Adobe reports q3 fy2014 financial results
San jose, calif.--(business wire)--adobe (nasdaq:adbe) today reported financial results for its third quarter of fiscal year 2014 ended aug. 29, 2014. third quarter financial highlights adobe achieved revenue of $1.005 billion, within its targeted range of $975 million to $1.025 billion. adobe exited q3 with 2 million 810 thousand paid creative cloud subscriptions, an increase of 502 thousand when compared to the number of subscriptions as of the end of q2 fiscal year 2014. creative annualized recurring revenue (“arr”) grew to $1.40 billion, and total digital media arr grew to $1.62 billion. adobe marketing cloud quarterly revenue was $290 million with strong bookings growth. diluted earnings per share were $0.09 on a gaap-basis, and $0.28 on a non-gaap basis. cash flow from operations was $269 million and deferred revenue grew to a record $997 million. 63 percent of adobe’s q3 revenue was from recurring sources. the company repurchased approximately 1.9 million shares during the quarter, returning approximately $133 million of cash to stockholders. a reconciliation between gaap and non-gaap results is provided at the end of this press release and on adobe’s website. executive quotes “adoption of creative cloud and adobe marketing cloud continues to accelerate,” said shantanu narayen, president and chief executive officer, adobe. “we are the leader in both of these high-growth categories and have a rapidly growing pipeline, setting us up for a strong finish to the year in q4.” “in q3, 63 percent of our revenue was recurring, demonstrating the continued success of our business model transformation,” said mark garrett, executive vice president and chief financial officer, adobe. “in addition to momentum with creative cloud adoption, our team drove strong bookings growth with adobe marketing cloud.” adobe to webcast earnings conference call adobe will webcast its third quarter fiscal year 2014 earnings conference call today at 2:00 p.m. pacific time from its investor relations website: www.adobe.com/adbe. earnings documents, including adobe management’s prepared conference call remarks with slides, financial targets and an investor datasheet are posted to adobe’s investor relations website in advance of the conference call for reference. a reconciliation between gaap and non-gaap earnings results and financial targets is also provided on the website. forward-looking statements disclosure this press release contains forward-looking statements, including those related to business momentum, the strength of our cloud business and growth of our revenue, recurring revenue and bookings, all of which involve risks and uncertainties that could cause actual results to differ materially. factors that might cause or contribute to such differences include, but are not limited to: failure to develop, market and distribute products and services that meet customer requirements, introduction of new products and business models by competitors, failure to successfully manage transitions to new business models and markets, fluctuations in subscription renewal rates, risks associated with cyber-attacks and information security, uncertainty in economic conditions and the financial markets, and failure to realize the anticipated benefits of past or future acquisitions. for a discussion of these and other risks and uncertainties, please refer to adobe’s annual report on form 10-k for our fiscal year 2013 ended nov. 29, 2013 and adobe’s quarterly reports on form 10-q issued in fiscal year 2014. the financial information set forth in this press release reflects estimates based on information available at this time. these amounts could differ from actual reported amounts stated in adobe’s quarterly report on form 10-q for our quarter ended aug. 29, 2014, which adobe expects to file in sept. 2014. adobe assumes no obligation to, and does not currently intend to, update these forward-looking statements. about adobe systems incorporated adobe is changing the world through digital experiences. for more information, visit www.adobe.com. © 2014 adobe systems incorporated. all rights reserved. adobe, the adobe logo, creative cloud and adobe marketing cloud are either registered trademarks or trademarks of adobe systems incorporated in the united states and/or other countries. all other trademarks are the property of their respective owners. condensed consolidated statements of income (in thousands, except per share data; unaudited) total cost of revenue condensed consolidated balance sheets (in thousands, except par value; unaudited) total current assets condensed consolidated statements of cash flows (in thousands; unaudited) non-gaap results (in thousands, except per share data) the following tables show adobe's gaap results reconciled to non-gaap results included in this release. ended use of non-gaap financial information adobe continues to provide all information required in accordance with gaap, but believes evaluating its ongoing 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 its ongoing operations and for internal planning and forecasting purposes. adobe's management does not itself, nor does it suggest that investors should, consider such non-gaap financial measures in isolation from, or as a substitute for, financial information prepared in accordance with gaap. adobe presents such non-gaap financial measures in reporting its financial results to provide investors with an additional tool to evaluate adobe's operating results. adobe believes these non-gaap financial measures are useful because they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making. this allows institutional investors, the analyst community and others to better understand and evaluate our operating results and future prospects in the same manner as management. adobe's management believes it is useful for itself and investors to review, as applicable, both gaap information that may include items such as stock-based and deferred compensation expenses, restructuring and other charges, amortization of purchased intangibles and certain activity in connection with technology license arrangements, investment gains and losses, loss contingencies and the related tax impact of all of these items, income tax adjustments, the income tax effect of the non-gaap pre-tax adjustments from the provision for income taxes, and the non-gaap measures that exclude such information in order to assess the performance of adobe's business and for planning and forecasting in subsequent periods. whenever adobe uses such a non-gaap financial measure, it provides a reconciliation of the non-gaap financial measure to the most closely applicable gaap financial measure. investors are encouraged to review the related gaap financial measures and the reconciliation of these non-gaap financial measures to their most directly comparable gaap financial measure as detailed above.
