Strong Revenue and Earnings Growth Highlight Third Quarter Results

SAN JOSE, Calif. - Adobe today reported financial results for its third quarter fiscal year 2016 ended Sept. 2, 2016.

Third Quarter Financial Highlights

• Adobe achieved record quarterly revenue of $1.46 billion, representing year-over-year growth of 20 percent.
• Diluted earnings per share were $0.54 on a GAAP-basis, and $0.75 on a non-GAAP basis.
• Digital Media segment revenue was a record $990 million, with Creative revenue growing 39 percent year-over-year to a record $803 million.
• Strong Creative Cloud and Document Cloud adoption drove Digital Media Annualized Recurring Revenue (“ARR”) to $3.70 billion exiting the quarter, a quarter-over-quarter increase of $285 million.
• Adobe Marketing Cloud achieved record revenue of $404 million.
• Year-over-year operating income grew 50 percent and net income grew 55 percent on a GAAP-basis; operating income grew 36 percent and net income grew 37 percent on a non-GAAP basis.
• Cash flow from operations was a record $518 million, and deferred revenue grew to a record $1.80 billion.
• The company repurchased approximately 3.5 million shares during the quarter, returning $344 million of cash to stockholders.

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

Executive Quotes

“We drove strong revenue and earnings performance in Q3, further distancing ourselves from our competitors,” said Shantanu Narayen, Adobe president and chief executive officer. “Our leadership in cloud-based content and data platforms make us a mission critical partner to the world's biggest brands as they transform how they engage with their customers.”

“Fiscal 2016 is shaping up to be another great year and Adobe's record results in Q3 reflect both our market leadership and strong execution,” said Mark Garrett, Adobe executive vice president and chief financial officer. “We are expecting another record quarter in Q4, and the leverage in our operating model is reflected in our increase to earnings targets for the year.”

Full Release