New trade on Autodesk

Shares of Autodesk gapped up last week from $97.50 to over $110/share on the news of a positive earnings report. The company has been losing money and going through a transformation to move from software licenses to SaaS subscription recurring revenue and it seems to be paying off. Ninety percent of their revenue is now recurring, and this should bode well for their future in many ways such as predictability of revenue, less lumpiness from software sales, fewer opportunities for people to use their products without paying, etc...

Their product portfolio seems stronger than ever with a push toward generative design, and using cloud computing and AI to drive optimal designs for products given a set of engineering constraints and parameters. We believe that the company and the industry is in the early innings around how this will transform the future of design, and Autodesk is positioned as a leader in this category. With a market cap of ~$24B, a stable revenue stream, and a solid product portfolio we like Autodesk's outlook, but wouldn't buy shares at current prices.

We are selling the October $85 Puts for $1.10, which would allow us to purchase shares at a lower price or to keep the premium if shares remain above this strike price.