Summary
Adobe opened fiscal 2022 with first quarter revenue of $4.26 billion, up 9.1% from $3.90 billion in the prior-year quarter. GAAP operating income rose 8.7% to $1.58 billion, and gross profit rose 8.4% to $3.75 billion. Net income was flat at $1.27 billion. Diluted EPS was $2.66, up $0.05 from $2.61 a year earlier.
The non-GAAP picture was stronger. Non-GAAP operating income was $1.99 billion and non-GAAP net income was $1.60 billion. Non-GAAP diluted EPS was $3.37 on a share count that had 475 million diluted shares in the quarter.
The revenue comparison carries a calendar wrinkle. Fiscal 2021 was a 53-week year, and the first quarter of fiscal 2021 had 14 weeks against 13 weeks this year. Adobe says total revenue growth would have been 17% after adjusting for the extra week and holding currency rates constant.
Digital Media remains the engine. Total Digital Media ARR ended the quarter at $12.57 billion, an increase of $418 million from the close of fiscal 2021. Creative ARR was $10.54 billion, and Document Cloud ARR was $2.03 billion, up from $1.93 billion at the end of fiscal 2021 and past the $2 billion mark for the first time. Creative revenue grew 7% year over year and Document Cloud revenue grew 17%. Digital Experience subscription revenue grew 15%, and Digital Experience segment revenue grew 13%. Total Digital Media segment revenue grew 9%.
Profitability held close to last year's level. Gross margin was 88.0%, down 0.6 percentage points, and operating margin was 37.1%, down 0.2 percentage points. Deferred revenue of $5.02 billion rose 17.0% from the prior-year quarter. Remaining performance obligations of $13.83 billion rose 19.1% year over year, but slipped $166 million, or 1%, from the close of fiscal 2021, which management tied to the timing of bookings for Digital Media offerings.
Cash generation held steady. Operating cash flow was flat at $1.77 billion, and capital expenditures were $100 million, up 69.5%. Adobe paid $2.4 billion into an accelerated share repurchase agreement during the quarter and repurchased roughly 3.8 million shares in total. After the quarter closed, the company prepaid $1.2 billion under a structured repurchase agreement, leaving $9.5 billion available under its December 2020 authorization.
The war in Ukraine forced a reset of the recurring revenue base. Adobe halted all new sales in Russia and Belarus and cut Digital Media ARR by $75 million for existing business there. It cut another $12 million for its entire Digital Media business in Ukraine, a total reduction of $87 million with an expected revenue impact of $75 million for fiscal 2022. Digital Media ARR entering the second quarter was $12.48 billion. Management said the conflict and the pandemic leave the macroeconomic picture uncertain, and the 10-Q lists competition, information security and privacy, interruptions in hosted services, fluctuations in subscription renewal rates, and tax and accounting changes among the risks.
For the second quarter of fiscal 2022, Adobe targets $440 million of net new Digital Media ARR. Constant currency growth targets are 13% to 14% for Digital Media segment revenue, 15% to 16% for Digital Experience segment revenue, and 17% to 18% for Digital Experience subscription revenue. The second quarter targets assume 474 million diluted shares and a non-GAAP tax rate of 18.5%. For the full fiscal year 2022, the updated non-GAAP target tax rate is also 18.5%.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2022 | Q4 FY2021 | QoQ | Q1 FY2021 | YoY |
|---|---|---|---|---|---|
| Revenue | $4.26B | $4.11B | +3.7% | $3.09B | +37.9% |
| Gross profit | $3.75B | $3.60B | +4.1% | $2.64B | +42.1% |
| Gross margin | 88.0% | 87.7% | +0.3 pp | 85.4% | +2.6 pp |
| Sales & marketing | $1.16B | $1.13B | +2.4% | $857.0M | +35.1% |
| General & administrative | $269.0M | $274.0M | -1.8% | $271.0M | -0.7% |
| Total operating expenses | $2.17B | $2.10B | +3.2% | $1.70B | +27.5% |
| Operating income (loss) | $1.58B | $1.50B | +5.3% | $937.0M | +68.6% |
| Operating margin | 37.1% | 36.5% | +0.5 pp | 30.3% | +6.8 pp |
| Net income (loss) | $1.27B | $1.23B | +2.7% | $955.0M | +32.6% |
| Net margin | 29.7% | 30.0% | -0.3 pp | 30.9% | -1.2 pp |
| Diluted EPS | $2.66 | $2.56 | +$0.10 | $1.96 | +$0.70 |
Risks
In March 2022, in response to the Russia-Ukraine war, Adobe announced a halt of all new sales of its products and services in Russia and Belarus. Subsequent to March 4, 2022, it reduced Digital Media ARR by $75 million for existing business in Russia and Belarus and by an additional $12 million for Ukraine, a total $87 million reduction; Digital Media ARR entering Q2 FY2022 was $12.48 billion.
The risk factor states competition for experienced information technology personnel is intense and has recently intensified further, and higher compensation costs to retain senior management and experienced personnel may not be offset by improved productivity or increased sales. MD&A reports research and development expense rose 13% and sales and marketing expense rose 10% in the quarter ended March 4, 2022, partly on compensation.
The risk factor states that social and ethical issues relating to AI in Adobe offerings may cause reputational harm, competitive harm, legal liability, and additional research and development costs, and potential government AI ethics regulation may increase the R&D burden. Adobe is increasingly building AI into many of its offerings.
Changes in tax rules or interpretations may adversely affect Adobe's effective tax rate. MD&A says the effective tax rate increased approximately 6 percentage points to 18% for the three months ended March 4, 2022, primarily due to lower tax benefits related to stock-based compensation, and notes the U.S. Tax Act's research and development capitalization requirement starting fiscal 2023 is expected to adversely impact effective tax rates if not modified.
The risk factor says some enterprise offerings, including Adobe Experience Cloud and Enterprise Term License Agreements, have extended and complex sales cycles, with a higher percentage of a quarter's total sales occurring in the final weeks, making timing unpredictable. MD&A highlights Digital Experience revenue growth of 13% and subscription revenue growth for the segment.
Global data protection, privacy, and security laws, including GDPR, PIPL, CCPA, CPRA, and Virginia CDPA, create compliance obligations and expand potential liability, may impact AI and machine learning innovation, and cross-border data transfer mechanisms remain subject to litigation and regulatory change.
SaaS KPIs
All quarters →Creative ARR
Document Cloud ARR
Remaining Performance Obligations (RPO)
Digital Media ARR
Summary, forecast, risks and KPIs are extracted from ADOBE INC.'s SEC filings for Q1 FY2022 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.