This summary is based on the second quarter fiscal 2008 earnings call conducted by Adobe Systems Incorporated (ADBE) on June 11, 2008.
Management:
Vice President, Investor Relations: Mike Saviage
President and Chief Executive Officer: Shantanu Narayen
Executive Vice President and Chief Financial Officer: Mark Garrett
Key Investors Issues
- EPS were 40 cents a share compared to 25 cents a share last year.
- Net income rose to $214.9 million from $152.5 million in the year-earlier period.
- Revenue rose to $886.9 million from $745.6 million a year ago.
Second Quarter Highlights
Adobe achieved revenue of $886.9 million.
This compares to $745.6 million reported for the second quarter of fiscal 2007 and $890.4 million reported last quarter.
- GAAP operating expenses were $543.8 million, compared to $532.5 million last quarter.
- Non-GAAP operating expenses were $479.5 million, compared to $471.8 million last quarter.
- GAAP operating income was $260.2 million, or 29.3% of revenue. This compares to GAAP operating income of $180.4 million, or 24.2% of revenue in the second quarter of fiscal 2007, and $275.4 million, or 30.9% of revenue last quarter.
- Non-GAAP operating income was $349.6 million, or 39.4% of revenue. This compares to non-GAAP operating income of $282.1 million, or 37.8% of revenue in the second quarter of fiscal 2007, and $359 million, or 40.3% of revenue last quarter.
- Adobe''s effective GAAP tax rate was 22.7%, and non-GAAP tax rate was 23.8%. The lower-than-forecasted tax rates are primarily due to stronger forecasted international profits for fiscal 2008 and lower foreign taxes on those forecasted profits
- GAAP net income was $214.9 million compared to $152.5 million reported in the second quarter of fiscal 2007, and $219.4 million last quarter.
- Non-GAAP net income was $272.7 million, compared to $223.2 million reported in the second quarter of fiscal 2007, and $273 million last quarter.
- GAAP earnings per share were 40 cents per share based on 542.4 million weighted average shares. This compares with GAAP earnings per share of 25 cents per share reported in the second quarter of fiscal 2007 based on $603.4 million weighted average shares, and GAAP earnings per share of 38 cents per share reported last quarter based on $571.3 million weighted average shares.
- Non-GAAP earnings per share were 50 cents per share. This compares with non-GAAP earnings per share of 37 cents per share in the second quarter of fiscal 2007, and 48 cents per share reported last quarter.
Creative Solutions segment revenue was $527.2 million, compared to $436.6 million in fiscal 2007, and $543.5 million last quarter.
On a year-over-year basis, this represents 21% growth.
-
Business productivity solutions segment revenue was $252.8 million, compared to $228.8 million in fiscal 2007, and $249.7 million last quarter. On a year-over-year basis, this represents 10% growth.
- With business productivity solutions,
knowledge worker revenue was a record $198.4 million, compared to $184.8 million in fiscal 2007, and $195.5 million last quarter. On a year-over-year basis, this represents 7% growth.
- The other component of business productivity segment is enterprise business.
-
Enterprise revenue was $54.4 million, compared to $44 million in fiscal 2007, and $54.2 million last quarter. On a year-over-year basis, this represents 24% growth.
-
Mobile and device segment revenue was $22.2 million, compared to $12.3 million in fiscal 2007 and $15.2 million last quarter. Year over year, this represents 80% growth.
-
Other segment revenue was $84.7 million, compared to $67.9 million in fiscal 2007 and $82 million last quarter. Year over year, this represents an increase of 25%.
Results on a percent of revenue basis were as follows: the Americas, 43%, Europe, 33%, Asia, 24%.
- In the Americas, revenue was flat year over year.
- In Europe, business remained solid and the company achieved record revenue in Japan.
- Employees at the end of the second quarter totaled 7,317 versus 7,037 at the end of the first quarter.
- Trade DSO was 33 days. This compares to 39 days in fiscal 2007 and 30 days last quarter. In regard to global channel inventory position, the company ended the quarter within company policy.
