Adobe Inc. · Earnings release · 8-K Exhibit 99

EX-99.1 2 adbeex991q225.htm EX-99.1 Document Exhibit 99.1 Investor Relations Contact Steve Day Adobe ir@adobe.com Public Relations Contact Ashley Levine Adobe adobepr@adobe.com FOR IMMEDIATE RELEASE Adobe Reports Record Revenue in Q2 and Raises FY25 Revenue and EPS Targets SAN JOSE, Calif. – June 12, 2025 – Adobe (Nasdaq:ADBE) today reported financial results for its second quarter fiscal year 2025 ended May 30, 2025. "Our strategy to deliver ground-breaking innovation for Business Professionals and Consumers, and Creative and Marketing Professionals is delighting customers and we are pleased to raise Adobe's FY25 revenue target," said Shantanu Narayen, chair and CEO, Adobe. "T1Adobe's AI innovation is transforming industries enabling individuals and enterprises to achieve unprecedented levels of creativity."

"As a result of us driving strong performance in the first half of the year, T2we are pleased to raise Adobe's FY25 total revenue and EPS targets," said Dan Durn, executive vice president and CFO, Adobe. "We continue to invest in AI innovation across our customer groups to enhance value realization and expand the universe of customers we serve." Second Quarter Fiscal Year 2025 Financial Highlights • T3Adobe achieved record revenue of $5.87 billion in its second quarter of fiscal year 2025, which represents 11 percent year-over-year growth as reported and in constant currency. Diluted earnings per share was $3.94 on a GAAP basis and $5.06 on a non-GAAP basis. • GAAP operating income in the second quarter was $2.11 billion and non-GAAP operating income was $2.67 billion.

GAAP net income was $1.69 billion and non-GAAP net income was $2.17 billion. • Cash flows from operations were $2.19 billion. • Exiting the quarter, Remaining Performance Obligations ("RPO") were $19.69 billion, and Current Remaining Performance Obligations ("cRPO") were 67 percent. • T4Adobe repurchased approximately 8.6 million shares during the quarter. Second Quarter Fiscal Year 2025 Business Segment Highlights • T5Digital Media segment revenue was $4.35 billion, which represents 11 percent year-over-year growth, or 12 percent in constant currency. T6Digital Media Annualized Recurring Revenue ("ARR") exiting the quarter was $18.09 billion, representing 12.1 percent year-over-year growth. • Digital Experience segment revenue was $1.46 billion, representing 10 percent year-over-year growth as reported and in constant currency.

Digital Experience subscription revenue was $1.33 billion, representing 11 percent year-over-year growth as reported and in constant currency. Customer Group Supplemental Disclosure • Business Professionals and Consumers Group subscription revenue was $1.60 billion, which represents 15 percent year-over-year growth as reported and in constant currency. • Creative and Marketing Professionals Group subscription revenue was $4.02 billion, which represents 10 percent year-over-year growth, or 11 percent in constant currency. Financial Targets The following table summarizes Adobe's third quarter fiscal year 2025 targets, T7which assumes current macroeconomic conditions 1 : G1Total revenue $5.875 billion to $5.925 billion G2Digital Media segment revenue $4.37 billion to $4.40 billion G3Digital Experience segment revenue $1.45 billion to $1.47 billion G4Digital Experience subscription revenue $1.35 billion to $1.36 billion Earnings per share GAAP: $4.00 to $4.05 Non-GAAP: $5.15 to $5.20 1 Targets assume non-GAAP operating margin of ~45.5 percent, non-GAAP tax rate of ~18.5 percent and diluted share count of ~425 million for third quarter fiscal year 2025.

The following updated table summarizes Adobe's fiscal year 2025 targets, which assumes current macroeconomic conditions 2 : G5Total revenue $23.50 billion to $23.60 billion G6Digital Media segment revenue $17.45 billion to $17.50 billion G7Digital Media ending ARR growth 11.0% year over year G8Digital Experience segment revenue $5.80 billion to $5.90 billion G9Digital Experience subscription revenue $5.375 billion to $5.425 billion Earnings per share GAAP: $16.30 to $16.50 Non-GAAP: $20.50 to $20.70 2 Targets assume non-GAAP operating margin of ~46 percent, non-GAAP tax rate of ~18.5 percent and diluted share count of ~428 million for fiscal year 2025. Adobe to Host Conference Call Adobe will webcast its second quarter fiscal year 2025 earnings conference call today at 2:00 p.m.

Pacific Time from its investor relations website: http://www.adobe.com/ADBE. Earnings documents, including Adobe management's prepared conference call remarks with slides and an investor datasheet are posted to Adobe's Investor Relations Website in advance of the conference call for reference. Forward-Looking Statements, Non-GAAP and Other Disclosures In addition to historical information, this press release contains "forward-looking statements" within the meaning of applicable securities laws, including statements related to our business, strategy, artificial intelligence ("AI") and innovation momentum; our market and AI opportunity and future growth; market and AI trends; current macroeconomic conditions; fluctuations in foreign currency exchange rates; strategic investments; customer success and groups; revenue; operating margin; operating efficiencies; annualized recurring revenue; tax rate; earnings per share; and share count.

Each of the forward-looking statements we make in this press release involves risks, uncertainties and assumptions based on information available to us as of the date of this press release. Such risks and uncertainties, many of which relate to matters beyond our control, could cause actual results to differ materially from these forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to: failure to innovate effectively and meet customer needs; issues relating to development and use of AI; failure to compete effectively; damage to our reputation or brands; failure to realize the anticipated benefits of investments or acquisitions; service interruptions or failures in information technology systems by us or third parties; security incidents; failure to effectively develop, manage and maintain critical third-party business relationships; risks associated with being a multinational corporation and adverse macroeconomic conditions; complex sales cycles; failure to recruit and retain key personnel; litigation, regulatory inquiries and intellectual property infringement claims; changes in, and compliance with, global laws and regulations, including those related to information security and privacy; failure to protect our intellectual property; changes in tax regulations; complex government procurement processes; risks related to fluctuations in or the timing of revenue recognition from our subscription offerings; fluctuations in foreign currency exchange rates; impairment charges; our existing and future debt obligations; catastrophic events; and fluctuations in our stock price.

Further information on these and other factors are discussed in the section titled "Risk Factors" in Adobe's most recently filed Annual Report on Form 10-K and Adobe's most recently filed Quarterly Reports on Form 10-Q. The risks described in this press release and in Adobe's filings with the U.S. Securities and Exchange Commission should be carefully reviewed. 2 Undue reliance should not be placed on the financial information set forth in this press release, which reflects estimates based on information available at this time. These amounts could differ from actual reported amounts stated in Adobe's Quarterly Report on Form 10-Q for our fiscal quarter ended May 30, 2025, which Adobe expects to file in June 2025.

Adobe assumes no obligation to, and does not currently intend to, update these forward-looking statements. A reconciliation between GAAP and non-GAAP earnings results and financial targets and a statement regarding use of non-GAAP financial information are provided at the end of this press release and on Adobe's investor relations website. About Adobe Adobe is changing the world through personalized digital experiences. For more information, visit www.adobe.com . ### ©2025 Adobe. All rights reserved. Adobe, Creative Cloud, Document Cloud and the Adobe logo are either registered trademarks or trademarks of Adobe (or one of its subsidiaries) in the United States and/or other countries. All other trademarks are the property of their respective owners. 3 Condensed Consolidated Statements of Income (In millions, except per share data; unaudited) Three Months Ended Six Months Ended May 30, 2025 May 31, 2024 May 30, 2025 May 31, 2024 Revenue: Subscription $ 5,641  $ 5,060  $ 11,124  $ 9,976  Product 88  104  183  223  Services and other 144  145  280  292  Total revenue 5,873  5,309  11,587  10,491  Cost of revenue: Subscription 505  456  995  911  Product 6  8  12  13  Services and other 127  134  253  264  Total cost of revenue 638  598  1,260  1,188  Gross profit 5,235  4,711  10,327  9,303  Operating expenses: Research and development 1,082  984  2,108  1,923  Sales and marketing 1,626  1,445  3,121  2,797  General and administrative 377  355  744  707  Acquisition termination fee —  —  —  1,000  Amortization of intangibles 41  42  82  84  Total operating expenses 3,126  2,826  6,055  6,511  Operating income 2,109  1,885  4,272  2,792  Non-operating income (expense): Interest expense (68) (41) (130) (68) Investment gains (losses), net 2  4  8  22  Other income (expense), net 58  82  133  152  Total non-operating income (expense), net (8) 45  11  106  Income before income taxes 2,101  1,930  4,283  2,898  Provision for income taxes 410  357  781  705  Net income $ 1,691  $ 1,573  $ 3,502  $ 2,193  Basic net income per share $ 3.95  $ 3.50  $ 8.10  $ 4.86  Shares used to compute basic net income per share 428  449  432  451  Diluted net income per share $ 3.94  $ 3.49  $ 8.08  $ 4.83  Shares used to compute diluted net income per share 429  451  433  454  4 Condensed Consolidated Balance Sheets (In millions; unaudited) May 30, 2025 November 29, 2024 ASSETS Current assets: Cash and cash equivalents $ 4,931  $ 7,613  Short-term investments 782  273  Trade receivables, net of allowances for doubtful accounts of $16 and $14, respectively 1,735  2,072  Prepaid expenses and other current assets 1,530  1,274  Total current assets 8,978  11,232  Property and equipment, net 1,890  1,936  Operating lease right-of-use assets, net 259  281  Goodwill 12,830  12,788  Other intangibles, net 631  782  Deferred income taxes 1,984  1,657  Other assets 1,535  1,554  Total assets $ 28,107  $ 30,230  LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Trade payables $ 360  $ 361  Accrued expenses and other current liabilities 2,256  2,336  Debt —  1,499  Deferred revenue 6,220  6,131  Income taxes payable 129  119  Operating lease liabilities 74  75  Total current liabilities 9,039  10,521  Long-term liabilities: Debt 6,166  4,129  Deferred revenue 114  128  Income taxes payable 477  548  Operating lease liabilities 323  353  Other liabilities 540  446  Total liabilities 16,659  16,125  Stockholders' equity: Preferred stock —  —  Common stock —  —  Additional paid-in capital 14,375  13,419  Retained earnings 41,744  38,470  Accumulated other comprehensive income (loss) (333) (201) Treasury stock, at cost (44,338) (37,583) Total stockholders' equity 11,448  14,105  Total liabilities and stockholders' equity $ 28,107  $ 30,230  5 Condensed Consolidated Statements of Cash Flows (In millions; unaudited) Three Months Ended May 30, 2025 May 31, 2024 Cash flows from operating activities: Net income $ 1,691  $ 1,573  Adjustments to reconcile net income to net cash provided by operating activities: Depreciation, amortization and accretion 209  214  Stock-based compensation 481  467  Other non-cash adjustments (101) (99) Changes in deferred revenue (156) (424) Changes in other operating assets and liabilities 67  209  Net cash provided by operating activities 2,191  1,940  Cash flows from investing activities: Purchases, sales and maturities of short-term investments, net (96) 163  Purchases of property and equipment (47) (41) Purchases and sales of long-term investments, intangibles and other assets, net (135) (11) Net cash provided by (used for) investing activities (278) 111  Cash flows from financing activities: Repurchases of common stock (3,500) (2,500) Taxes paid related to net share settlement of equity awards, net of proceeds from treasury stock re-issuances (112) (135) Proceeds from issuance of debt —  1,997  Other financing activities, net (176) (4) Net cash used for financing activities (3,788) (642) Effect of exchange rate changes on cash and cash equivalents 48  (3) Net change in cash and cash equivalents (1,827) 1,406  Cash and cash equivalents at beginning of period 6,758  6,254  Cash and cash equivalents at end of period $ 4,931  $ 7,660  6 Non-GAAP Results The following table shows Adobe's GAAP results reconciled to non-GAAP results included in this release.

(In millions, except per share data) Three Months Ended May 30, 2025 May 31, 2024 February 28, 2025 Operating income: GAAP operating income $ 2,109  $ 1,885  $ 2,163  Stock-based and deferred compensation expense 482  472  469  Amortization of intangibles 83  84  83  Non-GAAP operating income $ 2,674  $ 2,441  $ 2,715  Net income: GAAP net income $ 1,691  $ 1,573  $ 1,811  Stock-based and deferred compensation expense 482  472  469  Amortization of intangibles 83  84  83  Investment (gains) losses, net (2) (4) (6) Income tax adjustments (83) (102) (133) Non-GAAP net income $ 2,171  $ 2,023  $ 2,224  Diluted net income per share: GAAP diluted net income per share $ 3.94  $ 3.49  $ 4.14  Stock-based and deferred compensation expense 1.12  1.04  1.07  Amortization of intangibles 0.19  0.19  0.19  Investment (gains) losses, net —  (0.01) (0.01) Income tax adjustments (0.19) (0.23) (0.31) Non-GAAP diluted net income per share $ 5.06  $ 4.48  $ 5.08  Shares used to compute diluted net income per share 429  451  438  The following table shows Adobe's second quarter fiscal year 2025 GAAP tax rate reconciled to the non-GAAP tax rate included in this release.

Second Quarter Fiscal 2025 Effective income tax rate: GAAP effective income tax rate 19.5  % Income tax adjustments 1.5  Stock-based and deferred compensation expense (2.1) Amortization of intangibles (0.4) Non-GAAP effective income tax rate (*) 18.5  % (*) Represents Adobe's fixed long-term non-GAAP tax rate based on projections and currently available information through fiscal 2025 7 Reconciliation of GAAP to Non-GAAP Financial Targets and Assumptions The following tables show Adobe's third quarter fiscal year 2025 financial targets and assumptions reconciled to non-GAAP financial targets and assumptions included in this release. (Shares in millions) Third Quarter Fiscal 2025 Low High Diluted net income per share: GAAP diluted net income per share $ 4.00  $ 4.05  Stock-based and deferred compensation expense 1.19  1.19  Amortization of intangibles 0.19  0.19  Income tax adjustments (0.23) (0.23) Non-GAAP diluted net income per share $ 5.15  $ 5.20  Shares used to compute diluted net income per share 425  425  Third Quarter Fiscal 2025 Operating margin: GAAP operating margin 36.0  % Stock-based and deferred compensation expense 8.2  Amortization of intangibles 1.3  Non-GAAP operating margin 45.5  % Third Quarter Fiscal 2025 Effective income tax rate: GAAP effective income tax rate 19.0  % Stock-based and deferred compensation expense (1.7) Amortization of intangibles (0.3) Income tax adjustments 1.5  Non-GAAP effective income tax rate (*) 18.5  % (*) Represents Adobe's fixed long-term non-GAAP tax rate based on projections and currently available information through fiscal 2025 8 Reconciliation of GAAP to Non-GAAP Financial Targets and Assumptions (continued) The following tables show Adobe's updated annual fiscal year 2025 financial targets and assumptions reconciled to non-GAAP financial targets and assumptions included in this release.

(Shares in millions) Fiscal Year 2025 Low High Diluted net income per share: GAAP diluted net income per share $ 16.30  $ 16.50  Stock-based and deferred compensation expense 4.56  4.56  Amortization of intangibles 0.72  0.72  Income tax adjustments (1.08) (1.08) Non-GAAP diluted net income per share $ 20.50  $ 20.70  Shares used to compute diluted net income per share 428  428  Fiscal Year 2025 Operating margin: GAAP operating margin 36.0  % Stock-based and deferred compensation expense 8.7  Amortization of intangibles 1.3  Non-GAAP operating margin 46.0  % Fiscal Year 2025 Effective income tax rate: GAAP effective income tax rate 18.0  % Stock-based and deferred compensation expense (1.7) Amortization of intangibles (0.3) Income tax adjustments 2.5  Non-GAAP effective income tax rate (*) 18.5  % (*) Represents Adobe's fixed long-term non-GAAP tax rate based on projections and currently available information through fiscal 2025 Use of Non-GAAP Financial Information Adobe continues to provide all information required in accordance with GAAP, but believes evaluating its ongoing operating results may not be as useful if an investor is limited to reviewing only GAAP financial measures.

Adobe uses non-GAAP financial information to evaluate its ongoing operations and for internal planning and forecasting purposes. Adobe's management does not itself, nor does it suggest that investors should, consider such non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Adobe presents such non-GAAP financial measures in reporting its financial results to provide investors with an additional tool to evaluate Adobe's operating results. Adobe believes these non-GAAP financial measures are useful because they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making. This allows institutional investors, the analyst community and others to better understand and evaluate Adobe's operating results and future prospects in the same manner as management.

Adobe's management believes it is useful for itself and investors to review, as applicable, both GAAP information as well as non-GAAP measures, which may exclude items such as stock-based and deferred compensation expenses, amortization of intangibles, investment gains and losses, income tax adjustments and other items that are not considered part of Adobe's ongoing operations, and the income tax effect of the non-GAAP pre-tax adjustments from the provision for income taxes. Adobe uses these non-GAAP measures in order to assess the performance of Adobe's business and for planning and forecasting in subsequent periods. Whenever such a non-GAAP measure is used, Adobe provides a reconciliation of the non-GAAP financial measure to the most closely applicable GAAP financial measure.

Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measure as detailed above . 9