Autodesk Inc

Previous wording

The discussion in our MD&A and elsewhere in this Quarterly Report on Form 10-Q contains trend analyses and other forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are any statements that look to future events and consist of, among other things, our business strategies, including those discussed in “Strategy,” “Overview of the Three Months Ended April 30, 2024,” and in“Results of Operations-Overview.”Examples of such forward-looking statements may relate to items such as future net revenue, operating expenses, recurring revenue, net revenue retention rate, cash flow, remaining performance obligations, and other future financial results (by product type and geography); the transition to annual billings for multi-year contracts; the implementation of new transaction models; the effectiveness of our efforts to successfully manage transitions to new markets; our ability to increase our subscription base; expected market trends, including the growth of cloud and mobile computing; the availability of credit; the effect of unemployment; the effects of global economic conditions, including from an economic downturn or recession in the United States or in other countries around the world; the effects of revenue recognition; the effects of recently issued accounting standards; expected trends in certain financial metrics, including expenses; expectations regarding our cash needs; the effects of fluctuations in exchange rates and our hedging activities on our financial results; our ability to successfully expand adoption of our products; our ability to gain market acceptance of new business and sales initiatives; the impact of past acquisitions, including our integration efforts and expected synergies; the impact of economic volatility and geopolitical activities in certain countries, particularly emerging economy countries; the timing and amount of purchases under our stock buy-back plan; and the effects of potential non-cash charges on our financial results and the resulting effect on our financial results. In addition, forward-looking statements also consist of statements involving expectations regarding product capability and acceptance, anticipated benefits of our products; statements regarding our liquidity and short-term and long-term cash requirements, as well as statements involving trend analyses and statements including such words as “may,” “believe,” “could,” “anticipate,” “would,” “might,” “plan,” “expect,” and similar expressions or the negative of these terms or other comparable terminology. These forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q and are subject to business and economic risks. As such, our actual results could differ materially from those set forth in the forward-looking statements as a result of a number of factors, including those set forth below in Part II, Item…

Excerpt shortened here; the source contains the full paragraph.

Current wording

The discussion in our MD&A and elsewhere in this Quarterly Report on Form 10-Q contains trend analyses and other forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are any statements that look to future events and consist of, among other things, our business strategies, including those discussed in “Strategy,” “Overview of the Three and Six Months Ended July 31, 2024,” and in“Results of Operations-Overview.”Examples of such forward-looking statements may relate to items such as future net revenue, operating expenses, recurring revenue, net revenue retention rate, cash flow, remaining performance obligations, and other future financial results (by product type and geography); the transition to annual billings for multi-year contracts; the implementation of new transaction models; the effectiveness of our efforts to successfully manage transitions to new markets; our ability to increase our subscription base; expected market trends, including the growth of cloud and mobile computing; the availability of credit; the effect of unemployment; the effects of global economic conditions, including from an economic downturn or recession in the United States or in other countries around the world; the effects of revenue recognition; the effects of recently issued accounting standards; expected trends in certain financial metrics, including expenses; expectations regarding our cash needs; the effects of fluctuations in exchange rates and our hedging activities on our financial results; our ability to successfully expand adoption of our products; our ability to gain market acceptance of new business and sales initiatives; the impact of past acquisitions, including our integration efforts and expected synergies; the impact of economic volatility and geopolitical activities in certain countries, particularly emerging economy countries; the timing and amount of purchases under our stock buy-back plan; and the effects of potential non-cash charges on our financial results and the resulting effect on our financial results. In addition, forward-looking statements also consist of statements involving expectations regarding product capability and acceptance, anticipated benefits of our products; statements regarding our liquidity and short-term and long-term cash requirements, as well as statements involving trend analyses and statements including such words as “may,” “believe,” “could,” “anticipate,” “would,” “might,” “plan,” “expect,” and similar expressions or the negative of these terms or other comparable terminology. These forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q and are subject to business and economic risks. As such, our actual results could differ materially from those set forth in the forward-looking statements as a result of a number of factors, including those set forth below in Part I…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

We sell our products and services globally, through a combination of direct and indirect channels. Our direct channels include, but are not limited to, internal sales resources focused on selling our highly specialized solutions in our largest accounts, Solution Providers focused on serving certain Flex and subscription customers through our new transaction model, and business transacted through our online Autodesk branded store. Our indirect channels primarily include value added distributors, value added resellers, direct market resellers, volume channel partners, and product-specific resellers. During fiscal 2023, we entered into transition agreements with certain of our distributors, including TD Synnex and Ingram Micro, to provide transition distribution activities for a one-to-two-year period, with potential extensions. In connection with the transition agreements, Autodesk intends to increase its selling efforts with value-added resellers and Solution Providers. We introduced a new transaction model for our token-based Flex offering in North America, and certain countries in EMEA and APAC, and for most of our subscription offerings in Australia during fiscal 2024, whereby Solution Providers provide a quote to customers but the actual transaction occurs directly between Autodesk and the customer. We intend to transition our indirect business to the new transaction model in our major markets globally in fiscal 2025 and fiscal 2026. We expect the change in recognition of sales incentives to indirect channels from contra revenue to operating costs under the new transaction model to positively impact calculated revenue growth, while being broadly neutral to calculated operating profit and free cash flow dollars, and to result in a calculated negative impact to operating margin. See Part I, Item 1, “Financial Statements,” Note 3, “Revenue Recognition” in the Notes to the Condensed Consolidated Financial Statements for further detail on the results of our indirect and direct channel sales for the three months ended April 30, 2024 and 2023.

Current wording

We sell our products and services globally, through a combination of direct and indirect channels. Our direct channels include, but are not limited to, internal sales resources focused on selling our highly specialized solutions in our largest accounts, Solution Providers focused on serving certain Flex and subscription customers through our new transaction model, and business transacted through our online Autodesk branded store. Our indirect channels primarily include value added distributors, value added resellers, direct market resellers, volume channel partners, and product-specific resellers. During fiscal 2023, we entered into transition agreements with certain of our distributors, including TD Synnex and Ingram Micro, to provide transition distribution activities for a one-to-two-year period, with potential extensions. In connection with the transition agreements, Autodesk has increased its selling efforts with value-added resellers and Solution Providers. We introduced a new transaction model for our token-based Flex offering in North America, and certain countries in EMEA, and APAC during fiscal 2023 and 2024. Most of our subscription offerings transitioned to the new transaction model in Australia during fiscal 2024 and in North America during our second fiscal quarter of fiscal 2025. In this new transaction model, Solution Providers provide a quote to customers but the actual transaction occurs directly between Autodesk and the customer. We intend to transition our indirect business to the new transaction model in our major markets globally in remaining fiscal 2025 and fiscal 2026, including in Western Europe in our third fiscal quarter of 2025. We expect the change in recognition of sales incentives to indirect channels from contra revenue to operating costs under the new transaction model to positively impact calculated revenue growth, while being broadly neutral to calculated operating profit and free cash flow dollars, and to result in a calculated negative impact to operating margin. See Part I, Item 1, “Financial Statements,” Note 3, “Revenue Recognition” in the Notes to the Condensed Consolidated Financial Statements for further detail on the results of our indirect and direct channel sales for the three and six months ended July 31, 2024 and 2023.

Previous wording

An accounting policy is deemed to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, if different estimates reasonably could have been used, or if changes in the estimate that are reasonably possible could materially impact the financial statements. We highlighted those policies that involve a higher degree of judgment and complexity with further discussion in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in our Annual Report on Form 10-K. There have been no material changes to our critical accounting policies and estimates during the three months ended April 30, 2024, as compared to those disclosed in our Annual Report on Form 10-K for the fiscal year ended January 31, 2024. We believe these policies are the most critical to aid in fully understanding and evaluating our financial condition and results of operations.

Current wording

An accounting policy is deemed to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, if different estimates reasonably could have been used, or if changes in the estimate that are reasonably possible could materially impact the financial statements. We highlighted those policies that involve a higher degree of judgment and complexity with further discussion in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in our Annual Report on Form 10-K. There have been no material changes to our critical accounting policies and estimates during the three and six months ended July 31, 2024, as compared to those disclosed in our Annual Report on Form 10-K for the fiscal year ended January 31, 2024. We believe these policies are the most critical to aid in fully understanding and evaluating our financial condition and results of operations.

Previous wording

Overview of the Three Months Ended April 30, 2024

Current wording

Overview of the Three and Six Months Ended July 31, 2024

Previous wording

•Total net revenue increased 12%, to $1.42 billion, during the three months ended April 30, 2024, compared to the same period in the prior fiscal year.

Current wording

•Total net revenue increased 12% to $1.51 billion and $2.92 billion, during the three and six months ended July 31, 2024, respectively, compared to the same periods in the prior fiscal year.

Previous wording

•Recurring revenue as a percentage of net revenue was 97% and 98% for the three months ended April 30, 2024 and 2023, respectively.

Current wording

•Recurring revenue as a percentage of net revenue was 97% for both the three and six months ended July 31, 2024 and 98% for both the three and six months ended July 31, 2023.

Previous wording

•Net revenue retention rate (“NR3”) was within the range of 100% and 110%, on a constant currency basis, for both the three months ended April 30, 2024 and 2023.

Current wording

•Net revenue retention rate (“NR3”) was within the range of 100% and 110%, on a constant currency basis, for both the three and six months ended July 31, 2024 and 2023.

Previous wording

•Remaining performance obligations (short-term and long-term deferred revenue plus unbilled deferred revenue) (“RPO”) was $5.89 billion, a decrease of 4% compared to the fourth quarter in the prior fiscal year.

Current wording

•Remaining performance obligations (short-term and long-term deferred revenue plus unbilled deferred revenue) (“RPO”) was $5.86 billion, a decrease of 4% compared to the fourth quarter in the prior fiscal year.

Previous wording

•Current remaining performance obligations was $3.92 billion, a decrease of 1% compared to the fourth quarter in the prior fiscal year.

Current wording

•Current remaining performance obligations was $3.90 billion, a decrease of 2% compared to the fourth quarter in the prior fiscal year.

Previous wording

Net revenue increased 12% during the three months ended April 30, 2024, as compared to the same period in the prior fiscal year, primarily due to an 11% increase in subscription revenue.

Current wording

Net revenue increased 12% during both the three and six months ended July 31, 2024, as compared to the same periods in the prior fiscal year, primarily due to a 11% increase in subscription revenue for both periods.

Previous wording

We rely significantly upon major distributors and resellers in both the U.S. and international regions, including TD Synnex Corporation and its global affiliates (collectively, “TD Synnex”). Total revenue from TD Synnex accounted for 38% and 40% of our total net revenue for the three months ended April 30, 2024 and 2023, respectively. Our customers through TD Synnex are the resellers and end users who purchase our software subscriptions and services. During fiscal 2023, we entered into transition agreements with certain of our distributors, including TD Synnex and Ingram Micro Inc., to provide transition distribution activities for a one-to-two-year period, with potential extensions. In connection with the transition agreements, we intend to increase our selling efforts with value-added resellers and Solution Providers in connection with our new transaction model. Consequently, we believe our business is not substantially dependent on TD Synnex.

Current wording

We rely significantly upon major distributors and resellers in both the U.S. and international regions, including TD Synnex Corporation and its global affiliates (collectively, “TD Synnex”). Total revenue from TD Synnex accounted for 36% and 37% of our total net revenue for the three and six months ended July 31, 2024, respectively. Total revenue from TD Synnex accounted for 40% of our total net revenue during both the three and six months ended July 31, 2023. Our customers through TD Synnex are the resellers and end users who purchase our software subscriptions and services. During fiscal 2023, we entered into transition agreements with certain of our distributors, including TD Synnex and Ingram Micro Inc., to provide transition distribution activities for a one-to-two-year period, with potential extensions. In connection with the transition agreements, we intend to increase our selling efforts with value-added resellers and Solution Providers in connection with our new transaction model. Consequently, we believe our business is not substantially dependent on TD Synnex.

Previous wording

The following table outlines our recurring revenue metric for the three months ended April 30, 2024 and 2023:

Current wording

The following table outlines our recurring revenue metric for the three and six months ended July 31, 2024 and 2023:

Previous wording

NR3 was within the range of 100% and 110%, on a constant currency basis, for both the three months ended April 30, 2024 and 2023.

Current wording

NR3 was within the range of 100% and 110%, on a constant currency basis, for both the three and six months ended July 31, 2024 and 2023.

Previous wording

We generate a significant amount of our revenue in the United States, Japan, Germany, the United Kingdom and Finland.

Current wording

We generate a significant amount of our revenue in the United States, Germany, Japan, the United Kingdom and Finland.

Previous wording

At April 30, 2024, we had $2.23 billion in cash, cash equivalents, and marketable securities. Our cash flow from operations decreased to $494 million for the three months ended April 30, 2024, compared to $723 million for the three months ended April 30, 2023. We repurchased 33 thousand shares of our common stock for $9 million during the three months ended April 30, 2024. Comparatively, we repurchased 2.7 million shares of our common stock for $534 million during the three months ended April 30, 2023. See further discussion regarding the balance sheet and cash flow activities under the heading “Liquidity and Capital Resources.”

Current wording

At July 31, 2024, we had $2.11 billion in cash, cash equivalents, and marketable securities. Our cash flow from operations decreased to $706 million for the six months ended July 31, 2024, compared to $858 million for the six months ended July 31, 2023. We repurchased 504 thousand shares of our common stock for $124 million during the six months ended July 31, 2024. Comparatively, we repurchased 3.1 million shares of our common stock for $621 million during the six months ended July 31, 2023. See further discussion regarding the balance sheet and cash flow activities under the heading “Liquidity and Capital Resources.”

Previous wording

We introduced a new transaction model for our token-based Flex offering in North America, and certain countries in EMEA, and APAC, and for most of our subscription offerings in Australia during fiscal 2024. In this new transaction model, Solution Providers provide customers with a quote, however, the actual transaction occurs directly between Autodesk and the customer. We intend to transition our indirect business to the new transaction model in our major markets globally in fiscal 2025 and fiscal 2026.

Current wording

We introduced a new transaction model for our token-based Flex offering in North America, and certain countries in EMEA, and APAC during fiscal 2023 and 2024. Most of our subscription offerings transitioned to the new transaction model in Australia during fiscal 2024 and in North America during our second fiscal quarter of fiscal 2025. In this new transaction model, Solution Providers provide customers with a quote, however, the actual transaction occurs directly between Autodesk and the customer. We intend to transition our indirect business to the new transaction model in our major markets globally in remaining fiscal 2025 and fiscal 2026.

Previous wording

The following table highlights our expectation for the absolute dollar change and percent of revenue change between the second quarter of fiscal 2025, as compared to the second quarter of fiscal 2024:

Current wording

The following table highlights our expectation for the absolute dollar change and percent of revenue change between the third quarter of fiscal 2025, as compared to the third quarter of fiscal 2024:

Previous wording

Interest and other income, net, increased by $6 million during the three months ended April 30, 2024, as compared to the same period in the prior fiscal year. The increase was primarily due to an increase in interest income and an increase in gains for investments in debt and equity securities that are held in a rabbi trust under non-qualified deferred compensation plans in the current period as compared to the prior period.

Current wording

Interest and other income (expense), net, positively changed by $13 million during the three months ended July 31, 2024, and $19 million during the six months ended July 31, 2024, as compared to the same periods in the prior fiscal year. The positive change in the three and six months ended July 31, 2024, as compared to the same periods in the prior fiscal year was primarily due to a decrease in impairments of strategic investment equity securities, an increase in interest income, and an increase in gains for investments in debt and equity securities that are held in a rabbi trust under non-qualified deferred compensation plans in the current periods as compared to the prior periods.

Previous wording

We had an income tax expense of $57 million, relative to pre-tax income of $309 million for the three months ended April 30, 2024, and an income tax expense of $60 million, relative to pre-tax income of $221 million for the three months ended April 30, 2023. Income tax expense for the three months ended April 30, 2024, reflects U.S. and foreign tax expense, including withholding tax, reduced by tax-deductible stock-based compensation and the foreign derived intangibles tax benefit in the U.S.

Current wording

We had an income tax expense of $70 million, relative to pre-tax income of $352 million for the three months ended July 31, 2024, and an income tax expense of $36 million, relative to pre-tax income of $258 million for the three months ended July 31, 2023. Income tax expense for the three months ended July 31, 2024, reflects U.S. and foreign tax expense, including withholding tax, reduced by tax-deductible stock-based compensation and the foreign derived intangibles tax benefit in the U.S. The tax expense increased compared to July 31, 2023, mainly due to a nonrecurring tax benefit in the prior year arising from the temporary relief provided by Notice 2023-55 relating to U.S. foreign tax credit regulations.

Previous wording

Autodesk regularly assesses the need for a valuation allowance against its deferred tax assets. In making that assessment, Autodesk considers both positive and negative evidence related to the likelihood of realization of the deferred tax assets to determine, based on the weight of available evidence, whether it is more likely than not that some or all of the deferred tax assets will not be realized. Autodesk continues to retain a valuation allowance against Portugal, New Zealand, California, Massachusetts, and Michigan deferred tax assets and deferred tax assets that will convert to a capital loss upon reversal in Australia and U.S., as we do not have sufficient income of the appropriate character to benefit these deferred tax assets. Autodesk also established a valuation allowance on the remaining deferred tax assets in Australia as it is more-likely-than-not that these deferred tax assets will not be realized.

Current wording

Autodesk regularly assesses the need for a valuation allowance against its deferred tax assets. In making that assessment, Autodesk considers both positive and negative evidence related to the likelihood of realization of the deferred tax assets to determine, based on the weight of available evidence, whether it is more likely than not that some or all of the deferred tax assets will not be realized. The Company continues to retain a valuation allowance against Australia, Portugal, New Zealand, California, Massachusetts, and Michigan deferred tax assets and deferred tax assets that will convert to a capital loss upon reversal in the U.S., as we do not have sufficient income of the appropriate character to benefit these deferred tax assets.

Previous wording

As of April 30, 2024, we had $267 million of gross unrecognized tax benefits, of which $224 million would impact the effective tax rate, if recognized. The remaining $43 million would reduce our valuation allowance, if recognized. The amount of unrecognized tax benefits will immaterially decrease in the next twelve months for statute lapse.

Current wording

As of July 31, 2024, we had $271 million of gross unrecognized tax benefits, of which $228 million would impact the effective tax rate, if recognized. The remaining $43 million would reduce our valuation allowance, if recognized. The amount of unrecognized tax benefits will immaterially decrease in the next twelve months for statute lapses.

Previous wording

We anticipate that the U.S. Department of Treasury will continue to interpret or issue guidance on how provisions of the Tax Act will be applied or otherwise administered. As future guidance is issued, we may adjust the amounts that we have previously recorded that may materially impact our financial statements.

Current wording

The U.S. Tax Cut and Jobs Act (“Tax Act”) enacted on December 22, 2017, eliminates the option to deduct research and development expenditures and requires taxpayers to capitalize and amortize such expenditures over five or fifteen years beginning in fiscal 2023. We anticipate that the U.S. Department of Treasury will continue to interpret or issue guidance on how provisions of the Tax Act will be applied or otherwise administered. As future guidance is issued, we may adjust the amounts that we have previously recorded that may materially impact our financial statements.

Previous wording

Signed into law on December 18, 2023 in Ireland, the Finance (No. 2) Act 2023 provides legislation to implement tax principles arising from proposals made by the Organization for Economic Co-operation and Development to establish a global minimum tax rate of 15%. Autodesk’s assessment of this legislation resulted in additional tax expense having a minimal impact to the consolidated financial statements. Other countries have enacted legislation or are actively considering changes to their tax law. Autodesk will continue to monitor proposed and enacted legislation for potential future impact on its consolidated financial statements.

Current wording

Signed into law on December 18, 2023 in Ireland, the Finance (No. 2) Act 2023 provides legislation to implement tax principles arising from proposals made by the Organization for Economic Co-operation and Development to establish a global minimum tax rate of 15%. The Company’s assessment of this legislation resulted in additional tax expense having a minimal impact to the consolidated financial statements. Other countries have enacted legislation or are actively considering changes to their tax law. The Company will continue to monitor proposed and enacted legislation for potential future impact on its consolidated financial statements.

Previous wording

In addition to our results determined under GAAP discussed above, we believe the following non-GAAP measures are useful to investors in evaluating our operating performance. For the three months ended April 30, 2024 and 2023, our gross profit, income from operations, operating margin, net income, and diluted net income per share on a GAAP and non-GAAP basis were as follows (in millions except for operating margin and per share data):

Current wording

In addition to our results determined under GAAP discussed above, we believe the following non-GAAP measures are useful to investors in evaluating our operating performance. For the three and six months ended July 31, 2024 and 2023, our gross profit, income from operations, operating margin, net income, and diluted net income per share on a GAAP and non-GAAP basis were as follows (in millions except for operating margin and per share data):

Previous wording

At April 30, 2024, our principal sources of liquidity were cash, cash equivalents, and marketable securities totaling $2.23 billion and net accounts receivable of $353 million. In connection with the acquisition of a provider of a cloud-based artificial intelligence pipeline for creating computer-generated 3D characters into live-action scenes in the second quarter fiscal 2025, we used approximately $131 million, net of cash acquired, in readily available cash.

Current wording

At July 31, 2024, our principal sources of liquidity were cash, cash equivalents, and marketable securities totaling $2.11 billion and net accounts receivable of $402 million.

Previous wording

As of April 30, 2024, we have $2.30 billion aggregate principal amount of notes outstanding. See Part I, Item 1, “Financial Statements,” Note 14, “Borrowing Arrangements,” in the Notes to Condensed Consolidated Financial Statements for further discussion.

Current wording

As of July 31, 2024, we have $2.30 billion aggregate principal amount of notes outstanding, with $300 million due in fiscal 2026. See Part I, Item 1, “Financial Statements,” Note 14, “Borrowing Arrangements,” in the Notes to Condensed Consolidated Financial Statements for further discussion.

Previous wording

Our cash and cash equivalents balances are concentrated in a few locations around the world, with substantial amounts held outside of the United States. As of April 30, 2024, approximately 71% of our total cash or cash equivalents are located in foreign jurisdictions and that percentage will fluctuate subject to business needs. There are several factors that can impact our ability to utilize foreign cash balances, such as foreign exchange restrictions, foreign regulatory restrictions, or adverse tax costs. Earnings in foreign jurisdictions are generally available for distribution to the United States with little to no incremental U.S. taxes. We regularly review our capital structure and consider a variety of potential financing alternatives and planning strategies to ensure we have the proper liquidity available in the locations in which it is needed. We expect to meet our liquidity needs through or in combination of current cash balances, ongoing cash flows, and external borrowings.

Current wording

Our cash and cash equivalents balances are concentrated in a few locations around the world, with substantial amounts held outside of the United States. As of July 31, 2024, approximately 77% of our total cash or cash equivalents are located in foreign jurisdictions and that percentage will fluctuate subject to business needs. There are several factors that can impact our ability to utilize foreign cash balances, such as foreign exchange restrictions, foreign regulatory restrictions, or adverse tax costs. Earnings in foreign jurisdictions are generally available for distribution to the United States with little to no incremental U.S. taxes. We regularly review our capital structure and consider a variety of potential financing alternatives and planning strategies to ensure we have the proper liquidity available in the locations in which it is needed. We expect to meet our liquidity needs through or in combination of current cash balances, ongoing cash flows, and external borrowings.

Previous wording

Net cash provided by operating activities of $494 million for the three months ended April 30, 2024, primarily consisted of $252 million of our net income adjusted for $223 million non-cash items such as stock-based compensation expense, and depreciation, amortization, and accretion expense, and deferred income tax. The increase in working capital is primarily due to the change in accounts receivable of $526 million due to the seasonality of our billings in the fourth fiscal quarter and timing of cash collections from customers partially offset by a decrease in deferred revenue of $305 million due to the timing of our billing installments and seasonality of billings in the fourth fiscal quarter.

Current wording

Net cash provided by operating activities of $706 million for the six months ended July 31, 2024, primarily consisted of $534 million of our net income adjusted for $442 million non-cash items such as stock-based compensation expense, and depreciation, amortization, and accretion expense, and deferred income tax. The decrease in working capital is primarily due to a decrease in deferred revenue of $577 million due to the timing of our billing installments and seasonality of billings in the fourth fiscal quarter partially offset by the change in accounts receivable of $477 million due to the seasonality of our billings in the fourth fiscal quarter and timing of cash collections from customers.

Previous wording

Net cash provided by operating activities of $723 million for the three months ended April 30, 2023, primarily consisted of $161 million of our net income adjusted for $187 million non-cash items such as stock-based compensation expense, and depreciation, amortization, and accretion expense, and deferred income tax. Cash provided by working capital increased due to the change in accounts receivable of $630 million due to the seasonality of our billings in the fourth fiscal quarter and timing of cash collections from customers offset in part by the change in accounts payable and other liabilities of $157 million primarily due to the timing of payments related to employee compensation and related costs and a decrease in deferred revenue of $98 million due to the timing of our billing installments and seasonality of billings in the fourth fiscal quarter.

Current wording

Net cash provided by operating activities of $858 million for the six months ended July 31, 2023, primarily consisted of $383 million of our net income adjusted for $400 million non-cash items such as stock-based compensation expense, and depreciation, amortization, and accretion expense, and deferred income tax. Cash provided by working capital increased due to the change in accounts receivable of $559 million due to the seasonality of our billings in the fourth fiscal quarter and timing of cash collections from customers offset in part by a decrease in deferred revenue of $350 million due to the timing of our billing installments and seasonality of billings in the fourth fiscal quarter and the change in accounts payable and other liabilities of $106 million primarily due to the timing of payments related to employee compensation and related costs.

Previous wording

Net cash used in investing activities was $638 million for the three months ended April 30, 2024, primarily due to business combinations, net of cash acquired, and purchases of marketable securities partially offset by the sales and maturities of marketable securities. Net cash used in investing activities was $230 million for the three months ended April 30, 2023, primarily due to purchases of marketable securities partially offset by the sales and maturities of marketable securities.

Current wording

Net cash used in investing activities was $864 million for the six months ended July 31, 2024, primarily due to business combinations, net of cash acquired, and purchases of marketable securities partially offset by the sales and maturities of marketable securities. Net cash used in investing activities was $418 million for the six months ended July 31, 2023, primarily due to purchases of marketable securities partially offset by the sales and maturities of marketable securities.

Previous wording

Net cash used in financing activities was $61 million for the three months ended April 30, 2024, primarily due to taxes paid related to net share settlement of equity awards partially offset by proceeds from issuance of common stock, net of issuance costs and $523 million for the three months ended April 30, 2023, primarily due to repurchases of common stock.

Current wording

Net cash used in financing activities was $221 million for the six months ended July 31, 2024, primarily due to taxes paid related to net share settlement of equity awards and repurchases of common stock and $665 million for the six months ended July 31, 2023, primarily due to repurchases of common stock.

Previous wording

(2)These amounts correspond to the plan publicly announced and approved by the Board of Directors in November 2022 that authorized the repurchase of $5 billion. At April 30, 2024, $4.73 billion remained available for repurchase under the November 2022 repurchase program. The plan does not have a fixed expiration date. See Part I, Item 1, “Financial Statements,” Note 18, “Stockholders' Equity,” in the Notes to the Condensed Consolidated Financial Statements for further discussion.

Current wording

(2)These amounts correspond to the plan publicly announced and approved by the Board of Directors in November 2022 that authorized the repurchase of $5 billion. At July 31, 2024, $4.62 billion remained available for repurchase under the November 2022 repurchase program. The plan does not have a fixed expiration date. See Part I, Item 1, “Financial Statements,” Note 18, “Stockholders' Equity,” in the Notes to the Condensed Consolidated Financial Statements for further discussion.