Adbe q3 fy13-earnings-call-slides

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Adobe's earnings slides, as prepared and presented by the company.

Adobe's earnings slides, as prepared and presented by the company.

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  • 1. 2013 Adobe Systems Incorporated. All Rights Reserved. Adobe Systems Earnings Call Q3 FY2013 Results
  • 2. 2013 Adobe Systems Incorporated. All Rights Reserved. Introduction Mike Saviage, Vice President of Investor Relations
  • 3. 2013 Adobe Systems Incorporated. All Rights Reserved. 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.
  • 4. 2013 Adobe Systems Incorporated. All Rights Reserved. Q3 FY2013 Results Shantanu Narayen, President and CEO
  • 5. 2013 Adobe Systems Incorporated. All Rights Reserved. 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 2013 Adobe Systems Incorporated. All Rights Reserved.
  • 6. 2013 Adobe Systems Incorporated. All Rights Reserved. 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 2013 Adobe Systems Incorporated. All Rights Reserved.
  • 7. 2013 Adobe Systems Incorporated. All Rights Reserved. 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
  • 8. 2013 Adobe Systems Incorporated. All Rights Reserved. Q3 FY2013 Financial Results Mark Garrett, Executive Vice President and CFO
  • 9. 2013 Adobe Systems Incorporated. All Rights Reserved. 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
  • 10. 2013 Adobe Systems Incorporated. All Rights Reserved. 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%
  • 11. 2013 Adobe Systems Incorporated. All Rights Reserved. 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 ReaderAcrobat Forms CentralEchoSign
  • 12. 2013 Adobe Systems Incorporated. All Rights Reserved. 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
  • 13. 2013 Adobe Systems Incorporated. All Rights Reserved. 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
  • 14. 2013 Adobe Systems Incorporated. All Rights Reserved. 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
  • 15. 2013 Adobe Systems Incorporated. All Rights Reserved. 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
  • 16. 2013 Adobe Systems Incorporated. All Rights Reserved. Wrap-Up Mike Saviage, Vice President of Investor Relations
  • 17. 2013 Adobe Systems Incorporated. All Rights Reserved. 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
  • 18. 2013 Adobe Systems Incorporated. All Rights Reserved. Q&A
  • 19. 2013 Adobe Systems Incorporated. All Rights Reserved.