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10-QPeriod: Q2 FY2024

ADOBE INC. Quarterly Report for Q2 Ended Mar 1, 2024

Filed March 27, 2024For Securities:ADBE

Summary

Adobe Inc. reported its first quarter fiscal year 2024 results, showcasing continued growth driven by its Digital Media and Digital Experience segments. Total revenue increased by 11% year-over-year to $5.18 billion, primarily fueled by a 12% rise in subscription revenue. The Digital Media segment, including Creative Cloud and Document Cloud, saw revenue grow 12% to $3.82 billion, with Annualized Recurring Revenue (ARR) reaching $15.76 billion. The Digital Experience segment also posted solid growth, with revenue up 10% to $1.29 billion. Despite strong top-line performance, net income for the quarter was $620 million, a significant decrease from $1.25 billion in the prior year. This reduction was largely due to a $1 billion acquisition termination fee paid to Figma. Operating expenses also saw a substantial increase, driven by this fee. However, cash flow from operations remained robust at $1.17 billion, although lower than the prior year due to the termination fee. Adobe continues to return capital to shareholders through its substantial stock repurchase program, repurchasing $2.13 billion in the current quarter.

Financial Highlights

54 data points
Beta

Revenue

$5.31B

0.9% Gross Margin

Net Income

$1.57B

0.3% Net Margin

EPS (Diluted)

$3.49

Total Assets

$30.01B

Cash & Equivalents

$7.66B

Free Cash Flow

$1.14B

Financial Statements
Beta
Revenue$5.31B
Cost of Revenue$598.00M
Gross Profit$4.71B
Operating Expenses$2.83B
Operating Income$1.89B
Interest Expense$41.00M
Net Income$1.57B
EPS (Basic)$3.50
EPS (Diluted)$3.49
Shares Outstanding (Basic)449.10M
Shares Outstanding (Diluted)451.40M

Key Highlights

  • 1Total revenue grew 11% year-over-year to $5.18 billion, driven by strong subscription revenue which increased 12% to $4.92 billion.
  • 2Digital Media segment revenue increased 12% to $3.82 billion, with Creative Cloud up 11% and Document Cloud up 18%.
  • 3Digital Experience segment revenue grew 10% to $1.29 billion, supported by a 12% increase in subscription revenue.
  • 4Net income decreased by 50% to $620 million, primarily due to a $1 billion acquisition termination fee related to the Figma deal.
  • 5Operating expenses increased significantly by 47% primarily due to the $1 billion Figma termination fee.
  • 6Cash flows from operating activities were $1.17 billion, down from $1.69 billion in the prior year, impacted by the termination fee.
  • 7Adobe repurchased $2.13 billion of its common stock during the quarter, demonstrating a continued commitment to returning capital to shareholders.

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