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Adobe Provides Three-year Growth Strategy and Financial Targets

Adobe (Nasdaq:ADBE) today will host a financial analyst meeting at its Adobe MAX user conference. At the meeting, Adobe management will outline the company’s momentum and strategy, and discuss multi-year financial growth targets for its business.

“Adobe is the only company that brings great content and powerful data together, enabling millions of customers globally to build high-impact digital experiences,” said Shantanu Narayen, Adobe president and chief executive officer. “We are targeting 20 percent revenue and 30 percent non-GAAP earnings CAGRs between FY15 and FY18 that reflect our business momentum and growing addressable markets.”

FY2015 – FY2018 Financial Targets

At its financial analyst meeting today, Adobe management will discuss FY2015 through FY2018 compound annual growth rate (CAGR) and annualized recurring revenue (ARR) targets, which are summarized in the table below.

Total Adobe revenue Approximately 20 percent CAGR
Digital Media segment revenue Greater than 20 percent CAGR
Digital Media ARR Greater than 20 percent CAGR
Adobe Marketing Cloud revenue Greater than 20 percent CAGR
Adobe Marketing Cloud bookings Approximately 30 percent CAGR
Non-GAAP earnings per share1 Approximately 30 percent CAGR
Operating cash flow Approximately 25 percent CAGR

1As part of its long-term growth targets, Adobe believes it can achieve approximately 30 percent CAGR in non-GAAP diluted net income per share. Although the information to enable Adobe to reconcile and provide GAAP diluted net income per share targets for those years is not available at this time, reconciling items are expected to include, stock-based and deferred compensation expense, amortization of purchased intangibles, investment gains and losses and income tax adjustments.

In addition to these long-term financial targets, Adobe management also provided market research information which concludes the company’s total addressable market will grow to approximately $48 billion by 2018.

FY2016 Financial Targets

Adobe also will discuss preliminary financial targets for its fiscal year 2016, which are summarized in the table below.

Total Adobe revenue Approximately $5.7 billion
Digital Media segment revenue Approximately 20 percent year-over-year growth
Digital Media ARR Approximately 25 percent year-over-year growth
Adobe Marketing Cloud revenue Approximately 20 percent year-over-year growth
Adobe Marketing Cloud bookings Approximately 30 percent year-over-year growth
GAAP earnings per share Approximately $1.80
Non-GAAP earnings per share Approximately $2.70

A reconciliation between FY2016 GAAP and non-GAAP earnings per share targets is provided at the end of this press release.

Adobe to Webcast Financial Analyst Meeting

Adobe will webcast its meeting with financial analysts and investors in attendance at Adobe MAX beginning at 5:00 p.m. Eastern Time today. People can access the webcast and slides from this event from the Adobe Investor Relations webpage at The live video webcast will last approximately two and a half hours and will be archived on Adobe's website for approximately 30 days. There will be no phone dial-in capability.

Forward-Looking Statements Disclosure

This press release contains forward-looking statements, including those related to business momentum and strategy, revenue, margin, earnings, annualized recurring revenue, bookings and operating cash flow, all of which involve risks and uncertainties that could cause actual results to differ materially. Factors that might cause or contribute to such differences include, but are not limited to: failure to develop, market and distribute products and services that meet customer requirements, introduction of new products and business models by competitors, failure to successfully manage transitions to new business models and markets, fluctuations in subscription renewal rates, risks associated with cyber-attacks and information security, potential interruptions or delays in hosted services provided by us or third parties, uncertainty in economic conditions and the financial markets, and failure to realize the anticipated benefits of past or future acquisitions.

For a discussion of these and other risks and uncertainties, please refer to Adobe’s Annual Report on Form 10-K for our fiscal year 2014 ended Nov. 28, 2014, and Adobe's Quarterly Reports on Form 10-Q issued in fiscal year 2015.

Adobe assumes no obligation to, and does not currently intend to, update these forward-looking statements.

About Adobe Systems Incorporated

Adobe is changing the world through digital experiences. For more information, visit

© 2015 Adobe Systems Incorporated. All rights reserved. Adobe and the Adobe logo are either registered trademarks or trademarks of Adobe Systems Incorporated in the United States and/or other countries. All other trademarks are the property of their respective owners.

Reconciliation of GAAP to Non-GAAP Financial Targets

(In millions, except per share data)

The following tables show Adobe's GAAP financial targets reconciled to non-GAAP financial targets included in this document.

Fiscal 2016
Diluted net income per share:
GAAP diluted net income per share $ 1.80
Stock-based and deferred compensation expense 0.78
Amortization of purchased intangibles 0.24
Income tax adjustments (0.12 )
Non-GAAP diluted net income per share $ 2.70
Shares used to compute diluted net income per share 510.0

Use of Non-GAAP Financial Information

Adobe continues to provide all information required in accordance with GAAP, but believes evaluating its ongoing operating results may not be as useful if an investor is limited to reviewing only GAAP financial measures. Adobe uses non-GAAP financial information to evaluate its ongoing operations and for internal planning and forecasting purposes. Adobe's management does not itself, nor does it suggest that investors should, consider such non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Adobe presents such non-GAAP financial measures in reporting its financial results to provide investors with an additional tool to evaluate Adobe's operating results. Adobe believes these non-GAAP financial measures are useful because they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making. This allows institutional investors, the analyst community and others to better understand and evaluate our operating results and future prospects in the same manner as management.

Adobe's management believes it is useful for itself and investors to review, as applicable, both GAAP information that may include items such as stock-based and deferred compensation expenses, restructuring and other charges, amortization of purchased intangibles and certain activity in connection with technology license arrangements, investment gains and losses and the related tax impact of all of these items, income tax adjustments, the income tax effect of the non-GAAP pre-tax adjustments from the provision for income taxes, and the non-GAAP measures that exclude such information in order to assess the performance of Adobe's business and for planning and forecasting in subsequent periods. Whenever Adobe uses such a non-GAAP financial measure, it provides a reconciliation of the non-GAAP financial measure to the most closely applicable GAAP financial measure. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measure as detailed above.


Investor Relations Contact
Mike Saviage, 408-536-4416
Public Relations Contact
Edie Kissko, 408-536-3034

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