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September 18, 2015

Cloud boosts Adobe Q3 revenue 21%

The company added 684,000 new subscribers to its Creative Cloud business.

By CBR Staff Writer

Despite Adobe reporting a strong Q3 rise in net subscriptions for its Creative Cloud software suite, company shares took a hit following lower-than-expected revenue and profit forecast for the current quarter.

Revenue increased 21% to $1.22bn in Q3, compared to $1.05bn for the same period last year.

Net income was $174.46m, or $0.34 diluted earnings per share, compared to $44.6m, or $0.09 diluted earnings per share, for the same quarter last year.

Adobe added 684,000 new subscribers to its Creative Cloud business in the quarter, bringing its total to more than 5.33 million subscribers.

Digital media annualised recurring revenue (ARR) increased to $2.65bn, driven by sequential growth in Creative ARR of $262m.

Adobe Marketing Cloud revenue increased 27% to $368m. The company repurchased about 1.6 million shares during the quarter, returning $132m of cash to stockholders.

Adobe executive vice president and chief financial officer Mark Garrett said: "Our record Q3 financial results set us up for a strong fiscal 2015.

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"Our recurring revenue has reached 73 percent of total revenue, providing a strong foundation for long-term growth."

Adobe expects its fourth quarter revenue to be in the range of $1.28bn to $1.33bn.

The company also announced several organisational changes to its executive team, including the departure of senior vice president David Wadhwani.

Bryan Lamkin will lead the Digital Media business, which includes Creative Cloud and Adobe Document Cloud.

Abhay Parasnis, who joined Adobe in July as CTO and SVP of Cloud Technology, will also expand his existing role.

He will drive the overall technology strategy, architecture, and innovation and integration roadmap for the company’s cloud services.

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