Adobe 2003 Annual Report Download - page 33

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33
our ePaper segment strategy (which we renamed Intelligent Documents beginning in fiscal 2004), which was to
concentrate on the adoption of Acrobat across several identified markets. The release of Adobe Creative Suite was
also in line with our strategy for the Creative Professional business segment which was to continue our commitment
to Creative Professionals by enabling more efficient collaboration and workflow through improved product
integration and new functionality. Additionally, our overall revenues were positively impacted by the strength of the
euro and the yen during fiscal 2003.
We continue to focus on delivering innovative products and solutions for our customers to drive revenue and
earnings growth. In fiscal 2004, we expect to see continued growth in our business segments. Our success could be
limited by several factors, including the timely release of new products, continued market acceptance of our
products, the introduction of new products by existing or new competitors and unfavorable exchange rate
fluctuations. For a further discussion of these and other risk factors, see the section titled “Factors That May Affect
Future Performance.”
Revenue
Year Ended
November 28, 2003
% Change
2002 to 2003
Year Ended
November 29, 2002
% Change
2001 to 2002
Year Ended
November 30, 2001
Product ...................................... $ 1,269.0 10% $ 1,153.2 (6)% $ 1,229.7
Percentage of total revenues .. 98% 99% 100%
Services and support.................. 25.7 *% 11.6 * % ―
Percentage of total revenues .. 2% 1% ―
Total revenues ....................... $ 1,294.7 11% $ 1,164.8 (5)% $ 1,229.7
* Percentage is not meaningful.
We have four reportable segments that offer different product lines: Digital Imaging and Video, Creative
Professional, ePaper, and OEM PostScript and Other. The Digital Imaging and Video segment provides users with
software for creating, editing, enhancing and sharing digital images and photographs, digital video, audio and
animations. The Creative Professional segment provides software for professional page layout, professional Web
page layout, graphic and illustration creation, technical document publishing and business publishing. The ePaper
segment provides electronic document distribution software that allows users to create, enhance, annotate and
securely send Adobe PDF files that can be shared, viewed, navigated and printed exactly as intended on a broad
range of hardware and software platforms. In addition, this segment provides server-based solutions for enterprises
and government agencies in the areas of document generation, document process management and collaboration,
and document control and security. The OEM PostScript and Other segment includes printing technology used to
create and print simple or visually rich documents with precision.
Services and support is composed of professional services (such as consulting services and training) and support
(such as maintenance and technical support) primarily related to the licensing of our ePaper server solutions
products. Professional services revenue is recognized using the percentage of completion method and is measured
monthly based on input measures, such as on hours incurred to date compared to total estimated hours to complete,
with consideration given to output measures, such as contract milestones, when applicable. A significant portion of
our support revenue comprises our extended Enterprise Maintenance and Support offerings, which entitles
customers to receive product upgrades and enhancements during the term of the maintenance and support period,
which is typically one year. Our support revenue also includes support for our desktop products whereby we offer a
range of support programs, from fee-based incident to annual support contracts and developer support to partners
and developer organizations.
As noted in our 2002 Annual Report on Form 10-K, we realigned our business segments at the beginning of
fiscal 2003. The results for fiscal years 2002 and 2001, and the discussion that follows, have been reclassified to
reflect the realignment of the operating segments.