Comment on Autodesk's recent financial results

A brief note from one of the analysts at Morningstar about Autodesk’s recent financial results:

“ Autodesk ADSK reported fiscal 2014 results that were slightly ahead of our expectations, as the company had a strong fourth quarter. The company's cloud-based offerings such as BIM 360, PLM 360, and Fusion 360 resonated well with the market, and Autodesk was able to attract a number of significant new clients. As the company transitions through a business model change in which it will provide more desktop subscription, cloud subscription, and flexible licensing arrangements, revenue and earnings will be affected in the short term. Nevertheless, given the better long-term economics of subscription, we expect significant financial benefits starting in fiscal 2016. Therefore, in addition to accounting for cash earned over the past year, we are in the process o f quantifying the long-term benefit from the business model transition. We have placed our fair value estimate under review but maintain our wide economic moat rating. Revenue for the quarter fell 3% to $587 million, but on a normalized basis rose 2% year over year. Strength in the architecture, engineering, and construction suites was a highlight, growing 32% on a normalized basis over the year-ago period. In the AEC industry, collaboration and mobility are driving good growth for Autodesk's cloud-based BIM 360 software as clients increasingly need in-the-field access to information. PLM 360 and Fusion 360 are benefiting from the same shift in the market and will also drive future growth for Autodesk.”