Adobe Delivers Record Revenue of $2 Billion in Q4

SAN JOSE, Calif.--(BUSINESS WIRE)--Adobe (Nasdaq:ADBE) today reported financial results for its fourth quarter and fiscal year 2017 ended Dec. 1, 2017.

In its fourth quarter of fiscal year 2017, Adobe achieved quarterly revenue of $2.01 billion, which represents 25 percent year-over-year growth. In fiscal year 2017, Adobe achieved annual revenue of $7.30 billion, which also represents 25 percent year-over-year growth.

Adobe delivered record revenue of $2 billion in Q4, said Shantanu Narayen, president and CEO, Adobe. Our strong business momentum is driven by the market-leading solutions we provide to empower people to create and businesses to digitally transform.

Adobe achieved record annual and quarterly revenue, and the leverage in our business model once again drove record profit and earnings, said Mark Garrett, executive vice president and CFO, Adobe. We are raising our fiscal 2018 revenue target and remain bullish about delivering strong top line and bottom line growth.

Fourth Quarter Fiscal Year 2017 Financial Highlights

Adobe achieved record quarterly revenue of $2.01 billion in its fourth quarter of fiscal year 2017, which represents 25 percent year-over-year growth.

Diluted earnings per share was $1.00 on a GAAP-basis, and $1.26 on a non-GAAP basis.

Digital Media segment revenue was $1.39 billion, with Creative and Document Cloud achieving record quarterly revenue of $1.16 billion and $235 million, respectively.

Digital Media Annualized Recurring Revenue ( ARR ) grew to $5.23 billion exiting the quarter, a quarter-over-quarter increase of $359 million.

Adobe Experience Cloud achieved record revenue of $550 million, which represents 18 percent year-over-year growth.

Operating income grew 37 percent and net income grew 26 percent year-over-year on a GAAP-basis; operating income grew 37 percent and net income grew 39 percent year-over-year on a non-GAAP basis.

Cash flow from operations was a record $833 million and deferred revenue grew to an all-time high of $2.49 billion.

The company repurchased approximately 1.9 million shares during the quarter, returning $297 million of cash to stockholders.

Fiscal Year 2017 Financial Highlights

Adobe achieved record annual revenue of $7.30 billion in fiscal year 2017, representing 25 percent year-over-year growth.

The company reported annual GAAP diluted earnings per share of $3.38 and non-GAAP diluted earnings per share of $4.31.

Digital Media segment revenue was $5.01 billion, with Creative and Document Cloud achieving record annual revenue of $4.17 billion and $837 million, respectively. Digital Media ARR grew by $1.24 billion during the year.

Adobe Experience Cloud achieved record annual revenue of $2.03 billion, representing 24 percent year-over-year growth.

Operating income grew 45 percent and net income grew 45 percent year-over-year on a GAAP-basis; operating income grew 40 percent and net income grew 42 percent year-over-year on a non-GAAP basis.

Adobe generated a record $2.91 billion in operating cash flow during the year.

The company repurchased 8.2 million shares during the year, returning $1.10 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 2017 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 business momentum, product adoption, revenue, annualized recurring revenue, subscription bookings, 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 develop, acquire, market and offer products and services that meet customer requirements, introduction of new technology, complex sales cycles, fluctuations in subscription renewal rates, our ability to predict such renewals and risks related to the timing of revenue recognition from our subscription offerings, potential interruptions or delays in hosted services provided by us or third parties, risks associated with cyber-attacks, information security and privacy, failure to realize the anticipated benefits of past or future acquisitions, changes in accounting principles and tax regulations, and uncertainty in the financial markets and economic conditions in the countries we operate as 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 2016 ended Dec. 2, 2016, and Adobes Quarterly Reports on Form 10-Q issued in fiscal year 2017.

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. 1, 2017, which Adobe expects to file in Jan. 2018.

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

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