01—Abstract
Summary
Summary of the 10-K filed January 21, 2022. Cited figures are marked; the original filing is the authoritative source.
Adobe Inc.'s 2021 10-K filing highlights a year of robust growth, driven by strong performance in its Digital Media and Digital Experience segments.
The company experienced a significant increase in revenue, largely fueled by subscription-based offerings like Creative Cloud and Document Cloud, alongside continued expansion in its Digital Experience suite. Strategic acquisitions, including Frame.io and Workfront, bolstered its product portfolio and market position. Despite a challenging global economic environment influenced by the COVID-19 pandemic, Adobe demonstrated resilience.
The company's financial health remains strong, supported by significant operating cash flows and a substantial stock repurchase program. Adobe continues to invest in product development and innovation, focusing on expanding its customer base and enhancing its cloud-based solutions to capitalize on the ongoing digital transformation trend. Investors can look forward to continued subscription revenue growth and strategic investments aimed at long-term shareholder value.
02—Key points
Key Highlights
- Total revenue grew to $15.785 billion in fiscal 2021, a 23% increase year-over-year.
- Digital Media segment revenue increased by 25% to $11.52 billion, driven by strong Creative Cloud and Document Cloud subscription growth.
- Digital Experience segment revenue rose by 24% to $3.87 billion, benefiting from subscription revenue growth and the Workfront acquisition.
- Annualized Recurring Revenue (ARR) for Digital Media reached $12.24 billion, up 19% year-over-year.
- The company completed two significant acquisitions in fiscal 2021: Frame.io for approximately $1.18 billion and Workfront for approximately $1.52 billion.
- Net income was $4.82 billion, a decrease of 8% from fiscal 2020, primarily due to a non-recurring tax benefit in the prior year.
- Net cash provided by operating activities increased by 26% to $7.23 billion, reflecting strong operational performance.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2021, Adobe Inc. kept $0.31.
- Revenue$15.79B100.0%
- Cost of revenue−$1.86B11.8%
- Gross profit$13.92B88.2%
- Operating costs−$8.12B51.4%
- Operating income$5.80B36.8%
- Interest, other & tax−$980.0M6.2%
- Net income$4.82B30.5%
Where FY2021 revenue went
$15.79B- Operating costs: $8.12B, 51% of revenue
- Net income: $4.82B, 31% of revenue
- Cost of revenue: $1.86B, 12% of revenue
- Interest, other & tax: $980.0M, 6.2% of revenue
Kept 31% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2021filed January 21, 2022Financial Statements
FY2021 against FY2020
| Line item | FY2021FY2020 | Change |
|---|---|---|
| Revenue | $15.79B$12.87B | +22.7% |
| Cost of Revenue | $1.86B$1.72B | +8.3% |
| Gross Profit | $13.92B$11.15B | +24.9% |
| Operating Expenses | $8.12B$6.91B | +17.5% |
| Operating Income | $5.80B$4.24B | +36.9% |
| Interest Expense | $113.00M$116.00M | −2.6% |
| Net Income | $4.82B$5.26B | −8.3% |
| EPS (Basic) | $10.10$10.94 | −7.7% |
| EPS (Diluted) | $10.02$10.83 | −7.5% |
| Shares Outstanding (Basic) | 477.30M480.90M | −0.7% |
| Shares Outstanding (Diluted) | 481.00M485.50M | −0.9% |
05—Questions
Frequently Asked Questions
What are Adobe's main revenue drivers?
Adobe's primary revenue drivers are its subscription-based offerings, categorized into two main segments: Digital Media (Creative Cloud and Document Cloud) and Digital Experience (Adobe Experience Cloud). Subscription revenue accounted for 92% of total revenue in fiscal 2021.
How did acquisitions impact Adobe's performance in fiscal 2021?
Adobe made two significant acquisitions in fiscal 2021: Frame.io, a video collaboration platform integrated into Digital Media, and Workfront, a workflow platform integrated into Digital Experience. These acquisitions are expected to contribute to future revenue growth and enhance Adobe's product offerings.
What is Adobe's strategy for future growth?
Adobe's growth strategy centers on expanding its customer base for its subscription offerings, driving innovation in its Digital Media and Digital Experience segments, and leveraging its cloud-based platform. The company focuses on increasing customer value, attracting new users, and optimizing customer journeys through data-driven engagement and AI-powered solutions.
How is Adobe managing the impact of the COVID-19 pandemic?
Adobe is focused on employee health and safety, maintaining business continuity, and adapting to a hybrid work model. The company notes that the shift to digital during the pandemic has increased the relevance and demand for its solutions, contributing to its growth. However, the long-term economic implications remain uncertain.
06—Continue