel or using very low-grade ERPs to manage projects. there's just this push if you just look at within the united states still there's plenty of opportunity of getting companies that are still sitting on either excel or using very low-grade erps to manage projects If you take a step out of just the U.S., then you start to look at, say, for example, countries like India, which is the third-largest construction market now globally. It's caught up in a very short period of time, fueled by the infrastructure boom as well. If you go and travel to India, you'll see construction really is being done using paper and Excel. It's surprising, but it is. Now those companies that operate there are seeing that in order to do a good job, you have to use technology. There's just the secular trend of people using tech, and our solutions to manage these projects. When you talk about labor shortages that are impacting the industry, schedules are compressing, projects are becoming more complex. You really need to be building right the first time. We don't see that stopping. If you take a step out of just the U.S., then you start to look at, say, for example, countries like India, which is the third-largest construction market now globally. if you take a step out of just the u.s then you start to look at say for example countries like india which is the third-largest construction market now globally It's caught up in a very short period of time, fueled by the infrastructure boom as well. it's caught up in a very short period of time fueled by the infrastructure boom as well If you go and travel to India, you'll see construction really is being done using paper and Excel. if you go and travel to india you'll see construction really is being done using paper and excel It's surprising, but it is. it's surprising but it is Now those companies that operate there are seeing that in order to do a good job, you have to use technology. now those companies that operate there are seeing that in order to do a good job you have to use technology There's just the secular trend of people using tech, and our solutions to manage these projects. there's just the secular trend of people using tech and our solutions to manage these projects When you talk about labor shortages that are impacting the industry, schedules are compressing, projects are becoming more complex. when you talk about labor shortages that are impacting the industry schedules are compressing projects are becoming more complex You really need to be building right the first time. you really need to be building right the first time We don't see that stopping. we don't see that stopping People have to invest in tech to become more efficient and deal with it. People have to invest in tech to become more efficient and deal with it. people have to invest in tech to become more efficient and deal with it

Speaker 3: Do you want to talk a bit about why having the design and construction tools together is so important? Do you want to talk a bit about why having the design and construction tools together is so important? do you want to talk a bit about why having the design and construction tools together is so important

Speaker 2: For us, the differentiation. That's kind of the general theme as to why not only us, but our peers as well have all benefited and grown with it. There's plenty of opportunity out there. When you bring it back to what's different from Autodesk relative to our peer group, obviously, this is one thing that we don't talk too much about, but Simon said $600 million. That's cloud. You think about how much are we generating from just the construction industry, selling them not only our cloud tools, but also our modeling desktop tools. That's in excess of $1 billion. I say that because we've already got a very strong installed base of contractors upstream using design. That's one of our key differentiators. For us, the differentiation. for us the differentiation That's kind of the general theme as to why not only us, but our peers as well have all benefited and grown with it. that's kind of the general theme as to why not only us but our peers as well have all benefited and grown with it There's plenty of opportunity out there. there's plenty of opportunity out there When you bring it back to what's different from Autodesk relative to our peer group, obviously, this is one thing that we don't talk too much about, but Simon said $600 million. when you bring it back to what's different from autodesk relative to our peer group obviously this is one thing that we don't talk too much about but simon said $600 million That's cloud. that's cloud You think about how much are we generating from just the construction industry, selling them not only our cloud tools, but also our modeling desktop tools. you think about how much are we generating from just the construction industry selling them not only our cloud tools but also our modeling desktop tools That's in excess of $1 billion. that's in excess of $1 billion I say that because we've already got a very strong installed base of contractors upstream using design. i say that because we've already got a very strong installed base of contractors upstream using design That's one of our key differentiators. that's one of our key differentiators Historically, Forma for construction wasn't as robust mature, there was a need for contractors to go use what was best in class at the time. Given where we've reached now, the story of being on one platform starts to resonate tremendously. Obviously, when you layer in opportunities with artificial intelligence, having access to your information across the project life cycle becomes that much more critical. Upstream, we've got a very strong foothold. We've matured our platform to be end-to-end. The third thing I'll add is flexibility when it comes to our business model. We are not just wedded to one particular type of model. We can be user-based pricing, we can be a percentage of construction volume, we are consumption when you look at some of our enterprise customers. That's the third piece. Historically, Forma for construction wasn't as robust mature, there was a need for contractors to go use what was best in class at the time. historically forma for construction wasn't as robust mature there was a need for contractors to go use what was best in class at the time Given where we've reached now, the story of being on one platform starts to resonate tremendously. given where we've reached now the story of being on one platform starts to resonate tremendously Obviously, when you layer in opportunities with artificial intelligence, having access to your information across the project life cycle becomes that much more critical. obviously when you layer in opportunities with artificial intelligence having access to your information across the project life cycle becomes that much more critical Upstream, we've got a very strong foothold. upstream we've got a very strong foothold We've matured our platform to be end-to-end. we've matured our platform to be end-to-end The third thing I'll add is flexibility when it comes to our business model. the third thing i'll add is flexibility when it comes to our business model We are not just wedded to one particular type of model. we are not just wedded to one particular type of model We can be user-based pricing, we can be a percentage of construction volume, we are consumption when you look at some of our enterprise customers. we can be user-based pricing we can be a percentage of construction volume we are consumption when you look at some of our enterprise customers That's the third piece. that's the third piece The fourth piece for us is really our geo footprint, and that is enabled really by our channel partners. We already have a very strong network across multiple countries. That allows us to go to market at scale. The fourth piece for us is really our geo footprint, and that is enabled really by our channel partners. the fourth piece for us is really our geo footprint and that is enabled really by our channel partners We already have a very strong network across multiple countries. we already have a very strong network across multiple countries That allows us to go to market at scale. that allows us to go to market at scale

Speaker 3: Just to sort of piggyback on the back of that connection between design and make as a competitive advantage, that same thing is true in operations because the final version of a building is the digital twin, and then extending that with things like MaintainX into operations is, it's exactly the same strategy. Just to sort of piggyback on the back of that connection between design and make as a competitive advantage, that same thing is true in operations because the final version of a building is the digital twin, and then extending that with things like MaintainX into operations is, it's exactly the same strategy. just to sort of piggyback on the back of that connection between design and make as a competitive advantage that same thing is true in operations because the final version of a building is the digital twin and then extending that with things like maintainx into operations is it's exactly the same strategy

Speaker 1: Yeah. Let's talk about AI and maybe to start a bit of a thought exercise. If you think about being a protein scientist or like a coder, AI has changed what you do forever. Let's rate that a 10 out of 10. When you think about construction professionals or even going into design, just the work that architects do, where would you peg them on the same 10-point scale? Yeah. yeah Let's talk about AI and maybe to start a bit of a thought exercise. let's talk about ai and maybe to start a bit of a thought exercise If you think about being a protein scientist or like a coder, AI has changed what you do forever. if you think about being a protein scientist or like a coder ai has changed what you do forever Let's rate that a 10 out of 10. let's rate that a 10 out of 10 When you think about construction professionals or even going into design, just the work that architects do, where would you peg them on the same 10-point scale? when you think about construction professionals or even going into design just the work that architects do where would you peg them on the same 10-point scale

Speaker 2: For us, I'll talk about construction. I think it's very early right now. For us, I'll talk about construction. for us i'll talk about construction I think it's very early right now. i think it's very early right now

Speaker 1: One? One? one

Speaker 2: I'd probably say between a one and two is kind of where it is. The reasons for that, obviously, adoption of new technology, it takes a little while, as we've seen. Especially when you think about where you can see a lot of the impact, I think a lot of the impact you're going to see in the field. I think people that are working out of the offices, it makes a lot of sense. You don't need to have some really complicated use cases to get value. There are some very basic use cases. One thing that we have today, just imagine for a second you're a superintendent on a job site and you're looking and making sure that everything is working in order and you find a pipe that has a crack. I'd probably say between a one and two is kind of where it is. i'd probably say between a one and two is kind of where it is The reasons for that, obviously, adoption of new technology, it takes a little while, as we've seen. the reasons for that obviously adoption of new technology it takes a little while as we've seen Especially when you think about where you can see a lot of the impact, I think a lot of the impact you're going to see in the field. especially when you think about where you can see a lot of the impact i think a lot of the impact you're going to see in the field I think people that are working out of the offices, it makes a lot of sense. i think people that are working out of the offices it makes a lot of sense You don't need to have some really complicated use cases to get value. you don't need to have some really complicated use cases to get value There are some very basic use cases. there are some very basic use cases One thing that we have today, just imagine for a second you're a superintendent on a job site and you're looking and making sure that everything is working in order and you find a pipe that has a crack. one thing that we have today just imagine for a second you're a superintendent on a job site and you're looking and making sure that everything is working in order and you find a pipe that has a crack Now you need to create an issue of that and let people know that, hey, there's this pipe that's cracked, so we need to fix it. Typically, when you create that issue, you have to document that issue. You take a photo of the crack, and then you document it. Imagine a big job, you end up spending a lot of time documenting issues. With AI, and today we have that in our product, you can take a photo and when you take that photo, the AI will tell you what that is using our computer vision, and it will auto-populate the description of that issue. What would probably take about two minutes now gets compressed to maybe 15-20 seconds at the most. The individual just looks at it, makes sure from a quality control standpoint it's right, and then it gets sent out. Now you need to create an issue of that and let people know that, hey, there's this pipe that's cracked, so we need to fix it. now you need to create an issue of that and let people know that hey there's this pipe that's cracked so we need to fix it Typically, when you create that issue, you have to document that issue. typically when you create that issue you have to document that issue You take a photo of the crack, and then you document it. you take a photo of the crack and then you document it Imagine a big job, you end up spending a lot of time documenting issues. imagine a big job you end up spending a lot of time documenting issues With AI, and today we have that in our product, you can take a photo and when you take that photo, the AI will tell you what that is using our computer vision, and it will auto-populate the description of that issue. with ai and today we have that in our product you can take a photo and when you take that photo the ai will tell you what that is using our computer vision and it will auto-populate the description of that issue What would probably take about two minutes now gets compressed to maybe 15-20 seconds at the most. what would probably take about two minutes now gets compressed to maybe 15-20 seconds at the most The individual just looks at it, makes sure from a quality control standpoint it's right, and then it gets sent out. the individual just looks at it makes sure from a quality control standpoint it's right and then it gets sent out That, again, is something that's not very complicated, but it saves a ton of time for people on the field when right now there's massive labor shortages, and you need that superintendent working on more impactful things than actually documenting stuff and spending time doing manual work. We do believe, just given where labor shortages are going to show up, we do expect in the field you're going to see some outsized productivity gains with the use of AI. On the flip side, in the office, we're starting to see that take off more just because the user base is more attuned to using technology and some manual tasks that can be automated, they are embracing that. The field is where I think you'll be able to get a lot of productivity gains right off the bat once this gets more mainstream. That, again, is something that's not very complicated, but it saves a ton of time for people on the field when right now there's massive labor shortages, and you need that superintendent working on more impactful things than actually documenting stuff and spending time doing manual work. that again is something that's not very complicated but it saves a ton of time for people on the field when right now there's massive labor shortages and you need that superintendent working on more impactful things than actually documenting stuff and spending time doing manual work We do believe, just given where labor shortages are going to show up, we do expect in the field you're going to see some outsized productivity gains with the use of AI. we do believe just given where labor shortages are going to show up we do expect in the field you're going to see some outsized productivity gains with the use of ai On the flip side, in the office, we're starting to see that take off more just because the user base is more attuned to using technology and some manual tasks that can be automated, they are embracing that. on the flip side in the office we're starting to see that take off more just because the user base is more attuned to using technology and some manual tasks that can be automated they are embracing that The field is where I think you'll be able to get a lot of productivity gains right off the bat once this gets more mainstream. the field is where i think you'll be able to get a lot of productivity gains right off the bat once this gets more mainstream

Speaker 1: I wanted to ask on that because the use case you shared, super important, very valuable. I would say I actually see more kind of AI in pre-construction. I wanted to ask on that because the use case you shared, super important, very valuable. i wanted to ask on that because the use case you shared super important very valuable I would say I actually see more kind of AI in pre-construction. i would say i actually see more kind of ai in pre-construction

Speaker 2: Yes. Yes. yes

Speaker 1: In the scheduling aspect. In the scheduling aspect. in the scheduling aspect

Speaker 2: Yes. Yes. yes

Speaker 1: where the field matters the most. What's kind of the disconnect where people are focused on kind of the edges versus what we are talking about doing in the field is most consequential? Why the focus on pre--? where the field matters the most. where the field matters the most What's kind of the disconnect where people are focused on kind of the edges versus what we are talking about doing in the field is most consequential? what's kind of the disconnect where people are focused on kind of the edges versus what we are talking about doing in the field is most consequential Why the focus on pre--? why the focus on pre--

Speaker 2: Why pre-construction? Why pre-construction? why pre-construction

Speaker 1: Yeah. Why has that been the initial focus, it seems? Yeah. yeah Why has that been the initial focus, it seems? why has that been the initial focus it seems

Speaker 2: First of all, it's people that are in the office are more receptive to technology. The other piece I will say is projects are made or lost in pre-construction. If you end up scoping a bid inaccurately, then the margins are going to fade once you get out there on the job site. If you don't capture If your scopes of work don't match what are the specifications articulated by the architect, you may install work that then has to have a significant component of rework. You need to remove what you put in place. Again, it has an impact on margins. Getting all of that right happens in pre-construction. That's why you're seeing a lot of companies come in, or AI technologies try to make that as robust, so as a risk mitigation tool. First of all, it's people that are in the office are more receptive to technology. first of all it's people that are in the office are more receptive to technology The other piece I will say is projects are made or lost in pre-construction. the other piece i will say is projects are made or lost in pre-construction If you end up scoping a bid inaccurately, then the margins are going to fade once you get out there on the job site. if you end up scoping a bid inaccurately then the margins are going to fade once you get out there on the job site If you don't capture If your scopes of work don't match what are the specifications articulated by the architect, you may install work that then has to have a significant component of rework. if you don't capture if your scopes of work don't match what are the specifications articulated by the architect you may install work that then has to have a significant component of rework You need to remove what you put in place. you need to remove what you put in place Again, it has an impact on margins. again it has an impact on margins Getting all of that right happens in pre-construction. getting all of that right happens in pre-construction That's why you're seeing a lot of companies come in, or AI technologies try to make that as robust, so as a risk mitigation tool. that's why you're seeing a lot of companies come in or ai technologies try to make that as robust so as a risk mitigation tool That's what you're seeing is risk mitigation in pre-con. I think you're going to see productivity really manifest in the field. That's what you're seeing is risk mitigation in pre-con. that's what you're seeing is risk mitigation in pre-con I think you're going to see productivity really manifest in the field. i think you're going to see productivity really manifest in the field

Speaker 3: The challenge, and maybe we can talk about this, is you know, Most folks, companies lack data and context, and they also lack 3D engineering capabilities, too. The challenge, and maybe we can talk about this, is you know, Most folks, companies lack data and context, and they also lack 3D engineering capabilities, too. the challenge and maybe we can talk about this is you know, most folks companies lack data and context and they also lack 3d engineering capabilities too

Speaker 1: Yep. Yep. yep

Speaker 3: That's something Autodesk has in spades, but I'll wait and see if you want to talk about that a bit. That's something Autodesk has in spades, but I'll wait and see if you want to talk about that a bit. that's something autodesk has in spades but i'll wait and see if you want to talk about that a bit

Speaker 1: No, I think you run a survey every year around AI acceptance and where the interest is, where the pain points are, and I think the biggest pain point in the most recent survey was just system integration. You don't have anything connected, and so the data might be out there, but you have no idea how to actually use it. No, I think you run a survey every year around AI acceptance and where the interest is, where the pain points are, and I think the biggest pain point in the most recent survey was just system integration. no i think you run a survey every year around ai acceptance and where the interest is where the pain points are and i think the biggest pain point in the most recent survey was just system integration You don't have anything connected, and so the data might be out there, but you have no idea how to actually use it. you don't have anything connected and so the data might be out there but you have no idea how to actually use it

Speaker 2: Exactly. Exactly. exactly

Speaker 3: This is why what Sid was saying in the connection design and make, and then what I was saying about operations, then connecting the design and make into operations. That is why that is important. This is why what Sid was saying in the connection design and make, and then what I was saying about operations, then connecting the design and make into operations. this is why what sid was saying in the connection design and make and then what i was saying about operations then connecting the design and make into operations That is why that is important. that is why that is important

Speaker 2: What we are also starting to see increasingly within our customer base is historically, companies have had a whole hodgepodge of point solutions. That's going to start to go away as they continue to consolidate their spend in specific platforms. That's another thing, and partly is what you just raised because of data sitting in so many different silos and systems not talking to each other. What we are also starting to see increasingly within our customer base is historically, companies have had a whole hodgepodge of point solutions. what we are also starting to see increasingly within our customer base is historically companies have had a whole hodgepodge of point solutions That's going to start to go away as they continue to consolidate their spend in specific platforms. that's going to start to go away as they continue to consolidate their spend in specific platforms That's another thing, and partly is what you just raised because of data sitting in so many different silos and systems not talking to each other. that's another thing and partly is what you just raised because of data sitting in so many different silos and systems not talking to each other

Speaker 1: Yeah. One thing I've always appreciated about Autodesk is you're making these investments before anyone is asking you to do it. Like, cloud was 2010, give or take, and then Forge, which became the Autodesk Platform Services strategy a few years later, and then you were kind of getting data ready for training before GenAI was a thing. I want to focus on Autodesk Platform Services. That began as an API strategy, and I kind of think that's morphing into the MCP server strategy to the point where when Claude is looking to embrace creative companies, Autodesk is part of that announcement. With MCP servers, you've built out kind of the important, it gets to what we're talking about of making it easier for customers to move data around, but the importance of the strategy in AI investments that are now happening. Yeah. yeah One thing I've always appreciated about Autodesk is you're making these investments before anyone is asking you to do it. one thing i've always appreciated about autodesk is you're making these investments before anyone is asking you to do it Like, cloud was 2010, give or take, and then Forge, which became the Autodesk Platform Services strategy a few years later, and then you were kind of getting data ready for training before GenAI was a thing. like cloud was 2010 give or take and then forge which became the autodesk platform services strategy a few years later and then you were kind of getting data ready for training before genai was a thing I want to focus on Autodesk Platform Services. i want to focus on autodesk platform services That began as an API strategy, and I kind of think that's morphing into the MCP server strategy to the point where when Claude is looking to embrace creative companies, Autodesk is part of that announcement. that began as an api strategy and i kind of think that's morphing into the mcp server strategy to the point where when claude is looking to embrace creative companies autodesk is part of that announcement With MCP servers, you've built out kind of the important, it gets to what we're talking about of making it easier for customers to move data around, but the importance of the strategy in AI investments that are now happening. with mcp servers you've built out kind of the important it gets to what we're talking about of making it easier for customers to move data around but the importance of the strategy in ai investments that are now happening

Speaker 3: Yeah. Let me talk about that, a subject close to my heart. Just a quick detour. By the way, everything I'm about to say, if you look at our Q4, the last four pages of our Q4 opening commentary and the last four pages of our Q1 opening commentary, strongly encourage you to read them if you're interested in AI. What I'm about to say is in there. Not related to that question. You need data context to build a foundation model, to build a knowledge graph on which you can build a foundation model. Data is scarce in our industry because it's not available on the public web. It's locked up in a million and one different company's systems. Yeah. yeah Let me talk about that, a subject close to my heart. let me talk about that a subject close to my heart Just a quick detour. just a quick detour By the way, everything I'm about to say, if you look at our Q4, the last four pages of our Q4 opening commentary and the last four pages of our Q1 opening commentary, strongly encourage you to read them if you're interested in AI. by the way everything i'm about to say if you look at our q4 the last four pages of our q4 opening commentary and the last four pages of our q1 opening commentary strongly encourage you to read them if you're interested in ai What I'm about to say is in there. what i'm about to say is in there Not related to that question. not related to that question You need data context to build a foundation model, to build a knowledge graph on which you can build a foundation model. you need data context to build a foundation model to build a knowledge graph on which you can build a foundation model Data is scarce in our industry because it's not available on the public web. data is scarce in our industry because it's not available on the public web It's locked up in a million and one different company's systems. it's locked up in a million and one different company's systems If you have access to it through the cloud, which we do, most of our competitors don't because they only have on-premise software, then you can have enough data to build foundation models. You also need context because the assets that we're building are constantly changing. A building site on day 20 is different from the one on day 30 is different on the one on day 40. You have to know what's leading up to a particular point and decision and what happens after it. You have to understand the sequencing of how everything's put together. There's a bunch of context you need and data to build a knowledge graph, and those are very hard to come by in our industry. Once you've done that, you also need 3D engineering. Just to be clear, LLMs are 2D. They're sort of words and coding. If you have access to it through the cloud, which we do, most of our competitors don't because they only have on-premise software, then you can have enough data to build foundation models. if you have access to it through the cloud which we do most of our competitors don't because they only have on-premise software then you can have enough data to build foundation models You also need context because the assets that we're building are constantly changing. you also need context because the assets that we're building are constantly changing A building site on day 20 is different from the one on day 30 is different on the one on day 40. a building site on day 20 is different from the one on day 30 is different on the one on day 40 You have to know what's leading up to a particular point and decision and what happens after it. you have to know what's leading up to a particular point and decision and what happens after it You have to understand the sequencing of how everything's put together. you have to understand the sequencing of how everything's put together There's a bunch of context you need and data to build a knowledge graph, and those are very hard to come by in our industry. there's a bunch of context you need and data to build a knowledge graph and those are very hard to come by in our industry Once you've done that, you also need 3D engineering. once you've done that you also need 3d engineering Just to be clear, LLMs are 2D. just to be clear llms are 2d They're sort of words and coding. they're sort of words and coding They don't reason in 3D like our models do. 3D inference is really hard to do, and we know that because we've been trying to do it for almost a decade. Again, years ahead of, as Joe said, of need, so to speak. We're years ahead of our competitors on that. Doing all that stuff is hard. We've been doing it for almost a decade, and we're years ahead of our competitors. Once you're doing that and you're launching foundation models, that's when the technology stack becomes important. Just to give you sort of two examples, one of which is everyone worrying about token maxing and gross margins, something we've been talking about. Gross margin pressure is something you cannot escape as you put more workflows and high compute workflows into the cloud. They don't reason in 3D like our models do. 3D inference is really hard to do, and we know that because we've been trying to do it for almost a decade. they don't reason in 3d like our models do 3d inference is really hard to do and we know that because we've been trying to do it for almost a decade Again, years ahead of, as Joe said, of need, so to speak. again years ahead of as joe said of need so to speak We're years ahead of our competitors on that. we're years ahead of our competitors on that Doing all that stuff is hard. doing all that stuff is hard We've been doing it for almost a decade, and we're years ahead of our competitors. we've been doing it for almost a decade and we're years ahead of our competitors Once you're doing that and you're launching foundation models, that's when the technology stack becomes important. once you're doing that and you're launching foundation models that's when the technology stack becomes important Just to give you sort of two examples, one of which is everyone worrying about token maxing and gross margins, something we've been talking about. just to give you sort of two examples one of which is everyone worrying about token maxing and gross margins something we've been talking about Gross margin pressure is something you cannot escape as you put more workflows and high compute workflows into the cloud. gross margin pressure is something you cannot escape as you put more workflows and high compute workflows into the cloud What you're trying to do is to figure out how to bend the curve. Critical to that is how you ingest and process data. That's something and the reason why Autodesk Platform Services is so important is we've done a bunch of work over the efficiency with which we can ingest data and then how we process data. Give you two examples. None of this sounds very sexy, but it's critically important. One is around the data model, is that if you go into our customer systems and look at all the models, what you'll find is that the data is fragmented. They have an HVAC system in one file. They've got the structural building in another. If you turn up and scan it, you don't have a whole building to make inference on. What you're trying to do is to figure out how to bend the curve. what you're trying to do is to figure out how to bend the curve Critical to that is how you ingest and process data. critical to that is how you ingest and process data That's something and the reason why Autodesk Platform Services is so important is we've done a bunch of work over the efficiency with which we can ingest data and then how we process data. that's something and the reason why autodesk platform services is so important is we've done a bunch of work over the efficiency with which we can ingest data and then how we process data Give you two examples. give you two examples None of this sounds very sexy, but it's critically important. none of this sounds very sexy but it's critically important One is around the data model, is that if you go into our customer systems and look at all the models, what you'll find is that the data is fragmented. one is around the data model is that if you go into our customer systems and look at all the models what you'll find is that the data is fragmented They have an HVAC system in one file. they have an hvac system in one file They've got the structural building in another. they've got the structural building in another If you turn up and scan it, you don't have a whole building to make inference on. if you turn up and scan it you don't have a whole building to make inference on The reason the data model is important is it brings all of that disparate data back together again and allows you to extract meaning from it. We've done that work. It's really hard math to do that. What it means is that for any given data set, we can extract more value and more meaning from it in a scalable and efficient way than anybody else. At the other end of the spectrum, when you're doing inference, if you try and put 3D inference through a stack that's built for 2D, it's very cost inefficient. It uses much more capacity and costs you more money than it needs to. What we've done is we've built our own inference stack on top of AWS, which is massively more efficient at 3D inference, cost efficient than doing the equivalent inference on 2D stacks. The reason the data model is important is it brings all of that disparate data back together again and allows you to extract meaning from it. the reason the data model is important is it brings all of that disparate data back together again and allows you to extract meaning from it We've done that work. we've done that work It's really hard math to do that. it's really hard math to do that What it means is that for any given data set, we can extract more value and more meaning from it in a scalable and efficient way than anybody else. what it means is that for any given data set we can extract more value and more meaning from it in a scalable and efficient way than anybody else At the other end of the spectrum, when you're doing inference, if you try and put 3D inference through a stack that's built for 2D, it's very cost inefficient. at the other end of the spectrum when you're doing inference if you try and put 3d inference through a stack that's built for 2d it's very cost inefficient It uses much more capacity and costs you more money than it needs to. it uses much more capacity and costs you more money than it needs to What we've done is we've built our own inference stack on top of AWS, which is massively more efficient at 3D inference, cost efficient than doing the equivalent inference on 2D stacks. what we've done is we've built our own inference stack on top of aws which is massively more efficient at 3d inference cost efficient than doing the equivalent inference on 2d stacks Virtually all of the other stacks are built for 2D inference because nobody's trying to solve our problem, or very few people are trying to solve a 3D inference problem. That's why the technology stack is so important in terms of AI. It's also important to Joe's point is around how you develop your offering. What we've been doing, and this is a sort of technical debt problem, is we built a bunch of stuff over the last 40 years, and essentially building the same functionality across the organization. Virtually all of the other stacks are built for 2D inference because nobody's trying to solve our problem, or very few people are trying to solve a 3D inference problem. virtually all of the other stacks are built for 2d inference because nobody's trying to solve our problem or very few people are trying to solve a 3d inference problem That's why the technology stack is so important in terms of AI. that's why the technology stack is so important in terms of ai It's also important to Joe's point is around how you develop your offering. it's also important to joe's point is around how you develop your offering What we've been doing, and this is a sort of technical debt problem, is we built a bunch of stuff over the last 40 years, and essentially building the same functionality across the organization. what we've been doing and this is a sort of technical debt problem is we built a bunch of stuff over the last 40 years and essentially building the same functionality across the organization What we've been doing over the last three or four years is creating more common components so that when you update something, it propagates across the entire product suite rather than having to go in and update everything at once. What it also enables us to do, with the help of AI, is to start creating new value. One of the underrated things that we were talking about last week is we have probabilistic AI models, and we're using our deterministic parametric models, which we've been using for the last 40 years, to validate our AI models. That loop, so we create a probabilistic outcome. Top tip, don't walk into a building that's been created by a probabilistic model because it might fall down. What we've been doing over the last three or four years is creating more common components so that when you update something, it propagates across the entire product suite rather than having to go in and update everything at once. What it also enables us to do, with the help of AI, is to start creating new value. what we've been doing over the last three or four years is creating more common components so that when you update something it propagates across the entire product suite rather than having to go in and update everything at once. what it also enables us to do with the help of ai is to start creating new value One of the underrated things that we were talking about last week is we have probabilistic AI models, and we're using our deterministic parametric models, which we've been using for the last 40 years, to validate our AI models. one of the underrated things that we were talking about last week is we have probabilistic ai models and we're using our deterministic parametric models which we've been using for the last 40 years to validate our ai models That loop, so we create a probabilistic outcome. that loop so we create a probabilistic outcome Top tip, don't walk into a building that's been created by a probabilistic model because it might fall down. top tip don't walk into a building that's been created by a probabilistic model because it might fall down We validate it with a deterministic model, which we've had for 40 years, and that loop allows us then to improve our AI models in that loop. Again, sort of massively improvement. What we've done is those parametric models sit within our traditional products, so Revit and Fusion, et cetera. What we've been able to do is to extract just the parametric model and then plug it into our AI models to make them more efficient. Doing that a year ago would've been inconceivably hard to think about doing, but with AI and new engineering techniques, we were able to do that in three weeks, extract the parametric models from our engineering. One of our core beliefs is that AI is about doing more with the same number of people. It's not about doing the same with fewer people. We validate it with a deterministic model, which we've had for 40 years, and that loop allows us then to improve our AI models in that loop. we validate it with a deterministic model which we've had for 40 years and that loop allows us then to improve our ai models in that loop Again, sort of massively improvement. again sort of massively improvement What we've done is those parametric models sit within our traditional products, so Revit and Fusion, et cetera. what we've done is those parametric models sit within our traditional products so revit and fusion et cetera What we've been able to do is to extract just the parametric model and then plug it into our AI models to make them more efficient. what we've been able to do is to extract just the parametric model and then plug it into our ai models to make them more efficient Doing that a year ago would've been inconceivably hard to think about doing, but with AI and new engineering techniques, we were able to do that in three weeks, extract the parametric models from our engineering. doing that a year ago would've been inconceivably hard to think about doing but with ai and new engineering techniques we were able to do that in three weeks extract the parametric models from our engineering One of our core beliefs is that AI is about doing more with the same number of people. one of our core beliefs is that ai is about doing more with the same number of people It's not about doing the same with fewer people. it's not about doing the same with fewer people What you have to do is to be able to conceive of hard stuff and hard problems to solve. I think that's going to be a key challenge for most organizations. Fortunately, one thing Autodesk loves doing is solving hard problems. That's why we started trying to solve AI 10 years ago. It's why we started to try and solve the cloud 20 years ago. We always try and solve hard problems so it plays to our strengths. What you have to do is to be able to conceive of hard stuff and hard problems to solve. what you have to do is to be able to conceive of hard stuff and hard problems to solve I think that's going to be a key challenge for most organizations. i think that's going to be a key challenge for most organizations Fortunately, one thing Autodesk loves doing is solving hard problems. fortunately one thing autodesk loves doing is solving hard problems That's why we started trying to solve AI 10 years ago. that's why we started trying to solve ai 10 years ago It's why we started to try and solve the cloud 20 years ago. it's why we started to try and solve the cloud 20 years ago We always try and solve hard problems so it plays to our strengths. we always try and solve hard problems so it plays to our strengths

Speaker 1: How does that all get monetized? I've heard that the Autodesk direct sales team is trying to encourage their customers to Flex tokens because increasingly you can kind of get tied into that. What's the strategy there? How does that all get monetized? how does that all get monetized I've heard that the Autodesk direct sales team is trying to encourage their customers to Flex tokens because increasingly you can kind of get tied into that. i've heard that the autodesk direct sales team is trying to encourage their customers to flex tokens because increasingly you can kind of get tied into that What's the strategy there? what's the strategy there

Speaker 3: We're not encouraging to Flex tokens and actually, and this is again, another which I will discuss with a bottle of whiskey if anybody wants to, but it's not about maximizing tokens. If you're doing that, you're going to find soon that your AI agent costs you more than a human being does. It's actually about sipping, not sucking at the tokens and building the software that enables you to do that. Otherwise, you're going to have products that are too expensive, and not doing the job that you need them to do to drive efficiency in the industries. What we are trying to do is to enable our customers to try stuff and to build stuff, and try stuff. Partly because that's for their benefit, but what also it does for us is it generates data exhausts, which are useful for us as they do that. We're not encouraging to Flex tokens and actually, and this is again, another which I will discuss with a bottle of whiskey if anybody wants to, but it's not about maximizing tokens. we're not encouraging to flex tokens and actually and this is again another which i will discuss with a bottle of whiskey if anybody wants to but it's not about maximizing tokens If you're doing that, you're going to find soon that your AI agent costs you more than a human being does. if you're doing that you're going to find soon that your ai agent costs you more than a human being does It's actually about sipping, not sucking at the tokens and building the software that enables you to do that. it's actually about sipping not sucking at the tokens and building the software that enables you to do that Otherwise, you're going to have products that are too expensive, and not doing the job that you need them to do to drive efficiency in the industries. otherwise you're going to have products that are too expensive and not doing the job that you need them to do to drive efficiency in the industries What we are trying to do is to enable our customers to try stuff and to build stuff, and try stuff. what we are trying to do is to enable our customers to try stuff and to build stuff and try stuff Partly because that's for their benefit, but what also it does for us is it generates data exhausts, which are useful for us as they do that. partly because that's for their benefit but what also it does for us is it generates data exhausts which are useful for us as they do that Yes, we're trying to encourage them to do it. What we're not trying to do is to consume bad calories from it. We want them actually to become more match fit as a result of it. Yes, we're trying to encourage them to do it. yes we're trying to encourage them to do it What we're not trying to do is to consume bad calories from it. what we're not trying to do is to consume bad calories from it We want them actually to become more match fit as a result of it. we want them actually to become more match fit as a result of it

Speaker 1: That's bringing customers into kind of a new subscription, different subscription than a seat tied to a model. These are bundles of API uses that you can monetize. That's bringing customers into kind of a new subscription, different subscription than a seat tied to a model. that's bringing customers into kind of a new subscription different subscription than a seat tied to a model These are bundles of API uses that you can monetize. these are bundles of api uses that you can monetize

Speaker 3: Exactly that, I think this is, I don't know whether it's consensus, but emerging consensus is that the subscription's going to be around for a very, very long time. Included in a subscription will be a core, a level of functionality and a core level of capacity, will be included in your base subscription. If you need additional capacity for high compute workloads and high-value workloads like AI, you will essentially buy additional capacity. Very similar. A little known fact, 17% of our business is already consumption, which is a type of capacity model. There are others. It behaves financially like a subscription because essentially people buy capacity ahead of time and then consume against that capacity on a use it or lose it basis. Consumption doesn't have to be volatile. Exactly that, I think this is, I don't know whether it's consensus, but emerging consensus is that the subscription's going to be around for a very, very long time. exactly that i think this is i don't know whether it's consensus but emerging consensus is that the subscription's going to be around for a very very long time Included in a subscription will be a core, a level of functionality and a core level of capacity, will be included in your base subscription. included in a subscription will be a core a level of functionality and a core level of capacity will be included in your base subscription If you need additional capacity for high compute workloads and high-value workloads like AI, you will essentially buy additional capacity. if you need additional capacity for high compute workloads and high-value workloads like ai you will essentially buy additional capacity Very similar. very similar A little known fact, 17% of our business is already consumption, which is a type of capacity model. a little known fact 17% of our business is already consumption which is a type of capacity model There are others. there are others It behaves financially like a subscription because essentially people buy capacity ahead of time and then consume against that capacity on a use it or lose it basis. it behaves financially like a subscription because essentially people buy capacity ahead of time and then consume against that capacity on a use it or lose it basis Consumption doesn't have to be volatile. consumption doesn't have to be volatile You can give the customer the benefit of flexibility, and certainty, while also enabling us to have predictable and ratable revenue streams. You can give the customer the benefit of flexibility, and certainty, while also enabling us to have predictable and ratable revenue streams. you can give the customer the benefit of flexibility and certainty while also enabling us to have predictable and ratable revenue streams

Speaker 1: Maybe with the little time we have left to talk about something more recent, and you've taken control of your sales channel. You used to have a two-tier distribution model, now you're direct. What's been kind of the biggest learnings from that and benefits that you originally thought you would get? Are the benefits coming through? Maybe with the little time we have left to talk about something more recent, and you've taken control of your sales channel. maybe with the little time we have left to talk about something more recent and you've taken control of your sales channel You used to have a two-tier distribution model, now you're direct. you used to have a two-tier distribution model now you're direct What's been kind of the biggest learnings from that and benefits that you originally thought you would get? what's been kind of the biggest learnings from that and benefits that you originally thought you would get Are the benefits coming through? are the benefits coming through

Speaker 3: Yeah. I said earlier, Autodesk superpowers is we do hard stuff. This is a good example, but it's sort of a function of, and you should be asking all of our competitors this, is there's a bunch of stuff you have to do just to get onto the starting grid of AI. You have to sort out your technology stack for the reasons I talked about. You have to have cloud-based software. You have to have more direct integration with your customers, which we're going to talk about in a second. That's why I'm mentioning it. You have to have a bunch of different business models, so you can't just be subscription. You also have to have metered access models like consumption, et cetera as well. All of these things are really hard to do. Yeah. yeah I said earlier, Autodesk superpowers is we do hard stuff. i said earlier autodesk superpowers is we do hard stuff This is a good example, but it's sort of a function of, and you should be asking all of our competitors this, is there's a bunch of stuff you have to do just to get onto the starting grid of AI. this is a good example but it's sort of a function of and you should be asking all of our competitors this is there's a bunch of stuff you have to do just to get onto the starting grid of ai You have to sort out your technology stack for the reasons I talked about. you have to sort out your technology stack for the reasons i talked about You have to have cloud-based software. you have to have cloud-based software You have to have more direct integration with your customers, which we're going to talk about in a second. you have to have more direct integration with your customers which we're going to talk about in a second That's why I'm mentioning it. that's why i'm mentioning it You have to have a bunch of different business models, so you can't just be subscription. you have to have a bunch of different business models so you can't just be subscription You also have to have metered access models like consumption, et cetera as well. you also have to have metered access models like consumption et cetera as well All of these things are really hard to do. all of these things are really hard to do Autodesk has been doing them over the last five to 10 years, which is why, and also you have to invest in AI and the engineering capabilities to build foundation models. They're all really hard to do. They all mess up your P&L, balance sheet, cash flows, margins while you're doing them. We've been doing that for the last 10 years, 15 years, in the case of the cloud, in a way that most of our competitors have not been doing. They have to do it, and the time they have available to do it is getting shorter at a faster rate because of AI. The risk of getting it wrong is greater. Autodesk has been doing them over the last five to 10 years, which is why, and also you have to invest in AI and the engineering capabilities to build foundation models. autodesk has been doing them over the last five to 10 years which is why and also you have to invest in ai and the engineering capabilities to build foundation models They're all really hard to do. they're all really hard to do They all mess up your P&L, balance sheet, cash flows, margins while you're doing them. they all mess up your p&l balance sheet cash flows margins while you're doing them We've been doing that for the last 10 years, 15 years, in the case of the cloud, in a way that most of our competitors have not been doing. we've been doing that for the last 10 years 15 years in the case of the cloud in a way that most of our competitors have not been doing They have to do it, and the time they have available to do it is getting shorter at a faster rate because of AI. they have to do it and the time they have available to do it is getting shorter at a faster rate because of ai The risk of getting it wrong is greater. the risk of getting it wrong is greater The most recent one we've done is our sales reorganization, but the intent is essentially to have ourselves more directly integrated with our customers, enabling that with more things like more self-service, more auto-renew, and more co-terming, et cetera, so that you have more automation essentially in the process. Then using that then to help our customers build on top of us to drive more new applications for them and more revenue opportunities for us as well over time. In terms of the hard, it is hard to do, so we had a significant restructuring earlier on this year. The most recent one we've done is our sales reorganization, but the intent is essentially to have ourselves more directly integrated with our customers, enabling that with more things like more self-service, more auto-renew, and more co-terming, et cetera, so that you have more automation essentially in the process. the most recent one we've done is our sales reorganization but the intent is essentially to have ourselves more directly integrated with our customers enabling that with more things like more self-service more auto-renew and more co-terming et cetera so that you have more automation essentially in the process Then using that then to help our customers build on top of us to drive more new applications for them and more revenue opportunities for us as well over time. then using that then to help our customers build on top of us to drive more new applications for them and more revenue opportunities for us as well over time In terms of the hard, it is hard to do, so we had a significant restructuring earlier on this year. in terms of the hard it is hard to do so we had a significant restructuring earlier on this year We also, at the same time, ripped all of the custom integrated stuff we'd built on top of Salesforce, put ourselves onto the base Salesforce platform, and then have added a lot of the AI functionality that Salesforce has introduced to enable sales, productivity, et cetera, which we weren't able to do because of the customization we had on the platform. All of that stuff is hard. It creates disruption, which we've talked about, but well within the expectations that we'd set out in February. We also, at the same time, ripped all of the custom integrated stuff we'd built on top of Salesforce, put ourselves onto the base Salesforce platform, and then have added a lot of the AI functionality that Salesforce has introduced to enable sales, productivity, et cetera, which we weren't able to do because of the customization we had on the platform. we also at the same time ripped all of the custom integrated stuff we'd built on top of salesforce put ourselves onto the base salesforce platform and then have added a lot of the ai functionality that salesforce has introduced to enable sales productivity et cetera which we weren't able to do because of the customization we had on the platform All of that stuff is hard. all of that stuff is hard It creates disruption, which we've talked about, but well within the expectations that we'd set out in February. it creates disruption which we've talked about but well within the expectations that we'd set out in february

Speaker 1: Great. With that, we're at time. There will be a breakout session, but please join me in thanking Autodesk. Great. great With that, we're at time. with that we're at time There will be a breakout session, but please join me in thanking Autodesk. there will be a breakout session but please join me in thanking autodesk

Speaker 3: Thank you. Thank you. thank you