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Forward-looking statements made during the call are being made as of today. If this call is replayed or reviewed after today, the information presented during the call may not contain current or accurate information. Autodesk disclaims any obligation to update or revise any forward-looking statements. We will provide guidance on today's call, but we will not provide any further guidance or updates on our performance during the quarter unless we do so in a public forum.

During the call, we will also discuss non-GAAP financial measures. These non-GAAP measures are not prepared in accordance with Generally Accepted Accounting Principles. A reconciliation of our GAAP and non-GAAP results is provided in today's press release, prepared remarks and on the Investor Relations section of our website. We will quote a number of numeric or growth changes as we discuss our financial performance, and unless otherwise noted, each such reference represents a year-on-year comparison under ASC 606.

And now, I would like to turn the call over to Andrew.

Andrew Anagnost -- President and Chief Executive Officer

Thanks, Abhey. I have two exciting things to share with you today. First, we closed another fantastic quarter with strong performance across all key metrics. Second, we are expanding our capabilities in the construction space by acquiring PlanGrid to complement our construction portfolio as well as to enhance our reach within the industry.

Looking first at our Q3 performance, we built upon the strength of our Q2 results by posting accelerated growth driven by strength across all product families in major geographies. We generated 33% growth in total annualized recurring revenue, or ARR, with both product and cloud offerings delivering great performance.

There are several key areas that I want to highlight on the call today. We have record growth in total ARR and total ARPS. In fact, this is the highest growth quarter for both, since we started our business model transition over four years ago. We experienced strong growth in our enterprise business during the quarter, which speaks to the strategic importance of our products and a healthy demand environment. We hit a milestone of 4 million total subscriptions. The Maintenance to Subscription program continues to perform well and we're seeing an increase in the adoption of collections.

BIM 360 delivered broad based strength driving cloud ARR growth in the quarter, and we are enhancing our construction offering with the acquisition of PlanGrid. First, let's look at ARR, which is the best proxy for measuring progress in our business model transition and the overall health of our business. The strength in ARR was a result of accelerating growth in all geographic regions and across all product families. All geographic regions posted revenue growth of at least 25%. Subscription plan ARR has more than doubled on a year-over-year basis for seven out of the last eight quarters.

Growth in ARR was driven by strength across all subscription plan types, and once again product subscription led the group while EBAs also accelerated meaningfully. ARR for our core business, which represents the combination of maintenance, product subscription and our EBA sales also grew at 33% in line with total ARR as our core business drives the overwhelming majority of our revenue, ARR and billings growth. Now as you know, I've made construction one of the Company's critical near-term priorities, and that's why I'm incredibly excited to talk about the acquisition of PlanGrid, which expands our expertise, presence, scale and reach in the construction space.

You have heard me say many times that the construction industry is a key focus area for us in becoming a design and make company. It's hungry to deploy more technology and we're ready with compelling solutions. At PlanGrid, Tracy Young, Ralph Gootee, and the rest of the management team have built a leading construction tech company and we look forward to welcoming them to the Autodesk family.

PlanGrid has built an innovative mobile SaaS solution that's focused on document-centric workflows for field execution and project management. This is an excellent complement to our focus on model-centric workflows through Revit and BIM 360. On the field side of construction management, PlanGrid enables those working on the site to make informed decisions with real-time information. PlanGrid's solutions also empower project managers to ensure jobs are delivered within scope and on budget. The company currently serves approximately 12,000 customers and has approximately 120,000 paid users. Its products have been used on over one million construction projects. PlanGrid's quality and value are reflected by the many large customers it serves, like LPR Construction, Devcon, Granite, Nvidia, and Target and we intend to capitalize on its strength to further advance the state of the art in construction technology and better meet the needs of our customers. The combination creates a more comprehensive cloud-based construction platform for general contractors and will expand our relationships with subcontractors and building owners. Over time, we will integrate workflows between PlanGrid's software and our BIM 360 construction management platform for a seamless exchange of 2D and 3D project information.

Additionally, we will be able to leverage our global reach to accelerate adoption of PlanGrid's solutions. There are many GCs who have deployed both solutions. For example, DPR Construction is a commercial GC using Autodesk BIM 360 and PlanGrid software. Atul Khanzode, DPR's CTO, said, and I quote, one of the biggest challenges in the construction industry is data flow, how you get the most current and accurate information to the right people, at the right time. We're excited about this acquisition because it will improve the way information can be shared on project, and that leads to greater productivity and predictability. Using BIM 360 has made our project planning better. We're able to reliably plan, forecast and measure project tasks that support lean construction practices and reduce waste. And, we're using PlanGrid to help everyone in the field build off the most current data set, end quote. We're tremendously excited about joining forces with PlanGrid and I believe this will further position us for success as we move further into the $10 billion construction opportunity. Scott will cover financial details of the transaction in a few minutes, but I would like to turn our attention back to Q3 performance.

Particularly, I'd like to highlight the performance of our BIM 360 portfolio. We had a strong showing for the entire offering which helped us post 36% growth in cloud ARR in the quarter. Customers are deploying all modules of the BIM 360 platform, and I am excited to share that large customers like AECOM, Arcadis, Swinerton, and Layton have already started adopting our new platform and we look forward to more customers doing the same.

A great example of the convergence of design and make was a significantly expanded deal we signed with Daiwa House Industries, one of the largest construction companies in Japan. They sell pre-fabricated homes in the region and are working to expand globally. Their processes are a clear example of how manufacturing and construction are converging. They utilize a wide range of our product portfolio from AutoCAD and Revit to BIM 360 and Inventor. Our new EBA with them is one of the largest we have signed and it increases the account value by 16-fold. We now have three of the largest five general contractors in Japan on EBAs and we are not done. These transactions also highlight the progress we have made in Japan as a region where we saw broad-based strength across all customer types.

On the manufacturing side, our growth rate for the product family accelerated to 20% from 10% in the second quarter. During the quarter, we transitioned a major customer, Ford, to an EBA. It is yet another example of how our relationship has expanded with our large enterprise customers where we've evolved from a vendor to a collaborative thought leader. We are partnering with Ford to help them explore new workflows utilizing our most advanced software functionality such as generative design and Fusion, and our flexible token-based EBA, which will allow them to benefit from the breadth of our product portfolio. We expect a 4x increase in subscriptions as a result of our new EBA contract.

In summary, I am extremely pleased with the progress we've made with the transition and I believe we're positioning the Company to expand our technology leadership in the construction space. Many of you attended Autodesk University last week and I think you could feel the buzz and excitement in the air around both our core offerings and our cloud technologies like BIM 360 and Fusion. We are making terrific progress while remaining committed to our FY20 goals. In particular, I am also excited to see that we crossed the 30% mark for the sum of revenue growth and free cash flow margin. We look forward to nearly doubling that number in the next few years.

Now I'll turn it over to Scott for more details on the financials.

R. Scott Herren -- Senior Vice President and Chief Financial Officer

Thanks Andrew. Digging deeper into the numbers for the third quarter, I'll start with a few more details on our strong ARR performance. ARR benefited from a 17% increase in ARPS, a 14% increase in subscriptions, and a 30% growth in billings for the quarter.

Looking at subscriptions, we added 143,000 subs in the quarter and hit a milestone in total subscriptions as we crossed the 4 million mark, which is nearly twice the number of maintenance seats we had at the peak of the previous business model. Subscription plan subs grew by 252,000, led by product subscriptions. Core sub adds once again increased by 3% sequentially. We also added 53,000 cloud subs, which is a nice step-up from the 31,000 we added in Q2 and 18,000 in Q1. Strength in cloud was led by broad-based adoption of the BIM 360 family.

Moving to the Maintenance to Subscription program, we continue to make solid progress. In Q3,customers migrated 71,000 maintenance subs to product subscriptions. While the number of M2S subscriptions is down sequentially, the conversion rate remained strong with approximately one-third of the maintenance renewal opportunities migrating to product subscriptions. Of those that migrated, once again over 30% of eligible subscriptions upgraded from an individual product to an Industry Collection. We expect the number of M2S subs to increase in Q4 as our maintenance renewal opportunity is higher. The renewal rates for both maintenance and product subscription ticked up slightly from Q2 and were in line with our planning assumptions. Helping to bolster renewal rates for product subscription are the M2S related subs, which have, as expected, very high renewal rates because the program was designed to be sticky. We expect the renewal rate for product subscriptions to continue to increase as the product mix shifts toward higher value products.

Now let's talk a little more about annualized revenue per subscription, or ARPS. Total ARPS posted another quarter of strong growth as it continued to benefit from the same drivers we discussed at Investor Day and that we saw in Q2. These drivers include the growth of the renewal base, the ongoing strength of Industry Collections, and various pricing adjustments we made earlier in the year and are now having a greater influence on ARPS. The pricing adjustments include the price increase associated with the M2S program, lower channel discount on AutoCAD LT, and an increase for multi-user subscriptions. Long-term ARPS drivers will continue to be the growing renewal base, which comes at a higher net price to Autodesk, the increase in digital sales, also at a higher net price to Autodesk; the product mix shift to Industry Collections, the maintenance price increase for those customers who don't take advantage of the M2S program, and less discounting and promotional activity.

We expect total ARPS to continue to increase for all the reasons I just discussed as we progress through the transition and well beyond fiscal '20.

Our eStore, which is playing a bigger part in our digital sales, grew by 65% year-on-year. For the past five quarters, our eStore has generated over 20% of the product subscriptions. Q3 also marked the eighth consecutive quarter of greater than 30% growth in our EBAs. In fact, our EBAs posted over 50% growth in the quarter highlighting strong execution as well as adoption and expansion of EBA contracts. What's interesting is that while the growth of our total direct business accelerated even from the record levels in Q2, our indirect business expanded even faster. We continue to believe that over time the mix of direct business will outpace the growth of indirect leading to a more even split between direct and indirect revenue.

Moving to spend management, our total non-GAAP spend was up 5% and was slightly higher than expected, as we have done a nice job filling the open positions created by last year's resource rebalancing, cloud costs are higher year on year, and due to the impact of ASC 340, which requires us to capitalize sales commissions. If we normalize for ASC 340, the growth in total spend would have been less than 4%.

Looking at the balance sheet, total deferred revenue grew 17%. Unbilled deferred revenue increased by $45 million sequentially to $451 million due to strong EBA performance. We expect unbilled deferred revenue to increase meaningfully next quarter, with seasonally strong enterprise transactions. While we continued to experience an expected decrease in long-term deferred, our short-term deferred revenue grew by 14% due to strong billings in the quarter.

Looking at cash flow, we generated $39 million in operating cash flow, as we benefited from growth in billings and strong cash collections. We expect our cash flow to accelerate in the fourth quarter. We used $103 million in the quarter to buy back roughly 800,000 shares at an average price of $131.42. Year-to-date we have repurchased 2.1 million shares for $270 million, an average price of $129.86. We continue to be committed to managing dilution and reducing shares outstanding over time.

Before I turn to the outlook, let me run through some details about our acquisition of PlanGrid. As announced this afternoon, we are paying $875 million net of acquired cash. We will finance the deal with cash on hand and a short-term, pre-payable loan. The transaction is expected to close during our fiscal Q4. Since we cannot be sure of the exact timing, we have not included any impact in our guidance. That said, we would expect it to contribute slightly to revenue growth and be modestly negative for profitability and cashflows for the quarter. For fiscal '20, we expect PlanGrid to contribute approximately $100 million in ARR but create a slight headwind to our profitability. The transaction and associated financing costs will have some dilutive effect on our cash flow, but we believe we can achieve our goal of $1.35 billion in free cash flow for the year. There are more details about the company and our rationale behind the acquisition in a slide deck on our investor relations website.

Now I'll turn the discussion to our outlook. I'll start by saying that our view of the global economic conditions remains mostly unchanged from the last few quarters but we're monitoring the potential macroeconomic impact from the various trade and tariff disputes. There has been some foreign exchange volatility, but our hedging program has succeeded in smoothing out the bigger swings. As we look at our outlook for Q4, we expect to see continued sequential increases in most metrics including ARR, ARPS, billings, revenue, spend, and earnings. We are raising our outlook on all of those key metrics for the year. We expect our hiring ramp to continue as we finish the rebalancing of resources to the most strategic projects, and as such, we expect our spend to increase slightly sequentially. However, the sequential uptick in total operating expense in the fourth quarter will be lower than previous years due to the adoption of ASC 340 that requires capitalization of commissions, which historically had been very heavy during Q4. Even though our full year expenses are moving up modestly, our operating margin for the year will be higher by one percentage point versus our previous target. Also, our new margin forecast for the year represents nearly 17 points of improvement over last year. And we expect a sizable uptick in cash flow in Q4.

Regarding subscriptions, I'll reiterate that next quarter will be the last time we will report on subs and ARPS on a quarterly basis. After that, we will use events like our annual Investor Day to report on important metrics that will help you build your long-term models. For fiscal year '19, we continue to expect subscription additions to end up at the low-end of our guidance range, primarily related to the success we're having with the adoption of Industry Collections and the consolidation we're experiencing with the M2S program.

Before we start the Q&A part of this call, I want to summarize by highlighting the great progress we have made on driving the sum of our revenue growth plus free cash flow margin, which is a key metric for driving shareholder value under the rule of 40 framework. We ended the quarter with the sum of both metrics at 32%, a level we have not seen for four years. As Andrew said, we plan to nearly double this metric in the next few years.

Operator, we'd now like to open the call up for questions.

Questions and Answers:

Operator

Thank you. (Operator Instructions) Our first question comes from Saket Kalia of Barclays Capital. Your line is now open.

Saket Kalia -- Barclays Capital -- Analyst

Hi, guys. It's Saket from Barclays. Thanks for taking my questions here. First, maybe for you on -- maybe for you Andrew on PlanGrid. Nice addition to the construction portfolio. I guess, longer term as you think about the construction software market, how important is it going to be that Autodesk has both the underlying BIM data as well as the PlanGrid capabilities versus others in the space that maybe don't have that underlying BIM data?

Andrew Anagnost -- President and Chief Executive Officer

Yeah, that's an excellent question, Saket. So let me kind of give you a sense for where we are right now. Right now, a lot of the projects out there in the construction ecosystem are very document centric and that's where PlanGrid plays a very, very strong role. But there is a growing percentage of projects that are very BIM centric and these projects start with BIM data and move BIM data for the entire process. What you'll see us over time be able to do is capture the BIM centric projects, the document centric projects and bring the two together. PlanGrid really understands the document centric and sheet centric workflow and they really have the hearts and minds of the end user in that space. We really understand the BIM data and as those 2 things come together over time and over a five year period or more when more and more projects are BIM based, it is obviously going to allow us to cover almost 100% of the project ecosystem.

Saket Kalia -- Barclays Capital -- Analyst

Got it. That's super helpful. Maybe staying on PlanGrid with you, Andrew. Can you just talk a little bit about the pricing model and maybe how it compares to others in the industry? I know you talked about general contractors and subcontractors and we've heard others in the industry that perhaps base pricing on seat (ph) versus total value of a particular construction project. So can you talk a little bit about PlanGrid's pricing model?

Andrew Anagnost -- President and Chief Executive Officer

Yeah, so PlanGrid like us right now is predominantly a named user model. Now, Saket, you probably know, we have experienced in all the model types here. We have named user model. We have a pay-per-use consumptive model and we have the project-based model. And what we found over time is that the models that are tending to be the predominant play are going to be named user and consumptive or pay per use. The project-based models, they help in the short-term, they allow you to kind of land and account, they provide short-term growth. But long term, the customers basically just push back on this whole percent of turnover model, it's not an attractive model to the customers. So we absolutely see the pendulum swinging toward named user and pay-per-use and that PlanGrid is well aligned with that.

Saket Kalia -- Barclays Capital -- Analyst

Got it. Very helpful. Thanks for taking my questions.

Andrew Anagnost -- President and Chief Executive Officer

Thank you, Saket.

Operator

Thank you.Our next question comes from Philip Winslow of Wells Fargo. Your line is now open.

Philip Winslow -- Wells Fargo -- Analyst

Hey, thanks for taking my question and congrats on a great quarter. As you mentioned this is probably the strongest quarter that I can think of having both net add growth as well as a pretty impressive margin increase. What do you think about sort of what's driving that even in the context of higher cloud subs that typically came at a higher -- lower ARPS? Kind of walk us through sort of where we are in the sort of the ARPS lifecycle? Obviously you've given your guidance for next year that implies an increase versus what you guided to this year. But kind of help us through like what are the drivers that were there this year, which one of those continue into 2020, then just have one follow-up to that.

R. Scott Herren -- Senior Vice President and Chief Financial Officer

Yeah. So, this is Scott. I think on the subs, you touched on them, we had another good quarter of sub adds for core and cloud had a -- reaccelerating the sub add in the cloud business. So really driven by BIM 360, 53,000 sub adds to the quarter. So that's on the subs front. On the ARPS front, we're continuing to see the trend that we saw and we -- initially that we talked about in the Investor Day back in March and that we saw in Q2. So there is some effect from the change in channel discounts for AutoCAD LT that rolled out at the beginning of the year. We are seeing -- we made a slight adjustment to our multi-year -- our multi-user product pricing at the beginning of this year, that's coming through as well. And more importantly, we're seeing a bigger renewal base, which comes at a higher net price to us. We're seeing an increase in direct sales. The eStore one of the stats I gave on the opening commentary was that eStore grew 65% this quarter. So that drives higher ARPS. The move to collections continues to be strong. Collections are a notable percent of our total base both of new and of conversions on M2S and less discounting over time. So all those factors drove ARPS last quarter and again this quarter and almost all those will continue out not just in the fiscal '20 but out into fiscal '23 as well.

Philip Winslow -- Wells Fargo -- Analyst

Great. And then a follow-up for Andrew on PlanGrid and first off, congratulations on that deal and really reinforcing your leadership position defining construction lifecycle management as a market here. What do you think about PlanGrid and just the idea of construction lifecycle management? Where do you kind of put the dividing line between sort of where Autodesk us is going to play versus, call it, traditional we're more financials applications? When you think about, budgeting et cetera (inaudible) getting on to the financial side of construction. Is that where you kind of separate how deep Autodesk wants to go in construction or is it eventually something like, hey, look, we're going to be a player in the entire life cycle?

Andrew Anagnost -- President and Chief Executive Officer

Yeah, so I think you're actually touching on something that's important here. If you look at the way that's evolved in the manufacturing space what happened was that there was a rise of what we call, product lifecycle management systems. And they basically handle the entire data flow from the design phase, all the way through the delivery of the products and the manufacturing floor but ERP systems continued to fill the void in terms of the whole financial planning and budgeting aspects and some of the financial aspects. That's the way we see this unfolding in the future. We're not going to go into the ERP space of construction. We're going to stay on the whole life cycle from design, all the way through to site execution, and we think that's well aligned with our vision of how construction is going to industrialize over the next 10 years. So don't look -- don't see us getting into construction financials and budget management and those kind of things in the future.

Philip Winslow -- Wells Fargo -- Analyst

So the best idea is just sort of like PLM evolved from the design software player to becoming the leaders in PLM. Similar idea with you guys here, design and the construction life cycle management but financials being a separate area. Is that a fair assumption?

Andrew Anagnost -- President and Chief Executive Officer

Absolutely. I see it playing out exactly the same way and there is really no reason right now to not see it playing out the exact same way.

Philip Winslow -- Wells Fargo -- Analyst

Great. Awesome guys. Thanks a lot.

Andrew Anagnost -- President and Chief Executive Officer

Thanks, Philip.

Operator

Thank you. Our next question comes from Jay Vleeschhouwer of Griffin Securities. Your line is now open.

Jay Vleeschhouwer -- Griffin Securities -- Analyst

Thank you. Andrew, let me start with you on this big dose of Vitamin C that you are buying with PlanGrid? Could you talk about two things? One, how do you foresee the integration into the portfolio? And maybe talk about the technology roadmap here. And also what connection do you see if any of this acquisition to the manufacturing side of the portfolio? In other words, as we heard last week at AU there is the growing connection to manufacturing to ADC and construction. Does this have any bearing on that and could this also lay the groundwork? Does this imply a future construction collection? Then a follow-up.

Andrew Anagnost -- President and Chief Executive Officer

All right. So let me start -- it was actually three questions, Jay. That's good. I'll answer all of them, OK. All right. So first off, let's talk about the product integration strategy. So let's kind of just pause and talk about what is each product family good at. All right. PlanGrid has built an excellent fast mobile native platform for document centric workflows and sheet centric workflows and project management layers. They capture issues, change orders and things in these document centric workflows. They've done an absolutely exceptional job and you can tell by how far they've reached down into the construction ecosystem and the products beloved by the end users.

So they have really nailed this notion of document centric flow. You can see on the BIM 360 side, we have always been very BIM centric. All right. We've focused on how do you get BIM data deeper into the construction process, how do you explod it so that it can be useful to more teams. So I think what you're going to see us doing with this portfolio integration, especially over the next year and a half or so is, we're going to pull their document-centric view up into BIM 360 and they're going to pull our model-centric view down into their application. So basically you're going to see us close the loop between the document flows that go on in PlanGrid and the BIM data flows that go on in BIM 360. And you'll see each team kind of double downing on what it's best at. So you will see the BIM 360 team start to continue to move further upstream in its efforts on pre-construction and the PlanGrid team continue to execute more deeply on the document based flows and gaining insights from those flows.

Now in terms of the manufacturing integration, I think one of the things you're probably aware of is, as manufacturing industrializes more and more, what we classically call building product manufacturers are going to show up more and more in the construction world. They're going to be delivering products into the construction space. They're probably going to be one of the larger prefabricators out there in terms of what we think. These are the companies right now that builds things like ducting systems, air conditioning systems, curtain walls, prefabricated modular buildings , they're going to get more and more important. And as such, they will be a trade quotes in the workflow and they'll likely be consuming some of these applications too as the owners propagate their construction flows into these applications.

So you're absolutely see an overlap between what we classically call our product data management application and these construction life cycle applications. Now your last point on the construction collection, I wouldn't look for anything like that soon. The collections have primarily been targeted at the desktop products and integrating cloud-based capabilities with the desktop products. We think we have the appropriate layer of overlap there. Right now we are just going to keep rolling these products out separately and satisfy the needs of individual projects in the construction ecosystem one at a time.

Jay Vleeschhouwer -- Griffin Securities -- Analyst

A quick follow-up on M2S. Could you talk about -- this one is for, Scott, any material differences you're seeing in adoption or conversion by geo? For example, within Europe, are you seeing any notable differences there or Asia or here in terms of rates of adoption of M2S?

R. Scott Herren -- Senior Vice President and Chief Financial Officer

Yes, I'd say we are. So let me start by stating the conversion rate on M2S was unchanged this quarter. It's still staying at about a third maintenance agreement that came up for renewal that converted. So even though the number in absolute terms is smaller, just means that the number that came up for renewal is small, so no change in conversion rate. There is a difference for geo as you just pointed out. It's less so at the country level, it's more of what we typically see as new technologies roll out, where North America seems to be the earliest adopters followed by Continental Europe and then some of the emerging markets in Europe and then APAC comes in at the -- after Europe though. So that's exactly what we're seeing in our Maintenance to Subscription. We're furthest along in the US, we're about where the US was within the last two or three quarters in Europe at this point and APAC is behind.

Operator

Thank you. And our next question comes from Heather Bellini of Goldman Sachs. Your line is now open.

Heather Bellini -- Goldman Sachs -- Analyst

Great, thank you. I do have follow-up on collections. You guys mentioned that there were notable percentage of your total base. I'm just wondering if -- you said, I guess total base, and so I'm just wondering are collections tracking faster than you thought and then what do you think it is now that's driving adoption for existing customers to look at collections when you had (inaudible) in the past what's caused then people to get more interested in them? And the other, I guess just real quick one would be your eStore progress, is that progressing faster than where you thought you would be right now? Thank you.

R. Scott Herren -- Senior Vice President and Chief Financial Officer

Yeah, Heather, I'll start on the eStore. It's progressing right along with what our expectations are. We gave this data where 65% year-on-year during the third quarter that we disclosed. eStore continues to drive 20% or so of all of our products subs. So eStore is progressing nicely. I think there's more ground to cover there but the eStore is progressing nicely.

On the collections, they have moved faster than we had initially planned. And I think it's all upside. It's definitely good news. We spent, I think you've heard me say this, an enormous amount of time and Andrew both in his current role, but also in his prior role, spent an enormous amount of time ensuring that we put the right content in those collections that we simplified it. We went from seven suites, which each had a good, better, best versions of 21 suites down to just three collections. So it's easier to sell, it's easier to buy and easier to pay and consume. But we also spend lot of time getting the product mix inside those collections right.

It's moved faster both for new customers and certainly it's moved fast on people converting from maintenance over to product subscription and stepping up at that point of collection. It's been a quite an upside.

Andrew Anagnost -- President and Chief Executive Officer

And Heather, one of the things that's very different about the collections from the suite day is the integration with multi-platform in the cloud is a pretty significant delta from what we had in the suite day. So for instance, the AutoCADs you get in the box with a collection have a mobile version, they have a web version and also they're all integrated with a common data platform in the cloud so people can share their data. So it's a very different offering than what we had during the suite days.

Heather Bellini -- Goldman Sachs -- Analyst

Great. Thank you so much.

R. Scott Herren -- Senior Vice President and Chief Financial Officer

Thanks, Heather.

Operator

Thank you. Our next question comes from Gal Munda of Berenberg Capital Markets. Your line is now open.

Gal Munda -- Berenberg Capital Markets -- Analyst

Hey, thanks for taking my question. The first one I have is about PlanGird. Can you talk a bit about the growth profile of the business and the way you expect maybe the contributions of sales to come into FY '20? When you look at that, how does that contribute to kind of your target for FY '23? That's my first question. Thanks.

R. Scott Herren -- Senior Vice President and Chief Financial Officer

Yes. I'll start and then let Andrew chime in. They are running on a $60 million to $70 million revenue run rate right now and growing about 50% year-on-year. So that's what underpins one of the comments that I gave in the opening script that we expect it to contribute around $100 million ARR next year. There's likely to be some small haircuts, deferred revenue haircut as we work through all the purchase accounting. But that's -- so that will drive a small amount of upside in ARR for fiscal 2020. And actually between that the small amount of headwind on profitability and a small amount of financing costs would be a little bit of a headwind on cash flows. We think we can contain that and still achieve for fiscal 2020, the $1.35 billion in free cash flow we've put out there.

Do you want to talk about longer-term?

Andrew Anagnost -- President and Chief Executive Officer

So now, if we look out at the FY '23 targets, Gal, remember one of the things we said very explicitly when we talked about this target was that the cloud and specifically construction was one of the things that was required to hit those targets. So what you're seeing us do right now is executing on the strategy that allows us to hit those numbers we put out there for FY '23. So organic and inorganic tactics are actually how we're getting those numbers we've put out there and that's how we're going to -- that's how we are going to succeed in construction.

Gal Munda -- Berenberg Capital Markets -- Analyst

Perfect. And just if I talk -- if I think about the customer overlap and the way you guys and they go to the market today, first, maybe, if you think about the US, that's where they're mainly based in, how much is the -- how much customer overlap there is? And in the past, you talked a bit about the stages of adoption in BIM. You start with the project and expand into division, maybe go companywide, entitywide, where is PlanGrid as compared to BIM 360 today? Thank you.

Andrew Anagnost -- President and Chief Executive Officer

Yeah. So here's what's really exciting about this. We do have quite a bit of customer overlap, not a lot, they go deeper down into the system than we do. But what we don't have is project overlap, right. And what happens in the construction space is technology is sold on a project-by-project basis. So for instance, in accounts where we do overlap BIM 360 is on a completely different project and PlanGrid is used on another project. So what you see is, PlanGrid is built to go-to-market machine, it's very good at selling on a project-by-project basis. We've got a lot of success with BIM 360 selling to the IT departments in the large GC and the mid-sized GCs. So there is a really great complement between their project-centric go-to-market approach and our IT or top of the market go-to-market approach. So you can see it's actually coming at some of our companies in different ways.

The other growth synergy we're obviously going to see is taking the PlanGrid technology international, into EMEA and into APAC. So, yes, there is an overlap but the overlap is by account, not by projects. We do not share any projects.

Gal Munda -- Berenberg Capital Markets -- Analyst

Perfect. Thank you so much.

Operator

Thank you. Our next question comes from Sterling Auty with JP Morgan. Your line is now open.

Sterling Auty -- JP Morgan -- Analyst

Yes, thanks. Hi guys. You mentioned in the prepared remarks talking about the outlook and your commentary on macro is that it hasn't changed, but ahead of the G20 and a lot of concerns over trade discussions, et cetera, kind of what are you hearing specifically from customers in EMEA and APAC and what are your thoughts here going into next quarter from a macro perspective?

R. Scott Herren -- Senior Vice President and Chief Financial Officer

Yeah, Sterling we are not seeing any impact on macro at this point, it's something that obviously I think everyone is looking very closely for. We've been watching since the beginning of the year, frankly, to see if there's any effect in the UK or across the northern Europe from Brexit. We're not seeing that, we're not seeing it in demand. We're not seeing it in pipeline build. We've also been watching very carefully with the trading tariff situation, the way it's escalated over the last couple of months, we're not seeing any impact there. There is the anecdotal here and there, we're not seeing any impact on demand and we're not seeing any impact on pipeline build at this point. So, to this point the demand environment still remains robust and from what we can see it will continue that way through the end of the year.

Andrew Anagnost -- President and Chief Executive Officer

Yes, Sterling. I just came off of Autodesk University, and I spend a lot of time with construction and manufacturing customers and yes sure some of them are seeing increases in the material costs, but they are all seeing increases in material costs. So really it's not affecting their ability to execute on projects relative to their competition. So they're still investing in technology from our side because they are all seeing the same kind of small impact in their material costs, but it's not translating into any kind of impact on our business because the people have to get their job done.

Sterling Auty -- JP Morgan -- Analyst

That makes sense. And then my follow-up on PlanGrid, as you look at that space given the number of competitors that are in it, can you help us by comparing and contrasting what you think PlanGrid's, particular strengths were versus the other competitors in that space?

Andrew Anagnost -- President and Chief Executive Officer

Yes, you're right, it is a very competitive space, Sterling. There is lots of competition in this space. What we look at is a couple of important things. One, PlanGrid built an excellent SaaS native application, that's where our focus is on the BIM 360 portfolio. Everything started SaaS native, they've got an excellent set of technologies that are well tuned in mobile workflows, so they started with a stack that's highly scalable, highly SaaS-focused, highly mobile-centric and that's super important moving forward because that's the paradigm that you have to go with. You don't want to have to retool some underlying architecture to be more SaaS or mobile friendly. So that was number one, right.

Number two is, they are covering a set of project requirements that we don't necessarily cover as well with BIM 360. So they have that really robust document-centric flow, we have that really robust BIM-centric flow. Another thing that's super important, they're right down the street. All right, they're right here in San Francisco, it allows us to tap more robustly into the San Francisco talent pool, it's highly synergistic with our location strategy, so we're able to build up a stronger construction presence here in San Francisco.

And then finally there is big synergy with their business models. The business models are nicely aligned. As we discussed earlier when Saket asked, there is pluses and minuses to the various business models out there and we felt very strongly that the named user in pay-per-use models are the winning models and project-based models hit a brick wall. So it was really important for us to look at all these things out there in terms of execution. That what lead us in this direction. They really got the right application in the right space at the right time.

Sterling Auty -- JP Morgan -- Analyst

Thank you.

Operator

Thank you. Our next question comes from Matt Hedberg of RBC Capital Markets. Your line is now open.

Matt Hedberg -- RBC Capital Markets -- Analyst

Hey guys, thanks. I'll offer my congrats as well. Scott, can you help us how we should think through the impact of multi-year contracts to your -- you reiterate fiscal 2010 free cash flow targets, but is the plan to get back to more historical levels, is that primarily channel incentives to drive that behavior?

R. Scott Herren -- Senior Vice President and Chief Financial Officer

Yeah, Matt. It's a great question. You remember this is one thing that I talked about as we were laying out the road to the $1.35 billion free cash flow for fiscal '20 when I walked though that back at our Investor Day. And it really is about seeing multi-year sales kind of revert to its historic mean. We artificially depressed multi-year sales, we launched the Maintenance to Subscription program because we shot up all multi-year maintenance, we had to given three years of visibility to price increases that we're going to happen there. So I'd say it's more returning to the norm that it has been, which if you recall, I said, is about 20% of our sales. And that is focused on product subscription getting to that multi-year point. What that will mean is long term deferred will get up to less than it has been historically but probably into that 15% to 20% range below where it had been historically closer to 30% of our total deferred revenue. So it really is just about reverting that and that's both a channel play and through our mid-market team.

Matt Hedberg -- RBC Capital Markets -- Analyst

That's great. And then just maybe just a quick one. As we think forward to Q1, what's the right way to think about sort of like a cost of living price increase across the subscription portfolio of products? Is that kind of the right way to think about on an annual basis, just kind of like a cost of living increase?

R. Scott Herren -- Senior Vice President and Chief Financial Officer

It is Matt. That's not a decision that we've made or rolled out yet, but what we've said is over the long term expect to see us have annual price increases that are in that low-single digit kind of cost of living range longer term. We haven't talked through or made the decisions on what kind of a price increase to look like beginning next year.

Andrew Anagnost -- President and Chief Executive Officer

Right. Now as you know, we have published long-term price expectations for our M2S customers. So anyone who have taken the M2S offering has a 10-year visibility to how the cost of their subscription is going to trend over time, which is something we felt was really important to do for some of our best customers.

Matt Hedberg -- RBC Capital Markets -- Analyst

Absolutely. Thanks again, guys, congrats.

Andrew Anagnost -- President and Chief Executive Officer

Thank you.

Operator

Thank you. Our next question comes from Brad Zelnick of Credit Suisse. Your line is now open.

Brad Zelnick -- Credit Suisse -- Analyst

Thanks so much and congrats as well on PlanGrid and on a great quarter. I wanted to ask about the strength in EBAs and as well if you can comment about where we are in the shift to annual billings for EBAs and on penetrating within the enterprise?

R. Scott Herren -- Senior Vice President and Chief Financial Officer

Yeah, Brad. Thanks for that question. EBA -- our EBAs business continues to grow strongly. So if you remember the stat we gave -- when we haven't updated this at a mid-year point, but I would expect to see us updated on our Investor Day last year and we are about 45% penetrated through our base of EBA eligible customers. So obviously we made a little more progress on that. I expect to update that penetration rate when we come to the next Investor Day next March. What I'd say is we see great benefit as do our customers see great benefit as they convert over to EBAs.

Usage goes up significantly at that first renewal point. Because of the increased usage of that first renewal point, we see anywhere from 40% to 45% higher renewal at the first renewal point because the usage goes up so much during that period. So, the EBA business continues to grow strongly. I think statistically gave -- earlier was that the enterprise business grew about 50% during the quarter we just closed and it continues to be a focus area for us.

Brad Zelnick -- Credit Suisse -- Analyst

Excellent. If I could just follow up on PlanGrid, you had said that you expect it'll be dilutive to fiscal '20 cash flow, but yet good to see you're maintaining your fiscal '20 target, but I guess it's fair to assume it's going to be accretive to fiscal '23. Anyway to quantify that?

R. Scott Herren -- Senior Vice President and Chief Financial Officer

Yeah, so it doesn't make sense for us to update those fiscal '23 targets at this point. We haven't even closed the transaction yet. So I don't want to -- I don't want to get into addressing fiscal '23. It clearly is a part of the strategy we have laid out to get to our fiscal '23 targets. In terms of fiscal '20, to back up to that piece they are bringing along a fairly robust revenue stream in addition, so it will be slightly dilutive to profitability in fiscal 20 and slightly dilutive to free cash flows but we think we can contain it within our fiscal '20 target of $1.35 billion of free cash flow.

Andrew Anagnost -- President and Chief Executive Officer

Yes, Brad, one of the frequent questions I get when I am now talking to the investment communities, they ask us also how are you going to get to those construction numbers in the fiscal '23 target. Well, now you know, it's going to be a combination of organic and inorganic actions like what you just saw.

Brad Zelnick -- Credit Suisse -- Analyst

Excellent. Thank you.

Operator

Thank you. Our next question comes from Alex Tout of Deutsche Bank. Your line is now open.

Alex Tout -- Deutsche Bank -- Analyst

Yeah, hi guys. Thanks for taking the question. Congrats on the quarter. Just firstly, on the BIM side and kind of more the concept of BIM, are you seeing any more government or agency mandates coming through that may act as sort of general catalysts for the BIM market and your attack on the market first of all? And then on the manufacturing side, you mentioned the interesting Ford example and how this was at least driven in part by generative design. We've also got concepts like digital twin and IIoT getting a lot of attention on the manufacturing side. But do you maybe see these initiatives in manufacturing as a little bit further out than the construction opportunity? Just your thoughts there on kind of how quickly those opportunities are developing relatively speaking. Thanks.

Andrew Anagnost -- President and Chief Executive Officer

Right. So, Alex. Remind me what your first question was, because I got --

Alex Tout -- Deutsche Bank -- Analyst

Sorry.

Andrew Anagnost -- President and Chief Executive Officer

Yeah. BIM mandate, OK, thank you, yeah, because I got -- (inaudible). All right. Let me talk about the BIM mandate. So we're absolutely seeing more momentum around governments and owners mandating BIM as part of their building process and as part of their specification process. We expect this to continue as time goes on. You remember what happened with the UK mandates and how that drove some pretty intense adoption of Revit in the UK markets and surrounding markets. You're going to see more and more of those. It's just part of what's going to happen. We are very interested in seeing BIM based permitting processes, getting the government entities as well. That's going to be something that we'd like to be part of helping people understand and do. Now, when it comes to the manufacturing opportunity, what you said there about it being somewhat further out, I think what you're seeing right now, especially with our execution is on the construction side, you've got this perfect storm of technologies ready, the mobile platform as it is today and the cloud is absolutely 100% suited to what the construction industry needs. The customers are ready. They know they have to digitize and the products are ready. That's why you see this intense doubling down on the construction opportunity in the near term right now.

You look at manufacturing, tools like generatives and some of these other tools, IoT by the way we just see IoT as an input to generative, that's how you collect data and you use it to put information in. It's something we pioneered with the Hack Rod initiative a couple of years back. These initiatives are all very much in the exploratory stages of manufacturers, large and small. And what they're doing is they are sitting there going well. I know that these technologies, the cloud, high-performance computing in the cloud, connected workflows generative, all of these things are going to have a big impact on my business. I just don't know how I am going to deploy them yet. So you'll see those start to get much more traction over an 18 to 24-month horizon whereas construction is kind of a now opportunity.

Alex Tout -- Deutsche Bank -- Analyst

Great. Thanks.

R. Scott Herren -- Senior Vice President and Chief Financial Officer

Thanks, Alex.

Operator

Thank you. And our next question comes from Richard Davis of Canaccord. Your line is now open.

Richard Davis -- Cannacord Genuity -- Analyst

Hey thanks. Maybe a longer-term question. You may or may not want to name names, but when we think about kind of how the growth, the unit growth will come as you kind of go through your transition, subscription in cloud, how should we think about the mix of you guys chipping away market share from your competition versus kind of acquiring because we've talked about this before, acquiring and/or kind of getting people that are laggards to pay -- to become more sustainable but paying customers, is that 50-50, is it 60-40, or how you think about that?

Andrew Anagnost -- President and Chief Executive Officer

All right. Well, so, Richard, I can't give you a percentage, but here is the philosophical answer I'll give you, right? In the short term what you're going to see is piracy or what we call, in --

R. Scott Herren -- Senior Vice President and Chief Financial Officer

Non-genuine users.

Andrew Anagnost -- President and Chief Executive Officer

Non-genuine users, thank you. Piracy in your non-genuine users and legacy users are going to be a more important driver. But in the long term as you head out three to five years, you are absolutely going to see us chipping away competitors in this space, especially in the manufacturing space. The growth infusion is prefacing what's going on in terms of our ability to execute in that space. There is an absolute change in the manufacturing market and that change favors the cloud native. And we've invested, we've been patient, we've worked hard on that and it's going to pay off in terms of share shift long term. So the way I have you think about this is, the one to three-year horizon you're going to see a lot of these non-genuine users and legacy users coming in. When you look out to the three to five-year horizon, you're going to see some share shift coming into the mix.

Philip Winslow -- Wells Fargo -- Analyst

Yeah. And what I (ph) want to add to that Richard is on the construction market, this is Phil, we see it as a $10 billion opportunity over time, but it's probably less than $1 billion today. The last time we did our own surveys, we thought it was around the $500 million market today. So I think a lot of the growth going ahead is not necessarily reclaiming non-paying users whether they are legacy or pirates or share gains frankly in that space where we have to take it from someone else. Like in the construction market there is just an enormous amount of growth that's going to happen in that marketplace ahead of us and we're really well positioned, but it's a big market and there's a lot of competitors in that space. I think there is enough market there for all of us to grow.

Richard Davis -- Cannacord Genuity -- Analyst

Yeah, I agree, that's good -- good thoughts. Thank you so much.

Operator

Thank you. And our next question comes from Keith Weiss from Morgan Stanley. Your line is now open.

Stan Zlotsky -- Morgan Stanley -- Analyst

Hi guys. This is actually Stan Zlotsky sitting in for Keith. Just a quick clarification. When we think about the fiscal '23 targets and the M&A, the inorganic, I guess, contributions to get there, beyond PlanGrid should we be expecting similar type of transactions in the future? And then a quick follow-up on the cloud part of the business in the quarter. Thank you.

Andrew Anagnost -- President and Chief Executive Officer

So we've always been acquisitive, all right. We've been an acquisitive company. The last two years were an anomaly. What you're seeing is entering back into a period where we'll actually be acquisitive again. So we're going to make disciplined choices between inorganic and organic execution over the next five years in all of the new markets we're participating in. Construction being the first, manufacturing not being immune either, so I think you'll continue to see us doing appropriate organic and inorganic actions. And I can't remember -- what was your second question?

Stan Zlotsky -- Morgan Stanley -- Analyst

I didn't originally state it. The official -- the official question, so the 53,000 cloud subs that we just saw in the quarter was a nice uptick versus the trend that we saw in Q1 and Q2 and you specifically mentioned that it came from BIM 360. But maybe just digging into that one, what is it about BIM 360 that really drove such a strong result within the cloud, a portion of the product? Was it better renewal rates, maybe just help us to unpack that number a bit.

Andrew Anagnost -- President and Chief Executive Officer

There's two factors. One, and you might recall a year ago -- the infamous year ago, we had stopped doing promotions that were pushing kind of low-end BIM 360 products into our channel. We now have clean year-over-year compares from those days. So what you see is the year-over-year compares are more representative of where we're going with the business. The other piece that I think is really important to pay attention to is that you know that six or nine months ago we rolled out the new platform for BIM 360 that was integrating our field and planned functionality on a single platform. That platform is now starting to get adoption in some of our largest customers and what you're seeing is the pull through in the BIM 360 business as a result.

Stan Zlotsky -- Morgan Stanley -- Analyst

Perfect. Thank you so much.

Andrew Anagnost -- President and Chief Executive Officer

You're very welcome.

Operator

Thank you. Our next question comes from of Zane Chrane of Bernstein Research. Your line is now open.

Zane Chrane -- Bernstein Research -- Analyst

Great. Thanks for fitting me in and congrats on a great quarter guys. You had really strong growth in EMEA and APAC and that's really impressive given the fact that these regions tend to lag in cloud and subscription adoption versus North America. I'm just wondering is the strong growth you're seeing in those regions being driven more by customers getting more comfortable with these types of deployment models or is it more macro-driven such that there is maybe an uptick in construction or manufacturing demand? Thank you.

R. Scott Herren -- Senior Vice President and Chief Financial Officer

Yeah, Zane I think it's a little bit of both. I think -- and it's a little bit of different story between APAC than it is in EMEA. I think in EMEA we are seeing better penetration, we're seeing better uptake both of the new model types and of cloud across EMEA. I think in APAC what you see is more -- the fast growth rate we're seeing there is more common on the year-earlier quarter where as you recall we had struggled for a couple of years in Japan, made several changes there, changes in our market structure, changes in our own team frankly to drive execution. And we're really seeing Japan turn around very nicely and that's fueling a lot of the growth that we see in APAC. So it's a little bit -- a little bit of a different story between the two.

Zane Chrane -- Bernstein Research -- Analyst

That's great. And just a quick follow-up, any difference in the macro outlook in those regions versus North America?

R. Scott Herren -- Senior Vice President and Chief Financial Officer

No, not at this time.

Zane Chrane -- Bernstein Research -- Analyst

Got it. Great. Thanks very much, guys.

R. Scott Herren -- Senior Vice President and Chief Financial Officer

Yeah.

Operator

Thank you. Our next question comes from Ken Talanian of Evercore ISI. Your line is now open.

Ken Talanian -- Evercore ISI -- Analyst

Hi. Thanks for taking the question. So first off, when you look at the construction opportunity, what if anything do you need to do to better address the building owner constituent who may not be as familiar with Autodesk because they are with say a traditional ERP vendor?

Andrew Anagnost -- President and Chief Executive Officer

Yeah, so we actually have a very quiet product that we have out there in the market already, it's called BIM 360 Ops. And one of the big value propositions of BIM in general is that it leaves behind a 3D model that is a huge asset to the owner in terms of managing, maintaining and using their asset as time progresses. So we've been experimenting in that space. What you're going to do is see us getting deeper penetration there from a couple of fronts. Frankly some of our lead customers are actually starting to become more owners because they see opportunity for them in managing building spaces. Some of the customers that are using BIM Ops now -- BIM 360 Ops are in that category. So you'll see us getting more awareness in that space simply because some of our customers are starting to participate more in that part of the market.

Ken Talanian -- Evercore ISI -- Analyst

Okay, great. And then as another question, could you give us a sense for some of the factors that drove your renewal rates up and what levers you might have going forward?

R. Scott Herren -- Senior Vice President and Chief Financial Officer

Yeah, Ken, we just -- we continue to see in -- so let's just take maintenance effort from (inaudible) product subscription, we continue to see maintenance rates hold up despite the move from maintenance to subscription and we gave you the stat that 30% of those eligible actually moved from an individual product to a collection, which means they probably took more maintenance subscriptions and fewer industry collection subscription. So despite that fact and despite the price increase, we continue to see maintenance renewal rates hold up nicely. So that's a positive, little surprised we're not seeing faster migration frankly from maintenance over to product subscription. But at this point, the price difference between the two is still pretty nominal. That price gap will expand next year.

But again product subscription is just -- it's continued adoption and deep adoption and building that product subscription into your workflows such that it becomes an indispensable tool, much like the products have been back in the perpetual license world. So each of those are progressing -- actually ticking up modestly, but ticking up quarter-on-quarter.

Andrew Anagnost -- President and Chief Executive Officer

Operator, we have time for one more question.

Operator

Thank you. This does conclude our question-and-answer session. I would now like to turn the call back over to Abhey Lamba for closing remarks.

Abhey Lamba -- Vice President of Investor Relations

Yeah, thanks. This concludes the conference call. Thanks for joining us this afternoon. If you have any follow-up questions, please reach out to us. Thank you.

Operator

Ladies and gentlemen, thank you for participating in today's conference. This concludes today's program. You may all disconnect. Everyone have a great day.

Duration: 63 minutes

Call participants:

Abhey Lamba -- Vice President of Investor Relations

Andrew Anagnost -- President and Chief Executive Officer

R. Scott Herren -- Senior Vice President and Chief Financial Officer

Saket Kalia -- Barclays Capital -- Analyst

Philip Winslow -- Wells Fargo -- Analyst

Jay Vleeschhouwer -- Griffin Securities -- Analyst

Heather Bellini -- Goldman Sachs -- Analyst

Gal Munda -- Berenberg Capital Markets -- Analyst

Sterling Auty -- JP Morgan -- Analyst

Matt Hedberg -- RBC Capital Markets -- Analyst

Brad Zelnick -- Credit Suisse -- Analyst

Alex Tout -- Deutsche Bank -- Analyst

Richard Davis -- Cannacord Genuity -- Analyst

Stan Zlotsky -- Morgan Stanley -- Analyst

Zane Chrane -- Bernstein Research -- Analyst

Ken Talanian -- Evercore ISI -- Analyst

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