Autodesk's operating margin reached 29.3% in the quarter ended July 31, 2026, up from 25.2% a year earlier and 22.8% two years earlier — two consecutive years of expansion across three comparable quarters. That part is real operating leverage: revenue grew 16.1% to $2,046 million while every operating expense line fell as a share of revenue. But billings, which the company reported rising 10% to $1.85 billion, grew six points slower than revenue, and deferred revenue drained $434 million over the half — the cash the income statement is now recognizing was largely collected earlier. The 57.2% jump in net income is a separate story again, because roughly half of it came from the effective tax rate falling from 31.4% to 17.0%. And the $4,098 million cash balance that closed the quarter was never really there — three days later, on August 3, 2026, Autodesk paid approximately $3.53 billion, net of cash acquired, for MaintainX.
1. Condensed Consolidated Balance Sheet
1-1. Principal asset movements
| Item | Jan 31, 2026 ($M) | Jul 31, 2026 ($M) | Change % |
|---|---|---|---|
| Cash and cash equivalents | 2,249 | 4,098 | +82.2% |
| Marketable securities (short-term) | 348 | 57 | −83.6% |
| Long-term marketable securities | 376 | 202 | −46.3% |
| Accounts receivable, net | 1,439 | 684 | −52.5% |
| Prepaid expenses and other current assets | 906 | 831 | −8.3% |
| Computer equipment and leasehold improvements, net | 121 | 124 | +2.5% |
| Intangible assets, net | 467 | 423 | −9.4% |
| Goodwill | 4,295 | 4,331 | +0.8% |
| Total assets | 12,467 | 12,983 | +4.1% |
Source: Condensed Consolidated Balance Sheets, Autodesk Form 10-Q for the quarter ended July 31, 2026.
The cash build is the item to read carefully. Cash and equivalents rose $1,849 million, but $1,000 million of that is borrowed money — Autodesk established a commercial paper program in July 2026 (maximum face amount $2 billion) and had $1 billion outstanding at face value at July 31 (carrying value $994 million) at a weighted-average rate of 4.17%. The company also liquidated securities, with short and long-term marketable securities together falling from $724 million to $259 million. Of the $4,357 million total cash and securities on hand, then, the incremental build came about three-quarters from borrowing and portfolio sales rather than from retained trading profits — this was a war chest staged for a specific acquisition, not a cushion accumulated from operations.
Receivables halving to $684 million is mostly seasonality. Autodesk's fiscal year ends January 31, and the January quarter carries the heaviest billing load, so the balance drains through the first half. At $684 million against quarterly revenue of $2,046 million, days sales outstanding is roughly 30 days — collection is not a problem here.
Goodwill of $4,331 million already exceeds total stockholders' equity of $3,383 million, and the MaintainX purchase price of $3.53 billion will land almost entirely in goodwill and intangibles next quarter. Autodesk stated it was impracticable to disclose even a preliminary purchase price allocation at filing, so the split between goodwill and amortizable intangibles — and therefore the drag on future reported operating margin — is not yet knowable. Management has guided that MaintainX will add roughly $60 million of revenue in the second half of fiscal 2027 and will be dilutive to operating margin.
On debt maturities: senior notes total $2,500 million of principal — $500 million at 3.50% due June 2027, $500 million at 2.85% due January 2030, $1,000 million at 2.40% due December 2031, and $500 million at 5.30% due June 2035. Scheduled principal repayment is nil for the remainder of fiscal 2027, $500 million in fiscal 2028, and $500 million in fiscal 2030. So 20% of the notes mature within roughly a year. The refinancing arithmetic is unfavorable: the maturing paper carries a 3.50% coupon, while the new money Autodesk is raising costs 4.17% on commercial paper and 4.58% on the term loan drawn August 3. Separately, operating lease right-of-use assets of $145 million against lease liabilities of $227 million are small relative to a $12.98 billion balance sheet and do not change the leverage picture.
1-2. Financial versus operating liabilities
Financial debt totals $3,478 million: $994 million of short-term commercial paper, $499 million of current-portion senior notes, and $1,985 million of long-term notes. Against $4,357 million of cash and securities, Autodesk closed the quarter in a net cash position of $879 million.
Operating liabilities are dominated by deferred revenue — $4,036 million current plus $222 million long-term. This is customer money collected in advance of service delivery, and at $4,258 million it is larger than all of Autodesk's financial debt. It is interest-free float that funds the business. But the direction matters as much as the level: current deferred revenue fell from $4,406 million at January 31, and the cash flow statement shows a $434 million reduction over the six months. Float that is shrinking is float being consumed, and it ties directly to billings growing 10% against 16% revenue growth. Revenue recognition is currently running ahead of new cash commitments, which flatters the income statement relative to the underlying commercial momentum.
Accounts payable of $457 million and accrued compensation of $354 million are small by comparison; accrued compensation fell $305 million as the January 2026 restructuring plan paid out $111 million of employee termination costs (of $114 million total plan payments) and annual bonuses cleared.
The critical point is what happens to that net cash position after quarter-end. Autodesk drew a further $1 billion term loan on August 3 and spent $3.53 billion. On a simple pro forma basis, financial debt rises to roughly $4,478 million and cash and securities fall to roughly $1,827 million — a net debt position near $2,651 million. A $879 million net cash balance sheet became a $2.65 billion net debt balance sheet in three days.
Against covenants, this remains comfortable. The credit agreements cap consolidated debt to consolidated EBITDA at 3.50:1.00, relaxing to 4.00:1.00 for up to four consecutive fiscal quarters after a qualifying acquisition. Using first-half operating income of $1,140 million plus $101 million depreciation and $339 million stock compensation, annualized to roughly $3.16 billion, pro forma gross debt sits near 1.4 times — well inside the limit. That is an approximation, not the contractual calculation, which is defined differently in the agreements. Autodesk confirmed it was in compliance at July 31, 2026.
1-3. Capital structure
Paid-in capital stands at $4,846 million against an accumulated deficit of $(1,230) million. A profitable company carrying a deficit looks odd until you see the cause: Autodesk retires repurchased shares and charges most of the cost against accumulated earnings. In the first half, $906 million of buybacks recorded in the equity statement split $125 million to paid-in capital and $781 million to the deficit. Net income of $983 million more than covered it, so the deficit narrowed from $(1,432) million. The cash flow statement shows $901 million of repurchases, the small difference being settlement timing.
Accumulated other comprehensive loss was essentially flat at $(233) million, from $(232) million at year-end. Within it, a $24 million six-month gain on derivative hedges was offset by a $25 million negative swing in foreign currency translation. Total equity of $3,383 million supports $12,983 million of assets — thin, but normal for a subscription software company that funds itself on customer prepayments and returns capital aggressively.
2. Condensed Consolidated Statement of Operations
2-1. Three-year comparison, quarter ended July 31
| Item | FY2025 Q2 ($M) | FY2026 Q2 ($M) | FY2027 Q2 ($M) | 2Y CAGR |
|---|---|---|---|---|
| Total net revenue | 1,505 | 1,763 | 2,046 | +16.6% |
| Income from operations | 343 | 444 | 599 | +32.2% |
| Operating margin (%) | 22.8 | 25.2 | 29.3 | — |
| Net income | 282 | 313 | 492 | +32.1% |
| Net margin (%) | 18.7 | 17.8 | 24.0 | — |
FY2025 and FY2026 figures from SEC XBRL filings; FY2027 from this 10-Q. Billings and segment guidance figures cited below are from Autodesk's Q2 FY2027 results release of August 27, 2026, not the 10-Q.
Subscription revenue, which now includes maintenance revenue after a fiscal 2027 reclassification, grew 17.1% to $1,952 million and represents 95.4% of the total. The reclassification moved prior periods too and did not change total revenue.
Operating leverage was 2.17 times this quarter — every 1% of revenue growth produced 2.17% of operating profit growth. That is a strong ratio, and it was not an accident of comparisons. Restructuring was a $1 million credit this quarter against a $6 million charge last year, so stripping it out still leaves margins at 29.2% versus 25.5%. Over six months the restructuring swing is larger, $29 million of current-year charges against $111 million in the prior-year half, but normalized margin still improves, from 23.2% to 29.4% for the half versus 25.5% to 29.2% for the quarter alone. The year-over-year expansion survives the adjustment.
It does not, however, survive the billings comparison unscathed. Revenue is a recognition measure; billings is closer to a demand measure. At 10% billings growth against 16% revenue growth, the margin expansion is being delivered on a revenue base that is partly the unwinding of prior-period commitments. That does not make the cost discipline fake — the expense lines below are genuinely growing slower than revenue — but it does mean the 29.3% figure is unlikely to be the run rate once billings and revenue reconverge, and MaintainX is guided to dilute it further.
One piece of context belongs here, given that this analysis turns on reported margin. In March 2024 Autodesk's Audit Committee opened an internal investigation into the company's free cash flow and non-GAAP operating margin practices, which triggered a federal securities class action. The court dismissed the amended complaint with prejudice on January 26, 2026 and entered judgment on February 12, 2026; plaintiffs have appealed, with a reply brief permitted by September 16, 2026. Autodesk says it cannot reasonably estimate any possible loss. The GAAP figures used throughout this piece are not the subject of that dispute, but readers weighing the company's non-GAAP operating margin — 41% this quarter against 29.3% GAAP — should know the history of that particular metric.
Below the operating line, the picture is less clean. Net income rose $179 million, but if the quarter had been taxed at last year's 31.4% rate, net income would have been about $407 million instead of $492 million. That means roughly $85 million — 47% of the entire increase — came from the tax line. Autodesk's disclosure explains the gap versus the 21% statutory rate, not the year-over-year drop: tax on net controlled foreign corporation tested income (NCTI) and withholding tax push the rate up, while varying foreign tax rates, deductible stock compensation, the foreign-derived deduction-eligible income (FDDEI) regime, and tax credits pull it down. This is a genuine cash benefit, but it is a one-time reset in the rate, not a repeatable engine. Investors comparing next year's growth will lap it.
Two further quality notes. Interest and other income was negative $6 million this quarter against positive $12 million last year, even though interest income exceeded interest expense ($28 million versus $23 million). The six-month figure of $52 million is flattered by $45 million of net unrealized gains on equity investments — non-cash mark-to-market movements that do not recur predictably. The underlying cash interest spread in Q2, with income exceeding expense by $5 million, is a genuine but modest contributor.
Across all three statements the same pattern holds: real operating improvement, with the margin expansion over two fiscal years the clearest evidence of structural cost discipline. But that improvement is delivered on a revenue base running ahead of billings, onto a deferred-revenue balance being consumed rather than replenished, through a tax rate that fell from 31.4% to 17.0%, and against a cash balance that no longer exists three days after quarter-end. The headline results are real; so are the adjustments that sit between them and the forward run rate.