Stock Analysis on Net

Adobe Inc. (NASDAQ:ADBE)

Income Statement 

Adobe Inc., consolidated income statement

US$ in millions

Microsoft Excel
12 months ended: Nov 29, 2024 Dec 1, 2023 Dec 2, 2022 Dec 3, 2021 Nov 27, 2020 Nov 29, 2019
Subscription 20,521 18,284 16,388 14,573 11,626 9,994
Product 386 460 532 555 507 648
Services and other 598 665 686 657 735 529
Revenue 21,505 19,409 17,606 15,785 12,868 11,171
Subscription (1,799) (1,822) (1,646) (1,374) (1,108) (1,223)
Product (25) (29) (35) (41) (36) (40)
Services and other (534) (503) (484) (450) (578) (411)
Cost of revenue (2,358) (2,354) (2,165) (1,865) (1,722) (1,673)
Gross profit 19,147 17,055 15,441 13,920 11,146 9,499
Research and development (3,944) (3,473) (2,987) (2,540) (2,188) (1,930)
Sales and marketing (5,764) (5,351) (4,968) (4,321) (3,591) (3,244)
General and administrative (1,529) (1,413) (1,219) (1,085) (968) (881)
Acquisition termination fee (1,000)
Amortization of intangibles (169) (168) (169) (172) (162) (175)
Operating expenses (12,406) (10,405) (9,343) (8,118) (6,909) (6,230)
Operating income 6,741 6,650 6,098 5,802 4,237 3,268
Interest expense (169) (113) (112) (113) (116) (157)
Realized investment gains 12 6 11 9 5 46
Realized investment losses (1) (1)
Unrealized investment gains (losses), net 36 10 (29) 7 9 6
Investment gains (losses), net 48 16 (19) 16 13 52
Interest income 341 269 61 17 43 68
Foreign exchange gains (losses) (29) (17) (21) (17) (2) (26)
Realized gains on fixed income investments 1
Realized losses on fixed income investments (1) (7)
Other 1 1
Other income (expense), net 311 246 41 42 42
Non-operating income (expense), net 190 149 (90) (97) (61) (63)
Income before income taxes 6,931 6,799 6,008 5,705 4,176 3,205
(Provision for) benefit from income taxes (1,371) (1,371) (1,252) (883) 1,084 (253)
Net income 5,560 5,428 4,756 4,822 5,260 2,951

Based on: 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), 10-K (reporting date: 2019-11-29).


Revenue and Segment Performance
The overall revenue demonstrates consistent growth over the periods, increasing from $11,171 million in 2019 to $21,505 million in 2024, nearly doubling in six years. The subscription segment is the primary driver of this growth, with revenue increasing from $9,994 million to $20,521 million, showing strong and steady expansion. Conversely, the product segment exhibits a gradual decline, dropping from $648 million to $386 million, indicating a waning contribution to total revenue. Services and other revenues fluctuate modestly, peaking in 2020 at $735 million, then declining overall to $598 million by 2024.
Cost of Revenue and Gross Profit
Cost of revenue rises consistently from -$1,673 million in 2019 to -$2,358 million in 2024, reflecting the increased scale of business activities. Subscription costs also increase, though less steeply than revenue, potentially indicating some operational leverage. Product and services costs remain relatively stable or show minor fluctuations. Gross profit shows a robust upward trend, growing from $9,499 million to $19,147 million, maintaining a healthy margin expansion aligned with rising revenues.
Operating Expenses and Income
Operating expenses steadily increase from -$6,230 million to -$12,406 million, with research and development, sales and marketing, and general and administrative costs all contributing to this rise. Research and development expenditures almost double, suggesting significant investment in innovation and future growth. Sales and marketing expenses also see significant growth, indicating continued efforts to expand market presence. In 2024, a notable acquisition termination fee of -$1,000 million is recorded, contributing to the elevated operating expenses in that year. Despite rising costs, operating income increases from $3,268 million to $6,741 million, signaling efficient control over expenses relative to revenue growth.
Non-Operating Items and Income Taxes
Interest expense remains relatively constant around -$110 to -$170 million, with a slight increase in 2024. Investment-related gains and losses fluctuate but remain minor relative to core operations. Realized and unrealized investment gains occasionally show positive effects, while foreign exchange losses are persistently small but negative. Non-operating income transitions from a slight loss in early years to positive outcomes in 2023 and 2024. Income before income taxes tracks operating income growth, reaching $6,931 million in 2024. Income tax provision shows inconsistency, with a tax benefit recorded in 2020 and consistent but moderate tax expenses in later years.
Net Income and Profitability
Net income trends upwards over the analyzed periods, rising from $2,951 million in 2019 to $5,560 million in 2024. The increase in net income, despite rising operating expenses and tax variability, indicates improving overall profitability and successful management of costs relative to revenue increases. The data suggests a solid financial performance facilitated primarily by subscription revenue growth while managing a decline in product sales.