IoT User Interface Authors: Liz McMillan, Pat Romanski, Elizabeth White, David Paquette, Greg O'Connor

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,
  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.

@CloudExpo Stories
The best way to leverage your Cloud Expo presence as a sponsor and exhibitor is to plan your news announcements around our events. The press covering Cloud Expo and @ThingsExpo 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 Cloud Expo. Product announcements during our show provide your company with the most reach through our targeted audiences.
OnProcess Technology has announced it will be a featured speaker at @ThingsExpo, taking place November 1 - 3, 2016, in Santa Clara, California. Dan Gettens, OnProcess’ Chief Analytics Officer, will discuss how Internet of Things (IoT) data can be leveraged to predict product failures, improve uptime and slash costly inventory stock. @ThingsExpo is an annual gathering of IoT and cloud developers, practitioners and thought-leaders who exchange ideas and insights on topics ranging from Big Data in...
@ThingsExpo has been named the Top 5 Most Influential Internet of Things Brand by Onalytica in the ‘The Internet of Things Landscape 2015: Top 100 Individuals and Brands.' Onalytica analyzed Twitter conversations around the #IoT debate to uncover the most influential brands and individuals driving the conversation. Onalytica captured data from 56,224 users. The PageRank based methodology they use to extract influencers on a particular topic (tweets mentioning #InternetofThings or #IoT in this ...
Virgil consists of an open-source encryption library, which implements Cryptographic Message Syntax (CMS) and Elliptic Curve Integrated Encryption Scheme (ECIES) (including RSA schema), a Key Management API, and a cloud-based Key Management Service (Virgil Keys). The Virgil Keys Service consists of a public key service and a private key escrow service. 

In his general session at 19th Cloud Expo, Manish Dixit, VP of Product and Engineering at Dice, will discuss how Dice leverages data insights and tools to help both tech professionals and recruiters better understand how skills relate to each other and which skills are in high demand using interactive visualizations and salary indicator tools to maximize earning potential. Manish Dixit is VP of Product and Engineering at Dice. As the leader of the Product, Engineering and Data Sciences team a...
SYS-CON Events announced today that Cemware will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Use MATLAB functions by just visiting website mathfreeon.com. MATLAB compatible, freely usable, online platform services. As of October 2016, 80,000 users from 180 countries are enjoying our platform service.
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, will discuss the key considerations around quality, volume, timeliness, and pedigree that must be dealt with in order to properly fuel that engine.
SYS-CON Events announced today that StarNet Communications will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. StarNet Communications’ FastX is the industry first cloud-based remote X Windows emulator. Using standard Web browsers (FireFox, Chrome, Safari, etc.) users from around the world gain highly secure access to applications and data hosted on Linux-based servers in a central data center. ...
In an era of historic innovation fueled by unprecedented access to data and technology, the low cost and risk of entering new markets has leveled the playing field for business. Today, any ambitious innovator can easily introduce a new application or product that can reinvent business models and transform the client experience. In their Day 2 Keynote at 19th Cloud Expo, Mercer Rowe, IBM Vice President of Strategic Alliances, and Raejeanne Skillern, Intel Vice President of Data Center Group and ...
Digitization is driving a fundamental change in society that is transforming the way businesses work with their customers, their supply chains and their people. Digital transformation leverages DevOps best practices, such as Agile Parallel Development, Continuous Delivery and Agile Operations to capitalize on opportunities and create competitive differentiation in the application economy. However, information security has been notably absent from the DevOps movement. Speed doesn’t have to negat...
SYS-CON Events announced today that eCube Systems, the leading provider of modern development tools and best practices for Continuous Integration on OpenVMS, will exhibit at SYS-CON's @DevOpsSummit at Cloud Expo New York, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. eCube Systems offers a family of middleware products and development tools that maximize return on technology investment by leveraging existing technical equity to meet evolving business needs. ...
More and more companies are looking to microservices as an architectural pattern for breaking apart applications into more manageable pieces so that agile teams can deliver new features quicker and more effectively. What this pattern has done more than anything to date is spark organizational transformations, setting the foundation for future application development. In practice, however, there are a number of considerations to make that go beyond simply “build, ship, and run,” which changes ho...
Join Impiger for their featured webinar: ‘Cloud Computing: A Roadmap to Modern Software Delivery’ on November 10, 2016, at 12:00 pm CST. Very few companies have not experienced some impact to their IT delivery due to the evolution of cloud computing. This webinar is not about deciding whether you should entertain moving some or all of your IT to the cloud, but rather, a detailed look under the hood to help IT professionals understand how cloud adoption has evolved and what trends will impact th...
Successful digital transformation requires new organizational competencies and capabilities. Research tells us that the biggest impediment to successful transformation is human; consequently, the biggest enabler is a properly skilled and empowered workforce. In the digital age, new individual and collective competencies are required. In his session at 19th Cloud Expo, Bob Newhouse, CEO and founder of Agilitiv, will draw together recent research and lessons learned from emerging and established ...
I'm a lonely sensor. I spend all day telling the world how I'm feeling, but none of the other sensors seem to care. I want to be connected. I want to build relationships with other sensors to be more useful for my human. I want my human to understand that when my friends next door are too hot for a while, I'll soon be flaming. And when all my friends go outside without me, I may be left behind. Don't just log my data; use the relationship graph. In his session at @ThingsExpo, Ryan Boyd, Engi...
There is growing need for data-driven applications and the need for digital platforms to build these apps. In his session at 19th Cloud Expo, Muddu Sudhakar, VP and GM of Security & IoT at Splunk, will cover different PaaS solutions and Big Data platforms that are available to build applications. In addition, AI and machine learning are creating new requirements that developers need in the building of next-gen apps. The next-generation digital platforms have some of the past platform needs a...
Effectively SMBs and government programs must address compounded regulatory compliance requirements. The most recent are Controlled Unclassified Information and the EU’s GDPR have Board Level implications. Managing sensitive data protection will likely result in acquisition criteria, demonstration requests and new requirements. Developers, as part of the pre-planning process and the associated supply chain, could benefit from updating their code libraries and design by incorporating changes.
Whether they’re located in a public, private, or hybrid cloud environment, cloud technologies are constantly evolving. While the innovation is exciting, the end mission of delivering business value and rapidly producing incremental product features is paramount. In his session at @DevOpsSummit at 19th Cloud Expo, Kiran Chitturi, CTO Architect at Sungard AS, will discuss DevOps culture, its evolution of frameworks and technologies, and how it is achieving maturity. He will also cover various st...
Enterprises have been using both Big Data and virtualization for years. Until recently, however, most enterprises have not combined the two. Big Data's demands for higher levels of performance, the ability to control quality-of-service (QoS), and the ability to adhere to SLAs have kept it on bare metal, apart from the modern data center cloud. With recent technology innovations, we've seen the advantages of bare metal erode to such a degree that the enhanced flexibility and reduced costs that ...
Qosmos, the market leader for IP traffic classification and network intelligence technology, has announced that it will launch the Launch L7 Viewer at CloudExpo | @ThingsExpo Silicon Valley, being held November 1 – 3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. The L7 Viewer is a traffic analysis tool that provides complete visibility of all network traffic that crosses a virtualized infrastructure, up to Layer 7. It facilitates and accelerates common IT tasks such as VM migra...