Adobe Inc.'s shares rose in after-market trading Dec. 12 after the software company reported record fourth-quarter and full-year revenues for fiscal year 2019.
Speaking during the company's earnings conference call, CFO John Murphy largely attributed the revenue growth to Adobe's digital media segment revenue, up 22% year over year in the fourth quarter due to the strong performance of its creative businesses. Growth in the media segment was led by Creative Cloud, a set of Adobe subscription-based applications and services used for graphic design, video editing, web development and photography.
"Driving [Creative Cloud's] performance was continued strength with acquisition, upsell and retention rate of Creative Cloud subscriptions as well as the adoption of Creative Cloud services," Murphy said.
Also within the company's digital media segment, Adobe's Document Cloud business also grew, Murphy said. Document Cloud, which allows users to store and share PDF files in the cloud, saw increased subscription demand across all customer segments, as more free mobile app users converted to the paid option, the CFO explained.
Shantanu Narayen, president and CEO of Adobe, touted the Document Cloud business.
"With trillions of PDFs created every year and billions of people viewing PDF documents, we have expanded our ambitions in this space and estimate the total addressable market for Document Cloud will grow to approximately $13 billion by 2022," Narayen said.
Adobe will also expand the total addressable market for Creative Cloud to about $31 billion by 2022, the chief executive said.
Adobe on Dec. 12 reported total revenue of $2.99 billion for its fourth quarter of fiscal 2019, up 21% year over year from $2.46 billion in the prior-year quarter. Digital media segment revenue was up 22% year over year to $2.08 billion, with Creative Cloud revenue up to $1.74 billion and Document Cloud revenue totaling $339 million. Digital experience segment revenue for the quarter was $859 million, up 24% year over year.
Net income for the quarter totaled $851.9 million, or $1.74 per share, up from $678.2 million, or $1.37 per share, a year ago. The S&P Global Market Intelligence EPS consensus estimate for the quarter was $1.70 on a GAAP basis.
For its full year, Adobe's revenue totaled $11.17 billion, up 24% year over year from $9.03 billion in fiscal 2018. Digital media segment revenue was $7.71 billion. Digital experience segment revenue was $3.21 billion, up 31% year over year.
Net income for fiscal 2019 was $2.95 billion, or $6.00 per share, up from $2.59 billion, or $5.20 per share, in the prior fiscal year. The S&P Global Market Intelligence EPS consensus estimate for fiscal 2019 was $5.96 on a GAAP basis.
Looking ahead to Adobe's first quarter of fiscal 2020, the company expects total revenue of $3.04 billion, GAAP earnings of $1.76 per share and non-GAAP earnings of $2.23 per share. For full year 2020, the company expects total revenue of $13.15 billion, GAAP earnings of $7.40 per share and non-GAAP earnings of $9.75 per share.