Adobe reports record second-quarter revenue
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Adobe reported financial results for its second quarter fiscal year 2024 ended May 31, 2024.
“Adobe achieved record revenue of $5.31 billion driven by strong growth across Creative Cloud, Document Cloud and Experience Cloud,” said Shantanu Narayen, chair and CEO, Adobe. “Our highly differentiated approach to AI and innovative product delivery are attracting an expanding universe of customers and providing more value to existing users.”
“Adobe delivered outstanding Q2 results, positioning us to raise our annual targets,” said Dan Durn, executive vice president and CFO, Adobe. “Our market-leading products, strong execution and world-class financial discipline position us well for the second half of 2024 and beyond.”
According to a report at Chartr.com, the company’s subscription business dwarfs all other businesses.
Financial Highlights
- Adobe achieved revenue of $5.31 billion in its second quarter of fiscal year 2024, which represents 10 percent year-over-year growth or 11 percent in constant currency. Diluted earnings per share was $3.49 on a GAAP basis and $4.48 on a non-GAAP basis.
- GAAP operating income in the second quarter was $1.89 billion and non-GAAP operating income was $2.44 billion. GAAP net income was $1.57 billion and non-GAAP net income was $2.02 billion.
- Cash flows from operations were $1.94 billion.
- Remaining Performance Obligations (“RPO”) exiting the quarter were $17.86 billion.
- Adobe repurchased approximately 4.6 million shares during the quarter.
Business Segment Highlights
- Digital Media segment revenue was $3.91 billion, which represents 11 percent year-over-year growth or 12 percent in constant currency. Creative revenue grew to $3.13 billion, representing 10 percent year-over-year growth or 11 percent in constant currency. Document Cloud revenue was $782 million, representing 19 percent year-over-year growth as reported and in constant currency.
- Net new Digital Media Annualized Recurring Revenue (“ARR”) was $487 million, exiting the quarter with Digital Media ARR of $16.25 billion. Creative ARR grew to $13.11 billion and Document Cloud ARR grew to $3.15 billion.
- Digital Experience segment revenue was $1.33 billion, representing 9 percent year-over-year growth as reported and in constant currency. Digital Experience subscription revenue was $1.20 billion, representing 13 percent year-over-year growth as reported and in constant currency.
Financial Targets
Adobe is providing third-quarter targets and updated fiscal year 2024 targets. These targets factor in current expectations for the macroeconomic environment and FX outlook.
The following table summarizes Adobe’s third quarter fiscal year 2024 targets:
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Total revenue |
$5.33 billion to $5.38 billion |
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Digital Media net new ARR |
~$460 million |
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Digital Media segment revenue |
$3.95 billion to $3.98 billion |
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Digital Experience segment revenue |
$1.325 billion to $1.345 billion |
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Digital Experience subscription revenue |
$1.20 billion to $1.22 billion |
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Tax rate |
GAAP: ~18.0% |
Non-GAAP: ~18.5% |
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Earnings per share1 |
GAAP: $3.45 to $3.50 |
Non-GAAP: $4.50 to $4.55 |
The following table summarizes Adobe’s updated fiscal year 2024 targets:
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Total revenue |
$21.40 billion to $21.50 billion |
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Digital Media net new ARR |
~$1.95 billion |
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Digital Media segment revenue |
$15.80 billion to $15.85 billion |
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Digital Experience segment revenue |
$5.325 billion to $5.375 billion |
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Digital Experience subscription revenue |
$4.775 billion to $4.825 billion |
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Tax rate |
GAAP: ~20.5% |
Non-GAAP: ~18.5% |
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Earnings per share1 |
GAAP: $11.80 to $12.00 |
Non-GAAP: $18.00 to $18.20 |
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1 Targets assume diluted share count of ~447 million for third quarter and ~449 million for fiscal year 2024. |
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