Adobe Reports Record Revenue and Net Income

SAN JOSE, Calif.--(BUSINESS WIRE)--Adobe (Nasdaq:ADBE) today reported financial results for its fourth quarter and fiscal year 2016 ended Dec. 2, 2016.

In its fourth quarter of fiscal year 2016, Adobe achieved record quarterly revenue of $1.61 billion, representing year-over-year growth of 23 percent. In fiscal year 2016, Adobe achieved record annual revenue of $5.85 billion, representing year-over-year growth of 22 percent. The company also achieved record quarterly net income, cash flow and deferred revenue during its fourth quarter.

Adobe's market-leading digital media and digital marketing solutions are revolutionizing how customers design and deliver exceptional digital experiences, said Shantanu Narayen, president and chief executive officer of Adobe. We enter 2017 with significant market momentum and strong technology tailwinds.

Across our business, Adobe had a strong 2016 as we met or exceeded all of our key financial targets for the year, said Mark Garrett, Adobe executive vice president and chief financial officer. We are uniquely positioned as a cloud provider to deliver both top line and bottom line growth.

Fourth Quarter Financial Highlights

Adobe achieved record quarterly revenue of $1.61 billion in its fourth quarter of fiscal year 2016, representing 23 percent year-over-year growth.

Diluted earnings per share were $0.80 on a GAAP-basis, and $0.90 on a non-GAAP basis.

Digital Media segment revenue was $1.08 billion, with Creative revenue growing 33 percent year-over-year to $886 million.

Strong Creative Cloud and Document Cloud adoption drove Digital Media Annualized Recurring Revenue ( ARR ) to $4.01 billion exiting the quarter, a quarter-over-quarter increase of $316 million.

Adobe Marketing Cloud achieved record revenue of $465 million, representing 32 percent year-over-year growth.

Year-over-year operating income grew 63 percent and net income grew 79 percent on a GAAP-basis; operating income grew 44 percent and net income grew 45 percent on a non-GAAP basis.

Cash flow from operations was a record $696 million.

The company repurchased approximately 3.2 million shares during the quarter, returning $331 million of cash to stockholders.

Fiscal Year 2016 Financial Highlights

Adobe achieved record annual revenue of $5.85 billion in fiscal year 2016, representing 22 percent year-over-year growth.

The company reported annual GAAP diluted earnings per share of $2.32 and non-GAAP diluted earnings per share of $3.01.

Adobe grew Digital Media ARR by $1.13 billion during the year and exited the year with $4.01 billion.

Adobe Marketing Cloud achieved $1.63 billion in annual revenue, representing 20 percent year-over-year growth.

Adobe generated $2.2 billion in operating cash flow during the year.

Deferred revenue grew to an all-time high of $2.01 billion, and unbilled backlog grew to approximately $3.42 billion.

The company repurchased 10.4 million shares during the year, returning $1.01 billion 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.

Adobe to Webcast Earnings Conference Call

Adobe will webcast its fourth quarter and fiscal year 2016 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, financial targets 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 product and technology innovation, business momentum, the impact of our products and services to our customers, revenue, annualized recurring revenue, bookings, earnings per share and operating cash flow, 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 develop, market and offer products and services that meet customer requirements, introduction of new products, services and business models by competitors, failure to successfully manage transitions to new business models and markets, uncertainty in economic conditions and the financial markets, fluctuations in subscription renewal rates, complex and unpredictable sales cycles for some enterprise offerings, risks associated with cyber-attacks and information security, potential interruptions or delays in hosted services provided by us or third parties, changes in accounting principles, and failure to realize the anticipated benefits of past or future acquisitions. 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 2015 ended Nov. 27, 2015, and Adobes Quarterly Reports on Form 10-Q issued in fiscal year 2016.

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 Annual Report on Form 10-K for our year ended Dec. 2, 2016, which Adobe expects to file in January 2017.

Adobe assumes no obligation to, and does not currently intend to, update these forward-looking statements.

About Adobe Systems Incorporated

Adobe is changing the world through digital experiences. For more information, visit www.adobe.com.

2016 Adobe Systems Incorporated. All rights reserved. Adobe and the Adobe logo are either registered trademarks or trademarks of Adobe Systems Incorporated in the United

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