Adobe Surpasses $11 Billion in Annual Revenue

SAN JOSE, Calif.--(BUSINESS WIRE)--Adobe (Nasdaq:ADBE) today reported financial results for its fourth quarter and fiscal year 2019 ended Nov. 29, 2019.

In its fourth quarter of fiscal year 2019, Adobe achieved record quarterly revenue of $2.99 billion, which represents 21 percent year-over-year growth. In fiscal year 2019, Adobe achieved record annual revenue of $11.17 billion, which represents 24 percent year-over-year growth.

Adobes phenomenal performance in Q4 capped a record fiscal 2019 with revenue exceeding $11 billion, said Shantanu Narayen, president and CEO, Adobe. Adobe's vision, category leadership, continuous product innovation and large and loyal customer base position us well for 2020 and beyond.

Adobe delivered another year of strong revenue growth and expanding profitability resulting in record earnings, said John Murphy, executive vice president and CFO, Adobe. We are bullish about our opportunities and our ability to continue to deliver strong top- and bottom-line growth.

Fourth Quarter Fiscal Year 2019 Financial Highlights

Adobe achieved record quarterly revenue of $2.99 billion in its fourth quarter of fiscal year 2019, which represents 21 percent year-over-year growth. Diluted earnings per share was $1.74 on a GAAP-basis, and $2.29 on a non-GAAP basis.

Digital Media segment revenue was $2.08 billion, which represents 22 percent year-over-year growth. Creative revenue grew to $1.74 billion and Document Cloud revenue was $339 million. Digital Media Annualized Recurring Revenue ( ARR ) grew to $8.40 billion exiting the quarter, a quarter-over-quarter increase of $539 million. Creative ARR grew to $7.31 billion, and Document Cloud ARR grew to $1.09 billion.

Digital Experience segment revenue was $859 million, representing 24 percent year-over-year growth.

GAAP operating income in the fourth quarter was $970 million, and non-GAAP operating income was $1.27 billion. GAAP net income was $852 million, and non-GAAP net income was $1.12 billion.

Cash flow from operations was a record $1.38 billion.

Remaining Performance Obligation was $9.82 billion, a quarter-over-quarter increase of $1.05 billion.

Adobe repurchased approximately 2.8 million shares during the quarter.

Fiscal Year 2019 Financial Highlights

Adobe achieved record annual revenue of $11.17 billion in fiscal year 2019, representing 24 percent year-over-year growth.

The company reported annual GAAP diluted earnings per share of $6.00 and non-GAAP diluted earnings per share of $7.87.

Digital Media segment revenue was $7.71 billion, with Creative and Document Cloud achieving record annual revenue of

$6.48 billion and $1.22 billion, respectively. Digital Media ARR grew by $1.69 billion during the year.

Digital Experience segment revenue was $3.21 billion, representing 31 percent year-over-year growth, and subscription bookings grew by more than 20 percent during the year.

Operating income grew 15 percent and net income grew 14 percent year-over-year on a GAAP-basis; operating income grew

23 percent and net income grew 15 percent year-over-year on a non-GAAP basis.

Adobe generated a record $4.42 billion in operating cash flow during the year.

The company repurchased 9.9 million shares during the year, returning $2.7 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 Provides Fiscal Year and First Quarter 2020 Financial Targets

The following table summarizes Adobe's fiscal year 2020 targets.

Adobe fiscal year 2020 revenue

$13.15 billion

Digital Media segment revenue

19 percent year-over-year growth

Digital Media annualized recurring revenue (ARR)

$1.55 billion of net new ARR

Digital Experience segment revenue

16 percent year-over-year growth

Digital Experience subscription revenue1

18 percent year-over-year growth

Digital Experience subscription bookings2

>20 percent year-over-year growth

Tax rate

GAAP: 11%

Non-GAAP: 11%

Share count

486 million shares

Earnings per share

GAAP: $7.40

Non-GAAP: $9.75

1

Includes revenue from SaaS, managed service, ratable term, usage based, and subscription service offerings for Digital Experience

2

Includes annualized subscription value of SaaS, managed service, term and subscription service offerings under contract for Data & Insights, Content & Commerce and Customer Journey Management solutions

The following table summarizes Adobe's first quarter fiscal year 2020 targets.

Adobe Q1 fiscal year 2020 revenue

$3.04 billion

Digital Media segment revenue

19 percent year-over-year growth

Digital Media annualized recurring revenue (ARR)

$360 million of net new ARR

Digital Experience segment revenue

15 percent year-over-year growth

Tax rate

GAAP: 5%

Non-GAAP: 11%

Share count

489 million shares

Earnings per share

GAAP: $1.76

Non-GAAP: $2.23

A reconciliation between GAAP and non-GAAP targets is provided at the end of this press release.

Adobe to Webcast Earnings Conference Call

Adobe will webcast its fourth quarter and 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, our market opportunity, market trends, customer success, revenue, operating margin, seasonality, a

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