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Adobe Systems Incorporated Climbs As Earnings Results Top Estimates

Adobe Systems released its latest earnings report after closing bell tonight, posting adjusted earnings of 62 cents per share –2 cents ahead of consensus – and $1.31 billion in revenue (in line with estimates) for its fourth fiscal quarter. In last year’s fourth fiscal quarter, the firm reported earnings of 36 cents per share and $1.07 billion in revenue.

Adobe Systems

Adobe Systems’ earnings surge

GAAP earnings were 44 cents per share, compared to last year’s 17 cents. Operating income climbed 133%, while net income climbed 153% year over year on a GAAP basis. On a non-GAAP basis, net income climbed 59%. Total sales increased 22% year over year. Cash flow from operations was $455 million, while deferred revenue reached a new record of $1.49 billion. Cost of revenue was $201.4 million.

“Strong growth across key financial metrics reflect the amazing performance we’ve achieved in fiscal 2015,” said Adobe Executive Vice President and Chief Financial Officer Mark Garrett in a statement. “Our long-term financial targets, including a 20% revenue CAGR through fiscal 2018, show that the benefits of our move to the cloud are just beginning.”

During the fourth quarter, Adobe repurchased about 1.44 million shares for a total of $122 million. Throughout all of 2015, the company bought back about 8.1 million shares for $627 million.

Adobe’s results by segment

Adobe’s Digital Media Annualized Recurring Revenue increased by $350 million year over year to $2.99 billion, while Creative Annualized Recurring revenue rose by $310 million to $2.6 billion. Enterprise adoption drove the increase in Creative revenue as Adobe added 833,000 net new individual and team subscriptions to Creative Cloud. Adobe Marketing Cloud racked up $352 million in revenue on the back of strong growth in bookings and better than expected customer adoption of the company’s system-as-a-service offerings.

Subscription revenue climbed from $629 million last year to $907.4 million this year. Product revenue fell from $328 million to $284.5 million. Services and Support revenue edged downward from $116.4 million to $114.5 million.

Adobe Systems shares surged in after-hours trading, climbing by as much as 4.54% to $93 per share.

 

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