Adobe reported financial results for its first quarter fiscal year 2024 ended March 1, 2024. “The company drove record Q1 revenue demonstrating strong momentum across Creative Cloud, Document Cloud and Experience Cloud,” said Shantanu Narayen, chair and CEO, Adobe. “We’ve done an incredible job harnessing the power of generative AI to deliver groundbreaking innovation across our product portfolio.”
“Adobe’s Q1 results and record RPO reflect strong customer adoption of our innovative products and services,” said Dan Durn, executive vice president and CFO, Adobe. “As a result of our strong trajectory of growth and profitability, we are announcing a new $25 billion share repurchase program, which demonstrates Adobe’s continued commitment to returning capital to our shareholders.”
First Quarter Fiscal Year 2024 Financial Highlights
Adobe achieved revenue of $5.18 billion in its first quarter of fiscal year 2024, which represents 11 percent year-over-year growth or 12 percent in constant currency. Diluted earnings per share was $1.36 on a GAAP basis and $4.48 on a non-GAAP basis.
GAAP operating income in the first quarter was $907 million and non-GAAP operating income was $2.47 billion. GAAP net income was $620 million and non-GAAP net income was $2.05 billion.
Cash flows from operations were $1.17 billion. Remaining Performance Obligations (“RPO”) exiting the quarter were $17.58 billion. Adobe repurchased approximately 3.1 million shares during the quarter.
First Quarter Fiscal Year 2024 Business Segment Highlights
Digital Media segment revenue was $3.82 billion, which represents 12 percent year-over-year growth or 13 percent in constant currency. Creative revenue grew to $3.07 billion, representing 11 percent year-over-year growth or 12 percent in constant currency. Document Cloud revenue was $750 million, representing 18 percent year-over-year growth as reported and in constant currency.
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Net new Digital Media Annualized Recurring Revenue (“ARR”) was $432 million, exiting the quarter with Digital Media ARR of $15.76 billion. Creative ARR grew to $12.78 billion and Document Cloud ARR grew to $2.98 billion.
Digital Experience segment revenue was $1.29 billion, representing 10 percent year-over-year growth as reported and in constant currency. Digital Experience subscription revenue was $1.16 billion, representing 12 percent year-over-year growth as reported and in constant currency.
Bloomberg reported that Adobe has faced anxieties that new generative AI-based startups will cut into its market. “Adobe has responded by putting its proprietary AI model, Firefly, into its top products such as Photoshop and Illustrator. Still, a recent demonstration by OpenAI of its video-generation model, Sora, reignited investors’ concerns about competition.”
“Expectations were perhaps a little higher in terms of what we would guide,” CEO Shantanu Narayen said during a conference call after the results. “But you know I’m really optimistic about what we’ve done,” he said of the company’s AI initiatives.
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