Adobe presents its growth strategy at a meeting of financial analysts

LOS ANGELES–(BUSINESS WIRE)–Adobe (Nasdaq: ADBE) is hosting a financial analyst meeting today with investors and financial analysts at its Adobe MAX creativity conference. Adobe’s leadership team will share the company’s strategy for growth in its creative, digital document and customer experience management businesses.

Adobe reaffirms its current financial goals for the fourth quarter of fiscal 2022 and also provides preliminary financial goals for fiscal 2023.

“Our strategy to empower everyone to imagine and express their ideas, create the world’s best content and applications, and deliver personalized digital experiences represents a huge market opportunity that will drive Adobe’s next decade of growth.” , said Shantanu Narayen, president and CEO of Adobe. “Adobe’s continued success in this uncertain macro environment underscores that our solutions are mission critical to a growing universe of customers.

Adobe Provides Preliminary Financial Goals for Fiscal Year 2023

Adobe provides preliminary guidance for fiscal year 2023, which does not reflect the planned acquisition of Figma which is expected to close in 2023. These guidance takes into account current expectations regarding the macroeconomic environment and currency headwinds resulting from the strengthening US dollar against foreign currencies. .

Exchange rate changes should:

  • Drive a headwind of approximately 4% to total revenue year-over-year growth rates in fiscal year 2023;

  • Results in approximately $700 million downward revaluation of Adobe’s total annualized recurring revenue (ARR) digital media balance. As a reminder, the ARR is forecast each year at the December exchange rates, and the exchange rates are held constant throughout this fiscal year for measurement purposes; actual year-end ARR balances are revalued at the new December rates for the following year.

The following table summarizes Adobe’s preliminary goals for fiscal year 2023:

Total income

$19.1 billion to $19.3 billion

New ARR Digital Media Network

~$1.65 billion

Digital Media Segment Revenue

$13.9 billion to $14.0 billion

Digital Experience Segment Revenues

$4.925 billion to $5.025 billion

Revenue from digital experience subscriptions

$4.375 billion to $4.425 billion

Tax rate

GAAP: ~22.0%

Non-GAAP: ~18.5%

Earnings per share1

GAAP: $10.75 to $11.05

Non-GAAP: $15.15 to $15.45

1 Targets assume a diluted average number of shares of approximately 455 million for fiscal year 2023

Adobe will host a meeting of financial analysts

Adobe will webcast its meeting with financial analysts and investors at Adobe MAX beginning at 2 p.m. PT today. In addition to sharing its financial outlook, Adobe’s leadership team will present the company’s vision, strategies, and opportunities across Adobe Creative Cloud, Adobe Document Cloud, and Adobe Experience Cloud. Presentation materials are posted on www.adobe.com/ADBE prior to the meeting for reference. The live video webcast will last approximately three hours and will be archived at www.adobe.com/ADBE. There will be no phone call capability.

Forward-Looking Statements, Non-GAAP Information and Other Information

This press release contains forward-looking statements, including those related to business dynamics, the effects of the COVID-19 pandemic on our business and results of operations, our market opportunities, market trends, macroeconomic conditions exchange rate fluctuations, strategic investments, customer success, revenue, operating margin, seasonality, annualized recurring revenue, tax rate on a GAAP and non-GAAP basis, earnings per share on a GAAP and non-GAAP basis GAAP and number of shares, all of which involve risks and uncertainties that could cause actual results to differ materially. Factors that could cause or contribute to such differences include, but are not limited to: failure to compete effectively; failure to develop, acquire, market and offer products and services that meet customer requirements; introduction of new technologies, information security and privacy; potential disruptions or delays in hosted services provided by us or third parties; geopolitical and macroeconomic conditions; the Russian-Ukrainian war; the economic impact of the COVID-19 pandemic; the risks associated with cyberattacks; complex sales cycles; risks related to the timing of revenue recognition from our subscription offerings; fluctuations in subscription renewal rates; failure to realize anticipated benefits from past or future acquisitions; inability to effectively manage critical strategic business relationships with third parties; changes in accounting principles and tax regulations; uncertainty in financial markets and economic conditions in the countries where we operate; and various other risks associated with being a multinational corporation. For a discussion of these and other risks and uncertainties, please see Adobe’s Annual Report on Form 10-K for our 2021 fiscal year ended December 3, 2021 and Adobe’s Quarterly Reports on Form 10-Q published in fiscal year 2022.

The financial information presented in this press release reflects estimates based on information available at the time. Adobe undertakes no obligation to update these forward-looking statements and does not currently intend to do so.

A reconciliation between GAAP and non-GAAP financial targets is provided at the end of this press release and on Adobe’s Investor Relations website.

About Adobe

Adobe is changing the world through digital experiences. For more information, visit www.adobe.com.

© 2022 Adobe. All rights reserved. Adobe, Creative Cloud, Document Cloud and the Adobe logo are either registered trademarks or trademarks of Adobe (or one of its subsidiaries) in the United States and/or other countries. All other trademarks are the property of their respective owners.

Reconciliation of GAAP and non-GAAP financial objectives

The following tables present Adobe’s preliminary financial goals for fiscal year 2023 reconciled to the non-GAAP financial goals included in this document.

(Shares in millions)

Fiscal Year 2023 – Bottom

Fiscal Year 2023 – Top

Diluted net earnings per share:

Diluted net earnings per share under GAAP

$

10.75

$

11.05

Stock-based and deferred compensation expense

3.99

3.97

Amortization of intangible assets

0.82

0.82

Income tax adjustments

(0.41)

(0.39)

Non-GAAP diluted net earnings per share

$

3:15 p.m.

$

3:45 p.m.

Shares used to calculate diluted net earnings per share

455

455

Financial year 2023

Effective income tax rate:

Effective tax rate under GAAP

22.0

%

Stock-based and deferred compensation expense

(1.4)

Amortization of intangible assets

(0.1)

Income tax adjustments

(2.0)

Non-GAAP effective tax rate

18.5

%

Use of Non-GAAP Financial Information

Adobe continues to provide all required disclosures in accordance with GAAP, but believes that assessing its current operating results may not be as useful if an investor is limited to reviewing only GAAP financial measures. Adobe uses non-GAAP financial information to evaluate ongoing operations and for internal planning and forecasting purposes. Adobe’s management does not consider, and does not suggest that investors should, consider these non-GAAP financial measures separately or as a substitute for financial information prepared in accordance with GAAP. Adobe presents these non-GAAP financial measures in its financial results reporting to provide investors with an additional tool to evaluate Adobe’s results of operations. Adobe believes that these non-GAAP financial measures are useful because they provide greater transparency regarding the key measures used by management in its financial and operational decision-making. This enables institutional investors, the analyst community and others to better understand and evaluate our operating results and future prospects in the same way as management.

Adobe’s management believes it is helpful for itself and for investors to review, where appropriate, both GAAP information as well as non-GAAP measures, which may exclude items such as stock-based and deferred compensation, amortization of intangible assets, investment gains and losses, the related tax effect of all of these, tax adjustments and the tax effect of non-conforming pre-tax adjustments GAAP of the provision for income taxes. Adobe uses these non-GAAP measures to evaluate the performance of Adobe’s business and for planning and forecasting future periods. Whenever such a non-GAAP measure is used, Adobe provides a reconciliation of the non-GAAP financial measure to the nearest GAAP financial measure. Investors are encouraged to review the related GAAP financial measures and the reconciliation of such non-GAAP financial measures to their most directly comparable GAAP financial measure as noted above.