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Aug 28, 2020
Adobe Q3 2020 Earnings Report
Adobe achieved record quarterly revenue driven by growth in Digital Media and Digital Experience segments.
Key Takeaways
Adobe reported record revenue of $3.23 billion for Q3 2020, representing 14% year-over-year growth. The company's Digital Media segment saw substantial growth, and operating cash flows reached $1.44 billion.
Adobe achieved record quarterly revenue of $3.23 billion, a 14% increase year-over-year.
Digital Media segment revenue was $2.34 billion, representing 19% year-over-year growth, with Creative revenue at $1.96 billion and Document Cloud revenue at $375 million.
Digital Media ARR increased $458 million quarter-over-quarter to $9.63 billion.
Cash flows from operations were a record $1.44 billion.
Revenue by Segment
Forward Guidance
Adobe provided fourth quarter financial targets, factoring current macroeconomic conditions and typical year-end seasonal strength.
Positive Outlook
- Total revenue ~$3.35 billion
- Digital Media segment revenue~18 percent year-over-year growth
- Digital media annualized recurring revenue (ARR)~$540 million of net new ARR
- Digital Experience subscription revenue~1 percent year-over-year growth
- Non-GAAP diluted net income per share~$2.64
Challenges Ahead
- Digital Experience segment revenue~ Flat year-over-year
- Tax rate GAAP: ~(90) percent
- Share count ~485 million shares
- Earnings per share GAAP: ~$4.29
- Digital Experience subscription revenue (including Advertising Cloud) is expected to grow only 1% year-over-year
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
Analyze how earnings announcements historically affect stock price performance
Avg. Return Before/After Earnings
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