Summary
Adobe closed fiscal 2024 with record fourth-quarter revenue of $5.61 billion, up 11.1% from the prior-year quarter. Gross profit rose to $4.99 billion, up 13.0%, and gross margin reached 89.0%, up 1.6 percentage points. Operating income was $1.96 billion, up 12.3%, while operating margin was 34.9%, up 0.4 percentage points. Net income came in at $1.68 billion, up 13.5%. The quarter also produced record operating cash flow of $2.92 billion, up 82.9% from the prior-year quarter. Remaining performance obligations ended at $19.96 billion, up 15.9%, and deferred revenue was $6.26 billion, up 5.2%. For the full fiscal year, revenue was $21.50 billion, up 10.8%.
Digital Media ARR exited the quarter at $17.33 billion, with net new Digital Media ARR of $578 million in the quarter and $2.00 billion for the full year. Document Cloud ARR was $3.48 billion and Creative ARR was $13.85 billion. On a non-GAAP basis, fourth-quarter operating income was $2.60 billion and net income was $2.13 billion. Non-GAAP diluted EPS was $4.81 for the quarter and $18.42 for the year. GAAP diluted EPS for fiscal 2024 was $12.36, up 4.6% year over year.
Management framed the fiscal 2025 plan around non-GAAP profitability. The full-year targets assume a non-GAAP operating margin of 46%, a non-GAAP tax rate of 18.5%, and a diluted share count of 433 million. Non-GAAP diluted EPS is targeted at $20.20 to $20.50 for the fiscal year, and Digital Media ending ARR growth is targeted at 11.0% year over year. For the first quarter of fiscal 2025, the assumptions are a non-GAAP operating margin of 47%, a non-GAAP tax rate of 18.5%, and a diluted share count of 439 million. First-quarter non-GAAP diluted EPS is targeted at $4.95 to $5.00. Adobe also issued segment revenue targets for the fiscal year and the first quarter. Foreign exchange is expected to reduce Digital Media ARR entering fiscal 2025 by $117 million, from $17.33 billion to $17.22 billion, and to create an approximate $200 million headwind to fiscal 2025 revenue.
Cash generation was a highlight. Operating cash flow for fiscal 2024 was $8.06 billion, up 10.3% from fiscal 2023, while capital expenditures fell 49.2% to $183 million. In the fourth quarter, capital expenditures were $48 million, up 2.1% from the prior-year quarter. The $1 billion Figma termination fee weighed on fiscal 2024 operating expenses and cash flow. Adobe repurchased about 4.6 million shares during the quarter and about 17.5 million shares during the year.
Management called out a long list of risks, including foreign exchange, macroeconomic conditions, AI development and adoption, competition, security incidents, litigation, tax regulation, and complex sales cycles. Adobe also noted that unrecognized tax benefits could decrease by up to $50 million over the next 12 months. The company continues to monitor inflationary pressures, interest rates, potential economic slowdowns or recessions, and geopolitical pressures, including trade regulations.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2024 | Q3 FY2024 | QoQ | Q4 FY2023 | YoY |
|---|---|---|---|---|---|
| Revenue | $5.61B | $5.41B | +3.7% | $5.05B | +11.1% |
| Gross profit | $4.99B | $4.85B | +2.8% | $4.41B | +13.0% |
| Gross margin | 89.0% | 89.8% | -0.8 pp | 87.4% | +1.6 pp |
| Sales & marketing | $1.54B | $1.43B | +7.3% | $1.37B | +12.3% |
| General & administrative | $456.0M | $366.0M | +24.6% | $372.0M | +22.6% |
| Total operating expenses | $3.03B | $2.86B | +6.0% | $2.67B | +13.6% |
| Operating income (loss) | $1.96B | $1.99B | -1.8% | $1.74B | +12.3% |
| Operating margin | 34.9% | 36.8% | -1.9 pp | 34.5% | +0.4 pp |
| Net income (loss) | $1.68B | $1.68B | -0.1% | $1.48B | +13.5% |
| Net margin | 30.0% | 31.1% | -1.1 pp | 29.4% | +0.6 pp |
| Diluted EPS | $3.74 | $3.76 | -$0.02 | $3.23 | +$0.51 |
Risks
Generative AI competitors offering text-to-image, text-to-video and multi-modal products compete directly with Adobe's creative offerings; Adobe may not monetize Firefly or keep pace if rivals integrate AI more successfully.
The EU AI Act adopted in 2024 and phased through 2030, plus other jurisdictions, may increase compliance, governance and R&D costs and liability for Adobe's AI models, including Firefly, and could require changes to monetization or indemnity protections.
Adobe experienced difficulties obtaining regulatory approvals that resulted in termination of a previously announced acquisition and additional costs; MD&A reports a $1 billion Figma termination fee in fiscal 2024, contributing to a 19% year-over-year increase in operating expenses.
AI development requires significant additional investment in models, datasets and responsible-use frameworks, and AI inferencing and training costs may raise the cost of offerings and pressure margins; Adobe cites AI inferencing in cost of subscription revenue and AI training in R&D.
Enterprise offerings such as Adobe Experience Cloud and ETLAs have extended and complex sales cycles, and cross-cloud plus generative AI capabilities add contracting complexity; adverse macroeconomic conditions have caused and may continue to cause spend scrutiny and delayed purchasing decisions.
Global adverse economic conditions, including inflation, interest rates, foreign currency fluctuations, trade regulations and geopolitical tensions, could reduce customer spending or delay purchases; MD&A states the broader implications for Adobe's results remain uncertain.
Competition for talent, particularly with AI and cybersecurity backgrounds, is substantial and may require higher compensation to retain senior management and highly skilled personnel; MD&A reports R&D compensation costs were a 7% component of the 14% year-over-year increase in R&D expense.
Adobe had $5.65 billion in senior notes outstanding and reclassified $1.50 billion of current debt as of November 29, 2024; interest expense increased 50% in fiscal 2024 due to April 2024 senior notes, and the timing of refinancing may be impacted by market conditions.
SaaS KPIs
All quarters →Creative ARR
Document Cloud ARR
Remaining Performance Obligations (RPO)
Digital Media ARR
Net New Digital Media ARR
Summary, forecast, risks and KPIs are extracted from ADOBE INC.'s SEC filings for Q4 FY2024 (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 1, 2026.