Q4 2024 Adobe Inc Earnings Call Transcript
Key Points
- Adobe Inc (ADBE) achieved record revenue of $21.51 billion for FY24, representing 11% year-over-year growth.
- The company reported strong growth in its Digital Media business with net new ARR of $578 million in Q4.
- Adobe's AI innovations, including the Firefly family, have driven significant customer adoption, with Firefly-powered generations surpassing 16 billion.
- The Document Cloud segment saw a 17% year-over-year revenue growth, with a record net new ARR of $173 million.
- Adobe Experience Platform and native apps surpassed $1 billion in the book of business, with 48 of the Fortune 100 companies leveraging these solutions.
- Despite strong innovation, Adobe Inc (ADBE) faces challenges in accelerating growth, with some investors concerned about the lack of acceleration in Digital Media net new ARR.
- The company anticipates a $200 million revenue headwind in FY25 due to foreign exchange effects and the transition from perpetual to subscription offerings.
- There is a perceived pricing sensitivity in the market, particularly at the lower end, which may impact Adobe's ability to leverage pricing as a growth driver.
- The stock has been a major underperformer year-to-date, indicating investor concerns despite the company's reported successes.
- Adobe's guidance for FY25 suggests a deceleration in growth, raising questions about potential leaks in the growth equation or market share losses.
Good day, and welcome to the Q4 and FY24 Adobe Earnings Conference Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Steve Day, SVP, DX, CFO and Corporate Finance Interim Head of IR. Please go ahead, sir.
Good afternoon, and thank you for joining us. With me on the call today are Shantanu Narayen, Adobe's Chair and CEO; David Wadhwani, President of Digital Media; Anil Chakravarthy, President of Digital Experience; and Dan Durn, Executive Vice President and CFO.
On this call which is being recorded, we will discuss Adobe's fourth quarter and fiscal year 2024 financial results. You can find our press release as well as PDFs of our prepared remarks and financial results on Adobe's Investor Relations website.
The information discussed on this call, including our financial targets and product plans, is as of today, December 11, and contains forward-looking statements that involve risk, uncertainty and assumptions. Actual results may differ
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