Recurring Revenue More Than Half of Company’s First Quarter Revenue

SAN JOSE, Calif. - Adobe today reported financial results for its first quarter fiscal year 2014 ended Feb. 28, 2014.

First Quarter Financial Highlights

• Adobe achieved revenue of $1.0 billion, at the high end of its targeted range of $950 million to $1.0 billion.
• Adobe exited Q1 with 1 million 844 thousand paid Creative Cloud subscriptions, an increase of 405 thousand when compared to the number of subscriptions as of the end of Q4 fiscal year 2013.
• Creative Annualized Recurring Revenue (“ARR”) grew to $987 million, and total Digital Media ARR grew to $1.15 billion.
• Adobe Marketing Cloud quarterly revenue was $267 million, representing 24 percent year-over-year growth.
• Diluted earnings per share were $0.09 on a GAAP-basis, and $0.30 on a non-GAAP basis.
• Cash flow from operations was $252 million.
• Deferred revenue grew by $52 million to a record $881 million.
• More than half of Adobe’s Q1 revenue was from recurring sources such as Creative Cloud subscriptions and Adobe Marketing Cloud.
• The company repurchased 4.5 million shares during the quarter, returning approximately $263 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
“Adobe’s Q1 momentum was driven by strong adoption of Creative Cloud and Adobe Marketing Cloud, said Shantanu Narayen, president and chief executive officer, Adobe.  “We have an amazing pipeline of innovation that we will deliver in the coming months, as well as plans to differentiate ourselves by further integrating our Cloud businesses.”

“We achieved a significant milestone with our transition to the Cloud in our first quarter with more than half of Adobe’s total revenue coming from recurring sources such as Creative Cloud subscriptions and Adobe Marketing Cloud adoption,” said Mark Garrett, executive vice president and chief financial officer, Adobe. “In our Creative business, reported revenue from subscriptions exceeded revenue from legacy perpetual licenses for the first time.”