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Adobe Systems Q4 Earnings Call Transcript
Author: 123jump.com Staff
123jump.com
Last Update: 9:02 AM ET December 27 2008


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Right, but it sounds like, I mean, you are at least going to keep watching it. This is not you are done with all of the cost cuts and then the macro will be what it will be. It sounds like you are thinking about the margins as well as growth.

Shantanu Narayen

No, that’s absolutely true, Sara, and it’s not just the restructuring that we’ve done. We’ve also taken a number of other internal measures to make sure that there’s a very significant scrutiny on expenses, whether it’s travel where we are not doing really any travel that’s not related to customers. We use Acrobat Connect and so that’s a good use of travel. Every single external expense as it relates to contractors is being scrutinized by Mark. We’ve also made some decisions as it relates to the salary structure for employees, so we will continue to monitor all of that and balance investing in our strategic directions versus returning to shareholders.

Sara Friar - Goldman Sachs

Sure. And then just maybe the second derivative of that, you have been quite good at buying back your own shares. You still have a fair amount of cash on the balance sheet. How are you thinking about buy-backs as you look forward, just given kind of a generally credit constrained environment?

Mark Garrett

Hi Sara, it is Mark. We are very pleased with our share repurchase program. As we said, we bought back $58 million shares for over $2 billion in 2008. I continue, and Shantanu both and I continue to believe that that’s the right way to return excess cash to shareholders. We will continue buying back to offset dilution, like we did in the fourth quarter. And as it relates to a larger program, obviously we are watching the capital structure of the company with this tight credit market but when it makes sense to do it, we’ll let you know.

Sara Friar - Goldman Sachs

Terrific, okay, thanks very much for taking my questions.

Operator

And we’ll go next to Heather Bellini with UBS.

Heather Bellini – UBS

Yeah hi, thank you. I had a question about mobile, I guess two questions. In regard to the mobile business, you said you renewed contracts in the quarter. On the conference call last quarter you guys actually thought that the segment would decline sequentially. So I’m just wondering if these renewals happened earlier than you had thought. And then the second question, Shantanu, you talked about advanced demand generation, which to me implies a bigger marketing budget than maybe what we saw with CS3 and I was wondering one, am I thinking about it the right way and how might that factor into your margin expectations for this year?

Mark Garrett

Heather its Mark, as it relates to mobile, you’re right, we did anticipate it starting to drop a little sooner. What happened is a lot of the OEMs burned through some of their pre paids faster than we thought. Flash Lite has done extremely well and they just couldn’t wait for the OSP version of Flash to come out later in 2009. So we did some renewals with them earlier and larger than we thought we would do.

Heather Bellini – UBS

But Mark, before we leave that topic, does that…so the new level that you talked about for Q1, is that kind of how we should think about it for the year then, since you think that revenue stream is going to burn away?

Mark Garrett

Yes, that’s right.

Heather Bellini – UBS


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