ADSKAutodesk

If we breach any of the covenants and do not obtain a waiver from the note holders or lenders, then, subject to applicable cure periods, we would not be able to incur additional indebtedness under the credit agreement described in Part II, Item 8, 2025 Credit Agreement, and the lenders under the 2025 Credit Agreement could declare any outstanding indebtedness under the credit agreement may be declared 2025 Credit Agreement immediately due and payable. payable, which declaration could also lead to a default under agreements governing our outstanding senior notes and any future indebtedness.

New These new or increased tariffs and other changes in U.S. trade policy, including new sanctions, sanctions and increased export restrictions, have triggered and could continue to trigger retaliatory actions by affected countries, including Russia. Canada, China, Russia, and others, that have instituted, considered, or are considering imposing new or increased tariffs, export controls, and other trade sanctions targeting certain U.S. persons or U.S.-manufactured goods.

In addition, new and emerging state laws and regulations in the United States governing privacy, data protection, and information security, cybersecurity, such as the California Consumer Privacy Act (“CCPA”), the California Privacy Rights Act (“CPRA”), other laws and regulations in other states, and numerous laws in other states, many of which provide for obligations similar to and regulations at the CCPA and CPRA, U.S. federal level, have been enacted. enacted or otherwise promulgated.

We could be required to fundamentally change our business activities and practices or modify our offerings products, offerings, and services, any of which could require significant additional expense and adversely affect our business, business and results of operations, including impacting our ability to innovate, delaying our development roadmap and roadmap, negatively impacting our efforts to understand our customers, limiting the effectiveness of our marketing activities, adversely affecting our relationships with customers and our ability to compete. compete, harming our margins, and subjecting us to additional liabilities.

Government regulation addressing AI ethics ethics, transparency requirements, or other aspects of the development development, or use use, or deployment of AI may also increase the burden and cost of research research, development, and development in this area, subjecting other activities, which may increase our costs, limit our ability to leverage AI, and subject us to brand or reputational harm, competitive harm, or legal liability.

For example, the United States and other global actors have imposed continued to increase sanctions and export restrictions as a result of the war against Ukraine launched by Russia Russia, the geopolitical landscape with respect to China, ongoing conflicts in the Middle East, and the ongoing war between Israel and Hamas. other risks.

Increasing regulatory focus on privacy, data protection, and information security issues and cybersecurity issues, as well as new and expanding laws and regulations, and customer requirements, addressing AI, data localization and sovereignty, and the collection and processing of data and information, may impact our business and expose us to increased liability.

Globally, laws such as the General Data Protection Regulation (EU) (“EU”) 2016/679 (“GDPR”) in the European Union (“EU”) and the Personal Information Protection Law (“PIPL”) in China have been enacted, and numerous other countries have proposed or have enacted laws concerning privacy, data protection, these matters, and information security. we expect new laws, regulations, and industry standards concerning these matters to be proposed and enacted in various jurisdictions.

In addition, there is continued instability of international Available data transfer mechanisms impose obligations on us and other companies that engage in cross-border personal data transfer legal mechanisms that transfers and are complex, uncertain, and subject to active litigation and enforcement actions in a number of jurisdictions around the world.

We In May 2025, we also entered into a credit agreement that the 2025 Credit Agreement, which provides for an unsecured revolving loan facility in the aggregate principal amount of $1.5 billion, with an option to be increased up to $2.0 $2 billion, subject to receipt of additional commitments and other customary conditions, as described in Part II, Item 8.

In addition, the CPRA and many other new recently enacted state laws addressing privacy and information security, including those that have become or will become effective in 2025, cybersecurity provide for additional obligations such as data minimization and storage limitations, granting grant additional rights to consumers such as correction of personal information and additional opt-out rights.

Any perception of our practices, products, offerings, or services as a violation violating of individual privacy or data protection rights rights, or failing to comply with obligations under laws or regulations relating to privacy, data protection, or cybersecurity, may subject us to public criticism, lawsuits, reputational harm, or investigations, claims, demands, or other proceedings by regulators, industry groups or other third parties, all of which could disrupt or adversely impact our business and expose us to fines, penalties, and other liabilities.

Fiscal (In millions except for operating margin, and per share data):Fiscal Year Ended January 31, 2026 2025 2024 2023 (Unaudited) Gross profit $ 6,556 $ 5,553 $ 4,986 $ 4,525 Stock-based compensation expense 58 50 51 46 Amortization of developed technologies 89 80 43 53 Non-GAAP gross profit $ 6,703 $ 5,683 $ 5,080 $ 4,624 Income from operations $ 1,578 $ 1,354 $ 1,128 $ 989 Stock-based compensation expense 788 686 703 660 Amortization of developed technologies 80 43 53 Amortization of purchased intangibles 49 41 40 and developed technologies 139 129 84 Acquisition-related costs 16 47 33 10 Lease-related asset impairments and other charges — — 14 33 Restructuring, other exit costs, and facility reductions 216 15 — — Non-GAAP income from operations $ 2,737 $ 2,231 $ 1,962 $ 1,785 Operating margin 22 % 22 % 21 % 20 % Stock-based compensation expense 11 % 13 11 % 13 % Amortization of purchased intangibles and developed technologies 1 2 % 2 % 2 % Acquisition-related costs — % 1 % 1 % Amortization of purchased intangibles 1 Restructuring, other exit costs, and facility reductions 3 % 1 % 1 % Acquisition-related costs 1 % 1 — % — % Non-GAAP operating margin (1) 36 38 % 36 % 36 % Net income $ 1,124 $ 1,112 $ 906 $ 823 Stock-based compensation expense 788 686 703 660 Amortization of developed technologies 80 43 53 Amortization of purchased intangibles 49 41 40 and developed technologies 139 129 84 Acquisition-related costs 16 47 33 10 Lease-related asset impairments and other charges — — 14 33 Restructuring, other exit costs, and facility reductions 215 15 — — Loss (gain) on strategic investments and dispositions, net 9 10 32 (1) (Release) establishment of valuation allowance on deferred tax assets (15) 16 (38) Discrete GAAP tax items 6 (34) 28 Income tax effect of non-GAAP adjustments (151) (112) (163) (49) (160) (130) Non-GAAP net income $ 2,242 $ 1,839 $ 1,642 Diluted net income per share $ 1,445 5.23 $ 5.12 $ 4.19 Stock-based compensation expense 3.67 3.15 3.26 Amortization of purchased intangibles and developed technologies 0.65 0.60 0.39 Acquisition-related costs 0.07 0.22 0.15 Lease-related asset impairments and other charges — — 0.06 Restructuring, other exit costs, and facility reductions 1.00 0.07 — Loss (gain) on strategic investments and dispositions, net 0.04 0.05 0.15 Income tax adjustments (0.23) (0.74) (0.60) Non-GAAP diluted net income per share $ 10.43 $ 8.47 $ 7.60

In November 2022, Autodesk entered into an amended and restated credit agreement (“Credit Agreement”) by and among Autodesk, the lenders party thereto, and Citibank, N.A., (“Citibank”), as administrative agent, that which provides for a an unsecured revolving credit loan facility in the aggregate principal amount of $1.5 billion billion, with an option to be increased up to $2.0 billion. $2 billion subject to receipt of additional commitments and other customary conditions.

The tax expense for fiscal 2025 2026 consists primarily of the U.S. and foreign tax expense, including withholding tax on payments made to the United States or to Singapore Ireland from foreign sources, a partial audit settlement with the IRS, and related increase in reserves relating to research and development tax credits, on net controlled foreign corporation tested income (“NCTI”), offset by a decrease in tax expense relating to deductible stock-based compensation compensation, and tax benefit from the Australia valuation allowance release. credits.

General and administrative 693 43 7 % 650 30 5% 620 Increase primarily due to an increase in employee-related costs driven by higher headcount and merit increases and an increase in cloud hosting costs partially offset by a decrease in charitable contributions to the Autodesk Foundation and employee-related costs partially offset by a decrease in lease-related asset impairment and other charges. acquisition-related costs.

Fiscal The following table sets forth the components of interest and other expense, net:Fiscal year ended January 31, 2026 2025 2024 2023 (in millions) Interest and investment income (expense), income, net $ 20 $ 28 $ 26 $ (71) Gain on foreign currency 7 6 10 15 (Loss) gain Loss on strategic investments (9) (10) (32) 1 Other income 7 6 4 12 Interest and other income (expense), income, net $ 25 $ 30 $ 8 $ (43)

In assessing the need for or release of a valuation allowance, we consider all available evidence including past operating results and results, estimates of future taxable income. income, carryback potential if permitted under the tax law, and results of recent operations inclusive of tax planning strategies resulting in realization of the deferred tax asset.

Also, Marketing and sales $ 2,373 $ 373 19 % $ 2,000 Increase primarily due to an increase in sales commissions to Solution Providers due to the recognition of these costs in marketing and sales expense under the new transaction model, cloud hosting costs, model and professional fees partially offset by an increase in capitalized software costs. fees.

Net cash used in financing activities was $987 $1,361 million in fiscal 2025 2026 and was primarily due to repurchases of our common stock. stock and payment of notes payable due in June 2025 partially offset by the proceeds from the issuance of notes payable due in June 2035.

Our sales incentives to Solution Providers will be are recorded as operating expenses under the new transaction model as we will contract in which Solution Providers provide a quote to customers but the actual transaction occurs directly with end customers. between Autodesk and the customer.

Fiscal Other revenue consists of revenue from other products and services and is recognized as the products are delivered and services are performed.Fiscal Year Ended January 31, 2025 2026 Change compared to prior fiscal year Fiscal Year Ended January 31, 2024 2025 Management Comments (in millions, except percentages) $ % Net revenue:

AECO $ 3,583 $ 646 22% $ 2,937 $ 357 14% $ 2,580 Increase due to growth in revenue from AEC Collections, EBAs, EBA offerings, and Autodesk Construction Cloud, Revit, and Payapps. Cloud (now known as Forma for Construction).

Our cash flow from operations increased to $2.45 billion for the fiscal year ended January 31, 2026, from $1.61 billion for the fiscal year ended January 31, 2025, from $1.31 billion for the fiscal year ended January 31, 2024. 2025.

We recognize the tax benefit for an uncertain tax position when it meets the more likely than not likely-than-not threshold for recognition.

The deferred costs will then be are amortized over the period of benefit and recorded to “Sales and Marketing” on the Consolidated Statement of Operations.

The sales incentives not qualifying for capitalization will be are recorded to “Sales and Marketing” on the Consolidated Statement of Operations as the costs are incurred under the incentive program requirements.