What happened

Shares of Adobe (NASDAQ:ADBE) climbed 45.8% in 2019, according to data from S&P Global Market Intelligence. That result trounced the S&P 500's 29% gain as the creative software specialist's cloud and subscription services continued to gain steam.

So what

Adobe mustered a more than 30% gain in the first half of last year on the heels of better-than-expected quarterly updates in March and June. In the press release that accompanied the second-quarter report, CEO Shantanu Narayen pointed to an "explosion in creativity across the globe," as well as the company's efforts to build innovative software solutions with more "engaging customer experiences."

Adobe CEO Shantanu Narayen standing and smiling in the company's headquarters office.

IMAGE SOURCE: GETTY IMAGES

Between then and October, however, Adobe stock gave back about half its year-to-date gain as investors digested the implications of yet another solid quarterly report in September that was accompanied by seemingly tepid Q4 guidance relative to Wall Street's expectations. 

But it turned out that the company's forecast had been conservative; Adobe ended the fiscal year with an exceptional fourth-quarter report in mid-December that handily beat both management's guidance and analysts' consensus targets. 

All told, Adobe's revenues soared 24% in fiscal 2019 to $11.17 billion, spurred by a 22% increase in digital media segment revenue to $7.71 billion, and 31% growth from its digital experience products to $3.21 billion. Perhaps most impressive, Adobe exited the fiscal year with $8.4 billion in digital media annual recurring revenue (ARR), up from $6.71 billion in fiscal 2018.

Now what

Management signaled that it anticipated the momentum will largely continue in the 2020 fiscal year, issuing guidance for revenue to increase 17.7% to $13.15 billion -- including net new digital media ARR of $1.55 billion -- with adjusted net income of $9.75 per share. 

Given management's propensity for low-balling such targets, however, it should come as no surprise that Wall Street's consensus models already call for the company to slightly outpace its revenue and earnings forecasts. Barring a preliminary release in the next few weeks, we should receive our next update about where Adobe stands when it reports fiscal first-quarter 2020 results around the middle of March.

For now, though, suffice it to say Adobe's shareholders should be more than pleased with the state of its business.