Adobe F2Q07 (Qtr End 6/1/07) Earnings Call Transcript

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2007-06-14 18:04:31.0

Tags: Adobe Systems Inc.

Question-and-Answer Session

Operator

(Operator Instructions) We’ll go to Brent Thill with Citigroup.

Brent Thill - Citigroup

Thanks. Good afternoon. I was wondering if you could just help us understand your assumptions into the international launch of CS3. If we go back to CS1, I think between the U.S. and international launch you had a $65 million sequential improvement in revenue and it looks like you’re calling for a $35 million to $55 million sequential improvement into the next quarter. It seems a slightly more conservative approach into this cycle.

Bruce Chizen

There’s one thing you want to factor in is that it’s a particularly tough period for us in Europe because of the seasonality, so you have to factor that into those assumptions, as we did. Clearly how we do in the last few weeks of August as Europe gets back to work will determine to some degree whether we come at the high-end or closer to the lower end of the range.

Brent Thill - Citigroup

Okay, and a follow-up for Mark real quickly; on Other revenue, it looks like this is the lowest quarter in the last four. Can you just speak to what’s going on in the Other segment?

Mark S. Garrett

Hang on one sec, Brent. Other revenue, I’m sorry. I thought you said other income. On the Other revenue line, that’s the platform business and that’s been sequentially down due to the legacy product. So if you look at it, a piece of that business is composed of products like Pagemaker and Freehand and GoLive. Those are products that are obviously being somewhat replaced by some of the newer offerings in the Creative Suite.

Brent Thill - Citigroup

Thanks.

Operator

We’ll go next to Jay Vleeschhouwer with Merrill Lynch.

Jay Vleeschhouwer - Merrill Lynch

Thanks. Good afternoon. Bruce, as you had foreseen at the analyst meeting, the Design Suite is thus far the best-selling version of CS3. Could you foresee however that another flavor, perhaps Web or Master Collection or Production when they all become available could at some point surpass the contribution from design collection? Or would you expect it to remain the largest indefinitely?

Secondly, a longer term question since you brought up the various growth drivers; even before CS3 launched the company had said that one of the things you would have to do well, particularly with all the segmentation coming, would be messaging and positioning the different flavors well in the Creative Solutions business, and by the same token managing Acrobat well both as a general purpose and vertical market product, two different aims for that product. Do you think that you’re doing all of that well in terms of finding exactly the right balance of resources and messaging, or do you think that certain adjustments ought to be made?

 

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