Executive Summary
Adobe reported solid Q3 2024 results, underscoring durable demand for its cloud-based software and strong cash-generation capability. Revenue of USD 5.408 billion marked YoY growth of 4.36%, supported by a high gross margin near 89% and an operating margin of approximately 36.8%. Net income reached USD 1.684 billion, with diluted EPS of USD 3.76-3.78, contributing to a robust profitability profile. The company generated USD 2.021 billion in operating cash flow and USD 1.964 billion in free cash flow, while maintaining a strong balance sheet with a net cash position of roughly USD 1.50 billion (cash and equivalents of USD 7.19 billion and total debt of USD 5.70 billion). Notably, management executed a meaningful capital return program, with stock repurchases around USD 2.5 billion, signaling confidence in sustained cash generation. While there is no formal forward guidance in the provided data, the quarter reinforces Adobe’s leadership in Creative Cloud and Digital Experience solutions and its ability to convert revenue growth into substantial free cash flow. Investors should monitor product mix dynamics between Digital Media and Digital Experience, ongoing AI-enabled product development, and macro-driven demand for enterprise software.
Key Performance Indicators
Key Insights
Revenue: USD 5.408B; YoY growth: 4.36%; QoQ growth: 0.00%. Gross Profit: USD 4.811B; Gross Margin: 88.96% (approx. 0.8896). Operating Income: USD 1.992B; Operating Margin: 36.83% (approx. 0.3683). Net Income: USD 1.684B; Net Margin: 31.14% (approx. 0.3114). Earnings Per Share (diluted): USD 3.76-3.78; Weighted avg shares outstanding: ~445.3M. EBITDA: USD 2.325B; EBITDA Margin (EBITDARatio): ~42.99%. Cash Flow from Operations: USD 2.021B; Free Cash Flow: USD 1.964B. Cash and Cash Equivalents: USD...
Financial Highlights
Revenue: USD 5.408B; YoY growth: 4.36%; QoQ growth: 0.00%. Gross Profit: USD 4.811B; Gross Margin: 88.96% (approx. 0.8896). Operating Income: USD 1.992B; Operating Margin: 36.83% (approx. 0.3683). Net Income: USD 1.684B; Net Margin: 31.14% (approx. 0.3114). Earnings Per Share (diluted): USD 3.76-3.78; Weighted avg shares outstanding: ~445.3M. EBITDA: USD 2.325B; EBITDA Margin (EBITDARatio): ~42.99%. Cash Flow from Operations: USD 2.021B; Free Cash Flow: USD 1.964B. Cash and Cash Equivalents: USD 7.193B; Total Debt: USD 5.697B; Net Debt: approx. USD -1.496B (net cash). Current Ratio: 1.111; Quick Ratio: 1.111; CCC: -17.95 days. ROE: ~11.6%; ROA: ~5.65%; Return on Capital Employed: ~9.87%. Valuation (as implied by ratios): P/E ~ 37.9x; P/S ~ 47.1x; Enterprise Value Multiple ~ 109x; Price to Free Cash Flow ~ 129.8x. Dividend yield: 0%. Share repurchases: USD -2.50B; Stock issued: USD 0.264B.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
5.41B |
4.36% |
0.00% |
| Gross Profit |
4.81B |
6.68% |
0.89% |
| Operating Income |
1.99B |
4.46% |
0.00% |
| Net Income |
1.68B |
171.61% |
0.00% |
| EPS |
3.78 |
175.91% |
0.00% |
Key Financial Ratios
operatingProfitMargin
36.8%
operatingCashFlowPerShare
$4.54
freeCashFlowPerShare
$4.41
Management Commentary
No earnings call transcript data was provided in the dataset. As a result, there are no management quotes or call-themes to quote or summarize. The quantitative results, however, indicate durable profitability and a strong balance sheet that would typically be discussed by management (e.g., margin resilience, cash flow generation, and capital allocation).
Forward Guidance
No explicit forward guidance is included in the provided data. Based on the QQ3 2024 results and Adobe’s historical trajectory, the base-case outlook suggests continued revenue expansion from recurring Software-as-a-Service (SaaS) and expanding Digital Experience demand, supported by ongoing AI-enabled product enhancements. Potential upside drivers include deeper cross-sell between Digital Media and Digital Experience, a larger enterprise footprint, and further monetization of AI capabilities. Key risks include macro consumer/enterprise IT budget constraints, competitive pressure from other cloud software platforms, currency fluctuations, and potential changes in pricing or contractual terms. Investors should monitor: (1) trajectory of Digital Media and Experience bookings, (2) AI-related product adoption and associated cross-sell, (3) R&D investments vs. efficiency, and (4) macro-currency impacts given the USD-denominated results but international exposure.