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Adobe Systems Inc. Reports Operating Results (10-K)
Posted by: gurufocus (IP Logged)
Date: January 22, 2013 05:06PM
Adobe Systems Inc. (ADBE) filed Annual Report for the period ended 2012-11-30. Adobe Systems Inc has a market cap of $18.81 billion; its shares were traded at around $37.9 with a P/E ratio of 24.5 and P/S ratio of 4.3.
Highlight of Business Operations:We continue to derive the majority of our revenue from perpetual licenses. However, our subscription revenue, as a percentage of total revenue, has increased to 15% in fiscal 2012 from approximately 11% and 10% in fiscal 2011 and fiscal 2010, respectively, as we transition more of our business to a subscription-based model.
Our total revenue of $4.4 billion increased $187.4 million and $603.7 million, or 4% and 11%, from $4.2 billion and $3.8 billion in fiscal 2011 and fiscal 2010, respectively. The increase is primarily due to the continued success of our Adobe Marketing Cloud and Creative Suite family of products.
Cost of revenue and operating expenses of $3.2 billion increased by $106.5 million and $416.6 million, or 3% and 15%, from $3.1 billion and $2.8 billion in fiscal 2011 and 2010, respectively. These increases are primarily due to increases in costs associated with compensation and related benefits driven by additional headcount.
Net cash flow from operations of $1.5 billion remained stable compared to fiscal 2011 and increased $386.6 million, or 35%, from $1.1 billion in fiscal 2010 primarily due to increases in net income and deferred revenue and decreases in trade receivables from increased cash collections.
Our subscription revenue is comprised primarily of fees we charge for our subscription and hosted service offerings including our digital marketing services and Creative Cloud. We recognize subscription revenue ratably over the term of agreements with our customers, beginning on the commencement of the service. We expect our subscription revenue will continue to increase as a result of our investments in new SaaS and subscription models. We also expect this to increase the amount of recurring revenue we generate as a percent of our total revenue. Of the $673.2 million, $458.6 million and $386.8 million in subscription revenue for fiscal years 2012, 2011 and 2010, respectively, approximately $553.2 million, $429.2 million and $375.3 million, respectively, is from our Digital Marketing segment, with the remaining amounts representing our Digital Media segment offerings.
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