Summary
Adobe Systems Incorporated reported its first quarter fiscal 2010 results, showing a robust increase in total revenue driven significantly by the recent acquisition of Omniture. While product revenue saw a slight decrease year-over-year, the substantial growth in subscription revenue, largely attributed to Omniture, more than compensated, leading to an overall revenue increase of 9%. The company's financial position remains strong, with a significant increase in cash and cash equivalents and short-term investments. Operating expenses saw an increase, largely due to the integration of Omniture and increased investments in R&D and Sales & Marketing, reflecting a strategic focus on growth and product development.
Financial Highlights
53 data pointsBeta
Financial Statements
Beta
| Revenue | $858.70M |
| Cost of Revenue | $89.37M |
| Gross Profit | $769.33M |
| Operating Expenses | $592.50M |
| Operating Income | $176.83M |
| Interest Expense | $7.70M |
| Net Income | $127.15M |
| EPS (Basic) | $0.24 |
| EPS (Diluted) | $0.24 |
| Shares Outstanding (Basic) | 524.17M |
| Shares Outstanding (Diluted) | 532.64M |
Key Highlights
- 1Total revenue increased by 9% year-over-year to $858.7 million, primarily driven by the acquisition of Omniture.
- 2Subscription revenue saw a significant surge, increasing by over 675% to $95.5 million, largely due to Omniture's contribution.
- 3Cash and cash equivalents, along with short-term investments, increased substantially to $2.67 billion, indicating strong liquidity.
- 4Research and Development expenses increased by 16% and Sales & Marketing expenses by 19%, reflecting continued investment in growth and product innovation.
- 5The company issued $1.5 billion in senior notes to fund general corporate purposes and repay existing debt.
- 6Adobe completed the integration of Omniture, creating a new reportable segment and integrating its operations.
- 7Net income decreased to $127.15 million from $156.44 million in the prior year's comparable period, impacted by increased operating expenses and interest expense.
Frequently Asked Questions
The primary driver of Adobe's revenue growth was the acquisition of Omniture, Inc., which significantly boosted subscription revenue and contributed to overall top-line growth. The company also benefited from an extra week in the fiscal quarter compared to the prior year.
The acquisition of Omniture has been a significant factor, particularly in driving subscription revenue growth. It has also led to an increase in operating expenses due to integration costs and expanded headcount, and the creation of a new reportable segment for financial reporting purposes.
Adobe maintains a strong liquidity position, with cash, cash equivalents, and short-term investments totaling $2.67 billion as of March 5, 2010. This provides ample resources for operations, investments, and strategic initiatives.
Adobe is currently involved in several legal proceedings, including patent infringement claims and class-action lawsuits related to the Omniture acquisition. While the company is defending these vigorously, it is unable to estimate the potential financial impact at this time, though no amounts have been accrued as a loss is not probable or estimable.