Strong Adoption of Cloud Solutions Drives 20 Percent Year-over-year Revenue Growth

SAN JOSE, Calif. - Adobe (Nasdaq:ADBE) today reported financial results for its second quarter fiscal year 2016 ended June 3, 2016.

Second Quarter Financial Highlights

• Adobe achieved record quarterly revenue of $1.40 billion, representing year-over-year growth of 20 percent.
• Diluted earnings per share were $0.48 on a GAAP-basis, and $0.71 on a non-GAAP basis.
• Digital Media segment revenue grew by 26 percent year-over-year to a record $943 million, with Creative revenue growing 37 percent year-over-year to a record $755 million.
• Strong Creative Cloud and Document Cloud adoption drove Digital Media Annualized Recurring Revenue (“ARR”) to $3.41 billion exiting the quarter, a quarter-over-quarter increase of $285 million.
• Adobe Marketing Cloud achieved record revenue of $385 million that represents year-over-year growth of 18 percent.
• Year-over-year operating income grew 78 percent and net income grew 66 percent on a GAAP-basis; operating income grew 45 percent and net income grew 48 percent on a non-GAAP basis.
• Cash flow from operations was $489 million, and deferred revenue grew to $1.68 billion.
• The company repurchased approximately 2.2 million shares during the quarter, returning $205 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 cloud solutions are powering digital transformation at the world's biggest brands, educational institutions and government agencies," said Shantanu Narayen, Adobe president and chief executive officer. "Our record revenue reflects our market leadership and the exploding demand for digital experience solutions.”

“Record revenue with strong profit and cash flow highlight our second quarter results," said Mark Garrett, Adobe executive vice president and chief financial officer. “Based on our first half performance and momentum, we’re on track to meet or exceed all of our annual fiscal year 2016 targets.”

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