Strong Results Include Record Adobe Document Cloud Performance; Company Increases Fiscal 2019 Targets
SAN JOSE, Calif.--(BUSINESS WIRE)--Adobe (Nasdaq:ADBE) today reported financial results for its first
quarter fiscal year 2019 ended March 1, 2019.
Adobe adopted revenue accounting standard Accounting Standards
Codification (“ASC”) 606 for its fiscal year 2019. Financial targets
provided by the company in Dec. 2018 were based on the prior revenue
accounting standard ASC 605. This release reports results based on ASC
606, and where applicable results under the prior ASC 605 standard have
been provided for comparison purposes against the company’s ASC
605-based targets.
Q1 FY2019 Financial Highlights Under ASC 606
-
Adobe achieved quarterly revenue of $2.60 billion in its first quarter
of fiscal year 2019. Diluted earnings per share was $1.36 on a
GAAP-basis, and $1.71 on a non-GAAP basis.
-
Digital Media segment revenue was $1.78 billion, with Creative revenue
growing to $1.49 billion and Document Cloud achieving record revenue
of $282 million. Digital Media Annualized Recurring Revenue (“ARR”)
grew to $7.07 billion exiting the quarter, a quarter-over-quarter
increase of $357 million. Creative ARR grew to $6.21 billion, and
Document Cloud ARR grew to $856 million.
-
Digital Experience segment revenue was a record $743 million.
-
GAAP operating income in the first quarter was $695 million, and
non-GAAP operating income was $985 million. GAAP net income was $674
million, and non-GAAP net income was $844 million.
-
Cash flow from operations was $1.01 billion, and deferred revenue grew
to $3.22 billion exiting the quarter.
-
Adobe repurchased approximately 2.1 million shares during the quarter.
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 is fueling the creative economy, driving the paper-to-digital
revolution and enabling businesses to transform through our leadership
in customer experience management,” said Shantanu Narayen, president and
CEO, Adobe. "Our results in Q1 reflect continued momentum across Adobe
Creative Cloud, Document Cloud and Experience Cloud."
“We’re off to a strong start in fiscal 2019, with record revenue, strong
earnings and more than $1 billion of operating cash flow in our first
quarter," said John Murphy, executive vice president and CFO, Adobe.
ASC 606 to ASC 605 Comparison
The following table summarizes Adobe’s financial results with a
comparison to targets that Adobe previously provided based on ASC 605.
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Q1 FY2019 Result
Based on ASC 606
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Q1 FY2019 Result
Based on ASC 605
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Q1 FY2019 Target1
Based on ASC 605
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Total revenue
|
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$2.60 billion
|
|
$2.58 billion
|
|
~$2.54 billion
|
|
Digital Media segment revenue
|
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22% year/year growth
|
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22% year/year growth
|
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~20% year/year growth
|
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Digital Experience segment revenue
|
|
34% year/year growth
|
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32% year/year growth
|
|
~31% year/year growth
|
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GAAP EPS
|
|
$1.36
|
|
$1.31
|
|
~$1.14
|
|
Non-GAAP EPS
|
|
$1.71
|
|
$1.65
|
|
~$1.60
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|
1 Adobe provided Q1 FY2019 targets on Dec. 13, 2018 based on
ASC 605
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Adobe Updates Fiscal Year 2019 Financial Targets Based on ASC 606
Adobe provided annual fiscal year 2019 financial targets on Dec. 13,
2018, based on ASC 605. The company is today updating these targets to
be based on ASC 606, and to reflect first quarter reported results.
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Adobe total fiscal year 2019 revenue
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~$11.150 billion
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Digital Media segment revenue
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~20% year/year growth
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Digital Experience segment revenue
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~34% year/year growth
|
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Net new Digital Media annualized recurring revenue (“ARR”)
|
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~$1.500 billion
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Digital Experience annual subscription bookings1
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~25% year/year growth
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GAAP tax rate
|
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~10%
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Non-GAAP tax rate
|
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~11%
|
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GAAP EPS
|
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~$5.59
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Non-GAAP EPS
|
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~$7.80
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1 Includes annualized subscription value of SaaS, managed
service and term offerings under contract for Analytics Cloud,
Marketing Cloud and Magento Commerce Cloud
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Adobe anticipates Q3 FY2019 and Q4 FY2019 year-over-year revenue growth
rates to be similar to the growth rate implied in its Q2 FY2019 revenue
target. As in prior years, the company expects summer seasonality which
can lead to sequentially lower net new Digital Media ARR in Q3 FY2019,
followed by typical year-end strength in Q4 FY2019. As the impact of
lost deferred revenue due to purchase accounting from the acquisitions
of Magento and Marketo tapers off during fiscal year 2019 and the
business grows, Adobe expects quarterly operating margins to increase in
the second half of the year.
A reconciliation between GAAP and non-GAAP targets is provided at the
end of this press release and on Adobe’s website.
Adobe Provides Second Quarter Fiscal Year 2019 Financial Targets
The following table summarizes Adobe’s second quarter fiscal year 2019
targets.
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Adobe total Q2 fiscal year 2019 revenue
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~$2.700 billion
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Digital Media segment revenue
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~20% year/year growth
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Digital Experience segment revenue
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~32% year/year growth
|
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Net new Digital Media annualized recurring revenue (“ARR”)
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~$370 million
|
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Net non-operating other expense
|
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~$36 million
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Tax rate
|
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GAAP: ~12%
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Non-GAAP: ~11%
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Share count
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~495 million shares
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Earnings per share
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GAAP: ~$1.20
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Non-GAAP: ~$1.77
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A reconciliation between GAAP and non-GAAP targets is provided at the
end of this press release and on Adobe’s website.
Adobe to Webcast Earnings Conference Call
Adobe will webcast its first quarter fiscal year 2019 earnings
conference call today at 2:00 p.m. Pacific Time from its investor
relations website: www.adobe.com/ADBE.
Earnings documents, including Adobe management’s prepared conference
call remarks with slides and an investor datasheet are posted to Adobe’s
investor relations website in advance of the conference call for
reference. A reconciliation between GAAP and non-GAAP earnings results
and financial targets is also provided on the website.
Forward-Looking Statements Disclosure
This press release contains forward-looking statements, including those
related to business momentum, customer success, revenue, operating
margin, seasonality, annualized recurring revenue, non-operating other
expense, tax rate on a GAAP and non-GAAP basis, earnings per share on a
GAAP and non-GAAP basis, and share count, all of which involve risks and
uncertainties that could cause actual results to differ materially.
Factors that might cause or contribute to such differences include, but
are not limited to: failure to compete effectively, failure to develop,
acquire, market and offer products and services that meet customer
requirements, introduction of new technology, potential interruptions or
delays in hosted services provided by us or third parties, risks
associated with information security and privacy, cyber-attacks, complex
sales cycles, risks related to the timing of revenue recognition from
our subscription offerings, fluctuations in subscription renewal rates,
failure to realize the anticipated benefits of past or future
acquisitions, changes in accounting principles and tax regulations,
uncertainty in the financial markets and economic conditions in the
countries where we operate, and other various risks associated with
being a multinational corporation. For a discussion of these and other
risks and uncertainties, please refer to Adobe’s Annual Report on Form
10-K for our fiscal year 2018 ended November 30, 2018, and Adobe's
Quarterly Reports on Form 10-Q issued in fiscal year 2019.
The financial information set forth in this press release reflects
estimates based on information available at this time. These amounts
could differ from actual reported amounts stated in Adobe’s Quarterly
Report on Form 10-Q for our quarter ended March 1, 2019, which Adobe
expects to file in March 2019.
Adobe assumes no obligation to, and does not currently intend to, update
these forward-looking statements.
About Adobe
Adobe is changing the world through digital experiences. For more
information, visit www.adobe.com.
©2019 Adobe Inc. All rights reserved. Adobe, Adobe Experience Cloud,
Adobe Analytics Cloud, Adobe Marketing Cloud, Adobe Advertising Cloud,
Magento, and the Adobe logo are either registered trademarks or
trademarks of Adobe Inc. (or one of its subsidiaries) in the United
States and/or other countries. All other trademarks are the property of
their respective owners.
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Condensed Consolidated Statements of Income
(In thousands, except per share data; unaudited)
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Three Months Ended
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March 1,
2019 (*)
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March 2,
2018
|
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Revenue:
|
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|
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Subscription
|
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$
|
2,304,967
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|
$
|
1,793,358
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|
|
Product
|
|
170,554
|
|
|
171,608
|
|
|
Services and support
|
|
125,425
|
|
|
113,981
|
|
|
Total revenue
|
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2,600,946
|
|
|
2,078,947
|
|
|
|
|
|
|
|
|
Cost of revenue:
|
|
|
|
|
|
Subscription
|
|
288,031
|
|
|
164,685
|
|
|
Product
|
|
12,105
|
|
|
12,877
|
|
|
Services and support
|
|
97,150
|
|
|
81,340
|
|
|
Total cost of revenue
|
|
397,286
|
|
|
258,902
|
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|
|
|
|
|
|
|
Gross profit
|
|
2,203,660
|
|
|
1,820,045
|
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|
|
|
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|
|
Operating expenses:
|
|
|
|
|
|
Research and development
|
|
464,637
|
|
|
348,769
|
|
|
Sales and marketing
|
|
781,518
|
|
|
580,957
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|
|
General and administrative
|
|
216,109
|
|
|
170,440
|
|
|
Amortization of purchased intangibles
|
|
46,566
|
|
|
17,146
|
|
|
Total operating expenses
|
|
1,508,830
|
|
|
1,117,312
|
|
|
|
|
|
|
|
|
Operating income
|
|
694,830
|
|
|
702,733
|
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|
|
|
|
|
|
|
Non-operating income (expense):
|
|
|
|
|
|
Interest and other income (expense), net
|
|
4,266
|
|
|
16,672
|
|
|
Interest expense
|
|
(40,593
|
)
|
|
(19,899
|
)
|
|
Investment gains (losses), net
|
|
43,831
|
|
|
2,996
|
|
|
Total non-operating income (expense), net
|
|
7,504
|
|
|
(231
|
)
|
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Income before income taxes
|
|
702,334
|
|
|
702,502
|
|
|
Provision for income taxes
|
|
28,093
|
|
|
119,426
|
|
|
Net income
|
|
$
|
674,241
|
|
|
$
|
583,076
|
|
|
Basic net income per share
|
|
$
|
1.38
|
|
|
$
|
1.18
|
|
|
Shares used to compute basic net income per share
|
|
488,056
|
|
|
492,061
|
|
|
Diluted net income per share
|
|
$
|
1.36
|
|
|
$
|
1.17
|
|
|
Shares used to compute diluted net income per share
|
|
494,188
|
|
|
499,433
|
|
_________________________________________
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*
|
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Adobe adopted ASU No. 2014-09, Revenue from Contracts with
Customers, using the modified retrospective method during the
first quarter of fiscal 2019. Prior period results have not been
restated to reflect this change in accounting standards. Refer to
our Form 10-Q for the first quarter of fiscal year 2019 for
additional information.
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|
|
Condensed Consolidated Balance Sheets
(In thousands, except par value; unaudited)
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March 1,
2019 (*)
|
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November 30,
2018
|
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ASSETS
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Current assets:
|
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|
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Cash and cash equivalents
|
|
$
|
1,738,846
|
|
|
$
|
1,642,775
|
|
|
Short-term investments
|
|
1,487,411
|
|
|
1,586,187
|
|
|
Trade receivables, net of allowances for doubtful accounts of
$14,639 and $14,980, respectively
|
|
1,304,796
|
|
|
1,315,578
|
|
|
Prepaid expenses and other current assets
|
|
565,115
|
|
|
312,499
|
|
|
Total current assets
|
|
5,096,168
|
|
|
4,857,039
|
|
|
|
|
|
|
|
|
Property and equipment, net
|
|
1,104,065
|
|
|
1,075,072
|
|
|
Goodwill
|
|
10,707,715
|
|
|
10,581,048
|
|
|
Purchased and other intangibles, net
|
|
2,017,103
|
|
|
2,069,001
|
|
|
Other assets
|
|
542,938
|
|
|
186,522
|
|
|
Total assets
|
|
$
|
19,467,989
|
|
|
$
|
18,768,682
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
Trade payables
|
|
$
|
145,292
|
|
|
$
|
186,258
|
|
|
Accrued expenses
|
|
1,129,882
|
|
|
1,163,185
|
|
|
Debt
|
|
892,754
|
|
|
—
|
|
|
Income taxes payable
|
|
24,422
|
|
|
35,709
|
|
|
Deferred revenue
|
|
3,083,839
|
|
|
2,915,974
|
|
|
Total current liabilities
|
|
5,276,189
|
|
|
4,301,126
|
|
|
|
|
|
|
|
|
Long-term liabilities:
|
|
|
|
|
|
Debt
|
|
3,236,833
|
|
|
4,124,800
|
|
|
Deferred revenue
|
|
134,353
|
|
|
137,630
|
|
|
Income taxes payable
|
|
655,036
|
|
|
644,101
|
|
|
Deferred income taxes
|
|
125,660
|
|
|
46,702
|
|
|
Other liabilities
|
|
168,433
|
|
|
152,209
|
|
|
Total liabilities
|
|
9,596,504
|
|
|
9,406,568
|
|
|
|
|
|
|
|
|
Stockholders’ equity:
|
|
|
|
|
|
Preferred stock, $0.0001 par value; 2,000 shares authorized
|
|
—
|
|
|
—
|
|
|
Common stock, $0.0001 par value
|
|
61
|
|
|
61
|
|
|
Additional paid-in-capital
|
|
5,857,440
|
|
|
5,685,337
|
|
|
Retained earnings
|
|
12,579,311
|
|
|
11,815,597
|
|
|
Accumulated other comprehensive income (loss)
|
|
(150,432
|
)
|
|
(148,130
|
)
|
|
Treasury stock, at cost (112,330 and 113,171, respectively), net of
reissuances
|
|
(8,414,895
|
)
|
|
(7,990,751
|
)
|
|
Total stockholders’ equity
|
|
9,871,485
|
|
|
9,362,114
|
|
|
Total liabilities and stockholders’ equity
|
|
$
|
19,467,989
|
|
|
$
|
18,768,682
|
|
_________________________________________
|
*
|
|
Adobe adopted ASU No. 2014-09, Revenue from Contracts with
Customers, using the modified retrospective method during the
first quarter of fiscal 2019. Prior period results have not been
restated to reflect this change in accounting standards. Refer to
our Form 10-Q for the first quarter of fiscal year 2019 for
additional information.
|
|
|
|
|
|
|
|
|
|
Condensed Consolidated Statements of Cash Flows
(In thousands; unaudited)
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
March 1,
2019
|
|
March 2,
2018
|
|
Cash flows from operating activities:
|
|
|
|
|
|
Net income
|
|
$
|
674,241
|
|
|
$
|
583,076
|
|
|
Adjustments to reconcile net income to net cash provided by
operating activities:
|
|
|
|
|
|
Depreciation, amortization and accretion
|
|
144,898
|
|
|
76,522
|
|
|
Stock-based compensation
|
|
184,688
|
|
|
135,526
|
|
|
Unrealized investment (gains) losses, net
|
|
(41,678
|
)
|
|
(929
|
)
|
|
Changes in deferred revenue
|
|
190,334
|
|
|
77,662
|
|
|
Changes in other operating assets and liabilities
|
|
(139,035
|
)
|
|
117,744
|
|
|
Net cash provided by operating activities
|
|
1,013,448
|
|
|
989,601
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
Purchases, sales and maturities of short-term investments, net
|
|
110,270
|
|
|
7,894
|
|
|
Purchases of property and equipment
|
|
(65,268
|
)
|
|
(95,142
|
)
|
|
Purchases and sales of long-term investments, intangibles and other
assets, net
|
|
(77,103
|
)
|
|
(6,514
|
)
|
|
Acquisitions, net of cash acquired
|
|
(99,817
|
)
|
|
—
|
|
|
Net cash used for investing activities
|
|
(131,918
|
)
|
|
(93,762
|
)
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
Purchases of treasury stock
|
|
(500,000
|
)
|
|
(300,000
|
)
|
|
Taxes paid related to net share settlement of equity awards, net of
proceeds from treasury stock reissuances
|
|
(280,981
|
)
|
|
(240,969
|
)
|
|
Repayment of capital lease obligations
|
|
(2,931
|
)
|
|
(304
|
)
|
|
Net cash used for financing activities
|
|
(783,912
|
)
|
|
(541,273
|
)
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
(1,547
|
)
|
|
6,343
|
|
|
Net increase in cash and cash equivalents
|
|
96,071
|
|
|
360,909
|
|
|
Cash and cash equivalents at beginning of period
|
|
1,642,775
|
|
|
2,306,072
|
|
|
Cash and cash equivalents at end of period
|
|
$
|
1,738,846
|
|
|
$
|
2,666,981
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Results
(In thousands, except per share data)
The following table shows Adobe's GAAP results reconciled to
non-GAAP results included in this release.
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
March 1,
2019 (*)
|
|
March 2,
2018
|
|
November 30,
2018
|
|
Operating income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating income
|
|
$
|
694,830
|
|
|
$
|
702,733
|
|
|
$
|
720,546
|
|
|
Stock-based and deferred compensation expense
|
|
187,115
|
|
|
136,414
|
|
|
166,504
|
|
|
Amortization of purchased intangibles
|
|
102,690
|
|
|
31,704
|
|
|
65,397
|
|
|
Non-GAAP operating income
|
|
$
|
984,635
|
|
|
$
|
870,851
|
|
|
$
|
952,447
|
|
|
|
|
|
|
|
|
|
|
Net income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income
|
|
$
|
674,241
|
|
|
$
|
583,076
|
|
|
$
|
678,240
|
|
|
Stock-based and deferred compensation expense
|
|
187,115
|
|
|
136,414
|
|
|
166,504
|
|
|
Amortization of purchased intangibles
|
|
102,690
|
|
|
31,704
|
|
|
65,397
|
|
|
Investment (gains) losses, net
|
|
(43,831
|
)
|
|
(2,996
|
)
|
|
3,113
|
|
|
Income tax adjustments
|
|
(76,221
|
)
|
|
23,987
|
|
|
(7,051
|
)
|
|
Non-GAAP net income
|
|
$
|
843,994
|
|
|
$
|
772,185
|
|
|
$
|
906,203
|
|
|
|
|
|
|
|
|
|
|
Diluted net income per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted net income per share
|
|
$
|
1.36
|
|
|
$
|
1.17
|
|
|
$
|
1.37
|
|
|
Stock-based and deferred compensation expense
|
|
0.38
|
|
|
0.27
|
|
|
0.34
|
|
|
Amortization of purchased intangibles
|
|
0.21
|
|
|
0.06
|
|
|
0.13
|
|
|
Investment (gains) losses, net
|
|
(0.09
|
)
|
|
—
|
|
|
0.01
|
|
|
Income tax adjustments
|
|
(0.15
|
)
|
|
0.05
|
|
|
(0.02
|
)
|
|
Non-GAAP diluted net income per share
|
|
$
|
1.71
|
|
|
$
|
1.55
|
|
|
$
|
1.83
|
|
|
|
|
|
|
|
|
|
|
Shares used in computing diluted net income per share
|
|
494,188
|
|
|
499,433
|
|
|
495,118
|
|
_________________________________________
|
*
|
|
Adobe adopted ASU No. 2014-09, Revenue from Contracts with
Customers, using the modified retrospective method during the
first quarter of fiscal 2019. Prior period results have not been
restated to reflect this change in accounting standards. Refer to
our Form 10-Q for the first quarter of fiscal year 2019 for
additional information.
|
|
|
|
|
Non-GAAP Results (continued)
The following table show Adobe's GAAP first quarter fiscal year 2019 tax
rate reconciled to the non-GAAP tax rate included in this release.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First Quarter
Fiscal 2019
|
|
Effective income tax rate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP effective income tax rate
|
|
|
|
|
|
|
|
|
4.0
|
%
|
|
Stock-based and deferred compensation expense
|
|
|
|
|
|
|
|
|
(1.2
|
)
|
|
Amortization of purchased intangibles
|
|
|
|
|
|
|
|
|
(0.6
|
)
|
|
Income tax adjustments
|
|
|
|
|
|
|
|
|
8.5
|
|
|
Investment (gains) losses
|
|
|
|
|
|
|
|
|
0.3
|
|
|
Non-GAAP effective income tax rate
|
|
|
|
|
|
|
|
|
11.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
The following table shows Adobe's first quarter fiscal year 2019 GAAP
earnings per share result under ASC 605 reconciled to the non-GAAP
earnings per share result included in this release.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First Quarter
Fiscal 2019
|
|
Diluted net income per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted net income per share
|
|
|
|
|
|
$
|
1.31
|
|
|
Stock-based and deferred compensation expense
|
|
|
|
|
|
0.38
|
|
|
Amortization of purchased intangibles
|
|
|
|
|
|
0.21
|
|
|
Investment (gains)/losses
|
|
|
|
|
|
(0.09
|
)
|
|
Income tax adjustments
|
|
|
|
|
|
(0.16
|
)
|
|
Non-GAAP diluted net income per share
|
|
|
|
|
|
$
|
1.65
|
|
|
|
|
|
|
|
|
|
|
Shares used to compute diluted net income per share
|
|
|
|
|
|
494.2
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP to Non-GAAP Financial Targets
The following table shows Adobe's second quarter fiscal year 2019 GAAP
earnings per share target reconciled to the non-GAAP financial target
included in this release.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second Quarter
Fiscal 2019
|
|
Diluted net income per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted net income per share
|
|
|
|
|
|
$
|
1.20
|
|
|
Stock-based and deferred compensation expense
|
|
|
|
|
|
0.43
|
|
|
Amortization of purchased intangibles
|
|
|
|
|
|
0.20
|
|
|
Income tax adjustments
|
|
|
|
|
|
(0.06
|
)
|
|
Non-GAAP diluted net income per share
|
|
|
|
|
|
$
|
1.77
|
|
|
|
|
|
|
|
|
|
|
Shares used to compute diluted net income per share
|
|
|
|
|
|
495.0
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP to Non-GAAP Financial Targets (continued)
The following table shows Adobe's second quarter fiscal year 2019 tax
rate target reconciled to the non-GAAP target included in this release.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second Quarter
Fiscal 2019
|
|
Effective income tax rate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP effective income tax rate
|
|
|
|
|
|
|
|
|
12.0
|
%
|
|
Stock-based and deferred compensation expense
|
|
|
|
|
|
|
|
|
(1.0
|
)
|
|
Amortization of purchased intangibles
|
|
|
|
|
|
|
|
|
(0.5
|
)
|
|
Income tax adjustments
|
|
|
|
|
|
|
|
|
0.5
|
|
|
Non-GAAP effective income tax rate
|
|
|
|
|
|
|
|
|
11.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
The following tables show Adobe's annual fiscal year 2019 financial
targets reconciled to non-GAAP financial targets included in this
release.
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year 2019
|
|
Diluted net income per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted net income per share
|
|
|
|
|
$
|
5.59
|
|
|
Stock-based and deferred compensation expense
|
|
|
|
|
1.73
|
|
|
Amortization of purchased intangibles
|
|
|
|
|
0.81
|
|
|
Income tax adjustments
|
|
|
|
|
(0.33
|
)
|
|
Non-GAAP diluted net income per share
|
|
|
|
|
$
|
7.80
|
|
|
|
|
|
|
|
|
|
Shares used to compute diluted net income per share
|
|
|
|
|
493.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year 2019
|
|
Effective income tax rate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP effective income tax rate
|
|
|
|
|
|
|
|
|
10.0
|
%
|
|
Stock-based and deferred compensation expense
|
|
|
|
|
|
|
|
|
(1.0
|
)
|
|
Amortization of purchased intangibles
|
|
|
|
|
|
|
|
|
(0.5
|
)
|
|
Income tax adjustments
|
|
|
|
|
|
|
|
|
2.5
|
|
|
Non-GAAP effective income tax rate
|
|
|
|
|
|
|
|
|
11.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Use of Non-GAAP Financial Information
Adobe continues to provide all information required in accordance with
GAAP, but believes evaluating its ongoing operating results may not be
as useful if an investor is limited to reviewing only GAAP financial
measures. Adobe uses non-GAAP financial information to evaluate its
ongoing operations and for internal planning and forecasting purposes.
Adobe's management does not itself, nor does it suggest that investors
should, consider such non-GAAP financial measures in isolation from, or
as a substitute for, financial information prepared in accordance with
GAAP. Adobe presents such non-GAAP financial measures in reporting its
financial results to provide investors with an additional tool to
evaluate Adobe's operating results. Adobe believes these non-GAAP
financial measures are useful because they allow for greater
transparency with respect to key metrics used by management in its
financial and operational decision-making. This allows institutional
investors, the analyst community and others to better understand and
evaluate our operating results and future prospects in the same manner
as management.
Adobe's management believes it is useful for itself and investors to
review, as applicable, both GAAP information as well as non-GAAP
measures, which may exclude items such as stock-based and deferred
compensation expenses, restructuring and other charges, amortization of
purchased intangibles and certain activity in connection with technology
license arrangements, investment gains and losses, the related tax
impact of all of these items, income tax adjustments, and the income tax
effect of the non-GAAP pre-tax adjustments from the provision for income
taxes. Adobe uses these non-GAAP measures in order to assess the
performance of Adobe's business and for planning and forecasting in
subsequent periods. Whenever such a non-GAAP measure is used, Adobe
provides a reconciliation of the non-GAAP financial measure to the most
closely applicable GAAP financial measure. Investors are encouraged to
review the related GAAP financial measures and the reconciliation of
these non-GAAP financial measures to their most directly comparable GAAP
financial measure as detailed above.
Investor Relations Contact
Mike Saviage
Adobe
408-536-4416
ir@adobe.com
Public Relations Contact
Dan Berthiaume
Adobe
408-536-2584
dberthia@adobe.com