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Adobe Creative Cloud Surpasses One Million Subscriptions as Q3 Revenue Falls

Wednesday, September 18, 2013

Press release from the issuing company

SAN JOSE, Calif. - Adobe today reported financial results for its third quarter of fiscal year 2013 ended Aug. 30, 2013.

Third Quarter Financial Highlights

  • Adobe achieved revenue of $995.1 million, within its targeted range of $975 million to $1.025 billion. The acquisition of Neolane during the quarter contributed approximately $6 million of revenue to third quarter results.
  • Diluted earnings per share were $0.16 on a GAAP-basis, and $0.32 on a non-GAAP basis.
  • Operating income was $110.4 million and net income was $83.0 million on a GAAP basis. Operating income was $223.0 million and net income was $164.4 million on a non-GAAP basis.
  • Cash flow from operations was $215.5 million.
  • Deferred revenue grew by $42.7 million to a record $734.0 million.
  • Adobe exited Q3 with 1 million 31 thousand paid Creative Cloud subscriptions, an increase of 331 thousand when compared to the number of subscriptions as of the end of Q2 fiscal year 2013, and enterprise adoption of Creative Cloud was stronger than expected.
  • Creative Annualized Recurring Revenue (“ARR”) grew to $546 million, and total Digital Media ARR grew to $655 million.
  • Including revenue from Neolane, Adobe Marketing Cloud quarterly revenue was $254.9 million, representing 28 percent year-over-year growth.  Excluding revenue from Neolane, Adobe Marketing Cloud year-over-year growth was 25 percent.

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

Executive Quotes
“We exceeded one million subscriptions during Q3, demonstrating that the transition to Creative Cloud is happening sooner than expected,” said Shantanu Narayen, president and chief executive officer, Adobe.  “We successfully completed the acquisition of Neolane, adding a critical cross-channel campaign management solution to the Adobe Marketing Cloud, which will further extend our leadership position in digital marketing.”

“Our customers are overwhelmingly choosing subscriptions instead of perpetual model licenses which is accelerating our business model transition,” said Mark Garrett, executive vice president and chief financial officer, Adobe. “During Q3, 41 percent of our revenue was recurring and we exited the quarter with record deferred revenue on our balance sheet.  These results are building a stronger, more predictable revenue model for Adobe which will drive higher long-term growth.”

Full Release

 

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