Adobe reported financial results for its fourth quarter and fiscal year 2013 ended Nov. 29, 2013, achieving revenue of $1.04 billion for the quarter—within its targeted range of $1 billion to $1.05 billion.
The company also provided a financial outlook for fiscal year 2014 and long-term growth targets for key areas of its business.
Adobe exited Q4 with 1.439-million paid Creative Cloud subscriptions, an increase of 402,000 when compared to the number of subscriptions at the end of the third quarter of fiscal year 2013, and enterprise adoption of Creative Cloud was stronger than expected, the company said.
For its part, Adobe’s Creative Annualized Recurring Revenue (ARR) grew to $768 million, and total Digital Media ARR grew to $911 million. Also, the Adobe Marketing Cloud quarterly revenue was $316.2 million, representing 38 percent year-over-year growth. In addition, the company repurchased 7.9 million shares during the quarter, returning approximately $405 million of cash to stockholders.
"Adobe has redefined the Creative and Digital Marketing categories with its industry-leading Cloud offerings," said Shantanu Narayen, president and chief executive officer of Adobe, in a statement. "Creative Cloud and Adobe Marketing Cloud are the clear market leaders and are poised for accelerated growth," he proclaimed.
Earlier this week, Adobe announced the opening of registration for Adobe Summit 2014 – The Digital Marketing Conference. The annual event, now in its 12th year, will take place in Salt Lake City at the Salt Palace Convention Center from March 24-28, 2014. Summit 2014 will assemble thousands of marketers and advertisers to discover best practices around marketing analytics, media optimization, social marketing, audience targeting and more.
"Many marketers struggle with their digital abilities, feel pressured to show ROI on marketing spend, or lack formal digital marketing training," said Brad Rencher, senior vice president and general manager of the Digital Marketing Business at Adobe. "Summit helps marketers and advertisers hone their skills and measure their marketing effectiveness to thrive in today’s digital age."
Meanwhile, for the 2013 fiscal year, Adobe achieved revenue of $4.06 billion and generated $1.15 billion in cash flow from operations during the year. Creative Cloud subscriptions grew by 1.1 million and Document Services subscriptions doubled to more than 1.6 million. In addition, the company added more than $700 million in Digital Media ARR during the year.
Adobe Marketing Cloud achieved a record $1.02 billion in annual revenue, representing 26 percent year-over-year growth. The company repurchased 21.6 million shares during the year, returning approximately $1 billion of cash to stockholders.
"We are leading the software industry in transitioning our business to the cloud, which is enabling us to target higher top-line growth and greater recurring revenue," said Mark Garrett, executive vice president and chief financial officer at Adobe, in a statement. "We are raising our long-term revenue growth targets, with a compound annual revenue growth rate of 20 percent between fiscal year 2014 and fiscal year 2016."
For the first quarter of fiscal 2014, Adobe is targeting revenue of $950 million to $1 billion. Adobe expects its share count to be between 511 million and 513 million shares, and is targeting non-operating expenses between $18 million and $20 million.
For fiscal year 2014, Adobe is targeting total revenue to be essentially flat with revenue achieved in fiscal year 2013.
Moreover, Adobe provided new long-term revenue growth rate targets for its business. The company expects to achieve a 20 percent compound annual growth rate (CAGR) between fiscal year 2014 and fiscal year 2016. To achieve this goal, Adobe said it is targeting a 20 percent CAGR in its Digital Media business and a 25 percent CAGR in its Adobe Marketing Cloud business during that time frame.