Adobe reports record Q4 and fiscal 2021 revenue; company outlines strategy for next decade of growth

Picture credit: The Software Report

Company reports first $3 billion Digital Media and first $1 billion Digital Experience revenue quarter; and exceeds $2 billion in operating cash flows in the quarter

Adobe (Nasdaq: ADBE) today reported financial results for its fourth quarter and fiscal year 2021 ended Dec. 3, 2021.

“Adobe’s record performance in Q4 resulted in fiscal 2021 revenue exceeding $15 billion,” said Shantanu Narayen, chairman and CEO, Adobe. “Adobe’s vision, category leadership, ground-breaking technology and large and loyal customer base position us well for fiscal 2022 and beyond.”

“Adobe’s financial performance in fiscal 2021 was outstanding, with top-line acceleration resulting in more than $7 billion in operating cash flows,” said Dan Durn, executive vice president and CFO, Adobe. “With an estimated $205 billion addressable market, we are well positioned for significant growth in the years ahead with our industry-leading products and platforms.”

Fourth Quarter Fiscal Year 2021 Financial Highlights

•Adobe achieved record revenue of $4.11 billion in its fourth quarter of fiscal year 2021, which represents 20 percent year-over-year growth. Diluted earnings per share was $2.57 on a GAAP basis and $3.20 on a non-GAAP basis.

•Digital Media segment revenue was $3.01 billion, which represents 21 percent year-over-year growth. Creative revenue grew to $2.48 billion, representing 19 percent year-over-year growth. Document Cloud revenue was $532 million, representing 29 percent year-over-year growth.

•Digital Media Annualized Recurring Revenue (“ARR”) increased $571 million quarter over quarter to $12.24 billion exiting the quarter, including the addition of enterprise ARR of Frame.io, which closed on October 7, 2021. Creative ARR grew to $10.30 billion. Total enterprise ARR for Frame.io, including business closed by Adobe, exiting the quarter was approximately $29 million. Document Cloud ARR grew to $1.93 billion.

•Digital Experience segment revenue was $1.01 billion, representing 23 percent year-over-year growth. Digital Experience subscription revenue was $886 million, representing 27 percent year-over-year growth.

•GAAP operating income in the fourth quarter was $1.50 billion, and non-GAAP operating income was $1.86 billion. GAAP net income was $1.23 billion, and non-GAAP net income was $1.54 billion.

•Cash flows from operations were a record $2.05 billion.

•Remaining Performance Obligations (“RPO”) exiting the quarter were $13.99 billion, representing 23 percent year-over-year growth.

•Adobe repurchased approximately 1.6 million shares during the quarter.

Fiscal Year 2021 Financial Highlights

•Adobe achieved record annual revenue of $15.79 billion in fiscal year 2021, which represents 23 percent year-over-year growth.

•The company reported annual GAAP diluted earnings per share of $10.02 and non-GAAP diluted earnings per share of $12.48.

•Digital Media segment revenue was $11.52 billion, which represents 25 percent year-over-year growth. Creative revenue grew to $9.55 billion, representing 23 percent year-over-year growth. Document Cloud revenue was $1.97 billion, representing 32 percent year-over-year growth. Digital Media ARR grew by $1.98 billion during the year.

•Digital Experience segment revenue was $3.87 billion, representing 24 percent year-over-year growth. Digital Experience subscription revenue was $3.38 billion, representing 27 percent year-over-year growth.

•GAAP operating income was $5.80 billion, growing 37 percent year over year, and non-GAAP operating income was $7.26 billion, growing 31 percent year over year. GAAP net income was $4.82 billion, and non-GAAP net income was $6.00 billion.

•Adobe generated a record $7.23 billion in operating cash flows during the year.

•Adobe repurchased approximately 7.2 million shares during the year.