Adobe reports record revenue

In the second quarter of fiscal 2010, Adobe achieved record revenue of $943.0 million, compared to $704.7 million reported for the second quarter of fiscal 2009 and $858.7 million reported in the first quarter of fiscal 2010. This represents 34 percent year-over-year revenue growth. Adobe’s second quarter revenue target range was $875 to $925 million.

“Record revenue and our strong Q2 financial performance were driven by the successful launch of Creative Suite 5,” said Shantanu Narayen, president and CEO of Adobe. “Our growth is being fueled by the explosion of digital content across all media and devices.”

Adobe’s GAAP diluted earnings per share for the second quarter of fiscal 2010 were $0.28, based on 533.3 million weighted average shares. This compares with GAAP diluted earnings per share of $0.24 reported in the second quarter of fiscal 2009 based on 528.0 million weighted average shares, and GAAP diluted earnings per share of $0. 24 reported in the first quarter of fiscal 2010 based on 532.6 million weighted average shares.

GAAP operating income was $227.3 million in the second quarter of fiscal 2010, compared to $161.4 million in the second quarter of fiscal 2009 and $176.8 million in the first quarter of fiscal 2010. As a percent of revenue, GAAP operating income in the second quarter of fiscal 2010 was 24.1 percent, compared to 22.9 percent in the second quarter of fiscal 2009 and 20.6 percent in the first quarter of fiscal 2010.

GAAP net income was $148.6 million for the second quarter of fiscal 2010, compared to $126.1 million reported in the second quarter of fiscal 2009 and $127.2 million in the first quarter of fiscal 2010.

Adobe’s non-GAAP diluted earnings per share for the second quarter of fiscal 2010 were $0.44. This compares with non-GAAP diluted earnings per share of $0.35 reported in the second quarter of fiscal 2009 and non-GAAP diluted earnings per share of $0.40 reported in the first quarter of fiscal 2010.

Adobe’s non-GAAP operating income was $334.5 million in the second quarter of fiscal 2010, compared to $237.7 million in the second quarter of fiscal 2009 and $289.3 million in the first quarter of fiscal 2010. As a percent of revenue, non-GAAP operating income in the second quarter of fiscal 2010 was 35.5 percent, compared to 33.7 percent in both the second quarter of fiscal 2009 and the first quarter of fiscal 2010.

Non-GAAP net income was $234.2 million for the second quarter of fiscal 2010, compared to $185.0 million in the second quarter of fiscal 2009 and $211.7 million in the first quarter of fiscal 2010.

Reconciliation between GAAP and non-GAAP results is provided at the end of this press release.

For the third quarter of fiscal 2010, Adobe is targeting revenue of $950 million to $1 billion. The Company’s operating margin is targeted to be 25.5 percent to 27.5 percent on a GAAP basis, and 36 percent to 37 percent on a non-GAAP basis. In addition, the Company is targeting its share count to be between 532 million and 534 million shares, and it is targeting non-operating expense between $12.5 million and $13.5 million. Adobe’s GAAP and non-GAAP tax rate is expected to be approximately 25 percent.

These targets lead to a third quarter diluted earnings per share target range of $0.32 to $0.37 on a GAAP basis, and an earnings per share target range of $0.46 to $0.50 on a non-GAAP basis.

Reconciliation between these GAAP and non-GAAP financial targets is provided at the end of this press release.

Adobe also announced its Board of Directors has granted authority for the Company to repurchase up to $1.6 billion in common stock through the end of fiscal 2012. This new program modifies the existing share-based program to offset dilution to a dollar-based authority.