Adobe(ADBE) - 2024 Q4 - Annual Results

Revenue Growth and Performance - Adobe achieved record FY2024 revenue of $21.51 billion, representing 11% year-over-year growth[3][10] - Digital Media segment revenue reached $15.86 billion in FY2024, with 12% year-over-year growth, and net new Digital Media ARR exceeded $2.0 billion[13] - Document Cloud revenue grew to $3.18 billion in FY2024, an 18% year-over-year increase[14] - Creative revenue reached $12.68 billion in FY2024, with 10% year-over-year growth (11% in constant currency)[15] - Digital Experience segment revenue was $5.37 billion in FY2024, with 10% year-over-year growth, and subscription revenue grew 12% to $4.86 billion[15] - For FY2025, Adobe targets total revenue of $23.30 billion to $23.55 billion, with Digital Media segment revenue expected to grow 11% year-over-year[17] - Adobe expects a $200 million foreign exchange headwind to FY2025 revenue due to currency fluctuations[16] Financial Metrics and Cash Flow - Adobe reported record Q4 operating cash flows of $2.92 billion and FY2024 operating cash flows of $8.06 billion[5][11] - Remaining Performance Obligations (RPO) reached a record $19.96 billion at the end of Q4, reflecting 16% year-over-year growth[6] - Cash and cash equivalents increased to $7.613 billion from $7.141 billion year-over-year[29] - Total current assets rose to $11.232 billion from $11.084 billion year-over-year[29] - Net cash provided by operating activities increased to $2.921 billion from $1.597 billion year-over-year[31] Profitability and Earnings - GAAP net income for the quarter was $1.683 billion, up from $1.483 billion in the same period last year[31] - Non-GAAP operating income for the quarter was $2.596 billion, compared to $2.343 billion in the prior year[34] - Non-GAAP diluted net income per share for the quarter was $4.81, up from $4.27 in the same period last year[35] - GAAP effective income tax rate for the quarter was 15.5%, with a non-GAAP effective income tax rate of 18.5%[37] - Fiscal year 2025 GAAP diluted net income per share target ranges from $15.80 to $16.10, with a non-GAAP target of $20.20 to $20.50[38] - Fiscal year 2025 GAAP operating margin target is 36.0%, with a non-GAAP target of 46.0%[38] - GAAP diluted net income per share for the first quarter is $3.85, with a high of $3.90 for fiscal 2025[40] - Non-GAAP diluted net income per share for the first quarter is $4.95, with a high of $5.00 for fiscal 2025[40] - GAAP operating margin is 37.0%, while Non-GAAP operating margin is 47.0%[40] - GAAP effective income tax rate is 19.0%, adjusted to 18.5% for Non-GAAP[40] Share Repurchase and Capital Allocation - Adobe repurchased approximately 17.5 million shares during FY2024 and 4.6 million shares in Q4[7][12] - Shares used to compute diluted net income per share are 439 million[40] Non-GAAP Financial Measures - Adobe uses non-GAAP financial measures for internal planning and forecasting, providing greater transparency for key metrics[41] - Non-GAAP measures exclude items like stock-based compensation, amortization of intangibles, and income tax adjustments[42] - Adobe provides reconciliations of non-GAAP financial measures to GAAP measures for investor evaluation[42]