01—Abstract
Summary
Summary of the 10-K filed January 22, 2010. Cited figures are marked; the original filing is the authoritative source.
Adobe Systems Incorporated's 2009 10-K filing reveals a company navigating a challenging economic landscape.
Despite a significant year-over-year revenue decline of 18% in fiscal 2009, Adobe demonstrated resilience and strategic adaptation, notably with the acquisition of Omniture, Inc. for approximately $1.8 billiona. This acquisition is expected to bolster Adobe's capabilities in Web analytics and online business optimization, creating a new reportable segment and driving future growth. The company's core Creative Solutions segment experienced an 18% revenue decrease due to the global recession impacting creative professionals.
Similarly, Business Productivity Solutions saw a 19%b decline, largely attributed to a slowdown in Acrobat product licensing. However, the Enterprise segment, driven by LiveCycle solutions, showed a more modest 7% decline, suggesting its critical business process automation tools were more insulated from the economic downturn.
Adobe is actively managing its operational costs, as evidenced by restructuring plans aimed at aligning expenses with the fiscal 2010 operating plan. The company's liquidity remains strong, with a substantial cash, cash equivalents, and short-term investments balance of nearly $1.9 billionc, supported by positive cash flows from operations, though partially offset by investing activities related to the Omniture acquisition and share repurchases.
02—Key points
Key Highlights
- Adobe completed the strategic acquisition of Omniture for approximately $1.8 billion in October 2009, creating a new Web analytics and online business optimization segment.
- The company experienced an 18% year-over-year revenue decline in fiscal 2009, totaling $2.95 billion, primarily due to the global economic recession impacting customer spending.
- The Creative Solutions segment, representing 58% of revenue, saw an 18% decline, while Business Productivity Solutions (including Acrobat) decreased by 23%.
- The Enterprise segment, with its LiveCycle offerings, showed greater resilience, with revenue declining by only 7%, indicating the essential nature of these solutions for businesses.
- Adobe's Platform segment revenue declined 22%, significantly impacted by the Open Screen Project's removal of certain Flash Lite licensing fees.
- The company ended fiscal 2009 with a strong liquidity position, holding $1.9 billion in cash, cash equivalents, and short-term investments.
- Adobe initiated restructuring plans in fiscal 2009 to align costs with its operating plan, impacting approximately 630 positions and resulting in restructuring charges.
- Stock repurchases continued, with approximately 5.3 million shares repurchased in the last quarter of fiscal 2009.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2009, Adobe Inc. kept $0.13.
- Revenue$2.95B100.0%
- Cost of revenue−$296.7M10.1%
- Gross profit$2.65B89.9%
- Operating costs−$1.96B66.5%
- Operating income$690.5M23.4%
- Interest, other & tax−$304.0M10.3%
- Net income$386.5M13.1%
Where FY2009 revenue went
$2.95B- Operating costs: $1.96B, 66% of revenue
- Net income: $386.5M, 13% of revenue
- Cost of revenue: $296.7M, 10% of revenue
- Interest, other & tax: $304.0M, 10% of revenue
Kept 13% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2009filed January 22, 2010Financial Statements
FY2009 against FY2008
| Line item | FY2009FY2008 | Change |
|---|---|---|
| Revenue | $2.95B$3.58B | −17.7% |
| Cost of Revenue | $296.73M$362.63M | −18.2% |
| Gross Profit | $2.65B$3.22B | −17.7% |
| Operating Expenses | $1.96B$2.19B | −10.5% |
| Operating Income | $690.51M$1.03B | −32.8% |
| Interest Expense | $3.41M$10.02M | −66.0% |
| Net Income | $386.51M$871.81M | −55.7% |
| EPS (Basic) | $0.74$1.62 | −54.3% |
| EPS (Diluted) | $0.73$1.59 | −54.1% |
| Shares Outstanding (Basic) | 524.47M539.37M | −2.8% |
| Shares Outstanding (Diluted) | 530.61M548.55M | −3.3% |
05—Questions
Frequently Asked Questions
What was Adobe's overall financial performance in fiscal year 2009?
In fiscal year 2009, Adobe experienced an 18% decline in total revenue to $2.95 billion, reflecting the adverse impact of the global economic recession. Net income also significantly decreased to $386.5 million from $871.8 million in the prior year. The company's core Creative Solutions and Business Productivity Solutions segments were particularly affected by reduced customer spending.
What were the key strategic moves made by Adobe in fiscal year 2009?
The most significant strategic move was the acquisition of Omniture, Inc. for approximately $1.8 billion in October 2009. This acquisition aimed to strengthen Adobe's position in Web analytics and online business optimization, creating a new reportable segment. Additionally, Adobe initiated restructuring plans to manage costs in response to the economic climate.
How did the global economic recession affect Adobe's different business segments?
The global recession had a broad impact across Adobe's segments. Creative Solutions revenue decreased by 18%, and Business Productivity Solutions revenue fell by 23%. The Platform segment saw a 22% decline due to factors like the Open Screen Project impacting Flash Lite licensing. The Enterprise segment showed more resilience with only a 7% revenue decrease, suggesting its business process solutions were less affected by the economic downturn.
What is Adobe's financial position regarding liquidity and cash flow?
Adobe maintained a strong liquidity position at the end of fiscal 2009, with cash, cash equivalents, and short-term investments totaling $1.9 billion. The company generated $1.1 billion in net cash from operating activities, which helped fund investing activities, including the Omniture acquisition, and financing activities, such as share repurchases and debt management.
06—Continue