01—Abstract
Summary
Summary of the 10-K filed January 24, 2008. Cited figures are marked; the original filing is the authoritative source.
Adobe Systems Incorporated's 2007 10-K report highlights a strong year characterized by significant revenue growth across its key segments, driven by the successful launch of its Adobe Creative Suite 3 (CS3) family of products.
The company saw robust performance in its Creative Solutions segment, with CS3 adoption exceeding expectations and contributing to record revenues. The Knowledge Worker Solutions segment also performed well, supported by strong adoption of the Acrobat 8 family of products. Adobe's Enterprise and Developer Solutions business achieved record revenue with its LiveCycle and Flex technologies, indicating growing traction in enterprise markets.
The company's financial position remains solid, with substantial cash reserves. Adobe continued its commitment to returning value to shareholders through significant stock repurchase programs.
Looking ahead, Adobe outlined strategies to maintain its market leadership by focusing on product innovation, customer needs, and expansion into new markets, particularly the enterprise and mobile sectors. Despite a competitive landscape and evolving market dynamics, Adobe demonstrated a positive growth trajectory, supported by a strong brand and customer loyalty.
02—Key points
Key Highlights
- Record revenue growth in fiscal 2007, driven by strong performance across all business segments, particularly Creative Solutions with the launch of CS3.
- Successful integration and adoption of Macromedia products, contributing significantly to revenue and market expansion.
- Robust financial health with substantial cash reserves and successful stock repurchase programs returning value to shareholders.
- Strategic focus on innovation and expansion into enterprise, mobile, and rich internet application (RIA) markets through products like LiveCycle and Flex.
- Continued investment in research and development ($613.2 million in FY2007) to maintain product leadership and drive future growth.
- Strong brand loyalty and market position in creative software, with plans to expand offerings and capabilities.
- Diversified revenue streams across Creative Solutions, Knowledge Worker Solutions, Enterprise & Developer Solutions, and Mobile & Device Solutions.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2007, Adobe Inc. kept $0.23.
- Revenue$3.16B100.0%
- Cost of revenue−$354.7M11.2%
- Gross profit$2.80B88.8%
- Operating costs−$1.95B61.6%
- Operating income$857.6M27.2%
- Interest, other & tax−$133.8M4.2%
- Net income$723.8M22.9%
Where FY2007 revenue went
$3.16B- Operating costs: $1.95B, 62% of revenue
- Net income: $723.8M, 23% of revenue
- Cost of revenue: $354.7M, 11% of revenue
- Interest, other & tax: $133.8M, 4.2% of revenue
Kept 23% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2007filed January 24, 2008Financial Statements
| Revenue | $3.16B |
| Cost of Revenue | $354.69M |
| Gross Profit | $2.80B |
| Operating Expenses | $1.95B |
| Operating Income | $857.59M |
| Interest Expense | $253K |
| Net Income | $723.81M |
| EPS (Basic) | $1.24 |
| EPS (Diluted) | $1.21 |
| Shares Outstanding (Basic) | 584.20M |
| Shares Outstanding (Diluted) | 598.77M |
05—Questions
Frequently Asked Questions
What was Adobe's primary growth driver in fiscal year 2007?
Adobe's primary growth driver in fiscal year 2007 was the successful launch and strong adoption of its Adobe Creative Suite 3 (CS3) family of products, which led to record revenue in the Creative Solutions segment.
How did the Macromedia acquisition impact Adobe's performance in fiscal 2007?
The acquisition of Macromedia, completed in fiscal 2006, continued to positively impact Adobe's performance in fiscal 2007. It contributed to revenue growth across several segments, particularly Creative Solutions and Mobile & Device Solutions, by expanding Adobe's product portfolio and market reach.
What is Adobe's strategy for future growth?
Adobe's strategy for future growth centers on continued product innovation, meeting evolving customer needs, and expanding into new markets, specifically enterprise and mobile. The company plans to leverage its technology platform, including Adobe AIR, Flash, and PDF technologies, to drive adoption and deliver enhanced solutions.
How is Adobe managing its financial resources and shareholder value?
Adobe maintained a strong financial position with substantial cash reserves. The company actively returned value to shareholders through significant stock repurchase programs, demonstrating a commitment to managing dilution and enhancing shareholder returns.
06—Continue