Company raises annual targets for Digital Media net new ARR,
Digital Experience subscription revenue and EPS
Adobe (Nasdaq:ADBE) today reported financial results for its
second quarter fiscal year 2024 ended May 31, 2024.
“Adobe achieved record revenue of $5.31 billion driven by strong
growth across Creative Cloud, Document Cloud and Experience Cloud,”
said Shantanu Narayen, chair and CEO, Adobe. “Our highly
differentiated approach to AI and innovative product delivery are
attracting an expanding universe of customers and providing more
value to existing users.”
“Adobe delivered outstanding Q2 results, positioning us to raise
our annual targets,” said Dan Durn, executive vice president and
CFO, Adobe. “Our market-leading products, strong execution and
world-class financial discipline position us well for the second
half of 2024 and beyond.”
Second Quarter Fiscal Year 2024 Financial Highlights
- Adobe achieved revenue of $5.31 billion in its second quarter
of fiscal year 2024, which represents 10 percent year-over-year
growth or 11 percent in constant currency. Diluted earnings per
share was $3.49 on a GAAP basis and $4.48 on a non-GAAP basis.
- GAAP operating income in the second quarter was $1.89 billion
and non-GAAP operating income was $2.44 billion. GAAP net income
was $1.57 billion and non-GAAP net income was $2.02 billion.
- Cash flows from operations were $1.94 billion.
- Remaining Performance Obligations (“RPO”) exiting the quarter
were $17.86 billion.
- Adobe repurchased approximately 4.6 million shares during the
quarter.
Second Quarter Fiscal Year 2024 Business Segment
Highlights
- Digital Media segment revenue was $3.91 billion, which
represents 11 percent year-over-year growth or 12 percent in
constant currency. Creative revenue grew to $3.13 billion,
representing 10 percent year-over-year growth or 11 percent in
constant currency. Document Cloud revenue was $782 million,
representing 19 percent year-over-year growth as reported and in
constant currency.
- Net new Digital Media Annualized Recurring Revenue (“ARR”) was
$487 million, exiting the quarter with Digital Media ARR of $16.25
billion. Creative ARR grew to $13.11 billion and Document Cloud ARR
grew to $3.15 billion.
- Digital Experience segment revenue was $1.33 billion,
representing 9 percent year-over-year growth as reported and in
constant currency. Digital Experience subscription revenue was
$1.20 billion, representing 13 percent year-over-year growth as
reported and in constant currency.
Financial Targets
Adobe is providing third quarter targets and updated fiscal year
2024 targets. These targets factor in current expectations for the
macroeconomic environment and FX outlook.
The following table summarizes Adobe’s third quarter fiscal year
2024 targets:
Total revenue
$5.33 billion to $5.38
billion
Digital Media net new ARR
~$460 million
Digital Media segment revenue
$3.95 billion to $3.98
billion
Digital Experience segment revenue
$1.325 billion to $1.345
billion
Digital Experience subscription
revenue
$1.20 billion to $1.22
billion
Tax rate
GAAP: ~18.0%
Non-GAAP: ~18.5%
Earnings per share1
GAAP: $3.45 to $3.50
Non-GAAP: $4.50 to $4.55
The following table summarizes Adobe’s updated fiscal year 2024
targets:
Total revenue
$21.40 billion to $21.50
billion
Digital Media net new ARR
~$1.95 billion
Digital Media segment revenue
$15.80 billion to $15.85
billion
Digital Experience segment revenue
$5.325 billion to $5.375
billion
Digital Experience subscription
revenue
$4.775 billion to $4.825
billion
Tax rate
GAAP: ~20.5%
Non-GAAP: ~18.5%
Earnings per share1
GAAP: $11.80 to $12.00
Non-GAAP: $18.00 to $18.20
1 Targets assume diluted share count of
~447 million for third quarter and ~449 million for fiscal year
2024.
Adobe to Host Conference Call
Adobe will webcast its second quarter fiscal year 2024 earnings
conference call today at 2:00 p.m. Pacific Time from its investor
relations website: http://www.adobe.com/ADBE. Earnings documents,
including Adobe management’s prepared conference call remarks with
slides and an investor datasheet are posted to Adobe’s Investor
Relations Website in advance of the conference call for
reference.
Forward-Looking Statements, Non-GAAP and Other
Disclosures
In addition to historical information, this press release
contains “forward-looking statements” within the meaning of
applicable securities laws, including statements related to our
business, strategy, artificial intelligence and innovation
momentum; our market opportunity and future growth; market trends;
current macroeconomic conditions; fluctuations in foreign currency
exchange rates; strategic investments; customer success; revenue;
operating margin; and annualized recurring revenue; tax rate on a
GAAP and non-GAAP basis; earnings per share on a GAAP and non-GAAP
basis; and share count. Each of the forward-looking statements we
make in this press release involves risks, uncertainties and
assumptions based on information available to us as of the date of
this press release. Such risks and uncertainties, many of which
relate to matters beyond our control, could cause actual results to
differ materially from these forward-looking statements. Factors
that might cause or contribute to such differences include, but are
not limited to: failure to innovate effectively and meet customer
needs; issues relating to development and use of AI; failure to
realize the anticipated benefits of investments or acquisitions;
failure to compete effectively; damage to our reputation or brands;
service interruptions or failures in information technology systems
by us or third parties; security incidents; failure to effectively
develop, manage and maintain critical third-party business
relationships; risks associated with being a multinational
corporation and adverse macroeconomic conditions; failure to
recruit and retain key personnel; complex sales cycles; changes in,
and compliance with, global laws and regulations, including those
related to information security and privacy; failure to protect our
intellectual property; litigation, regulatory inquiries and
intellectual property infringement claims; changes in tax
regulations; complex government procurement processes; risks
related to fluctuations in or the timing of revenue recognition
from our subscription offerings; fluctuations in foreign currency
exchange rates; impairment charges; our existing and future debt
obligations; catastrophic events; and fluctuations in our stock
price. Further information on these and other factors are discussed
in the section titled “Risk Factors” in Adobe’s most recently filed
Annual Report on Form 10-K and Adobe's most recently filed
Quarterly Reports on Form 10-Q. The risks described in this press
release and in Adobe’s filings with the U.S. Securities and
Exchange Commission should be carefully reviewed.
Undue reliance should not be placed on the financial information
set forth in this press release, which reflects estimates based on
information available at this time. These amounts could differ from
actual reported amounts stated in Adobe’s Quarterly Report on Form
10-Q for our fiscal quarter ended May 31, 2024, which Adobe expects
to file in June 2024. Adobe assumes no obligation to, and does not
currently intend to, update these forward-looking statements.
A reconciliation between GAAP and non-GAAP earnings results and
financial targets and a statement regarding use of non-GAAP
financial information are provided at the end of this press release
and on Adobe’s investor relations website.
About Adobe
Adobe is changing the world through personalized digital
experiences. For more information, visit www.adobe.com.
©2024 Adobe. All rights reserved. Adobe, Creative Cloud,
Document Cloud and the Adobe logo are either registered trademarks
or trademarks of Adobe (or one of its subsidiaries) in the United
States and/or other countries. All other trademarks are the
property of their respective owners.
Condensed Consolidated Statements of
Income
(In millions, except per share data;
unaudited)
Three Months Ended
Six Months Ended
May 31, 2024
June 2, 2023
May 31, 2024
June 2, 2023
Revenue:
Subscription
$
5,060
$
4,517
$
9,976
$
8,890
Product
104
130
223
250
Services and other
145
169
292
331
Total revenue
5,309
4,816
10,491
9,471
Cost of revenue:
Subscription
456
436
911
870
Product
8
8
13
16
Services and other
134
128
264
254
Total cost of revenue
598
572
1,188
1,140
Gross profit
4,711
4,244
9,303
8,331
Operating expenses:
Research and development
984
876
1,923
1,703
Sales and marketing
1,445
1,345
2,797
2,646
General and administrative
355
357
707
688
Acquisition termination fee
—
—
1,000
—
Amortization of intangibles
42
42
84
84
Total operating expenses
2,826
2,620
6,511
5,121
Operating income
1,885
1,624
2,792
3,210
Non-operating income (expense):
Interest expense
(41
)
(26
)
(68
)
(58
)
Investment gains (losses), net
4
5
22
6
Other income (expense), net
82
47
152
90
Total non-operating income (expense),
net
45
26
106
38
Income before income taxes
1,930
1,650
2,898
3,248
Provision for income taxes
357
355
705
706
Net income
$
1,573
$
1,295
$
2,193
$
2,542
Basic net income per share
$
3.50
$
2.83
$
4.86
$
5.55
Shares used to compute basic net income
per share
449
458
451
458
Diluted net income per share
$
3.49
$
2.82
$
4.83
$
5.54
Shares used to compute diluted net income
per share
451
459
454
459
Condensed Consolidated Balance
Sheets
(In millions; unaudited)
May 31, 2024
December 1, 2023
ASSETS
Current assets:
Cash and cash equivalents
$
7,660
$
7,141
Short-term investments
405
701
Trade receivables, net of allowances for
doubtful accounts of $19 and $16, respectively
1,612
2,224
Prepaid expenses and other current
assets
1,346
1,018
Total current assets
11,023
11,084
Property and equipment, net
1,969
2,030
Operating lease right-of-use assets,
net
381
358
Goodwill
12,803
12,805
Other intangibles, net
933
1,088
Deferred income taxes
1,436
1,191
Other assets
1,462
1,223
Total assets
$
30,007
$
29,779
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Trade payables
$
357
$
314
Accrued expenses
1,899
1,942
Debt
1,498
—
Deferred revenue
5,558
5,837
Income taxes payable
95
85
Operating lease liabilities
67
73
Total current liabilities
9,474
8,251
Long-term liabilities:
Debt
4,127
3,634
Deferred revenue
128
113
Income taxes payable
591
514
Operating lease liabilities
398
373
Other liabilities
446
376
Total liabilities
15,164
13,261
Stockholders’ equity:
Preferred stock
—
—
Common stock
—
—
Additional paid-in capital
12,504
11,586
Retained earnings
35,227
33,346
Accumulated other comprehensive income
(loss)
(276
)
(285
)
Treasury stock, at cost
(32,612
)
(28,129
)
Total stockholders’ equity
14,843
16,518
Total liabilities and stockholders’
equity
$
30,007
$
29,779
Condensed Consolidated Statements of
Cash Flows
(In millions; unaudited)
Three Months Ended
May 31, 2024
June 2, 2023
Cash flows from operating activities:
Net income
$
1,573
$
1,295
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation, amortization and
accretion
214
220
Stock-based compensation
467
433
Unrealized investment (gains) losses,
net
(1
)
(5
)
Other non-cash adjustments
(98
)
(102
)
Changes in deferred revenue
(424
)
(96
)
Changes in other operating assets and
liabilities
209
394
Net cash provided by operating
activities
1,940
2,139
Cash flows from investing activities:
Purchases, sales and maturities of
short-term investments, net
163
446
Purchases of property and equipment
(41
)
(121
)
Purchases and sales of long-term
investments, intangibles and other assets, net
(11
)
(3
)
Net cash provided by investing
activities
111
322
Cash flows from financing activities:
Repurchases of common stock
(2,500
)
(1,000
)
Taxes paid related to net share settlement
of equity awards, net of proceeds from treasury stock
re-issuances
(135
)
(102
)
Proceeds from issuance of debt
1,997
—
Other financing activities, net
(4
)
22
Net cash used for financing activities
(642
)
(1,080
)
Effect of exchange rate changes on cash
and cash equivalents
(3
)
3
Net change in cash and cash
equivalents
1,406
1,384
Cash and cash equivalents at beginning of
period
6,254
4,072
Cash and cash equivalents at end of
period
$
7,660
$
5,456
Non-GAAP Results
The following table shows Adobe’s GAAP
results reconciled to non-GAAP results included in this
release.
(In millions, except per share data)
Three Months Ended
May 31,
2024
June 2,
2023
March 1,
2024
Operating income:
GAAP operating income
$
1,885
$
1,624
$
907
Stock-based and deferred compensation
expense
472
439
469
Amortization of intangibles
84
95
83
Acquisition-related expenses (*)
—
22
1,007
Loss contingency (**)
—
—
1
Non-GAAP operating income
$
2,441
$
2,180
$
2,467
Net income:
GAAP net income
$
1,573
$
1,295
$
620
Stock-based and deferred compensation
expense
472
439
469
Amortization of intangibles
84
95
83
Acquisition-related expenses (*)
—
22
1,007
Loss contingency (**)
—
—
1
Investment (gains) losses, net
(4
)
(5
)
(18
)
Income tax adjustments
(102
)
(52
)
(116
)
Non-GAAP net income
$
2,023
$
1,794
$
2,046
Diluted net income per share:
GAAP diluted net income per share
$
3.49
$
2.82
$
1.36
Stock-based and deferred compensation
expense
1.04
0.96
1.03
Amortization of intangibles
0.19
0.21
0.18
Acquisition-related expenses (*)
—
0.05
2.21
Investment (gains) losses, net
(0.01
)
(0.01
)
(0.04
)
Income tax adjustments
(0.23
)
(0.12
)
(0.26
)
Non-GAAP diluted net income per share
$
4.48
$
3.91
$
4.48
Shares used to compute diluted net income
per share
451
459
456
(*) Associated with the Figma transaction, and includes deal
costs, certain professional fees and the termination fee (**)
Associated with an IP litigation matter
Reconciliation of GAAP to Non-GAAP
Financial Targets
The following tables show Adobe's third
quarter fiscal year 2024 financial targets reconciled to non-GAAP
financial targets included in this release.
(Shares in millions)
Third Quarter Fiscal
2024
Low
High
Diluted net income per share:
GAAP diluted net income per share
$
3.45
$
3.50
Stock-based and deferred compensation
expense
1.12
1.12
Amortization of intangibles
0.19
0.19
Income tax adjustments
(0.26
)
(0.26
)
Non-GAAP diluted net income per share
$
4.50
$
4.55
Shares used to compute diluted net income
per share
447
447
Third Quarter
Fiscal 2024
Effective income tax rate:
GAAP effective income tax rate
18.0
%
Stock-based and deferred compensation
expense
(1.3
)
Amortization of intangibles
(0.2
)
Income tax adjustments
2.0
Non-GAAP effective income tax rate
(***)
18.5
%
(***) Represents Adobe’s fixed long-term non-GAAP tax rate based
on projections and currently available information through fiscal
2025
Reconciliation of GAAP to Non-GAAP
Financial Targets (continued)
The following tables show Adobe's updated
annual fiscal year 2024 financial targets reconciled to non-GAAP
financial targets included in this release.
(Shares in millions)
Fiscal Year 2024
Low
High
Diluted net income per share:
GAAP diluted net income per share
$
11.80
$
12.00
Stock-based and deferred compensation
expense
4.25
4.25
Amortization of intangibles
0.74
0.74
Acquisition-related expenses (*)
2.24
2.24
Loss contingency (**)
0.01
0.01
Income tax adjustments
(1.04
)
(1.04
)
Non-GAAP diluted net income per share
$
18.00
$
18.20
Shares used to compute diluted net income
per share
449
449
Fiscal Year 2024
Effective income tax rate:
GAAP effective income tax rate
20.5
%
Stock-based and deferred compensation
expense
(1.3
)
Amortization of intangibles
(0.2
)
Acquisition-related expenses (*)
(2.5
)
Income tax adjustments
2.0
Non-GAAP effective income tax rate
(***)
18.5
%
(*) Associated with the Figma transaction, and includes deal
costs, certain professional fees and the termination fee (**)
Associated with an IP litigation matter (***) Represents Adobe’s
fixed long-term non-GAAP tax rate based on projections and
currently available information through fiscal 2025
Use of Non-GAAP Financial Information
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. 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. Adobe believes these non-GAAP
financial measures are useful because they allow for greater
transparency with respect to key metrics used by management in its
financial and operational decision-making. This allows
institutional investors, the analyst community and others to better
understand and evaluate our operating results and future prospects
in the same manner as management.
Adobe's management believes it is useful for itself and
investors to review, as applicable, both GAAP information as well
as non-GAAP measures, which may exclude items such as stock-based
and deferred compensation expenses, amortization of intangibles,
investment gains and losses, income tax adjustments, and the income
tax effect of the non-GAAP pre-tax adjustments from the provision
for income taxes. Adobe uses these non-GAAP measures in order to
assess the performance of Adobe's business and for planning and
forecasting in subsequent periods. Whenever such a non-GAAP measure
is used, Adobe 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240613805724/en/
Investor Relations Contact Jonathan Vaas Adobe
ir@adobe.com
Public Relations Contact Ashley Levine Adobe
adobepr@adobe.com
Adobe (NASDAQ:ADBE)
Gráfico Histórico do Ativo
De Ago 2024 até Set 2024
Adobe (NASDAQ:ADBE)
Gráfico Histórico do Ativo
De Set 2023 até Set 2024