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Adobe Systems (ADBE)
Q2 2011 Earnings Call
June 21, 2011 5:00 pm ET
Mike Saviage -
Mark Garrett - Chief Financial Officer and Executive Vice President
Shantanu Narayen - Chief Executive Officer, President and Director
Adam Holt - Morgan Stanley
Chad Bartley - Pacific Crest Securities, Inc.
Brent Thill - UBS Investment Bank
Daniel Cummins - ThinkEquity LLC
Jay Vleeschhouwer - Griffin Securities, Inc.
Ross MacMillan - Jefferies & Company, Inc.
Walter Pritchard - Citigroup Inc
Steven Ashley - Robert W. Baird & Co. Incorporated
Brad Zelnick - Macquarie Research
Michael Olson - Piper Jaffray Companies
Kash Rangan - BofA Merrill Lynch
Previous Statements by ADBE
» Adobe Systems' CEO Discusses Q1 2011 Results - Earnings Call Transcript
» Adobe Systems CEO Discusses F4Q2010 Results – Earnings Call Transcript
» Adobe Systems CEO Discusses F3Q2010 Results - Earnings Call Transcript
Good afternoon, and thank you for joining us today. Joining me on the call are Adobe's President and CEO, Shantanu Narayen; as well as Mark Garrett, Executive Vice President and CFO.
In the call today, we'll discuss Adobe's second quarter fiscal year 2011 financial results. By now, you should have a copy of our earnings press release, which crossed the wire approximately 1 hour ago. If you need a copy of the press release, you can go to adobe.com under the Company and News Room links to find an electronic copy.
Before we get started, I want to emphasize that some of the information discussed in this call, particularly our revenue and operating model targets, and our forward-looking product plans, is based on information as of today, June 21, 2011, and contains forward-looking statements that involve risk and uncertainty. Actual results may differ materially from those set forth in such statements.
For a discussion of these risks and uncertainties, you should review the Forward-Looking Statements Disclosure in the earnings press release we issued today, as well as Adobe’s SEC filings.
During this call, we will discuss GAAP and non-GAAP financial measures. A reconciliation between the two is available in today’s earnings release and on our investor relations website in the Investor data sheet.
Call participants are advised that the audio of this conference call is being broadcast live over the Internet in Adobe Connect, and is also being recorded for playback purposes. An archive of the call will be made available on Adobe's Investor Relations website for approximately 45 days, and is the property of Adobe Systems. The audio and archive may not be rerecorded, or otherwise reproduced or distributed without prior written permission from Adobe Systems. I will now turn the call over to Shantanu.
Thanks, Mike, and good afternoon. I'm pleased to report, we delivered revenue of $1,023,000,000 in Q2 with non-GAAP earnings per share of $0.55. Our strong performance reflects our unique value proposition in the industry. We enable our customers to make, manage, mobilize and measure digital experiences across screens in ways no other company can. This end-to-end approach is resonating with our customers and fueling our growth across an increasingly diverse set of markets.
As we have previously shared with you, we're focused on 3 significant growth opportunities, content
authoring, digital marketing optimization and customer experience management. We're executing well in each area.
In content authoring, we successfully launched Creative Suite 5.5, an update to the CS5 product family. The release features enhancements for mobile content and application creation, new innovations for HTML5 and Flash authoring, and amazing new features and productivity improvements in our video authoring solutions.
CS5.5 is the first release in our transition to an annual release cycle, enabling us to deliver content creation innovations to our customers more frequently in response to the rapidly evolving marketplace. It also allows us to augment our business model to drive incremental revenue. In addition to the perpetual license model we've always offered, we now offer a new subscription addition with CS5.5 that provides a lower upfront price point for customers.
Whether it be HTML, Flash or any other output format, the goal of CS5.5 is to be the best authoring suite, regardless of platform, browser or operating system. Response to our HTML 5 tooling capabilities in CS5.5 has been positive and we recently made new contributions to the HTML standards process by proposing enhancements to build complex, magazine-like layouts in web browsers using web standards.
We are working on an implementation of this proposal in the WebKit open-source HTML engine with Apple, Google and other members of the community. Looking forward, we will deliver a beta release of Adobe Edge in July, which is a new Creative tool for creating expressive animations in HTML for desktops and devices.
While we work to help advance HTML capabilities, we will also continue to innovate with our Flash technology, particularly in areas such as premium video content delivery and measurement, rich Internet applications and gaming.
In premium video content, services such as Amazon Instant Video, HBO Go and Hulu and media companies such as ABC and CBS, the BBC in the U.K., M6 in France, MTV, Turner and many others rely on Adobe's platform for delivering and monetizing their assets.
For mobile apps, the industry is starting to recognize the power of utilizing Flash through the Adobe AIR runtime for devices running Android, iOS, RIM's BlackBerry tablet OS and others. IDC cited Adobe as having a, "leading multiplatform mobile-development environment."
This week, we released version 4.5 of Flash Builder and Flex to extend the capabilities of our developer tools platform. CS5.5 integrates with our new Digital Publishing Solution, which enables publishers to create, distribute and monetize their digital publications for use on tablets.