Welcome!

@CloudExpo Authors: Elizabeth White, Liz McMillan, Kong Yang, Mark Hauser, Yeshim Deniz

News Feed Item

Adobe Reports Record Quarterly and Annual Revenue

Adobe Systems Incorporated (Nasdaq:ADBE) today reported financial results for its fourth quarter and fiscal year ended Nov. 30, 2012.

Adobe achieved revenue in Q4 FY2012 of $1.153 billion, exceeding its targeted range of $1.075 billion to $1.125 billion. During the quarter, the Company continued to accelerate adoption of Adobe® Creative Cloud™ as it migrates to a subscription model. Adobe also achieved record Adobe Marketing Cloud and Document Services revenue during the fourth quarter.

For fiscal year 2012, Adobe achieved record revenue of $4.4 billion.

Fourth Quarter Financial Highlights

  • Diluted earnings per share were $0.44 on a GAAP-basis, and $0.61 on a non-GAAP basis.
  • Operating income was $307.8 million and net income was $222.3 million on a GAAP basis. Operating income was $414.7 million and net income was $307.9 million on a non-GAAP basis.
  • Cash flow from operations was $473.7 million.
  • Deferred revenue grew by $59.3 million to a record $619.6 million.
  • Adobe added approximately 10,000 Creative Cloud subscriptions per week during the quarter, versus the addition of 8,000 subscriptions per week in the third quarter.
  • In Document Services, which includes the Adobe Acrobat® product family, Adobe also achieved record revenue of $210.2 million during the quarter.
  • Adobe Marketing Cloud achieved record quarterly revenue of $220.4 million, which represents 32 percent year-over-year growth.

A reconciliation between GAAP and non-GAAP results is provided at the end of this press release.

Fiscal Year 2012 Financial Highlights

  • Adobe achieved record revenue of $4.404 billion. Annual GAAP diluted earnings per share for fiscal 2012 were $1.66, and annual non-GAAP diluted earnings per share were $2.35.
  • Annual operating income was $1.180 billion and net income was $833 million on a GAAP basis. Annual operating income was $1.597 billion and net income was $1.183 billion on a non-GAAP basis.
  • Adobe generated $1.5 billion in cash flow during the year.
  • Creative Cloud paid subscriptions grew to 326,000 as of the end of the year, with exiting annualized recurring revenue of $153 million for the Creative business.
  • Document Services achieved record annual revenue of $786 million.
  • Adobe Marketing Cloud achieved a record $777 million in reported annual revenue, representing 35 percent year-over-year growth.
  • The company repurchased 11.5 million shares during the year, returning approximately $372 million of cash to stockholders.

Executive Quotes

“We beat our Creative Cloud subscription goals and established Adobe Marketing Cloud as the leader in the exploding category of Digital Marketing during fiscal 2012,” said Shantanu Narayen, president and chief executive officer, Adobe. “In fiscal 2013 we intend to accelerate our pace of innovation, and drive integration between Creative Cloud and Adobe Marketing Cloud.”

“We're driving migration to a subscription model in our Creative business faster than we predicted a year ago, and we are confident fiscal 2013 will be the pivotal year for the transition,” said Mark Garrett, executive vice president and chief financial officer, Adobe. “This will yield a stronger, more predictable recurring revenue model with higher long-term revenue growth.”

Adobe to Webcast Earnings Conference Call

Adobe will webcast its fourth quarter and fiscal year 2012 earnings conference call today at 2:00 p.m. Pacific Time from its investor relations website: www.adobe.com/ADBE. The company will discuss financial targets for the first quarter of fiscal 2013 as well as fiscal year 2013 on its Q4 and FY2012 earnings call. A copy of Adobe management’s prepared remarks, including financial targets and conference call slides, has been posted to Adobe’s investor relations website in advance of the conference call for reference.

A reconciliation between GAAP and non-GAAP financial targets is also provided on the website.

Forward-Looking Statements Disclosure

This press release contains forward-looking statements, including those related to the transition of our business as we migrate to a subscription model, increases in recurring revenue, long-term revenue growth and our ability to continue to innovate and execute against our strategy in our key growth areas and drive integration between those areas, which involve risks and uncertainties that could cause actual results to differ materially. Factors that might cause or contribute to such differences include, but are not limited to: failure to develop, market and distribute products and services that meet customer requirements, introduction of new products and business models by competitors, failure to successfully manage transitions to new business models and markets, including our increased emphasis on a cloud and subscription strategy, fluctuations in subscription renewal or upgrade rates, continued uncertainty in economic conditions and the financial markets, difficulty in predicting revenue from new businesses and the potential impact on our financial results from changes in our business models, and failure to realize the anticipated benefits of past or future acquisitions.

For a discussion of these and other risks and uncertainties, please refer to Adobe’s Annual Report on Form 10-K for the fiscal year ended December 2, 2011 and its Quarterly Reports on Form 10-Q for the fiscal quarters ended March 2, 2012, June 1, 2012 and Aug. 31, 2012.

The financial information set forth in this press release reflects estimates based on information available at this time. These amounts could differ from actual reported amounts stated in Adobe’s Annual Report on Form 10-K for our year ended Nov. 30, 2012, which Adobe expects to file in Jan. 2013.

Adobe assumes no obligation to, and does not currently intend to, update these forward-looking statements.

About Adobe Systems Incorporated

Adobe is changing the world through digital experiences. For more information, visit www.adobe.com.

© 2012 Adobe Systems Incorporated. All rights reserved. Adobe, the Adobe logo, Creative Cloud and Acrobat are either registered trademarks or trademarks of Adobe Systems Incorporated in the United States and/or other countries. All other trademarks are the property of their respective owners.

 

Condensed Consolidated Statements of Income

(In thousands, except per share data; unaudited)

 
  Three Months Ended   Year Ended
November 30,
2012
  December 2,
2011
November 30,
2012
  December 2,
2011
Revenue:
Products $ 852,843 $ 931,895 $ 3,342,843 $ 3,416,483
Subscription 194,537 128,437 673,206 458,634
Services and support 106,048   91,829   387,628   341,141  
Total revenue 1,153,428   1,152,161   4,403,677   4,216,258  
 
Cost of revenue:
Products 28,687 34,048 121,663 125,640
Subscription 59,308 51,334 219,102 194,033
Services and support 36,983   30,997   143,017   118,200  
Total cost of revenue 124,978   116,379   483,782   437,873  
 
Gross profit 1,028,450 1,035,782 3,919,895 3,778,385
 
Operating expenses:
Research and development 195,047 195,403 742,823 738,053
Sales and marketing 402,181 368,330 1,516,159 1,385,822
General and administrative 111,449 119,586 434,982 414,605
Restructuring and other related charges (275 ) 94,502 (2,917 ) 97,773
Amortization of purchased intangibles 12,283   11,830   48,657   42,833  
Total operating expenses 720,685   789,651   2,739,704   2,679,086  
 
Operating income 307,765 246,131 1,180,191 1,099,299
 
Non-operating income (expense):
Interest and other income (expense), net (718 ) (1,351 ) (3,414 ) (2,974 )
Interest expense (16,767 ) (16,774 ) (67,487 ) (66,952 )
Investment gains (losses), net 351   5,174   9,504   5,857  
Total non-operating income (expense), net (17,134 ) (12,951 ) (61,397 ) (64,069 )
Income before income taxes 290,631 233,180 1,118,794 1,035,230
Provision for income taxes 68,298   59,461   286,019   202,383  
Net income $ 222,333   $ 173,719   $ 832,775   $ 832,847  
Basic net income per share $ 0.45   $ 0.35   $ 1.68   $ 1.67  
Shares used to compute basic net income per share 494,906   491,523   494,731   497,469  
Diluted net income per share $ 0.44   $ 0.35   $ 1.66   $ 1.65  
Shares used to compute diluted net income per share 502,154   496,288   502,721   503,921  
 

Condensed Consolidated Balance Sheets

(In thousands, except par value; unaudited)

   
November 30,
2012
December 2,
2011
ASSETS
 
Current assets:
Cash and cash equivalents $ 1,425,052 $ 989,500
Short-term investments 2,113,301 1,922,192
Trade receivables, net of allowances for doubtful accounts of $12,643 and $15,080, respectively 617,233 634,373
Deferred income taxes 59,537 91,963
Prepaid expenses and other current assets 116,237   133,423  
Total current assets 4,331,360 3,771,451
 
Property and equipment, net 664,302 527,828
Goodwill 4,133,259 3,849,217
Purchased and other intangibles, net 545,036 545,526
Investment in lease receivable 207,239 207,239
Other assets 93,327   89,922  
Total assets $ 9,974,523   $ 8,991,183  
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
Current liabilities:
Trade payables $ 49,759 $ 86,660
Accrued expenses 590,140 554,941
Capital lease obligations 11,217 9,212
Accrued restructuring 9,287 80,930
Income taxes payable 49,886 42,634
Deferred revenue 561,463   476,402  
Total current liabilities 1,271,752 1,250,779
 
Long-term liabilities:
Debt and capital lease obligations 1,496,938 1,505,096
Deferred revenue 58,102 55,303
Accrued restructuring 12,263 7,449
Income taxes payable 155,096 156,958
Deferred income taxes 265,106 181,602
Other liabilities 50,084   50,883  
Total liabilities 3,309,341 3,208,070
 
Stockholders' equity:
Preferred stock, $0.0001 par value; 2,000 shares authorized
Common stock, $0.0001 par value 61 61
Additional paid-in-capital 3,038,665 2,753,896
Retained earnings 7,003,003 6,528,735
Accumulated other comprehensive income 30,712 29,950
Treasury stock, at cost (106,702 and 109,294 shares, respectively), net of reissuances (3,407,259 ) (3,529,529 )
Total stockholders' equity 6,665,182   5,783,113  
Total liabilities and stockholders' equity $ 9,974,523   $ 8,991,183  
 

Condensed Consolidated Statements of Cash Flows

(In thousands; unaudited)

 
Three Months Ended
November 30,
2012
  December 2,
2011
Cash flows from operating activities:
Net income $ 222,333 $ 173,719
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and accretion 78,621 73,290
Stock-based compensation expense 73,535 72,527
Unrealized investment gains (281 ) (5,811 )
Changes in deferred revenue 59,232 47,399
Changes in other operating assets and liabilities 40,219   135,629  
Net cash provided by operating activities 473,659   496,753  
 
Cash flows from investing activities:
Purchases, sales and maturities of short-term investments, net (33,250 ) 18,826
Purchases of property and equipment (81,789 ) (74,897 )
Purchases of long-term investments, intangibles and other assets, net of sales (14,436 ) (51,684 )
Acquisitions, net of cash   (151,925 )
Net cash used for investing activities (129,475 ) (259,680 )
 
Cash flows from financing activities:
Purchases of treasury stock (100,000 )
Reissuance of treasury stock 19,089 1,191
Repayment of debt and capital lease obligations (2,985 ) (2,243 )
Excess tax benefits from stock-based compensation 3,477   853  
Net cash used for financing activities (80,419 ) (199 )
Effect of exchange rate changes on cash and cash equivalents (1,093 ) (16,586 )
Net increase in cash and cash equivalents 262,672 220,288
Cash and cash equivalents at beginning of period 1,162,380   769,212  
Cash and cash equivalents at end of period $ 1,425,052   $ 989,500  
 

Non-GAAP Results

(In thousands, except per share data)

The following tables show Adobe's GAAP results reconciled to non-GAAP results included in this release.

   
Three Months Ended Year Ended

November 30,
2012

 

December 2,
2011

 

August 31,
2012

November 30,
2012

 

December 2,
2011

Operating income:
 
GAAP operating income $ 307,765 $ 246,131 $ 278,304 $ 1,180,191 $ 1,099,299
Stock-based and deferred compensation expense 76,248 75,450 80,682 300,277 286,048
Restructuring and other related charges (275 ) 94,502 2,374 (2,917 ) 97,773
Amortization of purchased intangibles   30,912     28,444     30,410     119,890     104,005  
Non-GAAP operating income $ 414,650   $ 444,527   $ 391,770   $ 1,597,441   $ 1,587,125  
 
Net income:
 
GAAP net income $ 222,333 $ 173,719 $ 201,357 $ 832,775 $ 832,847
Stock-based and deferred compensation expense 76,248 75,450 80,682 300,277 286,048
Restructuring and other related charges (275 ) 94,502 2,374 (2,917 ) 97,773
Amortization of purchased intangibles 30,912 28,444 30,410 119,890 104,005
Investment (gains) losses (351 ) (5,174 ) (944 ) (9,504 ) (5,857 )
Income tax adjustments   (20,962 )   (34,347 )   (22,685 )   (57,290 )   (131,400 )
Non-GAAP net income $ 307,905   $ 332,594   $ 291,194   $ 1,183,231   $ 1,183,416  
 
Diluted net income per share:
 
GAAP diluted net income per share $ 0.44 $ 0.35 $ 0.40 $ 1.66 $ 1.65
Stock-based and deferred compensation expense 0.15 0.15 0.16 0.60 0.57
Restructuring and other related charges 0.19 (0.01 ) 0.19
Amortization of purchased intangibles 0.06 0.06 0.06 0.24 0.21
Investment (gains) losses (0.01 ) (0.02 ) (0.01 )
Income tax adjustments   (0.04 )   (0.07 )   (0.04 )   (0.12 )   (0.26 )
Non-GAAP diluted net income per share $ 0.61   $

0.67

  $ 0.58   $ 2.35   $ 2.35  
 

Shares used in computing diluted net income per share

502,154 496,288 499,757 502,721 503,921
 

Operating expenses:

 

 

GAAP operating expenses

$

720,685

$

789,651

$

682,655

$

2,739,704

$

2,679,086

Stock-based and deferred compensation expense

(70,658

)

(71,435

)

(75,762

)

(280,746

)

(270,268

)

Restructuring and other related charges

275

(94,502

)

(2,374

)

2,917

(97,773

)

Amortization of purchased intangibles

 

(12,283

)

 

(11,830

)

 

(12,331

)

 

(48,657

)

 

(42,833

)

Non-GAAP operating expenses

$

638,019

 

$

611,884

 

$

592,188

 

$

2,413,218

 

$

2,268,212

 
 
 

Three Months
Ended

November 30,
2012

Effective income tax rate:
 
GAAP effective income tax rate 23.5 %
Stock-based and deferred compensation expense (0.7 )
Amortization of purchased intangibles (0.3 )
Non-GAAP effective income tax rate 22.5 %
 

Adobe continues to provide all information required in accordance with GAAP, but believes evaluating its ongoing operating results may not be as useful if an investor is limited to reviewing only GAAP financial measures. Accordingly, Adobe uses non-GAAP financial information to evaluate its ongoing operations and for internal planning and forecasting purposes. Adobe's management does not itself, nor does it suggest that investors should, consider such non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Adobe presents such non-GAAP financial measures in reporting its financial results to provide investors with an additional tool to evaluate Adobe's operating results in a manner that focuses on what Adobe believes to be its ongoing business operations. Adobe's management believes it is useful for itself and investors to review, as applicable, both GAAP information that includes the stock-based and deferred compensation expenses, restructuring charges, amortization of purchased intangibles, investment gains and losses and the related tax impact of all of these items, income tax adjustments, the income tax effect of the non-GAAP pre-tax adjustments from the provision for income taxes, and the non-GAAP measures that exclude such information in order to assess the performance of Adobe's business and for planning and forecasting in subsequent periods. Whenever Adobe uses such a non-GAAP financial measure, it provides a reconciliation of the non-GAAP financial measure to the most closely applicable GAAP financial measure. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measure as detailed above.

More Stories By Business Wire

Copyright © 2009 Business Wire. All rights reserved. Republication or redistribution of Business Wire content is expressly prohibited without the prior written consent of Business Wire. Business Wire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

@CloudExpo Stories
In his session at 20th Cloud Expo, Scott Davis, CTO of Embotics, will discuss how automation can provide the dynamic management required to cost-effectively deliver microservices and container solutions at scale. He will discuss how flexible automation is the key to effectively bridging and seamlessly coordinating both IT and developer needs for component orchestration across disparate clouds – an increasingly important requirement at today’s multi-cloud enterprise.
SYS-CON Events announced today that Super Micro Computer, Inc., a global leader in compute, storage and networking technologies, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Supermicro (NASDAQ: SMCI), the leading innovator in high-performance, high-efficiency server technology, is a premier provider of advanced server Building Block Solutions® for Data Center, Cloud Computing, Enterprise IT, Hadoop/...
With billions of sensors deployed worldwide, the amount of machine-generated data will soon exceed what our networks can handle. But consumers and businesses will expect seamless experiences and real-time responsiveness. What does this mean for IoT devices and the infrastructure that supports them? More of the data will need to be handled at - or closer to - the devices themselves.
SYS-CON Events announced today that DatacenterDynamics has been named “Media Sponsor” of SYS-CON's 18th International Cloud Expo, which will take place on June 7–9, 2016, at the Javits Center in New York City, NY. DatacenterDynamics is a brand of DCD Group, a global B2B media and publishing company that develops products to help senior professionals in the world's most ICT dependent organizations make risk-based infrastructure and capacity decisions.
SYS-CON Events announced today that Hitachi, the leading provider the Internet of Things and Digital Transformation, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Hitachi Data Systems, a wholly owned subsidiary of Hitachi, Ltd., offers an integrated portfolio of services and solutions that enable digital transformation through enhanced data management, governance, mobility and analytics. We help globa...
NHK, Japan Broadcasting, will feature the upcoming @ThingsExpo Silicon Valley in a special 'Internet of Things' and smart technology documentary that will be filmed on the expo floor between November 3 to 5, 2015, in Santa Clara. NHK is the sole public TV network in Japan equivalent to the BBC in the UK and the largest in Asia with many award-winning science and technology programs. Japanese TV is producing a documentary about IoT and Smart technology and will be covering @ThingsExpo Silicon Val...
Keeping pace with advancements in software delivery processes and tooling is taxing even for the most proficient organizations. Point tools, platforms, open source and the increasing adoption of private and public cloud services requires strong engineering rigor – all in the face of developer demands to use the tools of choice. As Agile has settled in as a mainstream practice, now DevOps has emerged as the next wave to improve software delivery speed and output. To make DevOps work, organization...
The explosion of new web/cloud/IoT-based applications and the data they generate are transforming our world right before our eyes. In this rush to adopt these new technologies, organizations are often ignoring fundamental questions concerning who owns the data and failing to ask for permission to conduct invasive surveillance of their customers. Organizations that are not transparent about how their systems gather data telemetry without offering shared data ownership risk product rejection, regu...
Building a cross-cloud operational model can be a daunting task. Per-cloud silos are not the answer, but neither is a fully generic abstraction plane that strips out capabilities unique to a particular provider. In his session at 20th Cloud Expo, Chris Wolf, VP & Chief Technology Officer, Global Field & Industry at VMware, will discuss how successful organizations approach cloud operations and management, with insights into where operations should be centralized and when it’s best to decentraliz...
The 20th International Cloud Expo has announced that its Call for Papers is open. Cloud Expo, to be held June 6-8, 2017, at the Javits Center in New York City, brings together Cloud Computing, Big Data, Internet of Things, DevOps, Containers, Microservices and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding business opportunity. Submit your speaking proposal ...
“DevOps is really about the business. The business is under pressure today, competitively in the marketplace to respond to the expectations of the customer. The business is driving IT and the problem is that IT isn't responding fast enough," explained Mark Levy, Senior Product Marketing Manager at Serena Software, in this SYS-CON.tv interview at DevOps Summit, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
@DevOpsSummit at Cloud taking place June 6-8, 2017, at Javits Center, New York City, is co-located with the 20th International Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to wait for long developm...
Grape Up is a software company, specialized in cloud native application development and professional services related to Cloud Foundry PaaS. With five expert teams that operate in various sectors of the market across the USA and Europe, we work with a variety of customers from emerging startups to Fortune 1000 companies.
Financial Technology has become a topic of intense interest throughout the cloud developer and enterprise IT communities. Accordingly, attendees at the upcoming 20th Cloud Expo at the Javits Center in New York, June 6-8, 2017, will find fresh new content in a new track called FinTech.
@GonzalezCarmen has been ranked the Number One Influencer and @ThingsExpo has been named the Number One Brand in the “M2M 2016: Top 100 Influencers and Brands” by Analytic. Onalytica analyzed tweets over the last 6 months mentioning the keywords M2M OR “Machine to Machine.” They then identified the top 100 most influential brands and individuals leading the discussion on Twitter.
Cloud Expo, Inc. has announced today that Aruna Ravichandran, vice president of DevOps Product and Solutions Marketing at CA Technologies, has been named co-conference chair of DevOps at Cloud Expo 2017. The @DevOpsSummit at Cloud Expo New York will take place on June 6-8, 2017, at the Javits Center in New York City, New York, and @DevOpsSummit at Cloud Expo Silicon Valley will take place Oct. 31-Nov. 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
Cognitive Computing is becoming the foundation for a new generation of solutions that have the potential to transform business. Unlike traditional approaches to building solutions, a cognitive computing approach allows the data to help determine the way applications are designed. This contrasts with conventional software development that begins with defining logic based on the current way a business operates. In her session at 18th Cloud Expo, Judith S. Hurwitz, President and CEO of Hurwitz & ...
SYS-CON Events announced today that Interoute, owner-operator of one of Europe's largest networks and a global cloud services platform, has been named “Bronze Sponsor” of SYS-CON's 20th Cloud Expo, which will take place on June 6-8, 2017 at the Javits Center in New York, New York. Interoute is the owner-operator of one of Europe's largest networks and a global cloud services platform which encompasses 12 data centers, 14 virtual data centers and 31 colocation centers, with connections to 195 add...
Today we can collect lots and lots of performance data. We build beautiful dashboards and even have fancy query languages to access and transform the data. Still performance data is a secret language only a couple of people understand. The more business becomes digital the more stakeholders are interested in this data including how it relates to business. Some of these people have never used a monitoring tool before. They have a question on their mind like “How is my application doing” but no id...
With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo 2016 in New York. Learn what is going on, contribute to the discussions, and ensure that your enterprise is as "IoT-Ready" as it can be! Internet of @ThingsExpo, taking place June 6-8, 2017, at the Javits Center in New York City, New York, is co-located with 20th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry p...