Debbie Clifford
Executive Vice President, Chief Financial Officer at Autodesk
Thanks Andrew. Our financial performance in the fourth quarter and for the fiscal year was strong, particularly in our enterprise business. Early renewals and strong upfront revenue from enterprise business agreements or EBAs and federal governments drove some of the outperformance relative to our expectations in both Q4 billings and revenue. Overall market conditions and the underlying momentum of the business were consistent with the last few quarters. Total revenue grew 11% and 14% in constant currency, with upfront revenue driving 2 percentage points of that growth. By product, in constant currency, AutoCAD and AutoCAD LT revenue grew 7%, AEC revenue grew 18%, manufacturing revenue grew 16% and M&E revenue was up 8%. AEC and manufacturing benefited from EBA, true up and upfront revenue.
By region and constant currency revenue grew 19% in the Americas, 11% in EMEA and 8% in APAC. Direct revenue increased 19% and represented 39% of total revenue, up 3 percentage points from last year, benefiting from strong growth in both EBAs and the Autodesk Store. Net revenue retention rate remained within the 100% to 110% range at constant exchange rates. Billings declined 19% in the quarter, resulting from the transition from upfront to annual billings for multiyear contracts as expected, though slightly offset by some early renewals in North America. As part of our implementation sequencing for the new transaction model, we shifted our North American price increase from the end of March to the beginning of February. This resulted in some renewals moving from Q1, fiscal 2025 to Q4 fiscal 2024, which modestly boosted billings in January.
Total deferred revenue decreased 7% to $4.3 billion, an expected result of the transition from upfront to annual billings for multiyear contracts. Total RPO of $6.1 billion and current RPO of $4 billion grew 9% and 13% respectively. Early renewals drove about 1 percentage point of current RPO growth. Total RPO growth decelerated in Q4 when compared to Q3 when we closed our largest ever EBA. The year-over-year deceleration was due to the lower mix of multiyear contracts in fiscal 2024 when compared to fiscal 2023, which I mentioned last quarter.
In line with recent quarters and our expectations, we again saw some evidence of multiyear customers switching to annual contracts during the quarter. Turning to the P&L, GAAP and non-GAAP gross margin were broadly level, while operating margin was modestly lower in the fourth quarter, primarily due to the timing of Autodesk University costs shifting from Q3 to Q4, which we flagged last quarter. As expected, full year non-GAAP operating margin was level year over year but up about 1 percentage point at constant exchange rates.
Fourth quarter GAAP operating margin was up 40 basis points year-over-year and about one percentage point at constant exchange rates, partly due to a reduction in stock-based compensation as a percent of revenue. At current course and speed, the ratio of stock based compensation as a percent of revenue peaked in fiscal 2024. We expect it to fall to 10% or lower over time. Free cash flow for the quarter and full year was $427 million and $1.28 billion respectively, with early renewals providing a modest tailwind in the fourth quarter. The most significant free cash flow headwinds from our transition from upfront to annual billings for multiyear contracts are now behind us, which means our free cash flow troughed during fiscal 2024 and will mechanically rebuild over the next few years.
Turning to capital allocation, we continue to actively manage capital within our framework and deploy it with discipline and focus through the economic cycle to drive long term shareholder value. As you heard from Andrew, we continue to invest organically and through complementary acquisitions to enhance our capabilities and the industry clouds and platform that underpin them. During the quarter, we purchased approximately 300,000 shares for $63 million at an average price of approximately $217 per share. We have now offset estimated dilution from our stock-based compensation program well into fiscal 2026.
We will continue to repurchase shares opportunistically to offset dilution from stock-based compensation when it makes sense to do so. Now, let me finish with guidance. Overall, end market demand has remained pretty consistent over the last few quarters. Macroeconomic and one-off factors like the Hollywood Writers strike dragged on the new business growth rate during fiscal 2024 more, and will modestly drag on revenue growth in fiscal 2025. But Autodesk's resilience and robust underlying demand for its products and services reinforce its long term growth potential.
Turning to revenue, I want to highlight four key puts and takes impacting growth in fiscal 2025. First, let me talk about the new transaction model. We've added some slides to the earnings deck to help illustrate how to think about this shift, which I'll briefly summarize. The new transaction model enables Autodesk to build closer, more direct relationships with its customers and partners and to better understand and serve them with more data, more self service and greater predictability. It will be a cornerstone of the data services that Andrew talked about earlier. As you can see from Slide 11, the transition mechanically drives higher revenue and costs, is broadly neutral to operating profit and free cash flow dollars, and is a headwind to operating margin percent.
About $600 million of payments made to resellers in developed markets in fiscal 2024 were accounted for as contra revenue. As this business moves to the new transaction model, these payments will shift to marketing and sales expense over the next few years all else equal with the timing of cost recognition not materially different than before. The change affects a substantial majority of our business but note that emerging markets and our federal government business will remain on the buy-sell model for the foreseeable future.
The pace of the shift will primarily be determined by the mechanical build from rateable subscription revenue accounting and the rate of regional rollout of the new transaction model. While the former is relatively easy to predict given the rateable revenue recognition of our subscription business model, which builds over time, the latter will in part be determined by what we learn as we roll out the model further. We gained useful insights from the successful rollout in Australia and we're expecting to learn more as we roll out with much higher volumes in North America this year. We will be able to apply those learnings when we launch in EMEA. Our fiscal 2025 guidance assumes the new transaction model is deployed in North America in Q2 of fiscal 2025 and provides about 1 percentage point tailwind to Autodesk's revenue growth and a 3 point to 4 point tailwind to billings growth.
Second, the acquisition of Payapps, which closed on February 20, is expected to contribute about 0.5 point of revenue growth in fiscal 2025. Third, token consumption for the fiscal 2021 EVA cohort exceeded consumption predictions made during the pandemic, which resulted in true up payments in fiscal 2024. Token consumption in the smaller, post pandemic, fiscal 2022 EVA cohort is tracking more in line with predictions, which means we expect fewer true up payments in fiscal 2025. This pandemic echo effect is about a point of headwind to fiscal 2025 revenue growth. And fourth, our rolling four quarter, foreign exchange hedges means that FX is expected to be about a 1 percentage point headwind to reported revenue growth in fiscal 2025. Bringing this all together, we expect revenue of between $5.99 billion and $6.09 billion in fiscal 2025, which translates into revenue growth of about 9% to 11% compared to fiscal 2024.
Adjusting the midpoint of our guidance to exclude noise from the new transaction model, acquisitions, the absence of EBA true-up revenue and FX, we expect underlying revenue to grow more than 10% in fiscal 2025. Moving onto margins, we're going to manage our non-GAAP operating margins between a range of 35% and 36% in fiscal 2025, with the goal of keeping them roughly level with fiscal 2024. This means we expect a roughly one point underlying margin improvement will be broadly offset by the margin headwinds from the new transaction model.
As we transition to the new transaction model, we'll see operating margin headwinds from the accounting change of moving reseller costs from contra-revenue to sales and marketing expense. We'll also have incremental investment in people, processes and automation but over the long term, we expect that this transition to the new transaction model will enable us to further optimize our business, which we anticipate will provide a tailwind to revenue, operating income and free cash flow dollars, even after the incremental costs we expect to incur. Moving on to free cash flow, we expect to generate between $1.43 billion and $1.5 billion of free cash flow in fiscal 2025. In Australia, some channel partners accelerated renewals ahead of the transition to the new transaction model to derisk month one of the transition.
Because the new transaction model will be rolled out in Q2 in North America, it may be that the behavior we saw in Australia occurs also in North America, which may accelerate billings and free cash flow to earlier quarters, but should not materially change the outlook for the year. Excluding $200 million from fiscal 2024 free cash flow for multiyear upfront billings, which are now billed annually, in fiscal 2025 we expect free cash flow growth of about 35% at the midpoint of our guidance. We expect faster free cash flow growth in fiscal 2026 because of the return of our largest multiyear renewal cohort, the mechanical stacking of multiyear contracts billed annually, and a larger EBA cohort.
As we navigate the new transaction model transition, the pace of the rollout will create noise in the P&L, so we think free cash flow is the best measure of our performance. At current course and speed, our free cash flow estimate for fiscal 2026 at the midpoint is approximately $2.05 billion, which is in line with consensus estimates. In the context of significant macroeconomic, geopolitical, policy, health and climate uncertainty the mechanical rebuilding of our free cash flow as we transition to annual billings for multiyear contracts gives Autodesk an enviable source of visibility and certainty.
We continue to manage our business using a rule of 40 framework with a goal of reaching 45% or more over time. We are taking significant steps toward our goal this year and next. We think this balance between compounding growth and strong free cash flow margins captured in the rule of 40 framework is the hallmark of the most valuable companies in the world and we intend to remain one of them. The slide deck on our website has more details on modeling assumptions for Q1 and full year fiscal 2025.
Andrew, back to you.
