Strong Momentum Across Major Businesses Drives Record Quarterly and Fiscal Year Revenue
SAN JOSE, Calif. — Adobe Systems Incorporated (Nasdaq:ADBE) today reported financial results for its fourth quarter and fiscal year ended Dec. 3, 2010.
In the fourth quarter of fiscal 2010, Adobe achieved record revenue of $1.008 billion, compared to $757.3 million reported for the fourth quarter of fiscal 2009 and $990.3 million reported in the third quarter of fiscal 2010. This represents 33 percent year-over-year revenue growth. Adobe’s fourth quarter revenue target range was $950 million to $1 billion.
The Company also reported record revenue of $3.800 billion in fiscal year 2010, compared to $2.946 billion in fiscal 2009. This represents 29 percent year-over-year revenue growth.
“We posted our first billion dollar quarter and record annual revenue in 2010, driven by outstanding performance across all of our major businesses,” said Shantanu Narayen, president and CEO of Adobe. “Adobe is transforming how the world is creating, measuring and delivering digital experiences. We are one of the most diversified software companies in the world and are entering 2011 with strong momentum.”
Fourth Quarter Fiscal 2010 GAAP Results
Adobe’s GAAP diluted earnings per share for the fourth quarter of fiscal 2010 were $0.53, based on 511.9 million weighted average shares. This compares with GAAP diluted loss per share of $0.06 reported in the fourth quarter of fiscal 2009 based on 532.0 million weighted average shares, and GAAP diluted earnings per share of $0.44 reported in the third quarter of fiscal 2010 based on 523.2 million weighted average shares.
GAAP operating income was $286.9 million in the fourth quarter of fiscal 2010, compared to $153.6 million in the fourth quarter of fiscal 2009 and $302.0 million in the third quarter of fiscal 2010. As a percent of revenue, GAAP operating income in the fourth quarter of fiscal 2010 was 28.5 percent, compared to 20.3 percent in the fourth quarter of fiscal 2009 and 30.5 percent in the third quarter of fiscal 2010.
GAAP net income was $268.9 million for the fourth quarter of fiscal 2010, compared to a GAAP net loss of $32.0 million reported in the fourth quarter of fiscal 2009 and GAAP net income of $230.1 million in the third quarter of fiscal 2010.
Fourth Quarter Fiscal 2010 Non-GAAP Results
Adobe’s non-GAAP diluted earnings per share for the fourth quarter of fiscal 2010 were $0.56. This compares with non-GAAP diluted earnings per share of $0.39 reported in the fourth quarter of fiscal 2009 and non-GAAP diluted earnings per share of $0.54 reported in the third quarter of fiscal 2010.
Adobe’s non-GAAP operating income was $384.0 million in the fourth quarter of fiscal 2010, compared to
$265.2 million in the fourth quarter of fiscal 2009 and $384.9 million in the third quarter of fiscal 2010. As a percent of revenue, non-GAAP operating income in the fourth quarter of fiscal 2010 was 38.1 percent, compared to 35.0 percent in the fourth quarter of fiscal 2009 and 38.9 percent in the third quarter of fiscal 2010.
Non-GAAP net income was $285.7 million for the fourth quarter of fiscal 2010, compared to $206.8 million in the fourth quarter of fiscal 2009 and $284.0 million in the third quarter of fiscal 2010.
Reconciliation between GAAP and non-GAAP results is provided at the end of this press release.
Fiscal Year 2010 Results
In fiscal year 2010, Adobe achieved annual revenue of $3.800 billion, compared to $2.946 billion in fiscal 2009. This represents 29 percent year-over-year revenue growth.
Adobe’s annual GAAP operating income in fiscal 2010 was $993.1 million, compared to $690.5 million in fiscal 2009. The annual GAAP operating margin was 26.1 percent in fiscal 2010, compared to 23.4 percent in fiscal 2009. Adobe’s annual non-GAAP operating income in fiscal 2010 was $1.393 billion, compared to $1.035 billion in fiscal 2009. The annual non-GAAP operating margin was 36.6 percent in fiscal 2010, compared to 35.1 percent in fiscal 2009.
The Company’s annual GAAP net income was $774.7 million in fiscal 2010, compared to $386.5 million in fiscal 2009. Adobe’s annual non-GAAP net income was $1.016 billion in fiscal 2010, compared to $814.7 million in fiscal 2009.
Adobe’s annual GAAP diluted earnings per share for fiscal 2010 were $1.47, compared to $0.73 in fiscal 2009. Non-GAAP diluted earnings per share for fiscal 2010 were $1.93, compared to $1.54 in fiscal 2009.
Reconciliation between GAAP and non-GAAP results is provided at the end of this press release.
First Quarter Fiscal 2011 Financial Targets
For the first quarter of fiscal 2011, Adobe is targeting revenue of $1 billion to $1.05 billion. The Company’s operating margin is targeted to be 28 percent to 29.5 percent on a GAAP basis, and 37 percent to 38 percent on a non-GAAP basis. In addition, the Company is targeting its share count to be between 508 million and 510 million shares, and it is targeting non-operating expense between $16 million and $20 million. Adobe’s GAAP and non-GAAP tax rates are expected to be approximately 15 percent and 22 percent, respectively.
These targets lead to a first quarter diluted earnings per share target range of $0.43 to $0.49 on a GAAP basis, and an earnings per share target range of $0.54 to $0.59 on a non-GAAP basis.
Reconciliation between these GAAP and non-GAAP financial targets is provided at the end of this press release.