In yesterday's conference call, financial analysts were concerned about the second recession towards which the USA seems to be heading. Their concern stems from their worry that Autodesk won't make as many profits in the next year. Here is how ceo Carl Bass reacted to their questioning, as recorded by Seeking Alpha, and mildly edited by me.
The thing that strikes me the most is the disconnect between what we're seeing in the financial markets and how our customers are behaving. In most of my recent meetings with customers, they're seeing business to be fairly strong and it's been evidenced by most of the results that people have been reporting. Most of them feel that they made a number of adjustments during the recession. I don't see them yet making big changes in what they're doing. So maybe they're somewhat blind to what's going on in the financial markets, maybe not.
Our educational installed base is down a little bit, the commercial is actually up in more one aspect of the business, but the net-net is a slight negative [for subscriptions].
[If Autodesk's guidance for future revenues turns out to be optimistic,] I don't think we would do much right now. I think a lot remains to be seen if there really is a big economic slowdown. I wouldn't jump to things like the new services and things like that. There's certainly parts of the business in certain initiatives that we would slow down.
I think it remains to be seen what actually the shape of it is. Right now, there's the big bogeyman out there that everybody's worried about, but I don't quite know quite the shape of the bogeyman.
What I would say is if it's coming, it doesn't look at all like the last one [recession] did. None of the metrics that we saw go down last time, have we seen evidence of yet. I don't know if you remember, but last time we saw a slowdown in our Americas business about nine months or so before the collapse of Lehman. We also saw a number of things like subscription rates go down considerably. We also saw our run rate business, particularly LT and AutoCAD, go down substantially and differentially than the other things. We've been looking for evidence in our numbers of things that look like the last downturn. And so far, we haven't found those.
It doesn't mean that we're deaf and dumb, and we're not listening to the news or looking at the reports, and seeing what other people are saying. I'd say there was a real floor last time. While our operating margins got cut in half, I think we did a remarkably good job. Despite having our revenue go down by high 20-something percents decrease in revenue, the operating margins were always positive.
What we saw last time was a real reduction in customer pipelines. [This time,] many of them are already working with smaller workloads than they did when they went into the last recession. Many companies have been much more resourceful in where they're finding work, how they're doing work, the size of their workforce, it's been one of the issues behind unemployment in a number of places.
Last time we saw delayed deals, smaller deals, non-renewals, or smaller renewals. I think people were pretty freaked out. I've been with a lot of customers over the last few weeks, and this time there's a little bit of sense of immunity, or they just have the sense that we've seen this movie before. We don't think the world's coming to an end.
Many of them regret having not been more aggressive during the last downturn and being so reactive to the slowdown, but not in a long-term, healthy way. So most the customers I see right now, they're worried about getting new products out. But they don't have that same sense of fear that we saw last time