(Reuters) -Starboard Value on Wednesday launched a boardroom battle at Autodesk, raising concerns over the design software maker’s margins and intensifying the activist investor’s prolonged struggle to effect changes at the company.
Starboard, which holds a $500 million stake in Autodesk, intends to nominate a minority slate of director candidates for election at the 2025 annual meeting, it said in a letter to Autodesk shareholders.
Autodesk did not immediately respond to a Reuters request for comment.
The company’s annual shareholder meeting is scheduled for June 18, Autodesk said in a filing in January.
Autodesk’s shares rose close to 2% in premarket trading. They have fallen more than 12% so far this year, marking a far deeper slump that the S&P 500’s 4.5% drop. The company’s 21.4% gain last year also underperformed the S&P 500’s 23.3% jump in that period.
The company enjoys a unique position in the design software market, with industries like architecture, engineering, construction and product design making extensive use of its 3D design solutions.
“Despite the Company’s market-leading position, Autodesk spends significantly more than a wide range of scaled software peers on operating expenses,” Starboard said, reiterating its previous concerns brought up in August when it urged the company to change its CEO and reign in spending.
While Autodesk’s revenue grew more than 11% in fiscal 2025, its gross margin remained relatively stagnant according to LSEG data, with margin expansion emerging as a key investor concern.
The company in February laid out a restructuring plan including reducing its workforce by about 9% and reallocating resources towards cloud and artificial intelligence.
However, the company’s outlook for 240 basis points of margin improvement in fiscal 2026 underplays the potential impact of these restructuring efforts, which could bring in as much as 500 basis points of margin improvement this year, Starboard said in its letter.
(Reporting by Arsheeya Bajwa in Bengaluru; Editing by Maju Samuel)
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