Adobe to Take $75M Fiscal-Year Revenue Hit From Ukraine War: CFO
With its cessation of all new sales in Russia and Belarus due to the hostilities in Ukraine, Adobe reduced the annual recurring revenue balance in its digital media business by $75 million, “which represents all ARR for existing business in…
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these two countries,” said Chief Financial Officer Dan Durn on an earnings call Tuesday for fiscal Q1 ended March 4. “While we will extend subscriptions automatically in Ukraine during this period and continue to provide digital media services, we reduced ARR by an additional $12 million, which represents our entire Ukraine business,” he said. That will result in a total ARR reduction of $87 million and an expected revenue hit of $75 million for fiscal 2022 ending early December, he said. For the war in Ukraine, “we de-risked the profile around the situation,” said Durn. Adobe finished Q1 with 9% year-over-year revenue growth to $4.26 billion, a quarterly record. Despite the volatile “macroeconomic” situation, “we actually continue to see strength” in the business, and “we were pleased with the strong Q1,” said CEO Shantanu Narayen. “The last few weeks of the quarter, you saw some impact in Europe, specifically as it related to what happened in terms of the terrible situation in Ukraine,” he said.