Adobe reports record fourth quarter and fiscal 2021 revenue

GaryPageau

Adobe reported financial results for its fourth quarter and fiscal year 2021 ended Dec. 3, 2021. Adobe achieved revenue of $4.11 billion in its fourth quarter of the fiscal year 2021, which represents 20 percent year-over-year growth.

Shantanu Narayen, Chairman and Chief Executive Officer, Adpbe

“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 highlights

  • 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.

Fiscal Year 2021 Financial Highlights

  • Adobe achieved a record annual revenue of $15.79 billion in the 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 announces changes to executive leadership team

Anil Chakravarthy, executive vice president and general manager, Digital Experience Business and Worldwide Field Operations, was promoted to President of Adobe’s Digital Experience business and David Wadhwani, chief business officer and executive vice president, Digital Media, was promoted to President of Adobe’s Digital Media business. As Adobe Presidents, Chakravarthy and Wadhwani will be responsible for the strategy and execution of their respective businesses.

“I am thrilled that Anil Chakravarthy and David Wadhwani are being promoted to president of our Digital Experience and Digital Media businesses respectively,” said Narayen. “I have immense confidence in both leaders and look forward to continuing to work with them and the rest of our executive team as we execute on our strategy to unleash creativity for all, accelerate document productivity and power digital businesses across the globe.”

Chakravarthy joined Adobe in January 2020 as EVP and general manager of Adobe’s Digital Experience business, including Worldwide Field Operations. He successfully led the acquisition and integration of Workfront. Under his leadership, the Digital Experience segment delivered over $1 billion in revenue in the fourth quarter. Before joining Adobe, Chakravarthy was CEO of Informatica.

Wadhwani returned to Adobe in June 2021 as EVP and chief business officer of the company’s Digital Media business. From 2010 to 2015, Wadhwani served as SVP and general manager of Adobe’s Digital Media business and played a key role in the company’s successful transformation to a cloud-based subscription business. Adobe’s Digital Media business delivered record Q4 revenue of $3 billion. Before rejoining Adobe, Wadhwani was CEO of AppDynamics.

In their roles, Chakravarthy and Wadhwani will continue to work with the rest of Adobe’s seasoned executive team to drive the company’s next decade of growth.

Adobe also announced that Executive Vice President and Chief Technology Officer Abhay Parasnis will be leaving Adobe.