Summary
This 8-K filing by Adobe Inc. (ADBE) on December 15, 2016, primarily serves to furnish a press release announcing the company's record-breaking fourth fiscal quarter results for 2016, along with financial targets for fiscal years 2017. Investors should note that Adobe is presenting both GAAP and non-GAAP financial measures, with a significant portion of the filing dedicated to explaining the adjustments made for non-GAAP reporting, which exclude items such as stock-based compensation, restructuring charges, and amortization of intangibles. The company emphasizes that these non-GAAP measures are used internally for operational decision-making and provide supplemental insights into core profitability and comparisons with peers.
Key Highlights
- 1Adobe announced record revenue and net income for its fourth fiscal quarter ended December 2, 2016.
- 2The company provided financial targets for the first quarter and full year of fiscal 2017.
- 3Adobe also reaffirmed its long-term financial targets.
- 4The filing includes detailed explanations of non-GAAP financial measures used by Adobe.
- 5Key exclusions for non-GAAP reporting include stock-based compensation, restructuring charges, amortization of purchased intangibles, and investment gains/losses.
- 6Adobe believes non-GAAP measures offer meaningful supplemental information for investors to evaluate operational performance and compare results across periods and with peers.
- 7The press release (Exhibit 99.1) and financial targets (Exhibit 99.2) are furnished as part of this 8-K filing.
Frequently Asked Questions
The primary purpose of this 8-K filing is to officially release Adobe's financial results for its fourth fiscal quarter of 2016 and to provide financial outlook and targets for fiscal year 2017. It incorporates by reference a press release detailing these results and targets.
Non-GAAP financial measures are financial metrics that exclude certain items from the Generally Accepted Accounting Principles (GAAP) results. Adobe provides them because management believes these measures offer a clearer view of the company's core operational performance, excluding one-time or non-cash expenses like stock-based compensation and amortization, which helps in budgeting, resource allocation, and comparisons with historical results and peer companies.
Adobe excludes several items, including stock-based and deferred compensation expenses, restructuring and other charges, amortization of purchased intangibles and technology license arrangements, accrued loss contingencies from one-time litigation events, investment gains and losses, gain on sale of property assets, and certain income tax adjustments. The company details the rationale for excluding each item.
The detailed financial results and targets are presented in the press release (Exhibit 99.1) and Adobe's Financial Targets document (Exhibit 99.2), which are furnished and attached to this 8-K filing and incorporated by reference.