ADBE Q1 2019 Earnings

Call Details

• Call Title: Adobe Q1 2019 Earnings Call
• Date: March 14, 2019 at 9:00 PM UTC
• Management Team:
  • Mike Savage (Vice President of Investor Relations)
  • Shantanu Narayen (Chairman and CEO)
  • John Murphy (Executive Vice President and CFO)

Call Summary

Financial Performance

• Adobe reported revenue of $2.6B in Q1 FY19, representing 25% year-over-year growth versus Q1 FY18 under ASC 605 comparables.
• GAAP diluted EPS for Q1 was $1.36 and non-GAAP diluted EPS was $1.71 on an ASC 606 basis.
• Digital media revenue was $1.78B for the quarter, including Creative revenue of $1.49B and Document Cloud revenue of $282M.
• Experience Cloud revenue was $743M in Q1, which represents 34% year-over-year growth on ASC 606.
• Cash flow from operations was $1.01B in Q1 and ending cash and short-term investments were $3.23B exiting the quarter.
• Deferred revenue exited the quarter at $3.22B, which is up 25% year-over-year, and trade DSO was 46 days in Q1.

ARR / Recurring Revenue Growth

• Net new digital media ARR in Q1 was $357M and total digital media ARR exiting Q1 grew to $7.07B.
• Document Cloud ARR grew to $856M exiting Q1 and Adobe added $65M of net new Document Cloud ARR during the quarter.
• Adobe stated approximately 91% of Q1 revenue was from recurring sources.
• Adobe reported an approximately $20M cumulative adjustment to ARR from adoption of ASC 606 included in the exiting ARR balance.
• Adobe provided FY19 net new digital media ARR target of approximately $1.5B and Q2 net new digital media ARR target of approximately $370M.
• Remaining performance obligations (RPO) exiting Q1 were approximately $8.13B and include about $600M of non-cancellable, non-refundable committed funds.