ADBE Adobe Inc

Company Provides Preliminary Financial Targets for Fiscal Year 2017

Adobe (Nasdaq:ADBE) today will host a financial analyst meeting at its Adobe MAX user conference with investors and financial analysts.

At today’s meeting, Adobe will outline the company’s momentum, opportunities and strategy across each of its major businesses. As part of their presentations, Adobe executives will present market research information which indicates the company’s total addressable market has expanded to approximately $64 billion by 2019. The Company is also providing preliminary financial targets for fiscal year 2017, and is commenting on both its current Q4 FY2016 outlook and its long-term financial targets.

“Adobe's vision for delivering the world's greatest digital experiences, through our Creative Cloud, Document Cloud and Marketing Cloud solutions, continues to expand our long-term growth opportunities,” said Shantanu Narayen, Adobe president and chief executive officer.

Adobe Provides Preliminary FY2017 Financial Targets

At today’s financial analyst meeting, Adobe is providing preliminary financial targets for its fiscal year 2017, which are summarized in the table below.

Total Adobe revenue   Approximately $7 billion (~20 percent year-over-year growth) Digital Media segment revenue Approximately 20 percent year-over-year growth Digital Media Annualized Recurring Revenue (“ARR”) Approximately 25 percent year-over-year growth Adobe Marketing Cloud revenue Approximately 20 percent year-over-year growth

Adobe Marketing Cloud Annual Subscription Value (“ASV”) bookings

Approximately 30 percent year-over-year growth GAAP earnings per share Approximately $2.85 Non-GAAP earnings per share Approximately $3.75

A reconciliation between FY2017 GAAP and non-GAAP earnings per share targets is provided at the end of this press release.

Adobe Reaffirms Financial Targets

Adobe stated it expects to achieve Q4 FY2016 revenue in its targeted range of $1.55 billion to $1.60 billion. The Company also stated it is on track to achieve earnings per share within its targeted ranges which were $0.60 to $0.66 on a GAAP-basis, and $0.83 to $0.89 on a non-GAAP basis.

The Company also expects to meet or exceed its FY2015 through FY2018 compound annual growth rate (“CAGR”) targets, which are summarized in the table below.

Total Adobe revenue   Approximately 20 percent CAGR Digital Media segment revenue Greater than 20 percent CAGR Digital Media ARR Greater than 20 percent CAGR Adobe Marketing Cloud revenue Greater than 20 percent CAGR Adobe Marketing Cloud ASV bookings Approximately 30 percent CAGR Non-GAAP earnings per share1 Approximately 30 percent CAGR Operating cash flow Approximately 25 percent CAGR

1As part of its long-term growth targets, Adobe believes it can achieve approximately 30 percent CAGR in non-GAAP diluted net earnings per share. Although the information to enable Adobe to reconcile and provide GAAP diluted earnings per share targets for those years is not available at this time, reconciling items are expected to include, stock-based and deferred compensation expense, amortization of purchased intangibles, investment gains and losses and income tax adjustments.

Adobe to Webcast Financial Analyst Meeting

Adobe will webcast its meeting with financial analysts and investors in attendance at Adobe MAX beginning at 5:00 p.m. Eastern Time today. People can access the webcast and slides from this event from the Adobe Investor Relations webpage at http://www.adobe.com/ADBE. The live video webcast will last approximately three hours and will be archived on Adobe's website for approximately 30 days. There will be no phone dial-in capability.

Forward-Looking Statements Disclosure

This press release contains forward-looking statements, including those related to business momentum and strategy, market expansion, revenue, earnings, annualized recurring revenue, bookings, operating cash flow, non-operating other expense, GAAP and non-GAAP tax rate, GAAP and non-GAAP earnings per share and share count, all of which involve risks and uncertainties that could cause actual results to differ materially. Factors that might cause or contribute to such differences include, but are not limited to: failure to develop, market and distribute products and services that meet customer requirements, introduction of new products and business models by competitors, failure to successfully manage transitions to new business models and markets, fluctuations in subscription renewal rates, risks associated with cyber-attacks and information security, potential interruptions or delays in hosted services provided by us or third parties, uncertainty in economic conditions and the financial markets, and failure to realize the anticipated benefits of past or future acquisitions.

For a discussion of these and other risks and uncertainties, please refer to Adobe’s Annual Report on Form 10-K for our fiscal year 2015 ended Nov. 27, 2015, and Adobe's Quarterly Reports on Form 10-Q issued in fiscal year 2016.

Adobe assumes no obligation to, and does not currently intend to, update these forward-looking statements.

About Adobe Systems Incorporated

Adobe is changing the world through digital experiences. For more information, visit www.adobe.com.

© 2016 Adobe Systems Incorporated. All rights reserved. Adobe, the Adobe logo and Creative Cloud are either registered trademarks or trademarks of Adobe Systems Incorporated in the United States and/or other countries. All other trademarks are the property of their respective owners.

Reconciliation of GAAP to Non-GAAP Financial Targets

The following table shows Adobe's preliminary FY2017 GAAP earnings per share financial target reconciled to non-GAAP included in this document.

    Fiscal 2017 Diluted earnings per share:   GAAP diluted earnings per share $ 2.85 Stock-based and deferred compensation expense 0.72 Amortization of purchased intangibles 0.28 Income tax adjustments (0.10 ) Non-GAAP diluted earnings per share $ 3.75     Shares used to compute diluted earnings per share (in millions)   500.0    

Use of Non-GAAP Financial Information

Adobe continues to provide all information required in accordance with GAAP, but believes evaluating its ongoing operating results may not be as useful if an investor is limited to reviewing only GAAP financial measures. Adobe uses non-GAAP financial information to evaluate its ongoing operations and for internal planning and forecasting purposes. Adobe's management does not itself, nor does it suggest that investors should, consider such non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Adobe presents such non-GAAP financial measures in reporting its financial results to provide investors with an additional tool to evaluate Adobe's operating results. Adobe believes these non-GAAP financial measures are useful because they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making. This allows institutional investors, the analyst community and others to better understand and evaluate our operating results and future prospects in the same manner as management.

Adobe's management believes it is useful for itself and investors to review, as applicable, both GAAP information that may include items such as stock-based and deferred compensation expenses, restructuring and other charges, amortization of purchased intangibles and certain activity in connection with technology license arrangements, investment gains and losses and the related tax impact of all of these items, income tax adjustments, the income tax effect of the non-GAAP pre-tax adjustments from the provision for income taxes, and the non-GAAP measures that exclude such information in order to assess the performance of Adobe's business and for planning and forecasting in subsequent periods. Whenever Adobe uses such a non-GAAP financial measure, it provides a reconciliation of the non-GAAP financial measure to the most closely applicable GAAP financial measure. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measure as detailed above.

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Investor Relations ContactAdobeMike Saviage, 408-536-4416ir@adobe.comorPublic Relations ContactAdobeDan Berthiaume, 408-536-2584dberthia@adobe.com