The News: Adobe Q4 revenue totaled $4.53 billion for the fourth quarter of fiscal year 2022 (FY2022), up 10 percent from $4.11 billion one year ago and setting a company record as Adobe reported its earnings on December 15. The digital creativity and experiences software maker also set a company record for full fiscal year revenue for the quarter ending December 2 with $17.6 billion in sales, which is up 12 percent from $15.7 billion for FY2021. Read the full Press Release on Adobe’s Q4 and FY2022 earnings on the Adobe website.
Adobe Q4 Revenue Hits Record $4.53B for FY2022, Up 10% YoY
Analyst Take: Adobe’s Q4 revenue of $4.53 billion set its sixth quarterly revenue record dating back to Q3 of FY2021 when the company brought in $3.9 billion, giving Adobe a solid boost at the end of its fiscal year. And in a year of mixed results for many tech and consumer products companies, this is great news for the company.
And Adobe’s impressive $17.61 billion revenue performance for full FY2022 is icing on the cake, as the company continues its progress in growing its markets, product lines, and services to its customers in a wide range of creative fields.
Those record quarterly and fiscal year revenue totals are fabulous, but we believe that Adobe is seemingly just getting started as it awaits the completion of its planned $20 billion acquisition of collaborative design platform vendor, Figma, sometime in 2023. As we said after the Figma deal was announced in the last quarter, the acquisition is a bold move and a big bet on collaborative design that will help to further boost Adobe’s revenue and standing in the lucrative and demanding creative market.
Here are the Adobe Q4 FY2022 and full FY2022 earnings results by the numbers:
- Q4 FY2022 revenue of $4.53 billion, up 10 percent from $4.11 billion for the same quarter one year ago. The $4.53 billion in revenue met analyst consensus estimates for revenue in the quarter, according to Yahoo Finance.
- Q4 FY2022 non-GAAP net income of $1.67 billion, up nine percent from $1.53 billion one year ago.
- Q4 FY2022 diluted non-GAAP earnings per share (EPS) of $3.60, up from $3.20 EPS one year ago. The $3.60 per share price beat analyst consensus estimates of $3.50 per share, according to Yahoo Finance.
- Q4 FY2022 non-GAAP operating income of $2.02 billion, up 8.9 percent from $1.85 billion one year ago.
- Remaining Performance Obligations (RPO) totaled $15.19 billion at the end of the quarter.
- Full year FY2022 revenue of $17.61 billion, up 11.5 percent from $15.78 billion one year ago.
- Full year FY2022 non-GAAP net income of $6.46 billion, up 7.5 percent from $6 billion one year ago.
- Full year FY2022 diluted non-GAAP EPS of $13.71 per share, up 9.8 percent from $12.48 one year ago.
- Full year FY2022 non-GAAP operating income was $7.95 billion, up 9.4 percent from $7.25 billion one year ago.
Adobe generated a record $7.84 billion in operating cash flows during the year.
These are good overall Q4 and FY2022 earnings numbers for Adobe, which has been a steady performer that continues to make smart strategic bets like its planned acquisition of Figma. With cloud spending slowing a bit in the marketplace, it is still hard not to like Adobe’s prospects as we approach 2023.
The company again saw healthy revenue growth in its subscription and services categories in Q4, demonstrating its value to customers for its products and services as the topsy-turvy global marketplace continues to battle economic and other headwinds.
Adobe’s subscription revenue for Q4 FY2022 was $4.2 billion, up 11 percent from $3.8 billion one year ago. Product revenue for the quarter was $115 million, down 10 percent from $128 million last year, while services and other revenue totaled $178 million, up 4.7 percent from $170 million one year ago.
Adobe Revenue by Product Segment
Adobe Q4 revenue and full FY2023 figures by product segment also showed good progress.
Digital Media Q4 revenue totaled $3.3 billion, which was up 10 percent from $3 billion one year ago. Creative revenue rose eight percent to $2.68 billion from $2.47 billion one year ago, while Document Cloud revenue hit $619 million, a 16 percent rise from $532 million one year ago.
Digital Experience Q4 revenue came in at $1.15 billion, a 14 percent increase from $1.01 billion one year ago, while its Digital Experience subscription revenue rose to $1.01 billion, a 14 percent rise from $884 million one year ago.
Adobe also reported net new Digital Media Annualized Recurring Revenue (ARR) of $576 million, which helped boost the total Digital Media ARR for the quarter to $13.97 billion. The company’s Creative ARR rose to $11.60 billion, while its Document Cloud ARR rose to $2.37 billion.
For full FY2023, Adobe’s Digital Media revenue was $12.84 billion, which was up 11 percent from $11.52 billion one year ago. The company’s net new Digital Media ARR was $1.91 billion during the fiscal year.
Adobe’s Creative revenue rose to $10.46 billion for FY2022, up 10 percent from $9.54 billion one year ago, while its Document Cloud revenue hit $2.38 billion, up 21 percent from $1.97 billion one year ago.
In addition, Adobe Digital Experience revenue totaled $4.42 billion, up 14 percent from $3.86 billion one year ago, while its Digital Experience subscription revenue was $3.88 billion, a 15 percent rise from $3.37 billion one year ago.
Adobe Provides Guidance for Q1 FY2023 and for Full FY2023
Amid a still challenging macroeconomic environment around the globe and continuing foreign exchange headwinds, Adobe also provided earnings guidance for Q1 2023 and for full FY2023. The guidance does not, however, reflect any impacts from the planned acquisition of Figma that is expected to close during 2023.
For Q1 FY2023, Adobe expects total revenue of $4.60 billion to $4.64 billion and non-GAAP EPS of $3.65 to $3.70 per share. The company said it expects Digital Media revenue in Q1 of between $3.350 billion to $3.375 billion and Digital Experience revenue of $1.16 billion to $1.18 billion. Also expected is Digital Experience subscription revenue of between $1.025 billion to $1.045 billion.
For full FY2023, Adobe said it expects total revenue of between $19.1 billion to $19.3 billion and non-GAAP EPS of $15.15 to $15.45per share. The company said it expects Digital Media revenue of between $13.9 billion to $14.0 billion and Digital Experience revenue of $4.925 billion to $5.025 billion. Also expected is Digital Experience subscription revenue of $4.375 billion to $4.425 billion.
Foreign exchange rate fluctuations are expected to result in an approximately four percent headwind to total revenue year-over-year growth rates in fiscal year 2023, according to Adobe.
Overall Impressions on Adobe Q4 and Full FY2023 Earnings
Adobe’s Q4 revenue and full FY2022 earnings results are again solid as it benefits from continuing growth across its business segments and fresh success with ongoing record top-line revenue. The latest figures are evidence that Adobe remains well-positioned to benefit from long-term secular trends and that it is delivering on the promise of its broad product portfolio.
Its products, including Adobe Photoshop, Acrobat Pro, Illustrator, Adobe Express, Lightroom, Dreamweaver, Substance 3D Pro – as well as its Document Cloud and Experience Cloud offerings – connect daily with a huge number of business professionals and consumers directly and indirectly.
Continuing those trends and growth, through pending acquisitions of companies like Figma, will be important for Adobe as it works to further bolster enterprise adoption of its products and services. Enterprise customers are continuing to increase their demand for true and beneficial digital transformation and Adobe is successfully finding ways to respond to those needs.
We continue to see Adobe’s market position as a strong one as we head into 2023, led by the vision of its effective and experienced executive team which deftly drives that progress with a pinpoint focus on its customers and growing its markets.
Disclosure: Futurum Research is a research and advisory firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including those mentioned in this article. The author does not hold any equity positions with any company mentioned in this article.
Analysis and opinions expressed herein are specific to the analyst individually and data and other information that might have been provided for validation, not those of Futurum Research as a whole.
Other insights from Futurum Research:
A Deep Dive into Adobe’s Acquisition of Figma – Futurum Tech Webcast Interview Series
Adobe Q3 Revenue Hits $4.4B, Up 13% YoY for FY2022
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Author Information
Daniel is the CEO of The Futurum Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise.
From the leading edge of AI to global technology policy, Daniel makes the connections between business, people and tech that are required for companies to benefit most from their technology investments. Daniel is a top 5 globally ranked industry analyst and his ideas are regularly cited or shared in television appearances by CNBC, Bloomberg, Wall Street Journal and hundreds of other sites around the world.
A 7x Best-Selling Author including his most recent book “Human/Machine.” Daniel is also a Forbes and MarketWatch (Dow Jones) contributor.
An MBA and Former Graduate Adjunct Faculty, Daniel is an Austin Texas transplant after 40 years in Chicago. His speaking takes him around the world each year as he shares his vision of the role technology will play in our future.
