Welcome!

Containers Expo Blog Authors: Yeshim Deniz, Pat Romanski, Elizabeth White, Maria C. Horton, Liz McMillan

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.

@ThingsExpo Stories
In his keynote at 19th Cloud Expo, Sheng Liang, co-founder and CEO of Rancher Labs, discussed the technological advances and new business opportunities created by the rapid adoption of containers. With the success of Amazon Web Services (AWS) and various open source technologies used to build private clouds, cloud computing has become an essential component of IT strategy. However, users continue to face challenges in implementing clouds, as older technologies evolve and newer ones like Docker c...
Personalization has long been the holy grail of marketing. Simply stated, communicate the most relevant offer to the right person and you will increase sales. To achieve this, you must understand the individual. Consequently, digital marketers developed many ways to gather and leverage customer information to deliver targeted experiences. In his session at @ThingsExpo, Lou Casal, Founder and Principal Consultant at Practicala, discussed how the Internet of Things (IoT) has accelerated our abilit...
When shopping for a new data processing platform for IoT solutions, many development teams want to be able to test-drive options before making a choice. Yet when evaluating an IoT solution, it’s simply not feasible to do so at scale with physical devices. Building a sensor simulator is the next best choice; however, generating a realistic simulation at very high TPS with ease of configurability is a formidable challenge. When dealing with multiple application or transport protocols, you would be...
Data is the fuel that drives the machine learning algorithmic engines and ultimately provides the business value. In his session at Cloud Expo, Ed Featherston, a director and senior enterprise architect at Collaborative Consulting, discussed the key considerations around quality, volume, timeliness, and pedigree that must be dealt with in order to properly fuel that engine.
Two weeks ago (November 3-5), I attended the Cloud Expo Silicon Valley as a speaker, where I presented on the security and privacy due diligence requirements for cloud solutions. Cloud security is a topical issue for every CIO, CISO, and technology buyer. Decision-makers are always looking for insights on how to mitigate the security risks of implementing and using cloud solutions. Based on the presentation topics covered at the conference, as well as the general discussions heard between sessio...
Detecting internal user threats in the Big Data eco-system is challenging and cumbersome. Many organizations monitor internal usage of the Big Data eco-system using a set of alerts. This is not a scalable process given the increase in the number of alerts with the accelerating growth in data volume and user base. Organizations are increasingly leveraging machine learning to monitor only those data elements that are sensitive and critical, autonomously establish monitoring policies, and to detect...
Dion Hinchcliffe is an internationally recognized digital expert, bestselling book author, frequent keynote speaker, analyst, futurist, and transformation expert based in Washington, DC. He is currently Chief Strategy Officer at the industry-leading digital strategy and online community solutions firm, 7Summits.
In his session at @ThingsExpo, Arvind Radhakrishnen discussed how IoT offers new business models in banking and financial services organizations with the capability to revolutionize products, payments, channels, business processes and asset management built on strong architectural foundation. The following topics were covered: How IoT stands to impact various business parameters including customer experience, cost and risk management within BFS organizations.
Recently, REAN Cloud built a digital concierge for a North Carolina hospital that had observed that most patient call button questions were repetitive. In addition, the paper-based process used to measure patient health metrics was laborious, not in real-time and sometimes error-prone. In their session at 21st Cloud Expo, Sean Finnerty, Executive Director, Practice Lead, Health Care & Life Science at REAN Cloud, and Dr. S.P.T. Krishnan, Principal Architect at REAN Cloud, discussed how they built...
In his keynote at 18th Cloud Expo, Andrew Keys, Co-Founder of ConsenSys Enterprise, provided an overview of the evolution of the Internet and the Database and the future of their combination – the Blockchain. Andrew Keys is Co-Founder of ConsenSys Enterprise. He comes to ConsenSys Enterprise with capital markets, technology and entrepreneurial experience. Previously, he worked for UBS investment bank in equities analysis. Later, he was responsible for the creation and distribution of life settl...
IoT solutions exploit operational data generated by Internet-connected smart “things” for the purpose of gaining operational insight and producing “better outcomes” (for example, create new business models, eliminate unscheduled maintenance, etc.). The explosive proliferation of IoT solutions will result in an exponential growth in the volume of IoT data, precipitating significant Information Governance issues: who owns the IoT data, what are the rights/duties of IoT solutions adopters towards t...
With tough new regulations coming to Europe on data privacy in May 2018, Calligo will explain why in reality the effect is global and transforms how you consider critical data. EU GDPR fundamentally rewrites the rules for cloud, Big Data and IoT. In his session at 21st Cloud Expo, Adam Ryan, Vice President and General Manager EMEA at Calligo, examined the regulations and provided insight on how it affects technology, challenges the established rules and will usher in new levels of diligence arou...
Organizations planning enterprise data center consolidation and modernization projects are faced with a challenging, costly reality. Requirements to deploy modern, cloud-native applications simultaneously with traditional client/server applications are almost impossible to achieve with hardware-centric enterprise infrastructure. Compute and network infrastructure are fast moving down a software-defined path, but storage has been a laggard. Until now.
DXWorldEXPO LLC announced today that All in Mobile, a mobile app development company from Poland, will exhibit at the 22nd International CloudEXPO | DXWorldEXPO. All In Mobile is a mobile app development company from Poland. Since 2014, they maintain passion for developing mobile applications for enterprises and startups worldwide.
Digital Transformation is much more than a buzzword. The radical shift to digital mechanisms for almost every process is evident across all industries and verticals. This is often especially true in financial services, where the legacy environment is many times unable to keep up with the rapidly shifting demands of the consumer. The constant pressure to provide complete, omnichannel delivery of customer-facing solutions to meet both regulatory and customer demands is putting enormous pressure on...
The best way to leverage your CloudEXPO | DXWorldEXPO presence as a sponsor and exhibitor is to plan your news announcements around our events. The press covering CloudEXPO | DXWorldEXPO will have access to these releases and will amplify your news announcements. More than two dozen Cloud companies either set deals at our shows or have announced their mergers and acquisitions at CloudEXPO. Product announcements during our show provide your company with the most reach through our targeted audienc...
IoT is at the core or many Digital Transformation initiatives with the goal of re-inventing a company's business model. We all agree that collecting relevant IoT data will result in massive amounts of data needing to be stored. However, with the rapid development of IoT devices and ongoing business model transformation, we are not able to predict the volume and growth of IoT data. And with the lack of IoT history, traditional methods of IT and infrastructure planning based on the past do not app...
"Akvelon is a software development company and we also provide consultancy services to folks who are looking to scale or accelerate their engineering roadmaps," explained Jeremiah Mothersell, Marketing Manager at Akvelon, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
IoT is rapidly becoming mainstream as more and more investments are made into the platforms and technology. As this movement continues to expand and gain momentum it creates a massive wall of noise that can be difficult to sift through. Unfortunately, this inevitably makes IoT less approachable for people to get started with and can hamper efforts to integrate this key technology into your own portfolio. There are so many connected products already in place today with many hundreds more on the h...
More and more brands have jumped on the IoT bandwagon. We have an excess of wearables – activity trackers, smartwatches, smart glasses and sneakers, and more that track seemingly endless datapoints. However, most consumers have no idea what “IoT” means. Creating more wearables that track data shouldn't be the aim of brands; delivering meaningful, tangible relevance to their users should be. We're in a period in which the IoT pendulum is still swinging. Initially, it swung toward "smart for smart...