Creative Cloud and Adobe Marketing Cloud Adoption Accelerates

SAN JOSE, Calif. - Adobe today reported financial results for its third quarter of fiscal year 2014 ended Aug. 29, 2014.

Third Quarter Financial Highlights

• Adobe achieved revenue of $1.005 billion, within its targeted range of $975 million to $1.025 billion.
• Adobe exited Q3 with 2 million 810 thousand paid Creative Cloud subscriptions, an increase of 502 thousand when compared to the number of subscriptions as of the end of Q2 fiscal year 2014.
• Creative Annualized Recurring Revenue (“ARR”) grew to $1.40 billion, and total Digital Media ARR grew to $1.62 billion.
• Adobe Marketing Cloud quarterly revenue was $290 million with strong bookings growth.
• Diluted earnings per share were $0.09 on a GAAP-basis, and $0.28 on a non-GAAP basis.
• Cash flow from operations was $269 million and deferred revenue grew to a record $997 million.
• 63 percent of Adobe’s Q3 revenue was from recurring sources.
• The company repurchased approximately 1.9 million shares during the quarter, returning approximately $133 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

“Adoption of Creative Cloud and Adobe Marketing Cloud continues to accelerate,” said Shantanu Narayen, president and chief executive officer, Adobe.  “We are the leader in both of these high-growth categories and have a rapidly growing pipeline, setting us up for a strong finish to the year in Q4.”

“In Q3, 63 percent of our revenue was recurring, demonstrating the continued success of our business model transformation,” said Mark Garrett, executive vice president and chief financial officer, Adobe.  “In addition to momentum with Creative Cloud adoption, our team drove strong bookings growth with Adobe Marketing Cloud.”