David Gennarelli - Director of Investor Relations Mark J. Hawkins - Chief Financial Officer and Executive Vice President Carl Bass - Chief Executive Officer, President and Director

Dennis Simson - Crédit Suisse AG, Research Division Brent Thill - UBS Investment Bank, Research Division Daniel T. Cummins - ThinkEquity LLC, Research Division Gregg Moskowitz - Cowen and Company, LLC, Research Division Keith Weiss - Morgan Stanley, Research Division Blair Abernethy - Stifel, Nicolaus & Co., Inc., Research Division Chaitanya Yaramada - Robert W. Baird & Co. Incorporated, Research Division Kash G. Rangan - BofA Merrill Lynch, Research Division Fatima Boolani - Jefferies & Company, Inc., Research Division Steven R. Koenig - Longbow Research LLC Sterling P. Auty - JP Morgan Chase & Co, Research Division Perry Huang - Goldman Sachs Group Inc., Research Division Richard H. Davis - Canaccord Genuity, Research Division Brendan Barnicle - Pacific Crest Securities, Inc., Research Division Walter H. Pritchard - Citigroup Inc, Research Division Jay Vleeschhouwer - Griffin Securities, Inc., Research Division

Good day, ladies and gentlemen, and welcome to the Third Quarter 2012 Autodesk Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded for replay purposes. I would now like to turn the conference over to your host for today, Mr. Dave Gennarelli, Director, Investor Relations. Please proceed, sir.

Thanks, operator. Good afternoon. Thank you for joining our conference call to discuss our third quarter fiscal 2012. Joining me today are Carl Bass, our Chief Executive Officer; and Mark Hawkins, our Chief Financial Officer. Today's conference call is being broadcast live via webcast. In addition, a replay of the call will be available at autodesk.com/investor. As noted on our press release, we have published our prepared remarks on our website in advance of this call. Those remarks are intended to serve in place of extended formal comments, and we will not repeat them on this call. During the course of this conference call, we will make forward-looking statements regarding future events and the future performance of the company, such as our guidance for the fourth quarter and full year fiscal 2012, full year fiscal 2013 and long-term financial model guidance, the factors we use to estimate our guidance, new product and suite releases and expected growth rates, certain future strategic transactions, business prospects and financial results, our market opportunities and strategies and trends in sales initiatives for our products and trends in various geographies and industries. We caution you that such statements reflect our best judgment based on factors currently known to us and that actual events or results could differ materially. Please refer to the documents we file from time to time with the SEC, specifically our Form 10-K for the fiscal year 2011 and Forms 10-Q for the period ended April 30 and July 31, 2011, and our periodic 8-K filings, including the 8-K filed with today's press release and prepared remarks. Those documents contain and identify important risks and other factors that may cause our actual results to differ from those contained in our forward-looking statements. Forward-looking statements made during the call are being made as of today. If this call is replayed or reviewed after today, the information presented on the call may not contain current or accurate information. Autodesk disclaims any obligation to update or revise any forward-looking statements. We will provide guidance on today's call, but will not provide any further guidance or updates on our performance during the quarter, unless we do so in a public forum. During the call, we will also discuss non-GAAP financial measures. These non-GAAP measures are not prepared in accordance with Generally Accepted Accounting Principles. A reconciliation of both GAAP and non-GAAP results is provided in today's press release, prepared remarks and on the Investor Relations section of our website. We will quote a number of numeric or growth changes as we discuss the financial performance and unless otherwise noted, each reference represents a year-on-year comparison. And now I'd like to turn the call over to Carl.

Thanks, Dave, and good afternoon, everyone. Our strong revenue growth was driven by [Technical Difficulty] Thanks, Dave, and good afternoon, everyone. Our strong revenue growth was driven by double-digit growth across all of our major geographies, with particular strength in Asia Pacific. All of our business segments performed well, driven by revenue from Suites. When combined with continued cost controls [Technical Difficulty] When combined with continued cost controls, we achieved solid growth in our non-GAAP operating margin, EPS and cash flow from operations. There were several areas of notable growth and achievement during the quarter, including 15% growth in total revenue, 36% growth in total Suites revenue; 28% growth in revenue from Asia Pacific, 21% growth in our PSEB segment, double-digit growth in both our AEC and manufacturing segments, 18% growth in maintenance billings, 360 basis point improvement in non-GAAP operating margin, 38% growth in non-GAAP EPS and 20% growth in cash flow from operations. This is only the second full quarter that our new design suites have been in the market, and they're off to a terrific start. Our customers realize the significant value delivered in the suites, which is winning us new customers and motivating existing customers to migrate from point products and older suites to our new suites. Over the course of the next few years, we expect Suites to become the majority of our revenue mix. Two weeks from today, at our Autodesk University event, we'll be unveiling our offering for entering the PLM market. As I said previously, we'll be addressing the significant market opportunity with a very unique approach which will enable manufacturers as well as AEC and M&E companies to achieve the full promise of PLM for the first time. Our cloud-based approach will be easy-to-use, implement and deploy. It will be scalable, configurable and intuitive, which is a sharp contrast to the decades-old legacy technology in the market now. We think that customers are starving for this new kind of solution, and Autodesk succeeds in introducing this kind of disruptive technology. Speaking of cloud technology, we recently launched Autodesk Cloud, a collection of more than a dozen web-based capabilities. These services will enable customers to extend their desktops with greater mobility, while offering new viewing and sharing capabilities, and will provide more computing power, helping our users to better design, visualize and simulate their ideas. Along with our product advances, we continually strive to improve our customers' experience. Electronic download has benefited our subscription customers for the past 3 years. We're now aiming to increase the use of electronic delivery in developed countries by making new licenses of most of our products available for electronic delivery. In advance of this action, we initiated a plan to further reduce our already low inventory in the channel during the third quarter, and we will continue to do so in the fourth quarter. Channel inventory was reduced by approximately $10 million in the third quarter in conjunction with this initiative. Over time, we expect to phase in the electronic download availability of new licenses in emerging countries, as well. It's worth noting that channel inventory now stands at only 1.5 weeks. We have a long history of acquiring small businesses and leading-edge technologies and integrating them into the fabric of Autodesk in our products. In the third quarter alone, we closed 10 small but strategically important business and technologies -- and technology acquisitions, totaling close to $90 million net of cash acquired. These transactions were across all of our business units. We believe these purchases are an important component to advancing our products and offerings and delivering more value to our customers. Turning towards our view of FY '12 and beyond, plenty of economic uncertainties remain in each geography around the world, not just the Eurozone. Recall that we started FY '12 with expectations of 10% revenue growth and 200 basis point improvement in our non-GAAP operating margin. Despite some choppiness in the market, our business has performed well, and we believe we are on track to deliver 13% revenue growth and non-GAAP operating margin improvement of between 210 and 240 basis points in FY '12. Earnings growth is expected to be approximately 30%. We're very proud of our accomplishments so far this year. We have achieved this by continuing to focus on prudent cost containment, while making appropriate investments in the business to fuel future growth. We also felt it would be helpful to share with you our initial thoughts about FY '13. We are modeling revenue growth of at least 10% and non-GAAP operating margin improvement of approximately 200 basis points year-over-year. Our recent performance, coupled with our revenue outlook for FY '13, reinforces our confidence in achieving our long-term target of growing revenue by 12% to 14% compounded annually and getting to 30% operating margins by the end of FY '15. We remain highly confident in our market position. Our product portfolio is the most compelling it has ever been. We're very excited about our PLM opportunities, and we remain well positioned to expand our business and better serve our customers and attract new ones. Operator, we would now like to open up the call up for questions.

[Operator Instructions] And our first question comes from the line of Brent Thill of UBS. Brent Thill - UBS Investment Bank, Research Division: Mark, if you could just talk about the guidance for next year, starting at 10%. Maybe if you could just start with your visibility. And for Carl, just on Europe, if you could give us just your view of what's happening. You had decent growth, but obviously Asia-Pacific was outpacing it by quite a bit. So if you could compare and contrast that, that would be helpful. Mark J. Hawkins: Sure, Brent, glad to do so. Our 10% -- at least 10%, and as we look at FY '13, it's based on a kind of a normal process. It is 5 quarters out, but we look very comprehensively with our sales team, with our channel partners. We have a lot of, obviously, data that we get that we factor into a rigorous plan. We feel like this is a solid projection. We feel confident in the guidance. And it's kind of our normal process that we look at. And historically, in Q3, we typically give our fiscal year projection for the following year.

And Brent, we'll update it as we get closer to the beginning of the fiscal year. On Europe, I think -- I don't think our experience is very different than what other companies are seeing and reporting, that I think it's mixed across Europe. Certainly, Southern Europe is fairly weak. Northern and Central Europe is fairly strong, and I think there's a lot of uncertainty about what's going to go on in the Eurozone and in Brussels. Asia Pacific was really strong. It has continued to outpace both the Americas and Europe for a long time, and I expect it to continue to do so.

Our next question comes from the line of Heather Bellini of Goldman Sachs. Perry Huang - Goldman Sachs Group Inc., Research Division: Actually, this is Perry Huang for Heather. On your July earnings call, you had talked about various metrics you are monitoring to keep tabs on the business environment. Could you maybe talk to these indicators again for the October quarter and whether you noted any changes?

Yes. I mean, what we were trying to do, really, if you remember 3 months ago, the world was fearing going into a double-dip. And what I said at the time was we had no great insight into whether we were going, but in looking back at our business, I said if the world does go into a second dip, it'll look different than the first one. And we were trying to monitor all these metrics that we saw, some in front of and some when we look retrospectively of what happened a few years ago. Some of the indicators that we had seen the first time was decreases in our run rate business. Those would be products from our PSEB segment. If you look now, PSEB had a particularly strong quarter. So I would kind of stick to the comments I made before, that that as well as a bunch of the other metrics we looked at, subscription renewals, subscription attach, they were strong. And so like I said before, it's still hard to figure out what's going to go on in Washington and what's going to go on in Brussels. But just looking at our business, we're certainly not seeing the indicators we saw in 2009. If anything, we're seeing contrary indicators.

Our next question comes from the line of Richard Davis from Canaccord. Richard H. Davis - Canaccord Genuity, Research Division: So Carl, as you guys kind of transition and [indiscernible] your PLM product and you presumably put in the cloud and those kinds of things. One of the things that some of the early firms in the space were challenged with is just being able to sell, because PLM is more of a higher level sale than a department sale. How do you sell higher in the organization? Get into the C-Suite, because -- does that require different salesmen? Or how do you think about that, and how do you think about the process, and how should we look at it from the outside?

Good question, Richard. What I would say is we already sell fairly high up. It depends on the account. We've talked about, repeatedly, how our major account business is doing really well. We continue to invest in our major account business. Those are all decisions that are made at the executive suite. We're typically selling in large companies to the CIO or the head of engineering or the head of design. So I think for those customers, we already have a sales force in place. As you get to small-, medium-sized business, I think it's incumbent upon our partners. And many of our partners work at that level, though in smaller companies. So I think it will be different, it's a more holistic sale. It's more of an enterprise sale. But people often misunderstand our business. The fact they say over and over again is nearly 30% of our business comes from 1% of our customers. And in those cases where you look, people have thousands of licenses in mission-critical applications. So I don't think you should mistake the fact that a machine shop down the street has a license of our software with the fact that we're mission-critical and large enterprises. They both exist simultaneously.

Our next question comes from the line of Jay Vleeschhouwer. Jay Vleeschhouwer - Griffin Securities, Inc., Research Division: Carl, I'd like to ask about your Suites and maintenance business and the connection between them. Your Suites business declined some sequentially from the second quarter, although it did grow year-over-year, of course. Your maintenance billings, deducing from your prepared remarks, had a substantially greater decline in absolute terms from the second quarter than we've seen in previous second or third quarters. Although again it was up year-over-year, it was a pretty substantial decline from July. And on the other hand, you added a pretty considerable number to your active maintenance base with the most in the year. Could you perhaps talk about some of those moving parts in terms of Suites and maintenance and the active base?

Yes, I mean the quarter-over-quarter decline in Suites is to be anticipated. One is just the usual seasonality in 2, 3 but the more important thing is the introduction of most of the suites in Q2. So after the big introduction, I would have been very surprised if Q3 was bigger. In terms of maintenance, all of our subscription rates are doing really well. So attach is good. Renewal is well. Everything about that business seems particularly healthy. And in relation to the questioner before, that was another one of the indicators that we saw go down. We're not seeing that at all. So we're really pleased with where we saw the maintenance business going. Jay Vleeschhouwer - Griffin Securities, Inc., Research Division: Okay. Just a couple of quick follow-ups. Earlier this year in Q1, you pointed to some weakness in your infrastructure business, and that may have been due just to some product timing. But could you comment on how that's doing now? And then finally, also earlier this year, you made some changes in terms of your channel segmentation, with some airline-like platinum status and so forth. Could you talk about how those changes in your channel structure or certifications may have had any discernible incremental benefits thus far this year?

Yes. So let me just go -- let me just broaden your infrastructure question to the general AEC question. Two quarters ago, people were questioning a lot about the health of the AEC business and trying to extrapolate from there one thing or another. I tried to point out at the time something that remains true, has always been true, is that if you really want to understand how we serve architecture, engineering and construction, you have to look at the combination of what we report as AEC and PSEB. That one was particularly low in AEC 2 quarters ago. The other point I've made repeatedly is I try not to read too much into any one quarter's number in one particular area. And my logic around that is we have a capacity constraint system with various incentives. And under that, you see behavior that goes on within a quarter. That's not very controllable. Over time, when it becomes a trend, then you should take note of it, and we certainly do and try to do something about it. So overall, I'd say our AEC business is doing well. You can see it in the AEC number alone, as well as the fraction of the PSEB business. Along with that, infrastructure is doing well. There were some timing issues also that we brought up in 2 quarters ago. Had a lot to do with the introduction of suites, the introduction of the Infrastructure Suite in particular. Those are all things that came out later in the year in the U.S., as well as in other geographies and languages. Jay Vleeschhouwer - Griffin Securities, Inc., Research Division: Okay. And the channel question?

Oh, the channel question. I was so busy answering that one, Jay. No, we continue to make incremental changes. I think if you just try to step back and not try to dissect too finely any moves in our programs, but look at it more holistically, generally what we're trying to do is reward our partners who put in the most work and accomplish the most. And given the regulatory framework in which we operate the business conditions, there are various ways that we're able to incent people and make sure that the people who do the most work and contribute the most, provide the most value to the customers, get paid the most. And that's what we continue to do. And you've seen some changes this year. I think the introduction of a premier status. And I think you'll see some changes coming in the channel framework for next year, as well. But all keeping in mind that the goal remains to reward the people who do the most work.

Our next question comes from the line of Walter Pritchard of Citigroup. Walter H. Pritchard - Citigroup Inc, Research Division: Two questions. One, on Manufacturing. If I look at your 2 peers in that space that have already reported, Parametric and Dassault. It looks like they grew a little bit faster, and I thought of you as potentially being a share gainer there. And I know we're looking at one quarter of data here. But I'm wondering how you're -- on a competitive front in Manufacturing, what you're seeing and where you think the share battle is being fought in terms of that market?

Yes. So first thing, again, the part of PSEB that is not AEC is primarily Manufacturing. So again, when you look at Manufacturing, it's not our as reported number. You have to look at both those numbers together. And if you put the 2 together, I'd continue to say that we're growing. We're growing faster than our competitors. When you look at things like seed counts, and market share is measured by install base, we're growing much faster than our competitors there, as well. One of the other things to remember is when you look at some of the competitors out there, they're actually growing in areas where we don't even compete, and vice-versa. So I think when you look at things where we both compete, which is design and engineering software, as well as analysis software, by both the seed count and the revenue count, we're growing much faster. I love the position we're in, in Manufacturing. We're kind of the underdog. We're kind of the disruptor. We democratize technology. We have a broader product portfolio than anybody. We have a better product portfolio. I'd hold it up against anybody in the industry. And if you just look back, last quarter was the biggest quarter ever in Manufacturing history, and it grew 20% year-over-year. So I'm really happy with where we're going. And I'm really excited about what we're doing around PLM, because I think that's going to be a big game changer in terms of how we're able to serve customers and how we'll proceed in the market. Walter H. Pritchard - Citigroup Inc, Research Division: And just, Mark, on the comment around 0.5 percentage point of reduction in channel inventory -- or I guess 0.5 week of reduction in channel inventory and the $10 million impact. I mean, should we think about that as having gone straight to revenue? And I'm curious was that in your guidance or not? And just want to clarify that. Mark J. Hawkins: Yes. No, absolutely want to help you with that, Walter. First of all, for channel inventory, just to step away back from it. We only recognize revenue when we sell into the channel. So the fact that we did not sell into the channel, basically, and achieve these numbers -- if we would -- said differently, if would have kept the channel inventory flat, we would have had about $10 million more revenue, okay? Just so you understand from that standpoint. Does that answer your question? Walter H. Pritchard - Citigroup Inc, Research Division: It does. That makes sense. And I assume, were you expecting other guidance or not? Or is it insignificant? Mark J. Hawkins: Yes. In fact, this is comprehended in our guidance in Q3. And then also in Q4, as we talk about in the prepared remarks, we're going to take the channel down further. That's comprehensive into our guidance, as well. And you should see a natural kind of correlation with that in backlog. But this is absolutely correlated. And I think...

Again, I say the plan is not blind. We went into the quarter thinking we might do some. The quarter proved strong and we decided we could reduce and do it gracefully without any impact to our partners or our customers. And I'd say the same thing. We've contemplated a level of reduction in Q4. We might be slightly more aggressive if business is stronger than expected.

Our next question comes from the line of Sterling Auty of JPMorgan. Sterling P. Auty - JP Morgan Chase & Co, Research Division: Carl, when Adobe introduced Creative Suite 1, they got a definite benefit from Photoshop users that were not using Illustrator that always kind of wanted to but couldn't afford it, or didn't want to pay the price and vice-versa. When you look at the suites that you have available and the feedback that you've gotten so far, are there natural synergies between 1, 2 or 3 products that are now bundled together that are really making the difference on the suited option?

Yes. I think the 2 products that are coming along in Suites, one is 3ds Max. That many people have always wanted visualization capabilities. For others, it's AutoCAD or some flavor of AutoCAD that's in there, as well. Those are probably the 2 big ones. I think industry-by-industry, it's a little bit different with different customers latching onto it. We're really getting our first complete data right now about not only what they buy, but what customers use. And we'll have more data as this goes on. We're studying it pretty closely to understand the adjacency. And if you remember, we also have the 3 tiers of products. So it's interesting not only what people buy, but I'm interested in watching the migration over time between the various levels and the stack. Sterling P. Auty - JP Morgan Chase & Co, Research Division: Okay, and one follow-up. Mark, now the acquisitions you've been doing are small, but they're starting to add up. When you do the number of acquisitions that you did like in this last quarter, how should we think about the cumulative impact or contribution to revenue, or accumulative impact to earnings? Mark J. Hawkins: Yes. First of all, Sterling, this is factored into our guidance as we look at Q4. And obviously we comprehend this, and as we think about the future. We did 10 strategic deals that are small in nature, as you've noted. A number of them are intellectual property that will be worked into the overall portfolio over time. We have a few other ones that we've disclosed publicly, ones like Instructables and grid and map and things of that nature. But I think the way to think about this is a lot of these are the core technology that's going into the business. Some have revenue generation, as well, but each one of those is not material, otherwise, we would make a further public disclosure about that. And all that we see is comprehended into our view for the future.

Yes. I think if you just want to understand a little bit directionally where we're looking, there are really pretty much 2 things that we're trying to do with most of these acquisitions. As Mark said, they're mostly -- they're either IP or they're very small teams and technologies. And what we're generally trying to do is, one, is expand into adjacent markets. So when you see a particular kind of engineering or analysis software, it's adjacent to a market we're in and we're trying to round out the offering. And particularly as we package things into suites, we want to be able to give our customers a complete workflow that answers their problems. And the second thing is, as we've talked about many times, we're into going a platform technology transition. And so there are a bunch of technologies that we're getting in order to make sure that we're the best provider of engineering tools in the cloud.

Our next question comes from the line of Brendan Barnicle of Pacific Crest Securities. Brendan Barnicle - Pacific Crest Securities, Inc., Research Division: Carl, I wanted to follow up on, I think, a question that Jay had been trying to get at a little bit earlier, which was whether you're starting to see any change in maintenance pricing as a result of the introduction of Suites?

So the answer to the question is the maintenance pricing is higher on Suites than stand-alone products. And we're seeing no differential in discounting or anything around that. So as people have Suites, or higher value products, our average for maintenance is going up as well. Brendan Barnicle - Pacific Crest Securities, Inc., Research Division: And when do you think it gets to be material enough that you've got enough of the sort of install base on Suites that way, that it starts to have a material impact on the subscription number?

I think you'll start seeing it next year. Brendan Barnicle - Pacific Crest Securities, Inc., Research Division: Great. And then following up on the strength in Asia Pac, how much of that was related to sort of the recovery in Japan? Or how broad-based was that?

I didn't know there was a recovery in Japan. But I think it was pretty broadly based. Japan did well. But everywhere in Asia Pacific did reasonably well. I think what it's generally true is our fastest growing areas, whether Asia Pacific or emerging countries, are also our most volatile. And we see ups and downs, country by country, discipline by discipline, as also in emerging countries between the different ones quarter-to-quarter. They just are more volatile, and we saw a little bit of it this time. It seemed like everything kind of lined up this time in Asia Pacific. Brendan Barnicle - Pacific Crest Securities, Inc., Research Division: And then lastly, Mark, on gross margins. Those have been down year-over-year for the last 2 quarters. When do you think we might start to see those start to improve year-over-year again? Mark J. Hawkins: Well again, we're looking at -- one of the things that we think about, Brendan, is the broader operating margin. And of course you're seeing that expansion with the projection for the year between 210 and 240 basis points. Some of the downward pressure on the gross margin, which is kind of the subtext of the broader profitability, has to do with us as we have penetrated major accounts and enterprise. In some cases there's consulting work and such that's required and it has a little bit of a margin effect. You can see it's not a big effect on the year-on-year basis, but that is a dynamic that's happening. I think the most important thing that I would point to, Brendan, is just looking for the operating margin expansion in total, and knowing the geography will move a little bit here and there. Should be no sharp turns, but a little bit.

Our next question comes from the line of Blair Abernethy of Stifel, Nicolaus. Blair Abernethy - Stifel, Nicolaus & Co., Inc., Research Division: Mark, just following on that. I'm wondering if you could give us a little more review into your margins for next year, your operating margin expansion of 200-plus basis points. Is that -- can you give us a sense of how much of that is just going to come from operating leverage or -- versus ongoing productivity improvements? Mark J. Hawkins: Yes. Well I think there'll be both, Blair, from that standpoint. We'll get all the leverage we can. We'll look at each of the different areas we've got plans that were driving efficiencies really across multiple functions. And we have concerted efforts and initiatives to do that. You should expect both. It will be in both leverage and productivity items. I wasn't wanting to get into specific detail of all the initiatives that we have. We have a thing called an operating council, where there's large queue of activities that we work together on at the highest level in the company to really drive scale, basically. That is a long list of things that we're executing on. We have a plan well thought out as we go into FY '13, ideas that we'll capitalize on. But leverage is important, too. Blair Abernethy - Stifel, Nicolaus & Co., Inc., Research Division: Okay, great. And Carl, just, I don't know if you're willing to or not, but on the PLM side, what's your strategy in terms of target verticals you might be going after, or customer size you might be going after in the early days?

I think we'll see. Right now, we're finding 2 segments in particular. The large enterprise customers who are frustrated or disappointed with existing PLM offerings seem to be surprisingly receptive to it. That's probably the big surprise we've had as we've done out in beta, is we originally thought it would be appropriate for small and medium businesses. We've understood what PLM could do for them, but couldn't afford it. So we thought that was it. What we're finding is huge desire on the part of large manufacturers who are just frustrated with the previous offering. I mean, I think in some ways you compare this -- this is the same thing as Salesforce is to Siebel, or Workday is to PeopleSoft. I think this is exactly the same kind of dynamic where -- that was technology that was good in its time, but much of this technology dates back 20 years. And now there's just a much better way to deploy and it's much more effective. And I think we've -- what I underestimated a little bit during the year as we went through the planning on this is just how ready large customers are to move to the cloud. They're doing it with all kinds of offerings. And the question amongst the very large company CIOs is, "How do I go about this transformation? How does it integrate with my existing systems," much more so than what we had heard a year or 2 ago, which were lots of concerns about privacy and security and other stuff. So I think there's a greater willingness amongst the large customers to move there than we anticipated. Blair Abernethy - Stifel, Nicolaus & Co., Inc., Research Division: Okay. And are you -- is it a recurring revenue model or ratable revenue model? Is that the approach you're taking?

Yes, it's a ratable revenue model.

And our next question comes from the line of Kash Rangan of Merrill Lynch. Kash G. Rangan - BofA Merrill Lynch, Research Division: On the last question, I thought that Jay was going to ask on the PLM side. Clearly this is something that the manufacturing customers had been asking for. It's a nice job of introducing their product. Carl, just curious how long the product has been in beta, or is it still in alpha stage? What kind of feedback are you getting from customers? And also secondarily, how much of the PLM revenue is baked into your forecast for fiscal '13? And I have a follow-up.

Okay. So I'll start with -- there's almost no revenue baked in. And by the way, our pricing model and the business model doesn't look to dissimilar from some of the SaaS companies I mentioned. That part of the business, things like bookings will be a better indicator than revenue because they will be back-end loaded. And everything you've learned from following companies like that, you should apply at least to this part of the business. So there's not a lot of it baked in at all. The feedback that we're getting so far is that -- it's way exceeding our expectations. We're just surprised by how warm the reception is, and probably leave it for now at that. We'll be showing more of it in 2 weeks at Autodesk University, so for people who want to come there or who will be there already, you can see it in action. There will be customers who have used it. And as we head into the first months of the calendar year, you'll see a more public release of it. Kash G. Rangan - BofA Merrill Lynch, Research Division: Got it. And so, Carl, is it fair to assume that the subscription price of the PLM solution will probably be less than what customers are paying for the maintenance of their legacy PLM solutions?

Easily. It will easily do that. I also think, in many cases, what's happened with this PLM systems is they're kind of like the Chernobyl of the enterprise. They've gotten encased in concrete and they're in there. And really what the CIOs are trying to figure out is, "how do I work around the system?" And there are many of the users within the enterprise who are not served, who they've never been able to roll it out for. The prices are too expensive to reach large parts. And for almost everyone, the behind-the-firewall approach doesn't work for the current way they're doing business. Their businesses have moved far along. Both their suppliers and their customers -- suppliers, customers and employees are accessing information in new ways, and they want a more modern approach. Kash G. Rangan - BofA Merrill Lynch, Research Division: Got it. And one for you Mark, one final. The maintenance billings have been growing nicely, but there's been a trend of the maintenance subscription revenue growth rate actually lagging that. Just curious, what point could we start to see -- and also license growth has been far outpacing maintenance revenue, as a secondary observation there. Just curious, at what point is the real growth of subscription revenue really start to pick up from this point? Mark J. Hawkins: Well I think, again, the billings, we were certainly pleased with an 18% growth year-on-year for the subscription. And I think over time, we've talked a little bit before, Kash, there's a few moving parts, but over time, that will show up in our revenue. We don't give forward-looking guidance for subscription revenue, but growth of 18% year-on-year is a good dynamic. And over time we'll see that, and it will fuel [ph] it. You know how it works, that it's ratably recognized, divided by 12, most of it, some is multiyear. But hopefully, that will give you a sense. You're right on the track that it -- you'll see the growth come out in revenue over time.

Our next question comes from Gregg Moskowitz of Cowen. Gregg Moskowitz - Cowen and Company, LLC, Research Division: First question, I guess, for Mark. Just in terms of the shift to electronic delivery going forward, does that have an effect on margins in fiscal '13, or will it take a little longer to have an impact on the model? Mark J. Hawkins: Gregg, it will take a little bit of time. Partly is just we have to have the customers adopt that. But over time, we've factored in all that will happen with the electronic delivery in terms of efficiencies. But it will be a process that will evolve over the course of the year. Gregg Moskowitz - Cowen and Company, LLC, Research Division: Okay, perfect. And then just for Carl, I'm just curious to get your latest thoughts on hiring over the next several months, and from a go-to-market perspective, where you think you stand in terms of selling your PLM going forward.

Yes. I don't see drastic changes in our hiring pattern. Most of the hiring we've done absent the acquisitions has been for more salespeople. We will continue to hire more direct salespeople. On the other hand, our percentage of business through our major accounts has remained fairly constant. So I like the mix that we have right now, but most of the efforts or most of the investment will go to go-to-market activities and sales and marketing. But we have particular emphasis on the PLM, because as some of the people have already pointed out, it's a somewhat different nature of a sale. And we want to go as broad as we possibly can and be successful with it.

Our next question comes from the line of Philip Winslow of Credit Suisse. Dennis Simson - Crédit Suisse AG, Research Division: This is Dennis Simson for Phil. When you think about the FY '13 revenue guidance, which segments out of federal, construction, manufacturing do you think will grow above or below that 10% average?

I think if you want -- generally, we don't give any segment-by-segment forecasting. I think if you want to look back at historical trends and try to guess from there, Manufacturing has been the fastest and steadiest grower. I would expect that to continue. I see nothing to disrupt that trend. The big unknown, particularly as we start getting further out, is what happens in the worldwide economy around construction. We're having really great pickup in the construction part of AEC. Business has certainly stabilized, and in parts of the world, it's improving. So a little bit depends on something that my crystal ball is not that clear about, certainly towards the end of next year, what happens with the global AEC market. Mark J. Hawkins: I would certainly, I'd just -- we talked on the product side and such. It's certainly, geographically, Asia will help. As Carl said, if you looked backward, we would certainly expect that trend to continue, as well.

Our next question comes from the line of Steve Koenig of Longbow Research. Steven R. Koenig - Longbow Research LLC: Just 2 kind of qualitative questions here for you. The first one, just wondering about changes to the channel and how you manage them. We understand some of the resellers have expressed concern about opening them up to more competition as you open up the certification process. So my understanding is there won't be as rigorous product-specific certification required. I'm guessing that goes hand-in-hand with the adoption of your suites. I'm wondering, how do we think about that impact on your revenues, on the channel, and on the street pricing of your products?

So I think the way to look at it is while we've taken the authorization scheme and made it more open, at the same time, we've introduced a whole host of programs that are pay-for-value. And as I said earlier on the call, our goal is to reward the people who do the most work and are the most successful. So the only way it's made sense to open up on the authorization side is because we have these other programs in place. So what you're seeing is a combination of a number of programs coming together that we think can, even better than we've ever been able to, rewards the people who are the most successful. So I think that's what you're seeing, and if you hear griping out there, I would just say historically, almost every change we've made in the channel is met with some amount of griping. Probably the loudest I've heard in my career was the introduction of subscription, which has turned out to be, I think, a major benefit for both Autodesk and our channel partners. So I think -- and typically our channel partners have incomplete information as they hear about new programs. The only thing I would say is we've worked hand-in-hand with our partners for over 25 years. Our partners have gotten stronger during that time, and we continue to want to reward the best partners. And they're an integral part of our plan going forward. So when you see these changes, you have to know how important our channel partners are to us, and all the plans we're putting in place to make sure that they're successful along with us. Steven R. Koenig - Longbow Research LLC: Okay. And I'll have just one follow-up here, which is really in regards to your suites. You've talked a little bit about how the maintenance pricing on the combined suite ends up being better than one individual product. You should expect to see that somewhat in the revenues next year. I'm just wondering, given that customers can upgrade but they can't really downgrade, how do you -- how would you go about maintaining the customer value that you're delivering in those suite subscriptions as those subscriptions comes up for renewals? And the customers may be using a large part of their suite but maybe not all of it yet.

Yes. I think it's a great insight. I mean, we're spending a lot of time watching not only the purchase but the adoption and usage of the suites. We think once people are using more than one product, it becomes a value to them. And if you look at the prices, it makes sense. So we're very cognizant of how widely it's adopted and how broadly it's used in order to do that. Along with it, we made several introductions this year of various other technologies. Most of the cloud offerings are tied to our subscription. So we're continuing to increase the value of subscription as being more than just the annual delivery of new functionality in packaged software. We're also making sure that there's constant engagement with web services that provide ongoing value.

Our next question comes from the line of Keith Weiss of Morgan Stanley. Keith Weiss - Morgan Stanley, Research Division: I wanted to ask about -- it seemed like in the press release there was more language about cost controls from both Carl and Mark than we've seen in prior quarters. I just wanted to check to see, are there any new initiatives in there, or any kind of new programs that you guys have embarked on? Or is this just sort of the traditional cost control, and perhaps just more of a focus on a given media on certain macro environments?

No. I think, if anything, our cost controls have been balanced with investment for the future. And so we're always looking for places where there's slop, or kind of gunk in the system. Try to eliminate as much as that. And particularly when we see new opportunities, would I rather spend $2 million too much on travel or get $2 million worth of sales capacity to sales -- to sell PLM? So I think along with Mark and his team's help, we've been looking really carefully at all the costs. But it really is in balance with making sure that we're positioned for the future and being able to make the investments that we think are necessary for the future. More than anything -- so if you saw anything that's dramatically different, it wasn't intentional, and it's not really reflective of anything going on. I think, having said that, I think everybody in the middle of this year, inside Autodesk and outside, took pause as there was that moment of panic, and just wanted to make sure that none of the sloppiness was seeping back into the system after the big purge of 2 years ago. Mark J. Hawkins: I completely agree with Carl's point. And just -- we understand the duality, Keith, of investing, as Carl said. And then also chasing out the efficiencies that we should get only in the areas that makes sense, in the back-office, areas of that nature.

Yes. And in many cases, this is kind of a win, win, win. If you look at something like electronic software delivery, over time it's going to lower the costs, but it provides a much better experience for our customers. So it also gets our resellers out of a bunch of non-value-added work. And so you look at the combination and you say that it's, first of all, good for customers, it's good for partners, it's good for us. And those are the kind of initiatives that I really like to see. Keith Weiss - Morgan Stanley, Research Division: Excellent. And if I could sneak in one follow-up. Just on use of cash, considering [ph] trends this quarter in use of cash with 10 acquisitions. But you also saw a nice pickup in your repurchase activity, 3.5 million shares this quarter. To what extent do you expect those to continue, both those trends? One, is 10 deals in one quarter, is that an anomaly? Is that something unusual, or is that going to really pick up on a go-forward basis in terms of just taking up those smaller technology deals? And as far as repurchase, how much of that was related just to the fact that the share price got really low and you took advantage of it, or how much is a bigger commitment to repurchasing shares?

Well let me answer the question about the acquisitions and Mark can handle the one about stock repurchase. I think the acquisition is somewhat anomalous if you go back over any period of time. It just so happened a whole bunch of stuff just lined up this quarter. It wasn't particularly intentional. But -- and as you see, it was $90 million in aggregate for 10 acquisitions. And there were a couple that were large enough to talk about, which means the others were really small. But I wouldn't read too much into it. I would be surprised. 10 acquisitions is generally about what we've been averaging per year, not per quarter, and I don't see really any change in the historical rate. Mark J. Hawkins: And Keith, on the share buyback, you're absolutely correct in that we did step up a bit in this particular quarter. But what I would say to you is our philosophy hasn't changed in terms of covering our dilution. It just, again, will be a little bit lumpy at times. We'll look at the market and facts and circumstances. But the broader picture on the policy hasn't changed. But we'll look at the market and look at the situation.

Our next question comes from the line of Steve Ashley of Robert Baird. Chaitanya Yaramada - Robert W. Baird & Co. Incorporated, Research Division: This is Chaitanya Yaramada for Steve Ashley. Just quickly, you noted a large $11 million deal in Asia Pacific in the prepared comments. Was this deal included in the guidance you gave last quarter?

Not specifically this deal. All our deals are kind of factored in with the probability of closing in a particular quarter. So we had been working on that particular deal for a long time, as well as others. Some deals fell in this quarter. Some deals fell out this quarter. Big deal activity for us is not that important. We've often talked about the linearity of the quarters all through. And so what we saw this time as this one happened to close. There are at least a few deals that we anticipated in our guidance closing. They are now closed, but didn't close by the end of the quarter. Chaitanya Yaramada - Robert W. Baird & Co. Incorporated, Research Division: Okay, great. And then a follow-up. If you can just give us some color on the education vertical, given it was their year ender in the quarter. If you can comment on how did that vertical do versus your expectations?

Yes. Our education revenue is not really substantial. No big plus or minuses there. No surprises.

Our next question comes from the line of Fatima Boolani of Jefferies. Fatima Boolani - Jefferies & Company, Inc., Research Division: This is Fatima in for Ross MacMillan. Quick question on your direct sales force investment. You've mentioned that this is an area of priority in terms of investments at your Analyst Day, and you've reiterated that again. But just in terms of where these feet on the street are, is it sort of a regional thing, or the focus is just on bolstering the U.S.-based direct sales force?

The effort has been broad. It's in some of the areas we're looking at. So first all, if you just look geographically, it's been broad. It's not just the U.S. It's certainly been in Europe. It's certainly been in Asia, as well as the emerging countries in all 3 geos. Generally speaking, it's been for those areas that we've called out as being new, and those in which there are large entities that kind of dominated. So one is in the area of construction. Certainly there's some in the area of Manufacturing. Those are the kind of places where we're looking. So it's kind the cross product of looking at the geography and then the economic structure of the industry. And so as we've gone into construction as opposed to broad-based AEC, that's something where it makes more sense to go to market with a direct sales force. The same thing is absolutely true as we look at PLM. For a certain class of enterprise customer, it's a direct sell. Fatima Boolani - Jefferies & Company, Inc., Research Division: Okay. And just another question regarding Suites. Now that Suites are kind of in the 1 year, 1.5 year in stage for a lot of the newer ones, what are your plans around promotional campaigns? Are they going to be scaled back a bit, or are they going to become more aggressive as the new fiscal year begins?

Yes. So we're really 1/2 a year into having Suites. We had introduced some at the end of last year, more as tests and pilots to better understand what's going on. The spring and going to the summer was the first introduction. So I'd say we're still early in it. We're adjusting the knobs and dials. A bunch of the questions that have already come up on the call were analyzing the data. "What are people buying? Where are they finding value? Which things are they using?" So we're going to continue to monitor closely the activity around Suites. And we will definitely adjust prices, packaging, as well as promotions as we look to maximize our investment there.

Our last question comes from the line of Dan Cummins of ThinkEquity. Daniel T. Cummins - ThinkEquity LLC, Research Division: Okay. A final blast of AEC questions. With regard to the published comments about record AEC business and public agencies, just looking for color. Is that largely a comment about U.S. federal? Is there anything meaningful from other geographies? Was this good performance the result of longer lead time project business or more short term in nature? And just quick follow-ups.

Yes. I would just say general overall improvement worldwide in AEC. So I think when you look -- for awhile, construction had dramatically slowed down worldwide. I think you've seen a stabilizing and, in fact, growth in certain areas. I think the government deals are more one-off, but aren't the major determinants of growth overall in the sector. Daniel T. Cummins - ThinkEquity LLC, Research Division: Okay. Yes. There's some optimism there in terms of going forward, I guess, curiosity around, are you talking about stuff that's identifiable in the current sales funnel. But I hear what you're saying about short-term opportunities. if I could just move on...

I was just going to say one thing, Dan. I mean, if you really want to look at it, what I think is driving it is the stabilization in the overall market coupled with the retooling efforts that we've talked about, where people want to get tools that make them more productive. So generally speaking, as people are going into the downturn, they were less interested in retooling. Now, as they start to see job prospects on the future, starts for buildings increasing, they want to make sure they're in the best position to compete for those. And when they win them, that they can perform them as effectively as possible. The big shift in our business has been from a business that originally served primarily the architects and somewhat the engineers, our engineering capabilities have gone out dramatically, and we have invested quite a bunch to make sure that we serve the builders, or the construction part of AEC. So I think there's overall secular trends going on there in terms of the adoption and technology in the industry that's being bolstered or supported by a general improvement in the overall economy. Daniel T. Cummins - ThinkEquity LLC, Research Division: I guess, just last thing was just you mentioned penetrating utilities. Is that notable breakthrough? You have been talking about this as kind of a multiyear objective. Just some more color on that, too.

Yes. I think if you look -- in addition to the things that we're doing with broad-based industry, you can look at things like utilities, where we're doing in transportation, the Department of Transportation, those are long sales cycles. And we've continued to invest in it. We think we have great products to serve those needs, but it's not a decision any of those entities take slightly. They don't do it particularly quickly. It takes us a long time. And we're in it for the long term, and we've continued to make those investments. And both in utilities, as well as in transportation agencies, we're starting to see the payoff.

With no further questions, I would like to turn the call back over to Dave Gennarelli for closing remarks.

Thanks. So first of all, I want to apologize for the technical quality at the beginning of the call and the interruptions. Secondly, I want to mention that in a couple of weeks, as Carl mentioned, that we have our Autodesk University event. We'll be hosting an Investor Relations event there on the 29th. Most of you are going to be there. We're also going to be at the Crédit Suisse Conference in Scottsdale on November 30, and the NASDAQ London Conference on December 6 in London. And with that, we'll conclude the call and thanks for joining us.

Ladies and gentlemen, that concludes today's conference. Thank you for your participation. You may disconnect at this time. Have a great day.