Click here to close now.


Adobe Flex Authors: Matthew Lobas, Newswire, Shelly Palmer, Kevin Benedict

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: 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

© 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,
  December 2,
November 30,
  December 2,
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,
December 2,
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  
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,
  December 2,
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,


December 2,


August 31,

November 30,


December 2,

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   $


  $ 0.58   $ 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











Stock-based and deferred compensation expense











Restructuring and other related charges









Amortization of purchased intangibles
















Non-GAAP operating expenses
















Three Months

November 30,

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
WebRTC is about the data channel as much as about video and audio conferencing. However, basically all commercial WebRTC applications have been built with a focus on audio and video. The handling of “data” has been limited to text chat and file download – all other data sharing seems to end with screensharing. What is holding back a more intensive use of peer-to-peer data? In her session at @ThingsExpo, Dr Silvia Pfeiffer, WebRTC Applications Team Lead at National ICT Australia, will look at different existing uses of peer-to-peer data sharing and how it can become useful in a live session to...
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 Valley. The program, to be aired during the peak viewership season of the year, will have a major impac...
The buzz continues for cloud, data analytics and the Internet of Things (IoT) and their collective impact across all industries. But a new conversation is emerging - how do companies use industry disruption and technology enablers to lead in markets undergoing change, uncertainty and ambiguity? Organizations of all sizes need to evolve and transform, often under massive pressure, as industry lines blur and merge and traditional business models are assaulted and turned upside down. In this new data-driven world, marketplaces reign supreme while interoperability, APIs and applications deliver un...
Developing software for the Internet of Things (IoT) comes with its own set of challenges. Security, privacy, and unified standards are a few key issues. In addition, each IoT product is comprised of at least three separate application components: the software embedded in the device, the backend big-data service, and the mobile application for the end user's controls. Each component is developed by a different team, using different technologies and practices, and deployed to a different stack/target - this makes the integration of these separate pipelines and the coordination of software upd...
Internet of Things (IoT) will be a hybrid ecosystem of diverse devices and sensors collaborating with operational and enterprise systems to create the next big application. In their session at @ThingsExpo, Bramh Gupta, founder and CEO of, and Fred Yatzeck, principal architect leading product development at, discussed how choosing the right middleware and integration strategy from the get-go will enable IoT solution developers to adapt and grow with the industry, while at the same time reduce Time to Market (TTM) by using plug and play capabilities offered by a robust IoT ...
Through WebRTC, audio and video communications are being embedded more easily than ever into applications, helping carriers, enterprises and independent software vendors deliver greater functionality to their end users. With today’s business world increasingly focused on outcomes, users’ growing calls for ease of use, and businesses craving smarter, tighter integration, what’s the next step in delivering a richer, more immersive experience? That richer, more fully integrated experience comes about through a Communications Platform as a Service which allows for messaging, screen sharing, video...
Can call centers hang up the phones for good? Intuitive Solutions did. WebRTC enabled this contact center provider to eliminate antiquated telephony and desktop phone infrastructure with a pure web-based solution, allowing them to expand beyond brick-and-mortar confines to a home-based agent model. It also ensured scalability and better service for customers, including MUY! Companies, one of the country's largest franchise restaurant companies with 232 Pizza Hut locations. This is one example of WebRTC adoption today, but the potential is limitless when powered by IoT.
SYS-CON Events announced today that Luxoft Holding, Inc., a leading provider of software development services and innovative IT solutions, has been named “Bronze Sponsor” of SYS-CON's @ThingsExpo, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Luxoft’s software development services consist of core and mission-critical custom software development and support, product engineering and testing, and technology consulting.
“In the past year we've seen a lot of stabilization of WebRTC. You can now use it in production with a far greater degree of certainty. A lot of the real developments in the past year have been in things like the data channel, which will enable a whole new type of application," explained Peter Dunkley, Technical Director at Acision, in this interview at @ThingsExpo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
"Matrix is an ambitious open standard and implementation that's set up to break down the fragmentation problems that exist in IP messaging and VoIP communication," explained John Woolf, Technical Evangelist at Matrix, in this interview at @ThingsExpo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
You have your devices and your data, but what about the rest of your Internet of Things story? Two popular classes of technologies that nicely handle the Big Data analytics for Internet of Things are Apache Hadoop and NoSQL. Hadoop is designed for parallelizing analytical work across many servers and is ideal for the massive data volumes you create with IoT devices. NoSQL databases such as Apache HBase are ideal for storing and retrieving IoT data as “time series data.”
There are so many tools and techniques for data analytics that even for a data scientist the choices, possible systems, and even the types of data can be daunting. In his session at @ThingsExpo, Chris Harrold, Global CTO for Big Data Solutions for EMC Corporation, will show how to perform a simple, but meaningful analysis of social sentiment data using freely available tools that take only minutes to download and install. Participants will get the download information, scripts, and complete end-to-end walkthrough of the analysis from start to finish. Participants will also be given the pract...
Clearly the way forward is to move to cloud be it bare metal, VMs or containers. One aspect of the current public clouds that is slowing this cloud migration is cloud lock-in. Every cloud vendor is trying to make it very difficult to move out once a customer has chosen their cloud. In his session at 17th Cloud Expo, Naveen Nimmu, CEO of Clouber, Inc., will advocate that making the inter-cloud migration as simple as changing airlines would help the entire industry to quickly adopt the cloud without worrying about any lock-in fears. In fact by having standard APIs for IaaS would help PaaS expl...
SYS-CON Events announced today that ProfitBricks, the provider of painless cloud infrastructure, will exhibit at SYS-CON's 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. ProfitBricks is the IaaS provider that offers a painless cloud experience for all IT users, with no learning curve. ProfitBricks boasts flexible cloud servers and networking, an integrated Data Center Designer tool for visual control over the cloud and the best price/performance value available. ProfitBricks was named one of the coolest Clo...
Organizations already struggle with the simple collection of data resulting from the proliferation of IoT, lacking the right infrastructure to manage it. They can't only rely on the cloud to collect and utilize this data because many applications still require dedicated infrastructure for security, redundancy, performance, etc. In his session at 17th Cloud Expo, Emil Sayegh, CEO of Codero Hosting, will discuss how in order to resolve the inherent issues, companies need to combine dedicated and cloud solutions through hybrid hosting – a sustainable solution for the data required to manage I...
Mobile messaging has been a popular communication channel for more than 20 years. Finnish engineer Matti Makkonen invented the idea for SMS (Short Message Service) in 1984, making his vision a reality on December 3, 1992 by sending the first message ("Happy Christmas") from a PC to a cell phone. Since then, the technology has evolved immensely, from both a technology standpoint, and in our everyday uses for it. Originally used for person-to-person (P2P) communication, i.e., Sally sends a text message to Betty – mobile messaging now offers tremendous value to businesses for customer and empl...
Scott Guthrie's keynote presentation "Journey to the intelligent cloud" is a must view video. This is from AzureCon 2015, September 29, 2015 I have reproduced some screen shots in case you are unable to view this long video for one reason or another. One of the highlights is 3 datacenters coming on line in India.
Nowadays, a large number of sensors and devices are connected to the network. Leading-edge IoT technologies integrate various types of sensor data to create a new value for several business decision scenarios. The transparent cloud is a model of a new IoT emergence service platform. Many service providers store and access various types of sensor data in order to create and find out new business values by integrating such data.
SYS-CON Events announced today that IBM Cloud Data Services has been named “Bronze Sponsor” of SYS-CON's 17th Cloud Expo, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. IBM Cloud Data Services offers a portfolio of integrated, best-of-breed cloud data services for developers focused on mobile computing and analytics use cases.
Apps and devices shouldn't stop working when there's limited or no network connectivity. Learn how to bring data stored in a cloud database to the edge of the network (and back again) whenever an Internet connection is available. In his session at 17th Cloud Expo, Bradley Holt, Developer Advocate at IBM Cloud Data Services, will demonstrate techniques for replicating cloud databases with devices in order to build offline-first mobile or Internet of Things (IoT) apps that can provide a better, faster user experience, both offline and online. The focus of this talk will be on IBM Cloudant, Apa...