Autodesk, Inc. (ADSK) Earnings Call Transcript & Summary

Welcome, everyone, and thank you for joining us today. We are delighted to have you with us. My name is Simon Mays-Smith, and I'm the VP of Investor Relations. We have a great lineup of presenters for you today. We're going to start with Andrew and then have detailed presentations from many of our leaders, and then we'll finish with Debbie's financial update. We have 2 short breaks planned, and there will be a Q&A session with the entire executive team at the end. Before we start, I have 2 process items to cover. First, please enter your questions any time during the webcast in the client. We'll get to as many of them as we can in the time available. We aim to finish Q&A at 1:00 p.m. Pacific Time sharp as we know many of you will have commitments then. And second, let me share our safe harbor statement with you. I'll let you read through it, but in summary, we may make forward-looking statements during the course of this presentation. Please refer to our SEC filings for information on risks and other factors that may cause our actual results to differ materially from these statements. Now with that, let me hand it over to Andrew to kick it off. Andrew, over to you.

Thank you, Simon. Today, we're going to talk about the strategies and tools that are going to drive growth in fiscal '23 and beyond. But before I do that, I want to go back 4 years ago when I talked about our 5-year view heading up into fiscal '23 and what was going to drive the outlook for those 5 years. Some of you might remember that I talked about 5 years and 5 outcomes, and these are the 5 outcomes I talked about. The top 3 by the end of next year are arguably going to be substantially done. We would have completed the subscription transition. We're well on our way right now to digitizing the company that most of that work will be done next year. And we've driven them through the entire design and make process for AEC. Though there's still a lot of adoption that has to happen, it's accepted that BIM is going to be the premier way to move from design to make inside the advanced parts of the AEC ecosystem. Now when we get to the end of next year the 2 below, automating the process of design and manufacturing and converging construction and manufacturing to a new paradigm, are still going to have work to do. But we have made significant progress in bringing those 2 industries to the cloud and bringing them closer together. So we're going to retire this view for the next 5 years and talk about a different view of how we're going to be driving growth. But before I introduce the new view of how we look at the next 5 years, I want to look at a few other things that Debbie is going to talk about that we've also accomplished over the last 4 years. The first is we've built a more resilient company. There's 2 business trends here with regards to the revenue growth of Autodesk. The one in blue shows what happened during the great global financial crisis. The one in green shows what happened during the COVID-19 pandemic. What you can see indisputably is that the business is much more resilient than it was back in the days of the global financial crisis. This is exactly what we said was going to happen, and nobody wanted a pandemic or a global tragedy to illustrate how resilient our business was, but nonetheless, you can see it is resilient. The other thing we've done is we've built a more robust company. Look at how we bounced back in the first half of the fiscal year. Billings grew over 19%, cash flow grew over 35%. This is clearly a sign that we have underlying strength built into our business, and it continues to drive robust growth as we come out of the pandemic and into the future. But we've also built a more predictable company. If you look back to how we talked about our FY '23 goals in 2020 to the way we talk about our FY '23 goals today, you see very little change or changes that we told you about that were connected to acquisitions that were never built into our models. So for instance, if you look at the change in non-GAAP margin, that's all due to inorganic activity that was never part of our original models. You can also see that with regards to the way we look at the business internally, the sum of revenue growth and free cash flow margin, we're actually trending better than what we thought we were going to do in the Investor Day around 2020. So a much more predictable company and a much more resilient company and a much more robust company. So how are we going to deliver in the next 5-year cycle, FY '23 and beyond? Because FY '23 marks the end of that first 5-year cycle I talked about. Now we're moving on to talk about the next one. And there's going to be 3 critical areas that we're going to focus on: digital transformation in all our industries, leveraging some of the key growth enablers that we have core to our business and monetizing the long tail in new and compelling ways. And with regards to digital transformation, we're going to be looking at 3 buckets here today: the convergence of design and build in AEC, the convergence of design and make in manufacturing and the integration of adjacent verticals into these new digital transformations and digital processes. If you look at what we're doing in design and build, you're going to hear from Amy and Jim about all the new capabilities we're building into our design applications that are totally cloud-enabled and how those capabilities integrate downstream into the capabilities of Autodesk Construction Cloud, creating an end-to-end experience from design all the way to operate that's unrivaled in the industry. In addition, we're going to talk about our ongoing journey to converge design and make in manufacturing, to shift away from these siloed legacy solutions to one integrated cloud-based platform that brings together everything from design to use in one environment that robustly moves data across the various processes and speeds up execution and builds more resilient businesses for our manufacturing customers. In addition, we'll drill into some of the areas where we're integrating adjacent verticals. You'll hear from Amy about the work we've done on road, rail and water. In manufacturing, you'll hear a bit more about what we're doing around electronics and simulation and as we also move into production management in the future. In Media and Entertainment, which you haven't heard about for a while, you're going to get a view into how that industry is moving to production in the cloud and how XR experiences are extending across all our industries, and we'll be looking at next-generation ways to do content creation. And across all of that are the owners, the people that own buildings, the people that own factories, the people that own production facilities. These owners are going to need tools from us that go from digital models to digital twins, and some of the early work we're doing with Tandem is just the beginning of how we're going to be entering that owner market in the future. And what's also exciting about all of this is how digital transformation helps our customers create a better world. Every single one of our customers is worried about their carbon footprint, their water impact and how much waste their manufacturing or construction processes are creating. By digitizing what they do, we're going to give them visibility into where they're at, what they can do better and give them suggestions on how they can actually change the way they construct and manufacture and produce things so that they reduce their carbon footprint, their impact on water and their waste. And at the same time, we're expanding our TAM. Digital transformation allows us to extend more deeply into other parts of the process and extend into new industries. So you'll see our TAM grow this year from $62 billion to $78 billion, and a lot of that growth is going to be driven by our expansion into make. Yes, we're going to absolutely be expanding our TAM in design, but that growth in make is going to contribute a lot to that TAM expansion over the next few years. Now let me turn to this notion of leveraging key growth enablers. We have some core things in our business that are just going to keep giving incremental growth to the company over time, and they're unique to Autodesk. One of them is our business model. The next is our ability to converge multiple industries and create connections between AEC and Manufacturing and Media and Entertainment. And the third is, of course, our efforts in license compliance. If you look at our business model transition, we've already retired perpetual licenses, and we built a robust and resilient subscription business. We're also introducing tiered plans on top of that, that will add incremental value to our customers, and we're moving forward to providing consumption capabilities to everyone. And you're going to hear a bit about that as we move forward. And this is going to continue to deliver incremental growth to the company over the next 5 years. But in addition, there's something completely unique to Autodesk. We're building out a set of horizontal services and STKs and data pipelines that allow us to move data seamlessly across various industries and allow third parties to access that data and build new types of workflow capabilities that have never existed before and that power our customers' digital transformation above and beyond what we do with our core product offerings in design and manufacturing, AEC and Media and Entertainment. And like we do every year, we're going to talk about the conversion of noncompliant users into paying customers. You'll hear from Jeff and Steve about the tremendous progress we've made hardening our systems and identifying these noncompliant users. In fact, the pool of noncompliant users that we feel we can reach, as measured by versions that are close to the current version and show a lot of usage over the last 90 days, has increased to 15 million. We only have to move a fraction of that 15 million in order for us to continue to add accretive benefit to our business over the next few years. Which brings me at last to monetizing the long tail. This is a strength of Autodesk. We have reach that goes deep into departments in larger companies but also into very small companies across a very broad ecosystem. And we're going to introduce new types of consumption models, platform capabilities and ecosystem growth that's going to allow us to monetize this long tail even more effectively than we have in the past. You're going to hear from Jeff today about our innovative Flex model, which not only helps us monetize occasional use within large companies but also helps us bring our most advanced capabilities to smaller companies that either couldn't afford them in the past or didn't think they were for them. So look for this business model to expand the reach of our entire portfolio further and further into the long tail of our business. In addition, the amount of cloud services that we're going to integrate with data experiences in the cloud are going to ignite a whole new developer ecosystem that's even more powerful than what we had with AutoCAD 20 years ago. And that ecosystem is going to power new types of growth. As that ecosystem grows, the data in it, the data in that platform is going to become more valuable, which is going to drive more insights, more users, but it's also going to drive more workflow solutions, which is going to drive more developers into our ecosystem and more apps and extensions. It's a flywheel of growth that's going to build out a completely new ecosystem. So today, you're going to hear from my entire team about all of these long-term growth drivers and what they mean for the company. We're going to start things by handing it over to Amy Bunszel who's going to tell you about accelerating the digital transformation in architecture and engineering. Amy, over to you.

Thank you, Andrew. I'm excited to be here today to share how we are supporting our customers by accelerating digital transformation in our architecture and engineering business. Through FY 2026, our total AEC TAM is $35 billion, serving the 29 million design and make professionals who are traditionally potential customers for our software. $20 billion of that total TAM comes from design and $16 billion from make, with 12 million and 17 million professionals, respectively. Jim will talk to you about the construction opportunity in make. I'll focus on design and highlight some of the new opportunities like water infrastructure, which has expanded our total addressable market. To start, I will talk about a few of the ways we are enhancing our core portfolio to support digital transformation and add value for our current subscribers. Next, I will talk about the new opportunities we have to expand and deepen our reach across the ecosystem. And finally, I will share how we are transforming the way our customers approach design with outcome-based design capabilities and automation. Let's get started with how we are supporting our current subscribers in their digital transformation. As COVID-19 drove more and more people to remote work, digital transformation went from need to have in the future to must have now. COVID has fundamentally changed the way we work. In fact, in June 2020, an International Data Corporation report estimated the pandemic will speed up digital transformation by 5 years. We have seen this with our tools as well. The creation of new projects in BIM Collaborate Pro spiked by 225% in the early days of COVID and today is up over 100% year-over-year. Online collaboration is here to stay. As a response to these new ways of working, we've advanced our cloud collaboration offerings to a 3-tier model to better help customers solve problems with disconnected data, teams and workflows. At the entry level with Autodesk Docs, you can work off a single coordinated model while maintaining control over who has access to your data. With BIM Collaborate, we connect teams and enable customers to enhance their project data with artificial intelligence, class detection and issue management capabilities. The more data the customer puts in, the smarter the analysis and simulation and the more issues they can address before they become costly. At the highest tier, BIM Collaborate Pro enables anytime, anywhere collaboration and co-authoring, connecting workflows across data and teams. Our tiered access and pricing models provide customers the flexibility to pay for the level of access they require and move between them as their needs advance. With these options, all stakeholders can collaborate in a democratized transparent way. And good news, there are lots of stakeholders. Contractual requirements, government oversight and owner demands mean that even small to midsized projects can have hundreds of stakeholders. Meanwhile, larger projects can have several thousand project team members. Now let's talk about how we're using data and automation to build an even smarter AutoCAD. Jeff will remind you of the many benefits companies get from subscription. I will talk about the positive impacts we are having on our users. Now that we have transitioned from serial numbers to named users, we can provide a more tailored and personal experience. We're providing AutoCAD subscribers with powerful time-saving automations and insightful recommendations powered by data and machine learning, along with the anytime, anywhere access of AutoCAD across desktop, web and mobile. And coming soon, the AutoCAD web app will be getting a whole lot more powerful. Currently, our largest customers use custom scripts to take full advantage of AutoCAD on the desktop. And soon, they'll be able to leverage those same enterprise-grade customizations and automations in AutoCAD Web, too. Users not on subscription and on older versions of AutoCAD are missing out on these new benefits. Imagine learning new skills in the flow of your work, not outside of it. This is a significant differentiator for AutoCAD. We've delivered over 6 million usage-based insights to over 600,000 users already, and we are just getting started. Soon, you'll see us start to create usage-based macros tailored specifically to each of our users' needs. This means AutoCAD will be getting better alongside our users and help them achieve the best possible outcomes on their projects. Let's move on and talk about how the future of BIM is accelerating digital transformation. The AEC industry has been going through a transformation to reduce waste, increase efficiency and break down operational silos between the design, fabrication and construction phases. To enable this, the Revit model needs to include both the design intent and constructability details. That's why we've expanded Revit to accommodate more information, including detailed documentation, quantities and instructions for how to build and fabricate the design. As engineering firms extend their scope of services from design to detailing, these types of solutions allow for a common language between firms and can reduce coordination overhead and errors. This also gives us the opportunity to reach more market segments and target additional personas for new subscriptions. Today's building electrical systems are more complex than ever, incorporating on-site energy generation, battery storage and electric vehicle charging and more, all while trying to reduce carbon emissions and costs and improve resiliency. By partnering with industry leader, Schneider Electric, we are co-developing solutions on top of Revit and Forge to help engineers design and analyze electrical systems in buildings, enabling us to reach another new persona. On the infrastructure side, Civil 3D subscribers can leverage integrated purpose-built tools to design and deliver any scale road, highway or rail project. As the core environment for detailed modeling of transportation networks, models created in Civil 3D can be used to design bridges, tunnels and drainage, perform analytics, create some middle documentation and construction models. Civil 3D subscribers have access to solutions like rail, water and sewer modeling, plus integration into the Autodesk Bridge solution, supporting our efforts to win over DOTs and opening us up to a new audience of customers. Users on older versions do not benefit from increases in performance, scalability and workflow improvements and they are missing out on new capabilities. Our partnership with Esri is connecting Autodesk design solutions like Civil 3D, InfraWorks and MAP 3D to the Esri ArcGIS platform. The Autodesk Connector for our GIS capability is enabling our design customers to leverage a rich world of existing conditions to quickly provide context that can be used for design. We've been investing in generative design for Revit for a few years now. This year, we expanded these capabilities to infrastructure customers. Grading optimization for Civil 3D is a new AEC collection capability that enables Civil 3D users to automate the exploration of countless site-grading configurations, giving civil engineers and owners the ability to explore options faster and deliver better project outcomes. Next, I will highlight 3 exciting BIM expansion opportunities: road and rail, where we have been investing and succeeding for some time; and 2 newer areas, water and operations. But first, let's check in on the state of BIM penetration. Countries around the globe are recognizing the value that implementing BIM policies deliver across AEC industries, enabling the creation of digital twins to better plan, design, build and manage assets. Today, government BIM policies are addressing historic construction productivity and quality challenges with the adoption of international BIM standards, enabling governments to address wider goals like climate change, the reduction of CO2 emissions and energy efficiency. Policies, requirements and international standards will continue to be put in place. And even in countries that are slow to adopt, we'll see more owners from the private sector requiring BIM. Time and time again, we have seen BIM mandates drive adoption of Revit, Civil 3D and other Autodesk solutions. As you can see here, overall BIM penetration continues to grow globally. You can also see that even in the countries with the highest adoption, there is still plenty of opportunity and that there are many large economies still early in their BIM journey. While we did see some slowdown of BIM growth from the pandemic in the past 12 months, penetration held steady and continued to pick up in many parts of the world. Continued growth in BIM-mature regions like North America, Central and Northern Europe and Australia and New Zealand was driven by a combination of BIM mandates, increasing demand from clients and market competitiveness. APAC still lags behind the other countries but shows pockets of growth. Singapore is one example and there is an acceleration in Japan. While we've seen strong BIM growth over the past several years, we are still far from reaching market saturation and expect to see continued BIM growth globally for the foreseeable future. Autodesk continues to be at the forefront of accelerating the transportation industry's digital transformation. 18% of all construction output comes from transportation, making it one of the largest growth areas for Autodesk. Rail is one of the few markets that is projected to grow double digits over the next few years and a segment where we've had great success due to our ability to provide an integrated infrastructure and building design digital delivery platform for collaboration. Our investments started in design and have expanded to support broader non-design project stakeholders, creating new white space opportunities and many sales wins. For example, BIM Workflows will enable the Montana Department of Transportation to extend the use of BIM to better maintain more than 5,000 bridges and 150,000 lane miles of highway. Our new parametric bridge workflow solutions will transform the way they plan, design and build their bridges by incorporating more manufacturing approaches, resulting in improved efficiency and reduced risk. Another example is Norconsult, where they leverage the breadth of our portfolio for one of the largest road construction projects in Norway, Route E39 valued at $490 million. They were able to deploy a BIM process across all AEC disciplines using the AEC collection and cloud collaboration capabilities, resulting in a completely digital project, with a 70% increase in design delivery speed while also eliminating traditional drawings. Finally, the Link Alliance consortium is using our design and construction software for the Auckland City Rail Link project. This 3.5-kilometer twin tunnel and 3-rail station project took full advantage of our capability to deliver a seamless BIM process across both horizontal and vertical rail assets while leveraging our cloud collaboration technologies to coordinate across 1,600 stakeholders working in 30 countries across 16 disciplines. Let's move on now and look at the water infrastructure opportunity. I'll spend a bit more time here since this is the first time I'm covering this topic at Investor Day. First, let's do some context setting. Water is unevenly distributed around the globe and climate change is altering its availability. 1/4 of the global population lives in countries experiencing high water stress, and digital solutions for water infrastructure are key to creating a more resilient and sustainable water equity. Before acquiring Innovyze, we were focused on the design of the main structures supporting the water life cycle. With Innovyze, we have expanded our capabilities into hydraulic modeling while also expanding into asset management and operational analytics to enter the operations and maintenance phase of the life cycle. This expansion resulted in a 3.7x TAM growth, going from $0.7 billion to $2.6 billion and positioning Autodesk as the one-stop shop for water infrastructure. We can now address the needs of all stakeholders across the value chain. From engineering service providers of any size who want to get approvals quicker, increase productivity and design for the future; to water and sewer utilities who are under tremendous pressure to meet regulatory requirements and need to continue delivering a safe and reliable service; to environmental authorities, who need to make sure communities are safe while also planning for the future; and plant operators who need to optimize production, reduce their operational costs and more importantly, minimize their environmental footprint. As you can see, we've expanded our customer types well beyond engineering service providers. With the acquisition of Innovyze, we are also strengthening our strategic relationship with AWS and partnership with Esri. In the operations market, we can better address the digital twin opportunity, including the complete asset life cycle by partnering with best-in-class cloud and GIS services. With a highly complementary and synergistic portfolio, we now cover the entire water life cycle from planning to operations. With this powerful and comprehensive portfolio, we're able to provide the industry with solutions to create more resilient designs and to improve planning, operations and maintenance for a more sustainable future. No other company can offer such a comprehensive water-centric solution. We've identified 4 opportunities to grow this business. We'll accelerate the Innovyze business with our named accounts by leveraging the high-touch relationships Autodesk has with these customers. We'll also expand with Autodesk channel partners in countries where Innovyze already does business today: the U.S., Canada, United Kingdom, Australia and New Zealand. We'll expand into countries with little Innovyze business with our Autodesk channel partners. These countries include Germany, France, Japan and India. Finally, we'll expand to owners and operators addressing net new target personas and disciplines. Now let's look at how BIM has expanded into operations with digital twins. The digital twin is a digital replica of a built asset that is a dynamic digital reflection of its physical self. They possess the operational and behavioral awareness necessary to simulate, predict and inform decisions based on real world conditions. Digital twins are an important artifact of the BIM process and provide the means to transform the build asset life cycle. Autodesk Tandem was created to support digital transformation and help owners move up the digital twin maturity scale, empowering them to realize their digital twin vision. With Autodesk Tandem, you can create a digital twin through a digital handover, accelerating operational readiness and leveraging data created during the BIM process. In the future, connecting Autodesk Tandem to operational systems will create a single pane of glass for smarter operations. Analyzing the operational data collected by Tandem will empower greater insight to inform future decisions. There's a lot more detail on our digital twin strategy on our Investor Relations website if you are interested. Greater insights isn't just important for operations, it's also vital for all phases of design and plays an important role in creating sustainable and resilient buildings and infrastructure. Let's look at how outcome-based design and automation will reshape the design and make opportunity for our customers, Autodesk and the world. I want to share with you 3 examples. First, new outcomes are needed post pandemic, and automation is the key to being able to achieve them. For example, offices, as we know them, are being rethought and reconfigured for hybrid working. With generative design in Revit, you can build safe distancing standards into workplace design studies, use it to better visualize design data, understand trade-offs and weigh different room layout options without the manual work of rearranging and reorienting desks and interior elements. Next, our newly acquired Spacemaker technology is a great example of a helpful AI on your shoulder. Spacemaker helps architects and real estate professionals evaluate development site feasibility. NREP, the Lendager Group and Sweco worked on an ambitious residential project that addressed all 17 sustainable development goals from the UN. With Spacemaker, the team explored real-time options for sunlight, daylight, wind and views. Being able to combine generative design and real-time analysis of factors like daylight, noise, density, wind or sight lines allows for the analysis of a wide set of criteria that's critical for early planning decisions. By removing friction between design and analysis, we are empowering designers with data, freeing up valuable time and creativity to do what they do best, leading to better designs and better outcomes for everyone involved, from the owner to the occupant. And Spacemaker unlocks opportunity for Autodesk as well, with solutions targeted at owners, real estate developers and anyone doing early-stage planning. That's just the beginning for Spacemaker. We're also prototyping machine learning capabilities to help customers understand the energy use intensity of their projects during early-stage design, where they are best able to make changes that have a positive impact on sustainability. This leads me to a deeper dive on sustainability. We've only scratched the surface on how outcome-based design and automation can help our customers achieve their sustainability goals. With digital transformation, we're able to give customer solutions to lower their projects' total carbon as well as optimizing how they build and operate their physical assets. Sustainability is a vast and complex issue, with climate change and carbon emissions arguably the most valuable and addressable problems. We're seeing rapid growth of various net 0 carbon targets by governments and big corporations. More than 3/4 of the global economy is now covered by national commitments to reach net 0 greenhouse gas emissions by 2050. With the most recent IPCC report, we may see an acceleration to meet these targets. Architecture, engineering and construction is responsible for approximately 40% of total global carbon emissions, the single largest contributor by sector. The opportunity for a positive impact is enormous. We're addressing this by developing the next generation of Autodesk Insight to leverage the power of BIM to evaluate and optimize total carbon and other key aspects of building performance. By augmenting Revit data with total carbon analysis, designers get accurate, real-time and reliable total carbon calculations. With total carbon, designers can run analysis of both operational and embodied carbon from the earliest conceptual designs through construction and operations, making it easier to design for sustainable outcomes and environmental performance targets. Water is at the core of sustainable development. Our Innovyze solutions empower water experts to address 3 specific UN sustainable development goals, which are long-term widespread problems where we can have a positive impact. Let's take a closer look at the goals. Goal 6 looks at ensuring access to water and sanitation for all. Goal 9 targets building resilient infrastructure, promoting sustainable industrialization and fostering innovation. And finally, Goal 13 focuses on taking urgent action to combat climate change and its impact. With Innovyze, we are helping water experts design a better and more sustainable future for everyone. So why do we win? Autodesk is the technology leader in AEC, and we've led multiple digital transformations with CAD 40 years ago, BIM 20 years ago and cloud collaboration 6 years ago. CAD, BIM and cloud technologies are fueling transformation in our industry, and they build on each other in a way that creates huge differentiation for Autodesk. We are the only company that supports the entire project ecosystem for capital projects, from architecture to engineering to construction plus operations with Tandem and Innovyze across 3 major industries: buildings, transportation and water. Finally, we have a tremendous ecosystem that expands our reach and relevance from a large network of third-party developers building on AutoCAD, Revit, Forge and the Autodesk Construction Cloud, to strategic alliances with industry leaders and customers, to our flexible business models and channel partner and named account ecosystem. By bringing our strengths together, we are positioned to win in architecture and engineering. Thank you. And now I'll pass it over to Jim.

Thanks, Amy. During the past year, construction at Autodesk has made tremendous progress in solidifying our reputation as a technology leader in the construction industry. Our team has been moving fast to strengthen and scale Autodesk Construction Cloud. During FY '21, despite the global pandemic, we made considerable investments in our team, increasing headcount by nearly 30%. We continued to build out our best-in-class solutions in both preconstruction planning and construction management with the launch of new products, new features and the addition of Pype, which has become another unique differentiator in our portfolio. This resulted in year-over-year revenue growth in the mid-30s percent in FY '21. Today, I'll share more with you on why customers are choosing Autodesk as their preconstruction and construction management solution and how we'll continue to win globally in construction. As Amy mentioned earlier, by 2026, the construction TAM is expected to reach $16 billion with more than 17 million professionals. You may remember that last year, we predicted 19 million professionals on the construction side. This decrease is due to a loss in site execution professionals as a direct result of COVID-19. As we've spoken with customers over the past year, we're hearing about a shift in the types of projects. While commercial construction is still recovering, we're seeing growth in areas like infrastructure, energy and utilities. And as Amy mentioned earlier, there has been an uptick in REIT configuration and retrofitting as many commercial spaces need to meet new health and safety requirements. There also continues to be strong growth in residential construction as people shift to remote work. As the industry demands change, it's more important than ever for construction firms to have a standardized approach to technology and an integrated platform that connects all of their stakeholders throughout the entire construction process so they can pivot quickly to capture new work. At Autodesk, we are connecting stakeholders across all phases of construction, so the right people have access to the right information at the right time. Before I go into our construction strategy, let's take a minute to review the significant progress we've made on our product journey. Earlier this year, we launched Autodesk Build, Autodesk Takeoff and Autodesk BIM Collaborate. Since becoming available in February, we've already seen an extremely positive response from our customers, with Autodesk Build now being used on more than 11,000 active projects in less than 6 months. Construction teams are increasingly turning to Autodesk Build to bolster quality, safety and cost management workflows and connect project data across the construction life cycle in a single solution that is easy to deploy, adopt and use. By unifying the best-in-class features from BIM 360 and PlanGrid and adding compelling new capabilities, Autodesk Build is a powerful project management tool and the industry is taking notice. Around the world, contractors and owners like Barton Malow, Burns & McDonnell and Polytech are adopting Autodesk Build to connect their project teams, data and workflows. This quote from the CEO of Belgium-based Polytech echoes what I've heard repeatedly from customers. "Autodesk Build is changing the way teams collaborate." With these best-in-class project management capabilities, we are now focused on displacing the competition and our sales team have had tremendous success doing just that. SC Builders, a U.S.-based commercial GC started with our preconstruction solution assembled last fall. Over the next few months, our team worked closely with the customer to demonstrate the power of the entire Autodesk Construction Cloud, ultimately securing a win for Autodesk Build and displacing a competitor up for renewal. And at Cleveland Electric, our team highlighted how our common data environment connects teams across the entire project life cycle, aligning with the company's long-term vision. In addition, Autodesk Build exceeded their expectation as a project management solution and helped secure the win against the competition. We see these types of competitive wins daily as Autodesk Build continues to gain traction in the field and more and more customers see the power of connected construction. In addition to displacing the competition, we're also seeing tremendous growth in product adoption. In fact, Autodesk Construction Cloud has seen a more than 35% year-over-year increase in monthly active users. In addition, in the last year, we've seen a 2x increase in enterprise usage of construction products. This clearly demonstrates that our go-to-market synergies are effective at driving growth at the named account level. We've also seen an approximately 6x increase in the number of customers using multiple construction products since last year. Now as we look at FY '22, our construction strategy has been guided by 3 key objectives: strengthen and scale Autodesk Construction Cloud, global expansion and retention and optimize the customer experience. These should look familiar as our strategy from last year to become the global construction industry's preferred cloud solution remains intact. First, strengthen and scale Autodesk Construction Cloud. As I mentioned earlier, in February, we delivered the first phase of our product unification efforts and brought Autodesk Build, Takeoff and BIM Collaborate into the unified Autodesk Construction Cloud. And we continue to make significant enhancements to our portfolio. Over the last 12 months, we've delivered hundreds of new features and updates to our solutions, including design and model collaboration, document management, field management, project management and cost management. These capabilities are aimed at helping customers improve decision making and drive better outcomes, not only on the job site but during the critical preconstruction planning process. We have aggressive plans to continue to enhance Autodesk Construction Cloud with new capabilities to our products throughout the remainder of the year. We've also released a series of new workflows to help customers comply with ISO 19650, the standard for global design and construction information management. This is an incredibly important milestone in our journey of connected construction in Europe. With this release, customers can now manage and enforce ISO-required file naming standards and support connected workflows within Autodesk Construction Cloud, the AEC collection and other desktop applications. With the launch of our EMEA data center, our European prospects and customers can now store their project data locally, which is a common prerequisite for engaging with a global software provider. Additionally, Autodesk Docs is now available for purchase as a stand-alone product, and as Amy mentioned earlier, available in the AEC collection. As the centralized data management platform that underpins Autodesk Construction Cloud, Autodesk Docs is what enables a single source across the project life cycle and is highly regarded by our current customers. Autodesk Docs is at the core of our common data environment. As we continue to build out its capabilities, we're guided by 3 key pillars. The first is to enhance core workflows. We are expanding the functionality within our common data environment to ensure data is available to decision makers when they need it. Next, we're tightening our design integration so customers can seamlessly input information from our industry-leading design tools like AutoCAD, Revit and Civil 3D. Lastly, we have an opportunity to improve how the construction industry communicates regardless of where the project data comes from. We're strengthening our customers' relationships with each stakeholder throughout the project life cycle by creating more fluid connections between the data that starts in the design phase and keeps evolving through turnover. Our common data environment strategy consolidates our customers' information coming from different accounts, different users and different applications into a single source of truth, making it one of the most comprehensive common data environments in the market. I also want to call out Pype, a company that joined the construction portfolio in FY '21. Pype has already become a key differentiator in our portfolio. Pype utilizes machine learning to analyze and extract critical construction data from project plans, submittals and specifications. This gives customers a full understanding of their project from day 1, eliminating communication gaps between teams and ensuring a higher level of quality assurance, efficiency and risk management across projects. Pype further strengthens our industry-leading preconstruction offerings and will be tightly integrated into our unified Autodesk Construction Cloud in the coming months. Now let's talk about global expansion and retention. This past year, we continued our investment in building our go-to-market teams in both EMEA and APAC, and the teams are focused on expansion opportunities. For example, we have a strong BIM 360 Docs customer base in EMEA, who are leveraging the solution for basic document collaboration needs. With our recently launched ISO 19650-related workflows, we are now focusing on bringing these customers onto other Construction Cloud platform offerings such as Build and Takeoff to satisfy their field collaboration and quantity Takeoff needs. In APAC, we are extending our leadership in brand recognition beyond design into construction. We are tailoring our marketing and sales plays based on a country's digital maturity and the readiness of our solutions in each target country. For example, in Japan, we've invested in product localization and resources for PlanGrid, and we're now starting to see traction with strategic customers like Daiwa House who included PlanGrid in their large Autodesk enterprise agreement. In addition to investing in teams on the ground, we're also going to look to the Autodesk channel to extend our reach in countries where we have a smaller footprint. In fact, our expansion goal requires not only a focused direct sales team but also increasing the role of Autodesk's channel partners. As you'll hear later from Steve Blum, Autodesk partners provide global scale, coverage and local expertise around the world in over 170 countries. To do that, we're going to utilize our construction specialized partners, a subset of partners with dedicated staff for sales, presales and technical support and that have been certified on the applicable construction offerings. Historically, our channel partners have sold BIM 360 but not our broader construction portfolio. This year, we've enabled construction specialized partners to sell the entire construction portfolio, including Autodesk Build, Takeoff, Assemble, BIM 360 Build, cost and plan. In FY '22, we've increased our construction specialized partners by more than 20%, specifically in Latin America and APAC. And we'll continue to add strategic partners around the globe where we see the most opportunities in construction. And we've already seen tremendous traction globally from these specialized partners. Autodesk Construction Cloud is a game-changer for the industry, and bringing our partner network on this journey is the right thing to do for our customers and will ultimately lead to our collective success. Before I move on to our final priority, I want to highlight the innovative business models we've put in place for our construction solutions to enable even greater expansion opportunities. The industry is demanding flexibility in how they purchase and deploy software. They want more options beyond a single business model based on annual construction volume pricing. Autodesk Construction Cloud offers the most flexible business model available in construction management. For example, if a small team wants to make their life easier in the field, they can easily buy Autodesk Build with a credit card and be up and running in minutes. When other teams see what their peers are using and want access to Build, too, they can easily be transitioned to invoice either through Autodesk or one of our construction specialized partners. As more teams in the company start standardizing on Autodesk Construction Cloud, the C-suite takes notice and wants to find efficiencies. We can move the customer onto the account-based model, getting them unlimited user access and predictable pricing with the same great products for every worker. And with each job, we have another opportunity for additional subscriptions from their subcontractor network. We will grow from user to user, region to region, product to product. With this innovative pricing model, there is opportunity in every single account and is a true differentiator for Autodesk against other construction solutions. Our final priority is to optimize the customer experience. Our customer success organization has built plans to drive retention by helping customers not only deeply adopt our current products but also migrate to and embrace our new unified solutions. And the breadth of Autodesk Construction Cloud offers a compelling cross-sell opportunity into established accounts. In order to take advantage of this, our customer success team is partnering closely with customers to help them adopt our products, create that stickiness in advance of renewal and put them in a position to leverage all the capabilities that Autodesk has to offer. Boldt construction is a great example of what our customer success team is capable of. Boldt, a general contracting firm out of Wisconsin with 16 offices nationwide, had been a longtime PlanGrid customer. As the company looked to migrate to Autodesk Build, they partnered with their construction customer success manager to ensure a smooth transition. Our customer success team worked closely with Boldt as they established their desired business outcomes to reduce safety incidents and to reduce rework costs. Working with the Autodesk team hand in hand, Boldt saw a massive increase in monthly active users and projects. Now the company is on a trajectory for success with Autodesk Build. Boldt is a great example of how partnering with the customer to enable technology adoption results in more usage and ultimately, more deployments with each new project. With Autodesk Build, we want to make sure all customers have a seamless onboarding experience. One of the key tenets of our unified platform is its pervasive simplicity. Thanks to the ease of use of Autodesk Build, we've made it easy for customers to learn new features or to transition from a competitive project management system. As you look across our 3 strategic priorities, strengthen and scale Autodesk Construction Cloud, global expansion and retention and optimize the customer experience, I'm confident that we will capture this massive opportunity in the construction market. And the way we do that is through 3 key differentiators that set us apart from the competition: first, Autodesk Construction Cloud. Autodesk Construction Cloud spans the construction life cycle, offering best-in-class preconstruction planning and construction management capabilities. With Autodesk Build, we have a powerful project management tool that is extremely competitive against others in the market. Every day, we see more and more head-to-head wins against the competition that can no longer match the breadth and depth of our portfolio. Couple that with our forward-looking data strategy and our leadership in building information modeling and authoring tools such as Revit and AutoCAD, and we have all the pieces that customers want in a connected construction platform. Second, our go-to-market strategy offers one of the most flexible business models in the industry, a robust team of global construction professionals and a construction specialized global partner network that expands Autodesk's reach into new customers and new markets daily. Finally, beyond today's current need for digitization, the industry is looking for innovative ways to drive more predictability and safety in the construction process. Builders are looking to prefabrication, off-site construction and modular construction to better manage cost, materials and the safety of their workforce. This is industrialized construction, the convergence of construction and manufacturing. Leveraging the strength of our design, manufacturing and construction portfolio, Autodesk is empowering customers to navigate the demands of today and craft their vision for tomorrow to reimagine the new possible. There is massive opportunity in the construction industry. With a mid-30% growth rate in revenue for FY '21, we expect construction at Autodesk to continue to experience hyper-growth. We are looking at construction in a more connected way than ever before. Our solutions are built for every customer in every segment at all stages of the building life cycle. I'm confident Autodesk has the technology that will transform the construction industry. Thank you. Now we will be taking a short break and when we return, you'll hear from Scott Reese on the opportunity in manufacturing. [Break]

Please settle in. Our program is about to begin.

Okay. Welcome back from the break, everyone. My name is Scott Reese and now we're going to shift gears a little bit, and we're going to talk about the growth opportunity that we see in manufacturing. And as you know from looking at our results, manufacturing is a growth industry for us today. But as you look out beyond FY '23, this is an industry where we see that growth accelerating even further. So we wanted to share some perspective today as to why. Now let's start off by looking at the TAM data and we'll look at this a couple of different ways. First, just from a sheer dollar perspective, as you look out past FY '26, there's an over $38 billion opportunity there for us with over 31 million professionals that we have an opportunity to serve. But as you look at it between design and make, I think this is where it gets even more interesting. And historically, at Autodesk, the majority of our growth has come from the design side of things. But take a look at the make side of this opportunity. It's even larger than the design side. And as you know, our strategy is driving the convergence of design and make capability, so we believe that puts us in a unique position to realize this growth opportunity. Now in addition to taking a look at the TAM, I think it's important also to recognize where this industry is coming from. So everything on the left-hand side of this lightning bolt is kind of how this industry has historically worked. And you'll notice it's a very siloed way of working. And a lot of this is because these capabilities came from different companies. But you'll notice over the years, Autodesk has capabilities in each one of these segments. And those segments are things like CAD, which is primarily the design side of things; CAM, which is manufacturing; CAE, which is largely simulation; and PLM, which is the process that ties it all together. So that's kind of the historical view of the industry. And in a lot of cases, it's where the industry is today. But we believe the opportunity's on the right side of this lightning bolt. And that's where the cloud has given us the ability to converge, design and make capabilities and help those customers work in a very, very different way. And for the better part of a decade, we've been investing in Fusion 360 to help drive that disruption and help customers thrive on the other side of the disruptions that they're experiencing in their businesses. So over the last 12 to 18 months, we've seen the digitization of our customers' operations accelerate. And we've got a lot better picture of what we believe our customers' worlds will look like on the other side of their transformations. So we shot a little video here to paint a picture of what that looks like as well as to give you a feel for what we're doing to help those customers respond to that disruption. [Presentation]

So what did we see there? We saw people working concurrently all over the globe. You also saw all the different personas from industrial engineers, mechanical engineers, electronics engineers, people working out on the shop floor to ultimately ship those products. You saw them working together, but they all were using a native experience on the compute devices that they're familiar with. They were using iPhones and Android devices and Macs and PCs, and they weren't using a generic browser-based approach. They had a native experience in the compute environment that they're familiar with. And then arguably, the most important thing that you saw there is that they were all using the same common cloud data backbone. The data was flowing seamlessly across geographies and across personas, helping them respond and drive the agility into their operations that helps set them apart competitively. So what are the secular demands that these manufacturing companies are having to respond to? There are 3 really important ones here that I'll call out. So the first one is just how smart the products are getting that you and I as consumers are demanding from these manufacturing companies. Now that means that these companies can't just look at the mechanical aspect of a product, they have to look at the mechanical aspect, along with the electronics and the software aspects, and bring them all together and in a way that really keeps up with the demands that continue to evolve. And that's the smart products that are consumer-facing. Machine-to-machine connectivity is growing at an exponential rate as well. And then the processes that the manufacturing industry leverages continue to digitize as well. And we've seen a lot of acceleration here. We're starting to see automation and robotics, artificial intelligence show up, and the digitization of everything that happens out of the shop floor has reached a critical state. It is no longer optional for these companies to leverage the cloud and digitize those processes. It's just critical for them to do so. And then the third thing, which a lot of us have experienced, and I would argue probably all of us has experienced, is just how fragile supply chains are in the manufacturing industry, and we continue to feel the effects of that. So these supply chains are being revisited as to how do we reorganize them to build more resiliency into those, and that brings a big opportunity for us as well. Okay. So now if you look at our strategy for helping these customers respond to those secular demands, there are really 3 pillars that are important to look at. The first is all about differentiating with data. And this is about helping our customers have that data flow seamlessly throughout their enterprise. And a lot of this has to do with breaking down that old file-based economy and disaggregating them and turning it into the flow of information all across the different personas in their enterprise. Now the second thing that I'll touch on is what we're doing to converge the capabilities that it takes to design a product with what it takes to ultimately manufacture it and get it out to the customers. And then the third thing I'll touch on is what we're doing to expand out into adjacent markets. You've heard us talk a lot about smart products. You've heard us talk about shop floors and what we're going to do to ultimately expand our capabilities to address the needs in those segments as well. Okay. So let's first touch on what we're doing around data. And I'll remind you of the Upchain acquisition that we did earlier this year. It's played a key role in helping us meet the customer where they are. Whether they're using an Autodesk product or a competitive product, most of the time, our customers are working in some form of a heterogeneous CAD environment that is file-based. And the Upchain technology meets those customers where they are, wrap some process around kind of how they currently work, it starts to disaggregate those files into something much more useful. It turns it into information that flows more seamlessly across the enterprise. Think back to that video, how all of those personas were working concurrently across the entire globe, it's Upchain built on top of others' floors that's making that happen. Now the second thing I would touch on is just a reminder of what we're doing to converge the process of designing a product with the process of making it. And that convergence spans everything from mechanical design to the electronics and the PCB board that goes into the design as well as with simulation on out into all of the different elements of manufacturing, all converged into a single application on top of a common data backbone. Now the third thing that I'll touch on is what we're doing to ignite the manufacturing ecosystem. This notion of open and connected is just core to how we think about building out Fusion 360 moving forward. I'll remind you, Fusion 360 has end-to-end product development capabilities from mechanical design to electronics to simulation to manufacturing. But because it's built on top of Autodesk Forge and that common cloud data backbone, our partners can participate in that entire end-to-end product development process just as if those capabilities were coming from Fusion itself. So companies like Xometry, aPriori and Ansys, you've already seen leverage the Forge data backbone to bring their capabilities into the Fusion environment as well. Okay. So I think it's important also to spend a few minutes understanding how our customers will experience all of this. And the first thing that you'll notice is that everything is built on top of Autodesk Forge, helping us tie together our different industries. But Fusion 360 is our vertical environment, bringing those capabilities to the manufacturing industry. So there will be a base-level Fusion 360 subscription but we'll also offer extensions for those personas who have more advanced needs within your enterprise. And then on top of that, we'll have consumption services, which will be the more compute-intense services that will be available on a pay-as-you-go perspective. And then the third-party ecosystem can build both on top of Autodesk Forge directly as well as extend the Fusion 360 capabilities, really helping us address those more adjacent segments as well. Now in addition to just how differentiated the offering itself is, I think it's important to pay attention to how differentiated and disruptive the business model for Fusion 360 is as well. Now if you look at competitive offerings in the market, in order to do everything that you saw in that video with Fusion 360, you would have to acquire capabilities from all of these different companies. And not only would you have a bad experience in passing data back and forth between all of these companies, you'd also have to spend upwards of $50,000 to get the capabilities that you would need. Now you compare that with what we're doing with Fusion 360. For a base level subscription of $495 per user per year, you'd get the mass market capabilities that span design and make. And then you have access to expanded capabilities for the more advanced personas in your enterprise who need them without forcing you to over-serve all of your users. You're getting access to an unprecedented level of value for $495 per user per year. Now the extensions play a critical role in the Fusion 360 offering. And I think the important thing to get your head around here is that these extensions give us the ability to deliver the capabilities to the users who need them without forcing us to over-serve the entire enterprise. It's a very differentiated way to bring these products to market. Now I'm happy to report that the subscription growth numbers that we shared with you last year have continued to gain momentum. We exited Q2 of this year with 165,000 paid subscriptions of Fusion 360. But we're equally excited to share the billings growth as well. So you can see here that the trajectory of billings growth is outpacing the growth of subscriptions. So the business model is really starting to prove itself out and gain momentum, something we're really excited to see happen. Okay, so let's take a look at a few of the customers where we're experiencing this growth and pay attention of where this growth is coming from. I'll start off with Takeda, one of the largest pharma companies in Asia Pacific. They brought on 110 subscriptions to Fusion 360. Now their top 2 reasons were: one, just accessibility of the application throughout the enterprise, combined with the 3D printing capabilities that Fusion 360 has, something that is very, very important to the future of their business. So really excited to see companies like Takeda taking Fusion 360 and really rolling it out across their enterprise. Okay. So the next customer that we're excited to work with is a company called [ Creative ] out of Australia, a fast-growing startup, and they have their own in-house manufacturing capabilities. And like a lot of fast-growing start-ups, they end up with a lot of different applications throughout their enterprise. And what they noticed is that Fusion 360 was the only product that really brought in the design all the way through manufacturing elements of what they needed to do. So they moved their usage from SolidWorks and SketchUp and they standardized on Fusion 360 moving forward. So the next company I'd touch on is a company called Go Fast Campers. Now the reason I wanted to touch on Go Fast Campers is that it's a good example of the role extensions will play in helping customers in this industry work more efficiently. So Go Fast Campers, historically, they were using Onshape, but Onshape really is a design tool that was just looking at the shape of these campers. It wasn't helping them actually make the things that they sell to their customers. Go Fast Campers moved to 12 subscriptions of Fusion 360. And then for the more advanced personas in their enterprise, they bought 4 machining extensions, 3 managed extensions and 1 generative design extension. So a really good example of how we see the flexible Fusion 360 business model playing out for customers. Now I'd like to highlight some of the progress we've made in both the aerospace and in the automotive industries. And let's start by talking about Aerotech Machining, Inc. Now Aerotech, they make high-precision machine parts for the aerospace industry. And they chose Fusion 360 because of its comprehensive capabilities but also because of its ease of use and accessibility for their population. Now you noticed they also then bought 5 of the machining extensions for some of their more advanced operations, giving them the ability to scale alongside of their business without forcing them to over-serve their entire population of users. Now as we look to the automotive sector, I'm excited to share some of the work that the team from Atlis Motor Vehicles is doing with Fusion 360 to advance their electric vehicle platform. Now the team at Atlis, they're building an electric vehicle that tackles some of the historically diesel-based industrial and agricultural applications. Now they chose Fusion 360 to do that work because it expands all of their design needs for mechanical as well as the electronics but also extends out to the shop floor and tackles those manufacturing needs. So Fusion 360 is that comprehensive end-to-end product development platform that they need. Okay. So the education sector is a critically important area of adoption for Fusion 360 as well. So I just wanted to share an example of a student that we're very proud of, and we're seeing more and more examples like Jules Bettler started using Fusion 360 as a middle school student, carried his passion all through high school, took that to Texas A&M, became a great ambassador for Fusion 360 where he just really spread awareness. And then he carried that passion on into his professional career as a lead engineer at ZuGo Bike. So you can see that progression from education out of the commercial space really starting to play out. And again, there are so many students like Jules Bettler that we're just so proud of and so thankful for everything that they do, just be a great ambassador for the Fusion 360 brand. Okay. And it's not just the 4-year institutions that are making a big difference. The vocational schools are playing a big role in filling the skill gap as well. Now Humanmade is a vocational institution that we've been partnering with. And what they're doing is they're leveraging Fusion 360 to teach students new CNC skills that will help them get jobs. And I'm happy to report that Humanmade has signed up 4 different cohorts of students that they plan to graduate before the end of the calendar year, and they've just recently graduated the first cohort. And over 30% of the students who graduated in that first cohort, they actually landed a job with their newly acquired skills upon graduation. So we're really proud of the work that Humanmade is doing to make a big difference in really filling that skill gap, and we're proud that they're doing that with Fusion 360. Okay. So if all of that progress and momentum wasn't enough to be excited about, I want to leave you with a few teasers of what you're going to see more about at Autodesk University this year. Upper-left, you see the next generation of generative design. We're directly inside of the Fusion 360 Canvas itself. We're helping customers explore more and more iterations than ever before. Upper-right, you're seeing artificial intelligence drive the automatic documentation of drawings, and there's no one who understands drawings and documentations as well as Autodesk. And then at the bottom here, you're seeing artificial intelligence automatically generating the G-code that our customers need to drive their CNC equipment. These are all great examples of what we're doing to automate all of those downstream processes, helping our customers get their products out to market faster than ever before. Okay. So as we wrap, I'll leave you with a few things to think about. The first thing is just the magnitude of the opportunity. As you look out to FY '26 and beyond, we see over a $38 billion opportunity across design and manufacturing. But also just a reminder of the exceptional momentum that we have, both in terms of subscription growth as well as billings growth, something we're really proud of and excited about. Now think back to that video that we started off today with, why does Autodesk win? How do we make everything in that video come to life in a differentiated way for our customers? First, remember, our strength in core design and make. We have all of the capabilities that it takes to bridge design and manufacturing. But also the way that we're bringing the data together, back to the Upchain acquisition, how we're disaggregating the file-based economy and helping the data flow across the enterprise as well as how we're converging design and make with a platform approach. Big opportunity, a lot of momentum. We have all of the ingredients to win. We're very excited about the opportunity for growth in manufacturing. So with that, I'll welcome Diana Colella to join us to share with us the strategy that we have for the media and entertainment industry. Diana?

Thank you, Scott. Today, I'd like to give you an overview of what's happening in the industry and how it's shaping our strategy. Media and Entertainment is a $2 trillion industry that has rapidly transformed over the past few decades. Most segments are now either highly or completely digitized. Because of this, Media and Entertainment is often at the leading edge of innovation in both business models and digital technology and has a profound impact on many industries. The Media and Entertainment TAM in FY '26 is $5 billion, serving 2 million professionals. That's across film, TV, games and advertising. The TAM is being driven by growth in sophisticated movie visual effects, online shopping and interactive 3D viewing of products and the gaming and streaming content market. Competitive battles to win streaming subscribers are fueling a rapid increase in demand for content. There are several key trends shaping the future of media and entertainment, the most important of which is the impact of cloud technology. We can see this in the industry's transition to cloud-based distribution models, which are leading the current and massive content boom. In turn, this content boom is stressing traditional production methods, which are unable to cope with the demand and generate excessive amounts of digital waste. This is forcing the industry to embrace the cloud for production as well as distribution. I'd like to spend the next few minutes going over these trends in more detail. The Media and Entertainment industry has been shifting to cloud-based distribution and, in particular, streaming. We can see this in the rapid rise of digital platforms over the past few years such as Disney+, HBO Max and Apple TV, who are competing for attention from popular platforms such as Netflix, Amazon Prime and Hulu. And this is also true in games with Google. The media and entertainment industry has been shifting to cloud-based distribution and, in particular, streaming. We can see this in the rapid rise of digital platforms over the past few years, such as Disney+, HBO Max and Apple TV, who are competing for attention from popular platforms such as Netflix, Amazon Prime and Hulu. And this is also true in games. With Google, Epic Games and, now even, Netflix, all introducing new distribution platforms. Game studios are creating more content as we see more and more users playing online and across devices. Each competing platform means compelling content to draw and retain customers, and they are prepared to invest heavily in creating it. In fact, Disney has said it will spend $16 billion a year on content for its streaming channels by 2024. This is to compete with other platforms, such as Netflix, which is already investing $17 billion this year to create new content. However, the challenge of creating more hours of content for a given budget is compounded by industry processes that have not significantly evolved over the past few decades and results in our next topic, the wasteful and inefficient film and TV production processes that are currently in place. The typical production process has each company building its own custom production pipeline. So if a complex asset, such as a computer-generated character, is needed in a movie, it is likely that several hundred shots of that character are being worked on by several different companies. That means that asset will have to be recreated at each company as it cannot be shared. As you can imagine, this is incredibly inefficient and leads to high levels of redundancy and waste. The M&E industry is rife with such inefficiencies, and there is a need for solutions to help solve these problems, which brings us to the third trend we highlighted earlier, production in the cloud. One of the biggest challenges facing the industry is producing more content and getting it faster and cheaper. But not just any content will do. It needs to be high quality enough to attract and retain customers who have high expectations. In order to overcome these challenges, the industry has expressed a growing interest in cloud-based production workflows. In 2019, just before COVID hit, MovieLabs published a white paper outlining the future of production by 2030. That future is cloud-based production. If you're not familiar, MovieLabs is an organization created by the top U.S. studios, Disney, Universal Studios, Paramount, Warner Bros. and Sony Pictures. And although these studios are highly competitive, solving the problem of their future production needs was important enough for them to collaborate together through a joint venture. The MovieLabs white paper begins with the bold statement that by 2030, all assets are created or ingested straight into the cloud and do not need to be moved. To understand the significance of this statement, we need to visualize the scale of a single movie production. Each movie involves several petabytes of data across scores of companies that is accessed by several thousand people across the span of a few years. This statement is an ambitious goal, but the benefits to the industry are huge. Moving this data to the cloud means more collaboration and less reduplication, more transparency and less redundancy and ultimately greater cost savings on productions. This is the vision for the industry, but also an opportunity for Autodesk. We are working with MovieLabs to help the industry define best practices for cloud, while also investing to deliver next-generation cloud production experiences to our customers. Later, you will hear Raji talk about Autodesk's plan for fluid data, which will make it easy to disaggregate and break down files into cloud information models containing metadata that can easily move between cloud to maximize performance. This will be for all industries, but media and entertainment benefits from these innovations in a big way. The COVID-19 has had a significant impact on all industries, not just media and entertainment. However, it has also demonstrated the economic advantage and resilience of highly digitized businesses. We saw this in media and entertainment, where traditional segments like box office movies and advertising-funded TV programming were hit hard, while digital sectors, like streaming and video games, showed record subscriber and revenue growth. In fact, in 2020, online video subscribers increased 26%, passing 1 billion for the first time last year. The pandemic has not only rapidly accelerated the trends we talked about earlier, but also fast forwarded a large-scale disruption in the industry's production, distribution and business models. Even in a post-pandemic world, when people aren't at home as long or as often, the demand for fresh, high-quality content will be the new normal, which means increasing efficiency and moving to the cloud is not just a short-term solution, it is crucial to the success of the industry overall. The cloud transformation is picking up steam, and our goal at Autodesk is to enable it further by integrating processes to allow for much more efficient collaboration as well as by making it easier and faster for customers to create content on the cloud. Our customers are as eager as we are to get there, which is creating some powerful new partnership opportunities. You may have already heard about our partnership with Weta Digital, the visual effects studio founded by Peter Jackson that is behind such hits as Lord of the Rings, Avatar and Planet of the Apes. In June, we announced that we were partnering with Weta to offer customers a new cloud-based 3D production pipeline service called WetaM. Built on Maya, this new service will provide subscribers with access to Weta's unique collection of production resources, essentially democratizing access to high-end visual effects and animation tools. These tools will be based on Weta's technology, which has won them 12 Academy Sci-Tech Awards and 6 Best Visual Effects Oscars. This partnership has the dual benefit of helping us accelerate the industry's transition to the cloud as well as helping us increase our footprint in visual effects and games pipelines. The M&E industry is often at the leading edge of innovation in both business models and digital technology. One model that M&E uses and now is extending into other industries is the consumption-based business model. In fact, you just heard Scott mention the new approach for Fusion 360. It is a subscription-based model with extensions, but also has additional services that are billed as consumed. This allows Autodesk to deliver capabilities to those who need them. An example of this in M&E is rendering. Our customers have to deal with significant variability in the amount of resources they need at any given time, depending on how many projects they have going and the stage of each project in the production process. As deadlines approach, loads can significantly spike, requiring them to hire contractors and lease equipment. This means a company may have to lease a few hundred servers for a few weeks to meet a production deadline, or they may decide to burst to several thousand cloud instances. Even though they may be necessary to stay on time, these short, intense use cases typically incur very high software license costs, which is why consumption-based models are highly attractive to the M&E customers. As we saw with subscription, M&E is often a great proving ground for new business models at Autodesk. 3D representation and visualization is increasingly critical across all industries we work in here at Autodesk as it brings more accurate representations of projects to customers, whether it's a new skyscraper in New York or a new car being designed at Porsche. This means there are strong synergies between media and entertainment technology and those of other industries. We're seeing strong convergence in technologies for AR and VR in new places. You can see the expanding use of these technologies in e-tel, allowing you to better visualize a new interior design as one example. This convergence and crossover is increasingly prevalent. Look at products like Fusion. Manufacturing is using it to explore 3D formats such as Universal Scene Description, which was first developed by Pixar, to improve 3D data exchange, while media and entertainment customers use Fusion to help model video game content and 3D print props and costumes for movies. To conclude, Autodesk is well positioned to take advantage of the trends that are happening in media and entertainment, both in short and long term. As the industry matures and convergence increases, new and powerful synergies are emerging. Autodesk is very well positioned to become a go-to platform for media and entertainment production in the cloud. Because Maya is already a go-to desktop platform for many of our customers, so we are already in the most complex part of the production process. We have ShotGrid, an industry-recognized production management solution used by many of the world's leading studios, which will reduce inefficiencies in the industry and inform our next-generation cloud production workflows. We can leverage our deep relationships with our customers and partners to develop a solid cloud-based ecosystem that will bring our vision to reality. With the industry on the verge of its transition to the cloud, we see a strong future and a clear path to growth. Thank you. Next, you'll hear from our Chief Technology Officer, Raji.

Thanks, Diana. I am Raji Arasu, Executive Vice President and Chief Technology Officer. I would like to share with you how Autodesk is creating customer value at the intersection of products and industries using a platform approach. And you will see that our platform is comprehensive, differentiates us from others and is a critical growth driver for the future. From everything you've heard today, the trends that we are seeing in our industries are industry convergence, connected everything and digital transformation. In industry convergence, Scott talked about what's happening in design and make in manufacturing. Jim talked about connected construction all the way from bids, plan, build and operate. And in AEC, Amy showed us how digital twins are shaping the design of physical assets. And in M&E, Diana talked about synergies, where digital experiences are extending into construction and manufacturing of physical experiences, such as rides and theme parks. Customers are faced with the need to connect everything. Automation is driving the need for customers to connect their workflows across the tools and back-office tech that we use. Connected workflows need connected data, data that is interoperable across a multitude of products that they use. Connected teams, driven by the need to enable large team collaboration, hybrid work environments and the need to access information anywhere, anytime. This need for connected everything is accelerating our customers' migration and their operations in the cloud. In digital transformation, Amy touched upon insights in our in-product experience. There is need to embed insights and AI through the entire life cycle, from estimation to operation that's driven by sustainability, safety, speed and efficiency. And an argument in workforce is here and real, with the infusion of advanced robotics, people-to-machine and machine-to-machine interactions. And you heard Scott referenced the need for smart products. Consumers need less waste, customization and more convenience. If you need a functional repair or upgrade to your electric vehicle, you can now do it remotely with a software download. It's much less painful than booking an appointment and taking your car in. With these megatrends happening, our customers need us, and Autodesk has a unique advantage to provide solutions with our platform. The Autodesk platform is Autodesk Forge, as introduced by Andrew. It's foundational to our long-term horizontal growth. We have a comprehensive platform with a portfolio of capabilities that span all the way from design to the various endpoints in 3 major industries. In addition to that, our adjacent vertical expansion into infrastructure, such as water, space, rail and road, has given it so much more breath. And this rich, expansive portfolio of capabilities is what differentiates us. There are many capabilities in Forge, but let's focus on 3 capabilities that have the greatest impact on our customers and set us apart. We are constantly extending our modern cloud services for the future. We're solving for data interoperability and team collaboration through data experiences. And we are igniting and building on the success that we have been seeing with our developer ecosystem. Modern cloud services are run in the cloud and leverage modern cloud native technologies. We are investing to create a trusted platform that will deliver best-in-class SLAs on security, privacy, availability and performance for our customers. And shared capabilities create acceleration and leverage for our products and cloud offerings, helping us get more out of our R&D spend. It also drives employee productivity for developers, data scientists, marketing, sales and customer support. Let's talk about what we mean by hybrid experiences. Companies in our space talk about multi-tenancy and only browser-based applications. All our cloud offerings are multi-tenant, which we have years of experience with. And browser-based-only applications are not sufficient for our customers and industries who we serve. Many of our customers and their teams prefer to still work offline. Complex modeling and simulation workloads are heavily compute, data-intensive and latency sensitive. These days, device makers are packing in rich optimizations and capabilities. So we need experiences that are adaptive. We need client applications that leverage GPU benefits, native optimizations and interactions. In addition to providing browser-based applications, we are working on capabilities where our products can leverage native optimizations while leveraging the power of cloud. These hybrid experiences provide our customers with best of both worlds for their complex projects. Now let's talk about how data experiences help customers create a future that is about connected everything. Scott, Jim, Amy and Diana, they're working on data experiences within a particular industry. The platform is working on making these experiences interoperable across industries, and we believe this is a source of long-term competitive advantage for us because we see people use all aspects of our portfolio in unique and new ways. Traditional processes are inefficient. And as our customers move between the various phases of their project, data is lost at the transition of each phase. Rework becomes necessary to redefine or recapture lost data. Workflows are disconnected and lead to further lost productivity. This slide visualizes a sawtooth effect, as seen in manufacturing, but this is even more pronounced in construction. Today, our customers' data is in large files and siloed within each product. This data needs to be granular, so it can be easily shared. One of our customers, a large production studio, uses many Autodesk products and non-Autodesk products across industries in their pipelines. Their number one productivity barrier is data interoperability. They're struggling to track changes on objects and metadata for all of these products. We are building fluid data to disaggregate and break down these large files into cloud information models. You heard Scott refer to this in his presentation. These cloud information models are small but essential data sets and can easily move between cloud or our hybrid applications to maximize performance. We are starting with Revit to Inventor and Revit to Power Automate. Power Automate is a service for Microsoft. And by integrating with Power Automate, we open our data to the whole Microsoft ecosystem. We have identified 50 top workflows used by our customers, and 10 of them, we will tackle as soon as next year. This is going to be a multiyear journey, but our customers will see benefits as soon as we start rolling out these workflows. In addition to making data interoperable, our customers need consistent access to their project data across industries. Today, when our customers open Inventor, they only see project data for Inventor. As a next step in our journey, we will be building a cohesive experience where our customers can open their project data anywhere. This year, we're starting to merge the project view between Fusion and Inventor. On the right is a mockup example where you'll be able to find Fusion project data within Inventor, giving users a project-centric data experience rather than a product-centric view. In addition to a cross-industry project experience, the next step in our journey is providing a cross-industry user access experience across our portfolio of solutions, which is foundational in helping customers manage the thousands of collaborators that Amy talked about, and the hundreds of collaborators that Jim talked about, and they can do this at a granular level, securely and with confidence. Now about igniting our developer ecosystem. Our ecosystem includes third-party developers, partners, system integrators and customers who build on our open platform and extend value to our customers. Creating open extensible platforms is not new to Autodesk. I have two examples to share. AutoCAD started as a general computer-aided design system. Over time, developers extended and customized it to serve new verticals and industries. And we have another example in our M&E portfolio. As Diana mentioned, Maya is already the go-to desktop platform for many of our M&E customers, with thousands of custom apps built on Maya that are in many production pipelines in the M&A industry. Even with modest investment in our cloud APIs, we're seeing strong growth in adoption. This includes a 29% year-over-year increase in active Forge developers, a 396% year-over-year growth in API usage and a total of 209 billion external and internal API calls in the last 12 months. That represents a 71% year-over-year increase. By continuing to provide high-value APIs for developers, we can unlock huge value for our customers. Here's an example of how Forge APIs are driving value for Emerson, a Fortune 500 manufacturing company and its customers. Emerson manufacturers products and provides engineering services for a wide range of industrial, commercial and consumer markets. Forge APIs will enable Emerson customers to configure models directly on the website, which translates to 740,000 models annually. This capability helps build confidence and loyalty with their customers. Another customer is Perkins&Will, a global architectural firm. They leverage Forge APIs to build a product called Healthformer to support emergency planning and management of patient beds, allowing non-technical health workers to edit models on mobile devices in real-time. It's been a key service offering during the COVID pandemic. Our app store is where you'll find the work of third-party developers, partners, system integrators and customers. We currently have more than 3,900 apps published with over 1 million app downloads annually. There are far more external developers than internal developers at Autodesk building apps, a disproportionate but a powerful giveback on our R&D spend. Ultimately, we're shifting our mindset to delivering platform as a product. Customers, developers, system integrators and partners are asking for more. A lot of capabilities and data that we're unlocking through our products is what they need to get out through our APIs. APIs that will help them integrate better with the other tools they use and the back-office systems they use, and we are committed to giving them more. For customers, we're going to provide interoperable data, more workflows and more insights, and a developer ecosystem that will enable convergence and extend our reach outside traditional industry and workflow boundaries. For third-parties, including developers, partners and system integrators, we'll have more apps, more audience for their apps and more growth. For Autodesk, we'll have more customers, developers and partners, further accelerating the flywheel effect, delivering impactful outcomes for our customers in the areas of connected workflows, hybrid experiences and platform as a product. These are three outcomes that will help our customers win. Our platform is comprehensive. It has the capabilities to help our customers meet the demands of a rapidly changing landscape. And we're seeing traction with our developer ecosystem that we plan to build upon. Thank you. Now I would like to turn it over to Jeff Kinder.

Thank you, Raji, and good morning, everyone. I'm excited to be here today to share with you some priorities as well as progress in our digital transformation and how that transformation continues to drive growth for Autodesk. Last year, I shared this construct of outcomes and foundations, which is how we've organized our digital transformation efforts. These cover where we are going and how we will get there. But before we turn our attention to this year's focus, let me provide a flavor of what we said and what we did over the last year. We retired maintenance and announced the pending retirement of multiuser subscriptions. We rolled out our transition to named user program, similar to maintenance-to-subscription, or M2S, and we are seeing higher conversion rates in the first year of our transition to named users than we saw during M2S, 53% versus 32% conversion. As I said last year, following M2S, we have earned the trust of our customers. We launched premium plans, and continue to add more administration capabilities, reporting and support to increase value for premium customers. And finally, to harden our systems, we launched student verification last August and also improved our detection of noncompliant usage. This is an area we continue to emphasize and are seeing results, as I will show shortly. It's important to remember that our digital transformation is a multiyear journey that both enables and accelerates our business model evolution. Looking ahead, we'll keep the same construct of outcomes and foundations. Today, we'll build on last year and focus on 3 outcomes: named users, learning and flexible business models. We'll spend most of our time on flexible business models. I'll also describe 3 foundational investments to get there: hardened systems, financial and data platforms and increasingly important, our investments in self-service. As we talk about outcomes, I want to delve into these 3 priorities: integrating the benefits of named users into everything we do, creating dynamic learning and credentialing opportunities, then delivering flexible business models. Let's begin with named users. I showed this slide last year, and this remains a guiding principle. When everyone is a named user, everyone benefits. The benefits apply to users, business owners as well as to Autodesk and our partners. Let me highlight a few. Named users unlock collaboration within and across products. As Amy described earlier, our customers tend to have dozens, if not, hundreds of collaborators. Named users also enable any device in a location via log-in as opposed to serial number. This is very important when workforces are remote. And insights, while powerful at the user level, can also be aggregated for business owners to better understand their projects and the skill sets of their workforce. Insights also help our team at Autodesk and our partners engage in richer conversations to meet customer needs. We've been migrating named users since our transition to a subscription model with great success. The first couple of years were about migrating customers onto our user management platform. Over the past year, we've had specific initiatives focused on making everyone a named user. These include the multiuser trade-in program as well as integration of cloud products and acquisitions. Those initiatives, combined with organic growth from new sales, higher retention rates and assignment rates, have led to a 50% year-over-year increase since this time last year of named users in our systems. Going back to the benefits. The last one you saw on the previous slide was learning and the ability to enable personalized learning. Let's take a deeper look at learning. As we emerge from the pandemic, the need for reskilling and upskilling has never been greater. The world is in a wave of automation and digitization that requires workers to continually develop new skills. Autodesk is in a position to help them continue to grow. Learning is a journey that takes place over the course of a customer life cycle. It can start in school or on the job. Users gain skills, earn recognition and advance in their careers or toward their degrees. You heard Scott mention Jules Bettler earlier, who started using Fusion and AutoCAD in middle school and eventually introduce those products to ZuGo Bike. We love stories like that. We want to help users learn new skills, adapt to an increasingly digital workplace and grow their careers with expertise in Autodesk products. Through this life cycle, we encourage 2 types of learning. The first happens every day when customers use our products. In-product learning is focused on making users more proficient, helping them develop new skills as they're designing or making, enabling them to work better and faster. The second type of learning is focused on courses, certifications and role-based credentials that our users specifically seek to earn through Autodesk and with third-party providers. These milestones and recognitions make them more valuable to employers. Why is learning important? In addition to keeping customers up to date with necessary skills in a changing world, learning builds loyalty with users and helps employers identify what to look for when hiring and promoting. Let's now shift to flexible business models and how we align value with usage and outcomes. We think about flexible business models a lot at Autodesk. You heard Jim mention it earlier with the Autodesk Construction Cloud. You might remember this slide from last year. We have developed a business model framework that is configurable for the ways we go to market. It's based on the key levers of a customer's purchase decision. Here's how it works. Product. Customers first decide what capabilities they need, stand-alone product, an industry collection or access to the Autodesk portfolio. Term. How long do they need it? Access. How do they want users to access, dedicated assignment of subscriptions or flexible? Plan. What tier of administration, reporting and support do they need? Add-ons. Do they need any? This is where the consumption-based extensions for Fusion fit in. And Payment. How will they pay? As we put together an offering for customers, different elements of this framework light up. And I'm going to spend the next few minutes talking about our exciting new consumption business model, called Flex, launching later this month. Here's how Flex lights up the framework. It provides access to the portfolio. Tokens can be used with any frequency, but they expire a year from purchase. Access is flexible, meaning users are unlimited and don't have to be dedicated to a product subscription. The default is standard tier, though Flex works with premium, too. Lastly, users consume tokens from a shared pool every time they open a product. Stepping back, what is Flex? Flex is a pay-as-you-go solution for our broad base of customers. It is ideal for occasional use or new users and complements our core subscriptions. Customers get access to the Autodesk portfolio by purchasing token packs, either directly or through partners. Each product has a unique daily rate, the same rate as enterprise business agreements. Flex is an innovative new offering that merges the benefits of a named user model with the flexibility of pay-as-you-go, and it works for customers of all sizes. Flex lines value with usage and outcomes, benefiting both our customers and Autodesk. It allows customers to maximize the value they're getting for occasional users and usage. You may remember that we extended the eligibility period for our multiuser trade-in, in part due to the pandemic and in part until we have a flexible offering in place. This is that offering. Flex also lowers the price of entry to try products across our portfolio for existing customers. Customers don't have to purchase another product to test out the portfolio. Flex expands our ecosystem to new customers. By lowering the price point for those just getting introduced to our market-leading products, it provides an on-ramp for new customers and expands our total addressable market. Lastly, Flex lends itself to project-oriented work. Token packs can be purchased for a specific project with an unlimited number of named users. When those tokens are consumed, the customer can simply buy more for the next project. It's like having an open purchase order and access to our Autodesk portfolio. Flex is easy to both use and manage. Here's how it works. First, a customer buys tokens either directly or through partners. Next, they'll assign named users to Flex who get access to the Autodesk portfolio. Users then consume tokens from a shared pool when a product is opened at the daily rate for that product. Customers can easily track token use and spending to better understand their consumption patterns and learn when it may be time to move users to subscription. And when token balances run low, they can just buy more. Subscription and consumption work together. Subscription is our core business model and will remain so, but we have gained experience and consumption with our enterprise business agreements. And we have seen the value that a pay-as-you-go model can bring for customers and for Autodesk. Flex will complement our core subscriptions and fill a gap for the broader customer set for whom an enterprise business agreement may not be needed. Flex brings together the features of an enterprise business agreement, works for occasional usage and access to the portfolio, along with features of a dedicated subscription, standard pricing sold direct or through partners. Customers can choose to be as flexible as they want to be. They will use Flex to complement their existing subscriptions or they can also use Flex as a standalone. It's no longer either/or. As part of our research, we have spoken with customers and partners. They are very excited about the opportunities that Flex presents, and we, too, are excited to bring such value to the market. Now let's turn to foundations, the investments we're making that will help us achieve these outcomes. The 3 foundations I want to speak to are: continuing to harden our systems, modernizing our data and financial platforms to unlock speed and growth, and offering self-service opportunities to customers. We have continued to harden our systems on multiple fronts to combat noncompliant usage, and we've made solid progress. As I've mentioned, it's harder to be noncompliant in a named user model where you have to log in. We eliminated offline activation, and we launched student verification, which was a potential backdoor to noncompliant commercial use since access is free for students and educators. We continued to work on serial trialers and to enable concurrent user limits like we have in Fusion, across the portfolio. And our efforts have paid off. We see a decline in the number of noncompliant users in each successive year's product release. Here's where we were for product year 2020 and 2021, and here's where we are for 2022. Monitoring and chasing down noncompliant usage is never finished. Steve will talk more about that shortly, but we remain diligent in working to harden our systems upstream. We also continue to modernize our customer data, financial and order systems to enable the business models and strategies we've outlined. Our data system offers us a holistic view of our customers, ensuring we can deliver on the promise of named users and increased collaboration across products. And the more we can tie our customers' projects together, across products, the more we will enable the convergence of design and make. As for our financial and order systems, these have to enable both subscription and consumption in a way that brings speed and automation and helps us evolve how we go to market. If the pandemic has proven one thing, it's the importance of self-service in a remote work setting. We aren't unique in experiencing this, lots of studies have reflected an inflection point for customers. These quotes from McKinsey reflect what we've been hearing, too. And this is what we're seeing. Digital remains our fastest growing channel. 75% of our new customers are coming in through that channel. And also, not surprising, self-service scales really well. At the core of our self-service strategy is meeting the customers where they are. That means helping them buy and get help in-product across our digital experience and with partners seamlessly. We will be wherever it's most convenient for them with easy self-service tools. Tying two themes together, here's an example of how easy we will make it to repurchase tokens for Flex in-product. B2B and SaaS customers increasingly expect self-service in context, and we will give it to them. We are at an exciting point for Autodesk in our transformation. The impact of some of the investments we've made is coming to life. Our digital transformation is a multiyear journey, and we're making progress. We think about our journey across 3 major buckets: business models, digital experience and modernization. We're farthest along in our business model transformation, with Flex, our new consumption model, launching later this month. We're continuing to make strides in the digital experience and modernization. We're a little farther in modernization, but catching up quickly in the digital experience. And if you recall, we broke this journey down into phases: new systems and processes, new experiences and models, and digital maturity. As a reminder, we will never be fully mature. We will continue to invest on behalf of customers. To conclude, we believe our new flexible business models expand our ecosystem and the total addressable market. With flexible business models, customers are happier, more loyal and more likely to grow with us. We remain focused on driving outcomes for customers and to meeting them where they are, in context with seamless experiences. And the foundational investments we have made, plus the outcomes we are seeing, serve to further separate Autodesk from our industry competitors. These changes, business models, named users, self-service and the investments required, digital experience, data, financial and order systems take years. We are extending our lead, which helps us better serve our customers now and in the future. Thank you. At this time, we'll be taking a short break and when we return, you'll hear from our Chief Revenue Officer, Steve Blum, on delivering growth. [Break]

Hi, everyone. Welcome back from the break. I'm Steve Blum, and it's a pleasure to be here today to share with you how we've built a go-to-market engine focused on delivering growth in FY '22, FY '23 and beyond. Over the last 5 to 6 years, we've executed on key initiatives, all focused on driving growth. We've established selling practices for subscriptions, cloud-based offerings and consumption-based models. We built out an inside sales organization to ensure we can reach and talk directly with many more customers around the world. We built a customer success organization to ensure our customers are successful in adopting and using our subscriptions. We continue to invest in better ways of identifying and communicating with noncompliant users to convert them to genuine software. And as we mentioned last year, we've established an account-based everything approach to ensure that we're building long-term strategic relationships with our customers. So today, I want to review 3 key elements of our growth strategy. I'll give you an update on our customer engagement strategy. We'll review our noncompliant user strategy. And of course, I'll give you an update on our partner strategy. And to start, let's begin with the customer engagement strategy. All right. So I've shared this with you before, and I wanted to review our go-to-market approach. If you recall, we have 4 go-to-market segments: named, mid-market, strategic territory and territory. Now we're using our account-based everything approach within 3 of those segments: named, mid-market and strategic territory. We continue to have a geographical focus in the territory. Now we use a combination of human and digital touch for all 4 of these segments. Human touch is much higher in the ABSM segments, with the highest component in named and its lowest component in territory. But we do have digital touch across all 4 of these segments. We're using digital means of connecting and staying relevant with our customers across all 4 of these segments. From a sales lead approach, we use field-based sellers for named and mid-market, and we use inside sellers for our strategic territory and territory segments. Our partners play a role across all 4 of the segments. Within named, where our focus is on driving enterprise business agreements, our partners help deliver services against the customer success plans that we build together with our customers. For mid-market, strategic territory and territory, our partners plays roles in the sales process because the transactions are predominantly done indirectly there. They're also delivering services and customer success at scale. And we do have digital sales across all 4 segments. It's highest in the territory, but even some of our named accounts purchased digitally on our eStores. Now last year, we discussed our account-based everything strategy. The key element is focusing on helping customers achieve their most important business outcomes. We do that through a personalized journey orchestration approach across our marketing, sales and customer success motions. From a marketing perspective, our marketing campaigns target decision-makers with outcome-based content and success stories for like companies in their industries. When we develop opportunities, we pass them to the sales organization, who then hold discovery conversations, and they set the expectations and explore what are the most important outcomes our customers are focused on delivering. Once a customer subscribes, we then pass them over to our customer success organization, who focuses on onboarding and driving implementation and adoption services. The key here is to ensure our customers achieve those business outcomes that we actually talked to them about earlier in the cycle. Now the goal of account-based everything is to build long-term strategic relationships with our customers. As an example, I want to review our engagement with Burns & McDonnell, one of the largest construction companies in the United States. As we entered 2017, they were already executing against their second EBA renewal. During that year, they asked us to help them move to a cloud-based infrastructure for storage, and they wanted to use BIM 360 as a common data platform. They had great success there. And as we entered the early days of 2018, they did their third EBA renewal. Now during the term of that contract, they identified a handful of key projects and outcomes that they wanted us to help them drive. They wanted to drive BIM expansion across most of their different divisions. They also wanted us to help accelerate and improve the workflows they have by streamlining their engineering to in-house fabrication processes. At the beginning of 2019, we added the construction portfolio that Jim talked about earlier to their enterprise business agreements. So they then had access through our consumption model to those construction-based offerings. In 2018, they asked us to partner with them on an energy renewables and storage program focused on solar and wind power. And in mid-2020, they joined our digital twin lighthouse program, and they're actively engaged in that program. Now through the execution of these initiatives, they've identified that they've had over 60,000 hours of efficiency savings from these engagements, and that's produced a savings of about $6.3 million. They also identified that they've had over 5,000 hours of operational downtime that's been avoided by working through these initiatives, and that saved them, again, another $650,000. So I'm happy to say that the beginning of this year, 2021, we did our fourth EBA renewal. And what's really great is that the size of the renewal doubled. The size of the new contract was twice as large as the prior contract. Now I have to tell you, I'm proud of the relationship that we've built with Burns & McDonnell, and I'm excited to continue to build upon and extend this key strategic relationship. Now let's move on to a review of our noncompliant user strategy. The best way to prevent noncompliant use is to prevent it in the first place. And you heard earlier from Jeff how we've implemented multiple ways to harden our systems and make it more challenging for anyone to access noncompliant software. Earlier as well, Andrew mentioned that we've learned that older versions of software are just as convertible as newer ones. It's actually the amount of usage that matters. He also mentioned that the total number of detected noncompliant users has grown from 12 million to 15 million due to the hardening activities that Jeff talked about, better detection of noncompliant usage and also an increase in noncompliant usage that's happened through the pandemic. Last year, we talked about out of that large base of 12 million, there were really 2 million that were targetable noncompliant subscriptions within our customer base. This is 2 million noncompliant users within our paying customer base. That is the same targetable noncompliant base we're going after right now. Now we've converted quite a few of those customers to genuine software, but our better detection has helped us find more opportunities. So we still have 2 million targetable noncompliant subscriptions within our active customer base. We've been executing on a multiyear strategy and focusing on monetizing noncompliant users. We've been talking a lot about this over the last several years. But as a reminder, the first step is identification. Can we use systems? Can we use capabilities within the product to identify where noncompliant usage is occurring? Once we can do that, then we want to target communications to those users. We want to use the data and analytics. We want to use digital and human touch to drive conversions to genuine software. And of course, once we've got those things going, we want to scale the program, and we want to have it apply in more places around the world. And we've done a great job of continuing to drive that scale through in-product capabilities and in-product messaging. We're now up to 50 different countries, where we can identify and then in-product message users, letting them know they're using noncompliant software. That's being done now through 9 different products, where we can message those customers -- or those users. And that's giving us about a 90% coverage of noncompliant users, where we can message to them that they're using noncompliant software. When we can identify noncompliant usage, but we cannot identify the company or the account that those users work in, we need to use a fully digital engagement process. And here's how it works. In the product itself, it identifies that the software is noncompliant. It then starts delivering in-product messaging, letting the user know that you're using nonvalid software. It gives them the opportunity to click on the link that would take them directly to our eStore, where they can convert or purchase genuine software. After a period of time, the messaging lets them know they're going to lose access to that software. So again, this is a fully digital process, where we're communicating in-product, we're driving them to our eStore, where they can convert to genuine software. And sometimes they actually opt out of the digital engagement, and they contact one of our local partners and make a purchase there, which is, again, totally fine. Our focus is on driving conversions. But we are having fantastic success in driving a fully digital conversion process. And I've shown here 5 different examples of completely digital engagements, where we've contacted the users, let them know that they are using noncompliant software, and through the -- and complete digital means they've purchased compliant genuine software. And you can see great coverage across the different regions around the world. Some transactions are very large. I mean, there's -- first one is over 500 subscriptions that were purchased. And what we have identified is that these users are buying what they're using. They're not opting for the cheapest offering out there. So you can see a mix of different offerings. We've got AutoCAD and LT, but there's AEC Collections, there's Max and Maya, even Civil 3D. So again, great success in fully digital conversions when we cannot identify the account. Now we are able to identify accounts in most -- in many situations. And when we can do that, when we identify in-product that there's noncompliant usage, but we also can identify who the company or account is, we can now deliver information to specific individuals within that company and share with them their license usage information. Now when the opportunities are large, when the amount of noncompliant usage is sizable, we'll turn that information over to our license compliance teams. They'll then contact the customers and work on helping them understand what their noncompliant usage is, really educating them on how to ensure they are compliant. And also making them aware that 2 things are important: one, that they may be using noncompliant software that has malware included in it. Because we've done a study and found that some noncompliant offerings out in the marketplace have malware. So they're putting their company's data at risk. We also share with them the new capabilities that exist in our current offerings. The great new value-add that Scott, Amy and Diana talked about earlier to help them understand that they are missing out on capabilities that would help them be more effective and more competitive in their marketplaces. When the opportunities are small, we can continue to use our digital means and direct them to the eStore. And then something we've implemented over the last year is that we want to make sure these companies are successful once they actually move the compliance software. So we assign customer success specialists out of our customer success organization to provide onboarding, adoption, and to ensure that we're going to be in a very good position to drive the renewals at the end of the term of the contract. We've been sharing with you we've been having great successes in this known account engagement process. And here's another fantastic example that we've had. It's a company, big company out in China, we've had a proactive engagement with the customer. So our license compliance teams reached out, shared with them the findings, helped them understand what their key business objectives and outcomes were and then helped them build out an enterprise-wide adoption plan for the Autodesk offerings. And as a result of that engagement, we closed an opportunity that's over $3 million in billings, which included 3-year subscriptions for many of our AEC products. So it was a great success. Conversion of noncompliant users continues to be a growth driver for us. Through the first half of FY '22, total noncompliant user billings were up 40% compared to the same period in FY '20, the year before the pandemic, where we pulled back a bit on our noncompliant efforts. But even more interesting is that noncompliant user billings converted completely through digital engagements are up 16x compared to that same period of FY '20. As you can see, our multiyear strategy for converting noncompliant usage is working. Let's now move on to an update on our partner strategy. As we've discussed, we have 1 global framework that we've implemented around the world. And we're focusing on 3 key areas. One is we want our partners to continue to build out their customer success capabilities. We've got programs that included a focus on driving growth through our partner ecosystem and also investing in their growth so that they have more capacity and capability. And we have programs that are focused on both transactional and value-based incentives, and we're moving more and more to a focus on value-based incentives. Now those performance incentives are really built on 2 core areas: rewarding net -- new business growth and high revenue retention rates. As the business continues to grow, the total dollars in the ecosystem continue to grow, but more and more of those reward dollars are being moved from the front end to the back end. And by moving these to back-end incentives, it gives us the opportunity to give out quarterly growth targets, which also provide progressive payouts. So the further growth or the further above a target a partner gets, the more they can earn. We can also use those incentives to encourage value-added activities, things that are not focused on transactions, but are focused on driving better customer experiences, such as paying our partners after they help set up a customer who they've sold a premium subscription plan to so that the customer is prepared and enabled to take advantage of all the value included in our premium plans. We're also co-funding strategic investments, specifically, to help our partners build out their customer success capabilities. As I mentioned, we're moving more of the total incentive and reward dollars from the front end to the back end. And this is a journey we've been on for quite some time. And this chart demonstrates the movement from front-end dollars to back-end dollars we've had between FY '18 and our current fiscal year of FY '22. We're at about 50% mix now between front end and back end. And you can expect this journey will continue as we move more and more of the incentive dollars from the front end to the back end. Now partner enablement is really important, especially as our partners are building out their customer success capabilities. And as a result, we have scalable programs that we've implemented. So here's a handful of things that have been making a difference. We've delivered over 5,000 trainings for customer success staff that are part of our partner ecosystem. And the enablement programs that we have include things like consulting skills, workshops focused on accreditations. There's customer success workshops to share best practices. And by now, we have over 100 digital on-demand classes that our partners can take as they continue to add new staff. And of course, we're providing resources to help our partners be successful in this area. As we build out our own services IP and content, we're making that available to our partners so that they can scale it to all of the customers they're supporting. And of course, as we establish our own best practices for customer success, we're sharing those best practices with our partners. So why do we work with partners in the first place? Well, partners give us scale, coverage and local expertise around the world. We have approximately 1,300 resellers representing Autodesk each and every day, and they're representing us in approximately 175 countries, where we do business. What I like most, though, where the scale really comes to life, is in this third bullet or third item, which is, for every Autodesk person in a sales or customer success role, we have approximately 3.5x the number of people through our partner ecosystem doing those roles. That is an awesome thing, and that's how we drive scale. I'm also proud to say that if you check these numbers and compare them to the prior Investor Day, they're pretty much the same. And I'm proud of the fact that we've worked really closely with our partners to manage through a very uncertain time associated with COVID and the pandemic. So to summarize, we've built a go-to-market engine focused on driving growth. Our account-based everything approach is the key to building long-term strategic relationships with our customers. We continue to execute on our multiyear plan of monetizing noncompliant users and accounts. And of course, we are working closely with our partners, and we're focused on driving expansion and high revenue retention rates through our partner ecosystem. The success we've had over the last several years gives me great confidence that we will drive continued growth in FY '22, FY '23 and beyond. And on that note, it is my pleasure to introduce to you our Chief Financial Officer, Debbie Clifford.

Thanks, Steve, and thanks to all of you for joining us today. From what you've heard so far, you'll hopefully share some of the excitement I felt since I rejoined the company 6 months ago. I'm going to try and tie it all together, map out our financial vision and set out what sustainable growth at scale looks like for Autodesk. As I said during our earnings call last week, my initial focus when I rejoined the company was digging into our fiscal '22 budget and fiscal '23 financial goals. This past quarter, I turned my attention to our long-range financial plan, with a particular focus on fiscal '24 and beyond. Much of what I'm going to talk about today reflects that work. The framework for my analysis has been our publicly stated expectation that we can achieve double-digit growth beyond fiscal '23. Today, I'm going to put a finer point on that and share more about how we intend to achieve it. Once we've reached our fiscal '23 targets, I'll set out more detailed medium-term growth goals. My story today has 3 distinct chapters: Autodesk today, the path to our fiscal '23 financial goals and our high-level outlook for Autodesk in fiscal '24 and beyond. So let's begin by talking about Autodesk today. Autodesk today is a growth company with a resilient foundation and a strong track record of execution. Notwithstanding the pandemic, we've delivered consistent revenue growth since completing the business model transition. We are now an established growth company with a long runway of opportunity ahead of us. Our business model transition also made Autodesk more resilient. Almost all of our revenue now comes from recurring sources, which reduces volatility and provides a solid foundation to successfully navigate all kinds of macroeconomic cycles. More importantly, our business model transition is enabling our relationship with our customers to evolve from being a transactional software vendor to being a strategic enterprise partner. And that evolution is reflected in the scale and duration of the partnerships that we're building with our customers and ultimately fuels our growth potential. As you can see here, the financial impact of that changing relationship is our growing remaining performance obligations, or RPO, which is the sum of total short-term, long-term and unbilled deferred revenue. RPO is a strong leading indicator of our future revenue potential and has grown consistently in double digits over the last 5 years, even during the height of the pandemic. You can also see evidence of the resilience of our business model if you compare our financial performance during the global financial crisis that started in 2008 and the recent COVID-19 pandemic. During the global financial crisis, represented by the blue line on this slide, we were selling perpetual licenses, and our revenues declined around 30% during the midpoint quarters. In contrast, during the pandemic, represented by the green line, we saw sustained growth throughout, with the 12% revenue growth we reported in Q1 fiscal '22 expected to be the trough. Our diversification at scale across geographies, products and customers also makes us more resilient. We sell around the world, have multiple product families across industries and sell to a broad spectrum of customer sizes. And against the backdrop of significant change, we have a strong track record of execution. I've seen that execution in action since I rejoined the company earlier this year, with growing acceleration and momentum reflected in 19% billings growth and 35% free cash flow growth in the first half of fiscal '22. Now let's shift gears and talk about our path to fiscal '23. I'll first talk about where we're going and then about how we'll get there. Our fiscal '23 goals remain the same as the ones we set out at our Investor Day in 2020, other than some nominal adjustments primarily related to our recent M&A. We currently expect to deliver a 16% to 18% revenue compound annual growth rate between fiscal '20 and fiscal '23. In fiscal '23, we expect free cash flow of $2.4 billion and an operating margin of approximately 38%. So how will we get there? Well, let's start with Table 6. Real GDP growth, with inflation and cost of living adjustments, drives consistent growth for our customers and for Autodesk. All other factors equal, we expect these market factors to deliver single-digit top line growth. But there's more. We have a growing base of subscriptions, and those subscriptions are renewing. At the end of fiscal '21, we had 5.3 million total subscriptions and a net revenue retention rate in the range of 100% to 110%. This growing renewal base and strong net revenue retention provide a consistent engine for growth well beyond fiscal '23. You heard Amy talk about the proliferation of building information modeling, or BIM, around the world. We believe that the adoption of BIM will not only drive the uptake of our BIM solutions but also the adoption of the end-to-end workflows, which enable our customers to achieve their efficiency and sustainability goals and fully realize the enormous potential of BIM. The adoption of BIM provides a second consistent engine for growth well beyond fiscal '23. By enabling our customers to realize their efficiency and sustainability goals, our new businesses are driving revenue growth potential, both within verticals and by connecting those verticals end-to-end across the value chain. As you heard from Amy, with Innovyze, we now have an end-to-end portfolio for water infrastructure and can address the needs of all stakeholders across the water life cycle. And as you heard from Jim, Autodesk Construction Cloud serves every customer in every segment at all stages of the construction life cycle. And lastly, as you heard from Scott, Fusion 360 connects the process of design and make in the cloud and connects the needs of stakeholders across the manufacturing life cycle. New verticals and offerings and the available space between verticals provides a third consistent engine for growth well beyond fiscal '23. You heard Steve talk about the conversion of noncompliant users. We've made enormous progress realizing this significant opportunity and are demonstrating our ability to reduce noncompliant usage and to identify and convert noncompliant users with increasing efficiency. As Steve noted, a subset of 2 million users out of a total of 15 million noncompliant users exists within our current paying customer base. In addition, we have 2 million active nonsubscribers in our legacy base that are potential future customers. The conversion of noncompliant and legacy users provides a fourth consistent engine for growth well beyond fiscal '23. Steve also talked about how our direct sales, which enable us to better serve large enterprise customers and small and mid-market customers, are growing our potential market opportunity and net price realization. We've made great progress in building out our eStore, making it easier for customers to do business with us and creating a better overall customer experience. We've also realized significant growth through our enterprise business agreements, or EBAs. Our largest customers love a direct value-added relationship with us as well as the direct linkage between what they use and what they pay us for. Direct sales provide a fifth consistent engine for growth well beyond fiscal '23. These factors are fueling our 16% to 18% revenue compound annual growth rate expectation between fiscal '20 and fiscal '23. They will also contribute to our growth well beyond fiscal '23, and we're just getting started. New business models like Flex, that Jeff talked about, present potential additional opportunity and, thus far, are not factored into our long-term growth forecasts. We believe our growth potential is significant, and we're focused on making the right investment decisions to get us there. And so you can see from our margin trend that we are investing with focus and discipline to realize the growing market opportunity ahead of us, while delivering operating leverage along the way. We delivered 29% non-GAAP operating margin in fiscal '21, and we're on track to achieve approximately 31% operating margin in fiscal '22. Our target in fiscal '23 is approximately 38%. If we turn now to cash flow. Revenue growth, at scale with disciplined investment, drives improving margins, which results in significant net income growth. And as you can see here, net income growth is the most significant contributor to free cash flow growth between fiscal '20 and fiscal '23. The final element, which I'll talk about more in a minute, is the renewal of the large fiscal '20 multiyear upfront product subscription cohort. Strong net income growth and the large multiyear upfront product subscription cohort give us confidence in our ability to generate $2.4 billion of free cash flow in fiscal '23. So let me finish by commenting about Autodesk in fiscal '24 and beyond. Here, I want to talk about 3 connected themes, how we drive sustainable double-digit revenue growth, how we create more consistent free cash flow growth and how we continue to invest our capital with focus and discipline. As you've heard today, we expect to deliver significant and sustainable revenue growth through the digital transformation of the industries we serve by leveraging key growth enablers that are unique to Autodesk and by monetizing the long tail. We expect market GDP growth, net revenue retention, BIM penetration, direct and newer verticals and the available spaces between verticals to be significant contributors to growth well beyond fiscal '23. But I hope Amy, Jim, Scott and Diana's presentations today have also demonstrated how and why our addressable market is expanding. Through the provision of end-to-end software, we are enabling our customers to become more efficient and more sustainable, which is generating more users, more use cases and more usage in our ecosystem. And that's true both in our traditional markets and in newer verticals like owners, water, construction and manufacturing. There are many more opportunities ahead. Jeff, Raji and Steve's presentations showed how we're providing more on-ramps into our ecosystem through flexible business models, through common data and service platforms in the cloud and through license compliance. And Jeff and Raji also shared our road map to generating even more value for our customers, which we expect to drive growing value and usage of our ecosystem for new and existing users, which will power a self-sustaining flywheel of growth. We're also very passionate about sustainability and what it means for the world. While we're very proud of our environmental, social and governance, or ESG, track record and credentials, Autodesk typically ranks among the best companies in the world. We continue to believe that looking at our own ESG only addresses part of the opportunity in ESG practices. What we're even more excited about is the potential of our ESG opportunity, where we can enable our customers to achieve their sustainability goals. We believe the path to sustainable long-term financial returns is defined by the needs of our stakeholders, particularly those of our customers. As you can see here, a significant proportion of global carbon emissions, water usage and waste are generated in construction and manufacturing. Sustainability goals cannot be achieved without end-to-end solutions in the design and make process, building sustainability across the supply chain. We see this as a significant driver of demand for our end-to-end solutions over time. Andrew showed this chart at Investor Day last year to give you some feel for the evolving incremental contribution to growth we expect, and it still gives you a good feel for where we expect the mix of growth to come in the future. And it's this confluence of opportunities and the growth potential they represent that we expect will help us deliver sustainable double-digit revenue growth. But we don't want to just grow our revenues consistently. We also want to grow our free cash flow consistently. And we think we can do that while also achieving some of our most important goals, optimizing our business while doing what's best for our customers and for us. The ebb and flow of multiyear contracts paid upfront has historically met large upfront capital outlays for customers and inconsistent discounted cash flows for Autodesk, so we've been looking at ways to optimize our business in this area. At our earnings call last week, we discussed the ongoing shift of more of our enterprise customers to an annual billing cycle. Today, we'll discuss our intent to make the same shift for product subscription multiyear contracts starting in fiscal '24. As we said last week, there are clear benefits for our customers and for Autodesk in making this shift. Our customers retain price certainty with a multiyear contract term, but annual billings give them a more predictable annual cash outlay. For Autodesk, we generate more predictable cash flow and remove the discounts to generate upfront cash collections. When we post this deck online, you'll find a couple of illustrative slides that explain how this works in the appendix. As we look ahead and embark on this journey, in a very similar way to our business model transition from perpetual license sales to subscriptions, this shift will result in a predictable initial decline in free cash flow in fiscal '24 as we transition but then an accelerated return to growth in fiscal '25 and '26. The precise outcome over fiscal '24 through fiscal '26 will depend on the rate of transition of upfront product subscriptions to annual billings, which we've tried to illustrate in this chart. But as you can see, our scenario modeling suggests that over a 3-year period, the impact broadly washes out, generating a double-digit compound annual growth rate for free cash flow across fiscal '23 to fiscal '26. While we expect the change will drive some short-term volatility, we know from experience that making these kinds of transitions are worth it in the long run, and we have the track record to prove it. We expect this change to drive more predictable free cash flow growth and better price realization over time, which will make Autodesk a more valuable company. And of course, we'll continue to manage our capital with focus and discipline, investing to grow our addressable market and realize our growth opportunities. Our organic investments will focus on AI and machine learning, our platform and hybrid cloud products. We will continue to invest through M&A and attractive adjacent verticals with the free space opportunities between our current verticals, which can be served with end-to-end solutions. And we will continue to return capital to shareholders through share repurchases with the goal of offsetting dilution. Capital discipline also means balancing growth investments to realize the significant opportunities ahead of us with margin expansion and free cash flow growth. As long as we see exciting growth opportunities, we're going to continue to invest to drive that growth, but we're targeting smart growth, not growth at all costs. And we'll continue to focus on both revenue and free cash flow results as measures of our success. To conclude, with multiple growth drivers and disciplined focused capital allocation, we believe we can deliver double-digit revenue and free cash flow growth over time. As usual, we don't assume any M&A in our base assumptions. And as we said last week, once we have reached our fiscal '23 targets, we'll set out more detailed medium-term growth goals. Thank you. Let me pass it back to Andrew to conclude our presentation.

Thank you, Debbie. Before we go to Q&A, let me finish with a few closing remarks. One of the big headlines I want to underscore is that we're going to deliver sustainable double-digit growth in revenue and free cash flow over the next 5 years and beyond. At the same time, we're going to dramatically increase our TAM from $62 billion today to $78 billion in fiscal '26. And the way we're going to deliver that growth is by focusing on digital transformation, leveraging key growth enablers in our core business and monetizing the long tail in new and interesting ways. Now the 3 areas we covered today in digital transformation, where the convergence of design and build adjacency, the convergence of design and make and manufacturing, and some of the integration of adjacent verticals we're working on. You heard from Jim about all the depth and breadth that's being built in the Construction Cloud and how that's a significant competitive differentiator for Autodesk. You heard from Scott about how we're building out Fusion 360 to add extensions that allow us to not only expand the reach of the business but the average selling price per customer. And this is also acting as a beacon for the way we're going to build out new platforms for all of our industries in the future. Amy talked about expanding into the water vertical and all the capabilities and tools we're bringing to market that are going to allow us to make a huge difference in this really important market. And you heard from Diana about how the movie industry is moving to the cloud in a big way and embracing the whole notion of production workflows in the cloud. Now in terms of leveraging the key growth enablers, we covered business model, convergence of industry and license compliance as key aspects of this. Jeff did a great job of going into the various levers of a flexible business model and how these not only provide more value to our customers and more choice and more flexibility, but more value back to Autodesk over time. You heard from Raji about the work we're doing to deeply integrate workflows in the cloud so that information can move seamlessly from 1 application and 1 industry to another. These aren't file-based workflows. These are embedded cloud information models that allow us to not only move information seamlessly from 1 application to another, but create APIs for that information to allow other people to create new types of value with that data. You also heard from Steve how we drove 40% increases in billings from noncompliant users, but we also got 16x growth in noncompliant billings from digital engagement. So we're engaging with these customers directly to move them into compliance and make them long-term paying customers. We also talked about how we're monetizing the long tail in new and interesting ways. Jeff told you all about how Flex is going to be a new innovative capability that allows us to reach the long tail of our customers, both inside large companies and inside small companies in new and powerful ways. You also heard from Raji the details about how the platform is being built out in numerous ways to connect modern cloud services with data and ignite a whole new type of ecosystem, a flywheel ecosystem that's going to be even more powerful than the ecosystem that was built around AutoCAD 20 years ago. So you can see we're investing in our technology and in delivering the platform for design and make to our customers. But we are also investing in our brand, working to introduce more customers to Autodesk. So on September 7, we're going to launch a whole new look and brand story. I want to show you a preview here. [Presentation]

And with that, I'd like to turn it back over to Simon for our Q&A. Thank you.

Thank you, Andrew, and welcome, everyone. Great set of presentations. Thank you. We've got about 45 minutes for Q&A. We're going to finish at 1:00 p.m. sharp, as I promised at the beginning. We've got the entire leadership team here with me to answer your questions. Please remember, if you have a question to put them in the chat, and we will get to as many as we can. But I want to sort of start off first with a question from Jay Vleeschhouwer on his 30th Autodesk Investor Day. So how do you see the connection over time between your underlying data and micro services platform on the one hand and the business model on the other, specifically consumption and named user. Do you foresee the company becoming larger -- largely Autodesk as a Service? Andrew?

Jay, so another fabulous question. So first off, let me just be super clear about something. Subscription is still our core business model. So these 2 things, subscription and consumption will live together. And if you want me to give you an example that all of you know about or maybe some of you know about, look, if you subscribe to Amazon for video content, you're also consuming video content too during your watching live. Some things you pay for on demand, some things you use as a normal course and speed. That's going to be the steady state for Autodesk in the future, but you're pointing at something important here. As we continue to build more and more core services into the platform and aggregate more and more capabilities on to vertical platforms facing some of our industries, more and more people are going to be consuming what they need, when they need it. They'll be in a base subscription level where they're getting certain types of functionality they use every day. But when they need something, they'll be paying for it when they need it and they'll be using it when they need it. So no customer is going to pay more or less than they should for a certain capability. But it's going to be a blended world kind of like what you see day in and day out when you use Amazon to stream and capture movies and watch content. So that's the world I think you want to pay attention to for Autodesk and that's the one where we're heading to.

Fantastic. And just another one from Jay. The various GTM structures and frameworks you spoke of at the 2018, 2019 and 2020 meetings, what has worked well and what has not? What is your assessment of that, the structural health of the channel, given this consolidation that's already occurred? And what are your expectations for future channel consolidation and profitability?

Yes. So before I hand this one over to Steve, I just want to say our best channel partners are doing better than they ever have, and they will continue to be part of our business moving forward, and they will continue to grow with us. But Steve, why don't you -- why don't you give the more detailed answer to what Jay is asking here?

Yes, definitely. Thanks, Andrew. And Jay, congratulations on your 30th Investor Day. And an appropriate multipart question to top it all off. So as far as the framework goes, there's a few things that have really worked well, and I've talked a lot about them. Our account-based sales and marketing approach is definitely working. Our engagement and developing strategic relationships with customers is unlike anything before. It's going to be a key driver of growth for us in the future. I'd also say building out and now executing on our customer success motion is making a huge difference as the larger base of subscriptions come up for renewal, our ability to renew those customers and really a focus on helping them adopt and use the software effectively has been a key. And finally, I'd say that I'm really proud of what we've done from a digital engagement and digital sales perspective. We're engaging with customers around the world, unlike anything before through digital means, and you can see how it's benefiting us in the growth of our digital sales. I wouldn't say anything's not working. If there's anything, I'd say I wish we could go a little faster. The expansion -- last time we got together, I talked about moving account-based sales and marketing to inside sellers in the strategic territory. Little did we know, 2 months into that, we were going to hit the pandemic and things were going to slow us down a bit. So we're a little behind in our implementation there. We expect to expand that. And I wish we can go a little bit faster. We're going to go a lot faster in FY '23, have more accounts in the program. As Andrew said, from a channel health perspective, our best partners are doing better now than ever before. I want to complement the partners that have made really wise acquisitions and mergers. We've seen some really good smart consolidation. We weren't seeing great companies buying weak companies. We are seeing strong ones combining with other strong ones, and they've built out their ability to support customers in a better way as a result. I expect we'll see more of that as we continue down this journey together, and I think that's actually a good thing. As far as that health though, I want to remind you, we have more dollars in the partner ecosystem now than ever before. Our best partners who focus on delivering value, focus on executing on customer success and best practices and who will benefit from the foundational investments that Jeff and the team have been making, they're going to be poised for better profitability moving forward.

Great. Thanks, Steve. Question from Adam Borg at Stifel. How should we think about the decline in FY '24 free cash flow relative to FY '23? 5% down, 10% down, 20% down? Any directional color would be great.

Yes. So Adam, the first thing what you should think about this is a stronger and more predictable company. But I'll hand it over to Debbie, so she can give you whatever relevant color she feels as appropriate.

Yes. Thanks for the question, Adam. Look, Obviously, we haven't given guidance beyond fiscal '23. As I said in my presentation, we'll give you details on our ambitions beyond fiscal '23 once we've achieved our fiscal '23 goals. But having said that, we've modeled several scenarios of potential outcomes as we execute on the shift. And fundamentally, we think that annual billings are better for our customers and that a substantial majority of them will select annual billing terms in the future. The result of that is going to be a decline in our free cash flow in fiscal '24, followed by higher-than-normal growth in fiscal '25 and fiscal '26 as the billing stack normalizes. But in all scenarios, the transition broadly washes out in the fiscal '23 to fiscal '26 time frame, resulting in double-digit compound annual growth and free cash flow over that period.

Great. Thank you, Debbie. Another one from Adam at Stifel. On Fusion 360, it was great to see the billings growth of 107% CAGR, nicely above the 53% CAGR in new subscriptions, suggesting healthy ARPS growth. Can you talk about what is driving this? And how sustainable is this over time?

Yes. Thanks, Adam. You're starting to see the discipline of our extension strategy and the move away from promotions to drive the Fusion business. But Scott, why don't you give them a little bit more specifics on what's going on there and where it's going to move.

Yes, sure. Thanks, Adam, for the question. Good to hear from you. So there's a few things I would offer. So one is just a reminder that extensions don't count in that subscriptions number. So that strong momentum and growth that you're seeing in the subscription number, that's coming from the base Fusion 360 subscription. So that's the first thing. Now where are the billings coming from? Where is that growth coming from? What's driving it? So Andrew touched on them. As we continue to gain momentum, we're relying less and less on discounting to drive that demand, kind of that flywheel is starting to really work on the base subscription. And then, of course, from attacking extensions to those base Fusion 360 subscriptions. That's the entire business model. That's the whole idea. And that's the reason we were excited about that chart is that it's really good evidence that the business model is really starting to work as intended. Now is this sustainable? I'm not going to give you numbers on attach rates and that kind of stuff, but I'm telling you, we're scratching the surface. We're just getting started with this extension strategy. There will be more extensions. The extension attach rate will continue to go up. And like I hinted at, we're going to start to see partners leveraging the Forge data model to offer their own extensions on Fusion 360. So we're really excited about the momentum and the business model really coming to life.

Great. Thanks, Scott. So a question from Erick Maronak from Victory Capital. How has the competitive landscape changed? Which companies does ADSK compete with most frequently?

Yes. Erick, I think that's a really interesting question, and I'm not going to like talk specifically about specific companies. I think I'm going to talk about how the landscape has tipped a little bit. Because of the move towards different types of digital solutions, digitization, the move to the cloud and the move to more modern types of platforms, who we compete with is significantly different than it was just 5 or 6 years ago. Remember, Autodesk has been investing in the cloud for 8-plus years now, more than 8 years. And what we see is the competitive landscape has now tipped into the investment we were making all those years ago. And as a result, people are now buying on the new types of technology stacks and the cloud-native capability and the cloud business models and the cloud functionality that allows them to digitize their entire processes. So as a result, we compete more with people that have embraced this cloud-first vision, either they're cloud-native or they've moved forward with embracing the cloud vision in a big way. So it has shifted the competition, and we love it because what it's doing is it's shining a big light on, we are now in another big platform shift or technology shift in our sector, and we love it because we've been getting ready for it for 8 years, and let's bring it on because it's going to be an exciting time of change.

Fantastic. So let's go to the next one, thank you, Andrew, which is Phil Winslow at Credit Suisse. Welcome back, Phil. You've seen a major increase in noncompliant users from 12 million to 15 million. While the company has also made a lot of progress in the past releases in terms of noncompliance. How do you think of the timing of converting these users to paying subscribers, i.e., how long does it take? What are the drivers for them to convert, et cetera?

Yes. So first off, let me just reiterate something, and I've said it many, many times, I'm going to keep saying it again and again, all right? We are not driving or looking for a hockey stick in noncompliant user conversion, right? This is not the way our strategy goes. We are actually, if more than anything with regards to reaching those customers, constrained by our own processes and capacity to reach them. We've been building out those processes and capacity. So you see us incrementally increasing that. A lot of those customers will just sit there until we come and talk to them, all right? And that is the appropriate way this should work out, and we're refining how we talk to them, the ways we talk to them, the amount of digital capture we used to do this, the amount of human capture we used to do this, and you're seeing that steady growth. And that's the way we're going to manage this, steady growth. To give you a little more specifics on the exact nature of your question, it always depends, right? If some of these customers are noncompliant within our paying customer base, those will tend to be converted much more rapidly than others that are trying to deliberately evade action or paid us nothing in the past. But again, we just reinforce this. Our goal is not to drive a hockey stick on this. We want a happy, successful user base that enjoys being part of our paid ecosystem and that delivers steady value to Autodesk over multiple years.

Fantastic. Thank you, Andrew. So a question now from Saket Kalia. Andrew, maybe on construction. It was great to hear the go-to-market investments here. How big do you think this can be as part of your business long term? And where do you think customers are in terms of adopting more digital tools on the construction side?

Yes. I going to let Jim take most of that. But one thing I'll just open up with here is we're investing in the places where we have real strength to expand. It's down market in the U.S. It's international expansion in important countries that we're targeting initially. We have the bandwidth, the capability and the capacity to do this, and that's where you're seeing the money go, and that's where the demand is. So we're being very particular. We're focused in where we're sending the money. And I think Jim can comment a little bit more on how customers are responding and where the digital pickup is. Jim?

Yes, that's great. Thanks, Andrew. And Saket, thanks for the question because it's an important one. Everybody in the construction technology sector talks about how construction is slow to adopt digital technology. But that is definitely changing. There's no doubt in my mind, and we are seeing it in the data and the actions of our customers. In conversations that I have with our global customers almost on a daily basis, they're really optimistic around the business projects going -- prospects going forward, and they're continuing to make investments in technology in order to optimize their business processes. This is all driven, of course, by the industry pressures they all face, the labor shortages, the low margins. And while we see a slowdown in commercial, if you look at infrastructure, the investments we're hearing about infrastructure, data centers, warehouses, distribution centers, we're seeing growth in all those sectors. So that all points to positive and more use of digital technology. The other thing I would call out is the pandemic really has caused the industry to look at different ways of working. And we all heard about industrialized construction or the convergence of construction and manufacturing. But now it's real. There's much more emphasis and focus and interest around prefab, around off-site, around modular, and we're only going to see that grow. And all those things really will be aided and facilitated by the use of digital technology. As I said during my presentation, we've seen a 2x increase in enterprise usage of our tools, and we've also seen a 6x increase in the number of customers using multiple construction products. So all things point to increased adoption and increased use of digital technology. The last thing I would say is, Saket, you asked a question about the job site, and that is critically important. Great project management tools that we offer with Autodesk Construction Cloud really help there. But it's not just on the site. It's about the whole process. It's about the whole life cycle, including preconstruction planning all the way to operations and maintenance. And so that's why we are so focused on delivering a unified platform to the industry to really deliver best-in-class solutions in preconstruction out to the job site.

Great. Thank you, Jim. Next one is from Matt Broome with Mizuho. To what extent do you expect Flex to cannibalize EBAs and product subscriptions?

Yes. So Matt, this is an area we've given a lot of thought to. I always like to tell the company cannibals are much feared but infrequently cited in the wild. But we've really specifically looked at this, and we understand it and we've piloted a lot of things. So Jeff, why don't you comment on the way we view this and what we see happening and what we've seen happening in some of our desks?

Sure. Thanks, Matt. We're very excited to launch Flex later this month, and we have thought about this specific question. So could an EBA downsize to Flex? They could. But we don't expect that to happen. Our EBA customers tend to be large, they often use other Autodesk services, including consulting. And because of the extent of their relationship with us, EBA customers often have a negotiated discount on their token price, whereas the broader set of customers will have standard token price. So that's how we think about EBAs. On potential product subscriptions cannibalization, we believe in the long-term value of aligning customer value with usage. That's why Flex is a good solution for our multiuser customers and their occasional users. We actually think Flex is more likely going to be additive as customers can easily use more products across the Autodesk portfolio. And this expectation is also based on what we've seen with EBAs. Our EBA customers have tended to increase usage in the consumption model. So while we're just rolling out Flex, and it's not yet a big contributor to short or medium-term revenue, we expect it to be additive.

Great. Thank you, Jeff. Question -- another question from Saket at Barclays. On partner incentives. In the past, we talked about a growing renewal base, providing better economics going forward. Can you just connect that with the point around moving more partners to back-end incentives versus front end and whether that drives a similar outcome.

Yes. Saket, I'm just going to hand that question directly over to Steve. Steve?

Yes. Thanks, Saket, for the question. The answer to your question is fundamentally, yes. As we move more of the incentives from the front end to the back end, it allows us to direct how those incentives are paid. So we can apply them to specific growth targets, to retention levels, to value-based activities that ultimately deliver a better customer experience and then increase the economics for all of us, partners and Autodesk. And we certainly do believe in our modeling in that we'll get a benefit to price realization as we move more of the incentives from the front end to the back end. So this is the journey. We've been on it for a while. You're going to see us doing more of this moving forward. And I think it's going to be a benefit to all of us.

Great. Thank you, Steve. Next question. Is 40% margin a ceiling?

Yes, I'm going to hand that over to Debbie in just a second, but one of the things I want to reinforce for all of you here, and Debbie made a very clear point in her presentation about this, is we view ourselves as a growth company. And when we see growth and growth opportunities, we are going to invest in that growth first and foremost. If the day comes when we don't see those growth opportunities to invest in anymore, maybe we'll turn to margin as a key lever. But right now, we see growth as a significant opportunity for Autodesk, and we see it in many places. Debbie?

Yes. I think that covered a lot of it, Andrew, thanks. What I would add to it is that the 40% margin, it's not a cap per se. But we're planning it as our upper limit in the time window headed into our fiscal '26 because we feel we have this long runway of growth opportunities ahead of us, and we want to be able to invest to realize those opportunities. And we think we can generate attractive growth and returns from the investments that we intend to make. But to be clear, we're targeting smart growth, not growth at all costs, and we will continue to focus on both revenue and free cash flow results as measures of our success.

Great. Thank you, Debbie. So next question from Wyatt Neyman at First Manhattan. How do you expect infrastructure similars to affect your business, in particular, how much in incremental sales will the bill bring to Autodesk?

Yes. Wyatt, so thank you for that. Obviously, we all have eyes on what's going on there. A couple of things I want to say upfront. One, we have not factored any federal spending on infrastructure into any of our business models or business projections. So we don't have any of that built into anything. We're not dependent on it to achieve our goals. On another point, while the spending will show up at some point, it takes time to percolate to the system. So while we expect to see some growth in our infrastructure target businesses as a result of this, it won't show up immediately. It will show up over several years and in increments, right? So we got to be super clear that this is not something the money shows up and then all of a sudden, people are buying Autodesk software. It takes time to get there. However, one of the reasons we're really excited about this is we've been investing for this opportunity for quite a while now, in road and rail, in water, but also in partnerships. And technology that allows us to play in the upfront planning, capital planning pieces of some of these things. We have partnerships with companies like Oracle, where we're deeply engaged in terms of integration of the Construction Cloud. We have a technology that we've acquired with Innovyze. It's very much targeted at some of these planning challenges and the owner space associated with this. We also have the technology that was purchased through Spacemaker that's going to allow us to get into the real estate investment areas associated with some of the infrastructure that goes in. So we've been well invested from owner, all the way through to construction site. And we feel pretty confident that as these projects show up, we're going to be the vendor of choice for these projects, not only because of the breadth of our solutions, but kind of the advanced nature of our technology stack. We've been investing in cloud for a long time, and we're bringing it to the customers in a big way, the time has come and we're excited that people are finally starting to spend this much needed money on the infrastructure in the United States.

Great. Thank you, Andrew. Next question from Gal Munda, Berenberg, about the ecosystem. How important is the Forge platform to drive the value? And how can we see your -- are you monetizing this platform opportunity?

Yes. Gal, I'm going to hand that right over to Raji, so that you can hear from her where we're taking this short and long term. Raji?

Thanks, Andrew. Our primary focus is on externalizing our platform capabilities because we think this will increase our customer value and by helping them complete their unique workflows. This will increase the value of our subscriptions and create greater stickiness to our offerings. In addition, I think Forge -- in addition to exercising our capabilities, I think Forge is also going to grow our third-party ecosystem, which is our developers, partners and system integrators. And through many enhancements that we are making to our app store and also in the in-product discovery, more developers and more apps are going to be a huge accelerant for our customer outcomes. That is what we are focused on right now. But to Andrew's point, I think when we hit critical threshold at some point in time, we will -- this will be an opportunity for us to monetize these -- on that effort. But it is no different than what -- how we think about our business model with subscriptions and Flex that you already heard from Jeff. For example, today, our [ EBA counts ] API calls that they make to Forge, we apply and have gone through the tokens that they've already purchased with us. So I see this nothing differently than another offering that will follow the same consumption models that you heard before.

Great. Thank you, Raji. Next question is from Keith Weiss at Morgan Stanley. How should we think about M&A as part of the equation for sustaining double-digit revenue growth?

Yes. Keith, thank you very much for asking this question. We do not put M&E -- not M&E, M&A into the business models we present to you, all right? That is not a rational way for us to present our business to you where there's speculative M&A built into our business trajectory, right? We want to provide a clear kind of organic path to how we see our business growing over time, not include things that may or may not happen. That doesn't mean we're not thinking about inorganic activity, we're absolutely thinking about inorganic activity. We're absolutely an acquisitive company, and we'll continue to be an acquisitive company. But when we show you numbers like this and plans like this, it's built off what we can -- what we believe we can achieve with what we have today. And as we acquire companies, just like we have over the last few years, we modify that trajectory for you and give you both the positive and negative impacts with regards to our plans. Debbie, do you want to add anything to that?

Yes. I mean the key from my standpoint is that we intend to continue to be disciplined. There are 3 key things that we think about. We need to be looking at acquisitions that accelerate our strategy and the industries that we serve, we need to be looking at acquisitions that uniquely create value through a combination with Autodesk and most importantly, we only look at acquisitions that we think would be value accretive over time. That's table stakes for us, and it drives the discipline we use when we evaluate all acquisition opportunities.

Great. Thank you, both. So next question is from Joe Vruwink at Baird. How much of make growth is driven by market factors like customer digital readiness versus things Autodesk is doing?

Yes. Joe, that's a very difficult question to answer. What I can say is that in many cases, we're out there with our customers, leading them to their new processes. So a lot of our customers will tell you, they know they need to do something different, right? They're not exactly sure what they need to do. So it's our offerings. It's our story. It's some of the things we were talking about years ago, that have started bringing the customers to this space. So remember, it's a combination of our customers getting competitive pressure, realizing that the world is changing and they need to be more digital in order to compete, but it's also a combination of the things that we were talking about 8 years ago. Remember when we were talking about the future of making and the way the design and make world was changing. These conversations we've been having with our customers have definitely influenced how they view their technological journey and their path to increased competitiveness. So it's a combination, all right? Competition is getting tougher. The most digital players are winning more business in our customer base, but also, we've been telling a story that says, "Hey, we've got you. We got your back on this. Here's where you need to go to move there in the forward." So it's a little of both. How much of each, very hard to quantify.

Great. Thank you, Andrew. Next question from Jay, again, Vleeschhouwer from Griffin Securities. What has been done to enhance R&D productivity or effectivity, including assimilating customer inputs and requirements?

Yes. So that's a very multifaceted question, Jay. You actually hit several questions inside of your third question, which was -- nice move, well done. That's why you've been doing this for 30 years. So let me kind of answer this in a couple of ways, and then I'm going to bring Debbie -- Amy in as well to comment on this a little bit. So first off, R&D productivity in general is super important to us because we have 2 very important things we have to do. We have to currently continue to enhance and improve the way our customers work today with the tools they work today while also building out a future that we're bringing them to tomorrow. And we have a lot of fairly advanced experience with this in the manufacturing land, and we're going to be applying that experience everywhere. In addition, we're bringing more and more services into the core platform and doing joint development products with -- projects within the company to ensure that we are not building functionality that translates across all our industries multiple times, which is a serious drag in productivity. So whereas Raji's team will build core services, they also quarterback a series of projects that ultimately get built in the platform that benefit everyone. And some of these projects are super deep in certain technological areas around multi-platform cloud compute, cloud capabilities. Generative is a great example of some of these things and other things. However, we've also been deepening some of our technological capability around understanding what our current customers really need requirements wise. Sometimes they tell us what they think they need, but we now have a set of analytical capabilities that allow us to really crack under the hood in a deep way to understand where our customers are getting stuck. I'd like Amy to comment on that a little bit with regards to how we engage with the AutoCAD and the rev opportunity in particular. So Amy, why don't you weigh in on this a bit?

Great. Thank you, Andrew. We've been investing in really deeply understanding our customers' usage patterns so that we can be there to offer them advice, recommendations, suggestions, deepen their use within the products and that some of what the AutoCAD customers are experiencing today. We're also working on understanding our customer sentiment while they're using the product so that we can react to where they might be feeling stuck or feeling that we need to make some improvements on their behalf. And then the third thing we're doing is connecting a lot of this deep usage insights with our customer success organization so that we can create closed-loop processes and we can help customers in their experience with Autodesk knowing the context of where they're coming from when they're seeking help out from us.

Great. Thank you, Amy. So next question is from Matt Hedberg at RBC. It looks like the product sub transition won't start until FY '24. But might you accelerate that and actually begin in FY '23?

Yes. So as Debbie commented during our earnings call, it's actually sort of already started, but I'll let Debbie comment on that right now.

Yes, sure. So for our base product subscription multiyear contracts, we have 2 other factors on the table that we have to consider. The first is that we want to ensure a smooth transition with our channel partners. This multiyear cohort is different than our EBAs because it's largely indirect. So we need to work on a transition plan with our partners as we make the shift. And then second, we've been investing in back-office system upgrades that will enable us to better manage a high volume of multiyear contracts with annual billings at scale. We anticipate that, that system functionality is going to be ready in the back half of our fiscal '23, which positions us well to start the shift starting in fiscal '24. Overall, we're focused on optimizing our business. And this change, as we said, is good for both our customers and for us.

Great. Thank you, Debbie. Next one is from Ashish Bhandari at Ashler. Can you talk about why it's important for BIM models to be uniting architecture, engineering and construction as some of your competitors talk about going down a construction-only solid approach? Thank you for asking this question. Andrew, start with you?

Yes, yes. So first off, a lot of competitors can only go down a construction-side approach. So it's -- there's certainly a philosophy there. Look, here's what I've said in the past, and I'm going to say it again, and I'm going to hand this over to Jim. The evolution we're seeing in the construction industry, the AEC industry in general is a slower, longer transition period version of what we saw in manufacturing. Manufacturing started out very much like what you see in AEC. They're highly fragmented, distributed, drawing base, not very digital and matured to its current process of highly digital, a certain percentage of revenue being spent on IT that's well above right now, what you see in AEC, which we expect to shift over time and incredibly model-based. And these models incredibly tightly integrated to the entire process. When you watch what's happening in AEC, it parallels a lot of the evolution of the manufacturing market but also layer on top of that, the fact that construction has to become more like a manufacturing process. This is an option, okay? They cannot continue to be as wasteful as they are today. Believe me, I cringe as I watch a small remodel project on my house at home, and I'm just like, "I can't believe this." Okay? The amount of stuff they haul away for nothing, for no good reason is frightening. This cannot continue, all right? So this convergence of construction and manufacturing is inevitable. It's happening and it's going to happen. And in that scenario, the models win. That's what happened in manufacturing. A bunch of each vendors consolidated on certain -- and some companies consolidate on certain model platforms and those model platforms have become deeply part of their process. So it's the evolution in how things are going to evolve. And what happened in manufacturing as well as the stand-alone pure-play data flow vendors, they all disappear okay? It took a while, but they all disappeared. They were all gobbled up and they all -- and often -- and they're all owned by some of the big players left in the space. So Jim, do you want to comment on this in the here and now after my philosophical answer?

Yes. I think that's a great answer, Andrew. And I would just add a couple of points to that. I think, Ashish, the way you asked the question actually is really interesting, right? You've talked about competitors going down a construction-only solid approach. It's actually worse than that because I think what we see some competitor is doing is calling construction only what happens on the job side. And that is critically important, been a huge area of investment for us. But construction really starts in the preconstruction planning process. And so the idea of making sure that we're bringing those 2 worlds together and moving data between what happens on the job site, what happens during preconstruction planning, but then also taking -- pulling in the information from our design tools and closing that loop and in fact, sending information back, it's really about the whole life cycle solution. So you have to really -- if we're going to help drive change in the industry, you have to be able to affect change throughout the process and connect the worlds of design, preconstruction planning to what happens on the job site, ultimately out to operations and maintenance.

Great. Thank you, Jim. So next one is from Ari Friedman at Oppenheimer. Do you see Unity as a competitor in 3D technology? Do you see them when you go to market? If you do see them, why do you win and why do you lose?

So Ari, we've actually partnered with Unity in some regards. We think 3D Everywhere is good 3D. We want 3D Everywhere. But Diana, why don't you comment a little bit on what differentiates us and how the 2 players kind of compete or cooperate within the market?

Thank you. Thank you for the question. Unity is more of a platform for games in media and entertainment, and those games get created with our tools when they are in 3D. There is some intersection, but overall, they help contribute to our growth. Thank you.

Great. Next question. Thank you, Diana. From Nancy Liu at Guggenheim. As Debbie highlighted, renewing the large subscription base is one of the most significant growth drivers. As we exit the transition, do you see potential to return to pre-COVID NRR levels -- sorry, net revenue retention levels of 110% to 120%?

The short answer is yes. But Debbie, why don't you have -- add a little bit more color?

Yes, I think that's right. The short answer is absolutely yes. We see that potential. What we're seeing today is a net revenue retention rate in that range of 100% to 110%, and that is in line with our expectations because it's reflecting the impact that we saw from COVID over the last year. And over the short term, as we look ahead, our expectation is that the net revenue retention rate is going to stay in that range. But longer term, of course, our goal would be to drive more account expansion and customer value and increase that net revenue retention rate, and we think that's possible.

Great. Thank you, Debbie. So next one from Matt Hedberg, again, at RBC. With the assumption that manufacturing growth becomes a bigger portion of the mix over time, can you help us think about what inning we are in within your manufacturing platform buildout?

Yes. So let me open, and I'm going to hand it over to Scott. It's still early, all right? We told you that Fusion was going to be an FY '23 and beyond, to FY '24 plus type growth driver. We're super happy with where we're at. We believe we're getting market share. We are reaching new customers we haven't reached before. We haven't cannibalized a single seat of inventory in that process. So this is net new business for us, which is incredibly exciting. But Scott, why don't you give a little bit more color on where we are in this bigger journey.

Yes, of course. And I think it's important to remember also the depth of capability that we have in the broader manufacturing portfolio and then kind of hold that up against how we're building out the Fusion 360 solution. Remember, Inventor users, almost all of them, they get access to Inventor through the collection. What else is in that collection? Fusion 360. So we're bridging workflows more and more between Inventor and Fusion by leveraging that cloud data backbone in Forge. So we'll bridge those customers over to Fusion as it makes sense for them. But who else are we bridging? We're also bridging competitive users as well who are using predominantly geometry creation tools. They're able to leverage Fusion either stand-alone or as part of the collection for their manufacturing needs. So we're really happy with how we are bringing our users along as well as how we're bridging into that share shift opportunity as well.

Great. Thank you, Scott. Next question from Keith Weiss at Morgan Stanley. In media and entertainment, the rising priority of content has been an ongoing theme for a while now, but M&E growth has held steady at about 10%. What could catalyze that part of the business to better align to the industry trends?

Yes. Keith, I'm going to hand that straight over to Diana.

Yes. So I would just say, the content boom is not over, as I talked about in my presentation. I think content is -- after COVID, it's actually increasing as we look at more streaming companies that are -- companies like Apple, companies like -- sorry. So I think those companies are growing, the streaming companies are growing, gaming is growing. I think the area where we feel that there's a lot of growth to be had, there's areas where it's reducing, but then there's areas like the cloud that is going to provide growth inside of the industry. And I think the area that companies are trying to better is really the digital waste that's happening when you create all this content. I mean, the content not stopping anytime soon with all the streaming companies. So I think that's where the opportunity is, and I think that's where it will be better aligned with the industry.

Brilliant. Thank you, Diana. Next question from Jackson Ader at JPMorgan. How does the common data platform in the design and manufacturing space compare to the same efforts from the common data platforms of your competitors, PTC, Dassault, et cetera?

Yes. So first off, I want -- so to be clear, this is not something we've been just starting, okay? Raji has come here to bring up, up-level the game and expose it and build out the bar in the industry, but this is something we've been working on for near a decade, okay? We've been serious about the cloud for a long time and the underpinnings of Fusion, of Construction Cloud or all multi-tenant cloud-based systems. What we're doing with our platform now -- and we've had these platforms. Fusion is a very deep cloud-based platform. And Construction Cloud is a deep cloud-based platform. But what we're doing with Forge as we build out Forge is we're bringing together the common capabilities in there. And what's super unique about what we do is it drives convergent work across these industries, which is something none of our competitors can do. So we already have deep cloud stacks in our vertical spaces that rival our competitors, that are older than our competitors that we've invested more in than our competitors, and we're very comfortable in what's under the hood there, all right? And we're very comfortable about what more we can do with those things. But what we can do uniquely is build out a platform that cuts across all these industries, powers the flow of data and information between manufacturing and AEC, fueling the convergence of construction and manufacturing. We can drive the flow of virtual worlds and 3D media from M&E across these industries and back into these industries. We can connect things in ways that nobody else in our industry can. So this notion of industry convergence and bringing technology together and bringing capabilities together, we have the multiplier effect on that. Nobody has the footprint we have. And obviously, we are leading players in all the industries we serve. That's an amazing position to be in. So our platform is unique in that it's not just the vertical platform, which we have in each one of our vertical spaces. It's a convergent platform.

Brilliant. Thank you, Andrew. Next one from Steven Koenig at Nikko. Can you provide a little color on your anticipation for a shift in your growth complexion from AEC to manufacturing in the coming years? Is this a function of the overall market to direct your ADSK's own road map?

Both, all right? And here's what I want to talk about here is there's some secular trends happening, then there's some trends that we're driving with the cloudification of manufacturing and the convergence of design and make. First, a lot of growth in our manufacturing business over time is going to be driven by this convergence of construction and manufacturing, the rise of prefabrication, the rise of modular construction. As it becomes a larger percentage of what gets built out there because it has to, frankly, because you can't continue to build the way we build, especially with large building projects. People are going to be coming to Autodesk to bring those 2 things together. And they're going to be coming to Autodesk to get the right answers and get the right kind of solutions. But when you look at what we're doing in manufacturing with the convergence of design and make, we are actually disrupting our competitors, and we have been for 8 years now, okay? And we're going in there and we're driving share shift. Where are all those fusion customers coming from? Not a single one came from an Inventor customer, not a single one came from an AutoCAD customer. Where did they come from? They came from other places, all right? They came from people who wanted to move to a cloud-native environment that has the kind of capability that they see as forward-looking, with the kind of business models that allow them to work the way they should and the kind of underlying collaboration framework that makes sense in the new age of the cloud, okay? So it's our road map. It's the market factors. It's all of those things. And we're pretty excited about it, and we're pretty pleased with where we are on our journey right now.

Great. Thank you, Andrew. Just conscious of time. So this is probably our last question from Gal Munda at Berenberg. What are the plans to introduce cloud into AEC CAD, working on Revit in the cloud or similar product to Fusion 360 that builds on a new platform?

Okay. I am going to turn that question directly over to Amy. Amy, you're on.

Thank you. That's a big question for the last minute. So over time, we will be focusing on breaking down our monolithic applications while creating lighter and more portable solutions. We'll be moving data and workloads to the cloud and leveraging both automations and insights more deeply. You can see some of this platform thinking -- already happening in the Construction Cloud today. And if you look at our Spacemaker acquisition, this is a great example of a modern cloud-first application. Now similar to how Fusion got started, you can expect us to go deep in one area of the AEC workflow while continuing to invest in our core applications, and you can expect a long transition here. If you recall from my presentation, there is still plenty of growth in the core portfolio with BIM mandates, digital transformation and verticals like rail, highway and water fueling growth for the future. Back to you, Simon.

Brilliant. Thank you, Amy, and thank you, everyone, for attending. The slides from the presentations will be available on the Investor Relations website soon. If you do have any follow-up questions, please just ping us and ask. Thank you very much for attending, and we'll look forward to chatting with you all again soon. Thank you all.