Summary
Adobe reported fourth-quarter fiscal 2021 revenue of $4.11 billion, up 20.0% from the prior-year quarter. GAAP operating income was $1.50 billion, up 23.5%. GAAP net income fell 45.2% to $1.23 billion. Gross margin was 87.7%, up 0.2 percentage points, and operating margin was 36.5%, up 1.0 percentage point. Operating cash flow was $2.07 billion, up 15.9%, while capital expenditures were $99 million, down 3.9%. Deferred revenue was $4.88 billion, up 29.8%, and remaining performance obligations were $13.99 billion, up 23.4%. Non-GAAP operating income was $1.86 billion, non-GAAP net income was $1.54 billion, and non-GAAP diluted EPS was $3.20. Digital Media annualized recurring revenue ended the quarter at $12.24 billion, up $571 million quarter over quarter. Creative ARR was $10.30 billion, and Document Cloud ARR was $1.93 billion. The Frame.io acquisition, closed on October 7, 2021, added about $29 million of enterprise ARR. Adobe repurchased approximately 1.6 million shares in the quarter.
Fiscal 2021 revenue was $15.78 billion, up 22.7%. Gross profit was $13.92 billion, up 24.9%, and operating income was $5.80 billion, up 36.9%. Net income fell 8.3% to $4.82 billion, and diluted EPS fell 7.5% to $10.02. Gross margin was 88.2%, up 1.6 percentage points, and operating margin was 36.8%, up 3.8 percentage points. Operating cash flow was $7.23 billion, up 26.2%, and capital expenditures were $348 million, down 16.9%. Non-GAAP operating income was $7.26 billion, growing 31%, non-GAAP net income was $6.00 billion, and non-GAAP diluted EPS was $12.48. Digital Media ARR grew by $1.98 billion during the year. Adobe repurchased approximately 7.2 million shares during fiscal 2021.
Guidance for the full fiscal year 2022 calls for Digital Media net new ARR of $1.90 billion. Digital Media segment revenue growth is targeted at 14% on a GAAP basis, or 17% adjusted, and Digital Experience segment revenue growth is targeted at 14% on a GAAP basis, or 17% adjusted. Digital Experience subscription revenue growth is targeted at 16% on a GAAP basis, or 19% adjusted. The fiscal 2022 tax rate target is 17.5% on a GAAP basis and 17% on a non-GAAP basis. Non-GAAP diluted EPS is targeted at $13.70. For the first quarter of fiscal 2022, Adobe targets Digital Media net new ARR of $400 million. First-quarter Digital Media segment revenue growth is targeted at 8% on a GAAP basis, or 17% adjusted, and Digital Experience segment revenue growth is targeted at 11% on a GAAP basis, or 18% adjusted. Digital Experience subscription revenue growth is targeted at 13% on a GAAP basis, or 20% adjusted. The first-quarter tax rate target is 16% on a GAAP basis and 17% on a non-GAAP basis. Non-GAAP diluted EPS is targeted at $3.35. These targets factor in a stronger U.S. dollar and the return to a 13-week first quarter and a 52-week fiscal year after fiscal 2021 included an extra week in the first quarter.
Risks include competition, failure to develop and market products that meet customer requirements, information security and privacy, interruptions in hosted services, macroeconomic conditions, the economic impact of COVID-19, cyber-attacks, complex sales cycles, timing of subscription revenue recognition, fluctuations in renewal rates, acquisition integration, third-party relationships, tax changes, and multinational operating risks. The MD&A flags revenue recognition, business combinations, and income taxes as critical accounting policies and estimates. It also notes tax examinations and potential changes in global tax policy. Adobe completed the Frame.io acquisition for approximately $1.18 billion in the fourth quarter and the Workfront acquisition for approximately $1.52 billion in the first quarter. For fiscal 2022, Adobe expects capital investment of approximately $180 million to $220 million, mainly for San Jose and Bangalore construction projects. Subsequent to December 3, 2021, Adobe entered an accelerated share repurchase agreement for $2.4 billion, received an initial delivery of 3.2 million shares, and expects to settle the remaining balance in the third quarter of fiscal 2022. About $10.7 billion remains under the December 2020 repurchase authority.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2021 | Q3 FY2021 | QoQ | Q4 FY2020 | YoY |
|---|---|---|---|---|---|
| Revenue | $4.11B | $3.94B | +4.4% | $3.42B | +20.0% |
| Gross profit | $3.60B | $3.47B | +3.9% | $3.00B | +20.3% |
| Gross margin | 87.7% | 88.1% | -0.5 pp | 87.5% | +0.2 pp |
| Sales & marketing | $1.13B | $1.07B | +5.9% | $941.0M | +20.2% |
| General & administrative | $274.0M | $265.0M | +3.4% | $243.0M | +12.8% |
| Total operating expenses | $2.10B | $2.03B | +3.7% | $1.78B | +18.0% |
| Operating income (loss) | $1.50B | $1.44B | +4.2% | $1.22B | +23.5% |
| Operating margin | 36.5% | 36.6% | -0.1 pp | 35.5% | +1.0 pp |
| Net income (loss) | $1.23B | $1.21B | +1.7% | $2.25B | -45.2% |
| Net margin | 30.0% | 30.8% | -0.8 pp | 65.7% | -35.7 pp |
| Diluted EPS | $2.56 | $2.52 | +$0.04 | $4.64 | -$2.08 |
Risks
Adobe is increasingly building AI into many of its offerings, and the filing warns that social and ethical issues around new technologies such as AI may cause brand or reputational harm, competitive harm or legal liability. Potential government regulation of AI ethics could raise research and development costs and slow adoption of AI features in Adobe's products.
Sales cycles for enterprise offerings such as Adobe Experience Cloud, Adobe Experience Platform and Enterprise Term License Agreements are multi-phased and complex, and Adobe notes a higher percentage of a quarter's total sales occur in the final weeks of each quarter. Extended, unpredictable cycles are noted as more significant as Adobe targets larger enterprise customers.
Competition for experienced information technology personnel is intense and has recently intensified further, particularly in locations where Adobe's employees are based. Adobe may face higher compensation costs to retain senior management and experienced personnel that may not be offset by improved productivity or increased sales.
Adobe is subject to expanding global privacy and data protection laws including the GDPR in Europe, the PIPL in China and new U.S. state laws such as the CCPA, the CPRA and the Virginia Consumer Data Protection Act. The invalidation of Privacy Shield and open questions on the validity of Model Clauses create cross-border transfer uncertainty and potential sanctions and fines.
The COVID-19 pandemic continues to have widespread and unpredictable impacts, and the duration and extent of its effect on Adobe's future results remain uncertain. Adobe notes the pandemic has affected IT spending and may delay prospective customers' purchasing decisions, reduce the value or duration of subscription contracts or affect attrition rates.
Adobe warns that cyber-attackers, including sophisticated nation-state and state-sponsored groups, may misuse its systems, and that credential stuffing tools and weak or recycled passwords could expose employee or customer data. The shift to more frequent work-from-home arrangements has compounded the existing risk of fraudulent inducement such as phishing.
Adobe completed the acquisitions of Workfront (approximately $1.52 billion, integrated into Digital Experience) and Frame.io (approximately $1.18 billion, integrated into Digital Media). The filing cites risks including inability to achieve strategic goals, difficulty integrating operations and personnel, and disruption of ongoing business from acquisitions.
Adobe's effective tax rate increased by approximately 41 percentage points in fiscal 2021 versus fiscal 2020, primarily due to the non-recurring $1.35 billion tax benefits recognized in fiscal 2020 from intra-entity IP transfers and the corresponding change in geographic mix of international income. Unanticipated changes in tax rates or unfavorable tax law changes could affect future results.
SaaS KPIs
All quarters →Creative ARR
Document Cloud ARR
Digital Media ARR
Remaining Performance Obligations
Summary, forecast, risks and KPIs are extracted from ADOBE INC.'s SEC filings for Q4 FY2021 (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.