Adobe Reports Record Revenue

Remaining Performance Obligations exiting the quarter were $12.6 billion, up 22 percent year over year

Adobe (Nasdaq:ADBE) today reported financial results for its third quarter fiscal year 2021 ended Sept. 3, 2021.

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“We drove record revenues and strong profitability in the quarter, demonstrating our ability to succeed in a dynamic environment”

Third Quarter Fiscal Year 2021 Financial Highlights

  • Adobe achieved record revenue of $3.94 billion in its third quarter of fiscal year 2021, which represents 22 percent year-over-year growth.
  • GAAP diluted earnings per share was $2.52, representing 28 percent year-over-year growth, and non-GAAP diluted earnings per share was $3.11, representing 21 percent year-over-year growth.
  • Digital Media segment revenue was $2.87 billion, which represents 23 percent year-over-year growth. Creative revenue grew to $2.37 billion, representing 21 percent year-over-year growth. Document Cloud revenue was $493 million, representing 31 percent year-over-year growth.
  • Digital Media Annualized Recurring Revenue (“ARR”) increased $455 million quarter over quarter to $11.67 billion exiting the quarter. Creative ARR grew to $9.87 billion and Document Cloud ARR grew to $1.79 billion.
  • Digital Experience segment revenue was $985 million, representing 26 percent year-over-year growth. Digital Experience subscription revenue was $864 million, representing 29 percent year-over-year growth.
  • GAAP operating income in the third quarter was $1.44 billion, and non-GAAP operating income was $1.81 billion. GAAP net income was $1.21 billion, and non-GAAP net income was $1.50 billion.
  • Cash flows from operations were $1.42 billion.
  • Remaining Performance Obligations (“RPO”) exiting the quarter were $12.63 billion, representing 22 percent year-over-year growth.
  • Adobe repurchased approximately 1.7 million shares during the quarter.

A reconciliation between GAAP and non-GAAP results is provided at the end of this press release and on Adobe’s website.

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Executive Quotes

“Adobe had another outstanding quarter as Creative Cloud, Document Cloud and Experience Cloud continue to transform storytelling, learning and conducting business in a digital-first world,” said Shantanu Narayen, president and CEO, Adobe. “Our talented employees, category-defining innovation and product leadership uniquely position us for continued momentum and success.”

“We drove record revenues and strong profitability in the quarter, demonstrating our ability to succeed in a dynamic environment,” said John Murphy, executive vice president and CFO, Adobe. “Our operational rigor and data-driven insights enable us to execute while we continue to invest across massive market opportunities.”

Adobe Provides Fourth Quarter Financial Targets

Adobe today is providing fourth quarter financial targets factoring current macroeconomic conditions and expected year-end seasonal strength.

The following table summarizes Adobe’s fourth quarter fiscal year 2021 targets:

Total revenue

~$4.07 billion

Digital Media segment revenue

~20 percent year-over-year growth

Digital Media annualized recurring revenue (ARR)

~$550 million of net new ARR

Digital Experience segment revenue

~22 percent year-over-year growth

Digital Experience subscription revenue

~26 percent year-over-year growth

Tax rate

GAAP: ~17 percent

Non-GAAP: ~16 percent

Share count

~480 million shares

Earnings per share

GAAP: ~$2.52

Non-GAAP: ~$3.18

A reconciliation between GAAP and non-GAAP targets is provided at the end of this press release.

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