Adobe Financial Analyst Meeting
October 6, 2015
© 2015 Adobe Systems Incorporated. All Rights Reserved.
Welcome
Mike Saviage | VP, Investor Relations
© 2015 Adobe Systems Incorporated. All Rights Reserved.
Financial Disclaimer
Some of the information discussed today 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 the risks and uncertainties, you should review Adobe’s SEC
filings, including the annual report on Form 10-K for fiscal year 2014 and the quarterly reports
on Form 10-Q filed by the company in 2015. In our presentation, we may discuss non-GAAP
financial measures. The GAAP financial measures that correspond to such non-GAAP
measures, as well as the reconciliation between the two, are available on our website at
http://www.adobe.com/ADBE.
Adobe does not undertake an obligation to update forward-looking statements.
© 2015 Adobe Systems Incorporated. All Rights Reserved.
Adobe’s Growth Strategy
Shantanu Narayen | President & CEO
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Adobe’s Mission
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Market Trends
THE CONNECTED
CONSUMER
© 2015 Adobe Systems Incorporated. All Rights Reserved.
DATA
EXPLOSION
DIGITAL
DISRUPTION
Adobe’s Strategy
© 2015 Adobe Systems Incorporated. All Rights Reserved.
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Adobe’s Unique Advantage
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Adobe’s Cloud Platform
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Adobe’s Impact
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Adobe’s Growth Story
2018 Total
Addressable Market
~$48B
Unified
Adobe Cloud
Platform
© 2015 Adobe Systems Incorporated. All Rights Reserved.
FY15-FY18
Revenue CAGR
~20%
Leadership
in Content
and Data
Digital Media
Bryan Lamkin | SVP & GM, Digital Media |
© 2015 Adobe Systems Incorporated. All Rights Reserved.
@bryanlamkin
Adobe’s Strategy
© 2015 Adobe Systems Incorporated. All Rights Reserved.
Insert slide with images of pros & consumers
Content Consumption Trends
creating & consuming lots of content
© 2015 Adobe Systems Incorporated. All Rights Reserved.
Digital Media
© 2015 Adobe Systems Incorporated. All Rights Reserved.
Digital Media Business Momentum
Digital Media Ending ARR
$3,200
~$2.95B
$2,646
$2,800
$2,356
$M
$2,400
$2,092
$1,877
$2,000
$1,621
$1,600
$1,378
$1,151
$1,200
$944
$655
$800
$400
$300
$444
$0
Q1 FY13
Q2 FY13
Q3 FY13
Q4 FY13
Q1 FY14
Q2 FY14
Q3 FY14
Q4 FY14
Q1 FY15
Source: Adobe; beginning Q4 FY14, ARR was revalued to reflect FY15 plan rates; Q3 FY14 and prior periods have not been revalued; using mid-point of Q4 FY15 targets
© 2015 Adobe Systems Incorporated. All Rights Reserved.
Q2 FY15
Q3 FY15
Q4 FY15 E
Creative Update
1
2
3
BUSINESS
MOMENTUM
STRATEGY
OPPORTUNITY
© 2015 Adobe Systems Incorporated. All Rights Reserved.
Our Journey
• Adobe Stock
• Creative Cloud for enterprise
w/AEM integration
• Creative Cloud Photography
• Creative Cloud for enterprise
• Creative Cloud for teams
• Creative Cloud for individuals
• Creative Suite 6
• Desktop subscription
2012
© 2015 Adobe Systems Incorporated. All Rights Reserved.
• Sync & store
• Community
2013
• Touch
• Connected desktop & mobile
• Connected community
2014
• CreativeSync
2015
Creative Cloud Momentum
Total Creative ARR
$3,000
$2,500
$M
$2,000
$1,500
$1,000
$500
$0
Source: Adobe
*Using mid-point of Q4 FY15 targets
© 2015 Adobe Systems Incorporated. All Rights Reserved.
FY2012
FY2013
FY2014
FY2015E*
Business Momentum
Creative Cloud
Source: Adobe
© 2015 Adobe Systems Incorporated. All Rights Reserved.
>30%
>14M
>5.6M
New to CC
(excludes Enterprise)
Adobe IDs
created on mobile
Behance
members
>80%
18%
40%
Enterprise customers
transitioned to ETLAs
Enterprise seats licensed
in Q3 with services
Overall Q3 Y/Y growth
outside the U.S.
Creative Cloud Strategy
Desktop Apps
Mobile Apps
Community
CreativeSync
& Assets
Marketplace
© 2015 Adobe Systems Incorporated. All Rights Reserved.
Creative Cloud
Everything Creatives Need to Do Their Best Work
Desktop
Apps
Desktop Apps
Mobile
Apps
Community
CreativeSync
& Assets
Marketplace
© 2015 Adobe Systems Incorporated. All Rights Reserved.
Constant stream of innovation
focused on performance,
productivity and Adobe
magic—plus touch
Creative Cloud
Everything Creatives Need to Do Their Best Work
Desktop
Apps
Mobile Apps
Mobile
Apps
Community
CreativeSync
& Assets
Marketplace
© 2015 Adobe Systems Incorporated. All Rights Reserved.
A family of connected mobile
apps that extend the power of
desktop apps to devices
Creative Cloud
Everything Creatives Need to Do Their Best Work
Desktop
Apps
Marketplace
Mobile
Apps
Community
CreativeSync
& Assets
Marketplace
© 2015 Adobe Systems Incorporated. All Rights Reserved.
Single destination for all
creative needs, including stock
content & custom projects
Creative Cloud
Everything Creatives Need to Do Their Best Work
Desktop
Apps
Community
Mobile
Apps
Community
CreativeSync
& Assets
Marketplace
© 2015 Adobe Systems Incorporated. All Rights Reserved.
Increase opportunities to
get inspired, showcase
work and be discovered
Assets Everywhere You Work
Adobe CreativeSync
Ensures that files, fonts, design assets, and more all instantly
appear in workflows wherever they are needed. Start creative
work on any device and seamlessly continue on another.
© 2015 Adobe Systems Incorporated. All Rights Reserved.
Assets Everywhere You Work
Adobe CreativeSync
Ensures that files, fonts, design assets, and more all instantly
appear in workflows wherever they are needed. Start creative
work on any device and seamlessly continue on another.
Desktop to Desktop
© 2015 Adobe Systems Incorporated. All Rights Reserved.
Mobile to Desktop
Mobile to Mobile
Creative
Cloud
Marketing
Cloud
MAX: The Creativity Conference
Over 7,000 attendees from around the world
Graphic, web and app designers, creative
directors, photographers, filmmakers,
motion graphics and visual effects artists
Brightest minds come together to learn,
inspire and network
© 2015 Adobe Systems Incorporated. All Rights Reserved.
MAX Announcements
CreativeSync & Assets
New workflows across and
between desktop and mobile
Desktop Apps
Natural gestures on touch everywhere;
UX design tools; color & performance in video;
& hundreds of more features
Marketplace
Adobe Stock now with video
and business customer offerings
Community
New Adobe Portfolio –
showcase your work & get discovered
© 2015 Adobe Systems Incorporated. All Rights Reserved.
Mobile Apps
New Photoshop Fix and
Capture CC apps, plus
enhancements to all apps
Photography
Photoshop magic now in Lightroom mobile
capture workflow and Lightroom web
Growth Ahead
~675k
~$275B
New Creative jobs
each year
Corporate spend
on content
Source: Adobe
© 2015 Adobe Systems Incorporated. All Rights Reserved.
~65%
Use phone as
primary camera
~50%
Creative Pros use
mobile to capture and
create content
Creative Cloud: Big and Growing Market Opportunity
CORE
•
Creative Cloud
Source: Adobe
© 2015 Adobe Systems Incorporated. All Rights Reserved.
VALUE
EXPANSION
MARKET
EXPANSION
•
•
Photography
Mobile only
•
•
Adobe Stock
Creative Services
2018 Creative Cloud Addressable Market
Core Opportunity
EDUCATION
• Creative Cloud for Teams (CCT)
• Creative Cloud for Institutions (CCE)
$1.2B
2018 TAM
COMMERCIAL
CORE
Source: Adobe
© 2015 Adobe Systems Incorporated. All Rights Reserved.
INDIVIDUAL
• Creative Cloud for Teams (CCT)
• Creative Cloud for Enterprises (CCE)
$3.7B
• Creative Cloud for Individuals (CCI)
• Creative Cloud for Students (STE)
• Creative Cloud for Photographers (CCP)
$3.4B
$8.3B
2018 Creative Cloud Addressable Market
Targeting Core Users Beyond the Creative Suite Installed Base
Large incremental opportunity
~11.7M
~8.3M
CS3-CS6
CORE
~8.6M CC
Source: Adobe, as of Q3FY15, not to scale
© 2015 Adobe Systems Incorporated. All Rights Reserved.
•
New creative jobs
•
Student & Teacher penetration
•
Conversion from piracy base
Remaining Creative Suite installed base
•
Includes CS6 units sold after CC introduction
•
Includes Enterprise
Existing Creative Cloud installed base
•
Subscriptions: 5.3M (CCI, CCP, CCT, STE)
•
CCE seats: ~3.3M (Enterprise - Commercial and Education)
2018 Creative Cloud Addressable Market
Targeting Core Users
~11.7M
Total Users
~8.3M
CS3-CS6
CORE
~8.6M CC
Source: Adobe, not to scale
© 2015 Adobe Systems Incorporated. All Rights Reserved.
~29M
= $8.3B
2018 TAM
2018 Creative Cloud Addressable Market
Core Opportunity
$8.3B
CORE
Source: Adobe
© 2015 Adobe Systems Incorporated. All Rights Reserved.
MARKET
EXPANSION
VALUE
EXPANSION
2018 Creative Cloud Addressable Market
Market Expansion
PHOTOGRAPHERS
•
Expansion with hobbyists
•
~5M Lightroom & Elements
installed base
$1.6B
2018 TAM
$2.9B
CONSUMERS
MARKET
EXPANSION
Source: Adobe
© 2015 Adobe Systems Incorporated. All Rights Reserved.
•
Mobile and web-based solutions
for broad consumer base
$1.3B
2018 Creative Cloud Addressable Market
Core Opportunity + Market Expansion
$8.3B
$2.9B
CORE
MARKET
EXPANSION
Source: Adobe
© 2015 Adobe Systems Incorporated. All Rights Reserved.
VALUE
EXPANSION
2018 Creative Cloud Addressable Market
Value Expansion
STOCK
• Includes Images, video, editorial,
and premium content
$4.1B
2018 TAM
$6.2B
CREATIVE SERVICES
VALUE
EXPANSION
Source: Adobe
© 2015 Adobe Systems Incorporated. All Rights Reserved.
• Marketplace for project based work
and talent
• Training content and more
$2.1B
2018 Creative Cloud Addressable Market
Core Opportunity + Market Expansion + Value Expansion
$8.3B
$2.9B
CORE
MARKET
EXPANSION
Source: Adobe
© 2015 Adobe Systems Incorporated. All Rights Reserved.
$6.2B
VALUE
EXPANSION
2018 Creative Cloud Addressable Market
Total Addressable Market
TOTAL CREATIVE
$17.4B
$8.3B
$2.9B
$6.2B
CORE
MARKET
EXPANSION
VALUE
EXPANSION
Source: Adobe
© 2015 Adobe Systems Incorporated. All Rights Reserved.
Creative Summary
•
Strong momentum
•
Large remaining migration opportunity
•
•
© 2015 Adobe Systems Incorporated. All Rights Reserved.
Targeting new customers and
adjacent markets
$17.4B TAM
Document Cloud Update
1
MARKET
TRENDS
© 2015 Adobe Systems Incorporated. All Rights Reserved.
2
3
4
STRATEGY
BUSINESS
MOMENTUM
OPPORTUNITY
Document Cloud Update
© 2015 Adobe Systems Incorporated. All Rights Reserved.
Market Trends
PAPER TO DIGITAL
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MOBILE DEVICE GROWTH
THE EXPERIENCE MATTERS
The Document Cloud Opportunity
Signatures
Transact faster
Collaboration &
Sharing
Need to take advantage
of mobile workflows
© 2015 Adobe Systems Incorporated. All Rights Reserved.
Government
Use secure forms for
citizen engagement
Sales Acceleration
Get contracts reviewed,
approved and signed faster
HR Onboarding
Need modern process for new
employees to fill out HR forms &
capture data
Procurement Agility
Teams need to get deals
done faster
Typical Document Workflow Today
24
TOTAL STEPS
Draft NDA
E-mail
Review
Store Copy of
Sales Contract
Update CRM
System
Customize
NDA
E-mail
E-mail
Scan
12
MANUAL STEPS
Review
Apply Edits
& E-mail
Review
Sign
Print
Review &
E-mail
Approval
E-mail
E-mail
EXTERNAL
E-mail to
Partner
E-mail
Legal
© 2015 Adobe Systems Incorporated. All Rights Reserved.
Convert
to PDF
Account Manager
Business Development
Partner
Scan
Sign
Print
Improved Workflow with Document Cloud
6
TOTAL STEPS
0
MANUAL STEPS
Shared Review & Approval
Review
Draft NDA
Send
Sign
Sign
Approval
Review
Automatically stored
in ERP System
Review
Legal
© 2015 Adobe Systems Incorporated. All Rights Reserved.
Account Manager
Business Development
Partner
Adobe Document Cloud
Delivers streamlined workflows and compelling document
experiences that accelerate business transformation
© 2015 Adobe Systems Incorporated. All Rights Reserved.
Adobe Document Cloud
Desktop Apps
Acrobat DC
Acrobat DC Mobile
Mobile
Apps
Partners
PDF Services
eSign Services
Services
© 2015 Adobe Systems Incorporated. All Rights Reserved.
Adobe Document Cloud Strategy
ACROBAT DC
Individual Productivity
• Grow and transition installed
base to a subscription model
with PDF & mobility services
• Reach new users
© 2015 Adobe Systems Incorporated. All Rights Reserved.
Modernize
Document Experiences
ACROBAT DC
ENTERPRISE SERVICES
Enterprise Automation
• Create strong differentiated
enterprise value propositions,
building on electronic signatures
• Leverage Adobe’s worldwide sales
presence & strategic partnerships
PDF Has Never Been More Popular
Source: Adobe
© 2015 Adobe Systems Incorporated. All Rights Reserved.
~50B
~1B
~150M
PDFs opened in
Adobe products
in 2015
Adobe Reader
installed base
E-sign agreements
processed to date
Document Cloud Business Momentum
Document Cloud - ARR & Revenue
$900
$800
$700
$M
$600
$500
$400
$300
$200
$100
$0
FY2012
Source: Adobe
*Using mid-point of Q4 FY15 targets
© 2015 Adobe Systems Incorporated. All Rights Reserved.
FY2013
FY2014
Revenue
ARR
FY2015E*
Document Cloud Business Success
Source: Adobe, as of Q3FY2015
© 2015 Adobe Systems Incorporated. All Rights Reserved.
>50%
>50%
Recurring revenue
Adobe Direct
>75%
>30%
Choose subscription on
Adobe.com
Acrobat subscriptions
come from Reader
Document Cloud: Big and Growing Market Opportunity
2018 Total Addressable Market
$1.2B
$2.7B
+
ACROBAT DC
Source: Adobe
© 2015 Adobe Systems Incorporated. All Rights Reserved.
ENTERPRISE SERVICES
Document Cloud: Big and Growing Market Opportunity
2018 Total Addressable Market
$3.9B
$1.2B
$2.7B
+
ACROBAT DC
Source: Adobe
© 2015 Adobe Systems Incorporated. All Rights Reserved.
ENTERPRISE SERVICES
Document Cloud Summary
• PDF has never been more popular
• Cloud strategy and subscriptions
reinvigorating long-term growth
• Large and growing enterprise
document services opportunity
• $3.9B TAM by 2018
© 2015 Adobe Systems Incorporated. All Rights Reserved.
Digital Media
© 2015 Adobe Systems Incorporated. All Rights Reserved.
Digital Media Routes to Market
Direct on
adobe.com
Through
Partners
Direct to
Enterprises
Data-Driven Marketing & Customer Engagement
© 2015 Adobe Systems Incorporated. All Rights Reserved.
Digital Media Summary
~$21B
TAM by 2018
>20%
Revenue CAGR
FY2015-FY2018
© 2015 Adobe Systems Incorporated. All Rights Reserved.
Digital Marketing Update
Brad Rencher | SVP & GM Digital Marketing |
© 2015 Adobe Systems Incorporated. All Rights Reserved.
@bradrencher
Adobe’s Strategy
© 2015 Adobe Systems Incorporated. All Rights Reserved.
1
BUSINESS
MOMENTUM
© 2015 Adobe Systems Incorporated. All Rights Reserved.
2
3
STRATEGY
OPPORTUNITY
© 2015 Adobe Systems Incorporated. All Rights Reserved.
Adobe Marketing Cloud Momentum
~$1.4B
>30%
Adobe Marketing Cloud revenue1
Y/Y bookings growth 1
SOLUTION ADOPTION
LARGE DEAL MOMENTUM
51%
50%
166
38%
Y/Y increase in customers
>$500K in ARR2
Y/Y increase in
contracts >$1M3
Annual multi-solution
contracts >$500K4
Of >$1M contracts involve
multiple solutions5
DATA PLATFORM
1 Estimated
41 Trillion
45%
Annual customer data
transactions6
of Analytics transactions
from mobile devices7
FY15, using mid-point of Q4 FY15 targets
of customers with ARR >$500K as of FY15
3Based on YTD thru FY15 Bookings- Growth in number of deals >$1M
4Based on trailing 4 quarter bookings as of FY15- Number of deals >$500k with more than one solution
2 Number
© 2015 Adobe Systems Incorporated. All Rights Reserved.
5 Based
on YTD thru FY15 Bookings – % of deals >$1M with more than one solution
on trailing 4 quarters as of FY15
7 % of Analytics server calls from mobile devices as of FY15
6 Based
Adobe Marketing Cloud Momentum
FY2012
FY2015
Change
~$800M
~$1.4B
Revenue
75%
Growth
~10 Trillion
~41 Trillion
310%
253B
~1.5 Trillion
600%
8 Solutions
Integration and
solution selling
Revenue
Data transactions
Mobile app
transactions1
22 Products
Source: Adobe
1Trailing 4 quarters thru Q312
2Trailing 4 quarters thru Q315
© 2015 Adobe Systems Incorporated. All Rights Reserved.
Data
transactions1
Mobile app
transactions2
Growth
Growth
Adobe Marketing Cloud Momentum
TOP 100 ACCOUNTS
Source: Adobe
1Based on FY14 Top 100 ARR Customers
2Based on FY15 Top 100 ARR Customers
© 2015 Adobe Systems Incorporated. All Rights Reserved.
66%
$2.75M
Of customers
have 3+ solution products1
Average ARR of customers
with 3+ solution products1
83%
$4M
Of customers
have 3+ solution products2
Average ARR of customers
with 3+ solution products2
Adobe Marketing Cloud Momentum: Verticals
World’s largest
media companies
America’s largest financial
services companies
World’s biggest
auto companies
America’s top wealth
management firms
9/10
10/10
10/10
America’s largest
corporations
9/10
10/10
World’s most valuable
telecom brands
© 2015 Adobe Systems Incorporated. All Rights Reserved.
10/10
World’s biggest
hotel chains
8/10
Adobe Marketing Cloud
10/10
7/10
6/10
World’s more
valuable airlines
World’s top
internet retailers
Highest revenue
pharmaceutical companies
Adobe Marketing Cloud Momentum: Partners
$1M
>3,000
50%
45
Average deal size
with global partners1
Partner program
members
Bookings CAGR with
global partners2
Adobe specialized
partner practices
Source: Adobe
1 Q2 FY15
2 1H FY13 – 1H FY15
© 2015 Adobe Systems Incorporated. All Rights Reserved.
2018 Adobe Marketing Cloud Total Addressable Market
2018 MARKET OPPORTUNITY
Analytics
$5.4B
Audience Manager
$0.7B
Campaign
$6.1B
Experience Manager
$5.6B
Media Optimizer
$4.1B
Primetime
$1.1B
Social
$2.5B
Target
$1.7B
Source: Adobe
© 2015 Adobe Systems Incorporated. All Rights Reserved.
~$27B
Addressable Market
Growth Ahead
CONSUMER IS AT CENTER
THE EXPERIENCE MATTERS
BUSINESS RESULTS WIN
Data is the foundation
(profile & context)
Mobile dominates the interface
Consumers: Experience is the brand
Customers: Experience is results
Drive measurable impact
on the business
© 2015 Adobe Systems Incorporated. All Rights Reserved.
Our Customers
Practitioner,
Web and Data Analyst,
SEO, SEM, Social Media
© 2015 Adobe Systems Incorporated. All Rights Reserved.
CMO, CRO, CDO
CIO, CTO, CFO,
Line of Business Leader
Adobe Marketing Cloud
COMPREHENSIVE
INTEGRATED
ACTIONABLE
© 2015 Adobe Systems Incorporated. All Rights Reserved.
Momentum with Adobe Marketing Cloud Solutions
AUDIENCE MANAGER
ANALYTICS
EXPERIENCE
MANAGER
PRIMETIME
MARKETING
CLOUD
CORE SERVICES
CAMPAIGN
MEDIA OPTIMIZER
SOCIAL
© 2015 Adobe Systems Incorporated. All Rights Reserved.
TARGET
© 2015 Adobe Systems Incorporated. All Rights Reserved.
CONTENT
VELOCITY
© 2015 Adobe Systems Incorporated. All Rights Reserved.
Adobe Marketing Cloud
•
Significant Momentum
•
Explosive Market Opportunity
•
Market Leadership
& Most Complete Cloud Offering
© 2015 Adobe Systems Incorporated. All Rights Reserved.
Adobe’s Growth Strategy
Mark Garrett | EVP & CFO
© 2015 Adobe Systems Incorporated. All Rights Reserved.
Adobe’s Strategy
© 2015 Adobe Systems Incorporated. All Rights Reserved.
1
2
3
BUSINESS
MOMENTUM
CAPITAL
STRATEGY
ADDRESSING THE
OPPORTUNITY
© 2015 Adobe Systems Incorporated. All Rights Reserved.
Business Momentum
Revenue and Margin
Adobe Revenue & Non-GAAP Operating Margin
Revenue $M
$4,600
$4,200
50%
$4,404
36.3%
$4,055
23.1%
$3,800
40%
$4,147
30%
21.8%
20%
$3,400
10%
$3,000
0%
FY2012
Source: Adobe
*Using mid-point of Q4 FY15 targets
© 2015 Adobe Systems Incorporated. All Rights Reserved.
FY2013
Revenue
FY2014
Non-GAAP Operating Margin %
FY2015E*
Non-GAAP Operating Margin %
60%
$5,000
Business Momentum
Creative
Total Creative - ARR & Revenue
$3,000
$2,500
$M
$2,000
$1,500
$1,000
$500
$0
FY2012
Source: Adobe
*Using mid-point of Q4 FY15 targets
© 2015 Adobe Systems Incorporated. All Rights Reserved.
FY2013
Revenue
FY2014
ARR
FY2015E*
Business Momentum
Document Cloud
Document Cloud - ARR & Revenue
$900
$800
$700
$M
$600
$500
$400
$300
$200
$100
$0
FY2012
Source: Adobe
*Using mid-point of Q4 FY15 targets
© 2015 Adobe Systems Incorporated. All Rights Reserved.
FY2013
Revenue
FY2014
ARR
FY2015E*
Business Momentum
Marketing Cloud
Marketing Cloud - Revenue
$1,500
$M
$1,250
$1,000
$750
$500
FY2012
Source: Adobe
*Using mid-point of Q4 FY15 targets
© 2015 Adobe Systems Incorporated. All Rights Reserved.
FY2013
FY2014
Revenue
FY2015E*
Business Momentum
Recurring Revenue
Total Adobe - % Recurring Revenue
80%
> 73%
66%
% Recurring Revenue
70%
60%
50%
44%
40%
30%
27%
20%
10%
0%
FY2012
Source: Adobe
*Using mid-point of Q4 FY15 targets
© 2015 Adobe Systems Incorporated. All Rights Reserved.
FY2013
FY2014
FY2015E*
Business Momentum
Deferred Revenue & Unbilled Backlog
Total Adobe - Deferred Revenue & Unbilled Backlog
$4,000
$3,500
$2,910
$3,000
$M
$2,500
$1,860
$2,000
$1,500
$1,000
$500
$1,110
$1,755
$1,032
$491
$619
$829
FY2012
FY2013
$1,155
$0
Source: Adobe
© 2015 Adobe Systems Incorporated. All Rights Reserved.
Deferred Revenue
FY2014
Unbilled Backlog
FY2015E
Business Momentum
Operating Cash Flow
Operating Cash Flow
$1,600
$1,500
$1,500
$1,400
$1,287
$M
$1,300
$1,152
$1,200
$1,100
$1,000
$900
$800
FY2012
Source: Adobe
© 2015 Adobe Systems Incorporated. All Rights Reserved.
FY2013
FY2014
F2015E
Capital Structure
•
Strong liquidity position
$3.7B of cash and short-term investments
• $1.0B unutilized credit facility, recently extended until 2020
•
•
Conservative leverage approach
•
$1.9B of public debt
Rated A- by S&P
• Rated Baa1 by Moody's
•
•
Excess domestic cash returned to stockholders through stock repurchase
Source: Adobe, as of Q3 FY2015
© 2015 Adobe Systems Incorporated. All Rights Reserved.
Foreign Exchange Hedging Programs
•
Goal is to mitigate short-term currency risk to income
statement and balance sheet
•
Income statement
Mitigates risk when USD strengthens
• Contributed $140M to revenue since 2012
•
•
Balance sheet
Mitigates risk to earnings
• Hedges 100% of recognized foreign currency exposure
•
Source: Adobe
© 2015 Adobe Systems Incorporated. All Rights Reserved.
Creative Financial Summary
2018 MARKET OPPORTUNITY
•
Significantly higher TAM as a result of cloud strategy
•
Three pillars of growth
Migration of CS installed base
• New customer expansion
• New services driving higher ARPU
•
•
Financial transition to subscription largely complete
•
•
Elements business represents upside ARR opportunity
P&L leverage evident in FY2016 targets
Source: Adobe
© 2015 Adobe Systems Incorporated. All Rights Reserved.
Core Opportunity
$8.3B
Market Expansion
$2.9B
Value Expansion
$6.2B
~$17B
Addressable Market
Document Cloud Financial Summary
2018 MARKET OPPORTUNITY
•
Using Creative Cloud playbook and cloud strategy
to reinvigorate growth
•
Growing enterprise document opportunity
•
Financial transition more gradual
•
•
Revenue relatively stable while growing ARR
Executing synergies across direct
and enterprise GTM
Source: Adobe
© 2015 Adobe Systems Incorporated. All Rights Reserved.
Acrobat
$1.2B
Enterprise Services
$2.7B
~$4B
Addressable Market
Marketing Cloud Financial Summary
2018 MARKET OPPORTUNITY
•
Explosive enterprise growth category
•
Leader with most integrated offering for customers
•
Targeting multi-year, multi-solution engagements
•
FY16 targets reflect significant decline in perpetual revenue
•
Investment to capture market share, drive future growth
Analytics
$5.4B
Audience Manager
$0.7B
Campaign
$6.1B
Experience Manager
$5.6B
Media Optimizer
$4.1B
Primetime
$1.1B
Social
$2.5B
Target
$1.7B
~$27B
Addressable Market
Source: Adobe
© 2015 Adobe Systems Incorporated. All Rights Reserved.
FY2016 Target Assumptions
•
Bookings and ARR are focus for long-term growth
•
Last material businesses are transitioning to ratable revenue
•
•
•
Driven by Acrobat, Elements, Lightroom, AEM, and Campaign
>$100M expected revenue impact in FY2016
FX headwind reflected in FY2016 targets
•
~$200M expected FX impact to revenue in FY2016 (relative to rates in December 2014)
•
Combined potential impact on FY2016 non-GAAP EPS of ~$0.50
•
Margin continues to expand while investing for growth
© 2015 Adobe Systems Incorporated. All Rights Reserved.
FY2016 Preliminary Targets
FY2016 Preliminary Targets*
Total Adobe revenue
*Using mid-point of Q4 FY15 targets
© 2015 Adobe Systems Incorporated. All Rights Reserved.
~$5.7B
Digital Media segment revenue
~20% Y/Y
Digital Media ARR
~25% Y/Y
Marketing Cloud revenue
~20% Y/Y
Marketing Cloud bookings
~30% Y/Y
GAAP EPS
~$1.80
Non-GAAP EPS
~$2.70
Three Year Financial Targets
FY2015-FY2018 CAGR Targets
Total Adobe revenue
© 2015 Adobe Systems Incorporated. All Rights Reserved.
~20%
Digital Media segment revenue
>20%
Digital Media ARR
>20%
Marketing Cloud revenue
>20%
Marketing Cloud bookings
~30%
Non-GAAP EPS
~30%
Operating cash flow
~25%
Capitalizing on the Opportunity
Adobe Revenue & Non-GAAP Operating Margin
$8,000
$7,000
30%
$M
$6,000
$5,000
20%
$4,000
$3,000
10%
$2,000
$1,000
$0
FY2012
FY2013
FY2014
Revenue
Source: Adobe
*Using mid-point of Q4 FY15 targets
© 2015 Adobe Systems Incorporated. All Rights Reserved.
FY2015E*
FY2016E*
FY2017E*
Non-GAAP Operating Margin %
FY2018E*
0%
Non-GAAP Operating Margin %
40%
$9,000
Capitalizing on the Opportunity
Content + Data represent large,
expanding market opportunity
•
•
•
$9,000
~$48B TAM in 2018
Adobe Cloud Platform is unique
differentiation
Significant top-line and bottomline growth
40%
$8,000
$7,000
30%
$6,000
$M
•
$5,000
20%
$4,000
$3,000
10%
$2,000
$1,000
$0
0%
FY2012
Source: Adobe
*Using mid-point of Q4 FY15 targets
© 2015 Adobe Systems Incorporated. All Rights Reserved.
FY2013
FY2014
FY2015E* FY2016E* FY2017E* FY2018E*
Non-GAAP Operating Margin %
Adobe Revenue & Non-GAAP Operating Margin
Q&A
© 2015 Adobe Systems Incorporated. All Rights Reserved.
© 2015 Adobe Systems Incorporated. All Rights Reserved.