Adobe Systems (ADBE) Offers 3-Year Growth Strategy; Guides FY16 EPS, Revenue Below Views
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(Updated - October 6, 2015 4:07 PM EDT)
Adobe (Nasdaq: ADBE) 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 | |||
*** The Street sees FY16 revenue of $5.9 billion and EPS of $3.19.
A reconciliation between FY2016 GAAP and non-GAAP earnings per share targets is provided at the end of this press release.
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