Company Posts 41 Percent Year-Over-Year Revenue Growth

Adobe Systems Incorporated (Nasdaq:ADBE) today reported financial results for its third quarter of fiscal 2007 ended August 31, 2007. Adobe achieved record revenue of $851.7 million, compared to $602.2 million reported for the third quarter of fiscal 2006 and $745.6 million reported in the second quarter of fiscal 2007. This represents 41 percent year-over-year revenue growth. Adobe’s third quarter revenue target range was $760 to $800 million.

“Our record results were driven by outstanding Creative Suite 3 adoption and continued Acrobat momentum,” said Bruce Chizen, chief executive officer of Adobe. “As we near the end of fiscal 2007, we remain well positioned for continued double digit revenue growth.”

GAAP Results

Adobe’s GAAP diluted earnings per share for the third quarter of fiscal 2007 were $0.34, based on 597.3 million weighted average shares. This compares with GAAP diluted earnings per share of $0.16 reported in the third quarter of fiscal 2006 based on 600.9 million weighted average shares, and GAAP diluted earnings per share of $0.25 reported in the second quarter of fiscal 2007 based on 603.4 million weighted average shares. Adobe’s third quarter GAAP earnings per share target range was $0.28 to $0.31.

GAAP operating income was $255.0 million in the third quarter of fiscal 2007, compared to $110.0 million in the third quarter of fiscal 2006 and $180.4 million in the second quarter of fiscal 2007. As a percent of revenue, GAAP operating income in the third quarter of fiscal 2007 was 29.9 percent, compared to 18.3 percent in the third quarter of fiscal 2006 and 24.2 percent in the second quarter of fiscal 2007.

GAAP net income was $205.2 million for the third quarter of fiscal 2007, compared to $94.4 million reported in the third quarter of fiscal 2006, and $152.5 million in the second quarter of fiscal 2007.

Non-GAAP diluted earnings per share for the third quarter of fiscal 2007 were $0.45. This compares with non-GAAP diluted earnings per share of $0.29 reported in the third quarter of fiscal 2006, and non-GAAP diluted earnings per share of $0.37 reported in the second quarter of fiscal 2007. Adobe’s third quarter non-GAAP earnings per share target range was $0.39 to $0.41.

Adobe’s non-GAAP operating income was $340.9 million in the third quarter of fiscal 2007, compared to $207.2 million in the third quarter of fiscal 2006 and $282.1 million in the second quarter of fiscal 2007. As a percent of revenue, non-GAAP operating income in the third quarter of fiscal 2007 was 40.0 percent, compared to 34.4 percent in the third quarter of fiscal 2006 and 37.8 percent in the second quarter of fiscal 2007.

Non-GAAP net income was $269.4 million for the third quarter of fiscal 2007, compared to $171.5 million in the third quarter of fiscal 2006, and $223.2 million in the second quarter of fiscal 2007.