Welcome!

@CloudExpo Authors: Jason Bloomberg, Pat Romanski, Elizabeth White, Leon Adato, Harry Trott

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
From 2013, NTT Communications has been providing cPaaS service, SkyWay. Its customer’s expectations for leveraging WebRTC technology are not only typical real-time communication use cases such as Web conference, remote education, but also IoT use cases such as remote camera monitoring, smart-glass, and robotic. Because of this, NTT Communications has numerous IoT business use-cases that its customers are developing on top of PaaS. WebRTC will lead IoT businesses to be more innovative and address...
Blockchain is a shared, secure record of exchange that establishes trust, accountability and transparency across business networks. Supported by the Linux Foundation's open source, open-standards based Hyperledger Project, Blockchain has the potential to improve regulatory compliance, reduce cost as well as advance trade. Are you curious about how Blockchain is built for business? In her session at 21st Cloud Expo, René Bostic, Technical VP of the IBM Cloud Unit in North America, will discuss th...
While some vendors scramble to create and sell you a fancy solution for monitoring your spanking new Amazon Lambdas, hear how you can do it on the cheap using just built-in Java APIs yourself. By exploiting a little-known fact that Lambdas aren’t exactly single-threaded, you can effectively identify hot spots in your serverless code. In his session at @DevOpsSummit at 21st Cloud Expo, Dave Martin, Product owner at CA Technologies, will give a live demonstration and code walkthrough, showing how ...
SYS-CON Events announced today that CA Technologies has been named “Platinum Sponsor” of SYS-CON's 21st International Cloud Expo®, which will take place October 31-November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. CA Technologies helps customers succeed in a future where every business – from apparel to energy – is being rewritten by software. From planning to development to management to security, CA creates software that fuels transformation for companies in the applic...
Cloud adoption is often driven by a desire to increase efficiency, boost agility and save money. All too often, however, the reality involves unpredictable cost spikes and lack of oversight due to resource limitations. In his session at 20th Cloud Expo, Joe Kinsella, CTO and Founder of CloudHealth Technologies, tackled the question: “How do you build a fully optimized cloud?” He will examine: Why TCO is critical to achieving cloud success – and why attendees should be thinking holistically ab...
As more and more companies are making the shift from on-premises to public cloud, the standard approach to DevOps is evolving. From encryption, compliance and regulations like GDPR, security in the cloud has become a hot topic. Many DevOps-focused companies have hired dedicated staff to fulfill these requirements, often creating further siloes, complexity and cost. This session aims to highlight existing DevOps cultural approaches, tooling and how security can be wrapped in every facet of the bu...
Internet of @ThingsExpo, taking place October 31 - November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 21st Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The Internet of Things (IoT) is the most profound change in personal and enterprise IT since the creation of the Worldwide Web more than 20 years ago. All major researchers estimate there will be tens of billions devic...
WebRTC is great technology to build your own communication tools. It will be even more exciting experience it with advanced devices, such as a 360 Camera, 360 microphone, and a depth sensor camera. In his session at @ThingsExpo, Masashi Ganeko, a manager at INFOCOM Corporation, will introduce two experimental projects from his team and what they learned from them. "Shotoku Tamago" uses the robot audition software HARK to track speakers in 360 video of a remote party. "Virtual Teleport" uses a...
yperConvergence came to market with the objective of being simple, flexible and to help drive down operating expenses. It reduced the footprint by bundling the compute/storage/network into one box. This brought a new set of challenges as the HyperConverged vendors are very focused on their own proprietary building blocks. If you want to scale in a certain way, let’s say you identified a need for more storage and want to add a device that is not sold by the HyperConverged vendor, forget about it....
SYS-CON Events announced today that Calligo has been named “Bronze Sponsor” of SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Calligo is an innovative cloud service provider offering mid-sized companies the highest levels of data privacy. Calligo offers unparalleled application performance guarantees, commercial flexibility and a personalized support service from its globally located cloud platform...
As DevOps methodologies expand their reach across the enterprise, organizations face the daunting challenge of adapting related cloud strategies to ensure optimal alignment, from managing complexity to ensuring proper governance. How can culture, automation, legacy apps and even budget be reexamined to enable this ongoing shift within the modern software factory?
SYS-CON Events announced today that Elastifile will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 - Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Elastifile Cloud File System (ECFS) is software-defined data infrastructure designed for seamless and efficient management of dynamic workloads across heterogeneous environments. Elastifile provides the architecture needed to optimize your hybrid cloud environment, by facilitating efficient...
SYS-CON Events announced today that Cloudistics, an on-premises cloud computing company, has been named “Bronze Sponsor” of SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Launched in 2016, Cloudistics helps anyone bring the power of the cloud to the data center in an easy-to-use, on- premises cloud platform that automatically provides high performance resources for all types of applications: Docke...
With Cloud Foundry you can easily deploy and use apps utilizing websocket technology, but not everybody realizes that scaling them out is not that trivial. In his session at 21st Cloud Expo, Roman Swoszowski, CTO and VP, Cloud Foundry Services, at Grape Up, will show you an example of how to deal with this issue. He will demonstrate a cloud-native Spring Boot app running in Cloud Foundry and communicating with clients over websocket protocol that can be easily scaled horizontally and coordinate...
@DevOpsSummit at Cloud Expo taking place Oct 31 - Nov 2, 2017, at the Santa Clara Convention Center, Santa Clara, CA, is co-located with the 21st 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 ...
SYS-CON Events announced today that Golden Gate University will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Since 1901, non-profit Golden Gate University (GGU) has been helping adults achieve their professional goals by providing high quality, practice-based undergraduate and graduate educational programs in law, taxation, business and related professions. Many of its courses are taug...
SYS-CON Events announced today that Golden Gate University will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Since 1901, non-profit Golden Gate University (GGU) has been helping adults achieve their professional goals by providing high quality, practice-based undergraduate and graduate educational programs in law, taxation, business and related professions. Many of its courses are taug...
DevOps at Cloud Expo, taking place October 31 - November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 21st 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 w...
SYS-CON Events announced today that Secure Channels, a cybersecurity firm, will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Secure Channels, Inc. offers several products and solutions to its many clients, helping them protect critical data from being compromised and access to computer networks from the unauthorized. The company develops comprehensive data encryption security strategie...
Vulnerability management is vital for large companies that need to secure containers across thousands of hosts, but many struggle to understand how exposed they are when they discover a new high security vulnerability. In his session at 21st Cloud Expo, John Morello, CTO of Twistlock, will address this pressing concern by introducing the concept of the “Vulnerability Risk Tree API,” which brings all the data together in a simple REST endpoint, allowing companies to easily grasp the severity of t...