Adbe q3 fy13-earnings-call-slides

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Adobe Systems Earnings Call Q3 FY2013 Results


Introduction Mike Saviage, Vice President of Investor Relations


Financial Disclaimer

Some of the information discussed in this presentation, particularly our revenue, subscription and operating model targets, and our forward-looking product plans, is based on information as of today, September 17, 2013, and contains forward-looking statements that involve risk and uncertainty. Actual results may differ materially from those set forth in such statements.

For a discussion of these risks and uncertainties, you should review the Forward-Looking Statements Disclosure in our press release issued today, and Adobe’s SEC filings, including our annual report on Form 10-K for fiscal 2012, and our quarterly reports filed on Form 10-Q in fiscal 2013.

During this presentation, we will discuss non-GAAP financial measures. The GAAP financial measures that correspond to non-GAAP financial measures, as well as the reconciliation between the two, are available on our Website.

http://www.adobe.com/aboutadobe/invrelations/main.html


Q3 FY2013 Results Shantanu Narayen, President and CEO


Digital Media

Exceeded 1 million paid Creative Cloud subscriptions

Digital Media Annualized Recurring Revenue (“ARR”) grew to $655 million

Delivering a constant stream of innovation to Creative Cloud subscribers

Recently updated video tools

Adobe Anywhere

Adobe Generator

New Adobe devices to facilitate design on tablets



Digital Media (Continued)

Added single app subscription offering to Creative Cloud team

Introduced Photoshop + Lightroom subscription offering for photographers

Stronger-than-expected performance with enterprise term license agreements (“ETLAs”)

Majority of customers moving away from perpetual licenses

Continued to build momentum with Digital Publishing Suite

Surpassed 1.3 million Document Services subscriptions



Digital Marketing

Adobe Marketing Cloud achieved 28% year-over-year revenue growth

On a $1 billion run-rate in annual Adobe Marketing Cloud revenue

Completed acquisition of Neolane

Enables cross-channel campaign management

Adobe Campaign becomes sixth solution in Adobe Marketing Cloud

Strong Adobe Experience Manager performance

Major Adobe Target solution update

Adobe recognized as the digital marketing leader by industry analysts


Q3 FY2013 Financial Results Mark Garrett, Executive Vice President and CFO


Q3 FY2013

Revenue $995.1 million

EPS GAAP: $0.16 Non-GAAP: $0.32

Q3 FY2013 Results

Quarter Highlights

Strong Adobe Marketing Cloud revenue growth

Exceeded 1 million Creative Cloud subscriptions

Exited with approximately $655 million of Digital Media ARR driven by overachievement in Creative Cloud subscriptions and ETLAs

Exited with 41% of Q3 revenue as recurring, up from 35% in Q2 FY13


Digital Media Results – Creative Cloud

Achieved total Digital Media revenue of $637 million in Q3

Exited Q3 with 1 million 31 thousand paid Creative Cloud individual and team subscriptions

Increase of 331 thousand net new subscriptions

Achieved Creative ARR of $546 million, an increase of $191 million Q/Q

Metric Q1

FY13 Q2

FY13 Q3

FY13

Total paid subscriptions exiting the quarter (thousands) 479 700 1,031

Creative ARR (millions) $233 $355 $546

Percentage on Annual (vs. month-to-month) 92% 93% 95%

Percentage with full Creative Cloud (vs. point products) 81% 81% 81%


Digital Media Results – Document Services

Achieved Document Services revenue of $183 million in Q3

Success driven by continued adoption of Acrobat, Acrobat ETLAs, Acrobat cloud services and our EchoSign e-signing solution

Grew Document Services ARR from $84 million exiting Q2 to $109 million exiting Q3

Reader Acrobat Forms Central EchoSign


Digital Marketing Results

Achieved Adobe Marketing Cloud year-over-year revenue growth of 28%

Adobe Marketing Cloud revenue of $255 million included $6 million from the acquisition of Neolane

Neolane becomes our sixth Adobe Marketing Cloud solution and enhances our ability to drive larger customer engagements

(Millions)

Business Segment Q3 FY12 Q2 FY13 Q3 FY13

Digital Marketing Segment $263.7 $285.4 $311.7

Adobe Marketing Cloud $199.0 $229.6 $254.9

LiveCycle + Web Conferencing $64.7 $55.8 $56.8


Q3 FY2013 Results (continued)

Experienced stable demand across our major geographies

Net sequential quarterly currency decrease to revenue considering hedging gains was $7.4 million

Net year-over-year currency decrease to revenue considering hedging gains was $15.2 million

Americas 54%

EMEA 26%

ASIA 20%

Q3 Revenue by Geography


Q3 FY2013 Results (continued)

12,035 employees

Trade DSO of 48 days

Cash flow from operations was $216 million

Record deferred revenue of $734 million

Cash and short-term investments of $3.16 billion

Repurchased approximately 7 million shares


Financial Targets September 17, 2013

Q4 FY2013 Targets

Revenue $1 billion to $1.050 billion

Earnings per share GAAP: $0.09 – $0.15 Non-GAAP: $0.28 – $0.34

The information discussed on this slide contains forward looking statements that involve risk and uncertainty. Actual results may differ materially. For a discussion of these risks and uncertainties, you should review Adobe’s SEC filings. Please see our website for a detailed reconciliation between GAAP and non-GAAP targets.

Expect total Digital Media ARR to be approximately $875 million exiting Q4

Expect to add slightly more Creative Cloud paid subscriptions than what was achieved in Q3 and continued strength with ETLA adoption

Assuming the midpoint of our targeted Q4 revenue range:

Expect Digital Media reported revenue to be down sequentially

Targeting Adobe Marketing Cloud year-over-year revenue growth of ~35%

Expect LiveCycle and Connect revenue to be relatively flat quarter-over-quarter

Expect Print & Publishing revenue to decline sequentially

http://www.adobe.com/adbe


Wrap-Up Mike Saviage, Vice President of Investor Relations


Conference Call Archive and Replay

Follow Adobe on Twitter and through our corporate blogs @Adobe @Adobe_IR http://blogs.adobe.com/conversations Earnings call archive http://www.adobe.com/ADBE Available for approximately 45 days Conference call phone replay 1-855-859-2056 (US) 1-404-537-3406 (International) Conference ID #42772158 Available 4pm PT on September 17, 2013 through 4pm PT on September 20, 2013

http://blogs.adobe.com/conversations

http://www.adobe.com/ADBE


Q&A
