Hi there, I bring you Adobe today.
Between 2020 and 2024, Adobe delivered sustained growth, moving from $12.87 B in 2020 to $21.51 B in 2024, an impressive 67% cumulative increase. Operating income grew from $4.24 B to $6.74 B over the same period. Net income peaked at $5.26 B in 2020, dropped in 2021–2022, and recovered to $5.56 B in 2024 , with a 14.1% rebound in 2023 and a modest 2.4% gain in 2024, today sits at 6.87B.
Also shows great margins.
ADBE operates with industry-leading profitability. Gross margin in 2024 was 89% , reflecting low COGS for subscription-based products. Operating margin was 36% , down slightly from its 2021 peak due to higher R&D and sales investments. Net margin stood at 26% in 2024.
Return metrics are also strong. ROE exceeded 37% in 2024 (boosted by large buybacks reducing equity) and ROA was 17%. This is far ahead of peers like Salesforce (ROE 10%, ROA 6.4% ) and even in line with Microsoft numbers.
Adobe consistently generates robust FCF, moving from $6.88 B in 2021 to $7.87 B in 2024. The dip in 2023 (–6.1%) was due to higher tax payments, but 2024 saw a 13.4% rebound. FCF margins have hovered around 37–40%, providing ample capital for reinvestment and buybacks.
Long-term debt rose from ~$10.7 B in 2020 to $15.2 B in 2024 , while equity declined due to repurchases, pushing the debt-to-equity ratio from 0.84 in 2021 to 1.14 in late 2024. Leverage is still manageable given Adobe’s EBITDA and cash flows.
Adobe does not pay dividends, instead returning capital via buybacks. Over the last decade, it repurchased $39.7 B worth of stock, including $3.4 B in the most recent quarter. In March 2024, it authorized a new $25 B buyback program through 2028. (Bullish Bullish Bull)
Versus Salesforce, Adobe has smaller revenue but much higher margins and ROE. Microsoft surpasses Adobe in scale but not in gross margins (Adobe 89% vs Microsoft 70%). Adobe’s valuation (around 19x forward EPS ) is below its historical average, giving it a slight relative discount despite strong fundamentals.
Post Q2 2025, Adobe raised its FY guidance to 23.60 B revenue and $20.70 adjusted EPS , above prior consensus. Last quarter: $5.87 B revenue (+11% YoY) and $5.06 EPS (vs $4.97 expected) . Growth is expected to be driven by AI-powered Creative Cloud and Document Cloud, with analysts forecasting 10% annual revenue growth and sustained high margins.
Cheers!
Pablin
Between 2020 and 2024, Adobe delivered sustained growth, moving from $12.87 B in 2020 to $21.51 B in 2024, an impressive 67% cumulative increase. Operating income grew from $4.24 B to $6.74 B over the same period. Net income peaked at $5.26 B in 2020, dropped in 2021–2022, and recovered to $5.56 B in 2024 , with a 14.1% rebound in 2023 and a modest 2.4% gain in 2024, today sits at 6.87B.
Also shows great margins.
ADBE operates with industry-leading profitability. Gross margin in 2024 was 89% , reflecting low COGS for subscription-based products. Operating margin was 36% , down slightly from its 2021 peak due to higher R&D and sales investments. Net margin stood at 26% in 2024.Return metrics are also strong. ROE exceeded 37% in 2024 (boosted by large buybacks reducing equity) and ROA was 17%. This is far ahead of peers like Salesforce (ROE 10%, ROA 6.4% ) and even in line with Microsoft numbers.
Adobe consistently generates robust FCF, moving from $6.88 B in 2021 to $7.87 B in 2024. The dip in 2023 (–6.1%) was due to higher tax payments, but 2024 saw a 13.4% rebound. FCF margins have hovered around 37–40%, providing ample capital for reinvestment and buybacks.
Long-term debt rose from ~$10.7 B in 2020 to $15.2 B in 2024 , while equity declined due to repurchases, pushing the debt-to-equity ratio from 0.84 in 2021 to 1.14 in late 2024. Leverage is still manageable given Adobe’s EBITDA and cash flows.
Adobe does not pay dividends, instead returning capital via buybacks. Over the last decade, it repurchased $39.7 B worth of stock, including $3.4 B in the most recent quarter. In March 2024, it authorized a new $25 B buyback program through 2028. (Bullish Bullish Bull)
Versus Salesforce, Adobe has smaller revenue but much higher margins and ROE. Microsoft surpasses Adobe in scale but not in gross margins (Adobe 89% vs Microsoft 70%). Adobe’s valuation (around 19x forward EPS ) is below its historical average, giving it a slight relative discount despite strong fundamentals.
Post Q2 2025, Adobe raised its FY guidance to 23.60 B revenue and $20.70 adjusted EPS , above prior consensus. Last quarter: $5.87 B revenue (+11% YoY) and $5.06 EPS (vs $4.97 expected) . Growth is expected to be driven by AI-powered Creative Cloud and Document Cloud, with analysts forecasting 10% annual revenue growth and sustained high margins.
Cheers!
Pablin
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.