Adobe posts record Q1 revenue with double-digit growth in core clouds
Adobe on Tuesday published record Q1 revenue, beating the market's top- and bottom-line expectations. The software company also raised its annual targets for FY21.
The quarter delivered solid double-digit growth in Adobe's three core clouds: Creative, Document and Experience.
Non-GAAP diluted earnings per share came to $3.14 on revenue of $3.91 billion, representing 26 percent year-over-year growth.
Analysts were expecting earnings of $2.78 on revenue of $3.76 billion.
Adobe's first quarter results benefited from an extra week in the quarter due to the company's 52/53 week financial calendar -- fiscal 2021 is a 53-week year, while fiscal 2020 was a 52-week year.
"Adobe drove record Q1 revenue and we are raising our annual targets based on the tremendous opportunity across our business and our continued confidence in our global execution," CEO Shantanu Narayen said in a statement. "Adobe's Creative Cloud, Document Cloud and Experience Cloud have become mission critical to all customer segments—from students to individuals to large enterprises—across the world."
The company's Digital Media segment brought in $2.86 billion in revenue, representing 32 percent year-over-year growth. Within that segment, Creative revenue grew to $2.38 billion, increasing 31 percent year-over-year. Document Cloud revenue was $480 million, up 37 percent.
Digital Media Annualized Recurring Revenue (ARR) increased $435 million quarter-over-quarter to $10.69 billion exiting the quarter. Creative ARR grew to $9.12 billion and Document Cloud ARR grew to $1.57 billion.
The Digital Experience segment brought in revenue of $934 million, representing 24 percent year-over-year growth. Within that category, Digital Experience subscription revenue was $812 million, representing 27 percent year-over-year growth.
Adobe also announced that executive vice president and CFO John Murphy is retiring this year to spend more time with family and friends and focus on philanthropy. The company is currently evaluating internal and external candidates. Murphy plans stay on as needed to ensure an orderly transition.
For the second quarter, Adobe gave an outlook of about $3.72 billion in revenue, with non-GAAP earnings per share of about $2.81.
For fiscal 2021, Adobe expects revenue of about $15.45 billion.