10-QPeriod: Q3 FY2023

ADOBE INC. Quarterly Report for Q3 Ended Jun 2, 2023

Filed June 28, 2023For Securities:ADBE

Summary

Adobe Inc. reported solid financial results for the second quarter of fiscal year 2023, demonstrating continued growth across its key segments. Total revenue increased by 10% year-over-year to $4.82 billion, driven by robust performance in both the Digital Media and Digital Experience segments. The company's subscription-based model continues to be a strong performer, with subscription revenue up 11% year-over-year, reflecting sustained demand for Creative Cloud and Document Cloud offerings. Profitability remained strong, with net income increasing to $1.30 billion. Cash flow from operations was also robust, providing ample liquidity. The company continues to invest in research and development to drive innovation and maintain its competitive edge. Looking ahead, Adobe is progressing with its planned acquisition of Figma, which is expected to close in 2023, a move poised to further strengthen its Digital Media segment.

Financial Highlights

55 data points
Beta

Revenue

$4.82B

88.1% Gross Margin

Net Income

$1.29B

26.9% Net Margin

EPS (Diluted)

$2.82

Total Assets

$27.84B

Cash & Equivalents

$5.46B

Free Cash Flow

$2.02B

Financial Statements
Beta
Revenue$4.82B
Cost of Revenue$572.00M
Gross Profit$4.24B
Operating Expenses$2.62B
Operating Income$1.62B
Interest Expense$26.00M
Net Income$1.29B
EPS (Basic)$2.83
EPS (Diluted)$2.82
Shares Outstanding (Basic)457.80M
Shares Outstanding (Diluted)458.70M

Key Highlights

  • 1Total revenue grew 10% year-over-year to $4.82 billion for the second quarter of fiscal 2023.
  • 2Subscription revenue, the primary driver of growth, increased by 11% year-over-year to $4.52 billion.
  • 3Digital Media segment revenue grew 10% to $3.51 billion, fueled by Creative Cloud and Document Cloud subscriptions.
  • 4Digital Experience segment revenue saw a 12% increase, reaching $1.22 billion, driven by subscription revenue growth.
  • 5Net income for the quarter was $1.30 billion, demonstrating strong profitability.
  • 6Operating cash flow remained strong at $3.83 billion for the first six months of the fiscal year.
  • 7Adobe continues to progress with its planned $20 billion acquisition of Figma, which is expected to close in 2023.

Frequently Asked Questions

Adobe reported a total revenue of $4.82 billion for the second quarter of fiscal year 2023, representing a 10% increase compared to the same period last year. Subscription revenue, the company's primary revenue stream, grew by 11% to $4.52 billion.

The Digital Media segment, which includes Creative Cloud and Document Cloud, showed strong performance with revenue increasing by 10% year-over-year to $3.51 billion. Annualized Recurring Revenue (ARR) for Digital Media reached $14.14 billion.

Adobe is progressing with its planned acquisition of Figma, Inc. for approximately $20 billion. The transaction is subject to regulatory approvals and customary closing conditions and is expected to close in 2023.

Adobe reported a net income of $1.30 billion for the second quarter of fiscal year 2023, indicating a healthy profit margin. The company also generated $3.83 billion in cash flow from operations for the first six months of the fiscal year.