Stock Analysis on Net
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Adobe Inc. (NASDAQ:ADBE)

Common-Size Income Statement

Adobe Inc., common-size consolidated income statement

Microsoft Excel
12 months ended: Nov 28, 2025 Nov 29, 2024 Dec 1, 2023 Dec 2, 2022 Dec 3, 2021 Nov 27, 2020
Subscription 96.36 95.42 94.20 93.08 92.32 90.35
Product 1.37 1.79 2.37 3.02 3.52 3.94
Services and other 2.27 2.78 3.43 3.90 4.16 5.71
Revenue 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Subscription -8.53 -8.37 -9.39 -9.35 -8.70 -8.61
Product -0.10 -0.12 -0.15 -0.20 -0.26 -0.28
Services and other -2.11 -2.48 -2.59 -2.75 -2.85 -4.49
Cost of revenue -10.73% -10.96% -12.13% -12.30% -11.82% -13.38%
Gross profit 89.27% 89.04% 87.87% 87.70% 88.18% 86.62%
Research and development -18.07 -18.34 -17.89 -16.97 -16.09 -17.00
Sales and marketing -27.30 -26.80 -27.57 -28.22 -27.37 -27.91
General and administrative -6.62 -7.11 -7.28 -6.92 -6.87 -7.52
Acquisition termination fee 0.00 -4.65 0.00 0.00 0.00 0.00
Amortization of intangibles -0.66 -0.79 -0.87 -0.96 -1.09 -1.26
Operating expenses -52.64% -57.69% -53.61% -53.07% -51.43% -53.69%
Operating income 36.63% 31.35% 34.26% 34.64% 36.76% 32.93%
Interest expense -1.11 -0.79 -0.58 -0.64 -0.72 -0.90
Realized investment gains 0.07 0.06 0.03 0.06 0.06 0.04
Realized investment losses 0.00 0.00 0.00 -0.01 0.00 -0.01
Unrealized investment gains (losses), net 0.11 0.17 0.05 -0.16 0.04 0.07
Investment gains (losses), net 0.18% 0.22% 0.08% -0.11% 0.10% 0.10%
Interest income 1.11 1.59 1.39 0.35 0.11 0.33
Foreign exchange losses -0.06 -0.13 -0.09 -0.12 -0.11 -0.02
Realized gains on fixed income investments 0.00 0.00 0.00 0.00 0.00 0.01
Realized losses on fixed income investments 0.00 0.00 -0.04 0.00 0.00 0.00
Other 0.00 0.00 0.01 0.01 0.00 0.00
Other income, net 1.04% 1.45% 1.27% 0.23% 0.00% 0.33%
Non-operating income (expense), net 0.12% 0.88% 0.77% -0.51% -0.61% -0.47%
Income before income taxes 36.75% 32.23% 35.03% 34.12% 36.14% 32.45%
(Provision for) benefit from income taxes -6.75 -6.38 -7.06 -7.11 -5.59 8.42
Net income 30.00% 25.85% 27.97% 27.01% 30.55% 40.88%

Based on: 10-K (reporting date: 2025-11-28), 10-K (reporting date: 2024-11-29), 10-K (reporting date: 2023-12-01), 10-K (reporting date: 2022-12-02), 10-K (reporting date: 2021-12-03), 10-K (reporting date: 2020-11-27).

The common-size income statement reveals a significant shift in revenue composition and profitability trends over the analyzed period. A clear trend towards increasing revenue concentration in the subscription segment is observed, while contributions from product and services are declining. Operating income exhibits volatility, and net income demonstrates a complex pattern influenced by tax provisions and non-operating items.

Revenue Composition
Subscription revenue consistently increases as a percentage of total revenue, rising from 90.35% in 2020 to 96.36% in 2025. Conversely, product revenue declines steadily, decreasing from 3.94% to 1.37% over the same period. Services and other revenue also exhibits a downward trend, falling from 5.71% to 2.27%. This indicates a strategic shift towards a subscription-based business model.
Cost of Revenue and Gross Profit
Cost of revenue as a percentage of revenue generally decreases from 13.38% in 2020 to 10.73% in 2025, suggesting improved cost management or economies of scale. Consequently, gross profit as a percentage of revenue increases from 86.62% to 89.27% over the period, peaking at 89.04% in 2023. However, a slight dip in gross profit margin is observed in 2022.
Operating Expenses
Operating expenses initially decrease as a percentage of revenue, from 53.69% in 2020 to 51.43% in 2021. However, they increase significantly in 2024 to 57.69%, largely due to a substantial acquisition termination fee. Excluding this one-time event, operating expenses remain relatively stable, fluctuating between 52.64% and 53.61%. Research and development expenses remain consistently high, around 17-18% of revenue. Sales and marketing expenses also remain substantial, fluctuating around 27-28% of revenue.
Operating and Net Income
Operating income as a percentage of revenue fluctuates, peaking at 36.76% in 2021 and declining to 31.35% in 2024, before recovering to 36.63% in 2025. This volatility is influenced by both gross profit trends and operating expense fluctuations. Net income as a percentage of revenue demonstrates a more pronounced pattern, decreasing from 40.88% in 2020 to 27.01% in 2022, increasing to 27.97% in 2023, decreasing to 25.85% in 2024, and recovering to 30.00% in 2025. The (provision for) benefit from income taxes exhibits significant variation, including a negative value in 2021, indicating a benefit rather than an expense.
Non-Operating Items
Non-operating income (expense), net, fluctuates considerably, moving from a net expense of -0.47% in 2020 to a net income of 0.88% in 2024, before decreasing to 0.12% in 2025. Investment gains (losses), net, and other income, net, contribute to these fluctuations. Interest income increases significantly in 2023 and 2024, reaching 1.39% and 1.59% of revenue respectively, before decreasing in 2025. Interest expense consistently decreases as a percentage of revenue, from -0.90% to -1.11%.

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