Stock Analysis on Net

Adobe Inc. (NASDAQ:ADBE)

Cash Flow Statement 

The cash flow statement provides information about a company cash receipts and cash payments during an accounting period, showing how these cash flows link the ending cash balance to the beginning balance shown on the company balance sheet.

The cash flow statement consists of three parts: cash flows provided by (used in) operating activities, cash flows provided by (used in) investing activities, and cash flows provided by (used in) financing activities.

Adobe Inc., consolidated cash flow 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
Net income 5,560 5,428 4,756 4,822 5,260 2,951
Depreciation, amortization and accretion 857 872 856 788 757 737
Stock-based compensation 1,833 1,718 1,440 1,069 909 788
Reduction of operating lease right-of-use assets 77 72 83 73 87
Lease-related asset impairments 78
Deferred income taxes (468) (426) 328 183 (1,501) 3
Unrealized (gains) losses on investments, net (35) (10) 29 (4) (11) (48)
Other non-cash items 10 3 10 7 40 14
Trade receivables, net 143 (159) (198) (430) 106 (188)
Prepaid expenses and other current assets (616) (818) (94) (475) (288) (531)
Trade payables 44 (49) 66 (20) 96 23
Accrued expenses and other liabilities 196 146 7 162 86 172
Income taxes payable 68 (11) 19 2 (72) 4
Deferred revenue 309 536 536 1,053 258 497
Changes in operating assets and liabilities, net of acquired assets and assumed liabilities 144 (355) 336 292 186 (23)
Adjustments to reconcile net income to net cash provided by operating activities 2,496 1,874 3,082 2,408 467 1,470
Net cash provided by operating activities 8,056 7,302 7,838 7,230 5,727 4,422
Purchases of short-term investments (59) (909) (1,533) (1,071) (700)
Maturities of short-term investments 486 965 683 877 915 700
Proceeds from sales of short-term investments 11 223 270 191 167 86
Acquisitions, net of cash acquired (126) (2,682) (101)
Purchases of property and equipment (183) (360) (442) (348) (419) (394)
Purchases of long-term investments, intangibles and other assets (108) (53) (46) (42) (15) (49)
Proceeds from sales of long-term investments and other assets 2 1 9 3
Net cash (used for) provided by investing activities 149 776 (570) (3,537) (414) (456)
Repurchases of common stock (9,500) (4,400) (6,550) (3,950) (3,050) (2,750)
Proceeds from re-issuance of treasury stock 361 314 278 291 270 233
Taxes paid related to net share settlement of equity awards (677) (589) (518) (719) (681) (440)
Proceeds from issuance of debt 1,997 3,144
Repayment of debt (500) (3,150)
Other financing activities, net 95 (7) (35) 77 (21) 11
Net cash used for financing activities (7,724) (5,182) (6,825) (4,301) (3,488) (2,946)
Effect of foreign currency exchange rates on cash and cash equivalents (9) 9 (51) (26) 3 (13)
Net change in cash and cash equivalents 472 2,905 392 (634) 1,828 1,007
Cash and cash equivalents at beginning of year 7,141 4,236 3,844 4,478 2,650 1,643
Cash and cash equivalents at end of year 7,613 7,141 4,236 3,844 4,478 2,650

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).


Net Income
Net income exhibited a generally upward trend from 2019 through 2024, increasing from $2,951 million in 2019 to $5,560 million in 2024, despite a slight dip in 2021 and 2022. This indicates sustained profitability improvement over the period.
Depreciation, Amortization, and Accretion
These non-cash expenses showed a gradual increase over the years, rising from $737 million in 2019 to $857 million in 2024, reflecting ongoing capital investments and amortization of intangible assets.
Stock-Based Compensation
Stock-based compensation costs steadily escalated, more than doubling from $788 million in 2019 to $1,833 million in 2024. This growth suggests an increased emphasis on equity incentives in compensation structures.
Operating Lease Assets and Impairments
Reduction of operating lease right-of-use assets fluctuated moderately between $72 million and $87 million starting 2020, with a lease-related asset impairment of $78 million recorded in 2024, signifying some lease asset write-down in the latest year.
Deferred Income Taxes
Deferred income taxes showed volatility, swinging from a negative $1,501 million in 2020 to positive values in 2021 and 2022, then turning negative again in 2023 and 2024. This variation reflects changes in tax timing differences and potentially shifting tax planning strategies.
Unrealized Gains/Losses on Investments
Unrealized investment gains and losses were relatively minor with fluctuations around zero, indicating a stable investment portfolio with limited marked-to-market volatility.
Other Non-Cash Items
These items remained fairly stable and low in magnitude, generally under $50 million annually, suggesting minor adjustments in non-cash accounting adjustments.
Changes in Working Capital Components
Trade receivables, prepaid expenses, payables, accrued expenses, and income taxes payable displayed considerable volatility, with net changes in operating assets and liabilities ranging from -$355 million to $336 million. This reflects dynamic working capital management and varying operational cash flows.
Deferred Revenue
Deferred revenue showed notable fluctuations, peaking at $1,053 million in 2021 before declining to $309 million in 2024, which might indicate shifts in customer billing patterns or revenue recognition timing.
Cash Flow from Operating Activities
Net cash generated from operations consistently increased from $4,422 million in 2019 to $8,056 million in 2024, highlighting strong operational cash generation capacity.
Investing Activities
Purchases of short-term investments were significant until 2022 but ceased in 2023, with occasional maturities and sales providing liquidity. Acquisitions peaked negatively with a large outflow of $2,682 million in 2021 but were negligible or absent in other years. Capital expenditure fluctuated but generally trended downward from $394 million in 2019 to $183 million in 2024. Overall, net cash used for investing turned from substantial outflow in 2021 (-$3,537 million) to modest inflows in 2023 and 2024.
Financing Activities
Repurchases of common stock were consistently significant, with a peak of $9,500 million in 2024, signaling aggressive shareholder return policies. Issuance and repayment of debt showed sporadic large movements, including issuing $3,144 million in 2020 and repaying a similar amount the same year, with another issuance of $1,997 million in 2024. Net cash used in financing was largely negative across all years, reflecting heavy stock buybacks and other financing outflows.
Liquidity Position
Cash and cash equivalents increased overall from $2,650 million at the end of 2019 to $7,613 million at the end of 2024, with some fluctuations. The net change in cash generally remained positive, demonstrating a strengthening liquidity position over the period.
Summary of Trends
The company shows solid earnings growth accompanied by expanding non-cash expenses such as stock compensation. Operational cash flows are robust and growing, funding sizable share repurchase programs and selective investing activities. Working capital and tax-related items experienced variability, but the overall cash position strengthened, aided by balanced investing and financing activities. The data suggests a strategy focused on shareholder returns and operational efficiency while maintaining strong liquidity.