Summary
Adobe Systems Incorporated reported its fiscal first quarter 2009 results on April 2, 2009, reflecting performance ending February 27, 2009. The company experienced a significant decline in revenue, down 12% year-over-year to $786.4 million, largely attributed to the global financial crisis impacting end-user demand for its core products, particularly in the Creative Solutions and Knowledge Worker segments. Despite revenue headwinds, Adobe demonstrated effective cost management, resulting in earnings per share and profit margins within its targeted ranges. The balance sheet shows a robust cash position of $1.15 billion, an increase from the previous quarter, supported by strong operating cash flow. However, the company is navigating a challenging economic environment, with weaker than expected sales for its new CS4 product family and a slowdown in corporate spending impacting its Knowledge Worker segment. While the Enterprise and Platform segments showed year-over-year growth, these were not enough to offset the broader revenue decline. Investors should note the company's proactive expense management and strong liquidity, but also be aware of the ongoing macroeconomic pressures and projected near-term market environment weakness.
Financial Highlights
29 data points| Revenue | $786.39M |
| Cost of Revenue | $77.35M |
| Gross Profit | $709.04M |
| Operating Expenses | $501.12M |
| Operating Income | $207.92M |
| Interest Expense | $792K |
| Net Income | $156.44M |
| EPS (Basic) | $0.30 |
| EPS (Diluted) | $0.30 |
| Shares Outstanding (Basic) | 524.27M |
| Shares Outstanding (Diluted) | 527.83M |
Key Highlights
- 1Total revenue decreased by 12% year-over-year to $786.4 million, primarily due to decreased demand for Creative Solutions and Knowledge Worker products.
- 2Gross profit decreased by 12.2% to $709.0 million, with gross margin remaining stable at approximately 90.1%.
- 3Operating income saw a significant decline of 24.5% to $207.9 million, reflecting lower revenue and increased restructuring charges.
- 4Net income decreased by 28.7% to $156.4 million, or $0.30 per diluted share.
- 5Cash and cash equivalents increased to $1.15 billion, and the company generated $365.7 million in cash flow from operations.
- 6Restructuring charges increased substantially to $12.3 million compared to $1.4 million in the prior year period, related to workforce reductions and facility consolidation.
- 7The company highlighted the impact of the global financial crisis on customer demand and projected no near-term improvement for the creative and knowledge worker markets.