Adobe Raises Revenue Forecast -- Update

By Maria Armental 

Adobe Systems Inc. is betting that sustained demand from U.S. corporate customers and technology buyers in emerging markets will drive another year of revenue growth above 20%.

"Digital has become an imperative for enterprises," Chief Executive Shantanu Narayen said during a conference call with analysts, adding that company executives know if they fail to keep up with technology, a rival could swoop in.

"To compete and win today," Mr. Narayen said, businesses "must provide a world-class, end-to-end customer experience across every touch point."

The company, which reported a record $9.03 billion in revenue for the year ended Nov. 30, on Thursday raised its revenue target for the current financial year to $11.15 billion, including its acquisition of marketing-automation firm Marketo.

Adobe built its name around desktop publishing with products like Acrobat and the ubiquitous PDF but has since transitioned to a cloud-based, subscription business.

Its high-margin digital-media business, which includes the revamped Acrobat offerings, accounted for $6.33 billion of revenue in the year just ended. And Adobe said it expects the business to add about $1.45 billion of recurring revenue this year, up from its October view of $1.4 billion.

The company still expects a 25% increase in bookings in its digital-experience business, which houses the marketing technology and data and analytics products.

Adobe has been investing heavily in the business, including the purchase of Marketo, its largest acquisition at $4.75 billion. On Thursday, it said it expects financial benefits to kick in "as the accounting impact from the transaction dissipates" during the year and said it projects annual profit to increase to $5.54 a share, or $7.75 a share on an adjusted basis, short of analysts' expectations.

On Thursday, Adobe reported fourth-quarter profit rose 35% to $678.2 million, or $1.37 a share.

Revenue rose 23% to $2.46 billion.

Gross profit margin narrowed to 85.4% from 86.5% a year earlier.

Shares, which outperformed the market with a 42% increase this year, closed Thursday at $248.08.

Write to Maria Armental at [e-mail]

(END) Dow Jones Newswires

December 13, 2018 21:29 ET (02:29 GMT)

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