Earnings: Adobe Quarterly Revs Up 4 Percent: Net Income Up 11 Percent; Company Thanks Online Video

This story was written by Joseph Weisenthal.
Adobe (NSDQ: ADBE), the company behind the widely used Flash technology, reported revenue of $887 million for the quarter ended August 29, representing a 4.2 increase from $851.7 million in the year-ago quarter. Adjusted EPS grew 11 percent to $.50 per share, compared to $.45 a year ago. The top line slightly edge past the company'w own (wide) forecasted range of $855 to $885 million. Shares in the company, which attributed its growth to its Acrobat and Livecycle Products, are ticking up mildly in early trading. Release.

On the company's quarterly conference call, management talked up the company's strong position in online video, rattling off various stats about the extent of Flash-based video on the web and various customer winsChina's CCTV used Adobe Flash and Flex to deliver Olympics coverage during the recent games. What's interesting in reading through the transcript, is that while analysts understand that Adobe is behind Flash, they still don't understand how the money is made. Said CEO Shantanu Narayen: "I do want to clarify again, when you see a lot of the video on the web that's being streamed, it is being streamed through the usage of a Flash video streaming server that Adobe providers, or a Flash Media Server, and the way we monetize it isthink of it as megabytes served, so as the volume of Flash video increases, we have a direct correlation to driving revenue for Adobe." Narayen also explained how the company would make money on AIR, its internet apps technologyhe explained that it would drive usage of the Creative Suite technology, as well as its ability to push usage of the Flash server. (Transcript via SeekingAlpha)


By Joseph Weisenthal
  • CBSNews

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