How Adobe Knocked Out Earnings

By Chris Lange Updated Jan 13, 4:13PM EST · Published Dec 10, 4:27PM EST

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How Adobe Knocked Out Earnings — © Thinkstock

Adobe Systems Inc. (NASDAQ: ADBE) reported its fiscal fourth-quarter financial results after the markets closed on Thursday. The company had $0.62 in earnings per share (EPS) on $1.31 billion in revenue, compared to consensus estimates that called for $0.60 in EPS on $1.31 billion in revenue. The same period from the previous year had $0.36 in EPS on $1.07 billion in revenue.

Digital Media annualized recurring revenue grew to $2.99 billion at the end of the quarter, an increase of $350 million. Creative annualized recurring revenue grew to $2.60 billion, an increase of $310 million driven by enterprise adoption and the addition of 833 thousand net new individual and team Creative Cloud subscriptions.

Adobe Marketing Cloud achieved revenue of $352 million with strong bookings growth and a stronger-than-expected shift in customer adoption to SaaS-based solutions.

During this quarter Adobe repurchased roughly 1.4 million shares for a total of $122 million.
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Shantanu Narayen, president and CEO of Adobe, commented on earnings:

Adobe is driving digital experiences that are fundamental to the transformation of every global brand, government and educational institution. Our record revenue and strong momentum are a reflection of our industry-leading content and data solutions in Digital Media and Digital Marketing.

Mark Garrett, executive vice president and CFO, added:

Strong growth across key financial metrics reflect the amazing performance we’ve achieved in fiscal 2015. 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.

Cash flow from operations this quarter was $455 million, and deferred revenue grew to a record $1.49 billion. On the books, cash, equivalents, and short-term investments totaled $3.99 billion compared to the same period last year that had $3.74 billion.

Shares of Adobe closed Thursday down 0.7% at $88.96, with a consensus analyst price target of $93.87 and a 52-week trading range of $68.98 to $92.88. Following the release of the earnings report, shares were initially trading up 5% at $92.80 in the after-hours trading session.

About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.