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Autodesk (NASDAQ:ADSK) just made a bold movecutting 1,350 jobs, or 9% of its workforce, in a push to streamline sales and double down on AI. The decision, announced alongside solid Q4 earnings, comes amid pressure from activist investor Starboard Value, which has been pushing for stronger margins and cost efficiency. But CEO Andrew Anagnost insists this isn't about investor demandsit's about positioning Autodesk for the future. The company is shifting resources toward its cloud and AI initiatives while reshaping its go-to-market strategy. The share price dropped nearly 3% at 9.41am today.
Despite the cuts, Autodesk's financial seems to be in a decent spot. The company posted a 12% revenue jump in Q4 to $1.64 billion, with a non-GAAP operating margin of 37%. Recurring revenue makes up 97% of Autodesk's total. Subscription plan revenue rose 14%, reinforcing its transition to a recurring-revenue powerhouse. CFO Janesh Moorjani highlighted the company's free cash flow of $678 million as a key indicator of financial health. Meanwhile, the restructuring will cost Autodesk $135 million to $150 million, but leadership believes the long-term payoff will be worth it. With non-GAAP operating margin now expected to hit up to 37% in fiscal 2026outpacing analyst estimatesprofitability remains a priority.
Looking ahead, Autodesk expects fiscal 2026 revenue to land in the range of $7.06 billion to $7.21 billion , with non-GAAP EPS climbing as high as $9.67. The company's bet on AI-driven design automation, industry-specific cloud solutions, and platform expansion is setting it up for sustained growth. And with a steady stream of share repurchases, it's keeping investors happy. In a market where efficiency is everything, Autodesk's recalibration could pay off big, making it one to watch in the coming quarters.
This article first appeared on GuruFocus.