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Adobe (ADBE) Operating Income : $6,971 Mil (TTM As of Feb. 2024)


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What is Adobe Operating Income?

Adobe's Operating Income for the three months ended in Feb. 2024 was $1,907 Mil. Its Operating Income for the trailing twelve months (TTM) ended in Feb. 2024 was $6,971 Mil.

Operating Margin % is calculated as Operating Income divided by its Revenue. Adobe's Operating Income for the three months ended in Feb. 2024 was $1,907 Mil. Adobe's Revenue for the three months ended in Feb. 2024 was $5,182 Mil. Therefore, Adobe's Operating Margin % for the quarter that ended in Feb. 2024 was 36.80%.

Good Sign:

Adobe Inc operating margin is expanding. Margin expansion is usually a good sign.

Adobe's 5-Year average Growth Rate for Operating Margin % was 3.00% per year.

Operating Income or EBIT is linked to Return on Capital for both regular definition and Joel Greenblatt's definition. Adobe's annualized ROC % for the quarter that ended in Feb. 2024 was 18.71%. Adobe's annualized ROC (Joel Greenblatt) % for the quarter that ended in Feb. 2024 was 167.86%.


Adobe Operating Income Historical Data

The historical data trend for Adobe's Operating Income can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Adobe Operating Income Chart

Adobe Annual Data
Trend Nov14 Nov15 Nov16 Nov17 Nov18 Nov19 Nov20 Nov21 Nov22 Nov23
Operating Income
Get a 7-Day Free Trial Premium Member Only Premium Member Only 3,268.00 4,237.00 5,802.00 6,098.00 6,650.00

Adobe Quarterly Data
May19 Aug19 Nov19 Feb20 May20 Aug20 Nov20 Feb21 May21 Aug21 Nov21 Feb22 May22 Aug22 Nov22 Feb23 May23 Aug23 Nov23 Feb24
Operating Income Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 1,586.00 1,624.00 1,697.00 1,743.00 1,907.00

Adobe Operating Income Calculation

Operating Income, is the profit a company earned through operations. All expenses, including cash expenses such as cost of goods sold (COGS), research & development, wages, and non-cash expenses, such as depreciation, depletion and amortization, have been deducted from the sales.

Operating Income for the trailing twelve months (TTM) ended in Feb. 2024 adds up the quarterly data reported by the company within the most recent 12 months, which was $6,971 Mil.

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


Adobe  (NAS:ADBE) Operating Income Explanation

1. Operating Income or EBIT is linked to Return on Capital for both regular definition and Joel Greenblatt's definition.

Adobe's annualized ROC % for the quarter that ended in Feb. 2024 is calculated as:

ROC % (Q: Feb. 2024 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (Q: Nov. 2023 ) + Invested Capital (Q: Feb. 2024 ))/ count )
=7628 * ( 1 - 35.95% )/( (25251 + 26987)/ 2 )
=4885.734/26119
=18.71 %

where

Note: The Operating Income data used here is four times the quarterly (Feb. 2024) data.

2. Joel Greenblatt's definition of Return on Capital:

Adobe's annualized ROC (Joel Greenblatt) % for the quarter that ended in Feb. 2024 is calculated as:

ROC (Joel Greenblatt) %(Q: Feb. 2024 )
=EBIT/Average of (Net fixed Assets + Net Working Capital)
=EBIT/Average of (Property, Plant and Equipment+Net Working Capital)
     Q: Nov. 2023  Q: Feb. 2024
=EBIT/( ( (Property, Plant and Equipment + Net Working Capital) + (Property, Plant and Equipment + Net Working Capital) )/ count )
=3980/( ( (2388 + max(-4936, 0)) + (2354 + max(-4779, 0)) )/ 2 )
=3980/( ( 2388 + 2354 )/ 2 )
=3980/2371
=167.86 %

where Working Capital is:

Working Capital(Q: Nov. 2023 )
=(Accounts Receivable + Total Inventories + Other Current Assets) - (Accounts Payable & Accrued Expense + Defer. Rev. + Other Current Liabilities)
=(2224 + 0 + 1018) - (1695 + 5837 + 646)
=-4936

Working Capital(Q: Feb. 2024 )
=(Accounts Receivable + Total Inventories + Other Current Assets) - (Accounts Payable & Accrued Expense + Defer. Rev. + Other Current Liabilities)
=(2057 + 0 + 1131) - (1293 + 5975 + 699)
=-4779

When net working capital is negative, 0 is used.

Note: The EBIT data used here is four times the quarterly (Feb. 2024) EBIT data.

3. Operating Income is also linked to Operating Margin %:

Adobe's Operating Margin % for the quarter that ended in Feb. 2024 is calculated as:

Operating Margin %=Operating Income (Q: Feb. 2024 )/Revenue (Q: Feb. 2024 )
=1907/5182
=36.80 %

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

4. Please click Growth Rate Calculation Example (GuruFocus) to see how GuruFocus calculates Wal-Mart Stores Inc (WMT)'s revenue growth rate. You can apply the same method to get the Operating Income growth rate using Operating Income per share data.


Be Aware

Compared with a company's EBITDA margin, Operating Margin can be manipulated by adjusting the rate of depreciation, depletion and amortization (DDA).

If a company is facing competition, its Operating Margin may decline. Often the Operating Margin declines well before the company's revenue or even profit decline. Therefore, Operating Margin is a very important indicator of whether the company is facing problems.

For instance, by 2012, Nokia (NOK)'s problems were well known and its stock had lost more than 90% of its market value since 2007. But Nokia's Operating Margin had already been in decline since 2002, although its earnings per share were still rising. Investors who paid attention to Operating Margin would have avoided this huge loss. The same can be said for Research-in-Motion (RIMM).

Therefore, Operating Margin is a very important screening filter for GuruFocus. GuruFocus's Buffett-Munger screener requires that the profit margin is either consistent or expanding. The Model Portfolio of the Buffett-Munger screener has outperformed the market every year since inception in 2009.


Adobe Operating Income Related Terms

Thank you for viewing the detailed overview of Adobe's Operating Income provided by GuruFocus.com. Please click on the following links to see related term pages.


Adobe (ADBE) Business Description

Address
345 Park Avenue, San Jose, CA, USA, 95110-2704
Adobe provides content creation, document management, and digital marketing and advertising software and services to creative professionals and marketers for creating, managing, delivering, measuring, optimizing and engaging with compelling content multiple operating systems, devices and media. The company operates with three segments: digital media content creation, digital experience for marketing solutions, and publishing for legacy products (less than 5% of revenue).
Executives
Mark S. Garfield officer: VP, CAO & Corp. Controller 345 PARK AVENUE, SAN JOSE CA 95110-2704
Amy Banse director 345 PARK AVENUE, SAN JOSE CA 95110
David Wadhwani officer: SVP & GM, Digital Media ADOBE INC., 345 PARK AVE, SAN JOSE CA 95110
Shantanu Narayen director, officer: President and CEO 345 PARK AVENUE, SAN JOSE CA 95110
Daniel Durn officer: EVP and CFO C/O APPLIED MATERIALS, INC., 3050 BOWERS AVENUE, P.O. BOX 58039, SANTA CLARA CA 95052-8039
Scott Belsky officer: EVP, Chief Product Officer 345 PARK AVENUE, SAN JOSE CA 95110
Cristiano R Amon director 5775 MOREHOUSE DRIVE, SAN DIEGO CA 92121
John E Warnock director, other: Co-Chairman of the Board C/O ADOBE SYSTEMS INC, 345 PARK AVENUE P O BOX 2704, SAN JOSE CA 95110-2704
Dana Rao officer: EVP, Gen. Counsel & Secretary 345 PARK AVE, SAN JOSE CA 95110
Ann Lewnes officer: SVP, Chief Marketing Officer 345 PARK AVENUE, SAN JOSE CA 95110
David A Ricks director LILLY CORPORATE CENTER, INDIANAPOLIS IN 46285
M. Brett Biggs director 702 SW 8TH STREET, BENTONVILLE AR 72716
Laura Desmond director 345 PARK AVENUE, SAN JOSE CA 95110
Spencer Adam Neumann director SIERRA INCOME CORPORATION, 375 PARK AVE., SUITE 3304, NEW YORK NY 10152
Gloria Chen officer: EVP, Strategy & Growth 345 PARK AVENUE, SAN JOSE CA 95110

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