Adobe Reports Strong "Record" Q2 Earnings, Increases Internal Targets

On a day where Adobe Systems introduced its 2015 iteration of Creative Cloud, Adobe beat expectations thanks to its cloud options, specifically Creative Cloud, Document Cloud, and Marketing Cloud. While most of the earnings call centered around product descriptions and offerings, Adobe's strong performance and innovation is a welcome result among an increasingly cloud-based industry that requires near continuous changes. The main idea here is that Adobe has recorded record-high revenue at $1,162,158 billion, and the company is saying that it's best overall measure of business health, Creative Annualized Recurring Revenue, or "Creative ARR" has exceeded the boundaries set by just the legacy Adobe Creative Suite. Adobe reported a growth of 230 million ARR in Q2. Overall, the company's revenues grew 8.8% in the quarter, with expecting stronger growth in the back half of the year. Adobe stated that its retention rates among its current customer base remain strong, and that 4.61 million outstanding Creative Cloud subscriptions are in place, with 639,000 new subscriptions matriculating in Q2. Adobe's gross profit was reported at $976.985 billion for the quarter ending in May, bringing its net income to $0.30 per share (basic) non-GAAP, a twelve cent increase from last year's $.18 per share. Over the course of this year, Adobe issued 1,359 common shares. Adobe repurchased 2.6 million shares at a cost of $200 million, $133 million was done under the new $2 billion authorization approved by the Board of Directors in January 2015, reducing Adobe's float. However, Narayen made clear that Adobe's only going to grow from its already strong position. "Every single analyst that covers the digital marketplace identifies Adobe as the leader." Walter Richard Citi - Mark "As it relates to promotions, we didn't have a lot of promotions in the quarter. We are really pleased with the net new subscribers without a lot of promotion. As it relates to ARPU (average revenue per user), we've seen the smalles sequential decline in several quarters." Shantanu "You can if you're a creative cloud subscriber add a subscription to Adobe Stock. The standalone subscription for just Adobe Stock is not reported in the Creative Cloud numbers." UBS - CS6 3 year birthday. Japan "CS6 is long in the tooth. Today with CC's 15 release, it's even older. We still have a large CS base and an opportunity to convert them to the creative cloud. We continue to target CS5 and CS6 as converts to CC." Shantanu Lower DSO Jeffries - CC update subscriptions on Point Products "The momentum of subscriptions is growth across the board. The overall new customer adds continues to be greater than 20%." Shantanu "The bulk of the increase in Opex is really going to be driven by sales and marketing. The regular hires in this quarter was around 350." Mark Garrett