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Adobe Reports Record Revenue Q2 FY2015 Financial Results

Strong Q2 FY2015 Profit Growth Driven by Cloud Momentum; Creative ARR Tops $2 Billion

Adobe (Nasdaq:ADBE) today reported financial results for its second quarter fiscal year 2015 ended May 29, 2015.

Quarterly Financial Highlights

  • Adobe achieved record quarterly revenue of $1.16 billion.
  • Digital Media Annualized Recurring Revenue (“ARR”) grew to $2.35 billion exiting the quarter, driven by an increase in Creative ARR of $230 million to $2.02 billion.
  • Adobe Marketing Cloud achieved revenue of $327 million.
  • Diluted earnings per share were $0.29 on a GAAP-basis, and $0.48 on a non-GAAP basis.
  • Year-over-year, operating income grew 43 percent and net income grew 67 percent on a GAAP-basis; operating income grew 28 percent and net income grew 30 percent on a non-GAAP basis.
  • Cash flow from operations was $471 million, and deferred revenue grew to an all-time high of $1.23 billion.
  • The company repurchased approximately 2.6 million shares during the quarter, returning $200 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

"Strong execution against our Creative Cloud, Document Cloud and Marketing Cloud businesses drove record revenue," said Shantanu Narayen, Adobe president and chief executive officer.  "We are accelerating the pace of innovation in our Cloud offerings and are thrilled to be launching our best Creative Cloud release to date, which includes Adobe Stock – our new stock content service."

“With our business model transition largely behind us, the positive financial benefits are now reflected in our P&L,” said Mark Garrett, Adobe executive vice president and chief financial officer. “We are driving more profit, earnings per share, cash flow and deferred revenue and unbilled backlog.

Adobe to Webcast Earnings Conference Call

Adobe will webcast its second quarter fiscal year 2015 earnings conference call today at 2:00 p.m. Pacific Time from its investor relations website:  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 innovation, the success of our new stock image service, Adobe Stock, and capabilities and the strength of our cloud business and growth of our revenue, earnings, cash flow, deferred revenue and unbilled backlog, 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 distribute products and services that meet customer requirements, introduction of new products and business models by competitors, failure to successfully manage transitions to new business models and markets, fluctuations in subscription renewal rates, risks associated with cyber-attacks and information security, potential interruptions or delays in hosted services provided by us or third parties, uncertainty in economic conditions and the financial markets, 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 2014 ended Nov. 28, 2014, and Adobe's Quarterly Reports on Form 10-Q issued in fiscal year 2015.

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 May 29, 2015, which Adobe expects to file in June 2015.

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