Adobe Systems (NASDAQ:ADBE) released fiscal fourth-quarter 2019 results on Thursday after the market closed, comfortably exceeding its latest outlook thanks to the sustained momentum of its innovative suite of cloud-based creative software products.

Adobe also offered encouraging guidance for the coming year, helping shares surge nearly 4% on Friday to a fresh all-time high.

Let's zoom in, then, for a better idea of what drove Adobe over the past few months, starting with how its headline numbers fared:

Metric Fiscal Q4 2019* Fiscal Q4 2018 Growth
Revenue $2.992 billion $2.465 billion 21.4%
GAAP net income $851.9 million $678.2 million 25.6%
GAAP earnings per share (diluted) $1.74 $1.37 27%

Data source: Adobe Systems. *For the period ended Nov. 29, 2019.

Adobe logo on a company building as viewed from below.

IMAGE SOURCE: ADOBE SYSTEMS.

A "phenomenal performance"

Keep in mind the above GAAP figures included the impact of items like acquisition expenses and stock-based compensation. Adjusted for those items, Adobe generated (non-GAAP) net income of $1.118 billion, or $2.29 per share, up from $1.83 per share in the same year-ago period. By comparison, these results were again above Adobe's seemingly light guidance provided in September, which called for adjusted earnings of $2.25 per share on revenue closer to $2.97 billion.  

Within that top line, digital media segment revenue climbed 22% year over year to $2.08 billion -- above guidance for an increase of 20% -- including Creative revenue of $1.74 billion and Document Cloud revenue of $339 million. Meanwhile, digital experience segment sales climbed 24%, to $859 million, also above guidance for 23% growth.

Adobe's subscription-based software-as-a-service revenue model continued to gain momentum as well; the company boasted $8.40 billion of digital media annualized recurring revenue (ARR) exiting the quarter, up a whopping $539 million sequentially from Q3. Deferred revenue climbed to $3.378 billion, up from $3.26 billion three months earlier.

The company also generated enviable operating cash flow of $1.38 billion -- a fresh company record -- up from $922 million in Q3, and repurchased another 2.8 million shares this quarter. That brought full fiscal-year buybacks to 9.9 million shares repurchased for roughly $2.7 billion.

"Adobe's phenomenal performance in Q4 capped a record fiscal 2019 with revenue exceeding $11 billion," stated Adobe CEO Shantanu Narayen. "Adobe's vision, category leadership, continuous product innovation and large and loyal customer base position us well for 2020 and beyond."

On the year ahead

For the current first quarter of fiscal 2020, Adobe expects revenue of $3.04 billion, net new digital-media ARR of $360 million, and adjusted earnings of $2.23 per share.

Thus, Adobe is targeting full fiscal-year 2020 net new digital-media ARR of $1.55 billion, while total revenue should climb roughly 17.7% to $13.15 billion. The latter assumes 19% digital media segment revenue, and 16% growth from digital experience segment products. On the bottom line, that should translate to adjusted earnings of $9.75 per share, up 23.9% year over year.

That said -- and though we don't normally pay close attention to Wall Street's demands -- these full-year targets technically fell slightly short of analysts' consensus estimates.

Given Adobe's relative outperformance to end fiscal 2019, however -- as well as its propensity for underpromising and overdelivering in any given quarter -- it should be hardly surprising that Adobe shares rallied to new heights this week as investors absorbed the news. And I think the stock still has plenty of room to run if the company admirably sustains its growth in the coming years.