Adobe 2004 Annual Report Download - page 34

Download and view the complete annual report

Please find page 34 of the 2004 Adobe annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 108

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108

34
RESULTS OF OPERATIONS
Overview of 2004
During the fiscal 2004, we continued to focus on delivering comprehensive technology platforms for enterprises
and creative professionals to drive revenue and earnings growth. Our latest Acrobat desktop products, released
during fiscal 2003, continued to perform well which indicates we are making progress against our Intelligent
Documents segment strategy to increase the adoption of Acrobat. Our Intelligent Documents initiatives continue to
deliver a comprehensive server-based platform to help governments and enterprises improve their business
processes. Our Intelligent Documents server revenue has achieved both strong sequential and year-over-year
revenue growth. Additionally, we believe our strategy of providing creative professionals a complete design
platform is resonating with our customers. The success we achieved in fiscal 2003 in our Creative Professional
business segment continued in fiscal 2004 due to strong licensing of our Adobe Creative Suites and CS products.
We continue to focus on delivering innovative products and solutions for our customers. However, 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
Fiscal
2004
% Change
2004 to 2003
Fiscal
2003
% Change
2003 to 2002 Fiscal
2002
Product ...................................... $ 1,634.0 29% $ 1,269.0 10% $ 1,153.2
Percentage of total revenues.. 98% 98% 99%
Services and support ................. 32.6 27% 25.7 122% 11.6
Percentage of total revenues.. 2% 2% 1%
Total revenues ....................... $ 1,666.6 29% $ 1,294.7 11% $ 1,164.8
We have four reportable segments: Digital Imaging and Video, Creative Professional, Intelligent Documents,
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. Additionally, this segment provides
Photoshop and Acrobat Professional as part of its Adobe Creative Suite products. The Intelligent Documents
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,
in the areas of document generation, document process management, document 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.
Our services and support revenue is composed of professional services (such as consulting services and
training) and maintenance and support, primarily related to the licensing of our Intelligent Documents server
solution products. Our support revenue also includes technical support and developer support to partners and
developer organizations related to our desktop products. Our professional services revenue is recognized using the
percentage of completion method and is measured monthly based on input measures, such as hours incurred to date
compared to total estimated hours to complete, with consideration given to output measures, such as contract
milestones, when applicable. Our maintenance and support offerings, which entitle customers to receive product
upgrades and enhancements or technical support, depending on the offering, is recognized ratably over the term of
the arrangement.