Adobe Systems (ADBE)
Q4 2011 Earnings Call
December 15, 2011 5:00 pm ET
Mike Saviage - Former Vice President of Investor Relations
Mark Garrett - Chief Financial Officer and Executive Vice President
Shantanu Narayen - Chief Executive Officer, President and Director
Adam H. Holt - Morgan Stanley, Research Division
Brent Thill - UBS Investment Bank, Research Division
Philip C. Rueppel - Wells Fargo Securities, LLC, Research Division
Michael J. Olson - Piper Jaffray Companies, Research Division
Steven M. Ashley - Robert W. Baird & Co. Incorporated, Research Division
Brad A. Zelnick - Macquarie Research
Mark L. Moerdler - Sanford C. Bernstein & Co., LLC., Research Division
Walter H. Pritchard - Citigroup Inc, Research Division
Jay Vleeschhouwer - Griffin Securities, Inc., Research Division
Ross MacMillan - Jefferies & Company, Inc., Research Division
Previous Statements by ADBE
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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 will discuss Adobe's fourth quarter and fiscal year 2011 financial results. By now, you should have a copy of our earnings press release, which crossed the wire approximately one 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, December 15, 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 2 is available in today's earnings release and on our Investor Relations website in the investor datasheet. 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 excited to report we delivered record revenue of $1,152,000,000 in Q4. This performance helped us achieve record revenue of $4,216,000,000 in fiscal year 2011, which represents 11% annual growth.
Our Q4 results demonstrate we are executing exceptionally well against our strategy. We achieved quarterly revenue with 14% year-over-year growth, 5 quarters in a row with more than $1 billion of revenue with strong profit and cash flow results for the year. We accomplished these milestones while putting in place a long-term strategy that will solidify our leadership position in 2 fast-growing markets.
Our strategy centers on our unique capability to help customers make, manage, measure and monetize their digital experiences. Customers are asking for our help in accelerating their digital businesses, and we're doubling down in areas where digital content is mission-critical: Digital media and digital marketing. We have organized Adobe to focus on these opportunities, and we're investing to win in each area.
After I recap some of the accomplishments we achieved during the year, I'll turn it over to Mark for more details on our financial performance in the quarter and the year. Later, I will close with a summary of our priorities in 2012, and then we'll take your questions.
This was a big year for innovation in our digital media business, which delivers solutions that allow customers to create, publish, promote and monetize their content on any device. We introduced the latest version of our flagship desktop product, CS5.5, which achieved strong revenue during the year. We introduced brand new applications such as Edge and Muse that leverage advances in HTML5 while continuing to push the envelope of the expressive Internet with Flash Player and AIR.
As part of our HTML strategy, we acquired Nitobi, maker of PhoneGap, to allow our customers to not only deliver interactive content for browsers, but also make those experiences available as standalone mobile applications.
We announced Creative Cloud, a comprehensive subscription offering that reimagines the creative process. Subscribers will have access to our creative desktop tools, touch applications, creative and publishing services and a strong community.
We introduced several new touch applications for use on tablets including Photoshop Touch, Proto, Debut, Collage and Ideas. We will offer cloud services based on our Digital Publishing and Business Catalyst solutions as well as Typekit, a web phone service that we acquired.
Creative Cloud membership will be launched in fiscal 2012 to coincide with the next release of our CS products. We will aggressively acquire new users as well as help customers migrate from all CS versions to the latest releases of our products.