Autodesk (ADSK) Grew Revenue 16% but Remaining Performance Obligations Rose Only 2%

Autodesk, Inc. (NASDAQ: ADSK ) reported fiscal 2027 second-quarter revenue of $2.046 billion, up 16% year over year, while billings increased 10% to $1.854 billion. The obligations data presented a more complicated picture. Total remaining performance obligations, or RPO, rose only 2% to $7.433 billion. Current RPO, covering revenue expected within the next 12 months, grew 12% to $5.245 billion.

The gap reflects an intentional change in contract economics. Autodesk, Inc. (NASDAQ:ADSK) has been reducing discounts on multiyear contracts, including winding down multiyear Maintenance-to-Subscription renewals. Management expects better price realization over time, while the strategy temporarily weighs on unbilled deferred revenue and RPO growth. Unbilled deferred revenue declined 8% to $3.175 billion, showing the effect on reported backlog.

The question is whether better price realization will offset weaker growth in long-duration commitments. The answer will depend on contract value, renewal rates, and duration.

Profitability strengthened alongside the pricing changes at Autodesk, Inc. (NASDAQ:ADSK). GAAP operating margin expanded four percentage points year over year to 29%. The company-defined non-GAAP operating margin, which excludes stock-based compensation, amortization of purchased intangibles and developed technologies, and acquisition-related costs, increased two percentage points to 41%.

The company did not attribute a specific portion of the margin expansion to lower discounts. Management expects the pricing benefit to emerge over time, while operating leverage and go-to-market optimization supported current profitability.

Cash generation was also strong. The company produced $575 million in operating cash flow, up 25%, and company-defined free cash flow of $561 million, up 24%. The company defines free cash flow as operating cash flow less capital expenditures, which were $14 million in the quarter.

Current RPO growth of 12% supports solid near-term visibility. Autodesk, Inc. (NASDAQ:ADSK) also increased its fiscal 2027 billings and revenue outlook to reflect higher underlying expectations and MaintainX. If customers accept lower discounts without weaker renewal rates, the shift could improve contract value even with shorter commitments.

The weak point is duration. Autodesk, Inc. (NASDAQ:ADSK) grew revenue 16% while total RPO increased just 2%, and unbilled deferred revenue fell 8%. Reduced discounting explains part of that divergence, but it does not eliminate the risk. If customers increasingly choose shorter contracts, the company gains pricing power today while surrendering some long-term revenue visibility.