Company Raises Q4 FY2019 Digital Media Net New ARR
Target
Adobe (Nasdaq:ADBE) today will host a financial analyst meeting
with investors and financial analysts at its Adobe MAX conference,
where Adobe’s executive team will unveil the company’s strategy to
expand its leadership in the creative, digital documents and
customer experience management categories to drive sustainable,
long-term top and bottom line growth in 2020 and beyond. As part of
its presentation, Adobe will provide data showing that its total
addressable market is expected to reach approximately $128 billion
by 2022.
“Our strategy to unleash creativity, accelerate document
productivity and power digital businesses is driving our growth and
represents a $128 billion opportunity in 2022,” said Shantanu
Narayen, president and CEO, Adobe. “Our expanding universe of
customers, strong global brand, market-leading products and
continued innovation position us for a stellar 2020.”
Creative Cloud: Unleashing Creativity
At its core, Adobe’s Creative Cloud strategy is about unleashing
creativity for all, which is driving an increase in Creative Cloud
total addressable market for 2022 to approximately $31 billion
across creative professionals, communicators and consumers.
Creative Cloud’s growth will be driven by:
- Continuously releasing innovative new applications that
accelerate productivity and collaboration for individuals, small
businesses and enterprises across all surfaces;
- Expanding to new audiences, including consumers and
communicators, with new products like Photoshop on iPad, Fresco and
Photoshop Camera;
- Growing customer loyalty and retention by engaging its global
creative community through live events like MAX as well as through
its online properties, including Behance, which now boasts 18
million members; and
- Pushing category and technology boundaries by leveraging its
Adobe Sensei AI and Machine Learning framework and embracing new
emerging media types like 3D and augmented reality.
Adobe Document Cloud: Accelerating Document
Productivity
Adobe continues to benefit from the paper-to-digital
transformation. With trillions of PDFs created every year and
approximately two billion Adobe mobile and reader users, the total
addressable market for Adobe Document Cloud is expected to grow to
$13 billion by 2022. Adobe is accelerating document productivity
with a Document Cloud strategy focused on:
- Delivering the best PDF viewing experience everywhere by
revolutionizing the mobile and online reader experience;
- Expanding Acrobat document capabilities—including editing,
collaborating, scanning and signing—to help accelerate business
productivity;
- Making PDF frictionless for mobile and web by providing users
with simple, one-click experiences to access Adobe’s powerful PDF
tools online; and
- Unleashing the PDF ecosystem to embed services through a rich
set of APIs, enabling a new model of delivery and
monetization.
Adobe Experience Cloud: Powering Digital Businesses
With every business, government and educational institution
going through its own digital transformation, Adobe’s Customer
Experience Management (CXM) opportunity continues to grow. The
total addressable market for Adobe Experience Cloud is expected to
increase to $84 billion by 2022, driven by increased demand for
data and insights, content and personalization, commerce, customer
journey management and advertising.
As Adobe continues to power digital businesses across all
sectors, its Digital Experience strategy is focused on:
- Building on established relationships with Chief Marketing
Officers and Chief Digital Officers to drive CXM adoption across
the enterprise;
- Becoming mission critical to the Chief Information Officer with
the Adobe Experience Platform, a purpose-built platform to unite
customer data in real time to power digital businesses;
- Extending its offering and go-to-market from B2C to B2B and B2E
as all customers now expect the same high-quality experience from
companies;
- Building scale in the mid-market segment through its
acquisitions of Magento and Marketo; and
- Evangelizing Adobe’s own Data-Driven Operating Model (DDOM) as
a transformation playbook for its customers.
Adobe Raises Q4 Digital Media Net New ARR Target
Based on strong quarter-to-date performance, Adobe indicated it
is raising its Q4 fiscal year 2019 Digital Media net new annualized
recurring revenue (ARR) target to approximately $475 million, an
increase of $25 million above its prior target. Adobe is also
affirming it is on track to achieve Q4 revenue of $2.97 billion,
and its Q4 earnings per share targets of approximately $1.68 on a
GAAP-basis, and approximately $2.25 on a non-GAAP basis. The
company indicated it expects to meet other financial metrics it
targeted for the quarter.
Adobe Provides Preliminary FY2020 Financial Targets
At today’s financial analyst meeting, Adobe is providing
preliminary growth targets for its fiscal year 2020, which are
summarized in the table below.
Total Adobe revenue1
~$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
revenue2
~18 percent year-over-year
growth
Digital Experience subscription
bookings3
>20 percent year-over-year
growth
Earnings Per Share
GAAP: ~$7.40
Non-GAAP: ~$9.75
1
Revenue targets were set based on Oct.
2019 foreign exchange (FX) rates, which for current planning
purposes are assumed to be constant during fiscal year 2020
2
Includes revenue from SaaS, managed
service and term offerings for Adobe Analytics Cloud, Adobe
Marketing Cloud, and Adobe Experience Platform; all revenue for
Adobe Advertising Cloud; and all technology revenue for Adobe
Commerce Cloud
3
Includes annualized subscription value of
SaaS, managed service and term offerings under contract for Adobe
Experience Cloud and excludes Adobe Advertising Cloud
Adobe expects to report its Q4 fiscal year 2019 financial
results on Dec. 12, 2019. A reconciliation between GAAP and
non-GAAP earnings per share targets is provided later in this press
release.
Adobe to Webcast Financial Analyst Meeting
Adobe will webcast its meeting with financial analysts and
investors in attendance at Adobe MAX beginning at 5 p.m. Eastern
Time today. People can access the webcast and slides from this
event from the Adobe Investor Relations webpage at
http://www.adobe.com/ADBE. The live video webcast will last
approximately three hours and will be archived on Adobe's website
for approximately 45 days. There will be no phone dial-in
capability.
Forward-Looking Statements Disclosure
This press release contains forward-looking statements,
including those related to business momentum and strategy, market
expansion, customer adoption, revenue, earnings, annualized
recurring revenue, bookings, GAAP and non-GAAP earnings per share
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, information security
and privacy, potential interruptions or delays in hosted services
provided by us or third parties, risks associated with
cyber-attacks, complex sales cycles, risks related to the timing
and revenue recognition from our subscription offerings,
fluctuations in subscription renewal rates, failure to realize the
anticipated benefits of past or futures acquisitions, failure to
effectively manage critical strategic third-party business
relationships, changes in accounting principles and tax
regulations, uncertainty with the financial markets and economic
conditions in the countries where we operate, and other various
risks associate 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, and Adobe's Quarterly Reports on Form 10-Q issued in
fiscal year 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, Creative Cloud,
Adobe Document Cloud, Adobe Experience Cloud 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.
Reconciliation of GAAP to Non-GAAP Financial Targets
The following table shows Adobe's preliminary fiscal year 2020
GAAP earnings per share target reconciled to the preliminary
non-GAAP financial target included in this document.
Fiscal Year 2020
Diluted net income per share:
GAAP diluted net income per share
$
7.40
Stock-based and deferred compensation
expense
1.99
Amortization of purchased intangibles
0.74
Income tax adjustments
(0.38
)
Non-GAAP diluted net income per share
$
9.75
Shares used to compute diluted net income
per share
486.0
The following table shows Adobe's fourth quarter fiscal year
2019 GAAP earnings per share target reconciled to the non-GAAP
financial target included in this document.
Fourth Quarter Fiscal
2019
Diluted net income per share:
GAAP diluted net income per share
$
1.68
Stock-based and deferred compensation
expense
0.44
Amortization of purchased intangibles
0.20
Income tax adjustments
(0.07
)
Non-GAAP diluted net income per share
$
2.25
Shares used to compute diluted net income
per share
490.0
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 that may
include 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 and
the related tax impact of all of these items, income tax
adjustments, the income tax effect of the non-GAAP pre-tax
adjustments from the provision for income taxes, and the non-GAAP
measures that exclude such information in order to assess the
performance of Adobe's business and for planning and forecasting in
subsequent periods. Whenever Adobe uses such a non-GAAP financial
measure, it 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.
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version on businesswire.com: https://www.businesswire.com/news/home/20191104005954/en/
Investor Relations Contact Mike Saviage Adobe
408-536-4416 ir@adobe.com
Press Contact Colleen Rodriguez Adobe 408-536-6803
corodrig@adobe.com
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